‘Powers Of CCI & Arbitral Tribunal Not Overlapping’: Bombay HC

Jul28,2020 #Bombay High Court
Bombay High Court LAW INSIDER IN

By Anurag Mishra-

In the matter of Nuziveedu Seeds Ltd. Vs. Mahyco Monsanto Biotect (India) Pvt. Ltd. and connected cases .An issue came before the Bombay High Court, which was whether Arbitral tribunal exceeded its jurisdiction by adjudicating upon the matter while simultaneously the Competition Commission of India was examining if the Sub-License Agreement (SLA) was anti-competitive.  

Moreover, the 2017 order was also challenged on the ground that as per Section 16 of Arbitration and Conciliation Act, 1996  the arbitral tribunal did not have the jurisdiction to adjudicate upon this matter in the light of the fact that the matter is pending before the CCI for adjudication. 

To the answer to the above issue, the Bombay High Courtthrough Justice RD Dhanuka has upheld the arbitral award favoring Mahyco Monsanto Biotech Ltd, an agri-business giant against Nuziveedu Seeds Ltd. along with its associate companies pertaining to an issue regarding the use of Bt Cotton Seeds mentioned in the SLA.

The court further held that the jurisdiction of the arbitral tribunal and of the CCI under the Competition Act under 2015 Sub License Agreement are dissimilar in nature and therefore not overlapping. The court further held that the Arbitral tribunal was adjudicating on purely contractual disputes which squarely falls under the widely worded Arbitration Clause in the contract between them. Therefore the essence of distinction of issues before 2 distinct forums must be understood. The issue before the CCI was that whether the contracts are in violation of the Competition Act are distinct from the issues before the arbitral tribunal which was whether Monsanto was entitled to its contractual dues

The court also held that the Section 61 of Competition Act i.e. the ouster clause was not attracted in the case as the nature of disputes under the consideration of Arbitration Tribunal and the CCI were different. Previously the Delhi High Court had held that the jurisdiction of the CCI to entertain the complaints regarding the abuse of dominance by MMB in respect to Patent Rights was not excluded by the Patents Act.  

Thus according to the Bombay High Court, the tribunal rightly held that the adjudication by the tribunal shall be in the nature of the right and liability of the parties to the agreement and would relate to right in personam and not right in rem. If the arbitral tribunal would have held that it had no jurisdiction in the matter and would have dismissed the claim of the respondent, the respondent would not have any remedy at all. In the proceedings before the CCI, whatever may be the outcome, the respondent would not be able to get any effective relief or decree or award directing the petitioner herein to pay the particular amount to the respondent. The arbitral tribunal rightly held that the respondent had certain rights under the 2015 SLA and thus it must also have remedy for enforcement of such rights. If the challenge to the jurisdiction of the tribunal by the respondent is upheld, it would result in dismissal of the claim without adjudication of the merits and without granting any relief to him. The tribunal accordingly rightly held that wherever there is right, there is a remedy or where there is no wrong without remedy.

Therefore in the light of the above arguments and observations the court passed an order in favour of the respondent i.e. Mahyco Monsanto Biotech (India) Pvt. Ltd. in this case.

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