NEW ERA IN ARBITRATION PROEEDINGS: SUPREME COURT OF INDIA

by Agrim Jain

INTRODUCTION

The judgment given by the Supreme Court in the case of Bharat Aluminum Company Ltd (BALCO) Vs Kaiser Aluminum Technical Service, Inc. (Kaiser) is considered as to be the judgment which is responsible for changing the entire paradigm relating to seat of arbitration in matters of international Commercial Arbitration. The concept of seat of arbitration is of prominent value as it decides the law which will govern the arbitration proceedings including its procedural aspects as well. The applicable law will be determined as per the seat of arbitration only and only if the parties have not come to a consensus decision upon the issue of law which will govern the arbitration proceedings, but in case they have then that law would be applicable on the parties. In India this has been a matter of continuous controversy as even the judgments of the Supreme Court were being able to provide a definitive solution to the problem. In this sense it is the judgments of the Supreme Court in case of Bhatia International Vs Bulk Trading S.A and Anr and Venture Global Engineering Vs Satyam Computer Services Ltd and Anr, in which the Supreme Court had held that it is the Part I of Arbitration and Conciliation Act, 1996, which has dealt with all issues such as the setting out of procedures, award, interim relief and also appeal provisions will be applicable in respect of all the arbitration proceedings which would be held outside India, unless the parties in an earlier agreement either expressly or impliedly have excluded all or any of the provisions of the act.

It was in light of these judgments that the matter once again reached before Supreme Court in the case of BALCO vs Kaiser Aluminum Technical Services Inc. in which case the doctrine established in previous cases was abolished and also it was stated that the choice of another country as seat of arbitration inevitably imports an acceptance that the law of the country relating to conduct and supervision of arbitration will be applicable upon the proceedings. It was further pointed that in case the seat of arbitration is located outside India, then no application seeking interim relief will be maintainable in India, irrespective of applied either through arbitration proceedings or even through institution of a suit as well. Thus, it is through this judgment that there are certain amendments brought within the legal sphere which governs the arbitration proceedings in International Commercial Arbitration in India with respect to the agreement between the parties and also the agreement entered into between the parties if any entered into between the parties, if any entered into between the parties to the dispute. 

One question which is most frequently asked in International Commercial Arbitration is that what law would govern the substance of dispute between the parties, i.e. the law which will govern the construction and validity of arbitration agreement and also regulate procedure of Arbitration as well.

Seat of Arbitration and its significance:

It is understood that it is the seat of arbitration which is the determining factor for the purpose of determining the law that will govern the arbitration including its procedural aspects in India as well. The determination of the system depends upon two main criterions:

1. Either upon the agreement entered into between the parties of the dispute;
2. Ifno agreement, then it would be determined as per the place of seat of arbitration between the parties.

Thus the responsibility falls upon the court situated at the place of seat of arbitration to regulate arbitration conduct and also decide if challenge to the award filed as well[i].

Law of Contract:

The domestic law of a country is supposed to deal with issue of rights and obligations of parties arising out of the contract between the parties to the contract. Thus, the local law elected is referred to as the governing or proper law of contract. The law of contract is determined in accordance with the general principles of law dealing in conflict of laws, which is chosen by the parties to contract and in the absence of contract the law which will govern is determined with the help of the law of country which is closest to provisions contained in the agreement. 

Law governing Arbitration and Procedural Law:

The law which governs and regulates arbitration is considered as important as it is responsible for determining the validity, effect and interpretation of the arbitration agreement and also it is through this law only that the arbitrator derives its scope of powers and functions and also governs the procedure that needs to be followed by arbitral tribunal, except in the cases that the dispute is submitted to the International Organizations with the consent of the parties and their established procedure is followed[ii].  

Position existent in India prior to judgment: 

The position prior to the judgment in BALCO[iii]case, was owing to the judgments of the Supreme Court in the case of Bhatia International Vs Bulk Trading S.A and Anr[iv] and Venture Global Engineering Vs Satyam Computer Services Ltd and Anr[v], in which it was held by the supreme Court that it is the Part 1 of Arbitration and Conciliation Act, 1996 is applicable to all proceedings held outside India, unless the parties by agreement whether express or implied exclude all or any of its provisions. 

It was in light of these judgments that the BALCO judgment is considered as the judgment which is responsible for changing paradigm of Arbitration Law in India in terms of International Commercial Arbitration.

