Delhi High Court
Sujith Krishnan Nair vs Ekibom Technology India Pvt Ltd & ... on 11 November, 2021
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$~8 & 9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 11th November, 2021
+ C.R.P. 23/2020
VIBHOR JAIN ..... Petitioner
Through: Mr. Vikas Dutta, Mr.Siddharth Silwal
and Mr.Rajesh Jha, Advocate.
versus
EKIBOM TECHNOLOGY INDIA PVT LTD
& ORS ..... Respondents
Through: Mr. Tanmaya Mehta, Ms. Aayushi
Sharma, Ms. Niyati Kohli, Mr.
Pradyuman Kaistha & Mr. Subham
Jain, Advocates for R-1.
9 And
+ C.R.P. 27/2020
SUJITH KRISHNAN NAIR ..... Petitioner
Through: Mr. Vikas Dutta, Mr.Siddharth Silwal
and Mr.Rajesh Jha, Advocate.
versus
EKIBOM TECHNOLOGY INDIA PVT LTD
& ORS. .... Respondents
Through: Mr. Tanmaya Mehta, Ms. Aayushi
Sharma, Ms. Niyati Kohli, Mr.
Pradyuman Kaistha & Mr. Subham
Jain, Advocates for R-1.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present revision petitions arise out of the impugned order dated
25th November, 2019 passed by the Ld. ADJ, South West District, Dwarka
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Courts, Delhi (hereinafter "Trial Court") in Civil Suit No. CS (Comm)
22/2019 titled Vibhor Jain v. Beijing Mobike Technology Co. Ltd. & Ors.
By the impugned order, the application filed by the Respondent
No.1/Defendant No.3 under Section 45 of the Arbitration and Conciliation
Act, 1996 (hereinafter "Act") has been allowed by the Trial Court, and
accordingly, the commercial suit for declaration and damages as
consequential relief has been disposed of.
3. The dispute in the present case arose out of a suit instituted by the
Petitioners against three companies, namely Beijing Mobike Technology
Co. Ltd., Ekibom Technology India Pvt. Ltd. and Mobike B.V., Netherlands.
The Indian entity, Respondent No.1, is a company incorporated under the
Companies Act, 2013. Respondent No.2 is a company incorporated under
the laws of China. Respondent No.3 is a company incorporated under the
laws of Netherlands and is a subsidiary of Respondent No.2. The
Respondent No.2 & 3 along with its various group entities, including
Respondent No.1, are engaged in the business of rendering bike-sharing
services worldwide. Respondent No.1 was incorporated for the purposes of
setting up and running the business of the Respondents in India. It was for
this purpose that the services of the Petitioners were engaged.
4. It is the case of both the Petitioners that they have entered into a
Service Contract dated 25th September, 2017 under which certain amounts
were payable to the Petitioners for rendering consultancy services to the
Respondents. The said Service Contract envisaged the payment of
approximately USD 10,000 per month to the Petitioners. The suit of the
Petitioners arose out of the Termination Letter dated 20th September, 2018,
which was issued by the Indian entity, i.e., Respondent No.1 herein, thereby
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terminating the services of the Petitioners as Chief Executive Officer
(hereinafter "CEO") and Chief Business Officer (hereinafter "CBO") of
the Respondent No.1. According to the plaint, the initial Service Contract
dated 25th September, 2021 was continuing and the termination of the said
contract could not have taken place in the manner, in which it was done by
the Respondent No.1. Hence, the Petitioners were constrained to file a suit
seeking declaration of the Termination Letter dated 20th September, 2018 as
null and void as also for damages against the Respondents.
