知识产权争议的可仲裁性（印度案例）

更新时间：2017-11-23 09:32:25  张振安 临时仲裁ADA 编辑：lianluobu  点击次数：2591次

印度马德拉斯高院在Lifestyle Equities Cv vs QD Seatoman Designs Pvt. Ltd案的裁定中指出，与专利许可有关的争议可以仲裁，但涉及专利有效性的问题不具有可仲裁性。

一、案件背景

一方当事人Lifestyle与另一方当事人QD Seatoman Designs Pvt. Ltd., Quintessential Designs India Pvt. Ltd., 及Quintessential designs India Pvt. Ltd（以下简称“QDS”）因一份服务协议产生纠纷，该服务协议约定由Lifestyle每月向QDS支付一定费用，QDS则为Lifestyle提供一系列服务。另外，该协议中包含仲裁条款并约定适用1996《仲裁与调解法》。Lifestyle根据《仲裁与调解法》向马德拉斯高院提交了三份申请（编号为O.A.Nos.515至 517 of 2017）。独任法官于2017年5月12日对第515号申请批准了临时禁令（编号为A.No.3176of 2017）。随后，Lifestyle向QDS发送了仲裁通知，QDS并未予以回应。

Lifestyle向印度Hon'ble最高法院提交任命仲裁员的请求，QDS则请求马德拉斯高院驳回Lifestyle已经提交的三份禁令申请并寻求法定救济，希望上述所有申请均由独任法官通过一份裁定合并处理。独任法官对上述5份申请进行审理，并特别指示Lifestyle在账户中存放1000万卢比以维持账目的利润并在第三方保管帐户内存放与2017年秋季展相关的所有销售收益。

该案件通过法院内部上诉（intra-court appeal）程序再一次由马德拉斯高院进行审理。

二、当事人观点

Lifestyle认为：（1）在QDS未提出适用《仲裁与调解法》第9条的情况下，资深独任法官不应对Lifestyle作出指令，要求Lifestyle存放1000万卢比以维持账目的利润并在第三方保管帐户内存放与2017年秋季展相关的所有展品收益；（2）本案缺少《1908民事诉讼法典》中关于索赔保全的要件，独任法官下达的保全指示是错误的；（3）独任法官作出的关于案件实体问题的认定，与最终救济（即通过仲裁解决争议）相重叠的部分不应在关于第9条申请的裁定中作出。

QDS则认为对方当事人不能根据《仲裁与调解法》第9条提出主张，因为双方之间的争议并不具有可裁性。

三、法院观点

1．知识产权争议是否可以仲裁

在这个方面，马德拉斯高院提到了印度Hon'ble最高法院作出的三个先例：BoozAllen一案处理了仲裁中的相关物权争议（物权争议的可仲裁性）；Ayyasamy一案处理了仲裁中的相关欺诈争议（欺诈争议的可仲裁性）。VimalKishor Shah一案涉及仲裁中的信托争议（信托争议的可仲裁性）。马德拉斯高院认为，“可以说专利许可的争议可以仲裁，但专利的有效性问题可能无法仲裁”。该法院注意到原审独任法官已就该问题的反对意见作出了处理。原审法官认为，“依据相关立法，版权注册或外观设计注册的授予可通过（或只能通过）法定机构（根据相关立法设立）取得”。本案中双方关于使用权的主张“进一步明确了本案的事实属于对人权（而非对物权）的范畴。马德拉斯高院支持了独任法官的观点并认为本案中Lifestlye与QDS之间的争议具有可仲裁性。

2．法院是否可以对实体问题进行认定

对于原审法官的裁定中涉及的实体问题，马德拉斯高院认为，这些问题应当由仲裁员在仲裁程序中进行审理，“根据第9条规定的程序，法院不会进行任何认定，如果此种认定会动摇仲裁庭对该问题所作裁定的效力。因此，我们撤销了资深独任法官作出的关于该协议事实的认定。”

