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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on: 24.09.2021

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O.M.P.(I) (COMM.) 182/2021

M/S GOLDEN TOBACCO LIMITED

..... Petitioner

versus

M/S GOLDEN TOBIE PRIVATE LIMITED ..... Respondent

Advocates who appeared in this case:

For the Petitioner

: Mr Sumeet Verma and Mr Mahinder

Pratap Singh, Advocates.

For the Respondent

: Mrs Anjali J. Manish, Mr Priyadarshi

Manish and Ms Kinjal Shrivastava,

Advocates.

CORAM

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

1.

M/s Golden Tobacco Limited (hereafter „GTL‟) has filed the

present petition under Section 9 of the Arbitration and Conciliation

Act, 1996 (hereafter the „A&C Act‟), inter alia, praying that the

respondent – M/s Golden Trobe Private Limited (hereafter „GTPL‟) be

restrained from manufacturing, selling and supplying to the market,

cigarettes under the exclusive brands owned by GTL, that is, Panama,

Golden Gold Flake, Golden Classic, Taj Chhap and Chancellor

(hereafter referred to as „the Exclusive Brands‟).

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2.

GTL claims that it is the owner of the Exclusive Brands, which

have acquired significant reputation and goodwill in domestic and

international market. The trademarks „Panama‟ and „Taj Chhap‟ were

registered in the name of GTL on 20.06.1954 and 22.06.1954

respectively; the trademark „Golden Gold Flake‟ was registered in

favour of GTL on 05.04.1979; the trademark „Chancellor‟ was

registered in favour of GTL on 25.02.1993; and the trademark „Golden

Classic‟ was registered in favour of GTL on 15.09.2015.

3.

GTL claims that GTPL was not engaged in the business of

manufacturing or selling of cigarettes prior to August, 2019. On

16.08.2019, the parties entered into an agreement captioned „Master

Long Term Supply Agreement‟. In terms of this agreement, GTL

agreed to supply cigarettes under its Exclusive Brands to GTPL and,

GTPL agreed to purchase and distribute the same in domestic as well

as international markets.

4.

On 12.02.2020, the parties entered into a comprehensive

Trademark License Agreement (hereafter „the Trademark License

Agreement‟). In terms of the Trademark License Agreement, GTL

granted exclusive non-transferable and non-assignable license in

respect of the Exclusive Brands to GTPL. This was subject to the

exception in respect of duty free sales in India and in few other

countries in respect of the trademark „Golden Gold Flake‟ and

„Panama‟.

5.

GTL contends that the said Trademark License Agreement was

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a comprehensive agreement not only for sale, supply and distribution

of cigarettes, but also for manufacture of the same under the Exclusive

Brands. According to the GTL, the Master Long Term Supply

Agreement dated 16.08.2019 stood superseded by the Trademark

License Agreement and the same did not survive after 12.02.2020.

6.

GTL terminated the Trademark License Agreement by a

termination notice dated 14.08.2020 alleging that GTPL had neither

commenced manufacturing of cigarettes nor paid any royalty to GTL

for a period exceeding six months. Subsequently, on 29.08.2020, GTL

withdrew the said termination notice in view of an amicable settlement

arrived at between the parties. On that date (that is, 29.08.2020), the

parties entered into an Amendment Agreement (hereafter „the

Amendment Agreement‟) whereby it was agreed that GTPL would

pay a minimum monthly royalty as specified under the Amendment

Agreement for an initial period commencing from August, 2020

through November 2020. The parties agreed that they would once

again meet in December, 2020 to discuss and agree upon a minimum

turnover and payment of royalty.

7.

GTL claims that GTPL has violated the terms of the

Amendment Agreement dated 29.08.2020 as it did not enter into any

further discussions regarding the payment of royalty,