Delhi High Court - Orders
Geniemode Global Private Limited vs Ritesh Nair on 16 May, 2023
Author: Chandra Dhari Singh
Bench: Chandra Dhari Singh
$~49
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 142/2023
GENIEMODE GLOBAL PRIVATE LIMITED ..... Petitioner
Through: Mr. Raj Shekhar Rao, Sr. Advocate
with Mr. Zehra Khan, Mr. Anauntta
Shankar and Ms. Manasa, Advocates
versus
RITESH NAIR ..... Respondent
Through: Mr. Samir Sagar Vasishta, Mr.
Nachiketa Vijay Suri and Mr.
Abhishek Pratap Singh, Advocates
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
ORDER
% 16.05.2023
I.A. 9206/2023 (Exemption)
Exemption allowed subject to just exceptions.
The application stands disposed of.
O.M.P.(I) (COMM.) 142/2023
1. The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act") has been filed on behalf of the petitioners seeking the following reliefs:
"a) Direct/Restrain/Injunct the Respondent from soliciting and/or attempting to solicit employment of or advise any of the Petitioner's existing employees or any person who was employed by the Petitioner or any person or organization providing services to or through Petitioner to terminate his or her contract or relationship with the Petitioner or to accept any contract (directly or indirectly) or other arrangement for This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:32 providing services to any other person or organization, including but not limited to list of clients set out in paragraph 51 above,
b) Direct/Restrain/Injunct the Respondent from contacting and/or attempting to contact any of the existing or prospective clients, buyers or suppliers (i.e. any person or organization with whom the Petitioner are carrying on or is in advanced stages of exploring a professional or business relationship, including but not limited to list of clients set out in paragraph 51 above) of the Petitioner to entice such clients, buyers or suppliers away from the Petitioner or to damage in any way their business relationship with the Petitioner or for the provision of substantially the same services provided to such clients by the Petitioner;
c) Direct/Restrain/Injunct the Respondent from soliciting and/or attempting to solicit or undertake employment with any client of the Petitioner or any organization where the employee has been taken or sent for training, deputation or secondment or professional work by the Petitioner,
d) Direct/Restrain/Injunct the Respondent from entering into the employ of, or render any other services to, any person engaged in a business which competes with the business of the Petitioner,
e) Direct/Restrain/Injunct the Respondent from sharing and disclosing trade secrets, confidential data, Intellectual Property Rights or work of the Petitioner to any other person, competitor or entity which may cause any harm, loss to the Petitioner;
f) Direct/Restrain/Injunct the Respondent from taking advantage of and/or using and/or misusing any documents which the Respondent is in his possession to the detrimental of the Petitioner;
g) Direct/Restrain/Injunct the Respondent from doing or saying anything which is harmful to the reputation or goodwill of the Petitioner or which may lead any person to cease to deal with the Petitioner,
h) Direct/Restrain/Injunct the Respondent from making any disparaging/defamatory/libelous statements against the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:32 Petitioner;
i) Direct the Respondent to deposit before this Hon'ble Court/secure a sum of Rs. 5,00,00,000/- towards loss suffered by the Petitioner on account of deliberate breach of the Employment Agreement (as defined above);
j) Pass such further orders as this Hon'ble Court may deem fit and proper in the interest of justice, in favor of the Petitioner and against the Respondent."
2. The learned senior counsel for the petitioner submitted that the petitioner, Geniemode Global Private Limited, is one of the leading sourcing platform for B2B buyers in a variety of textiles, furniture, and other similar products. The respondent has been in the business connecting B2B buyers to sellers, having experience of 23 years in apparels and accessories sector. In the year 2022, the respondent approached the petitioner with a proposal to sell the complete business of his LLP vide Purchase Agreement dated 19th February 2022, with all economic and other rights including goodwill, for a total consideration of Rs.8,28,00,000/-.
3. It is submitted on behalf of the petitioner that Clause 11 of the Purchase Agreement specifically provides for 'Non-Compete', whereby it was agreed between the parties that the respondent shall not enter the employment of any competitor of the petitioners, shall in no manner do anything harmful to the reputation and goodwill of the petitioners or cause any person to cease to deal with the petitioners for a period of two years from the 'Closing Date', i.e., 28nd February 2022. It is further submitted that the Clause 10 of the Purchase Agreement relates to the confidentiality to be maintained by the petitioners and the respondent.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:33
4. It is submitted that upon signing the Purchase Agreement, the respondent became the Senior VP of petitioner No. 1 to enable the respondent to actively continue earning a livelihood by working in the same sector, without being in breach of his obligation to not compete with the businesses of the petitioners. Subsequently, the petitioner entered into an Employment Agreement with the respondent on 2nd February 2022, which came into effect from 1st March 2022.
5. It is submitted that the said Employment Agreement provides for non- solicitation and non-compete under Clause 5, as per which the employees of the petitioners shall refrain from any competitive and solicitation activities for a reasonable period of two years after leaving the petitioner company.
6. It is submitted that Employment Agreement stipulated that the respondent would continue to be in the employment of the petitioner at least until the third quarter of the year 2023 and thereafter, in consideration of the sale of his LLP to petitioner, the respondent would refrain any competitive and solicitation activities for a reasonable period of two years after leaving the petitioner.