3．独任法官下达的保全指示是否有误

马德拉斯高院认为，即使在QDS的撤销禁令申请（A.No.3176 of 2015）中，也未涉及《1908民事诉讼法典》第38条规则5中的构成要件、参考因素、决定因素和基本原则。另外，如果诉讼的一方当事人认为第9条不适用于双方之间的争议，主张不适用该条款的当事人不能比主张适用该条款的对方当事人获得更多救济。此外，如果当事人没有根据第9条提出申请，该当事人就不能根据该条款获得救济（即本案的索赔保全）。最后，法院撤销了原审独任法官关于索赔保全（原裁定第53段）的裁定。

四、法院结论

法院支持了Lifestyle的上诉请求并最后裁定：（1）本案争议具有可仲裁性，有待仲裁庭（待组成）依据《仲裁与调解法》第16条作出最终裁决；（2）撤销独任法官在裁定中所作的关于案件实体问题的认定（原裁定第50段）；（3）撤销独任法官关于对索赔主张予以保全的裁定（原裁定第53段）。此外，虽然法院内部上诉只针对部分申请提起，但法院所作的裁定对本案涉及的所有申请（共5份）均具有约束力。

【英文原文】

To what extent disputes relating to intellectual property rights are arbitrable?

MadrasHigh Court

LifestyleEquities Cv vs Qdseatoman Designs Pvt. Ltd on 13 October, 2017

O.S.A.Nos.216and 249 of 2017andC.M.P.No.14932 of 2017O.S.A.No.216 of 2017 :Adversaries are appellants before us in these two intra-court appeals. Adversaries before the learned Single Judge have one common plea before us. That common plea made in unison is, they are aggrieved by the order of the learned Single Judge. In other words, while one intra-court appeal being O.S.A.No.216 of 2017 has been filed by the applicant (in O.A.Nos.515 to 517 of 2017) before the learned Single Judge, the other intra-court appeal being O.S.A.No.249 of 2017 has been filed by three respondents (in O.A.Nos.515 to 517 of 2017) before the learned Single Judge. We propose to dispose of both these intra-court appeals by this common order.

2Though the matter came up for admission, as respondents in O.S.A.No.216 of2017, who are appellants in O.S.A.No.249 of 2017 were on caveat, by consent of both parties, the main appeals were heard out.

3To be noted, the order of the learned Single Judge was made in exercise of powers under Section 9of the Arbitration and Conciliation Act, 1996(hereinafter referred to as 'A and C Act' for brevity). Though many submissions were made on facts and on merits of the matter by rival litigants at lis, a thumbnail sketch of facts, which according to us, is imperative and essential for appreciating and understanding this judgment, are set out infra under the caption 'Facts in a nutshell'.

FACTS IN A NUTSHELL :

4(a)Lifestyle Equities CV is a Dutch limited partnership with address at Prins Bernharplein 200, 1097 J.B., Amsterdam, Netherlands and is hereinafter referredto as 'Lifestyle' for the sake of brevity.

4(b)QDSeatoman Designs Pvt. Ltd., Quintessential Designs India Pvt. Ltd., andQuintessential designs India Pvt. Ltd. - Apparel Ventures, all having addressat 5th Floor, Status Quo, 38 Sterling Road, Nungambakkam, Chennai-600 034 arehereinafter collectively referred to as 'QDS' for brevity, clarity and convenience.Wherever it is necessary to refer to each one of these three entitiesindividually, full name of the entity, i.e., the name of the company, is beinggiven.

4(c)Lifestyle is the applicant before the learned Single Judge, having filed anapplication under Section 9 of the A and C Act and QDS are three respondentsbefore the learned Single Judge. The fulcrum of the case is an agreement dated30.6.2014 (hereinafter referred to as the 'said agreement' for brevity) betweenQDSeatoman Designs Pvt. Ltd and Lifestyle. It is not in dispute before us thatthough QDSeatoman Designs Pvt. Ltd., alone is the contracting party to the saidagreement, QDS (all three entities) are bound by the said agreement.

4(d)We are also informed that the line of activity, i.e., business of bothLifestyle and QDS is apparels and garments to put it in simple terms. To benoted, the said agreement is for a period of three years beginning August 1,2014 and ending July 31, 2017 with a provision for renewal by mutual consent.However, before the expiry of the full three years period, this litigationbroke out between Lifestyle and QDS in May, 2017.

