WIPRO LTD Vs. BECKMAN COULTER INTERNATIONAL S A

JUDGEMENT

(1.) In this petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the said Act'), the petitioner is seeking directions and / or orders restraining the respondent from employing any person who is, or has been employed with the petitioner, during the pendency of arbitral proceedings. This prayer emanates from the Canvassing Representative Agreement said to have been entered into by and between the petitioner and the respondent in January, 2002. The relationship between the petitioner and the respondent is that of a distributor and principal and has subsisted for almost 17 years which has been renewed from time-to-time. The last of the documents delineating the relationship between the parties is said to be the Canvassing Representative Agreement entered into in January, 2002. This agreement is said to have taken effect on 1.1.2002 and was to operate til! 31.12.2002. It is alleged by the petitioner that, subsequently, by virtue of a letter dated 24.5.2004 (Annexure-P-3), the terms and conditions of the said agreement of 2002 were extended by another two year period commencing from 1.1.2004 and ending with 31.12.2005. Therefore, according to the petitioner, the said Canvassing Representative Agreement of January, 2002 was to continue to operate till 31.12.2005 and this governed the relationship between the parties. The said agreement contained a document entitled 'Exhibit-D' and and forms part thereof. Clause 5 of the said agreement which is the bone of contention between the parties, reads as under:

(2.) It is the contention of the petitioners that the parties had agreed that for a period of two years after the termination of the agreement, this non-solicitation of employees clause would be operative. This clause provides that upon the termination of the agreement, neither party shall solicit, directly or indirectly or induce or encourage the employees of the other party to leave and join a competitor or join the other party. There was an exception and that was that general advertising of posts and other general means of recruitment were not to be considered as solicitation.

(3.) It is the case of the petitioner that it was only the petitioner who, for the past 17 years, was the exclusive distributor of the respondent's products in India. It is the petitioner's case that on 1.9.2005, the respondent informed the petitioner's representative over the telephone that a decision had been taken to prepare for direct operations in India without distributorship, such as the one with the petitioner. It was also indicated that by the end of October, 2005, the respondent would issue to the petitioner aformal notice for non-renewal of the contract and that shortly thereafter a communication was also received from the respondent to this effect. It is submitted by the petitioner that efforts were made with the respondent to work out a plan for ensuring a smooth transition mainly in the interest of thousands of customers and installations all over the country where the products of the respondent were installed and which were hitherto being exclusively maintained by the petitioner. Some proposed transition documents, which were not finalised by the parties, are annexed as Annexure-P-6. It is in this background that in the month of October, 2005 an advertisement was issued by the respondent in leading English newspapers of India with, inter alia, the following text: