1. Suit for permanent injunction and damages regarding trademark infringement — Application under Section 8, Arbitration and Conciliation Act, 1996, based on assignment deeds containing arbitration clauses. (Para 1 , 2 , 3 )
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2025 Supreme(SC) 828
SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
K. Mangayarkarasi & Anr. – Petitioners
Versus
N.J. Sundaresan & Anr. – Respondents
Special Leave Petition (Civil) No. 13012 of 2025
Decided On : 09-05-2025
Important Points
A valid arbitration agreement compels parties to arbitrate disputes arising from it, regardless of allegations of fraud if they pertain to internal matters, reinforcing arbitration's role in resolving commercial disputes.
Subject
Commercial Disputes - Arbitration
Act Referred
Headnote
(A) Arbitration and Conciliation Act, 1996 - Section 8 - Reference to arbitration - High Court upheld lower court's order referring parties to arbitration based on assignment deeds containing arbitration clauses - Allegations of fraud did not bar arbitration as claims arose from contracts - Court emphasized judicial authority's obligation to refer parties to arbitration when an arbitration agreement exists. (Paras 6, 8, 22, 24, 27)
(B) Arbitration Clauses - The enforceability of arbitration agreements and their scope - Courts must respect valid arbitration agreements and refer disputes to arbitration, unless the agreement itself is invalid. (Paras 21, 23)
(C) Allegations of Fraud - Mere allegations of fraud are insufficient to preclude arbitration if they pertain to internal affairs between parties and do not have public implications. (Paras 12, 26)
Facts of the case:
Petitioners sought permanent injunction and damages due to trademark infringement, while respondents filed for arbitration based on assignment deeds containing arbitration clauses. Court of first instance allowed arbitration, which was affirmed by the High Court.
Findings of Court:
High Court upheld that the dispute was arbitrable as it was based on contractual rights and did not involve public interest concerns.
Issues: Whether the arbitration clause in the assignment deeds was valid considering the alleged fraud, and whether the disputes were arbitrable.
Ratio Decidendi: The court ruled that the existence of a valid arbitration agreement compels referral to arbitration, and internal disputes over contractual interpretation do not negate that obligation.
Result: Special Leave Petition dismissed.
(B) Arbitration Clauses - The enforceability of arbitration agreements and their scope - Courts must respect valid arbitration agreements and refer disputes to arbitration, unless the agreement itself is invalid. (Paras 21, 23)
(C) Allegations of Fraud - Mere allegations of fraud are insufficient to preclude arbitration if they pertain to internal affairs between parties and do not have public implications. (Paras 12, 26)
Facts of the case:
Petitioners sought permanent injunction and damages due to trademark infringement, while respondents filed for arbitration based on assignment deeds containing arbitration clauses. Court of first instance allowed arbitration, which was affirmed by the High Court.
Findings of Court:
High Court upheld that the dispute was arbitrable as it was based on contractual rights and did not involve public interest concerns.
Issues: Whether the arbitration clause in the assignment deeds was valid considering the alleged fraud, and whether the disputes were arbitrable.
Ratio Decidendi: The court ruled that the existence of a valid arbitration agreement compels referral to arbitration, and internal disputes over contractual interpretation do not negate that obligation.
Result: Special Leave Petition dismissed.
Legal Category Hierarchy
- practice and procedure
- intellectual property law
- contract law
Advocates appeared:
For the Petitioner(s): Mr. V. Prakash, Sr. Adv. Mr. Aneesh Renganathan, Adv. Ms. Swadha Gupta, Adv. Mr. Karan Dang, Adv. Mr. Vishwam Mishra, Adv. Mr. Prabhat Kumar, AOR
For the Petitioner(s): Mr. V. Prakash, Sr. Adv. Mr. Aneesh Renganathan, Adv. Ms. Swadha Gupta, Adv. Mr. Karan Dang, Adv. Mr. Vishwam Mishra, Adv. Mr. Prabhat Kumar, AOR
Table of Contents
2. Whether trademark disputes and allegations of fraud in the execution of assignment deeds render the matter non-arbitrable and oust the jurisdiction of the arbitral tribunal. (Para 3 , 4 , 5 )
3. Trademark registration is a right in rem, but disputes over assignment deeds are rights in personam and thus arbitrable, including allegations of fraud between parties. (Para 4 , 5 , 12 , 15 )
4. Disputes arising from contractual assignments of trademarks are rights in personam and arbitrable; mere allegations of fraud inter se parties do not oust arbitration jurisdiction. (Para 12 , 15 , 17 )
5. Special Leave Petition dismissed; order referring parties to arbitration affirmed. (Para 18 , 19 )
6. Are all trademark disputes non-arbitrable?
No. While the grant and registration of trademarks are sovereign functions (rights in rem) and non-arbitrable, disputes regarding subordinate rights, such as those arising from license or assignment agreements, are rights in personam and are arbitrable. (Para 12 )