4(e)The most important aspect to be noted is, both parties, i.e., Lifestyle and QDSstate that though the said agreement is dated 30.6.2014, it was entered into /executed only in 2016. This has been specifically articulated by QDS in itsapplication before the learned Single Judge being A.No.3176 of 2017 (vacateinjunction application and more particularly in the affidavit dated 15.6.2017filed in support of the said vacate injunction application). In paragraph 8 ofthe said affidavit, it has been averred by QDS that the said agreement, i.e.,agreement dated 30.6.2014, was signed only in the year 2016. It is not disputedby Lifestyle before us.

4(f)Therefore, a business arrangement that was operating between Lifestyle and QDSfrom August 2014 was reduced to writing and codified by drawing up specificcovenants in 2016 for a period of three years from August 2014 to July 2017. Inaddition to the above, it is also not in dispute between the parties before usthat the commencement of business relationship between Lifestyle and QDS is notjust from 2014, but from 2008.

4(g)From a perusal of the said agreement, it emerges that Lifestyle is the absoluteowner of the trademark "Beverly Hills Polo Club" ('BHPC' forbrevity). It has been covenanted in the said agreement that QDS shall organize,hire and support the brand BHPC of Lifestyle. It has also been covenanted inthe said agreement that Lifestyle shall pay monthly retainer of 15,000 USDollars to QDS for its services. We are informed that this was subsequentlyincreased to 21,000 US Dollars from 2016 and further increased to Rs.21,500 USDollars from 2017.

4(h)Considering that this narrative is facts in a nutshell, suffice to say thatdisputes arose between Lifestyle and QDS in their aforesaid businessrelationship. This resulted in Lifestyle filing three applications before alearned Single Judge of this Court, being O.A.Nos.515 to 517 of 2017 withcertain interim prayers. All three applications were filed under Section 9 of Aand C Act. On 12.5.2017, a learned Single Judge of this Court granted aninterim order in O.A.No.515 of 2017. After filing Section 9applications andafter grant of interim order by this court on 12.5.2017, we are informed thatLifestyle issued a notice dated 13.6.2017 invoking the arbitration clause inthe said agreement, inter-alia claiming 6 Million US Dollars. It is not indispute that QDS received this notice dated 13.6.2017 invoking arbitrationclause. Therefore, in the instant case, as of today arbitration has commencedwithin the meaning of Section 21 of A and C Act. To be noted, we are alsoinformed that this notice invoking the arbitration clause was followed by anomination letter dated 5.7.2017 by Lifestyle.

4(i)It is also not in dispute that QDS did not send reply to the aforesaid noticeinvoking arbitration clause. However, QDS filed an application being A.No.3176of 2017 for vacating the aforesaid interim injunction granted on 12.5.2017 by alearned Single Judge of this Court. Judges summons of this vacate injunctionapplication is dated 16.6.2017.

4(j)In the interregnum, Lifestyle has filed a petition for appointment of anArbitrator in the Hon'ble Supreme Court of India, as this is an internationalcommercial arbitration within the meaning of Section 2(1)(f) of A and C Act.This application by Lifestyle in the Supreme Court of India under Section 11 ofA and C Act for appointment of an arbitrator has been taken on file asApplication No.35 of 2017. It is also not in dispute that QDS is yet to enterappearance in the same.

4(k)Be that as it may, the aforesaid injunction applications (O.A.Nos.515 to 517 of2017) together with vacate injunction application, i.e., A.No.3176 of 2017 andanother application being A.No.4263 of 2017 were taken out by QDS with a ratherpeculiar prayer, i.e., Court's permission to pursue statutory remedies by wayof a suit and both the applications came to be disposed of by a learned SingleJudge on the original side of this Court in and by a common order dated11.8.2017.

4(l)Though five applications were disposed of by one common order by the learnedSingle Judge on the Original Side of this Court as aforesaid, Lifestyle hasfiled O.S.A.No.216 of 2017 against the order in injunction application beingO.A.No.515 of 2017 and QDS have filed O.S.A.No.249 of 2017 against the order invacate injunction application being A.No.3176 of 2017 in O.A.No.515 of 2017.

4(m)To be noted, learned Single Judge closed all five applications, inter-alia witha direction to Lifestyle to deposit Rs.1 Crore and to maintain accounts ofprofits and deposit the entire sale proceeds of collection qua Fall 2017 in anescrow account. We shall now proceed to examine the matter in the light of thesubmissions made before us.

