VVF (INDIA) LTD. Vs. JYOTHY LABORATORIES LTD.

JUDGEMENT

(1.) The petitioner seeks to enforce a negative covenant contained in a sale and purchase agreement of December 21, 2009 between the predecessor-in-interest of the respondent and the predecessor-in-interest of the petitioner. The agreement of 2002 was executed by Henkel India Limited and VVF Limited and contains the following negative covenant at clause (4) under Article 4 thereof:

(2.) The products listed in Annexure 'C' to the agreement are Margo Soap, Fa Soap and Neem Toothpaste. The petitioner says that notwithstanding the petitioner not being entitled to specifically enforce the agreement or the other terms thereof, the petitioner is entitled to an injunction restraining the respondent from allowing any other party to manufacture the products listed in Annexure 'C' to the agreement.

(3.) Several grounds, primarily technical in nature, have been urged on behalf of the respondent. To begin with, the respondent contends that the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 is maintainable since there is no arbitration agreement between the parties. The respondent refers to the agreement and the parties thereto and, in particular, to the parties being limited only to their successors and permitted assigns. According to the petitioner, since the respondent herein has neither accepted the terms and conditions of the sale and purchase agreement nor the arbitration clause contained therein, the disputes between the parties may be arbitrable. The respondent also refers to Clause 22(1) of the agreement that provides that the agreement "is personal to the parties and shall be assignable by either party without the prior written consent of the other.." The respondent suggests that notwithstanding the conduct of the respondent or whatever representation may have been made by the respondent to the petitioner or any authority, if the agreement requires the rights and obligations thereunder to be personal to the parties and capable of assignment except by a writing, the negative covenant cannot be enforced against the respondent in the absence of a writing evidencing the assignment of the agreement.