Arbitration clauses are limited to the scope of contractual obligations, and disputes relating to copyright infringement do not fall under such clauses.

JUDGMENT

The defendant in a suit alleging infringement of copyright submitted an application to refer the dispute to arbitration under Section 8 of Arbitration and Conciliation Act, 1996, based on a clause incorporated in a contract reduced into writing between the parties, by which admittedly, what is given to the defendant is a mere permission to use the software and its distribution. There is no assignment of any copyright or its transfer either for a period or otherwise. Hence, the arbitration clause included in the contract is only for the purpose of resolving the dispute pertaining to the licence/agency granted under the written contract, more specifically, the permission given to use the software and for its distribution. A suit filed by the plaintiff alleging infringement of copyright would stand outside the purview of the contract and the arbitration clause thereof, since the suit is one for permanent prohibitory injunction and mandatory injunction.

2. At this juncture, it is necessary to go into the nature of the suit. It is an injunction suit restraining the defendant from causing infringement of copyright of the plaintiff over a software named “KRITI LIMS” or to engage into any kind of independent commercial activity with respect to any form of the said software, effecting any kind of advertisement through newspaper, electronic/social media and also for a mandatory injunction directing the defendant to remove all the articles and materials from websites and social media sites with respect to the infringed copyright over “KRITI LIMS” of the plaintiff and for other consequential reliefs. The plaintiff is a proprietary concern engaged in the production and development of a software in specialized domains for the last thirty years. The plaintiff and the defendant entered into an agreement on 01/08/2010 for the purpose of marketing and implementation of software products. Clause 17.3 under the said agreement according to the defendant is an arbitration clause and will come under the purview of Section 8 of Arbitration and Conciliation Act. Going by the abovesaid clause, it is clear that it is subject to negotiation or failure, if any, as per clause 17.2 of the agreement and what is agreed into by the parties is to refer all such disputes to arbitration. But the agreement is not with respect to any copyright or entitlement thereof, but to canvass or procure customers and orders from such customers for the plaintiff firm for the consideration set out in the agreement and to procure products from the plaintiff firm and supply the same to the customers. So every dispute as enumerated under clause 17.3 must be a one within the four corners of the contractual obligation arising out of the contract reduced into writing. It has nothing to do with the entitlement of copyright or to address the infringement of copyright as alleged. On the other hand, the suit is one for permanent prohibitory injunction as well as mandatory injunction. Necessarily, the matter would not come under the purview of arbitration clause incorporated in the agreement. It is true that initially, it is upon the arbitrator to decide regarding the existence of any arbitral issue and not by the court. But at the same time, there should be a valid clause/agreement between the parties to sort out the dispute through arbitration and it cannot be extended to a matter which is alien to the contract, which was reduced into writing. The parties should stand governed by the contractual obligations and every dispute falling under the contractual obligation alone would stand amenable to arbitration and cannot be extended to a totally alien matter pertaining to entitlement of copyright or infringement thereof. Hence, the various decisions relied on by the trial court inVidya Drolia v. Durga Trading Corporation [ (2021) 2 SCC 1 ], Intercontinental Hotels Group (India) Pvt. Ltd. v. Waterline Hotels Pvt. Ltd [2022 (1) KLT Online 1170 (SC)], Sundaram Finance Ltd. v. Thankam [2