DISCUSSION :

5(a)Detailed submissions touching upon facts were made before us. We do not intendexamining those facts in great detail as these are intra court appeals underSection 37 of the A and C Act and have arisen out of proceedings under Section9 of A and C Act.

5(b)From the covenants in the said agreement, it is clear that Lifestyle hasengaged the services of QDS on a monthly retainer for maintaining certainselect defined creative services such as product translation, technical designand production administration together with other relevant supporting creativeservices. It is also not in dispute before us that there is a disputeresolution clause in the said agreement and the same is clause 40 of the saidagreement.

5(c)We deem it appropriate to extract clause 40 of the said agreement, which readsas follows :

40.Anydispute arising out of or in connection with this Agreement, shall first beresolved mutually by the Parties through negotiations. If the Parties are notable to settle the same through negotiations, each party may appoint anarbitrator and such appointed arbitrators shall appoint a third arbitrator forarbitration. The arbitration shall be conducted in accordance with the Arbitrationand Conciliation Act, 1996. The place of arbitration shall be Chennai, Indiaand the language of arbitration shall be in English.  5(d) If the said agreement is the fulcrum ofthe case, exit of one Laura Wilson, a specialized Designer from Lifestyle, isadmittedly the genesis of the lis. That Laura Wilson is a specialized designer,that she was working with Lifestyle and that she was stationed in QDS, Chennaifor the purpose of effectively operating the said agreement are facts that arenot in dispute.

5(e)It is also not in dispute that Laura Wilson left / quit Lifestyle and obviouslythe office of QDS in Chennai, where she was stationed, in 2015, but bothparties are unable to give the exact month. To be noted, even in the writtensubmission, in one/same breath, Lifestyle has stated that she quit in May, 2015and early 2015. Be that as it may, the fact that Laura Wilson quit in the firsthalf of 2015 is not in dispute. To simplify and encapsulate the issue, the caseof QDS is that the exit of Laura Wilson from Lifestyle resulted in QDSproviding certain additional services in addition to services adumbrated in thesaid agreement and it is the further case of QDS that such services are outsidethe said agreement. This is strongly disputed by Lifestyle. This assertion anddenial, in our understanding, is the crux and gravamen of the lis between theparties.

5(f)We have set out the crux and gravamen of this lis / essential facts supra. Inlaw, broadly speaking the contentions of Lifestyle can be summarised as follows:

(a)Directions against Lifestyle, directing Lifestyle to deposit Rs.1 Crore, tomaintain accounts of profits and to deposit all proceeds of collection relatingto Fall 2017 in an escrow account, etc., ought not to have been given by thelearned Single Judge when there was no Section 9application by QDS.

(b)On a demurrer, directions are in the nature of securing the claim which aregoverned by principles of Order XXXVIII Rule 5 of Code of Civil Procedure, 1908('CPC' for brevity) and therefore, in the complete absence of avermentstouching upon the ingredients of Order XXXVIII Rule 5 CPC (even in vacateinjunction application), learned Single Judge erred in giving directions quasecurity.

(c)Finding of facts / views on merit overlapping with final relief, which aresought to be adjudicated in the arbitral proceedings before the ArbitralTribunal ought not to have been given in an order in section 9applications.

5(g)On the contrary, legal submissions on the part of QDS can be summarized asfollows :

(a)application under Section 9 of A and C Act is not maintainable as the disputesthat have now arisen between the parties are not arbitrable.

(b)As a corollary, it is the submission of QDS that issues pertaining toIntellectual Property Rights ('IPR' for brevity) are in the realm of rights inrem and therefore, are not arbitral.

5(h)We now proceed to discuss and examine the matter further.

5(i)As we proceed to discuss the matter further, it becomes necessary toencapsulate and capture the case laws that were pressed into service by bothsides.

5(j)To buttress the legal submission that directions for deposit of Rs.1 Crore andto deposit the money into escrow account, etc., ought not to have been given inan application by Lifestyle, where QDS is only respondents (particularly whenQDS have not moved a separate Section 9application) and that too when none ofthe ingredients / parameters / determinants of the principle of Order XXXVIIIRule 5 CPC have been pleaded even in the vacate injunction application,Lifestyle pressed into service the following four judgments.