7. It is contended that after 28th February 2023, various employees of the petitioner left the company and joined its competitor companies. It is further contended that vide email dated 28th March 2023, respondent asserted that he was in possession of business-related information belonging to the petitioner and openly threatened that he will poach each member of his team at the petitioner company and join "one of the biggest competitors of Geniemode very soon".
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:33
8. It is submitted that the petitioner has been constrained to approach this Court with utmost urgency because the petitioner have come to know that the respondent has received a job offer from a competitor of the petitioners', namely, 'Fashinza'. It is further submitted that several other employees of the petitioner have also threatened to leave the petitioner in complete and gross violation of the Purchase Agreement.
9. It is submitted that the respondent has been soliciting clients of the petitioner by using its confidential information and inducing employees and consultants of the petitioners to resign and join its competitors and is actively maligning the reputation of the petitioner in the market. Therefore, it is prayed that the emergent and interim relief sought by the petitioner may be granted by this Court.
10. At this juncture, the learned senior counsel for the petitioner concedes that the disputes between the parties arising out the Agreements executed between them are arbitrable in nature and may be raised before and settled by an arbitrator, for which this Court may pass appropriate directions and appoint an independent sole arbitrator. The learned senior counsel for the petitioner further submits that upon convening of the Arbitral Tribunal, the petitioner will move an application under Section 17 of the Act for interim relief which has been sought by way of the instant petition.
11. Per Contra, the learned counsel for the respondent vehemently opposed the instant petition. It is submitted that there is no relief which accrues to the petitioner and may be granted by this Court, therefore, the instant petition may be dismissed.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:33
12. However, it is submitted that the disputes between the parties are arbitrable in nature and there is no objection on behalf of the respondent in case the same are referred by this Court to an independent and impartial sole arbitrator for adjudication.
13. Heard learned counsel for the parties and perused the record.
14. The petitioners have approached this Court by way of the instant petition seeking urgent relief against the respondent. Upon perusal of the record as well as the arguments advanced on behalf of the parties, this Court finds that there are disputes between the parties, which may be adjudicated and settled by an arbitrator. In the instant case, there is an Agreement in existence which has given rise to the contractual relationship between the parties as well as to the disputes between them. There is no challenge to the fact that the disputes between the parties are arbitrable in nature.
15. At this juncture, it is deemed pertinent to reiterate the intent and purpose of enacting the Act which facilitates a mechanism to the public to resolve their disputes in a process which is less rigorous, technical, and formal than that of litigation. Arbitration, Conciliation and other alternate mechanisms of dispute resolution have proven to be easier, more accessible, efficient and even cost effective for the parties involved, whether at an individual level or at the level of a business or corporation.
16. The alternative dispute mechanism is not only advantageous for the people involved in disputes but has also been aiding the effective disposal and release of burden on the Courts of the Country. It has been time and again reiterated that where in terms of an Agreement or otherwise, the parties to a dispute agree to resolve them amicably, they may be referred to arbitration. Therefore, keeping in view the spirit and purpose of the Act, the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:33 nature of disputes between the parties, their consensus on appointing an arbitrator for adjudication of the disputes that have arisen amongst them, this Court is inclined to refer the disputes between the parties to arbitration, by appointing a sole arbitrator.
17. In view of the request made by the parties, to resolve the dispute between the parties, the said disputes and differences are referred to arbitration, by appointing a sole arbitrator. Hence, the following Order:
ORDER
(i) Justice S.K Gupta, Retd. Judge of the Allahabad High Court is appointed as a sole arbitrator to adjudicate the disputes which have arisen between the parties;
(ii) The learned sole arbitrator, before entering the arbitration reference, shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996;
(iii) The learned sole arbitrator shall be paid fees as prescribed under the Delhi International Arbitration Centre (DIAC) (Administrative Cost and Arbitrators Fees) Rules, 2018 as amended vide notification dated 15th November, 2022;
(iv) At the first instance, the parties shall appear before the learned sole arbitrator within 10 days from today on a date which may be mutually fixed by the learned sole arbitrator; and
(v) All contentions of the parties are expressly kept open.
18. A copy of the order be forwarded to the learned sole arbitrator on the following address:
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:33 Justice S.K Gupta Retd. Judge of the Allahabad High Court Address- B-601, Designer's Park,Section 62, Noida- 201309 Email address- [email protected] Phone No.- 9415216833
19. The petitioner is directed to file an application under Section 17 of the Act within two weeks from the date of this order, to raise before the Arbitral Tribunal all the issues and grounds that have been raised before this Court by way of the instant petition.
20. In the meanwhile, both the parties are directed to maintain the status quo and not to violate the Clauses 5 of the Employment Agreement dated 02nd February, 2022.
21. Accordingly, the instant petition is disposed of with the aforesaid directions.
22. Pending applications, if any, also stand disposed of.
23. The order to be uploaded on the website forthwith.
CHANDRA DHARI SINGH, J MAY 16, 2023 gs/db Click here to check corrigendum, if any This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:35