BRAWN LABORATORIES LIMITED Vs. FITTYDENT INTERNATIONAL GMBH

JUDGEMENT

(1.) On 20.5.1994 the plaintiff entered into an agreement with defendant No.1 whereby the plaintiff was granted the exclusive right to manufacture and market denture cleansing tablets and adhesive powder in India on the technical know-how, trade marks and trade names of the product being provided, to the plaintiff by defendant No.l. The agreement was subject to terms and conditions contained therein. According to clause 18.5 the agreement was subject to requisite approval of Government of India and/or Reserve Bank of India as the case may be. Plaintiff is stated to have applied to the Secretariat for Industrial approvals of the Government of India for approval of the licence agreement vide its letter dated 25.3.1994. It is alleged in the plaint that in complete breach of the agreement defendant No.l failed to supply the technical know-how for manufacturing adhesive powder and denture cleansing tablets. The government also did not give requisite approval to the agreement. On 25.4.1996 the agreement was terminated by defendant No.l on grounds that the plaintiff did not commence commercial production nor did it use its best efforts to promote the sales and use of the products in India. The plaintiff has alleged this termination of the agreement to be false and frivolous and according to the plaintiff the fact was that it was defendant No.l who had committed breach of the agreement inasmuch as it had failed to provide required technical know-how for commencement of commercial production. On account of the alleged illegal termination of the agreement the plaintin is alleged to have suffered losses and it is slated in the plaint that it contemplates lo lake legal action to recover a sum of Rs.l crore alongwith interest from defendant No.1.

(2.) In the meantime, it appears that defendant No. 1 had initiated proceedings for arbitration before the international Court of Arbitration of LC.C., Paris raising a demand of US $ 1.75.000) plus 8%. interest thereon towards lumpsum licence fee and lor restraining the plaintiff from using the trade mark "Fittydent". On receipt of this notice from the I.C'.C. of Paris the plaintiff filed this suit fora declaration that as no concluded agreement tor want of government approval, required to be obtained under clause IS.5 of the agreement, had come into existence between the parties the matter could not be referred to the International Court of Arbitration under clause IS.4 . A mandatory injunction restraining the defendants from proceeding with the arbitration proceedings in ICC case No. 9714/JK based on the alleged non- concluded contract was also claimed in the suit. Alongwith the suit the plaintiff also filed an application under Order 39 Rules I and 2 of the Code of Civil Procedure for an ad interim injunction restraining the defendants from proceeding with the arbitration case before the International Court of Arbitration, I.C.C., Paris.

(3.) Summons of the suit having been served upon the defendants, defendant No.1 besides Filing reply to the application of the plaintiff under Order 39 Rules 1 & 2 Civil Procedure Code . for the grant of ad intenin injunction, al.so filed an application under Order 7 Rule 11 of the Code of Civil Procedure read with Sections 44 and 45 of the Arbitration & Conciliation Act. IWC) for rejection of the plaint or dismiss the suit and/or in the alternative to slay the suit of the plaintiff under Sections 44 and 45 of the Arbitration & Conciliation Act, 1996.