(i)PremrajMundra Vs. Md. Maneck Gazi [AIR 1951 Cal 156] decided on 29.01.1951,

(ii)A-1Biz Solutions Chennai Vs. Cascade Billing Center Incorporated [(2011) SCCOnline Mad 924] decided on 27.7.2011,

(iii)C.S.S.Corp. Private Limited Vs. Space Matrix Design Consultants Private Limited [2012(1) CTC 225] decided on 13.12.2011,

(iv)CholamandalamInvestment and Finance Co. Ltd. Vs. Philomina George, O.S.A.No.195 of 2011,decided on 17.3.2014.

5(k)To buttress the proposition that finding of facts / views on merit overlappingwith final reliefs, which are sought to be adjudicated in the arbitralproceedings before the Arbitral Tribunal ought not to have been given insection 9application, M/s.Niko Resources Ltd. Vs. Union of India and others [93(2001) DLT 12] case decided on 01.06.2001 was pressed into service.

5(l)To buttress the submission that lis / disputes that have arisen between theparties are arbitrable in the light of wide amplitude and broad scope ofarbitration clause, i.e. Clause 40, wherein the expression 'arising out of orin connection with' has been used, Renusagar Power Co. Ltd. Vs. GeneralElectric Company [(1984) 4 SCC 679] decided on 16.8.1984 and Govind PrasadSharma Vs. Doon Valley Officers Cooperative Housing Society Ltd. [2017 SCConline SC 1001] decided on 23.08.2017 were pressed into service.

5(m)On the side of QDS, to buttress its submission that IPR rights being in therealm of rights in rem are not arbitrable by way of private arbitrationagreement between two parties, two judgments, i.e., Booz Allen and HamiltonInc. Vs. SBI Home Finance Limited and others [(2011) 5 SCC 532 = AIR 2011 SC2507] decided on 15.4.2011 and A.Ayyasamy Vs. A.Paramasivam and others [(2016)10 SCC 386] decided on 4.10.2016 were pressed into service. In this regard, adecision of a Division Bench of our High Court being R.K. Productions Pvt. Ltd.Vs. M/s.N.K.Theatres Pvt. Ltd. reported in 2013-1-LW 485 and decided on11.12.2012 wherein Booz Allen case was followed was also pressed into service.Dovetailed with these submissions, it was submitted that a plaintiff cannot becalled upon to bifurcate the disputes and in support of this, a judgment of theSupreme Court in Sukanya Holdings (P) Ltd. Vs. Jayesh H.Pandya and another[(2003) 5 SCC 531], decided on 14.4.2003 and an unreported judgment of theBombay High Court dated 21.11.2014 in Steel Authority of India Ltd. Vs. SKSIspat and Power Ltd. and 2 others, in which Sukanya Holdings (P) Ltd.'s casewas followed, were pressed into service.

5(n)Another judgment of a learned Single Judge of Bombay High Court dated 31.8.2006made in Arbitration Petition No.341 of 2012 being The Indian Performing RightSociety Ltd. Vs. Entertainment Network (India) Ltd., wherein Booz Allen casewas followed and a judgment of Delhi High Court dated 11.9.1990 in MundipharmaAG Vs. Wockhardt Ltd. [ILR (1991) 1 Delhi 606] and a judgment dated 1.5.1996 ofHon'ble Supreme Court of India in Vikas Sales Corporation and another Vs.Commissioner of Commercial Taxes and another [(1996) 4 SCC 433] were alsopressed into service.

5(o)In sum and substance. All the aforesaid authorities were pressed into serviceby QDS to say that IPR disputes are not arbitrable and that plaintiff cannot becalled upon to bifurcate the disputes.

