Vijay Kumar Munjal V. Pawan Kumar Munjal, 17 feb 2022

IN THE HIGH COURT OF DELHI AT NEW DELHI %

Judgment delivered on: 17.02.2022 +

ARB.P. 975/2021 and IA Nos. 12836/2021 & 14638/2021

VIJAY KUMAR MUNJAL AND ORS. ….. Petitioners

versus

PAWAN MUNJAL & ORS. ….. Respondents

Advocates who appeared in this case:

For the Petitioner: Mr Gopal Subramaniam, Senior Advocate,  Mr Parag P. Tripathi, Senior Advocate with 

Mr Sanjeev Kapoor, Mr Sahil Narang, Mr 

Ankur Sangal, Mr Dhritiman Roy, Ms Pragya 

Mishra, Ms Ananya Bhat, Mr Madhavam 

Sharma, Mr Ayushman Kacker, Mr 

Vishakha, Advocates.

For the Respondents: Dr. Abhishek Manu Singhvi, Senior  Advocate, Mr. Rajiv Nayar, Senior Advocate, 

Mr. B.B. Gupta, Senior Advocate with Mr. 

Mahesh Agarwal, Mr. Rishi Agrawala, Mr. 

Karan Luthra, Mr. Ankit Banati, Ms. Manavi 

Agarwal, Mr. Saurabh Seth, Mr. Aman 

Sharma and Mr. Achal Gupta, Advocates for 

Respondent Nos.1 and 3. 

Mr Mukul Rohatgi, Senior Advocate Mr 

Sandeep Sethi, Senior Advocate, Mr Akhil 

Sibal, Senior Advocate with Mr Sidharth 

Chopra, Mr Kanishk Kumar, Mr Muktesh 

Maheshwari, Ms Abhiti Vachher, Ms Asavari 

Jain, Ms Shriya Misra, Advocates for 

Respondent No. 2.

ARB. P. 975/2021 Page 1 of 69

CORAM

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

Introduction

1. The petitioners have filed the present petition under Section 11  of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C  Act’), inter alia, praying that an arbitrator be appointed, on behalf of  the respondents, to adjudicate the disputes that have arisen between the  parties in relation to the Family Settlement Agreement dated  20.05.2010 (hereafter the ‘FSA’) and Trade Marks and Name  Agreement dated 20.05.2010 (hereafter the ‘TMNA’).

2. The Munjal Family, a well-known business family, comprises of  family members of four brothers (since deceased) – Late Shri Dayanand  Munjal, Late Shri Satyanand Munjal, Late Shri Brij Mohan Lall Munjal  and Late Shri Om Prakash Munjal (hereafter the ‘Munjal Brothers’). 

3. The petitioners state that the Munjal Brothers established the  business of bicycle spare parts in Amritsar, India in 1944. In 1956, the  Munjal Brothers commenced manufacturing key components of bicycle  and established a manufacturing plant in Ludhiana. Over a period of  time, the Munjal Group diversified its business in the automotive sector,  manufacture of bicycles and its components, and the financial sector

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including other such services. The Munjal Group comprises of several  operating and investment companies (‘Munjal Group Companies’),  Hindu Undivided Families of the members of the Four Family Groups  (‘Munjal HuFs’), partnerships (‘Munjal Partnerships’), trusts  (“Munjal Trusts”) and association of persons (‘Munjal AoPs’). The  Munjal Group Companies, Munjal HuFs, Munjal Partnerships, Munjal  Trusts and Munjal AoPs are hereafter collectively referred to as the  ‘Munjal Group Entities’.

4. The petitioners state that the Munjal Group started using the  name / brand / trademark “Hero” and its variants in connection with its  businesses from 1953 onwards. On 13.06.1966, the Munjal Brothers,  through their partnership firm, M/s. Hero Cycles Industries, applied for  and obtained registration of the trademark “Hero” in Class 12 under  application no. 235780. Further, the Munjal Brothers/entities of the  Munjal Group also applied for registration of other trademarks containing the word “Hero” and/or its variants.

5. It is stated that on 02.03.1993, the Munjal Brothers established a  firm, named Hero Exports. The said entity is engaged in exporting bicycles under the brand/trademark “Hero” to certain specified  territories. Thereafter, in the year 2007, members of the Munjal Family  commenced the business of Electric Vehicles under the brand/  trademark “Hero” and its variants through the firm Hero Exports.

6. By the year 2010, the Munjal Group had significantly expanded  its business operations and other activities.

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The Agreements

A. The FSA

7. The Munjal Family, comprising of four Family Groups, entered  into the FSA (Family Settlement Agreement) on 20.05.2010 through  their respective family heads (referred to as the ‘Patriarchs’). The four  Family Groups were designated as the F1 Family Group (Late  Dayanand Family Group); F2 Family Group (Satyanand Family  Group); F3 Family Group (Brijmohan Lall Family Group); and F4  Family Group (Om Prakash Family Group). 

8. The heads of the family felt – and the same was accepted by the  other family members of the Munjal Family – that it is inevitable that  “the second and third generations below the Patriarchs harbour diverse  interests, different ambitions and varying perceptions as to, inter alia,  the strategic direction, growth and governance of the Munjal Group  Entities, and … due to uneven growth, differing perceptions and  expectations, and ambitions including matters relating, amongst others,  to the strategic direction, growth and governance of the Munjal Group  Entities, differences arising in future in the succeeding generations of  Munjal Family Members could not be ruled out”.¹ They were of the  view that “where the family grows in this manner, with diverse members  spanning two generations running different segments of the business,  family disputes tend to arise”²and “for the sake of peace and harmony 

¹ Recital F of the FSA.

² Recital G of the FSA.

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amongst the Munjal Family Members, and in order to preserve the  mutual respect goodwill and to avoid any dispute or differences at a  later date between them and to manage the diverse expectations,  ambitions, and strategic directions desired by various Munjal Family  Members”³it was “necessary to reorganise the family businesses”⁴.

9. The FSA was premised on the broad principle “that as far as  possible the family member managing the business shall continue to run  that business and similarly the residential houses occupied by a family  member shall belong to that family Member”⁵.

10. The four Family Groups agreed that they would separate  ownership and control of the properties and “for the purposes of  separation of the business and property interests of the Munjal Group  among the four distinct Family Groups, each Family Group and  respective Munjal Family Members agreed to the cessation of joint  ownership and control over business and property interests of Munjal  Group and establishment of sole ownership, management and control  of designated Family Group as more particularly set out in Schedule  7”⁶to the FSA. 

11. The businesses and properties of the Munjal Group were divided  into four packages as set out in Schedule 7 to the FSA, which the Family  Groups agreed was a fair allocation of the Munjal Group Entities and 

³ Recital H of the FSA.

⁴Ibid. 

⁵ Recital I of the FSA.

⁶ Clause 1.2 of the FSA.

