JUDGEMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

2. These three petitions raise an important issue concerning appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter, the ‘Act, 1996’) in employment contracts.

3. The two main questions that arise for consideration in these petitions are:

i. Whether a lock-in period in employment contracts is valid in law, or does it violate the fundamental rights enshrined in the Constitution of India?

ii. Whether disputes relating to a lock-in period in employment contracts are arbitrable in terms of the Act, 1996?

4. The parties in all the three petitions are set out in the following table: Case Number Petitioner Respondents Agreement ARB.P.

1210/2023 Lily Packers Private Limited Ms. Vaishnavi Vijay Umak Service Employment Agreement (Executive) dated 16th April, 2022 ARB.P.

1212/2023 Lily Packers Private Limited Mr. Meetkumar Patel Service Employment Agreement (Executive) dated 30th June, 2021 ARB.P.

1213/2023 Lily Packers Private Limited Mr. Rahul Sharma Service Employment Agreement (Executive) dated 21st March, 2022 The facts in each of the three petitions are as under:

ARB.P. 1210/2023

5. The present petition has been filed on behalf of the Petitioner-Lily Packers Pvt. Ltd. under Section 11 (6) of the Act, 1996. The Petitioner vide the present petition is seeking constitution of an Arbitral Tribunal in terms of the Service Employment Agreement (Executive) dated 16th April, 2022 (hereinafter, ‘Agreement dated 16th April, 2022’).

6. In the present petition, the Petitioner claims to be a company, which is engaged in the business of manufacturing and trading of corrugated packaging, sourcing and outsourcing of materials by way of hiring and/or contracting with third-parties to perform tasks, handle operations, or provide services for various companies worldwide.

7. It is stated that the Petitioner on 16th April, 2022 employed the Respondent- Ms. Vaishnavi Vijay Umak as a fashion designer in its division called ‘De Belle’ (hereinafter, ‘division company’). Further, in this regard, Agreement dated 16th April, 2022 was executed between the parties, wherein scope of the employee’s services were defined.

8. In terms of the Agreement dated 16th April, 2022, there were various conditions agreed upon by the parties including-salary and benefits, working hours, other employment conditions, lock-in period, confidentiality clause, data protection, etc.

9. Clause 5 of the Agreement dated 16th April, 2022 pertains to a lock-in period vide which the Respondent employee agreed to serve the Petitioner company for a period of 3 years from the date of joining. Clause 5 is extracted hereinunder for ready reference:

“5. LOCK IN PERIOD. After successful completion of probation period, the Employee will be on lock in period for (2) three years with the company from the date of the joining which cannot be terminated by the Employee before completion of the LOCK IN PERIOD, the Employee contract can be terminated before the Lock in period at sole discretion of the Company or may continue subject to his/her satisfactory performance and conduct, the Company may confirm his/her employment pursuant to expiry of Lock in Period according to the terms of the employment. During his/her Lock in Period or extended period if any, the Employee's employment shall be liable to be terminated by the Company without any notice and without assigning any reason thereof”

10. The Agreement dated 16th April, 2022 contains a negative covenant in Clause 9, as per which, the Respondent employee has agreed to devote her full time and energy to the Petitioner company during the course of her employment. Clause 9 of the said agreement reads as under:

“9. OTHER EMPLOYMENT. During the terms of his/her employment the Employee agrees to devote his/her full time and energy to the duties assigned to him/her. During the term of his/her employment, the Employe