Court Orders Respondent to Cease Use of Petitioner’s Intellectual Property Pending Arbitration, Rejects Claims of Government Restrictions on Contract Performance
In a significant ruling delivered on September 1, 2026, the Bombay High Court, presided over by Justice Amit Borkar, partially allowed Zee Learn Limited’s petition seeking interim relief against Pragati Shiksha Shrot Trust. The dispute arose from the termination of license and academic alliance agreements that permitted the Respondent to use the Petitioner’s registered trademarks "MOUNT LITERA ZEE SCHOOL," "MLZS," and its proprietary educational program.
The Petitioner, Zee Learn Limited, a reputed education services provider with a network of CBSE-affiliated schools, alleged that the Respondent continued to use its trademarks and proprietary "MLZS Program" even after the lawful termination of the agreements due to repeated contractual breaches, including non-payment of dues and refusal to procure educational materials ("Litera Gear"). The Respondent challenged the jurisdiction of the Bombay High Court, contending that Dehradun, where the school operates, was the appropriate venue, and raised defences based on government directives concerning textbook usage.
Rejecting the Respondent’s jurisdictional objection, the Court held that the arbitration clause in the agreements clearly designated Mumbai as the “place of arbitration,” which constitutes the juridical seat of arbitration. Relying on precedents including Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. and the Supreme Court’s ruling in Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, the Court affirmed that the parties’ contractual choice of Mumbai confers exclusive jurisdiction to courts in Mumbai for arbitration-related matters. The mere location of the school in Dehradun or where the cause of action arose does not override the parties’ agreed arbitration seat.
On the validity of the arbitration agreement, the Court found the agreements—including the Academic Alliance Agreement, Intellectual Property Agreement, and subsequent Settlement Agreement—formed a valid and subsisting arbitration agreement. Although the clause allowed Zee Learn Limited unilateral appointment of the sole arbitrator, the Court held that any defect in the appointment mechanism is severable and does not invalidate the arbitration agreement itself. The Court emphasized that the parties’ conduct, including prior invocation of arbitration and settlement, showed a clear intention to arbitrate disputes.
Addressing the core dispute on intellectual property rights, the Court reiterated settled law that a licensee’s right to use a trademark or proprietary program ceases upon termination or expiry of the license. Continued use post-termination amounts to trademark infringement and misrepresentation. The Court granted interim injunctions restraining the Respondent from using the Petitioner’s trademarks "MOUNT LITERA ZEE SCHOOL" and "MLZS," implementing the MLZS Program, or representing any continuing association with the Petitioner pending arbitration.
The Respondent’s defence based on government directions from the Department of Education, Uttarakhand, mandating the use of NCERT or SCERT textbooks was found unconvincing. The Court observed that the Petitioner’s Litera Gear included NCERT textbooks and complied with government directives. Moreover, these directions existed prior to the agreements and cannot be invoked to avoid contractual obligations subsequently accepted by the Respondent.
The Court declined to grant interim reliefs that would effectively continue the contractual relationship, such as compelling the Respondent to procure Litera Gear or pay alliance fees. It also refused to direct the furnishing of a bank guarantee or appoint a court receiver for fee collection, noting the disputed nature of amounts and the operational implications for the school.
The Court directed the Respondent to remove all references to the Petitioner’s trademarks from websites, promotional materials, and stationery within seven days and to preserve and disclose documents related to use of the MLZS Program and trademarks post-termination. The interim reliefs are to remain in place until the arbitral tribunal commences proceedings and issues further orders.
This ruling underscores the importance of adhering to arbitration agreements and the contractual consequences of termination of license agreements in intellectual property disputes. The Court’s decision preserves the Petitioner’s trademark rights and proprietary interests pending a final resolution by arbitration.
Bottom Line:
Arbitration law - The place specified in the arbitration clause as the "place of arbitration" is to be treated as the juridical seat of arbitration, granting jurisdiction to the courts at that location. Termination of a license agreement prohibits the licensee from continuing to use the trademarks, proprietary programs, or representing any association with the licensor.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 2(1)(e)(i), Section 7, Section 9, Section 11, Section 17; Civil Procedure Code, 1908 Sections 16, 20
Zee Learn Limited v. Pragati Shiksha Shrot Trust, (Bombay) : Law Finder Doc Id # 2971034