Facts of Dispute:

The parties to this dispute had entered into an agreement dated 22^nd April, 1993, under which Kaiser was to supply and install a computer based system at BALCOs premises. The arbitration agreement had stated that dispute if any must be settled through the English Arbitration Law and also that seat of arbitration would be in London. However, the agreement stated that the governing law would be Indian Law, though proceedings were to be conducted in accordance with the English Law. The dispute was referred for arbitration in England, which passed awards but they were challenged in India under Article 34, several petitions were rejected and thus the matter reached the Supreme Court[vi].

Another issue which arose in the case which was decided as well was the applicability of Section 9 of the Act, which talks about interim measures which can be passed under the act by the respective authorities.

Judgment of the Court:

The Supreme Court in the present case dealt with various provisions of the statute along with dealing with issue of applicability of Part 1 of the Act to International Commercial Arbitrations. The main points of judgment are as the following:

• The section 2(7) of act aims to demarcate clearly the boundaries of domestic awards (Part I) and foreign awards (Part II) and not to differentiate between domestic and international award passed in India;
• It was also held that there is clear demarcation between Part I and Part II, as they both are applicable in entirely different fields and have no overlapping provisions as such;
• The court in its judgment has also marked out a difference between the seat and venue of arbitration, which is especially more important in the situation that the parties have fixed foreign country as a seat of arbitration proceedings and furthermore have even selected the law or act which would govern the arbitration proceedings;
• Another important point made in judgment was that the Indian Courts do not have the required jurisdiction to pass interim relief when the seat of arbitration is situated outside of India, it is in contrast with the judgment in the cases of Bhatia International Case. It is section 9 of the Act which is responsible for granting of interim relief, that is before or during arbitral proceedings or even after making of arbitral award but before it is enforced under Article 36 of Act.
• It was also held that the in foreign related International Commercial Arbitrations, no application for foreign interim relief would be maintainable, be it either instituted through a suit or even by arbitration proceedings as well. 

Post- BALCO Landscape:

The BALCO judgment which has overruled the earlier judgments such as the Bhatia International and Venture Global, is responsible for the following changes:

1. This judgment has categorically ruled out the jurisdiction of the Indian Courts in the following matters:
2. Granting of Interim remedies in case of foreign seated arbitrations purportedly pursuant to Section 9 of the Act;
3. Appointment of Arbitrators in foreign seated arbitrations as purportedly pursuant to Section 11 of the Act;
4. Also, no jurisdiction in case of application filed to set aside a foreign arbitral award passed in pursuance of Section 34 of the Act.
5. This judgment is also responsible for making the jurisdiction of the Indian Courts free from the intention of parties (Express/ Implied), and as such it will not be necessary for the parties to include a clause excluding jurisdiction of courts in case of foreign seated arbitration, in an arbitration agreement signed on or after 6^th September, 2012.
6. Another thing to be noted is that this judgment has made the Indian Law similar to that of the law existing in England, in the sense that it makes clear that no ordinary civil court has no jurisdiction in respect of suits filed under Code of Civil Procedure, 1908, seeking interim relief in case of foreign seated arbitrations. The reason of it is that the relief is not a substantive cause of action so as to warrant the institution of suit under the Indian Law.
7. Lastly it was also stated that the Part I of Arbitration and Conciliation Act, 1996 is applicable on all arbitrations (whether Domestic/ International), is seated in India. The Indian courts have been provided with wide enabling powers to act as supervisory courts at seat of arbitration and also support the arbitral process as well[vii].

Another thing to be noted from the above legal provisions is that this judgment is a symbol of paradigm shift away from the pre-1996 arbitral Jurisprudence, in the sense that the Supreme Court has embarked on a direct inquiry as to the intention and purpose behind the relevant provisions of UNCITRAL Model Law and also the New York Convention, as discernible from the travaux preparatoires in continuance to the appreciation towards the application of these statutory provisions in various jurisdictions.

The Challenges that lie ahead:

It is without a doubt that the judgment of the Supreme Court in BALCO Case has certainly opened opportunities for all the courts to make an entirely new fresh start but there are several issues which need to dealt with also in the aftermath of the judgment.

First and foremost, concern which arose was related to the issue of prospective application of the judgment, i.e. the judgment would be made applicable only on arbitration agreements which come into force on or after 6^th September 2012, this in itself is a concern as it means that the Part I of Act would be applicable on all foreign seated arbitrations unless and until the parties have excluded it either by express or implied terms. The doctrine of Prospective ruling is not new in India as it has been applied by the Supreme Court in a number of past cases.

