SC: Not All Trademark Disputes Non-Arbitrable; License Issues Are

SC: Not All Trademark Disputes Non-Arbitrable; License Issues Are

In a recent ruling, the Supreme Court held that not all trademark disputes are non-arbitrable, particularly when they arise from contractual arrangements involving rights in personam. The case involved a suit filed in the Commercial Court, Coimbatore, where the petitioners sought a permanent injunction and damages to restrain the defendants from using the trademark "Sri Angannan Briyani Hotel." The defendants invoked an arbitration clause contained in the Deed of Assignment of Trade Marks under Section 8 of the Arbitration and Conciliation Act, 1996. Both the Commercial Court and the Madras High Court directed the matter to arbitration, rejecting the petitioners’ objections. The petitioners contended that the assignment deeds were fraudulent, but the Supreme Court clarified that mere allegations of fraud do not exclude arbitration unless the fraud taints the entire contract or affects public interest. It emphasized that once a valid arbitration agreement exists, civil courts must refer the matter to arbitration, and arbitral tribunals are competent to determine their own jurisdiction under Section 16. Dismissing the Special Leave Petition, the Court upheld the High Court’s ruling and confirmed that the dispute, being contractual and involving private rights, was arbitrable.