Court Finds No Evidence to Support Petitioners' Claims for Loss of Revenue and Profit in Arbitration Award Challenge
In a significant ruling, the Bombay High Court has dismissed a petition challenging an arbitral award that refused to grant damages or adjudicate intellectual property rights concerning the software "TestMagic." The case, Anand Khosla and Ors. v. Punam Kumari Singh, revolved around disputes in a business partnership and ownership claims over the software.
The arbitration proceedings were initiated after Anand Khosla, the petitioner, expelled Punam Kumari Singh from the Limited Liability Partnership (LLP) they had formed to develop and market "TestMagic." The arbitral tribunal validated the expulsion but dismissed Khosla's counterclaims for damages, citing a lack of evidence.
In the judgment delivered by Justice Sandeep V. Marne, the court upheld the tribunal's decision, emphasizing the importance of concrete evidence in claims for loss of revenue and profit. The tribunal had rejected the counterclaims for Rs. 40 crore in alleged lost revenue, noting that the petitioners failed to substantiate these claims with specific evidence of loss due to the respondent's actions.
The court also upheld the tribunal's decision not to adjudicate the ownership of intellectual property rights related to "TestMagic." The tribunal had determined that disputes over ownership of intellectual property rights are non-arbitrable as they involve rights in rem, which require resolution through appropriate legal proceedings.
The court's decision reinforces the principle that arbitral awards must be based on credible evidence and that disputes over intellectual property ownership are not within the purview of arbitration. This judgment serves as a critical reminder for parties seeking damages in arbitration to present substantial evidence to support their claims.
Bottom Line:
Arbitral Tribunal's refusal to grant damages or adjudicate intellectual property rights in arbitration upheld due to lack of evidence and non-arbitrability of disputes concerning ownership of intellectual property.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 34
Anand Khosla v. Punam Kumari Singh, (Bombay) : Law Finder Doc Id # 2827283
