Delhi High Court refers dispute over use of ‘Pind Balluchi’ mark to arbitration

The Delhi High Court on Monday referred the dispute over the alleged unauthorised use of the “Pind Balluchi” mark to arbitration [Triom Hospitality v. JS Hospitality]

A Division Bench of Justices C Hari Shankar and Om Prakash Shukla set aside a commercial court order that had refused to send the matter to arbitration, ruling that the lower court exceeded its jurisdiction by conducting a detailed evidentiary inquiry at the referral stage.

“The practice of entering into the merits of the dispute at the referral stage defeats the purpose of the doctrine of kompetenz kompetenz and Section 16 of the Act,” the Bench held.

JS Hospitality Services (plaintiff), proprietor of the registered “Pind Balluchi” trademark, approached the commercial court alleging that Triom Hospitality was running a restaurant in Dwarka, New Delhi under the same name without authorisation. An ex parte injunction was granted restraining Triom from using the mark.

Triom sought a reference to arbitration on the basis of a Memorandum of Understanding (MoU) dated June 2022. However, the plaintiff denied having signed the MoU and filed an affidavit stating that it was forged and fabricated. The commercial court treated these allegations as grave and refused the reference.

The High Court held that the refusal was contrary to the standard of prima facie review required under Section 8.

The commercial court had reasoned that extensive evidence of the parties would be required including the examination of [the] document by a handwriting expert/forensic expert and therefore the dispute was “non-arbitrable.”

The High Court rejected this approach, stating:

“The need of extensive evidence by the parties cannot, by itself, constitute a ground for declining reference to arbitration.”

The Bench found that the lower court had relied on multiple surrounding circumstances, such as absence of a company seal, inconsistencies in partnership deeds and a police complaint, to conclude that the MoU was forged. This, the High Court said, amounted to an impermissible “mini-trial.”

Emphasising the pro-arbitration position in Indian law, the Court reiterated:

“Section 7 of the Act requires only that an arbitration agreement be in writing and does not mandate that such agreement be signed or stamped by the parties...What is material is the clear intention of the parties to submit disputes to arbitration to be established through written communication, surrounding conduct, or other documentary evidence.”

Since the parties had an undisputed commercial relationship and the MoU was in writing, the Court held that formal validity was met. Whether signatures were genuine is a matter of substantive validity, reserved for the arbitral tribunal.

The commercial court’s refusal was, therefore, set aside and the parties were referred to arbitration. All issues, including the existence and authenticity of the MoU, are left open for adjudication by the tribunal.

Triom Hospitality was represented by Advocates Amit George, Rajiv Kumar, Rupam Jha, Adhishwar Suri, Ibamsara Syiemlieh, Dushyant Kaul and Medhavi Bhatia.

JS Hospitality was represented by Senior Advocate J Sai Deepak with Advocate Vikas Tomar.

[Read Judgment]