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properties. This is clear from Clause 1.4 of the FSA, which is set out  below:

“1.4 The Four Family Groups, pursuant to their desire to  attain lasting peace amongst each of the Family Groups  have by consensus and mutual agreement arrived at the  four blocks listed in Schedule 7, as realigned and  rearranged (“Packages”). The Four Family Groups  acknowledge and confirm that these four Packages  constitute fair allocation of Munjal Group Entities and  properties between the Four Family Groups and their  respective Munjal Family Members.”⁷

12. It was agreed that the shares of the Munjal Group of Companies  would be realigned and exchanged and if necessary, the Board of  Directors would be re-constituted to ensure transfer and control of the  Munjal Group of Companies to the respective Family Groups. In  addition, the four Family Groups agreed that they shall cause each of  the Munjal Group Entities to agree to be bound by the terms of the  FSA⁸.

13. The Four Family Groups also agreed that the “Hero” trademark  and brand shall be separated 

B. The TMNA

14. Hero Cycles Limited was the registered proprietor of the  trademark “Hero” and other word marks and devices using the term  “Hero” (hereafter referred to as ‘Hero Marks’). However, each of the 

⁷ Clause 1.4 of the FSA

⁸ Clause 8.2 of the FSA

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Munjal Group Entities were using and continue to use one or more Hero Marks. Hero Cycles Limited was included in the package allocated to  the F4 Family Group (Family Group of Mr Om Prakash Munjal). Thus,  it was necessary to separate the ownership of the Hero Marks.

15. On 20.05.2010 – same date as that of the FSA – the heads of each  of the four Family groups and Hero Cycles Limited entered into the  TMNA and agreed that the ownership and use of the trademark “Hero”  be divided in respect to the businesses, which were allocated to each  Family Group under the FSA. 

The Dispute 

16. The present dispute, which the petitioners seek to refer to  arbitration, arises between the F1 Family Group and the F3 Family  Group. 

17. Mr Vijay Kumar Munjal (petitioner no. 1) is the eldest son of  Late Shri Dayanand Munjal. Being the patriarch of the F1 Family  Group, petitioner no. 1 signed and entered into the FSA and TMNA on  20.05.2010 on behalf of the F1 Family Group. M/s Hero Exports  (petitioner no. 3) is a partnership firm that was established by the  Munjal Brothers on 02.03.1993 and was involved in the business of  export of bicycles under the brand/trademark “Hero” to certain  specified territories. Subsequently, in the year 2007, the members of the  F1 Family Group began conducting the business of Electric Vehicles  through petitioner no. 3. In 2010, the F1 Family Group incorporated  Hero Electric Vehicles Pvt Ltd. (petitioner no. 2) under the Companies

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Act, 1956 which is, inter alia, engaged in the business of electric  vehicles. M/s V.R. Holdings (petitioner no. 4) is also a partnership firm.  Petitioner nos. 2, 3 and 4 are constituted and/or controlled by the  members of the F1 Family Group. 

18. Mr Pawan Kumar Munjal (respondent no. 1) has been nominated  as the alternate patriarch of the F3 Family Group. In 1981, the Munjal  Group also incorporated Puja Investments Private Limited, now known  as Hero InvestCorp Private Limited (respondent no. 3). Admittedly, in  terms of Clause 8.2 of the FSA, respondent no. 3 has signed a Deed of  Adherence and agreed to be bound by the provisions of the FSA as if it  was an original party thereto. Hero MotoCorp Limited (respondent no.  2) earlier known as Hero Honda Company was incorporated in 1984 by  the Munjal Group and is, inter alia, engaged in the business of  manufacturing and selling of two-wheeler motor vehicles. There is  some controversy whether respondent no.2 has signed the Deed of  Adherence in terms of Clause 8.2 of the FSA. Whilst respondent no. 2  states that it has not, the petitioners claim that it has. In terms of the  FSA⁹, respondent nos. 2 and 3 are included in the package allocated to the F3 Family Group. 

19. The petitioners (who belong to the F1 Family Group) allege that  the respondents (who belong to the F3 Family Group) have violated the  terms of the FSA and TMNA as they now intend to conduct the business  relating to electric/eco-friendly vehicles, including their components 

⁹ Schedule 7 of the FSA.

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and related infrastructure and services, under the brand or trademark  “Hero”. The petitioners claim that under the terms of the FSA and  TMNA, the F1 Family Group has the exclusive right to use the  brand/trademark “Hero” for the business in certain goods being  “electric /environment friendly vehicles i.e., non-fuel land vehicles and  components and related infrastructure and services in relation thereto” (hereafter ‘Electric Vehicles’). They claim that the F3 Family Group  has the exclusive right to use the trademark “Hero” in respect of the  business that are allocated to their share under the FSA but cannot use  the trademark “Hero” or any variant thereof in respect of Electric  Vehicles. The petitioners are aggrieved as respondent no. 2 now  proposes to launch Electric Vehicles and Electric Mobility Solutions under the brand name “Hero”. Respondent no.1 has, as the CEO of  respondent no.2, made public statements to that effect.

20. It is not disputed that respondent no. 2 is intending to launch an  Electric Scooter or Motorcycle shortly under the trademark “Hero” or  its variant. Although the petitioners do not dispute that the F3 Family  Group or other Family Groups can enter into the business of Electric  Vehicles; they claim that the other Family Groups cannot do so under  the trademark “Hero” or any variant thereof.

21. Respondent no. 1 disputes that, in terms of the FSA or TMNA, the F1 Family Group has the exclusive right to use the trademark  “Hero” in respect of the business of Electric Vehicles. He claims that in  terms of the TMNA, the FI Family Group is entitled to exclusively use  only certain trademarks referred to as the ‘FI Family Group Trade

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Marks’, which are specified under Clause 1.1.7 of the TMNA. The said  clause is set out below:

“1.1.7 “F1 Family Group Trade Marks” means:

a. the trademark HERO EXPORTS, registered or  unregistered, owned and/or used upon or in relation to or  in connection with the trading business of M/s Hero  Exports for exports relating to sale, marketing of its trading  items, other than those items covered in clause 1.1.7(d)  below, and import in India of two wheeler electric vehicles  & parts thereof and bicycle parts:

b. the trademark HERO ELECTRIC, registered or  unregistered, owned and/or used upon or in relation to or  in connection with the electric/environment friendly  vehicles (i.e. non fuel land vehicles) and components, and  related Infrastructure;

c. the trademark HERO ECO, registered or unregistered  owned and/or used upon or in relation to or in connection  with the business relating to projects, plants & equipment,  components in the field of Solar Energy, Wind Energy and  other Renewable Energy, and Medical Products &  Lifestyle Care equipment for Hospitals, Rehabilitation and  Homes; and

d. the trademark HERO registered or unregistered and  used for export of Bicycles and Bicycle parts by F1 family  Group for all territories, other than USA, Russia,  Australia, New Zealand, Japan and European Union  (except UK, Germany & Turkey), which exclusively are  retained by F4 Family Group.”¹⁰

¹⁰ Clause 1.1.7 of the TMNA.

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22. Respondent no.1 contends that whilst the F1 Family Group can  use the trademark “Hero Electric”, it does not have the right to use any  other variant of the trademark “Hero”.