5(p)Wenow deal with the first aspect of the matter, i.e., as to whether IPR disputesare arbitrable. This takes us to the question as to whether it is in the realmof a right in rem and therefore, not arbitrable. In this context, a cleardistinction has been made inter-alia in the line of authorities referred tosupra between a right in rem and an action in personam. A judgment in personamrefers to a judgment against a person as distinguishable from a judgmentagainst a thing, right or status. A judgment in rem refers to a judgmentagainst a thing, right or status or condition of property which operatesdirectly on the property itself. To make this illustrative, it can be said thata patent license issue may be arbitrable, but validity of the underlying patentmay not be arbitrable. This has been alluded to by the Hon'ble Supreme Court ofIndia in Booz Allen supra and the learned Single Judge has also noted thisaspect of the matter as is evident from a reading of the order which has beencalled in question before us.

5(q)We are aware that after Booz Allen and Ayyasamy supra, there is one morejudgment of the Supreme Court, which dealt with the question as to whetherthere can be an arbitration clause in a trust deed and as to whether a disputepertaining to a trust or as amongst trustees of a public trust is arbitrableand the same was answered in the negative. This judgment is Vimal Kishor ShahVs. Jayesh Dinesh Shah [(2016) 8 SCC 788] decided on 17.8.2016.

5(r)While Booz Allen dealt with disputes relating to rights in rem qua arbitration/ arbitrability, Ayyasamy dealt with fraud qua arbitration / arbitrability. Thethird judgment dealt with a dispute touching upon a trust qua arbitration/arbitrability. Though the last of the three judgments, i.e., Vimal Kishor Shahwas not cited before us, the same stand noticed by us.

5(s)Pivotal submission of Lifestyle on this aspect of the matter is thattheaforesaid judgment of the Hon'ble Supreme Court of India has not consideredor excluded IPR disputes from the scope of arbitrability.For absolute clarityon this aspect of the matter, learned counsel for Lifestyle referred toparagraph 14 of Ayyasamy case and said that the list of disputes which may notbe arbitrable as adumbrated therein is not the ratio or conclusion of theHon'ble Supreme Court of India, but a mere extract from a book titled 'The Lawand Practice of Arbitration and Conciliation'. A perusal of paragraph 14affirms this position and very fairly, learned Senior Counsel for QDS does notdispute this.

5(t)We also notice that the learned Single Judge has dealt with the rivalsubmissions on this aspect of the matter and summarized the findings returnedby the Court. Learned Single Judge has held that there is no quarrel with theproposition that the grant of registration of a copyright or design under therelevant statutes can be achieved through / only by statutory authoritiesconstituted under the respective statutes.Learned Single Judge has gone on tohold in the present case that both parties are in reality claiming a betterright of usage vis-a-vis the other and that this would clearly bring the factsof the present case within the realm of a right in personam rather than a rightin rem.On this aspect of the matter, we have no difficulty in sustaining thefinding returned and opinion of the learned Single Judge. At the risk ofrepetition,while a patent right may be arbitrable, the very validity of theunderlying patent is not arbitrable.This has been articulated in Mustill andBoyd in their '2001 Companion Volume to the 2nd Edn. of Commercial Arbitration'. This has also been extracted by the Hon'ble Supreme Court of India in BoozAllen's case and the learned Single Judge has noticed this. Therefore, to thisextent, there is no difficulty in agreeing with the learned Single Judge andholding that the disputes in the instant case as between Lifestyle and QDS arearbitrable.

5(u)Having said that, what we would like to add is that it will still be open forthe Arbitral Tribunal to rule on this issue by exercising its power underSection 16 of A and C Act. Therefore, we make it clear that this view expressedherein is only a prima facie view, for the limited purpose of deciding interimmeasures under Section 9 of A and C Act. Therefore, we leave this issue open tobe agitated before the Arbitral Tribunal inter-alia under section 16 of A and CAct. When we say this, it is our considered view and opinion after taking intoconsideration the admitted factual position that Lifestyle issued a noticedated 13.6.2017 followed by a nomination letter dated 5.7.2017 invoking /triggering the arbitration clause and claiming 6 Million US Dollars. Admittedly/ concededly, learned Senior Counsel for QDS fairly submitted that QDS has notsent a reply or response to this. Further more, as it is an internationalcommercial arbitration within the meaning of Section 2(1)(f) of A and C Act,Lifestyle has also filed an arbitration application being ArbitrationApplication No.35/2017 in the Hon'ble Supreme Court of India.

