Full Judgment Text
$~30
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Decided on: 16 March, 2022
+ FAO (OS) (COMM.) 66/2022
DEAN CHANDLER .....Appellant
Represented by: Mr. Rohit Rattu, Advocate.
versus
SAZERAC BRANDS LLC & ANR. ...... Respondents
Represented by: Mr.Nitin Sharma, Mr. Kanishk
Kumar, Mr. Sohrab S. Mann & Mr.
Priyansh Kohli, Advocates for R-1.
CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA
NEENA BANSAL KRISHNA, J. (ORAL)
CM APPL. 13424/2022 (Exemption)
1. Allowed, subject to all just exceptions.
2. Application is disposed of.
CM APPL. 13425/2022 (Delay of 60 days in filing appeal)
1. By this application, the appellant seeks condonation of 60 days‟ delay
in filing the appeal.
2. For the reasons stated in the application as also in view of the
extension of the period of limitation granted by the Hon‟ble Supreme Court
in W.P.(C) 3/2020 in Re: Cognizance for extension of Limitation , delay of
60 days in filing the appeal is condoned.
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3. Application is disposed of.
FAO (OS) (COMM.) 66/2022
1. The present appeal has been filed under Section 37(1)(c) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as „the Act‟)
and Section 13 (1A) of the Commercial Courts Act, 2005 challenging the
judgement dated 27.10.2021 passed by the learned Single Judge in OMP
(COMM) 37/2021, whereby the petitioner ( appellant herein ) was directed to
immediately transfer the disputed domain name <www.fireball.in> to the
respondent-complainant and has sought restoration of the domain Name
„fireball.in‟ .
2. Briefly stated, the claim of the respondent in arbitration was:
“The respondent-Sazerac Brands, LLC, a Company incorporated
in Louisiana, United States of America (USA), having its
registered office at 10101 Linn Station Road, Suite 400,
Louisville, Kentucky-402 23, markets and manufactures
cinnamon whisky under the name and brand of „ fireball‟ and
associated merchandise therewith. The domain name
„fireballwhisky.com‟ is also the owner of the registered trademark
„fireball‟ with the earliest registration in India dating back to July
19, 2013 under Classes 32 and 33 as well as in more than 70
jurisdictions globally. Sazerac's predecessor was one of America's
oldest family–owned and privately-held distilleries. Sazerac itself
was founded in 1869 and owns many of America's most venerable
distilling companies – including Buffalo Trace Distillery, A. Smith
Bowman, Glenmore Distillery and 1792 Barton, et al. The
trademark „fireball‟ is well-known on account of
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goodwill acquired by the brand over the years and
substantial marketing, including through the
internet as a ready medium of exposure to consumers
apropos their goods and services. Sazerac owns
and operates the websites 'www.fireballwhisky.com' and
'www.sazerac.com' and has also registered numerous domain
names containing the word „ Fireball‟ that include,
inter alia, 'Fireballmusic.co.uk', 'Fireballwhiskey.cn',
„Fireballwhiskey.co.uk‟, Fireballwhiskey.com','Fireballwhiskeyindia.
com, „Fireballwhisky.cn', Fireballwhiskybeer.com'.
3. The respondent filed a complaint challenging the registration of
domain name by the appellants on the ground that it was registered in bad
faith with an intention to disrupt the business of the respondent.
4. The appellant herein claimed that he is a resident of Ontario, Canada
and holds a Bachelor degree in Engineering and Management from
McMaster Faculty of Engineering, McMaster University, Hamilton, Ontario,
Canada. He asserted that since 1960, all the students and alumni of Faculty
of Engineering are referred to as the „FireBall Family‟ , as the official
symbol for McMaster's Faculty of Engineering is a 'fireball' . He has been
part of McMaster's 'Fireball Family' since 1995, i.e., well before the
.
respondent registered its Trademark in Canada in 1997. Appellant along
with a batchmate, had searched for a single-word domain name, but found
that <.com> and other Country Code Top-Level Domains ('ccTLD's') such
as <.net>, <.org> or even <.co>, <.ca>, etc. were not available. Thus, they
had to register the impugned domain name.
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5. As per paragraph 5(b) of IN Domain Name Dispute Resolution
Policy (hereinafter referred to as „INDRP‟), the .IN Registry appointed a
Sole Arbitrator, who in its award dated 23.09.2020 considered in detail the
evidence and concluded that the disputed domain name was identical or
confusingly similar to the Trademark of the complainant. It was observed
that there was no evidence to suggest that the appellant herein was using the
disputed domain name in the course of its trade or business and it even
failed to demonstrate any preparations undertaken for the same. A mere
claim was made that the disputed domain name was registered to build an
alumni website but the same was not set up even after two years and no
tangible preparation for use of impugned domain name was demonstrated.
