Startupwala Private Limited vs Google India Private Limited on 2 September, 2024

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Delhi High Court - Orders

Startupwala Private Limited vs Google India Private Limited on 2 September, 2024

1. This is a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 ("Act of 1996") seeking directions against the respondent to maintain status quo ante by reinstating all the digital ads of the petitioner related to Google Ads account: 104-104-2770, which were unfairly and arbitrarily disapproved/marked as limited by policy, on 10.12.2023; 29.12.2023; and 30.01.2024, i.e. as on the date of filing of the present Petition.

2. Petitioner is a company incorporated under the Companies Act, 2013 and is engaged in the business of corporate and management consultancy services.

3. Respondent is a Company incorporated under the Companies Act, 1956 and is a non-exclusive authorized reseller of online This is a digitally signed order.

4. Petitioner to utilize the digital advertisement services of the respondent, accepted respondent's Advertising Program Terms ("Advertisement Terms") while signing up for the service on 05.05.2020. The provides an arbitration clause as Clause 13 which reads as under:-

"If the Dispute is not resolved within 30 days, its must be resolved by arbitration by the International Centre for Dispute Resolution of the American Arbitration Association and conducted in accordance with its Expedited Commercial Rules in force as of the date of these Terms."

5. During the period, when the petitioner was using the advertisement platform of the respondent, the petitioner's Advertisement Terms were impacted on two-three occasions but were subsequently restored. Lastly, the services were impacted on 30.01.2024, wherein the advertisement were marked as disapproved. Consequently, the petitioner filed the present petition.

6. When the matter came up for hearing on 27.03.2024, this Court granted interim protection to the petitioner. The relevant para of the said order reads as under:-

"20. Since the Respondent is yet to file a reply and there are no reasons on record as to why any of these advertisements are disapproved or marked as eligible (limited), the Court has considered the irreparable loss which can be caused to the Petitioner and its business. Hence, it is directed that 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 20/09/2024 at 21:24:22 those advertisements which have currently not been blocked and are labelled as 'Eligible (limited)' in the above sereenshots shall not be blocked or taken down till the next date of hearing. Mr. Mason submits that the said advertisements which are under the Petitioner's control ought not to be modified. Accordingly, the above order shall be subject to the condition that the advertisements would be run as they are running and the content thereof shall not be modified till the next date of hearing."

7. It is pertinent to note paragraphs 10 and 16 of the said order which reads as under:-

"10. Ld. Counsel for the Petitioner submits that Clause 13 of the Advertisement Terms provides for an arbitration clause which states that the disputes between parties would be resolved by arbitration which will be conducted in Santa Clara County, California, USA. He submits that this is a standard arbitration clause in the Advertisement Terms and the said clause precludes the Petitioner from exercising its legal remedies effectively.

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16. The arbitration clause 13 of the Advertisement Terms would show that the arbitration contemplated is by the International Centre for Disputes Resolution of the American Arbitration Association and the venue is Santa Clara County, California, USA. The relevant portion of the said clause reads as under:

"(a) These Terms are governed by California law, excluding California's choice of law rules, (b) Nothing in these Terms will limit a party's ability to seek equitable relief The parties will try in good 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 20/09/2024 at 21:24:22 faith to settle any dispute relating to these Terms ("Dispute") within 30 days after such Dispute arises, if the Dispute is not resolved within 30 days, its must be resolved by arbitration by the International Centre for Dispute Resolution of the American Arbitration Association and conducted in accordance with its Expedited Commercial Rules in force as of the date of these Terms. There will be one arbitrator selected by mutual agreement of the parties. The arbitration will be conducted in English in Santa Clara County, California, USA. Any decision rendered by the arbitrator will be final and binding on the parties, and judgment thereon may be entered by any court of competent jurisdiction."

This is a standard clause as per the Google program terms. These advertising programs may be availed of by millions of customers of Google India Pvt Limited within the country and, thus, the Court would like to consider as to whether such a clause would in fact prevent people like the Petitioner from availing their legal remedies in accordance with law in India or should arbitration in such cases be held in India."

8. It is stated by Mr Marwah, learned counsel for the petitioner that in the present case, it is not possible for the petitioner to go and initiate proceedings under the International Centre for Dispute Resolution of American Arbitration Association.

9. This Court on 27.03.2024, prima facie, indicated that the arbitration clause needs a relook. However, in the fact of the present case, what weighs with me is that despite obtaining order on 27.03.2024, the petitioner has still not initiated arbitration proceedings till today.

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 20/09/2024 at 21:24:23

10. My attention has been drawn to paragraph 65 of the present petition which reads as under:-

"65. The Petitioner has already sent a Legal Notice dated 19.02.2024 to the Respondent, however, there has been no reply. The Petitioner will subsequently be taking appropriate steps to commence the arbitral proceedings but needs the protection from this Hon'ble Court to survive. Thus, the Petitioner is constrained to approach this Hon'ble Court seeking interim protections by way of the instant Petition pending the constitution of the arbitral tribunal, commencement of arbitral proceedings, rendering of final award, and further execution of that award."

11. The said para itself shows that the petitioner would take steps to commence arbitration proceedings but has not done so far. Sub section 2 of section 9 of Act of 1996 is clear in this regard and reads as under:-

"[(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine."

Emphasis added

12. Learned counsel for the petitioner has relied upon a judgment rendered by the Calcutta High Court in Abdul Vaheed v. Srei Equipment Finance Limited, 2018 SCC OnLine Cal 1529. The operative portion of the said judgment reads as under:-

"6. The appellant contends that in view of the statutory 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 20/09/2024 at 21:24:23 mandate in Section 9(2) of the Act, a pre-reference petition for interim measures cannot be continued without the arbitral proceedings being commenced within 90 days from the date of the original order passed on such provision. That does not appear to be command of the statute. Indeed, the relevant provision permits the commencement of the arbitral proceedings to be even later as may be determined by Court. It also does not appear that Section 9(2) of the Act requires a subsisting interim order to be undone or vacated merely because the arbitral proceedings may have not been commenced, though it may be open for the Court so to do in an appropriate situation."

13. In the present case, I am of the view that the petitioner on 27.03.2024 obtained interim order. It was incumbent on the petitioner to initiate arbitration proceedings under Act of 1996 as stated in section 9(2) of Act of 1996 and also stated in paragraph 65 of the present petition.

14. The question whether the arbitration agreement is harsh, invalid and needs to be ignored can only be decided in a substantial petition as and when filed by the petitioner and definitely not in a petition under Section 9 of Act of 1996.

15. For the said reasons, in view of clear mandate of section 9(2) of Act of 1996, the interim orders cannot continue.

16. The petition is dismissed with granting liberty to the petitioner to initiate any and all legal action as available in law.

17. At this juncture, Mr. Marwah, learned counsel for the petitioner states that the reason why the petitioner did not take steps is because the This is a digitally signed order.

18. I am unable to accept the same in view of the findings noted above.

19. Even though the petition has been dismissed and the petitioner has been given liberty to initiate appropriate proceedings and the business of the petitioner depends on the Google Advertisements Platform, the Interim Order dated 27.03.2024 shall continue only for a period of 10 days from today.

20. The petition is disposed of in the above terms.

JASMEET SINGH, J SEPTEMBER 2, 2024/NG 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 20/09/2024 at 21:24:23

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Delhi High Court - Orders