5(v)Therefore, the above answers the plea of QDS that disputes that have arisenbetween parties are not arbitrable, axiomatic to which, it was submitted thatSection 9application is not maintainable.In other words, our finding is thatthe disputes that have arisen between the parties are arbitrable subject ofcourse to the Arbitral Tribunal to be constituted by the Hon'ble Supreme Courtof India ruling on its own jurisdiction inter-alia under Section 16 of A and CAct.To be noted, at the risk of repetition, QDS has not sent a reply to thenotice dated 13.6.2017 followed by a nomination letter dated 5.7.2017 invokingarbitration proceedings.

5(w)This takes us to the next aspect of the matter, wherein Lifestyle submits thatit is prejudiced by the impugned order as certain findings on merits have beenreturned. A particular reference has been made to the finding on merit aboutwhether the said agreement covers both creative design and technical design. Inother words, Lifestyle contends before us that it should have been left openfor the Arbitral Tribunal to decide whether the scope of the said agreementcovers both creative design and technical design or only the technical design.

5(x)It is to be noted that the learned Single Judge has clearly held in paragraph51 of the impugned order that allegations and counter allegations have beenmade and therefore, the court refrains from addressing the same since it is amatter of evidence to be gone into and decided by the Arbitrator in the courseof proceedings before him. Equally, there is no difficulty in accepting theproposition that in asection 9proceedings, the court will not return anyfinding which would have the effect of swaying the decision of ArbitralTribunal on the issue. Therefore, we vacate the finding on fact qua the saidagreement returned by the learned Single Judge in paragraph 50 of the impugnedorder. In other words, paragraph 50 of the impugned order is vacated by us. Forthe purpose of absolute clarity, we extract paragraph 50 of the impugned orderof learned Single Judge and the same reads as follows :

50.Ithus hold that the scope of services as enumerated in the agreement dated30.06.2014 is restricted only to preparation of the technical designs which areblue prints for detailing the specifications for converting the creative designinto a marketable product. This issue is held in favour of QDS.  5(y) This takes us to the last aspect of thematter as to whether directions to give security, i.e., to deposit Rs.1 Crore,maintain accounts of profits and deposit the entire proceeds of business ofFall 2017 Collection (to be precise) in an escrow account can be given whenthere is no section 9application at all that has been filed by QDS.

5(z)As would be evident from the narration of facts and discussion thus far in thisjudgment, QDS has taken the stand that all applications filed by Lifestyleunder Section 9are not maintainable as the disputes that have arisen betweenthe parties, according to QDS, are not arbitrable. Therefore, it may be unfairto put it against QDS and say that QDS has not filed section 9application, butwhat is to be noted is even in the vacate injunction application beingA.No.3176 of 2015 (in the affidavit dated 15.6.2017 filed by QDS in support ofthe vacate injunction application), there are no averments touching upon theingredients / determinants / parameters / underlying principles of OrderXXXVIII Rule 5 CPC. More over, when a party to a lis takes a stand that section9is inapplicable to the disputes that have arisen between the parties, thatparty cannot be given relief in a section 9application more so in a section9application filed by its adversary. Beneath and beyond all this is a basicproposition that the relief cannot be granted to a party under section 9when noapplication under section 9 of A and C Act has been moved. Therefore, the threedirections given by the learned Single Judge as adumbrated / articulated inparagraph 53 of the impugned judgment are set aside.

5(aa)For the purpose of convenience and clarity, we extract paragraph 53 of thejudgment of learned Single Judge, which reads as follows :

53.Inthe interregnum, I issue the following directions for protection of the subjectmatter of the proposed arbitration and in the interests of both parties:

(i)Lifestyleshall deposit a sum of Rs.1crore to the credit of this Original Application inan interest bearing account in any Nationalised Bank, the disbursal of whichwill depend on the outcome of the arbitration relating to the claims of theparties;

(ii)Uponcomplying with the condition in (i) above, Lifestyle shall proceed with thelaunch of the Fall 2017 Collection in order to ensure that the slim windowavailable for the fashion season is not lost. However, separate accounts of thebusiness relating to Fall 2017 shall be maintained and the proceeds depositedin an escrow account pending proceedings for arbitration.