The appellant failed to demonstrate any legitimate right or interest in the
domain name. It was further observed by the learned Arbitrator that
indisputably the appellant is in the business of sale of domain name. Soon
after the registration of the impugned domain name, it was made available
for sale to third parties. Learned Arbitrator concluded that the offer to sell
the impugned domain name establishes the dishonest conduct and bad faith
and demonstrates that the appellant never had any bona fide intent to use the
disputed domain name for any legitimate business interest, including alumni
website. Thus, the appellant was directed to restore the domain name to the
respondent.
6. The Award was challenged before the learned Single Judge of this
court who in the impugned Order dated 27.10.2021 concurred with the
findings of the Arbitrator that there was confusing similarity between the
trademark of the respondent and the domain name of the appellant. Also, the
appellant had no right and legitimate interest in the impugned domain. He
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did not commence the use of the domain name even two years after its
registration purportedly to build an alumni website and there was no
evidence on record to suggest that the domain name was being used by the
appellant in the course of its trade and business. Moreover, the slogan
„Fireball Family‟ by McMaster Faculty of Engineering cannot be claimed as
a proprietary right of the appellant. It was concluded by the learned Single
Judge that the appellant had no right or legitimate interest in the impugned
domain name.
7. It was further observed by the learned Single Judge that indisputably
the appellant is in the business of sale of domain names. As per the
appellant‟s statement, he is one of the largest holders of „.IN‟ domain names
in the world, cumulatively owning around 7,500 „.IN‟ domain names, out of
which around 900 pertain to three-lettered „.IN‟ domain names; around 450
pertain to „.CO.IN‟ domain names; around 180 pertain to three-numbered
„.IN‟ domain names and around 300 pertain to four numbered „.IN‟ domain
names. It was thus concluded that the appellant had indulged in a carefully
thought-out practice of selectively registering domain names to maximize
business. No connection with India was found, except that India is gigantic
and growing quickly.
8. The legitimacy of appellant‟s plea of the alleged connection with
„Fireball Family‟ alumni was also considered by the learned Single Judge
and found it strange that appellant did not register domain names, such as
„fireballfamily.com‟ or „fireballalumni.com‟ , but chose to register the
impugned domain name. Further, the appellant‟s intention not to use the
domain name for the alleged purpose of setting up the alumni website was
also found to be mis-founded as soon after the registration the impugned
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domain name was made available for sale to third parties. The conclusion of
learned Arbitrator that the appellant was offering to sell the disputed domain
name established dishonest conduct and bad faith and demonstrated the
appellant never had any bona fide intent to use the disputed domain name
for any legitimate business interest, including alumni website, was upheld.
9. A plea had also been set up by the appellant that „fireball‟ is a
generic term and cannot be exclusively attributed to anyone including the
respondent. It was noted that in numerous cases, the courts have
.
acknowledged that descriptive words or common words of a language, when
used in reference to a different class of goods, can be registered as a
trademark. Further, the mark 'fireball' is presently registered in India for
alcoholic spirits, and there exists a very strong presumption in law as to the
validity of the registration of the trade mark in favour of the respondent.
10. The learned Single Judge thus concluded that the findings of the
Learned Arbitrator were based on material produced and evidence placed
before him and there was no ground for interference in the award.