Secondly the issue also arises due to the fact that the Supreme Court has not invalidated a constitutional amendment or a statutory enactment, rather it has merely overruled its own judgments through this judgment, so the question that which particular past transactions need judicial immunity so that gravely unfair or disruptive consequences would not follow from the overruling of the previous judgments.

Another concern was that before the BALCO judgment the Indian Courts could interfere in matters of foreign seated arbitrations involving an Indian party, unless agreed to contrary either expressly or impliedly. These decisions do not affect the foreign seated arbitrations involving an Indian party, thus it was presumed that after these judgments that such foreign seated clauses would be susceptible to being invalidated as well, but the fact was that there was no effect on them rather on those past transactions that were instituted in courts.

Finally, last issue is that the apart from the previous decisions there are several other similar decisions as well of the Supreme Court which still are good law and can cause problems in future in International Commercial Arbitrations involving Indian party.

Conclusion

In the end it is understandable that either the agreement entered into by the parties to a dispute or the seat of arbitration plays a monumental role in the International Commercial Arbitration, but the same concept is not yet entirely clear in India. It is felt that the BALCO judgment which has overruled previous judgments such as the Bhatia International and Venture Global, still it is not the panacea for all the ills associated with International Commercial Arbitration in India, but it is no doubt a good starting point which has also allowed all the courts to start afresh. It is also without a doubt that the path ahead for India in this regard is going to be a long, arduous path which will be fraught with difficult legal and policy challenges before India can be truly considered as arbitration friendly jurisdiction in the world and it is the BALCO decision which has inspired hope that a new and promising era has begun for the arbitration law in India.

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[i]https://www.legallyindia.com

[ii] Supra

[iii]Bharat Aluminum v. Kaiser Technical Services, Civ App 3678 of 2007 (6 September 2012)

[iv](2002) 4 SCC 105

[v]Appeal (civil) 309 of 2008

[vi]https://arbitrationblog.kluwerarbitration.comm

[vii]https://www/mondaq.com

[viii] Pictures: The Daily Guardian

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COPYRIGHT AND TRADEMARK INFRINGEMENT: A COMPARATIVE ANALYSIS

by Harsh Rai

ABSTRACT

Despite the fact that Copyright and Trademark systems sound similar in attribute they have a whole different sphere of operations. The variances are considerably larger than the similarities among them. The basic factor in which the law governing each of the systems is designed to address the specific facets of their respective fields of rights and relationships, as are laws enacting negotiable tools to deal with bills and notes, as are sales laws to deal with relationships resulting from the acquisition and sale of personal property.

In the restricted scope of this Article, it would be unrealistic, if not impossible, either to attempt to trace each of those areas of law’s history, beginnings and ways of developing it or to offer a thorough review of the individual statutes and other regulations governing its application. Even at the risk of over-simplification, some of its essential features, some noteworthy parallels and differences, and certain sectors in which they intersect can be more useful to investigate. INTRODUCTION:

The system of copyright addresses the contents of the articles. It addresses the transmission of information, ideas and expressions when they have been reduced to a certain tangible form that can be viewed and reproduced by a reader or viewer. ¹ Products like as books, plays, music, journals, magazines, images, films, and three-dimensional works of art are part of the copyright system. They are sometimes referred to as literary, artistic and research works under the idea of “writing by an author,” and the private interest in their content is diversely referred to as literary or intellectual property.

The purpose of Copyright Law is to encourage the development and dissemination of this content, enabling writers to profit from their work and the industry[i]. The copyright system guarantees that the substance of these works is widely communicated by allowing the physical embodiment of these works to be distributed without losing dominance over the intellectual property contained within[ii]. In unpublished works, the copyright and common law regulations for literary property consist of a copyright system, which protects such property from invasion.

Unlike copyright, frequently called intellectual property, trademarks and patents are sometimes classed as industrial property, as mentioned above. If the distinction is not regarded too literally there’s a degree of reason because of the main area in which trademarks and patents play their leading role. The function is the sector that we generally call, trade and industry.

The legislation on trademarks does not deal with the contents but the identifying function, they deal with words, symbols, sounds and pictures as well. The aim of a trademark is not to define a product or to transmit information but is to relate the product with the manufacturer or distributor or with a set of items of the same or common source. The items may range from vehicles, razor blades, cigarettes and home appliances, although, these things may not be described or told by a trademark. A trademark is meant to “pack a bell” to use a colloquial term so that the buyer may pick a branded object over an item of the same or similar sort. A trademark’s role is twice as much. It is designed, on the one hand, to promote and protect the goodwill of its owner whose profits are obtained by the sale and, on the other hand, by preventing uncertainty regarding the source or identity of such items, to safeguard the buying public. Consequently, the trademark system has been intended to achieve these outcomes by focusing on the utility as a mark or comparable method of identification, not on the substance of the mark or its intrinsic literary or creative quality.

