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IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
Epsilon Eduventures Private Limited - Appellant
Versus
Bikash Dash - Respondent
Arb.P. 938 of 2021
Decided On : 05-05-2022
Disputes regarding contractual representation claims are arbitrable under the Arbitration & Conciliation Act when stemming from a valid settlement-cum-waiver agreement.
Headnote:(A) Arbitration & Conciliation Act, 1996 - Section 11(6) - The petitioner sought appointment of a sole arbitrator under the A&C Act for disputes arising from a settlement-cum-waiver agreement regarding representation as co-founder of software - The court highlighted that disputes over interpretation of contractual terms are arbitrable. (Paras 1, 8, 21, 26)
(B) Settlement-cum-waiver agreement - The terms of the agreement permitted the respondent to represent himself as co-founder, indicating no negative covenant on such representation relates to ownership claims, thus allowing for arbitration. (Paras 10, 24)
Facts of the case:
The petitioner, a company providing educational services, contested the respondent's representation as co-founder of 'Classplus' software, arguing it breached an agreement that aimed to limit such claims.
Findings of Court:
The court confirmed that the respondent can be arbitrated over his representation rights, as established by the agreement's clauses.
Issues: The core issues included the interpretation of the settlement-cum-waiver agreement and whether arbitration was applicable for disputes over representation claims.
Ratio Decidendi: The court concluded that claims under the agreement that concern representations made by the respondent regarding the software's co-foundership are arbitrable, reinforcing the validity of arbitration clauses.
Result: Petition allowed; arbitrator appointed.
| Table of Content |
|---|
| 1. arbitration petition filed for dispute resolution. (Para 1 , 2 , 3) |
| 2. petitioner's arguments regarding settlement agreement. (Para 4 , 5 , 6 , 7 , 8 , 9) |
| 3. respondent's counterarguments against arbitration. (Para 10 , 11 , 12 , 13 , 14 , 15) |
| 4. judgments cited supporting arbitration. (Para 16 , 17 , 18) |
| 5. court's analysis on arbitration agreement scope. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 6. court's conclusion to appoint an arbitrator. (Para 27 , 28 , 29 , 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 Technology 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 Technology 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 31, 2018, and that the Company agrees to allow the Party to represent itself as the Co-Founder and Chief Technology 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 unconditionally agrees that no claims/disputes exist in this regard against the Party.
d. The settlement and waiver of claims by the Party