11. Learned counsel on behalf of the appellant has argued that there is
glaring and patent error apparent on the face of the impugned order and it is
unjustified, unwarranted and contrary to the law. The appellant argued that
the learned Single Judge has failed to appreciate that once the appellant had
acquired a common word domain name „ fireball.in‟ without having any
knowledge of the trademark of respondent No. 1, it did not violate the rights
of respondent No. 1 in any form. Whether the appellant treated the domain
name passively or activated it for sale or planned to build an alumni website
would not be ground to conclude that it was done in bad faith. The word
„fireball‟ is a dictionary term which refers to a large bright meteor and is a
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natural phenomenon visible in the sky. The learned Arbitrator failed to
acknowledge that the appellant was fond of astronomy and had been
mesmerized by the fireball phenomena which is a regular feature and occurs
many a time in a year in the Canadian sky. Further, parking the domain
name for sale cannot lead to an inference that there was no intention to set
up alumni website or that it amounted to bad faith. Furthermore, there is no
restriction placed by respondent No. 2 as to sale of „.IN‟ domain names. The
domain name investor has legitimate right to hold a domain name portfolio
of generic/common word domain names. The appellant has developed many
domain names and early submissions have been included under para-11 of
INDRP response. The business activity of registering domain names for the
purpose of selling is legitimate and is not in breach of the policy so long as it
does not encroach on third party‟s trademark rights. Moreover, fireball is
not only a dictionary or generic word but also is a brandable term and has
been adopted by numerous organizations rendering to various classes of
goods and services. It is not in itself something that is distinctive or
invented by the respondent No. 1 but has been mostly used globally by
different businesses for over six decades. Moreover, the respondent‟s mark
„fireball‟ was registered in Canada since 1997, while the appellant has been
part of „Fireball Family‟ since 1995 and, therefore, it is the prior user of
term „fireball‟ . While the respondent No. 1 had applied in 2013 and
registered it in 2018 in India but the same has been used since 2019 only and
they were not having any active presence before that. It was argued that the
respondent No. 1 cannot claim any monopoly over this common term
whatsoever; in fact, respondent No. 1 had realized the importance of domain
names and had ample opportunities to register the disputed domain name. It
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was argued that learned Single Judge has failed to appreciate that in order to
prove bad-faith registration, it has to be specifically established.
12. The appellant further submits that the learned Single Judge wrongly
referred to the mark of respondent No. 1 as a famous/strong mark, though
respondent No. 1 failed to prove any secondary meaning in the term of
producing any proper evidence as to sales, promotion, advertising material
from Canada and also did not include any information in its complaint or in
its rejoinder.
13. It was further submitted on behalf of the appellant that it has been
referred to as a sophisticated domainer having registered 7,500 domain
names. The appellant has a right to register unlimited number of domain
names in terms of „.IN‟ registry policy and which has been totally
disregarded and ignored.
14. It was thus, submitted that the learned Single Judge has wrongly
concluded that the domain name was registered in bad faith or that the
appellant had no legitimate right or interest in the domain name. It is thus
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argued that the impugned order dated 27 October, 2021 of the learned
Single Judge was liable to be set aside and the appellant was entitled to
restoration of domain name „fireball.in‟ as the same being generic in nature.
15. Learned counsel appearing on behalf of the respondent No. 1 has
argued that the scope of objection under Section 34 is limited to breach of
public policy and any patent illegality which is not established in the
impugned order and the present appeal is liable to be dismissed.
16. Submissions heard from learned counsel on behalf of Appellant and
learned counsel for the respondent.
17. It is undisputed that appellant has registered the domain name in India
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in 2018; on the other hand, the predecessor of the respondent has been using
„fireball‟ mark since 1989 in USA, the rights of which were subsequently
transferred to the respondent in 2000. Since then the respondent has been
selling whisky under this mark throughout the world. Sazerac has also
registered the trade mark „ fireball‟ in India.
18. The dispute in the present case is not in regard to trademark
infringement but whether the impugned domain name conflicted with
Sazerac‟s legitimate rights or interests. There is a distinction between a
trademark and a domain name which is not relevant to the nature of the right
of an owner in connection with the domain name, but is material to the
scope of the protection available to the right. In the decision reported as
(2004) 6 SCC 145 Satyam Infoway Ltd. v. Sifynet Solutions (P) Ltd. decided
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on 06 May, 2004, the Hon‟ble Supreme Court explained that the distinction
lies in the manner in which the two operate. A trademark is protected by the
laws of a country where such trademark maybe registered. Consequently, a
trademark may have multiple registration in many countries throughout the
world. On the other hand, since the internet allows for access without any
geographical limitation, a domain name is potentially accessible irrespective
of the geographical location of the consumers. The outcome of this potential
for universal connectivity is not only that a domain name would require
worldwide exclusivity but also that national laws might be inadequate to
effectively protect a domain name.
19. This lacuna necessitated international regulation of the domain name
system (DNS) which was effected through WIPO and ICANN. A system of
registration of domain names with accredited registrars and Uniform
Domain Name Disputes Resolution Policy (UDNPR Policy) by ICANN was
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set up on 24-10-1999. India is one of the 171 States of the world which are
members of WIPO.