Arbitration Agreements 

23. Clause 19.5 of the FSA and Clause 5.6 of the TMNA embody  agreements to refer the disputes to arbitration. Clause 19.5 of the FSA  reads as under:

19.5 The Parties further agree that the Facilitator is fully  authorized to settle all issues, questions and disputes  among two or more Family Groups arising out of or in  connection with this Family Settlement Agreement, by  acting as mediator and upon failure of the mediation  process, the Four Family Groups shall submit their  disputes to the joint arbitration by Mr. Satish Bansal and  two other persons to be appointed jointly by the four  Patriarchs. The three persons so appointed shall constitute  the arbitral tribunal. The arbitration proceedings shall be  conducted in accordance with the Indian Arbitration and  Conciliation Act, 1996 and the venue of arbitration shall  be New Delhi. The arbitrators shall have the power to  decide the disputes by majority by following summary  procedure and shall also have the power to award specific  performance.

24. Clause 5.6 of the TMNA is set out below:

“5.6 Dispute Resolution

Each Party and the Confirming Party hereby agrees that  Mr. Satish Banal, senior partner of M/s B.D. Bansal & Co.;  Delhi/Amritsar is fully authorized to settle all issues,  questions and disputes among two or more Family Groups

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and/or the Confirming Party arising out of or in connection  with this Agreement, by acting as mediator and upon  failure of the mediation process, the Four Family Groups  and the Confirming Party shall submit their disputes to the  joint arbitration by Mr. Satish Bansal and two other  persons to be appointed jointly by the four Patriarchs. The  three persons so appointed shall constitute the arbitral  tribunal. The arbitration proceedings shall be conducted in  accordance with the Indian Arbitration and Conciliation  Act, 1996 and the venue of arbitration shall be New Delhi.  The arbitrators shall have the power to decide the disputes  by majority by following summary procedure and shall  also have the power to award specific performance.”

Other relevant facts

25. On 10.02.2011, respondent no. 3 had applied for registration by  assignment of the mark “Hero” registered under Class 12, from Hero  Cycles Limited. The Registrar of Trade Marks approved the application  on 31.01.2014 and accordingly, respondent no. 3 was recorded as the  subsequent proprietor of the trademark “Hero”.

26. In the year 2012, the respondents showcased the model of an  electric scooter in an Auto Expo. The respondents did so again in the  year 2014: the respondents exhibited an Electric Vehicle as a concept,  in the Auto Expo, under the name “Hero Leap”. The petitioners objected  to it and alleged that the same was in violation of the FSA and TMNA.  The respondents denied the allegation that the F3 Family Group had  violated the terms of the TMNA and claimed that the F3 Family Group  could use the mark “Hero”, with or without suffixes, for any product

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category except the names, marks or monograms, which were assigned  to other Family Groups. 

27. The petitioners contend that the respondents once again  showcased the model of an electric scooter under the mark “Hero Leap” as a concept in the Auto Expos in 2016. In 2017, the petitioners came  across several media reports wherein Hero MotoCorp Limited  (respondent no. 2) announced the launch of an Electric Vehicle under  the brand name “Hero Duet E” by September 2018 and its commercial  rollout thereafter. The petitioners state that the petitioners and the  respondents met in November 2017 to resolve the issue amicably. The  petitioners contend that thereafter, the respondents held several press  conferences publicly wherein it confirmed the release of its Electric  Vehicle under the brand name “Hero Duet E” and its promotion at the  upcoming Auto Expo being held in Delhi between 09.02.2018 to  14.02.2018. 

28. The petitioners aver that the acts of the respondents violated the  terms of the FSA and the TMNA and accordingly, it filed a petition¹¹ under Section 9 of the A&C Act in this Court praying that the  respondents be restrained from using, manufacturing and selling any  two-wheeler electric vehicles and its components under the trademark  “Hero Leap”, “Hero Duet”, “Hero Duet E”, “Hero Moto” or any  trademark/trade name containing “Hero” or under the trade name “Hero  Motocorp Limited” and “Hero Investcorp Limited”. However, the 

¹¹ OMP(I) (Comm) 49/2018

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petitioners sought leave to withdraw the aforesaid petition with liberty  to invoke the Arbitration Agreement. By an order dated 15.03.2018, this  Court dismissed the said petition as withdrawn. 

29. The petitioners state that in April 2021, the petitioners came  across media reports/articles concerning a collaboration between Hero MotoCorp Limited (respondent no. 2) and Gogoro, a Taiwanese based  company, for the launch of two-wheeler Electric Vehicles under the  brand/ trademark “Hero”. 

30. Accordingly, the petitioners representing the F1 Family Group  issued a legal notice dated 27.04.2021 to the representatives of the F3  Family Group calling upon them to refrain from using the brand or  trademark “Hero” in respect of any Electric Vehicle. Respondent No. 2  replied to the aforesaid legal notice, on 28.06.2021, denying F1 Family  Group’s exclusive right to use the trademark “Hero” and further stated  that the F1 Family Group only has a limited right to use the mark “Hero  Electric” in respect of Electric Vehicles.

31. On 19.07.2021, the petitioners issued a notice under Section 21  of the A&C Act to commence arbitration under Clause 19.5 of the FSA  and Clause 5.6 of the TMNA. In terms of the Arbitration Agreement,  the disputes were required to be resolved by meditation before the  Facilitator, Mr Satish Bansal. In the event of failure of the mediation  process, the disputes would be referred to arbitration by an arbitral  tribunal constituted of the Facilitator, Mr Satish Bansal, and two other  arbitrators, jointly appointed by the four patriarchs.

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32. The petitioners claim that Mr Satish Bansal is ineligible for being  appointed as an arbitrator under Section 12(5) of the A&C Act on the  grounds that (i) he is acting as an advisor to the other Family Groups;  (ii) he has furnished evidence in support of claims against the  petitioners; (iii) he/his firm had been engaged by the F3 Family Group  as an Auditor; and, (iv) he derives significant financial benefit from the  other Family Groups. The petitioners averred that in two recent  arbitrations arising out of the FSA and TMNA, Mr Satish Bansal was  also excluded from the constitution of the Arbitral Tribunal.  Accordingly, the petitioners nominated a former Chief Justice of India  as its nominee arbitrator and, further called upon the respondents to  appoint their nominee arbitrator. 

33. The respondents replied to the aforesaid notice by its letter dated  30.07.2021 denying the allegations of the petitioners. The respondents  disputed the Notice Invoking Arbitration on grounds that the disputes  raised are non-arbitrable; the notice has not been invoked in terms of  the Arbitration Agreement; the claims of the petitioners are ex-facie  barred by limitation; and that the F3 Family Group has acted in  accordance with the terms of the FSA and TMNA. 

34. The petitioners claim that on 09.09.2021, Mr Pawan Munjal  (respondent no. 1) during the celebrations of the tenth anniversary of  Hero MotoCorp Limited (respondent no. 2) announced the launch of  Electric Vehicles and Electric Mobility Solutions. The petitioners  further rely on the Annual Report dated 06.05.2021 of respondent no.  2, wherein it had made statements that it would be launching Electric

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Vehicles under the brand name “Hero”. Aggrieved by the conduct of  the respondents, the petitioners have filed the instant petition for  appointment of an arbitrator on behalf of the respondents. 