5. In the said suit, an application was filed by the Respondent
No.1/Defendant No.3 under Section 45 of the Arbitration and Conciliation
Act, 1996 on the ground that the dispute between the parties arises out of the
Service Contract dated 25th September, 2017, which contains an arbitration
clause as under:
"9. DISPUTE RESOLUTION
In the event of a dispute or difference, relating to,
arising out of or in connection with any of the matters
set out in this Contract, including any question
regarding its existence, validity or termination
("Dispute"), the parties to the Dispute shall discuss in
good faith to resolve the Dispute. In case the Dispute is
not settled within 30 (thirty) calendar days, it shall be
referred to and finally resolved by arbitration in
arbitration in Singapore in English in accordance with
the Arbitration Rules of the Singapore International
Arbitration Centre ("SIAC Rules") for the time being
in force. There shall be a sole arbitrator who shall be
jointly appointed by the parties to the Dispute and
falling agreement on such appointment, arbitrator
shall be appointed by the appointing authority of the
Singapore International Arbitration Centre. The venue
of the arbitration may be determined by the arbitrator
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from time to time having regard to the convenience of
the parties to the Dispute. The award of the arbitrator
shall be final and conclusive and binding upon the
Parties and non-appealable to the extent permitted by
Applicable Law."
6. Accordingly, it was prayed by the Respondent No.1/Defendant No.3
that the disputes between the parties ought to be referred to arbitration in
consonance with Clause 9 of the Service Contract dated 25th September,
2017. Vide the impugned order, the Respondent No.1/Defendant No.3's
application under Section 45 of the Act was allowed, and accordingly, the
parties were relegated to arbitration, and the commercial suit was disposed
of. The operative portion of the impugned order reads:
25. Since plaintiff's suit has been filed assailing
termination notice dated 20.09.2018 and seeking
damages along with pendente lite and future interest on
the basis of Service Contract dated 25.09.2017 whereas
clause 9 of Service Contract specifically provides that
dispute or difference relating to, arising out of or in
connection with any of the matters set out in this
contract, including any question regarding its
existence, validity or termination shall be finally
resolved by arbitration in Singapore in accordance
with the arbitration rules of the "Singapore
international Arbitration Centre (SIAC Rules)", so
application under Section 45 of Arbitration and
Conciliation Act filed by defendant No.3 Is allowed
and parties or any person claiming through or under
them may approach / refer the dispute for resolution as
per clause 9 of the Service Contract dated 25.09.2017.
26. Commercial suit is disposed off accordingly.
27. File be cosigned to record room.
7. Mr. Dutta, ld. Counsel appearing for the Petitioners, submits that the
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case of the Petitioners is against the Indian entity i.e., Respondent No.1, with
whom there is no arbitration clause, as the Respondent No.1 is not a party to
the Service Contract. He submits that, vide email dated 22nd October, 2018,
the Respondents themselves have admitted that the Service Contract expired
when the Petitioners were appointed as CEO and CBO of the Respondent
No.1. Thus, the dispute is not covered under the Service Contract and
therefore, the commercial suit was maintainable. He further relies upon the
various correspondences as also the Termination Letter 20th September,
2018, which specifically has a clause to the effect that the exclusive
jurisdiction in respect of termination shall be with the Courts in Delhi.
8. On the other hand, Mr. Mehta, ld. Counsel appearing for the
Respondent No.1 i.e., the Indian entity, made the following submissions:
i) Firstly, he submits that he does not represent Respondent Nos.2
& 3.
ii) He further submits that the Respondent had invoked the Group
of Companies doctrine before the Trial Court.
iii) He relies upon the judgments in MTNL v. Canara Bank
[(2020) 12 SCC 767], Chloro Controls India Private Ltd. v.
Severn Water Purification [(2013) 1 SCC 641] and Ameet
Lalchand Shah v. Rishabh Enterprises and Anr. [(2018) 15
SCC 678].
iv) He submits that the arbitration clause contained in the Service
Contract would be triggered, even to decide as to whether the
issue raised by the Petitioners would be covered under the
Service Contract or not.
v) He relies upon the contents of the plaint to argue that the entire
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plaint has been drafted with the fulcrum being the Service
Contract, which clearly contains the arbitration clause. He also
submits that the damages also arise out of the Service Contract,
and since there is no separate remuneration or salary being paid
to the Petitioners as CEO and CBO of the Respondent No.1, the
disputes trace back to the Service Contract itself.
vi) Specific reference is made to paragraphs 23 and 27 of the plaint
to argue that the case of the Petitioners is itself that they were
never appointed as CEO and CBO of the Respondent No.1.