20. IN Domain Name Dispute Resolution Policy ( hereinafter referred to
as „INDRP‟) has been adopted by National Internet Exchange of India
(hereinafter referred to as „NIXI‟). Paragraph 4 of the Policy sets forth the
terms and conditions that shall govern the disputes in connection with „.IN‟
or .Bharat domain name. Paragraph 4 provides the „class of disputes‟ which
reads as under:
"4. Class of Disputes
Any Person who considers that a registered domain name
conflicts with his/her legitimate rights or interests may file a
Complaint to the .IN Registry on the following premises:
(a) the Registrant's domain name is identical and/or
confusingly similar to a Name, Trademark or Service Mark etc.
in which the Complainant has rights; and
(b) the Registrant has no rights or legitimate interests in respect
of the domain name; and
(c) the Registrant's domain name has been registered or is
being used either in bad faith or for illegal/unlawful purpose. "
21. Hon‟ble Supreme Court in Satyam Infoway Ltd (supra) held as
under:
“ 12.The original role of a domain name was no doubt to
provide an address computers on the internet. But the
internet has developed from a mere means of
communication to a mode of carrying on commercial
activity. With the increase of commercial activity on the
internet, a domain name is also used as a business
identifier. Therefore, the domain name not only serves as
an address for internet communication but also identifies
the specific internet site. In the commercial field, each
domain-name owner provides information/services which
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are associated with such domain name. Thus, a domain
name may pertain to provision of services within the
meaning of Section 2 (1) (c). A domain name is easy to
remember and use and is chosen as an instrument of
commercial enterprise not only because it facilitates the
ability of consumers to navigate the internet to find
websites they are looking for, but also at the same time,
serves to identify and distinguish the business itself, or its
goods or services, and to specify its corresponding online
internet location. Consequently a domain name as an
address must, of necessity, be peculiar and unique and
where a domain name is used in connection with a
business, the value of maintaining an exclusive identity
becomes critical.
As more and more commercial enterprises trade or
advertise their presence on the web, domain names
have become more and more valuable and the
potential for dispute is high: Whereas a large number
of trademarks containing the same name can
comfortably coexist because they are associated with
different products, belong to business in different
jurisdictions, etc., the distinctive nature of the domain
name providing global exclusively is much sought
after. The fact that many consumers searching for a
particular site are likely, in the first place, to try and
guess its domain name has further enhanced this
value.”
XXXX XXXX XXXX
XXXX XXXX XXXX
“16. The use of the same or similar domain name may
lead to a diversion of users which could result from such
users mistakenly accessing one domain name instead of
another….. Ordinary consumers/users seeking to locate the
functions available under one domain name may be
confused if they accidentally arrived at a different but
similar website which offers no such services: Such users
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could well conclude that the first domain-name owner had
misrepresented its goods or services through its
promotional activities and the first domain-owner would
thereby lose its custom . It is apparent, therefore, that a
domain name may have all the characteristics of a trade
mark and could found an action for passing off.”
22. The Apex Court in in Satyam Infoway Ltd (supra) thus concluded that
principle relating to passing off actions in connection with trademark is
applicable to domain names.
23. The Bombay High Court in Rediff Communication Limited vs.
Cyberbooth and Another, (1999) SCC Online Bom 275 made a reference to
Marks and Spencer PLC v. One in a Million, reported in 1998 FSR 265, and
held that any person who deliberately registers a domain name on account of
its similarity to the name, brand name or trademark of an unconnected
commercial organization must expect to find himself on the receiving end of
an injunction to restrain the threat of passing off, and the injunction will be
in terms which will make the name commercially useless to the dealer. It
was further observed that the value of the name consists solely in its
resemblance to the name or trademark of another enterprise and the Court
will normally assume that the public is likely to be deceived, for why else
would the defendants choose it.
24. This Court in Tata Sons Limited vs. Manu Kosuri & Ors. ILR (2001) I
Delhi 236 reiterated that domain names or internet sites are more than a
mere address. Reference was made to Rediff Communications Ltd. (supra)
to conclude that „the advancement and progress in technology and services
rendered by an internet site, the domain names are also entitled to be given
protection equal to a trademark from passing off'.‟
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25. Having concluded that the duly registered trade mark in the name of
respondent no.1 has to be given protection from passing off even vis a viz a
domain name registered in favour of the appellant, what now needs to be
examined is whether the Award made by learned Arbitrator suffers from any
infirmity making it liable to be set aside under Section 34 of the Act. The
arguments addressed on behalf of the appellant essentially revolve around
the facts and challenges the findings of the learned Single Judge on merits
claiming it to be based on wrong appreciation of facts and documents and
erroneous application of law. Essentially, the challenge is on the merits of
findings on facts and it needs to be considered whether these can be a basis
to set aside the award under Section 34 of the Act.
