Trademark "Pind Balluchi"- Forgery in an arbitration agreement do not render the dispute non-arbitrable

Delhi High Court Directs Arbitration in Trademark Dispute Over "Pind Balluchi" Allegations of forgery insufficient to render dispute non-arbitrable, court emphasizes arbitration tribunal's role in substantive examination.

In a significant ruling, the Delhi High Court set aside an earlier order by the Commercial Court, directing the parties involved in a trademark dispute over the "Pind Balluchi" brand to resolve their issues through arbitration. The dispute arose between M/s. Triom Hospitality and M/s J.S. Hospitality Services Pvt. Ltd., concerning the alleged unauthorized use of the trademark "Pind Balluchi" by the former.

The High Court was tasked with determining whether the alleged forgery of a Memorandum of Understanding (MOU) dated June 22, 2022, which contained an arbitration clause, rendered the dispute non-arbitrable. The Commercial Court had previously denied the application under Section 8 of the Arbitration and Conciliation Act, 1996, which sought to refer the parties to arbitration, citing serious allegations of forgery that needed extensive examination.

However, the High Court emphasized that the mere allegation of forgery does not automatically make a dispute non-arbitrable. It noted that the doctrine of Kompetenz-Kompetenz allows the arbitration tribunal to rule on its own jurisdiction, including the validity of the arbitration agreement. The court underscored that the referral court’s role is limited to a prima facie examination of the existence and formal validity of the arbitration agreement, leaving substantive issues for the arbitral tribunal.

The High Court criticized the Commercial Court for conducting an in-depth review akin to a mini-trial, which is beyond the permissible scope under Section 8 of the Act. The court reiterated that arbitration agreements do not necessarily have to be signed if the intention to arbitrate is evident from the parties' conduct or communication.

This decision reinforces the pro-arbitration stance of Indian jurisprudence, emphasizing minimal judicial intervention and upholding the autonomy of arbitral tribunals to decide on substantive issues. The ruling directs the parties to proceed with arbitration and dismisses the pending civil suit as barred by law.

Bottom Line:

Arbitration and Conciliation Act, 1996 - Allegations of forgery in an arbitration agreement do not render the dispute non-arbitrable at the referral stage; substantive determination of validity, including examination of evidence, should be left to the arbitral tribunal.

Statutory provision(s): Arbitration and Conciliation Act, 1996 - Sections 7, 8, 16, 24, 26, 27  

Commercial Courts Act, 2015 - Section 13(1-A)

M/s. Triom Hospitality v. M/s J.S. Hospitality Services Pvt. Ltd., (Delhi)(DB) : Law Finder Doc Id # 2812479