A party cannot take contradictory stands in the same case and cannot be permitted to approbate and reprobate on the same facts. Both parties must be ad idem for arbitration to proceed.

JUDGMENT

Navin Chawla, J. - This hearing has been held by video conferencing.

2. This petition has been filed by the petitioner challenging the order dated 27.02.2020 passed by the learned District Judge, (Commercial Court-02), South District, allowing the application of the respondents herein filed under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act'); accepting the plea of the respondents that the parties be referred to arbitration; and dismissing the suit filed by the petitioner as not maintainable.

3. It is the case of the petitioner that it is the registered owner of the trade mark "SAGAR", "RATNA" and "SAGAR RATNA" which has been duly renewed by the petitioner from time to time. The petitioner contends that it entered into a Franchise Agreement dated 06.06.2013 and a Supplementary Agreement dated 08.10.2014 with the respondents wherein the respondents were appointed as Franchisees and granted licence to use said trade mark.

4. As certain disputes arose, the petitioner claims to have sent a cease and desist notice dated 31.10.2018 to the respondents to terminate the Franchise Agreement.

5. The petitioner thereafter filed a petition under Section 9 of the Act, being ARBP No. 269/2018, wherein, vide order 27.12.2018, the respondents were restrained from using the trademark of the petitioner.

6. The respondents challenged the above order before this Court in form of an appeal, being FAO No. 36/2019. The same was dismissed vide order dated 29.01.2019.

7. The petitioner thereafter, vide notice dated 27.02.2019, invoked the Arbitration Agreement contained in the Franchise Agreement, and on failure of the respondents to agree to the appointment of an arbitrator, filed a petition under Section 11 of the Act, being ARB.P. 239/2019. The said petition was allowed by this Court vide its order dated 07.05.2019, appointing an arbitrator.

8. The petitioner thereafter filed an application under Section 17 of the Act before the Arbitrator. The learned Arbitrator was pleased to dismiss the said application vide his order dated 13.08.2019. In the said order, the learned Arbitrator recorded the objection of the respondents to the maintainability of the arbitration proceedings as under:

"8. On the other hand, Ld. Counsel for the respondents submits that the franchisee agreement does not stand terminated for want of legal notice in terms of the Franchisee Agreement because 45 days' notice has not been served by the claimant. Secondly, that as per the ratio laid down by the Hon'ble Apex Court in A.Ayyasamy vs. A. Paramasivam & Ors., (2016) 10 SCC 386 the disputes in relation to trademarks and patents are not arbitrable. Thirdly, that the relief against alleged infringement does not fall within the jurisdiction of the arbitrator as it does not arise out of the contract between the parties containing the arbitration agreement. Ld. Counsel has also relied upon Emaar MGF Land Ltd. vs. Aftab Singh,2018 SCConlineSC 2771 and Steel Authority of India Ltd. vs. SKS Ispat & Ltd.,2014 SCConlineBom. 4875."

9. The petitioner herein filed an appeal under Section 37(2)(b) of the Act challenging the above order of the learned Arbitrator, being ARB No.41/2019. In the said appeal, the respondents again contended as under:

"10(4). The matter is not arbitrable, in as much as, the Trademark Act provides a mechanism and machinery for determination of such rights, and any such determination would be a judgment in rem, having far reaching consequences and as such, the arbitration cannot be a remedy for such determination."

10. The learned Additional District Judge-02, vide order dated 14.10.2019, was pleased to dismiss the appeal of the petitioner, observing as under:

"18. So far as the question No.1 is concerned, it is settled law that no injunction can be granted in case the contract is determinable. It has been consistently held by the Superior Courts that even if the termination is illegal, the remedy would be damages. This Cour