26. The scope of grounds of challenge of an award under Section 34 of
the Act is limited and is not equivalent to an appeal. The grounds on which
an Arbitral Award can be challenged are circumscribed by Section 34 of the
Act and the judicial precedents interpreting the said provision. Section 34 of
the Act is as under:
“34. Application for setting aside arbitral award— xxx xxx xxx
(2) An arbitral award may be set aside by the Court only if—
(a) the party making the application furnishes proof that— xxx xxx
xxx
(iii) xxxx
(iv) xxxx
Provided that, xxx xxx xxx”
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of
settlement by arbitration under the law for the time being
in force, or
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(ii) the arbitral award is in conflict with the public policy
of India.
1
[Explanation 1.--For the avoidance of any doubt, it is clarified
that an award is in conflict with the public policy of India, only
if,--
(i) the making of the award was induced or affected by
fraud or corruption or was in violation of section 75 or
section 81; or
(ii) it is in contravention with the fundamental policy of
Indian law; or
(iii) it is in conflict with the most basic notions of morality
or justice.
Explanation 2.--For the avoidance of doubt, the test as to whether
there is a contravention with the „fundamental policy of Indian law‟
shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is vitiated by „patent
illegality‟ appearing on the face of the award:
Provided that an award shall not be set aside merely on
the ground of an erroneous application of the law or by re
appreciation of evidence.]”
27. The scope of challenge has been explained in Ssangyong Engineering
and Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 wherein it was
observed that the grounds of challenge of an award under Section 34 have
been amended by Amendment Act, 2015. The „public policy‟ is now
constricted to mean firstly that a domestic award is contrary to the
fundamental policy of Indian law. Secondly, such award is against basic
notions of justice or morality. However, principles of natural justice as
contained in „Section 18 and 34(2) (a) (iii) of 1996 Act‟ shall continue to be
the ground of challenge of an award. The ground for interference on the
basis that the award is in conflict with justice or morality is now to be
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understood as a conflict with the “most basic notions of morality or justice”.
This would apply only to such arbitral awards that shock the conscience of
the court and that can be set aside on this ground.
28. It was further observed that an additional ground is now available
under sub-Section 2A added by the Amendment Act, 2015 to Section 34.
Here, there must be „patent illegality‟ appearing on the face of award which
refers to such illegality as goes to the root of the matter but which does not
amount to mere erroneous application of the law. In short, what is not
subsumed within the fundamental policy of Indian law, namely, the
contravention of a statute not linked to public policy or public interest
cannot be brought in by the backdoor when it comes to setting aside an
award on the ground of patent illegality. It was also made clear that
re-appreciation of evidence which is what an appellate court is permitted to
do, cannot be permitted under the ground of patent illegality appearing on
the face of the award. A change that has been brought in by the Amendment
Act, 2015 is that the construction of the terms of a contract is primarily for
an arbitrator to decide, unless the arbitrator construes the contract in a
manner that no fair-minded or reasonable person would; in short that the
arbitrator's view is not even a possible view to take. Also, if the arbitrator
wanders outside the contract and deals with matters not allotted to him, he
commits an error of jurisdiction and would fall within the new ground of
patent illegality added under Section 34(2A).
29. It has been further explained in Ssangyong Engineering and
Construction Co. Ltd. (supra) that a decision which is perverse, may no
longer be a ground for challenge under “ public policy of India” but would
certainly amount to patent illegality appearing on the face of the award. A
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finding based on no evidence at all or an award which ignores vital evidence
in arriving at its decision would be perverse and liable to be set aside on the
ground of patent illegality. Section 34 (2)(a) does not entail a challenge to an
arbitral award on merits.
30. Essentially, the appellant has sought re-appreciation of evidence and
findings of the learned Arbitrator on facts which is specifically barred by
proviso to sub-Section 2A of Section 34 and is beyond the scope of
Section 34 of the Act.
31. The award is a well reasoned order made after due appreciation of
facts and evidence and due application of law as held by learned Single
Judge. The appellant has failed to demonstrate the breach of public policy or
patent illegality in the impugned order.
32. There being no infirmity in the impugned order, the appeal is hereby
dismissed.
CM APPL. 13423/2022 (Stay)
1. In view of the order passed in the appeal, the application is disposed
of as infructuous.
(NEENA BANSAL KRISHNA)
JUDGE
(MUKTA GUPTA)
JUDGE
MARCH 16, 2022
S.Sharma
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