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IN THE HIGH COURT OF DELHI
Prateek Jalan, J.
Dr Reddys Laboratories Limited - Appellant
Versus
Alpha Sciences Pte Limited - Respondent
O.M.P.(I)(COMM.) 190 of 2022
Decided On : 07-10-2022




The court emphasized that under Section 9 of the Arbitration Act, it can grant mandatory injunctions when there is a strong prima facie case and balance of convenience favors the petitioner, especially when public interest is at stake.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Interim measures - Petition filed for mandatory injunction directing the respondent to issue a no-objection certificate for appointing a new distributor for pharmaceutical products in Myanmar after the expiration of the Supply Agreement on 05.05.2021 - The court determined that despite extensive correspondences and the need for public interest, the respondent failed to respond to the petitioner's request for issuing the NOC - The requirement for a NOC was established under Clause 14.1.4 of the Agreement. (Paras 4, 22-24)

(B) Legal principles for mandatory injunctions - The court affirmed that a strong prima facie case, balance of convenience, and the prevention of irreparable harm are critical for granting mandatory injunctions. (Paras 16-19)

(C) Jurisdiction - The court established jurisdiction under Section 9 of the Act, highlighting the broad powers conferred to the court for interim relief. (Paras 14, 15)

Facts of the case:
The petitioner is a manufacturer of pharmaceutical products that entered into a Supply Agreement with the respondent, which expired on 05.05.2021. Despite numerous communications urging the respondent to extend the agreement, the respondent failed to do so and did not issue the required no-objection certificate for a new distributor.

Findings of Court:
The court ordered the respondent to issue a NOC within four weeks and mandated the petitioner to maintain separate accounts for business transactions in Myanmar.

Issues: Whether a mandatory injunction should be granted for issuing a no-objection certificate for a new distributor when the current agreement has expired, and the implications of public interest in the provision of pharmaceutical products.

Ratio Decidendi: The court held that the lack of action from the respondent jeopardized the petitioner's business and the availability of essential medicines in Myanmar, warranting the issuance of a mandatory injunction to protect public interest.

Result: Petition is disposed of directing the issuance of the NOC.

Table of Content
1. request for interim measures under arbitration. (Para 1 , 2 , 4)
2. details on the expired agreement and responsibilities. (Para 5 , 6 , 10)
3. petitioner’s attempts to contact respondent. (Para 9 , 12)
4. prima facie case for granting injunction. (Para 16 , 22 , 23)
5. guidelines for mandatory injunctions. (Para 17 , 18 , 19)
6. court orders respondent to issue noc. (Para 24 , 25 , 26)

JUDGMENT

Prateek Jalan, J. (Oral)--The petitioner has filed this petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"], for interim measures of protection in anticipation of arbitral proceedings between the parties under an agreement dated 06.05.2016 entitled "Supply Agreement" [hereinafter, "the Supply Agreement"]. The Supply Agreement was extended twice, by way of amendment agreements dated 24.05.2019 and 14.05.2020.

2. Although several reliefs have been claimed in the petition, Ms. Neelima Tripathi, learned Senior Counsel for the petitioner, presses the petition only as far as prayer "a" is concerned, which reads as follows:

    "a. Pass an order/mandatory injunction directing the Respondent to issue a no-objection certificate or consent letter for appointment of a new distributor for pharmaceutical products of the Petitioner in Myanmar;"

3. Notice was issued in the petition on 03.06.2022, at which stage, Ms. Tripathi did not press for ex parte ad interim relief. Learned counsel for the petitioner has filed an affidavit of service dated 01.09.2022, which shows that service has been effected upon the respondent by e-mail, courier and Speed Post. E-mail service was effected on 09.06.2022 from the e-mail address of learned counsel for the petitioner to the email address-nancy.mmhtwe@gmail.com, which is the e-mail address from which correspondence was addressed to the petitioner on behalf of the respondent1 . Learned counsel for the petitioner has affirmed that the e-mail has not bounced back. Speed Post delivery and courier delivery were effected upon the respondent on 14.06.2022 and 24.06.2022, respectively, at the address mentioned in Clause 16 of the Supply Agreement for service of notice. Printouts of the tracking reports have also been placed on record. Pursuant to the directions of this Court vide order dated 25.07.2022, by an e-mail communication dated 01.08.2022, learned counsel for the petitioner also informed the respondent of the next date of hearing i.e. 06.09.2022.

4. Despite all these efforts towards service of notice, the respondent has not entered appearance. As sufficient time has lapsed to enable the respondent to enter appearance, the petition is taken up for hearing in its absence.

5. The petitioner is a manufacturer of pharmaceutical products. The respondent is a company incorporated in Republic of Singapore. By way of the Supply Agreement, the respondent was appointed as the petitioner's distributor for the territory of Myanmar. The respondent had nominated a consignee in the territory of Myanmar namely M/s Biosy's Company Limited [hereinafter, "Biosy's"]. The original term of the Supply Agreement was three years, after which it was extended by way of amendment agreements dated 24.05.2019 and 14.05.2020 for one year each. The Supply Agreement has thus expired by efflux of time on 05.05.2021.

6. The clauses of the Supply Agreement, insofar as they are relevant for the purposes of the present petition, are as follows:

    "6. REGULATORY MATTERS

    xxxx xxxx xxxx

    6.3 It is the responsibility of DISTRIBUTOR to inform DR.REDDY'S about the laws, regulation of the Territory applicable to the Products including Patents, imports, regulations, labelling, technical specifications, safety requirements, etc.

    xxxx xxxx xxxx

    7. COMPLIANCE

    7.1 DISTRIBUTOR shall during the term of this Agreement comply with all legal and regulatory requirements relevant to the promotion, supply and sale of medicines within the Territory. DISTRIBUTOR ___ shall also comply with all the relevant laws inclu

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