35. The respondents have opposed the present petition on several  grounds including that the disputes are not arbitrable; the disputes are  barred by limitation; the petitioners have waived and acquiesced in the  respondents using the trademark “Hero”; the petition is not  maintainable for non-joinder of parties; there is no real dispute as the  terms of the TMNA are clear; and, the petitioners are entitled to use  “Hero Electric” and other trademarks specifically reserved for the F1 Family Group and no other trademark.

Submissions

36. Mr Mukul Rohatgi and Mr Sandeep Sethi, Senior Advocates  advanced oral submissions on behalf of respondent no.2. They opposed  the present petition on, primarily, three grounds. First, they submitted  that respondent no.2 was not a party to the Arbitration Agreement. They  stated that respondent no.2 was a public company. It was a Munjal  Group Entity and included in the package allocated to the F3 Family  Group. But it was not a party to the FSA or the TMNA. The F3 family  Group owned only 35% of the issued equity share capital and, the  balance was held by public and other institutions. 

37. Second, they stated that as the petitioners had not included other  Family Groups as parties to the present petition, the petition was liable  to be dismissed for non-joinder of necessary parties.

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38. Third, they stated that the petitioners had not invoked the  arbitration in terms of the Arbitration Agreement. The petitioners had  not made any endeavor to resolve the disputes by mediation by the  named Facilitator or Arbitrator. The petitioners had not called upon the  other three patriarchs of the Munjal Family Group to constitute the  Arbitral Tribunal. In addition, the petitioners had removed the  Facilitator as the named Arbitrator, in terms of the Arbitration  Agreements. 

39. They relied upon the decision of the Supreme Court in Atul  Singh and Ors. v. Sunil Kumar Singh¹² and Vimal Kishor Shah v.  Jayesh Dinesh Shah¹³, in support of their contention that non signatories cannot be joined in arbitration proceedings and merely  naming a party in an agreement would be of no effect, unless the said  party had signed the Arbitration Agreement. They also referred to the  decisions of this Court in Avantha Holdings Ltd. v. CG Power and  Industrial Solutions Ltd.¹⁴ and M/s Spentex Industries Ltd. v. O.P.  Lohia¹⁵. In addition, they also referred to the decision of the Supreme  Court in Iron and Steel Co. Ltd. v. Tiwari Road lines¹⁶ and contended  that the parties cannot re-write the Arbitration Clause. The written  submissions also refer to the decision of the Supreme Court in Reliance  Natural Resources Ltd. v. Reliance Industries Ltd.¹⁷

¹² (2008) 2 SCC 1.

¹³ (2016) 8 SCC 788.

¹⁴ 2021 SCC OnLine Del 5202.

¹⁵ 2009 SCC OnLine Del 2815.

¹⁶ (2007) 5 SCC 703.

¹⁷ (2010) 7 SCC 1.

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40. Dr Singhvi and Mr Nayar, learned senior counsels advanced  submissions on behalf of respondent nos.1 and 3. Dr Singhvi opposed  the present petition on, essentially, three grounds. First, he submitted  that the disputes raised were not arbitrable as the dispute pertained to  respondent no.3’s right to use the trademark “Hero”, which was  registered in its favour. He contended that the registration of a  trademark operates in rem. Thus, in effect, the petitioners were seeking  to question the registration of the trademark in favour of respondent  no.3 and were seeking to circumscribe the registration by limiting the  use of the trademark to vehicles using Internal Combustion Engines. He  submitted that the said disputes could only be adjudicated by the IPR  Division of the High Court and no other forum could decide the said  disputes. He referred to the decisions of the Supreme Court in the case  of Vidya Drolia v. Durga Trading Corporation¹⁸; Booz Allen and  Hamilton Inc. v. SBI Home Finance Ltd.¹⁹ and A. Ayyasamy v. A.  Paramasivam & Ors.²⁰. 

41. Second, he submitted that the disputes are barred by limitation and that the petitioners had acquiesced the use of the trademark “Hero”  by the respondents in respect of Electric Vehicles. He referred to an  email dated 04.06.2013 sent by one Mr Ashok Goyal of the F1 Family  Group confirming that the respondents could use the trademark “Hero”,  with or without suffix, except the trademark “Hero Electric”, in respect  of Electric Vehicles. He also submitted that the Power of Attorneys

¹⁸ (2021) 2 SCC 1.

¹⁹ (2011) 5 SCC 532.

²⁰ (2016) 10 SCC 386.

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issued by the respective branches of the Munjal Family also recorded  their consent for registration of the trademark “Hero”, in favour of  respondent no.3. Consequently, the Registrar of Trade Marks had passed an order recording respondent no.3 as the subsequent proprietor  in respect of TM nos. 235780, 659053 and 813245, in respect of the  trademark “Hero” in Class 12. 

42. Fourth, he submitted that the petitioners had not followed the  mandatory procedure for appointment of an arbitrator. He also relied on  the decision of the Supreme Court in Iron and Steel Co. Ltd. v. Tiwari Road Lines¹⁶. 

43. Mr Nayar, learned senior counsel, also contended that the  disputes were barred by limitation; that the disputes were not arbitrable;  and, the invocation was not in terms of the Arbitration Agreements. In  addition, Mr Nayar also submitted that petitioner no.2 and respondent  nos. 2 and 3, were not parties to the Arbitration Agreement. Petitioner  no.2 was also not a Munjal Group Entity as it was incorporated  subsequent to the FSA. He contended that petitioner no.2 and  respondent nos. 2 and 3 could not be joined as parties to the arbitral  proceedings. 

44. He further submitted that the petitioners were indulging in forum  shopping as they had filed objections before the Registrar of Trade Marks relying on the terms of the FSA and TMNA. Thus, it was not  open for the petitioners to now seek reference of the disputes to  arbitration.

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45. Mr Nayar also submitted that the TMNA had been implemented  by the Family Groups. He submitted that the four Family Groups had taken necessary steps for registration of the trademarks in respect of  their respective group entities and therefore, the said agreement stood  discharged by performance. In the circumstances, recourse to the  Arbitration Agreement under the TMNA was no longer available. He  submitted that the clock cannot be rolled back once the TMNA had been  performed and had resulted in statutory rights. 

46. Mr Tripathi, learned senior counsel appeared on behalf of the  petitioners and countered the submissions made on behalf of the  respondents. He referred to the decisions of the Supreme Court in  Mayavati Trading Pvt. Ltd. v. Pradyuat Deb Burman²¹ as well as  Vidya Drolia v. Durga Trading Corporation¹⁸ and contended that the  scope of examination under Section 11 of the A&C Act was confined  to examining the existence of an arbitration agreement. 

47. Next, he submitted that the present petition was not barred by  limitation as the dispute regarding the respondents, proceeding to  commercially launch an Electric Vehicle under the brand name “Hero” had arisen in the year 2021. He submitted that the conduct of the  respondent to showcase concept vehicles did not extinguish the rights  and remedies of the petitioners.

²¹ (2019) 8 SCC 714.

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48. Mr Tripathi relied upon the decisions of the Supreme Court in  Hari Shankar Singhania v. Gaur Hari Singhania²² and Kale v. Dy.  Director of Consolidation²³, and submitted that family settlements  should be treated differently to commercial settlements and thus, issues  concerning limitation ought not impede the implementation of a family  settlement. 

