LG ELECTRONICS INC Vs. ONIDA SAVAK LIMITED

JUDGEMENT

(1.) The appellant before us is M/s. LG Electronics Inc. (hereinafter called as "LG") who, aggrieved by an order passed by the learned Single Judge dated 29.7.1997 in I.A. No.6040 of 1997, has appealed to this Court. By the said order dated 29.07.1997, the appellant, its subsidiaries, its distributors, stockists and/or any one acting on its behalf or claiming through it, was restrained from transferring, causing to transfer or utilising or causing to utilise "Fuzzy Logic Technology" or the sold technology by any other name for the manufacture, sale, assembly of automatic washing machines. The appellant was also restrained from manufacturing, assembling, selling, offering for sale, fully automatic washing machines and parts thereof with "Fuzzy Logic Technology". It was also restrained from taking delivery of the automatic washing machines lying with the customs authorities and further restraining the customs from releasing the same unto the appellant or any one claiming through the appellant. The appellant was further restrained from advertising by hand bills, hoardings, newspapers, television, periodicals, that the appellant is manufacturing or can offer to sell washing machines manufactured with "Fuzzy Logic Technology".

(2.) Onida Savak Limited (hereinafter called as "ONIDA"), respondent herein, filed an application under section 8 of the Arbitration and Conciliation Act, 1996, (hereinafter called as "the Act") which was numbered as A.A.168 of 1997. Along with the said application, another application bearing I.A. No. 6040 of 1997 was filed under section 9 of the Act. In the petition und section 8 of the Arbitration & Conciliation ACt, 1996, ONIDA asserted that it is carrying on business of manufacture and sale of electronic goods including televisions, semi-automatic washing machines, various electronic components including tuners, speakers, printed circuit boards etc. It is further asserted that it had tied up with internationally well known electronic companies, like JVC Japan and Murata Manufacturing Company Ltd., Japan, for colour T.V. sets and V.C.Rs. It was also asserted that ONIDA was in the business of semi-automatic washing machines since 1990, and wanted to start making fully automatic washing machines, and in that connection, had encountered "LG", which was earlier known as Goldstar Company Limited (Lucky Goldstar Company Limited). LG had been, inter alia, engaged in manufacturing of fully automatic washing machines. It was further asserted in para 6 of the application that, "the respondent (LG) expressed its willingness to provide to Onida the technology for fully automatic washing machines. This latest technology was at the relevant point of time termed by the respondent as the FUZZY LOGIC TECHNOLOGY". It was also asserted that, "the respondent further unequivocally agreed to make India as the exclusive territory of Onida for sale of fully automatic washing machines with Fuzzy Logic Technology. It was on this clear understanding by the respondent and the understanding between the parties that the rights granted to Onida would be exclusive for Onida, did Onida agree to pay such a heavy amount as technical assistance fee. As per the assessment of Onida, the demand of US $ 700,000 coupled with royalty on a per-machine basis was extremely high. However, on the respondent's promise that Onida's rights would be exclusive, Onida agreed for these terms and conditions".

(3.) ONIDA further asserted that a Technical Assistance Agreement dated 10.12.1994 was entered into between the parties, and that the said agreement was to be approved by the Government of India, and also by the Government of Korea.