$~O-1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on: 04.10.2024 + ARB. A. (COMM.) 48/2024 & I.As. 39812-39814/2024 LAVA INTERNATIONAL LIMITED .....Petitioner Through: Mr. Sonal Kumar Singh, Mr.

Abhay Raj Verma, Mr. Ratik Sharma, Mr. Arjun Rekhi, Mr. Parth Sidhwani & Mr. Ritesh, Advocates.

versus MINTELLECTUALS LLP .....Respondent Through: Mr. Samrat Nigam & Ms. Arpita Rawat, Advocates.

CORAM:

HON’BLE MR. JUSTICE PRATEEK JALAN PRATEEK JALAN, J. (ORAL)

1. This appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 [“the Act”], is directed against two orders passed by a three-member arbitral tribunal under Section 17 of the Act.

A. Facts:

2. The arbitration proceedings arise out of disputes between the parties under an agreement dated 01.07.2017 entitled “Research and Collaboration Agreement”. The agreement was for a period of five years i.e., 20 quarters, which have been referred by the parties as Quarters 1 to

20.

3. The respondent, which is the claimant in the arbitration, inter alia contends that quarterly payments of royalty were to be made to it in respect of sales of “Covered Devices” sold by the appellant and/or its affiliates, and that the appellant was required to submit quarterly reports with regard to such sales. The impugned orders are in respect of the respondent’s claims for the 12 ^th to 20^th Quarters.

4. An earlier round of arbitration took place with regard to the respondent’s claims for royalty for the 2 ^nd to 5^th Quarters. This culminated in an award dated 15.07.2020 against the appellant, for a total sum of Rs. 47.18 crores¹. The appellant has challenged the award in O.M.P.(COMM) 437/2020, which remains pending.

5. During the pendency of those proceedings, similar disputes arose for subsequent quarters. The respondent filed a petition under Section 9 of the Act before this Court [O.M.P(I)(COMM) 305/2019] seeking security for a sum of Rs.11,31,09,035.38/- towards royalty for the 6th, 7th and 8th Quarters. On 26.09.2019, the appellant undertook before this Court to secure the said claim by furnishing a cheque. After invocation of the arbitration clause, the tribunal was constituted and, by an order dated 12.12.2019, the Section 9 petition was directed to be treated as an application under Section 17 of the Act. The application was ultimately disposed of by a consent order passed by the tribunal on 02.03.2020, continuing the order passed by this Court.

6. The respondent thereafter made another application under Section 17 of the Act, seeking directions for security relating to royalty for the 9^th,10^th and 11^th Quarters. By an order dated 10.01.2021, the application 1Total amount awarded against invoices raised for the sales in 4th Quarter [Claim A], 5th Quarter [Claim

C] and by the appellant’s Affiliates. The amount also includes pre-award and post-award interest.

was disposed of, directing the appellant to furnish similar security i.e., security in the form of a cheque for the same amount as in the earlier orders. The tribunal rejected the respondent’s request for enhancement of the security amount, or for change in the nature of the security. The respondent subsequently filed two applications for the same purpose, which were also rejected by order dated 15.09.2021. However, on a further application for clarification moved by the respondent, the tribunal passed an order dated 29.11.2021, granting liberty to the respondent to move a fresh application.

7. The respondent filed an appeal before this Court against the order dated 15.09.2021 [ARB A. (COMM) 76/2021], which was disposed of by an order dated 12.07.2024, permitting the respondent to approach the tribunal for clarification. I am informed that such an application has recently been made, and remains pending.

8. The impugned orders dated 26.05.2024 and 03.08.2024 arise out of yet another application made by the respondent, this time for security over its claims for the 12^th to 20^th Quarters. By the first of the impugned orders, the arbitral tribu