7. Does an allegation of fraud automatically make a dispute non-arbitrable?
No. Mere allegations of fraud between parties (inter se) do not oust the jurisdiction of an arbitral tribunal. Fraud only renders a dispute non-arbitrable if it has implications in the public domain. (Para 9 , 15 )
8. What is the court's obligation under Section 8 of the Arbitration and Conciliation Act, 1996?
When a valid arbitration agreement exists and an application is filed under Section 8, the judicial authority has a positive obligation to refer the parties to arbitration, with no discretion to refuse. (Para 16 , 17 )
9. Can an arbitral tribunal decide on the validity of the arbitration agreement itself?
Yes. Under Section 16 of the Act, the arbitral tribunal is empowered to rule on its own jurisdiction, including objections regarding the existence or validity of the arbitration agreement. (Para 8 )
ORDER :
(J.B. Pardiwala, J.)
1. This petition arises from the judgment and order passed by the High Court of Judicature at Madras dated 09.01.2025 in C.R.P. No. 1272 of 2024 by which the Civil Revision Petition filed by the petitioners herein (original plaintiffs) came to be rejected thereby affirming the order passed by the Commercial Court (District Judge Cadre), Coimbatore allowing application filed by the respondents herein (original defendants) under Section 8 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act of 1996’) and referring the parties to arbitration.
2. It appears from the materials on record that the petitioners herein instituted a suit being C.O.S. No. 147 of 2023 in the Commercial Court seeking following reliefs:-
“(i) Permanent injunction restraining Defendant No. 1, by himself, partners, business successors, servants, agents, representatives and every other person claiming through Defendant No. 1 to offer, sell, open any other shop with the same name or for any other purpose using the plaintiff No. 1 mark in Application No. 3440505 of “SRI ANGANNAN BIRIYANI HOTEL” or “ABM SRI ANGANNAN HOTEL” or any other name format signifying the term ANGANNAN.
(ii) Permanent injunction restraining the Defendant No. 1 by himself, partners, successors in business, servants, agents, representatives and every other person claiming through the Defendant No. 1 from using or associating himself with the mark in Application No. 3440505 of “SRI ANGANNAN BIRIYANI HOTEL” OR “ABH SRI ANGANNAN HOTEL” or any other term ANGANAN in any kind of social media platform or any other media platform until the court passes further orders.
(iii) to pay for damages of Rs. 20,00,000 /- (Rupees Twenty Lakhs only) for the loss that the Plaintiffs had incurred due to the use of the Trademark in Application No. 6440505 of “SRI ANGANNAN BIRIYANI HOTEL” and pass any other order that this Hon'ble Court may deem fit and thus render justice.
(iv) For costs of the suit.
(v) and pass such further or other orders as this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render Justice.”
3. The defendants appeared before the Commercial Court and preferred application under Section 8 of the Arbitration and Conciliation (Amendment) Act, 2019 stating as under:-
“APPLICATION FILED UNDER SECTION 8 OF THE ARBITRATION AND CONCILIATION AMENDMENT ACT, 2019
I. Petitioner/1st Defendant
N. J. Sundaresan S/o Jagadeeswaran, Hindu, aged about 45 years, residing at Flat No. 69, Sai Gangotri Apts., N.S.R. Road, Sai Baba Colony, Coimbatore 641 025.
The address for service of the Petitioner is same as above and in care of his counsel Mr. P.R. Ramakrishnan /Advocate, “Ram Prasad , No. 2, Ramar Koil Street, Ram Nagar, Coimbatore - 641 009.
II. Respondents/ Plaintiffs
1. Mrs. K. Mangayarkarasi, W/o. Late Mr. N. Kadiravadivei, Hindu, aged about 77 years, residing at A2/1, Sree Annapporna Apartments, Bharathi Park, 1st cross, Saibaba Colony, Coimbatore- 641011 Presently residing at No. 153, Lakshmi Mills Colony, Coimbatore South, Pappanaickenpalayam, Coimbatore - 541037.
2. Mrs. K. M. Shredevi, D/o Late N. Kathiravadivel, Hindu, aged about 48 Years, residing at Flat #503, Kanakadhara's Landmark Apts., Virat Nagar Colony, Saket Road, Kapra, Hyderabad - 500 062,
Both Rep. by their Power Agent Mrs. Jaishree S, W /o. Mr. Sandeep, Residing at 153, Lakshmi Mills Colony, Pappanaickenpalayam, Coimbatore - 641 037.
III. Respondent/2nd Defendant
3. Mrs. Manonmani Angannan D/o Late N. Kathlravadivel, Hindu, aged about 50 years, residing at 4 704 Antebeilum lane, Mansfield, 75063, Texas, USA.
The address for service of the Respondent is same as above. FOR THE REASONS stated in the accompanying affidavit, the petitioner prays that this Honorable Court may be pleased to refer the parties to Arbitration and thus render justice.
| LIST OF DOCUMENTS | |
| 1. 20.09.2017 | Deed of Assignment of Trade Marks (Original) |
| 2. 14.10.2019 | Deed of Assignment of Trad |
