Prior Withdrawal of Suit Without Liberty Does Not Bar Section 9 Petition if Valid Arbitration Clause Exists

In brief

The question

1. Whether the present petition under Section 9 is maintainable despite the withdrawal of a previous civil suit without liberty to file fresh proceedings

The court held

The Court held that the petition is maintainable and, with the parties' consent, appointed Hon’ble Mr. Justice (Retd.) Dr. Bharat Bhushan Prasson as the Sole Arbitrator

It also directed

The Section 9 petition was ordered to be treated as an application under Section 17 of the Act to be decided by the Arbitrator

The requirements for Section 21 notification and Section 11 proceedings were dispensed with

The parties were directed to share the arbitral costs equally, and the petition was disposed of without any expression on the merits of the trademark dispute

01Facts

The Petitioners filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking an ex-parte injunction to restrain the Respondents from using the trademarks "MOTI MAHAL" and "MOTI MAHAL DELUX"

pp. 1-2

The relationship between the parties is governed by a Franchise Agreement dated 23.11.2020 which contains an arbitration clause (Clause XXVII)

pp. 3-4

The Respondents objected to the maintainability of the petition, arguing that the Petitioners had previously filed and withdrawn a civil suit on the same cause of action without obtaining liberty to file fresh proceedings

p. 2

02Issues

i.1. Whether the present petition under Section 9 is maintainable despite the withdrawal of a previous civil suit without liberty to file fresh proceedings

p. 3 · ¶ 4-5

ii.2. Whether the court can appoint a Sole Arbitrator and dispense with Section 21 and Section 11 procedures based on the mutual consent of the parties

pp. 4-5 · ¶ 6-7

03Law Applied

Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures by the Court

p. 1

The principle of bar on fresh suits under Order 23 Rule 1(3) of the Code of Civil Procedure, referencing Bakhtawar Singh v. Sada Kaur, which holds that a fresh suit on the same cause of action is barred if the earlier suit was withdrawn without liberty

pp. 2-3

Existence of a valid arbitration agreement under the Arbitration and Conciliation Act, 1996

pp. 3-4

Provisions in the judgment · 8 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 9 Section 11 Section 12 Section 17 Section 21 Section 4

Code of Civil Procedure, 1908 Section 23

Limitation Act, 1963 Section 14

04Reasoning

The Court distinguished the precedent in Bakhtawar Singh, noting it applied to the filing of successive civil suits and did not preclude arbitration proceedings initiated under a specific contractual clause

p. 3

The Court observed that since the parties’ relationship is governed by a Franchise Agreement containing a specific arbitration clause (Clause XXVII), the Section 9 petition remains maintainable

pp. 3-4

During the hearing, the parties mutually consented to bypass the formal requirements of a Section 21 notice and a separate Section 11 petition to avoid undue delay in adjudicating the dispute

pp. 4-5

Consequently, the Court found it appropriate to refer the matter directly to a Sole Arbitrator while preserving the Section 9 prayers for the Arbitrator’s consideration under Section 17

pp. 5-6

05Holding

The Court held that the petition is maintainable and, with the parties' consent, appointed Hon’ble Mr. Justice (Retd.) Dr. Bharat Bhushan Prasson as the Sole Arbitrator

pp. 4-5

The Section 9 petition was ordered to be treated as an application under Section 17 of the Act to be decided by the Arbitrator

p. 6

The requirements for Section 21 notification and Section 11 proceedings were dispensed with

p. 5

The parties were directed to share the arbitral costs equally, and the petition was disposed of without any expression on the merits of the trademark dispute

pp. 5-6

LawLens.Delhi High Court

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