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TMI Blog1998 (10) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... licences to third parties to use the Kite process for the manufacture and distribute/sale of MLCP in various territories the world over. 3. Another group of companies, namely, Unicorn Rohn systems GmbH of Germany (URS), Unicorn GmbH Rohn Plastmaschinen of Germany (Plastmaschinen) and their associates etc. (for short the Unicorn Group ) of Germany had also developed similar products and its Equipments etc. (called the Unicorn process ). Both the parties are foreign groups. 4. Disputes had arisen between Kite Group and Unicorn Group and litigations were pending in some courts in U.K. and Germany. The two groups agreed to settle their disputes and for that purpose entered into settlement/agreement dated 11.11.1994 at Germany (hereinafter called the Hamburg Agreement ) and it was, inter alia, agreed that Kite Group will transfer/assign their aforesaid Kite patent rights to Unicorn Group, close down its production, manufacture and distribution of MLCP and withdraw from direct involvement in the development, manufacture and distribution of the Equipments and MLCP, the licensing of the Kite patents and the Kite-Knowhow, on the agreed terms and conditions for consideration and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which, by virtue of the applicable rules of international private law or by imperative operation of a foreign system of law, are subject to the laws of another country. 17.2 To the extent that this can be validly agreed in accordance with German law or the applicable provisions of the laws of other countries. Frankfurt/Main shall be the exclusive venue. 18. CONCILIATION AND ARBITRATION 18.1. Any disputes arising in connection with this Agreement or the Agreements at Schedules 5 and 6 inclusive shall, wherever this is feasible, first be discussed between the parties, in particular between Mr. Horst Rahn and Mr. Nathan Kirsh. If the efforts to obtain an amicable settlement fail, the parties shall use their best endeavours to solve their disputes by agreeing on a conciliator and on conciliation proceedings in order to avoid formal arbitration. If these efforts do not lead to a satisfactory result within a reasonable period of time, any and all disputes within the aforementioned area shall be finally settled by arbitration in accordance with the provisions set out below. 18.2 The Arbitration Board shall consist of three arbitrators. The party wishing to initiate arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had also been given to Unicorn Group. But in breach of the terms of the said agreement, the Unicorn Group has been threatening to resume production and sale of this product in India on untenable grounds, and for that purpose they had participated in an exhibition Plast India 97 held at Pragati Maiden, New Delhi in 1997 where they have openly displayed their products, they are in contact with Indian parties and vide their letter dated 3.4.1997 have terminated its license illegally. It is further alleged that Unicorn Group have unreasonably demanded proof about achieving commercial production from the applicants and the proof furnished has been unreasonably not accepted and also that no standard was prescribed for achieving commercial production and for that reason, the license could not be cancelled. 7. They thus allege that Unicorn group have acted in breach of the Hamburg Agreement and are threatening to take over the business covered by this agreement in India from applicant No.2 and give to someone else. 8. The applicants in this application under Section 9 of the Act have sought the reliefs of permanent/ prohibitory injunction against the respondents for restraining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion also arose in Delhi where the respondents have participated in the exhibition (Plast India' 97) and as such they are entitled to the interim remedy provided under Section 9 of the Act in this Court. 13. Whereas learned counsel for the respondents has contended that both the applicants are not parties to the Hamburg Agreement and applicant No.2 is not a lawful licensee contemplated under the said Agreement, that the said agreement was entered into between two groups of foreign companies and their foreign associates/affiliates at Germany, none of whom was Indian nationals, they are not governed by Indian laws and are not subject to jurisdiction of Indian courts; in the said agreement, it was specifically, agreed that disputes and differences arising out of the agreement shall be resolved through arbitration, procedure for appointment of arbitrators is agreed and it was specifically agreed that German Laws, both substantive and procedural will apply and the venue/seat of the Tribunal agreed is Frankfurt Main; that neither Section 9 is attracted nor this Court has jurisdiction, territorial or otherwise, to entertain this petition. He also contends that if at all, which is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia and where at least one of the parties is : (i)an individual who is a national of, or habitual resident, in any country other than India; of (ii)a body corporate which is incorporated in any country other than India; or (iii)a company or an association or a body of individuals whose central management and control is exercisable in any country other than India; or (iv)the Government of a foreign country. 19. The Act has been divided into four parts. Part I comprising of Sections 2 to 43 deals with arbitration . Section 9 falls in this part. This Section will be attracted in this case if the present case relates to an international commercial arbitration and fulfills other conditions contemplated in this Chapter. Sub-section (2) of Section 2 of the Act provides that Part I shall apply where the place of arbitration is in India. 20. These provisions make it clear that this Act applies in such cases where one or more of the parties is foreigner but the place of arbitration agreed is in India and obviously the law applicable would also be Indian law. It follows that where the parties to the agreement are foreigners and the place of arbitration is not in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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