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2013 Supreme(Del) 21
High Court of Delhi
REVA KHETRAPAL, J.
LETS Engineering & Technology Services Pvt. Ltd.
Versus
Manoj Das
ARB.P. No. 250 of 2012
Decided On : 04-01-2013
Advocate Appeared:
For the Petitioner:Sanjay Goswami, Advocate.
For the Respondent:Arunav Patnaik, Advocate.
The main legal point established is that an arbitration agreement can be inferred from an exchange of emails, as per Section 7(4)(b) of the Arbitration and Conciliation Act 1996.
Headnote:
Arbitration Agreement - Marketing Agreement - Arbitration and Conciliation Act 1996 - Section 11(5)
Fact of the Case:
LETS engaged DASS for outsourcing assignments. DASS allegedly set up a new company and competed with LETS using its proprietary data. LETS suffered substantial business losses and sought compensation from DASS. DASS initiated a winding-up petition against LETS, leading LETS to seek settlement through arbitration.
Finding of the Court:
The court found that an arbitration agreement existed between LETS and DASS based on the exchange of emails, and appointed an arbitrator to adjudicate the disputes between the parties.
Issues: Existence of a valid arbitration agreement between LETS and DASS.
Ratio Decidendi: The court held that the exchange of emails between the parties constituted a record of the arbitration agreement, as per Section 7(4)(b) of the Arbitration and Conciliation Act 1996.
Final Decision: The court appointed an arbitrator to adjudicate the disputes between LETS and DASS.
Reva Khetrapal, J.
1. By way of this petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, the Petitioner – LETS Engineering Technology Services Pvt. Ltd. (for short “LETS”) prays for appointment of an independent Sole Arbitrator to decide the claims of LETS as set out in the petition against the Respondent, viz., Digital Analysis and Software Solutions (for short “DASS”) arising out of the disputes which have arisen between LETS and DASS.
2. The facts as narrated in the petition are as follows. LETS is since long been engaged in execution of outsourced Digital Analysis and Software Solutions for its customers in UK, USA and other countries, and has certain indigenously developed proprietary Solutions, Designs, Analysis and Software for Geographical Mapping services, in which LETS is the pioneer and trend setter in India. Somewhere in the year 2004, LETS started sub-outsourcing some of its overseas assignments and job works to DASS with the clear understanding that the Technical Know How and Digital Analysis including GIS Mapping, etc., and Software Solutions of LETS were all Copyrights and the Proprietary Data and Software of LETS, in which DASS would have no Intellectual Property Rights and would not be authorized to use the same for any purposes other than purposes of job work for LETS, for which it would receive remuneration in Indian Rupees.
3. LETS asserts that over the period DASS’s ambition soared and without informing LETS, it set up a new company under the name of Weaver Bird Engineering and Technology Pvt. Ltd. and under the guise of a separate company, without disclosing the setting up of the same to LETS, started competing with LETS by using their Technical Know How, and Copyrighted Digital Analysis Software and Customer Data and started approaching customers of LETS in UK, Europe and USA for soliciting business from them. From January, 2010 onwards, the business turnover of LETS suddenly dropped substantially on account of the diversion of its business by DASS to the newly incorporated company M/s. Weaver Bird Engineering and Technology Pvt. Ltd., which by conservative estimates amounted to an average of Rs. 30 lacs per month (approx) from a single customer, i.e., BLOM AEROFILMS, U.K.
4. LETS alleges that it suffered losses of a minimum of Rs. 2.5 crores in terms of business revenue in the period intervening January, 2010 to October, 2010 alone and in this regard also issued to DASS an e-mail dated 20th September, 2010. After discounting what it owed to DASS, LETS claimed from DASS the balance amount of Rs. 2,30,06,080/- as compensation/damages for breach of contract and infringement of their Intellectual Property Rights, including Copyrights, etc. in the Digital Analysis and Software Solutions and Customer Database by its legal notice dated 01.11.2010. DASS did not choose to reply, but instead chose to issue a spate of legal notices to LETS on the same lines, viz., notice dated 01.10.2010, 14.12.2010 and 03.09.2011, which were duly replied by LETS. Thereafter, DASS proceeded to initiate a winding up petition against LETS, which was left with no alternative but to seek settlement of its claims along with the interest due through the process of arbitration, in terms of the Contract Agreement dated 04.11.2009 vide the mail of LETS, which had been ratified and confirmed by DASS through its e-mails dated 16.11.2009 and 19.11.2009 on all clauses including the arbitration clause. The petitioner accordingly got served upon the respondent a legal notice dated 31.01.2012, seeking resolution of the disputes through arbitration. The respondent chose not to reply to the said notice.
5. In the circumstances, the present petition was instituted by LETS on 6th July, 2012, to which DASS filed a reply in which it was contended that the petition was an abuse of the process of law and deserved dismissal as there exists no Arbitration Agreement as contemplated under the Arbitration and Conc
