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2023 Supreme(Del) 1362

IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Mini Pushkarna, JJ.
Ttwenty Lifestyle Llp – Appellant
Versus
M/s Social Organics Pvt. Ltd. & Ors. – Respondents
FAO (COMM) 126 of 2023 & CM Appls. 31160 of 2023, 31161 of 2023, 31162 of 2023, 31163 of 2023 and 31164 of 2023
Decided On : 28-07-2023

Advocates appeared:
Mr. Jayant Mehta, Senior Advocate with Mr. Ankur Sangal, Mr. Ankit Arvind, Mr. Raghu Vinayak Sinha and Mr. Kiratraj Sadana, Advocates, for the Appellant.
Ms. Jasmine Damkewala with Ms. Vaishali Sharma, Advocates, for R-1 (through VC).

The main legal point established in the judgment is the duty of the arbitrator to consider responses before passing an award and the need for fresh adjudication in arbitration proceedings.

Headnote:

Arbitration and Conciliation Act, 1996 - Domain Name Dispute - [SLIMJIM] - [Trademark Dispute] - [Section 37(1) of the Arbitration and Conciliation Act, 1996] - [Summary of Acts and Sections: The judgment discusses the application of Section 32 of the Arbitration and Conciliation Act, 1996, which provides that arbitral proceedings shall be terminated by the final arbitral award. It also highlights the INDR Policy, which stipulates that there shall be no in-person hearings, and the duty of the arbitrator to consider responses before passing an award. The judgment emphasizes the principles of natural justice and the duty to consider the stand of all parties before passing an order. The judgment also addresses the issue of conflicting claims and the need for fresh adjudication in arbitration proceedings. The court directs the constitution of a new arbitral tribunal for rehearing the matter in the light of the contentions raised by the parties.

Fact of the Case:

The respondent filed a complaint alleging that the domain name 'slimjim.in' was deceptively similar to their trademark 'SLIMJIM'. An arbitrator was appointed, and an award was passed in favor of the respondent. However, the appellant claimed that their response was not considered, and subsequently, an amended award was passed in their favor. The respondent challenged the amended award, leading to the present appeal.

Finding of the Court:

The court found that the arbitrator passed two contradictory and conflicting awards, one in favor of the appellant and the other in favor of the respondent. It directed the constitution of a new arbitral tribunal for rehearing the matter in the light of the contentions raised by the parties.

Issues: The issues included the failure of the arbitrator to consider the appellant's response before passing the original award, the conflicting claims of the parties, and the need for fresh adjudication in arbitration proceedings.

Ratio Decidendi: The court held that the arbitrator's failure to consider the appellant's response before passing the original award was illegal and in conflict with the Public Policy of India. It emphasized the duty to consider the stand of all parties before passing an order and the need for fresh adjudication in arbitration proceedings.

Final Decision: The present appeal was allowed, and the court directed the constitution of a new arbitral tribunal for rehearing the matter in the light of the contentions raised by the parties.

JUDGMENT

Mini Pushkarna, J.:

1. The present appeal has been filed under Section 37(1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act') against the judgment dated 9th May, 2023 passed by District Judge (Commercial Courts-03), Patiala House Courts, New Delhi in O.M.P. (COMM) 13/2022, M/s Social Organics Private Limited Vs. A.W. Alliance and Others. By way of the impugned judgment, the learned District Judge has set aside the amended award dated 22nd July, 2021 passed by the learned arbitrator, which was in favour of the appellant herein.

2. As per the case canvassed before this Court, the respondent no.1 herein filed a complaint on 24th March, 2021 before the IN Registry of National Internet Exchange of India (NIXI) under Indian Domain Name Dispute Resolution Policy (INDR Policy). As per the said complaint, respondent no.1 was a registered proprietor of trademark `SLIMJIM', claiming to use the said trademark from 14th February, 2013 in respect of Cigarettes, Tobacco, Cigarette Paper, Tobacco Paper, Rolling Paper, Smoking Paper, Tobacco Filters, Cigarette Filters, Filter Rods, Filter Buds, Smoker Articles and other tobacco related articles and accessories. Since as per the data available with the WHOIS website (an Internet Service used to look up information about a domain name), the domain name SLIMJIM.IN was registered in the name of A.W. Alliance, respondent no.2 herein, respondent no.1 filed a complaint to NIXI.

3. In the complaint to NIXI, it was claimed that the domain name SLIMJIM.IN was visually, phonetically and structurally identical to the registered trademark `SLIMJIM' of the respondent no.1 in respect of its goods. The respondent no.1, thus, claimed that the Registrant, i.e., respondent no.2 herein had no rights or legitimate interest in respect of the said domain name and that Registrant's domain name had been registered or was being used in bad faith.

4. Pursuant to the aforesaid complaint, an arbitrator was appointed by NIXI under INDR Policy. Respondent no.2 herein, "A.W. Alliance" was made the sole respondent in the said arbitration proceedings. The learned arbitrator passed an award dated 29th May, 2021 wherein it was observed that the respondent therein, i.e., respondent no.2 herein, had failed/neglected to file its reply to the specific allegations made in the complaint within the stipulated time, despite receipt of a copy of complaint and annexures. Since no response had been received from respondent no.2, it proceeded ex parte against respondent no.2. Thus, by award dated 29th May, 2021, the learned arbitrator held that the domain name `slimjim.in' be transferred to the complainant/petitioner, i.e., respondent no.1 herein.

5. Appellant claiming to be subsequent proprietor of the trademark `SLIMJIM', and "A.W. Alliance" being agent/IT contact of its current partners, received the award dated 29th May, 2021 on 8th July, 2021. Thus, an email dated 8th July, 2021 was sent by attorney of the appellant to the learned arbitrator informing that the findings of the learned arbitrator in its award that the appellant had not filed its reply, was incorrect. It was submitted that reply was filed on behalf of the appellant on 15th April, 2021.

6. Subsequently, appellant received an email dated 20th July, 2021 from NIXI informing that the reply filed by appellant was being considered. It was intimated that the matter was being re-considered in view of the appellant's reply.

7. Appellant herein also received an email on the same date, i.e., 20th July, 2021 from the learned arbitrator informing that he did not receive the reply from the appellant and accordingly asked NIXI to forward the reply to him. In the said email, it was intimated by the learned arbitrator that he would consider the response and will pass an amended order. The learned arbitrator further informed that the earlier award dated 29th May, 2021 be treated as cancelled.

8. Thereafter, the learned arbitrator passe

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