A COMPARATIVE VIEW ON COPYRIGHT AND TRADEMARK INFRINGEMENT:

Infringement of copyright shall be without the consent of the copyright holder the use or creation of copyright-protected content. Infringement of copyright implies that a third party infringes upon the copyright holder’s rights, such as exclusive use of a work for a certain period of time. Music and films are two of the most popular types of entertainment with substantial copyright violations[iii]. Cases of violation might lead to contingent obligations, which, for potential proceedings, are reserved for sums. In order to ensure that their work can benefit, owners produce new work and get copyright protection. The Owner may either sell or lease his work to a third party who may use its work, however, but if the copyrighted Owner’s work is reproduced or reproduced without the latter’s consent, it may result in a violation of copyright by the Owner of the work against the Copyright Infractor[iv].

The cardinal stumbling block regards to trademark Infringement is creating confusion in the minds of customers in resemblance to the product. “Is one symbol so near to another that it is possible that an average buyer is misled, misguided, or fooled about the source of the products or service?” “The courts would want to make a judgement on the violation to know what the client thinks about, how he reacts to the two markings and thus if he is likely to be tricked. While in most cases the main problem of trademark infringement has been consumer confusion, there are two alternative types of misunderstanding that deal with commerce rather than the consumer public, namely trade confusion and ‘Passing over’”. Proof of trade confusion in infringement cases has been thought to be highly useful, as the trade members are not likely to be as quickly misled or confused as the ordinary consumer[v]. Pieces of evidence of “passing off” when a trader actively and consciously tries to distribute one product as another are also valuable in the law infringement.

STATUTORY PROVISIONS:

Infringement of trademarks is specified under the “Section 29(8), Trademarks Act, 1999”[vi], In this section, when a marketer utilises the mark of the rival to create a comparison to dismiss them, this act generates not only questions connected to comparative advertising but also trademark violations.

At the same time, however, the exemption is provided for under “Section 30(1) of The Trademark Act, 1999”[vii]. Under this section, the use of the trademark of another trader is not a violation if it follows honest practises and fails to take any unfair advantage of a comparable trademark nor is it harmful to the distinctive or reputation of that trademark.

EXCEPTION TO INFRINGEMENT:

“Section-52, The Copyright Act, 1957”[viii] states:

• If the content is for personal use or private study, or even including research.
• Providing review, or criticism to the work in question or any other work.
• Current event and current affairs reporting, including a public lecture reporting.

REMEDIES FOR THE INFRINGEMENT:

In accordance with Copyright:

1. Civil remedy: In accordance with “Section 55, The Copyright Act, 1957”[ix], if copyright infringes any work, the copyright owner shall have the right via injunction, damages and accounts to all such remedies.
2. Criminal Remedy: Under “Section 63 of the Copyright Act, 1957”, the holder of the copyright can act against the offender, in which the provision may extend to at least three years of imprisonment and a fine of Rs. 50,000, which might increase to 2 lakhs, of a minimum of six months imprisonment[x].

In the event that the defendant proves that he did not know at the date of the infringement and had no reasonable ground for believing that copyright existed in the proceedings, the plaintiff shall, in the circumstances deemed reasonable, be not entitled to any remedy for any of the defendant’s profits made in the sale of infringing copies[xi].

In accordance with Trademark:

1. Monetary Compensation: Monetary compensation is the traditional legal remedy in any kind of dispute. Monetary damages are a type of legal remedy in situations of trademark infringement, which an affected plaintiff might seek. Claimants may seek real damages (e.g. lost sales), the profits of the defendant from the use of the infringed trademark, as well as costs (see the lawyer’s fee below). Claimants may also apply for punitive damages in accordance with state legislation in various countries[xii].

2. Court Ordered Injunction: Complainants may apply for an order of the Court requiring the violator to halt all infringement actions, including the use of the infringing trademark. The injunction could force an infringement to halt immediately all sales of infringing goods, or to require that the infringing product cease to be sold when a reasonable sales period has ended. Injunctions can be either provisional or permanent in nature. Orders in terms of geographical scope may likewise be limited.

