M/S Shinhan Apex Corporation vs M/S Euro Apex B.V

To briefly note the facts, there was a Licence Agreement between the appellant and the respondent dated 22.2.1993 which provided for settlement of disputes by way of arbitration in accordance with the Rules of the Dutch Arbitration Institute. The said agreement was sought to be terminated by a notice by the respondent on 12.3.2007. The termination was to take effect from 23.02.2008. The dispute went before the Arbitral Tribunal. On 11.6.2008, the appellant filed an application for registration of Patent Nos.10-0865115 and 100909490 in the United States as well as in India. In the arbitral proceedings, a Partial Final Award (for short, PFA) came to be passed by the Arbitral Trinunal on 23.12.2011. We are presently concerned with the Indian Patents in which the appellant's rights and interest were involved, namely, Patent Nos. 2143/MUM/2008 and 2144/MUM/2008. The relevant part of the award (viz) paragraphs 7 and 9, of the PFA reads as under:-

That apart, in clause 5.5 of the re-draft it was mentioned that arbitration of the dispute arising out of or in connection with the deed should be initially settled under the Rules of Singapore International Arbitration Centre by a Sole Arbitrator appointed in accordance with the said Rules and the proceedings should be in English and the seat of arbitration should be Singapore. Insofar as the said clause was concerned, the same was different than the one which was contained in the earlier draft, as per which the arbitration was to be carried out with the Rules and provisions by Netherlands Arbitration Institute and the venue of the arbitration as Hague, The Netherlands and governing law was also mentioned as the laws in force in the Netherlands and the Courts at Netherlands to have jurisdiction. In the draft dated 4.4.2012 the governing law was to be the laws in force in India.

The appellant received the re-draft by way of e-mail on 3.4.2012 with a direction to the appellant to sign the document, get it legalized by the Indian Embassy in Seoul and dispatch the same to the respondent's lawyers in Amsterdam. The appellant executed the deed of transfer dated 4.4.2012 and thereby transferred all its rights and interests in the Indian Patents in favour of the respondent. The appellant's lawyers sent an electronic copy of the said document to the respondent duly notarized with an assurance that the original would be promptly couriered to the respondent upon confirmation. In response to the same, the lawyers of the respondent in their e-mail dated 11.4.2012 intimated that the signature part of the deed was correctly executed by the appellant and also wanted the original deed to be sent by courier to their Amsterdam Office for carrying out other additional formalities for effecting the transfer. Simultaneously, their lawyers also on the same day informed the respondent confirming the forwarding of the transfer deed for effecting the transfer of the patent applications duly signed by the appellant. The original document was also forwarded to the lawyers of the respondent on 12.4.2012.

Having drawn our attention to the above factual details which emanated after the passing of PFA dated 23.12.2011, Mr. Vishwanathan, learned senior counsel, contended that when the application was initially moved, the respondent failed to bring to the notice of the Court about the extensive correspondence which took place between 19.1.2012 and 15.6.2013, that after the appellant in its Chamber Summons brought to the notice of the Court the relevant information, namely, the re-draft sent by the respondent on 3.4.2012 which contained the variation in para 'B' as between the one contained in the earlier draft of 19.1.2012 and 3.4.2012 as well as the arbitration clause and the governing law contained in paragraphs 5.5 and 5.6, the respondent for the first time in their rejoinder referred to those documents. The learned senior counsel pointed out that learned Judge completely omitted to take note of such relevant factors and proceeded to hold as though the draft sent by the respondent on 19.1.2012 alone was material and that the changes found in the final deed dated 4.4.2012 was at the instance of the appellant which unfortunately led to the passing of the impugned order.

In the above-stated background, when we consider the prayer of the respondent as claimed in the application, the prayer was for a direction to the appellant to execute the deed of transfer and assignment of Patent Nos. 2143/MUM/2008 and 2144/MUM/2008 in favour of the respondent in terms of the draft deed in Annexure P6, which was dated 4.4.2012. In fact the learned Judge, as rightly pointed out by Mr. Vishwanathan, learned senior counsel for the appellant, completely missed to note that based on the correspondence exchanged between the respondent and the appellant between 19.1.2012 and 3.4.2012 Annexure P6 which was dated 4.4.2012 was the ultimate transfer deed which the appellant was obliged to execute, that the appellant duly executed the said document by signing the same on 4.4.2012 and forwarded to the respondent's lawyers on 9.4.2012 and the due execution of which was also confirmed on behalf of the respondent by their lawyers on 11.4.2012. A further confirmation was made by the respondent's counsel to the respondent themselves on the same day, i.e. 11.4.2012 as to the execution of the transfer deed dated 4.4.2012. The original documents were also forwarded by the appellant on 12.4.2012. After the above referred sequence of events as regards Annexure P6 dated 4.4.2012 are noted, it must be held that the direction contained in paragraph 7 of the PFA of the Arbitral Tribunal was duly carried out by the appellant based on the first request of the respondent themselves as made on 19.1.2012 and as per the modified request dated 3.4.2012. If that was the real fact situation in regard to the execution of the transfer deed, which was completely omitted to be noted by the learned Single Judge, it must be held that there was no occasion for the respondent to have any grievance in regard to the execution of the transfer deed as directed in paragraph 7 of the PFA of the Arbitral Tribunal dated 23.12.2011. The failure on the part of the learned Judge in having noted the fact that the transfer deed dated 4.4.2012 was as per the re-draft forwarded by the respondent themselves which was duly executed and sent back by the appellant by 9.4.2012 and the original by 12.4.2012 unfortunately resulted in the passing of the impugned order. In the light of the said patent illegality in the impugned order, the same is liable to be set aside.

With that view, the learned Judge directed the appellant to execute the deed of transfer and assignment of Patent Nos. 2143/MUM/2008 and 2144/MUM/2008 in favour of the award holder in terms of Annexure P6 to the Execution Application incorporating therein the complete recital 'B' and the Arbitration Clause 5.5 showing the future arbitration in Netherlands within two weeks from the date of the order. Aggrieved by the impugned order, the appellant is before us.

In the said circumstances, the impugned order of the learned Judge cannot be sustained, the same is set aside and the appeals stand allowed.

April 22, 2016