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IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
Epsilon Eduventures Private Limited - Appellant
Versus
Nikhil Goel - Respondent
Arb.P.936 of 2021 & I.A. 4598 of 2022
Decided On : 05-05-2022
The court held that disputes about the interpretation of a settlement-waiver agreement concerning representation rights are arbitrable, determining the scope of any agreement must include any disputes arising therefrom.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of sole arbitrator - Disputes arose from a settlement-cum-waiver agreement concerning representation rights as co-founder - Key provisions cited include clauses regarding employment representation and dispute resolution - Court finds disputes over representation of title as co-founder of software are arbitrable - The agreement's scope includes 'any and all disputes' - Court permits arbitration appointment. (Paras 1-28)
Facts of the case:
The petitioner, a company providing virtual educational services, disputes the respondent's claims of co-founding software developed during his employment, asserting misrepresentation affects commercial exploitation. The respondent claims rights under a waiver agreement allowing his title.
Findings of Court:
The court noted that the respondent was permitted to represent himself as co-founder and Chief Operations Officer, thus finding the arguments presented by the petitioner to be arbitrary without deeper factual inquiries.
Issues: The key issues were whether the respondent's claims about software contradicted the waiver agreement and if the dispute is arbitrable under the agreement.
Ratio Decidendi: The court concluded that allegations of there being a dispute and the interpretation of the waiver agreement's provisions requires scrutiny by the arbitrator, affirming the importance of arbitration in governance of their relationship.
Result: Petition allowed; sole arbitrator appointed.
| Table of Content |
|---|
| 1. dispute arose from employment contract agreement. (Para 1 , 2 , 3) |
| 2. petitioner claims breach of settlement agreement regarding representations. (Para 4 , 5 , 6 , 7 , 8) |
| 3. respondent argues right to represent as co-founder is valid. (Para 10 , 11 , 12 , 13 , 14 , 15) |
| 4. judicial precedents on arbitration dispute scope cited. (Para 16 , 17 , 18) |
| 5. court's analysis indicates disputes fall within arbitration agreement. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 6. court allows petition for arbitration appointment. (Para 27 , 28 , 29) |
| 7. court orders actions for next steps in arbitration. (Para 30 , 31) |
JUDGMENT
Anup Jairam Bhambhani J.
Brief Background
1. By way of the present petition filed under section 11(6) of the Arbitration & Conciliation Act, 1996 (`A&C Act'), the petitioner seeks appointment of a sole arbitrator to adjudicate the disputes that are stated to have arisen with the respondent.
2. The petitioner is a company engaged in providing virtual educational services to schools and other similar institutions. The respondent was previously employed with the petitioner and held the position of Chief Operations Officer.
3. The disputes between the petitioner and the respondent are stated to have arisen from a settlement-cum-waiver agreement dated 11.09.2019, (the `agreement') whereby, accordingly to the petitioner, the respondent was entitled to represent himself as co-founder and Chief Operations Officer of the petitioner i.e. the company M/s. Epsilon Eduventures Pvt. Ltd.; and not as co-founder of `Classplus', which the petitioner contends, is a product developed by the petitioner during the respondents tenure as its employee.
Petitioner's Arguments
4. In support of the petitioner's contention that the settlement-cum-waiver agreement with the respondent prohibits him from representing himself as co-founder of `Classplus' software (the `software'), Mr. Gautam Swarup, learned counsel appearing for the petitioner has drawn the attention of this court to the following provisions contained in the agreement :
"1. Gainful Employment with the Company. The Party and the Company agree that the Party has provided valuable service to the Company during the period from January 27, 2016 to March 31, 2018, and that the Company agrees to allow the Party to represent itself as the Co-Founder and Chief Operations Officer of the Company, and that his services were valuable to the growth and development of the Company during the course of his employment. The Company agrees that it shall not object to the use of the aforementioned designation/capacity by the Party.
*****
"3. Settlement and Waiver of claims and disputes. The Party hereby acknowledges and agrees, that for valuable consideration provided to it as described herein :
a. The Party waives any claims it may have against the Company, its Directors and Promoters, including in relation to present claims, arising either out of its employment or in its capacity as a shareholder of the Company, and waives its claims under any disputes against the Company by any party, including any present or future shareholder or employee of the Company.
b. The Party unequivocally and unconditionally agrees that it has no claims and disputes on its behalf against the Company, its Promoters, Directors and shareholders in lieu of valuable consideration not restricted to the pay and emoluments during their service to the Company, the payment of consideration of Rs.10,77,240 (Rupees Ten lakhs, Seventy Seven Thousand, Two Hundred and Forty Only), towards the first tranche consideration, by the Purchaser to the Party under the Share Purchase Agreement dated September 07, 2019 ("SPA"), and as also mutual considerations under this Agreement.
c. The Company also hereby waives any claims it may have against the Party that may have arisen either out of or in relation to such Party's employment or in its capacity as a shareholder of the Company, and the Company hereby unequivocally and unconditio