49. He referred to the decisions of this Court in M/s Foodworld v  Indian Railway Catering and Tourism Corporation Ltd.²⁴ and M/s  Jyoti Sarup Mittal v The Executive Engineer-XXIII, South Delhi  Municipal Corporation²⁵ and contended that Courts would endeavor to  make arbitration agreements workable.

50. He submitted that the dispute between the parties is not in rem but is an issue concerning the entitlements of the F1 and F3 Family  Groups arising under the FSA and TMNA. He submitted that the  grievance of the petitioners is that the respondents have violated the  provisions of the FSA and TMNA. The rights under these agreements  are rights in personam and hence, arbitrable. He further referred to a  recent decision of this Court in Hero Electric Vehicles Private Limited  & Anr. v. Lectro E-Mobility Private Limited & Anr.²⁶, in support of his  contention. He submitted that the aforesaid decision was in connection  with a somewhat similar dispute arising under the FSA and TMNA. He  stated that this Court had authoritatively upheld that such disputes 

²² (2006) 4 SCC 658.

²³ (1976) 3 SCC 119.

²⁴ 2021 SCC OnLine Del 4264.

²⁵ 2021 SCC OnLine Del 3674.

²⁶ 2021 SCC OnLine Del 1058.

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between the parties requires a holistic interpretation of the terms of the  FSA and the TMNA, which is required to be decided in arbitration.  Accordingly, the Court had allowed the application under Section 8 of  the A&C Act and, referred the parties to arbitration. 

51. Mr Gopal Subramanium, learned senior counsel appearing for  the petitioners, submitted that respondent nos. 2 and 3 are bound by the  Arbitration Agreement. He submitted that even though the FSA and  TMNA were only signed between the patriarchs of the respective  Family Groups, nonetheless, the parties had intended to bind each  member of the four Family Groups and the Munjal Group Entities under  the terms of the FSA and TMNA. He submitted that respondent nos. 2  and 3. being Munjal Group Entities, had executed a Deed of Adherence  under Article VIII of the FSA wherein they have agreed to be bound by  the FSA as if they were original parties of the same. 

52. He submitted that in the pleadings filed by respondent no. 2 in  proceedings under Section 9 of the A&C Act, respondent no.2 had  admitted that it had signed the Deed of Adherence in terms of Clause  8.2 of the FSA. Further, he submitted that the question whether  respondent no. 2 has or has not signed the Deed of Adherence is a matter  of a factual dispute and should be adjudicated by an Arbitral Tribunal.

53. He submitted that in any event, even non-signatories could be  joined in arbitration in given circumstances. He referred to the decision  of the Supreme Court in Chloro Controls India Private Limited v.

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Severn Trent Water Purification Inc. and Ors.²⁷ and the decision of  this Court in Shapoorji Pallonji and Co. Pvt. Ltd. v. Rattan India  Power Ltd. and Anr.²⁸, in support of his contention. He also referred to  the travaux préparatoires of the New York Convention and contended  that similar to the New York Convention, the drafters of the A&C Act  consciously chose the word ‘party’ and not ‘signatory’ under Section 7 of the A&C to allow non-signatories to join arbitral proceedings in  certain circumstances.

54. The learned senior counsels for the respondents have filed note  of the written submission referring to a number of decisions. Some of  them were not cited during the course of the arguments and this Court  is confining itself to the submissions made before this Court. 

Reasons and Conclusion

55. It is well settled that in terms of Sub-section (6A) of Section 11  of the A&C Act, the scope of examination is confined to the existence  of an arbitration agreement. In Duro Felguera, S.A. v. Gangavaram  Port Limited²⁹, the Supreme Court had held as under:

“48. … From a reading of Section 11(6-A), the intention  of the legislature is crystal clear i.e. the court should and  need only look into one aspect—the existence of an  arbitration agreement. What are the factors for deciding as  to whether there is an arbitration agreement is the next  question. The resolution to that is simple—it needs to be  seen if the agreement contains a clause which provides for 

²⁷ (2013) 1 SCC 641.

²⁸ 2021 SCC OnLine Del 3688.

²⁹ (2017) 9 SCC 729.

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arbitration pertaining to the disputes which have arisen  between the parties to the agreement.

*** *** ***

59. The scope of the power under Section 11(6) of the 1996  Act was considerably wide in view of the decisions in SBP  & Co. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618]  and Boghara Polyfab [National Insurance Co.  Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 :  (2009) 1 SCC (Civ) 117] . This position continued till the  amendment brought about in 2015. After the amendment,  all that the courts need to see is whether an arbitration  agreement exists—nothing more, nothing less. The  legislative policy and purpose is essentially to minimise the  Court’s intervention at the stage of appointing the arbitrator  and this intention as incorporated in Section 11(6-A) ought  to be respected.”

56. In Mayavati Trading Pvt. Ltd. v. Pradyuat Deb Burman²¹, the  Supreme Court had referred to the aforementioned decision and  observed as under:

“10. This being the position, it is clear that the law prior  to the 2015 Amendment that has been laid down by this  Court, which would have included going into whether  accord and satisfaction has taken place, has now been  legislatively overruled. This being the position, it is  difficult to agree with the reasoning contained in the  aforesaid judgment [United India Insurance Co.  Ltd. v. Antique Art Exports (P) Ltd., (2019) 5 SCC 362 :  (2019) 2 SCC (Civ) 785] , as Section 11(6-A) is confined  to the examination of the existence of an arbitration  agreement and is to be understood in the narrow sense as  has been laid down in the judgment in Duro Felguera,

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S.A. [Duro Felguera, S.A. v. Gangavaram Port Ltd.,  (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] ”

57. In the present case, the respondents have opposed the present  petition, principally, on two grounds. First, that the disputes are not  arbitrable; and second, that they are barred by limitation. Undisputedly, under the principle of kompetenz-kompetenz, the questions whether the  disputes are barred by limitation and/or whether they are arbitrable, fall  within the jurisdiction of an Arbitral Tribunal. However, the Court may  examine the said aspects at a referral stage mainly for two reasons – (a)  to prevent wastage of public and private resources, which may result to  refer a dispute that is ex facie barred; and, (b) that the existence of an  agreement to refer the disputes to arbitration cannot be examined as  completely disjunct from the disputes.¹⁸ 

58. Having stated the above, it is also necessary to observe that the  scope of such examination under Section 11 of the A&C Act is narrow  and unless this Court is ex facie satisfied that the disputes are not  arbitrable or otherwise barred by law, the Court would relegate the  parties to their preferred remedy of arbitration. In NCC Limited v.  Indian Oil Corporation Limited³⁰ a Coordinate Bench of this Court had  observed that “unless it is in a manner of speech, a chalk and cheese  situation or a black and white situation without shades of grey, the court  concerned hearing Section 11 petition should follow the more  conservative course of allowing parties to have their say before the 

³⁰ (2019) SCC OnLine Del 6964.

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Arbitral Tribunal”. This view was also approved by the Supreme Court  in Vidya Drolia v. Durga Trading Corporation¹⁸.