(iii)Partiesare at liberty to approach the Arbitral Tribunal, once constituted for interimdirection, in terms of Section 17of the Act and in accordance with law.  5(ab) On the aforesaid aspect of the matter,we have also noticed the submission made by Mr.P.H.Arvind Pandian, learnedSenior Counsel for QDS that they did not want the benefit of directions givenby learned Single Judge as contained in paragraph 53 of the impugned order.Therefore, we also record that QDS as per its stated position before us cannotbe aggrieved by way of setting aside the directions contained in paragraph 53of the impugned order.

5(ac)There are two other aspects of the matter, which have been brought to ournotice. One aspect is, post impugned order on 11.8.2017 and also post filing ofthe fist of the intra-court appeals herein, i.e., O.S.A.No.216 of 2017 byLifestyle on 24.08.2017, QDS has filed a suit on the Original Side of thisCourt being C.S.No.678 of 2017 alleging violation of its copyright and claiminginjunctive reliefs as well as damages.

5(ad)The second aspect that has been brought to our notice is that Lifestyle,without prejudice to its rights and contentions in its intra-court appealbefore us, has deposited Rs.1 Crore by way of a demand draft dated 8.9.2017under a memo dated 11.9.2017. It was also contended by learned Senior counselfor QDS that this has rendered the intra-court appeal of Lifestyle infructuous.We do not think so.

5(ae)The reasons are twofold. One is that there is no interim order in favour ofLifestyle in its appeal, though an application praying for an interim order hasbeen moved. The second reason is that a perusal of the memo shows that deposithas been made strictly without prejudice to the rights and contentions ofLifestyle in the instant intra-court appeal. In the absence of an interim orderfrom this court, Lifestyle was under peril of contempt.

5(af)To be noted, as already mentioned supra, several submissions on merits anddetailed facts were made before us. In the light of the view which we aretaking and the principles on which we are disposing of both these intra-courtappeals under Section 37 of A and C Act, we are not alluding to the same,leaving it to the Arbitral Tribunal (to be constituted) to examine all thoseaspects. In other words, though obvious, we leave all questions on merits open.Further, though obvious, we make it clear that it is open to the parties tomove the Arbitral Tribunal (to be constituted) for any relief under Section 17of A and C Act notwithstanding the fact that there may be certain overlappingarea.

5(ag)We have enlisted the case laws pressed into service by both sides, supra inthis judgment, but we have dealt with only those which are germane to the scopeof this judgment.

CONCLUSION :

6(a)Owing to all that we have stated supra with regard to the impugned order of thelearned Single Judge, what we do in these intra-court appeal can be summarizedas follows :

(a)Findingof the learned Single Judge that the disputes that have arisen between theparties are arbitrable is sustained by clarifying that these are only primafacie views and that it is subject to final decision by Arbitral Tribunal (tobe constituted) inter-alia by exercise of power under Section 16 of A and CAct;

(b)Findingsof facts returned by learned Single Judge as adumbrated in paragraph 50 of theimpugned order are vacated;

(c)Directionsgiven by learned Single Judge in the nature of directions to secure the claimas adumbrated and articulated in paragraph 53 of the impugned order are setaside.

6(b)In the normal course, the above three conclusions would amount to a decisionthat one appeal being O.S.A.No.216 of 2017 filed by Lifestyle is partlyallowed, but in the peculiar facts and circumstances of the case and in the lightof the peculiar plea of Lifestyle before us that they accept the order oflearned Single Judge upto paragraph 37, we have to necessarily say that theappeal of Lifestyle is allowed and consequently, the appeal of QDS isdismissed.

6(c)To be noted, as set out supra in this judgment, both intra-court appeals aredirected against O.A.No.515 of 2017 and A.No.3176 of 2017, though fiveapplications in all have been disposed of by a common order. Though obvious, wemake it clear that this judgment of ours will govern the fate of the otherapplications too.

DECISION :

7(a)O.S.A.No.216 of 2017 filed by Lifestyle is allowed. O.S.A.No.249 of 2017 filedby QDS is dismissed as bereft of merits.

7(b)Considering the nature of the matter and the trajectory the litigation hastaken and also bearing in mind the fact that the appeals were heard out in fullat the admission stage itself as QDS was in caveat, we make no order as tocosts. Consequently, connected miscellaneous petition is closed.