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2.5 Robert Mathys and his son Renauld Mathys on one side and N. P. Dhawan and his brother R. M. Dhawan and other entered into collaboration agreement on 15th April, 1977. They formed the appellant/defendant company Rob Mathys (India) Pvt. Ltd. with effect from 24th November, 1978, having equity investment to the extent of 60% and two of the Mathys to the extent of 40%. Two of the Mathys were also appointed as Directors in January, 1979. The defendant company installed its factory at Jaipur and started production using the aforesaid trade marks in dispute in 1979 and thus carrying out the manufacturing of the orthopedic implants and surgical instruments and trading activities from 1979 till date. The appellant company have been manufacturing and marketing its goods in India and using trade mark in dispute with the "permission of the plaintiffs on account of his financial and technological collaboration between plaintiff No. 2 and the defendants" as has been put by learned Counsel for the appellant. The collaboration agreement was initially for 10 years from 15th April, 1977 and that period had expired. However, the parties, it appears, continued to act upon the said agreement till it was specifically sought to be canceled by letter dated 24-6-1992 and legal notice dated 12th November, 1992 and Public Notice.

Disputes between the parties 3.1 In short, according to the case of the respondents, Clause 11 of the Collaboration agreement related to future Trade Marks and did not cover existing Trade Marks, including the mark Synthes device and word mark "Synthes". Further by virtue of the said Clause 11, no sub-licensee was granted in favour of the appellant company to use the existing Trade Marks of respondent No. 1, including the Synthes device and word mark "Synthes". Robert Mathys Company (predecessor of respondent No. 2) prior to incorporation of Rob Mathys India Pvt. Ltd., the appellant had been carrying on large business in the manufacturing and sales of surgical products and orthopedic implants in Europe and elsewhere. They have carried out both the function of export of goods manufactured by them under the Trade Marks in question as well as other Trade Marks from Switzerland into India and advertising, promoting and offering them for sale, packaging them and selling them directly to the customers. In most cases finished goods manufactured by respondent No. 2 in Switzerland and bearing the Trade Mark in question have been imported into India by the appellant. In some cases, semi-finished goods and raw materials have been imported into India by the appellant for conversion into finished goods in terms of the collaboration agreement. The value of the goods imported and manufactured by the appellant was rupees 2.4 crores and rupees 61 lakhs respectively. Thus, the Trade Marks were continuously used into India by the respondents. Respondent No. 2 merely granted the bare privilege to use the Trade Mark in question, as such a gratuitous licence was granted. Four reasons have been given to revoke the licence. Firstly, failure of the appellant to pay a colossal sum of rupees 3.5 crores for the finished and semi-finished goods and raw material supplied to it by respondent No. 2; secondly, numerous complaints received by them from hospital and other parties in India about sub-standard qualities of the goods supplied by the appellant bearing Trade Marks in question; thirdly, dispute relating to shares and fourthly, non-payment of a sum of Rs. 1,72,767/- for supply of machinery and capital goods along with interest at the rate of 4 per cent. Consequently, the collaboration agreement was cancelled by letter dated 24th June, 1992 and legal notice 12th November, 1992 coupled with Public Notice dated 15th November, 1992 published in "The Hindustan Times". The trade mark in dispute has been continuously advertised by the defendant/appellant for the last 17 years with their permission. The plaintiff have revoked their permission. The defendant/appellant company has no right to use the trade marks in dispute.

20. It is clearly understood that DHAWANS are acting for and on behalf of the proposed company or wherever the context permits, they are acting for and on behalf of MATHYS. It is clearly understood between both the parties that this agreement shall be governed by the approval of the Government of India or any other Government authority."

There is a subsequent agreement at page 72 by which Clause 19 has been amended to incorporate as below :-

AGREEMENT "In view of Clause 19 of the agreement of collaboration between M/s. Rob Mathys, Bettlach and Mr. N. P. Dhawan submitted to the Ministry of Industry, Govt. of India. This Clause stands amend as stated below :
M/s. Rob Mathys India Pvt. Ltd. shall export the manufactured products only to Switzerland and Australia and to any other country only with prior and specific consent of M/s. Rob Mathys, Bettlach, Switzerland."
This documents indicates that there was an agreement between Dhawans and the two - Mathys Robert and Reynold.
A bare reading of Clauses 14 & 15 of the agreement indicates that in ordinary course it was non-cancelable for 10 years for two reasons; (a) firstly, it was initially for a period of 10 years and parties intended to do their best to extend the period by mutual consultation, (b) Secondly, it was non-cancelable except in the event of (i) bankruptcy, and (ii) assignment of this agreement. In such an agreement there is an arbitration Clause to settle disputes arising out of the agreement, by arbitration in accordance with the rules of the International Chamber of Commerce in terms of Clause 13.