59. Bearing the aforesaid principles in mind, the first question to be  examined is whether the disputes are arbitrable. It was contended on  behalf of respondent nos. 1 and 3 that the disputes raised by the  petitioners related to the use of the word mark “Hero”, which was  registered by assignment in favour of respondent no.3. It was submitted  that the registration of the trademark vested exclusive rights in favour  of the registered proprietor and entitled it to seek specific relief against  infringement of the trademark. Dr. Singhvi has earnestly contended that  the registration of the trademark operates in rem and no person can  assert a right contrary to the same. He also submitted that any dispute  regarding the proprietary rights in the trademark must be referred to the  persona designata, being the Registrar of the Trade Mark. He submitted  that there was a specific forum for seeking rectification of registration  of a trademark in favour of the registered proprietor and, as such the  proceedings were in rem and therefore, inherently non arbitrable. 

60. Mr. Nayar, learned senior counsel appearing for respondent no.3, had also amongst other submissions made submissions to the aforesaid  effect. 

61. It is apparent that the disputes, essentially, concern the rights of  the F1 Family Group under the FSA and TMNA. Admittedly, the  trademark “Hero” was registered in the name of Hero Cycles Ltd. A  plain reading of the FSA clearly indicates that the four Family Groups

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had agreed to separate and divide the said brand for use in relation to  various businesses amongst the four Family Groups. This was an  integral part of the family agreement to separate the businesses in the  four packages as specified under Schedule 7 to the FSA. 

62. The claim of the petitioners that the respondents cannot use the  trademark “Hero” in respect of Electric Vehicles is premised on the  inter se agreement between the four Family Groups. The petitioners are  not claiming the use of the trademark “Hero” in connection with the  Electric Vehicles in rem. Their claim is limited to what they consider  their contractual right under the FSA and TMNA. 

63. It is also relevant to bear in mind that it is conceded that the  assignment of the trademark “Hero” – on which respondents nos.1 and  3 rely for opposing the present petition – was pursuant to the FSA and  TMNA. 

64. The decisions of the Supreme Court in the case of A. Ayyasamy  v. A. Paramasivam & Ors.²⁰; Booz Allen & Hamilton Inc. v. SBI  Home Finance Limited & Ors.¹⁹ and Vidya Drolia v. Durga Trading  Corporation¹⁸ do not further the case of the respondents in the given  facts of this case. 

65. In Booz Allen & Hamilton Inc. v. SBI Home Finance Limited  & Ors.¹⁹, the Supreme Court had set out certain disputes, which are non arbitrable. These included disputes that arise out of criminal offence; matrimonial matters; insolvency and winding up matters; testamentary  matters; eviction or tenancy matters; and, those governed by special

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statutes. However, the Supreme Court had also explained that the said  cases related to actions in rem, which were exercisable against the world  at large in contrast to rights in personam. The relevant extract of the  said decision is set out below: 

“35. The Arbitral Tribunals are private fora chosen 

voluntarily by the parties to the dispute, to adjudicate  their disputes in place of courts and tribunals which  are public fora constituted under the laws of the  country. Every civil or commercial dispute, either  contractual or non-contractual, which can be decided  by a court, is in principle capable of being adjudicated  and resolved by arbitration unless the jurisdiction of  the Arbitral Tribunals is excluded either expressly or  by necessary implication. Adjudication of certain  categories of proceedings are reserved by the  legislature exclusively for public fora as a matter of  public policy. Certain other categories of cases,  though not expressly reserved for adjudication by  public fora (courts and tribunals), may by necessary  implication stand excluded from the purview of  private fora. Consequently, where the cause/dispute is  inarbitrable, the court where a suit is pending, will  refuse to refer the parties to arbitration, under Section  8 of the Act, even if the parties might have agreed  upon arbitration as the forum for settlement of such  disputes.

36. The well-recognised examples of non-arbitrable  disputes are: (i) disputes relating to rights and  liabilities which give rise to or arise out of criminal  offences; (ii) matrimonial disputes relating to divorce,  judicial separation, restitution of conjugal rights, child  custody; (iii) guardianship matters; (iv) insolvency  and winding-up matters; (v) testamentary matters  (grant of probate, letters of administration and  succession certificate); and (vi) eviction or tenancy

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matters governed by special statutes where the tenant  enjoys statutory protection against eviction and only  the specified courts are conferred jurisdiction to grant  eviction or decide the disputes.

37. It may be noticed that the cases referred to above  relate to actions in rem. A right in rem is a right  exercisable against the world at large, as contrasted  from a right in personam which is an interest protected  solely against specific individuals. Actions in  personam refer to actions determining the rights and  interests of the parties themselves in the subject

matter of the case, whereas actions in rem refer to  actions determining the title to property and the rights  of the parties, not merely among themselves but also  against all persons at any time claiming an interest in  that property. Correspondingly, a judgment in  personam refers to a judgment against a person as  distinguished from a judgment against a thing, right or  status and a judgment in rem refers to a judgment that  determines the status or condition of property which  operates directly on the property itself. (Vide Black’s  Law Dictionary.)

38. Generally and traditionally all disputes relating to  rights in personam are considered to be amenable to  arbitration; and all disputes relating to rights in rem  are required to be adjudicated by courts and public  tribunals, being unsuited for private arbitration. This  is not however a rigid or inflexible rule. Disputes  relating to subordinate rights in personam arising from  rights in rem have always been considered to be  arbitrable.”

66. The aforesaid decision was also referred to by the Supreme Court  in A. Ayyasamy Vs. A. Paramasivam & Ors.²⁰

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67. The expression “action in rem” is defined by R.H. Graveson³¹ as  under:

“An action in rem is one in which the judgment 

of the court determines the title to property and 

the rights of the parties, not merely as between.”

68. The aforesaid definition was noted by the Supreme Court in  Vidya Drolia v. Durga Trading Corporation¹⁸. After examining the  various authorities, the Supreme Court had propounded a fourfold test  for determining whether the subject matter of a dispute is arbitrable.  The relevant extract of the said decision is as under:

“76. In view of the above discussion, we 

would like to propound a fourfold test for 

determining when the subject-matter of a 

dispute in an arbitration agreement is not 

arbitrable:

76.1 (1) When cause of action and subject 

matter of the dispute relates to actions in rem, 

that do not pertain to subordinate rights in 

personam that arise from rights in rem.

76.2 (2) When cause of action and subject 

matter of the dispute affects third party rights; 

have erga omnes effect; require centralized 

adjudication, and mutual adjudication would 

not be appropriate and enforceable.

76.3 (3) When cause of action and subject 

matter of the dispute relates to inalienable 

sovereign and public interest functions of the 

State and hence mutual adjudication would be 

unenforceable.

³¹ Conflict of Laws 98, 7^th Edition 1974

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76.4 (4) When the subject-matter of the  dispute is expressly or by necessary implication  non-arbitrable as per mandatory statute(s).

76.5 These tests are not watertight  compartments; they dovetail and overlap, albeit  when applied holistically and pragmatically  will help and assist in determining and  ascertaining with great degree of certainty when  as per law in India, a dispute or subject matter  is non-arbitrable. Only when the answer is  affirmative that the subject matter of the dispute  would be non-arbitrable.