3. Forfeiture or Destruction of Goods: The claimants can also request the court to give an order requiring the violator to declare the infringing products to be cancelled or destroyed. This order might provide the defendant with a certain term in which the infringing items should be produced/forfeited or destroyed.

4. Payment of Plaintiff’s Attorney Expenses: In rare instances, in addition to any other remedy, it may be proper for the claimant to apply for and get reimbursement by the defendant for their attorneys’ fees.

REAL-WORLD INSTANCES OF INFRINGEMENTS:

By developing internet portals for the sharing of music like Napster, the music business was attracted to attention.

“A&M RECORDS, INC., et al v. NAPSTER, INC”

Napster was a website for online music, enabling peer-to-peer file sharing over its networks. Customers would exchange or distribute music free of charge from different artists. Napster was sued and won for a copyright violation by recording firms in the music business for protecting their intellectual property[xiii]. Napster was determined to be in breach of the copyright rules since, in part, it knew of and did not do enough to prohibit the widespread distribution. The music was also duplicated and utilised, financially harming record firms and the selling of their songs by customers. Napster has also been proven to have benefited financially from the copying and dissemination of music at the cost of record labels.

“Yahoo Inc. v. Akash Arora and Anr.”

Maybe the first of India’s most important judgments against cyber-squatting. The High Court in Delhi held a domain name registered comparable to a trademark which gave it the right to equal protection for the first time. In this case, the defendant was ‘Yahoo India!.’ Their domain name was protected. Now, the mark of the plaintiff, “Yahoo,” was identical and even phonetically identical.

The Court thought that people would be taught that both the domains have the same source. They thought. In this case, the defendant said he had placed a notice on the website expressing the same thing. However, because the Internet nature makes it impossible to correct the domain name merely by making a disclosure, the court did not approve of the disclaimer[xiv].

CONCLUSION:

From the above research, it can be concluded that the common law phase has its roots both in copyright and in trademarks. Under the dual copyright system, unpublished works not reproduced in copies to be sold or distributed to the general public are protected under literary property doctrines of the common law. Once published, the works lose their complete protection unless if the provisions of the federal copyright law are taken in order to comply. In India, there are provisions such as “The Copyright Act, 1957”, and “The Trademark Act, 1999” that provide safeguards to such infringements and assure the remedy given under the statute. Indian Judiciary plays a very important role in such matters of disparagement and provides fair and equitable justice.

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REFERENCES

[i] David L. Hudson Jr., Copyright & The First Amendment, FREEDOM FOREIGN INSTITUTE (Aug. 05, 2004), https://www.freedomforuminstitute.org/2004/08/05/copyright-the-first-amendment/.

[ii] UNITED STATES COPYRIGHT OFFICE A BRIEF INTRODUCTION AND HISTORY, https://www.copyright.gov/circs/circ1a.html (last visited July 07, 2021).

[iii] Will Kenton, Copyright Infringement, INVESTOPEDIA (June 12, 2020), https://www.investopedia.com/terms/c/copyright-infringement.asp.

[iv] Diganth Raj Sehgal, Copyright Infringement, IPLEADERS (Aug. 22, 2019), https://blog.ipleaders.in/copyright-infringement/.

[v] Sujay Dixit, Comparative Advertisement & Infringement of Trademark, LEGAL SERVICES INDIA (last visited July 08, 2021), https://www.legalservicesindia.com/article/604/Comparative-Advertisement-&-Infringement-of-Trademark.html.

[vi]The Trade Marks Act, 1999, s. 52, No. 47, Acts of Parliament, 1999 (India).

[vii] Id. at s. 30(1).

[viii] The Copyright Act, 1957, s. 52, No. 14, Acts Of Parliament, 1957 (India).

[ix] Id. at s.55.

[x] COPYRIGHT, supra note III, at s.63.

[xi] Parul Shrivastava, Copyright Infringement, MONDAQ (June 16, 2020), https://www.mondaq.com/india/copyright/953334/copyright-infringement.

[xii] Olusola Jegede, Trademark Infringement In Nigeria And Legal Remedie, MONDAQ (Nov. 18, 2020), https://www.mondaq.com/nigeria/trademark/1006792/trademark-infringement-in-nigeria-and-legal-remedies.

[xiii] A&M RECORDS, INC., et al v. NAPSTER, INC., NOS. 00-16401 & 00-16403.

[xiv] Yahoo Inc. v. Akash Arora and Anr., 1999 IIAD Delhi 229.

[xv] Picture: Web solutions Inc.