LexK. MANGAYARKARASI & ANR. versus N.J. SUNDARESAN & ANR.
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[2025] 5 S.C.R. 1199 : 2025 INSC 687 K. Mangayarkarasi & Anr. v. N.J. Sundaresan & Anr. (SLP (C) No. 13012 of 2025) 09 May 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration Can a trademark infringement suit be referred to arbitration if the defendant questions its maintainability on the ground of existence of an arbitration agreement between the parties and seeks a reference under Section 8 of the Arbitration and Conciliation Act, 1996 (“Act”). Headnotes† Arbitration and Conciliation Act, 1996 – s.8 – Not all trademark disputes are non-arbitrable; those concerning contractual rights can be arbitrated – Petitioners filed a commercial suit against Respondents seeking permanent injunction in relation to trademark “SRI ANGANNAN BIRIYANI HOTEL/ABM SRI ANGANNAN HOTEL/ any other name format signifying the term ANGANNAN” – Respondents filed an Application under Section 8 of the Act and sought reference to arbitration on the basis of two assignment deeds containing an arbitration clause – Petitioners disputed execution of the said deeds on the ground of fraud – The commercial court allowed the said application holding that the subject matter of suit was arbitrable and the basis of Respondents’ claim was not rooted in Trade Marks Act, 1999 (“TM Act”) but in the said assignment deeds – Being aggrieved, Petitioners filed civil revision application in the High Court which came to be dismissed inter-alia on the ground that mere allegation of fraud is insufficient to refuse reference to arbitration and such an allegation must have an implication in public domain – Challenged in the Special Leave Petition: Held: When arbitrability of a dispute is opposed on the ground of fraud, Courts must examine whether mere allegation of fraud warrants exclusion of such disputes from the realm of arbitration and such a challenge can be adjudicated by the arbitral tribunal in terms of Section 16 of the Act – Reliance placed on A. Ayyasamy v. A.Paramasivam & Ors. (2016) 10 SCC 386 and * Author 1200 [2025] 5 S.C.R. Supreme Court Reports Kvaerner Cementation India Ltd. v. Bajranglal Agarwal and Anr., (2012) 5 SCC 214. [Paras 8, 9] The “arbitrability” of a dispute depends on following three aspects: (i) capability of a dispute being adjudicated and settled by arbitration; (ii) if the dispute was covered by the arbitration agreement; and (iii) if the parties had referred the disputes to arbitration – All these factors are required to be determined keeping in mind the express or implicit exclusion of certain categories of cases from the domain of arbitration (private fora) as a matter of public policy – Such excluded cases largely are those which relate to action in rem which are reserved for adjudication by public fora (Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. & Ors., (2011) 5 SCC 532) – It cannot be held that all disputes related trademark are non-arbitrable, such as those related to in personam rights (Vidya Drolia v. Durga Trading Corporation reported in (2021) 2 SCC 1) – Arbitral Tribunal enjoys a wider jurisdiction under Section 16 of the Act and even cases where a contract stood discharged by way of a full and final settlement, can be referred to arbitration if such a settlement is vitiated by fraud, coercion or undue influence (SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754, National Insurance Company Limited v. Boghara Polyfab Private Ltd., (2009) 1 SCC 267). [Paras 10-13] The post 2015 amendment judgments to the Act, such as Mayavati Trading Private Limited v. Pradyut Deb Burman, (2019) 8 SCC 714 and In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1966 and the Indian Stamp Act, 1899, 2023 INSC 1066 provide that at the stage of application under Section 8 of the Act, the court should take an approach that focuses on bestowing jurisdiction over the Arbitral Tribunal, and ousts their own jurisdiction – If jurisdiction is ousted, whether it’s in terms of statutory framework (wherever applicable) is to be examined – As long as there exists an arbitration agreement, the courts must adopt an enabling approach and refer the parties to the arbitration – As the dispute is held to be in personem, and not in rem, the dispute is arbitrable in nature, and the Special Leave Petition is dismissed. [Paras 14-17] Case Law Cited Kvaerner Cementation India Ltd. v. Bajranglal Agarwal and Anr. (2012)
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