76.6 However, the aforesaid principles have  to be applied with care and caution as observed  in Olympus Superstructures (P) Ltd.: (SCC  p.669, para 35)

“35…Reference is made there to 

certain disputes like criminal 

offences of a public nature, 

disputes arising out of illegal 

agreements and disputes relating to 

status, such as divorce, which 

cannot be referred to arbitration. It 

has, however, been held that if in 

respect of facts relating to a 

criminal matter, say, physical 

injury, if there is a right to damages 

for personal injury, then such a 

dispute can be referred to 

arbitration (Keir v. Leeman). 

Similarly, it has been held that a 

husband and a wife may refer to 

arbitration the terms on which they 

shall separate, because they can 

make a valid agreement between 

themselves on that matter (Soilleux

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v. Herbst, Wilson v. Wilson and 

Cahill v. Cahill).”

77. Applying the above principles to  

determine non-arbitrability, it is apparent that  

insolvency or intracompany disputes have to be  

addressed by a centralized forum, be the court  

or a special forum, which would be more  

efficient and has complete jurisdiction to  

efficaciously and fully dispose of the entire  

matter. They are also actions in rem. Similarly,  

grant and issue of patents and registration of  

trademarks are exclusive matters falling within  

the sovereign or government functions and  

have erga omnes effect. Such grants confer  

monopoly rights. They are non-arbitrable.  

Criminal cases again are not arbitrable as they  

relate to soverign functions of the State.  

Further, violations of criminal law are offences  

against the State and not just against the victim.  

Matrimonial disputes relating to the dissolution  

of marriage, restitution of conjugal rights, etc.  

are not arbitrable as they fall within the ambit  

of sovereign functions and do not have any  

commercial and economic value. The decisions  

have erga omnes effect. Matters relating to  

probate, testamentary matter, etc. are actions in  

rem and are a declaration to the world at large  

and hence are non-arbitrable.”¹⁸

69. Dr. Singhvi had referred to Paragraph 76.2 of the decision in  Vidya Drolia v. Durga Trading Corporation¹⁸ and submitted that the  disputes, which have erga omnes effect, would not be arbitrable.  According to him, a decision in respect of the disputes raised in the  instant case would have an erga omnes effect. Whilst there is merit in  the contention that disputes that have erga omnes effect may not be

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arbitrable, the said contention that the dispute sought to be referred in  this case is such a dispute is clearly, without merit. 

70. The dispute sought to be raised by the petitioners is a dispute  relating to the rights under the FSA and TMNA. The said disputes do not affect the rights of any third party. The petitioners are not seeking  grant of registration of any trademark under the Trade Marks Act, 1999.  They are also not seeking rectification of the Register of Trade Marks.  There are separate remedies available for such reliefs. The petitioners  are essentially seeking adjudication of their claim as to the  interpretation of the FSA and TMNA and, the consequential relief inter  se. 

71. In Vidya Drolia v. Durga Trading Corporation¹⁸, the Supreme  Court had clearly specified that grant and issue of patents and  registration of trademarks are matters that fall within the sovereign or  government functions and have erga omnes effect. Prima facie, the  nature of disputes sought to be raised by the petitioners cannot be  considered as actions in rem. The assumption that all matters relating to  trademarks are outside the scope of arbitration is plainly erroneous.  There may be disputes that may arise from subordinate rights such as  licences granted by the proprietor of a registered trademark. Undisputedly, these disputes, although, involving the right to use  trademarks, are arbitrable as they relate to rights and obligations inter  se the parties to a licence agreement³². Similarly, disputes arising inter 

³² Eros International Media Ltd v. Telemax Links India Pvt Ltd. & Ors., 2016 SCC OnLine Bom  2179.

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se the contracting parties in respect of their rights and obligations under  the contract, are arbitrable and any action to enforce such contractual  rights inter se the contracting parties, is an action in personam. 

72. Petitioners nos. 2 and 3 had filed a suit²⁶ against Lectro E Mobility Private Ltd. and Hero Cycles Ltd. seeking a permanent  injunction restraining the said defendants from dealing in any manner  in electrical bikes having a throttle using the trademark “Hero” or any  mark deceptively similar thereto. In its plaint, petitioner no.3 claimed  the exclusive right to use the trademark “Hero” in respect of Electric  Vehicles, as the registered owner of certain trademarks. The defendants  in that case (part of the F4 Family Group) had filed an application under  Section 8 of the A&C Act seeking reference of the parties to arbitration.  They (F4 Family Group) contended that the plaintiffs did not possess  any trademark registration for the mark “Hero” for Electric Cycles / E

Cycles and claimed that they had the exclusive right to use the trade  mark “Hero” without any prefix or suffix in relation to bicycles, which  would also include E-Cycles. 

73. The plaintiffs (petitioner nos. 2 and 3) resisted the application  under Section 8 of the A&C Act, inter alia, contending that the issues  in the controversy would operate in rem and therefore, the disputes were  not arbitrable. This is precisely the contention advanced by respondent  nos. 1 and 3 in this case. It is their case that respondent no. 3 is the  proprietor of the trademark “Hero” and all other variants. Although the  F1 Family Group can use the trademark “Hero Electric” in respect of  Electric Vehicles; they cannot use any mark including the word “Hero”.

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74. In Hero Electric Vehicles Pvt. Ltd. & Anr. v. Lectro E-Mobility  Pvt. Ltd, the Court noted the essence of the disputes as under:

“45. I am unable to agree with Mr. Sudhir  

Chandra. As has been correctly pointed out by Mr.  

Sibal, the dispute, as raised by Mr. Sudhir  

Chandra’s clients, is almost entirely centred around  

the FSA and TMNA. Though the prayer clause, in  

the suit, superficially read, seeks remedies against  

alleged infringement by the defendants, the  

infringement is alleged, not on the ground that the  

defendants are using deceptively similar  

trademarks, but on the ground that the right to use  

the trademarks, on electric cycles was conferred, by  

the FSA and TMNA, not on the F-4 group, but on  

the F-1 group. The reliance, by Mr. Sibal, on paras  

19 to 25 of the plaint, is also well taken. The precise  

case set up by the plaintiff, in the said paras, is that  

the right to use the trademark “Hero” and its  

variants, which, prior to the execution of the FSA  

and the TMNA, vested in Hero Cycles, was  

transferred, by the FSA and the TMNA, to the F-1  

group, insofar as electric cycles were concerned. In  

using the “Hero” trademark, on electric cycles and  

e-cycles, therefore, it was alleged that the F-4 group  

was infracting the covenants of the FSA and  

TMNA. Even if, in the process, the plaintiffs were  

to rely on any of the provisions of the Trade Marks  

Act, the essential infraction, as alleged to have been  

committed by the defendants, was not of the  

provisions of the Trade Marks Act, but of the  

provisions of the FSA and TMNA. As against this,  

the defendants rely on Articles 17.1 and 17.2 of the  

FSA and Article 3.7 of the TMNA, to dispute the  

claim of the plaintiffs. I am in agreement with Mr.  

