Page 26 - Banking Finance September 2019

LEGAL UPDATE

Trademark violations in Retires employee can be arbitrator
cyberspace An engineer retired from the Public Works Department can act as an arbitrator
in a dispute between the department and
a contractor, the Supreme Court ruled in
its judgment in the case, PWD Haryana vs
GF Toll Road Ltd.
The agreement contained a clause which
stated in case of dispute, each party will
nominate its arbitrator and the third one
would be selected according to the rules of the Indian Council of Arbitration
With the spread of information tech- (ICA). Disputes did arise and the PWD named an engineer, who had retired from
nology, the argument over jurisdic- the department 10 years earlier.
tion of the court in trademark cases
seems to be fading. Corporations use The ICA objected to the selection as according to it, he was a retired employee
various social media platforms such of the State, and there may be justifiable doubts with respect to his integrity
as LinkedIn, Facebook, Twitter, and and impartiality to act as an arbitrator. The government refuted the objection
YouTube for advertising and conduct- on the ground that there was not rule that prohibited a former employee from
ing business. In the case, Exxon being an arbitrator, and the employee retired a decade ago.
Mobil Corporation vs Exoncorp Ltd, This was accepted by the Supreme Court. It said that the Arbitration and Con-
the Delhi High Court ordered an in- ciliation Act did not bar a former employee from acting as an arbitrator unless
junction against Exoncorp for using
the similar-sounding name, though it there are other grounds for doubting his impartiality. The Act, which lists dis-
claimed to be operating in Chennai qualified persons, prevents only a current employee from acting as an arbitra-
tor, not former employees. The court then appointed a judge retired from it as
and had no office in Delhi.
arbitrator.
The suit was about the trademark
'Exxon' claimed by the US petroleum
company and the use of the mark 'Exon' Work-at-home staffers also get PF
by the opposite company rendering in- Those who work from home for piece-rate wages for a company are also its
formation technology services. Exon ‘employees’ and the company is bound to pay
resisted the suit arguing that it has no their provident fund (PF) contribution, the Su-
presence in Delhi and, therefore, the preme Court ruled that in its judgment in Of-
high court has no jurisdiction in this ficer, Provident Fund vs Godavari Garments
matter. The court rejected the conten- Ltd. The company is a Maharashtra govern-
tion while passing the injunction, stat- ment undertaking, established to promote
ing that the nature of IT services is such garment manufacturing. It employed women
that the same can be provided from any
to stitch garments on their machines at home
corner of the globe.
with raw materials provided by the firm. When PF authorities demanded con-
Facts showed that the Indian com- tribution for the wages paid to the women, the firm argued that they were not
pany did not limit its business opera- employees as defined in the PF Act.
tions only to Chennai or Tamil Nadu,
and it has been marketing its ser- The women could engage others to do the job and there was no regular atten-
vices to Indian and international cus- dance. The management had no supervisory control over them. The Bombay
tomers. It used not only its website High Court agreed with these arguments. However, on appeal, the apex court
but also several other channels and set aside the high court judgment and emphasised that the women were em-
platforms. Thus, there was clear use ployees according to the Act and the precedents set in the case of beedi work-
of the mark within the territorial ju- ers. Since the firm had the right to reject the stitched garment, it had supervi-
risdiction of the Delhi High Court. sory control over the employees, the judgment emphasised.

26 | 2019 | SEPTEMBER | BANKING FINANCE