Therefore, the Service Contract could not have been terminated
by the Respondents.
vii) Accordingly, it is submitted that the revision petitions are liable
to be dismissed, inasmuch as the Trial Court has rightly
referred the parties to arbitration, in terms of the arbitration
clause contained in the Service Contract.
9. On 29th September, 2021, these matters were partly-heard by this
Court and the parties were directed to seek instructions on certain aspects.
The relevant extract of the order dated 29th September, 2021 reads as under:
3. Arguments heard in part. Before proceeding further,
let the parties seek instructions, on the following
aspects:
1. Whether any specific appointment letter was
issued by the Indian entity i.e., Respondent No.l/M/s.
Ekibom Technology India Pvt. Ltd. to the Petitioners
appointing them as CEO and CBO of the
Respondent No.l? If so, what were the contents of
the said appointment letter and what was the date of
the same?
2. Whether any amounts were paid either as salary
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or fee to the Petitioners by any of the Respondents?
If so, how much?
3. If any other remuneration was paid to the
Petitioners after they assumed their positions of
CEO and CBO of the Respondent No.l? If so, by
which entity, and how much?
4. Mr. Mehta, Id. Counsel appearing for the
Respondent No.l would also seek instructions whether
as well.
5. Both the parties to file short affidavits in respect of
the above aspects
within one week.
10. Accordingly, the parties placed on record affidavits in compliance of
order dated 29th September, 2021, wherein it was admitted by both the
parties that the Petitioners were never formally appointed as CEO and CBO
of the Respondent No.1. Consequently, there were no salaries or any other
remuneration paid by the Respondent No.1 to the Petitioners on account of
such appointment. Further, the amounts paid to the Petitioners by the
Respondent No.1 were in the nature of service fees, and not salary.
11. Parties have been heard further. This Court is prima facie, of the
opinion that considering that the case of the Respondents is that the Group of
Companies doctrine is liable to be invoked, the Petitioners cannot be left
remediless qua Respondent No.1, which had in fact issued the Termination
Letter dated 20th September, 2018, which had been challenged in the suit.
Based on the submissions made by the parties, the Court put a query to Mr.
Mehta, ld. Counsel for the Respondents, as to whether Respondent No.1,
which is the Indian entity would also be willing to join the arbitration
proceedings, despite not being a party to the Service Contract.
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12. After seeking instructions, Mr. Mehta, ld. Counsel submits that since
the Group of Companies doctrine was invoked before the Trial Court as also
this Court, as also the fact that the commercial suit has been disposed of,
even in respect of Respondent No.1, the Petitioners may be permitted to
invoke arbitration under the Service Contract against all the three
Respondents i.e., the following companies:
1. Ekibom Technology India Private Limited
Having its registered office at L-2/110, New Mahabir Nagar,
Opp. Arya Samaj Mandir, Outer Ring Road, Near Vikas Puri,
New Delhi-1100018
2. Beijing Mobike Technology Co. Ltd.
Manning Co-working Center, No.53 Maizidian Street,
Chaoyang District, Beijing.
3. Mobike B.V.
Jan Pietersz, Coenstraat 7, 2595 WP's -Gravenhage,
Netherlands.
13. The impugned order dated 25th November, 2019, shall accordingly
stand modified to the effect that the Petitioner is permitted to invoke
arbitration in terms of the arbitration clause, as extracted above and
contained in the Service Contract dated 25th September, 2017, against all the
three aforementioned Respondents. Any award that may be rendered, as an
outcome of the arbitration proceedings, would be binding and enforceable
against all the three Respondents.
14. The impugned order dated 25th November, 2019 shall stand modified
in the above terms. The Respondent No.1 shall file an Affidavit of a
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competent and authorized signatory confirming the above position within
two weeks.
15. The petitions, along with all pending applications, are disposed of in
these terms.
16. List for compliance, for the purpose of perusing the affidavit to be
filed by Respondent No.1, on 3rd December, 2021.
PRATHIBA M. SINGH
JUDGE
NOVEMBER 11, 2021
Rahul/AD
