Delhi High Court Jindal Steel And Power Limited vs M/S. Sap India Pvt. Ltd. on 29 June, 2015 * Judgment reserved on May 25, 2015 Judgment delivered on June 29, 2015 + OMP 119/2015 & IA 9264/2015 JINDAL STEEL AND POWER LIMITED ..... Petitioner Through: Mr.Dhruv Mehta, Sr. Adv. with Mr. Manish Sharma, Ms.Ranjana Roy Gawai, Mr.Krishna Keshav, Advs. versus M/S. SAP INDIA PVT. LTD. ..... Respondent Through: Mr.Parag Tripathi, Sr. Adv. with Mr.Vikas Dutta, Mr.Siddharth Silwal, Mr.Nikhil Varshney, Ms.Mahima Gupta, Advs. HON'BLE MR. JUSTICE V.KAMESWAR RAO V.KAMESWAR RAO, J. 1. This petition under Section 9 of the Arbitration and Conciliation Act has been filed by the petitioner initially seeking a restraint order against the respondent from terminating the SAP Software EndUser License Agreement dated September 27, 2005 entered into between the parties. 2. This relief was in view of the legal notice issued by the respondent dated December 30, 2014 threatening termination of the License. I may only note here that during the pendency of the petition, the respondent has in fact, OMP No. 119/2015 Page 1 of 49 terminated the License Agreement dated September 27, 2005, vide order dated April 30, 2015, which compelled the petitioner to file an application seeking the stay of the termination order. Suffice to state, this Court had not stayed the termination of the License Agreement. Even though, the petitioner has not amended the petition incorporating the challenge to order dated April 30, 2015, as the order dated April 30, 2015 has been placed on record and the learned Senior Counsel for the respondent has no objection on this Court proceeding on the premise that the present Petition lay a challenge to order dated April 30, 2015, this Court has heard the arguments on the termination order as well. The Facts: 3. On September 27, 2005, the petitioner and the respondent entered into a License Agreement whereby the petitioner was granted a nonexclusive perpetual License to use the SAP software documentation and other SAP proprietary information to run the petitioner‟s internal operation and to provide internal training and testing. Clause 2.1 relates to the „License‟. Clause 3 relates to „Verification‟. Clause 5.1 defines the „Term‟ and Clause 11 is the „Arbitration‟ clause. According to the petitioner, the total Licenses available with the petitioner are 21,908 and it has made huge one time investment of Rs. 13,86,57,580/ (approximately) and recurring payments of Rs. 15,28,57,254/ (approximately) to procure the SAP Licenses and the OMP No. 119/2015 Page 2 of 49 petitioner has been using the SAP applications for business computing, for which the petitioner has been paying a recurring amount as per agreed terms. It is the case of the petitioner that since the initial License of the year 2005, the petitioner has been using the SAP Licenses and during all these years, there has never been any complaint of excess usage or violation of the License agreement, by the respondent. According to the petitioner, on November 13/14, 2014, a team from the respondent‟s office of License had visited the petitioner‟s facilities at Raigarh, Chattisgarh and conducted onsite License audit. The petitioner‟s representatives/officials extended all cooperation and assistance in the conduct of the audit by the respondent‟s representatives. It is the case of the petitioner that the respondent‟s officers were required to hold a closing meeting with the representatives of the petitioner after the conduct of the License audit in order to explain the methodology adopted by the respondent in conducting the License audit and to discuss and explain the findings of the audit. However, after completing the audit on November 14, 2014, the representatives of the respondent left the site/facilities of the petitioner without holding any closing meeting or submitting a draft report and without discussing or explaining the findings of the audit with the representatives of the petitioner. The petitioner‟s case is that on November 20, 2014, the petitioner was completely shocked and surprised to receive an email from the respondent, wherein, for the first time, OMP No. 119/2015