Court refuses injunction against third-party exhibition organizers, citing lack of direct involvement and delay in petition
In a significant ruling, the Bombay High Court dismissed a petition filed by Messe Frankfurt Trade Fairs India Pvt. Ltd. seeking interim measures against Netlink Solutions India Limited and others, concerning alleged breaches of "non-compete and non-solicit" clauses in an asset purchase agreement. The court ruled that interim measures could not be granted against third parties not bound by the arbitration agreement, particularly in the absence of evidence of clandestine or fraudulent activities by the respondents.
The case arose from Messe Frankfurt's apprehension that exhibitions titled "Indian Gifts & Premium Show" and "PPS Expo-Pen, Paper & Stationery Show," scheduled from January 22-24, 2026, were in violation of the asset purchase agreement signed with Netlink Solutions. Messe Frankfurt claimed that Netlink Solutions and its associates were conducting these exhibitions in breach of the agreement.
Justice Sandeep V. Marne, presiding over the case, noted that Messe Frankfurt had delayed filing the petition, having known about the alleged violations for over a year. The court highlighted that the petitioner's lack of urgency and substantial delay disentitled them from equitable relief under Section 9 of the Arbitration and Conciliation Act, 1996.
The judgment emphasized that the non-compete clause in the agreement could not bind third parties or former employees who were not signatories to the agreement. The court also pointed out that interim measures under Section 9 could not be directed wholly against a third party unless exceptional circumstances justified such relief.
Furthermore, the court found no sufficient evidence to support Messe Frankfurt's claims of concerted action by Netlink Solutions and its associates in organizing the exhibitions. It observed that the alleged involvement of the respondents was based on speculative reports and circumstantial evidence that did not substantiate the claims.
In conclusion, the court dismissed the petition, clarifying that the observations were preliminary and should not influence the final arbitration proceedings. Messe Frankfurt retains the option to seek damages in arbitration for any alleged breaches of the agreement.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Section 9 - Interim measures cannot be granted against a third party not bound by the arbitration agreement unless exceptional circumstances justify such relief, and the subject matter of arbitration involves the property of the third party.
Statutory provision(s): Arbitration and Conciliation Act, 1996 - Section 9, Indian Contract Act, 1872 - Section 27
