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IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
Epsilon Eduventures Private Limited - Appellant
Versus
Vatsal Rustagi - Respondent
Arb.P. 937 of 2021
Decided On : 05-05-2022
The court affirmed that any dispute related to the interpretation of a contract and claims therein, including misrepresentation, is arbitrable under the Arbitration & Conciliation Act.
Headnote:(A) Arbitration & Conciliation Act, 1996 - Section 11(6) - Petition for the appointment of a sole arbitrator to resolve disputes arising from a settlement-cum-waiver agreement - The respondent's purported misrepresentation as co-founder of software developed during employment is arbitrable under agreement clause. (Paras 1, 8, 20, 21, 27).
(B) Dispute Resolution - The existence of any dispute between the parties allows for arbitration under the terms of the agreement. (Paras 22, 24).
(C) Intellectual Property Rights - The court clarifies that the dispute does not pertain to ownership but rather to the representation and claims made by the respondent. (Paras 23, 25).
Facts of the case:
The petitioner alleges that the respondent misrepresented himself as a co-founder of a software product developed during his employment, despite a settlement agreement stated otherwise.
Findings of Court:
The court permits the appointment of an arbitrator for the resolution of the disputes consistent with the agreement's provisions.
Issues: Whether the dispute regarding the respondent's representation as co-founder falls within the arbitration agreement.
Ratio Decidendi: The court found that the arbitration clause encompasses all disputes under the agreement, allowing the arbitrator to determine the validity of claims made by both parties.
Result: Petition allowed; an arbitrator is to be appointed.
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 Marketing 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 Marketing 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-cumwaiver 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 23, 2018, and that the Company agrees to allow the Party to represent itself as the Co-Founder and Chief Marketing 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.
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"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 unconditionally agrees that no claims/disputes exist in this regard against the Party.
d. The settlement and waiver of claims by the Party under this Clause 3 also extends, pari materia, to waiver of claims against related parties and group companies of the Company, including specifically M/s Bunch Microtechnologies Private Limited, and its Promoters and Directors, as the case may be."
(bold in original; under-scoring supplied)
5. It is the petitioner's contention that, in his `LinkedIn' profile, the respondent has posted the following text and content representing and claiming that he is co-founder of the software :
6.