Sibal that the dispute, as thus emerged between the  

plaintiffs and the defendants, required a holistic  

appreciation of the FSA and the TMNA, their

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various covenants, and the interplay thereof, in  

order to adjudicate on the rights conferred on the  

various family groups. Any effective adjudication  

of the disputes, without reference to the FSA and  

the TMNA would, in my view, be impossible.”²⁶

75. After noting the nature of disputes as above, the Court rejected  the contention that the suit was an action in rem. The relevant extract  of the said decision is as under:

“48. Booz Allen and Ayyasamy have both been 

considered, comprehensively, in Vidya Drolia, 

which includes, among the categories of disputes 

which cannot be arbitrated upon, “grant and issue 

of patents and registration of trade marks”, as “they 

are exclusive matters falling within the sovereign or 

government functions”, having “erga omnes 

effect”, resulting in conferment of “monopoly 

rights”. The controversy, in the present case, does 

not relate to grant, or registration, of trademarks. 

The trademarks already stood granted, and 

registered, prior to the FSA and TMNA. The 

dispute is regarding the Family Group to which the 

rights to use the said trademarks, in connection with 

electric cycles and e-cycles has been assigned, by 

the FSA and TMNA. This assignment is by 

contractual, not statutory, fiat. It does not involve 

any exercise of sovereign functions (unless, of 

course, the patriarchs of the four Family Groups 

are, in a limited sense, to be regarded as 

“sovereigns”). In any event, no inalienable exercise 

of sovereign governmental functions can be said to 

be involved, in the assignment, to the various 

Family Groups, of their individual rights to use the 

existing trademarks, in respect of one, or the other, 

categories of goods. The dispute does not, 

therefore, fall under any of the categories of

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disputes excepted, by the Supreme Court, from the  arbitral umbrella.

49. Nor am I able to accept Mr. Sudhir  Chandra’s arguments that the dispute is in the nature  of an action in rem. Mr Sibal has, in this context,  sought to distinguish between actions in rem and  rights in rem. Though this distinction does, to an  extent, manifest the fallacy in the submission of Mr  Sudhir Chandra, I do not deem it necessary to enter,  for the purpose, into that intricate jurisprudential  thicket. (Avoidance of the temptation to enter into  such thickets is, indeed, one of the cautions that  Vidya Drolia administers.) The right that the  plaintiffs seek to assert, in the plaint, is clearly  against the F-4 group, and the F-4 group alone, and  not against the whole world. More precisely put, the  plaintiffs are not seeking a declaration, of their right  to use a particular trademark, against any potential  infringer, anywhere in the world, as is the case with  “normal” infringement suits.The dispute is clearly  inter-se amongst two Family Groups, pillowed on  the rights emanating from the FSA and the TMNA,  and essentially alleges infraction of the terms of the  FSA and TMNA, not of the provisions of the Trade  Marks Act. The precise case of the plaintiff is that  the defendants have, in using the “Hero” trademark  in respect of electric cycles and e-cycles, infracted  the covenants of the FSA and TMNA. The  infraction, consequently, of the provisions of  the Trade Marks Act, even if asserted, is only  incidental, arising from the fact that the right to use  a particular trademark is statutorily conferred by the  said Act. Equally, therefore, even if it were to be  assumed that the declaration, by the adjudicator, of  the Family Group which would be entitled to use  the “Hero” or “Hero Electric” trademark on electric  cycles, or e-cycles, would result in that Family  Group being the repository of the said trademark,

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qua the said goods, against the whole world, that by 

itself would not convert the dispute, as raised in the 

plaint, as one in rem, or lend it erga omnes effect. 

To reiterate, in this context, the right asserted by the 

plaintiffs is not a right that emanates from the Trade 

Marks Act, but a right that emanates from the FSA 

and the TMNA, and is not asserted vis-à-vis the 

whole world, but is asserted specifically vis-à-vis 

the F-4 Family Group. The argument that the 

dispute is in rem and is, therefore, not amenable to 

the arbitral process, therefore, fails to impress.”²⁶

76. This Court is of the view that the decision in Hero Electric  Vehicles Pvt. Ltd. & Anr. v. Lectro E-Mobility Pvt. Ltd²⁶ would  substantially address the contention advanced on behalf of the  respondents regarding non-arbitrability of the disputes. Dr. Singhvi  contended that the dispute in that case was arbitrable as it involved the  question whether bicycles would include E bicycles (throttle assisted)  or whether E bicycles would be Electric Vehicles. He also submitted  that the certain observations made by the Court in Hero Electric  Vehicles Pvt. Ltd. & Anr. v. Lectro E-Mobility Pvt. Ltd. & Anr.²⁶ are  per incuriam. 

77. This Court is not persuaded to accept either of the aforesaid  contentions. Having stated the above, it is also necessary to state that  this Court is not required to express a conclusive view in respect of the  rival contentions but merely form a prima facie view. The parties are  not precluded from urging their contentions before the Arbitral  Tribunal. 

78. Dr Singhvi, had also referred to the decision of the Supreme

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Court in Competition Commission of India v. Bharti Airtel Limited &  Ors.³³. On the strength of the said decision, he submitted that it was  necessary that the issue regarding registration of the trademark be  decided by a ‘persona designata’ which, according to him, would be  the Registrar of Trade Marks or the IP Division of this Court, before  reference of the disputes to arbitration. 

79. The decision in Competition Commission of India v. Bharti  Airtel Limited & Ors.³³ is not applicable to the facts of this case. In that  case, the principal issue was regarding jurisdiction of the Competition  Commission of India (CCI) to investigate allegations regarding abuse  of dominance and anti-competitive agreements. In the said case,  Reliance Jio Infocom. Limited (RJIL) had filed information under  Section 19(1) of the Competition Act, 2002 alleging that three major  telecom operators (referred to as IDOs) had formed a cartel and entered  into an anti-competitive agreement. RJIL had also claimed that the  IDOs had refrained from augmenting the Points of Inter-connection (POIs) for the necessary access resulting in congestion and call failures  in its network. Admittedly, the Telecom Regulatory Authority of India  (TRAI) was vested with the statutory powers under the Telecom  Regulatory Authority of India Act, 1997 (TRAI Act) to decide the  issues regarding provision of services. One of the principal questions which fell for consideration before the Supreme Court was whether the  CCI could examine allegations against the IDO. The Bombay High  Court had quashed the notices issued by the CCI as it was of the view 

³³ (2019) 2 SCC 521.

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that the dispute was within the jurisdiction of TRAI. 

80. The Supreme Court was of the view that until the factual  jurisdictional issues were answered by TRAI, CCI would be ill  equipped to proceed in the matter. The Supreme Court held that TRAI  was required to examine the allegations regarding failure or delay on  the part of IDOs to provide adequate POIs. The Supreme Court had set  down various questions (in paragraph 72 and 102 of the judgment) and  the findings regarding those questions would constitute the  jurisdictional facts for any further proceedings by CCI. These jurisdictional issues were required to be determined by TRAI under the  TRAI Act. 

81. In the present case, the disputes raised arise predominantly in  respect of the contractual rights and obligations and therefore, there is  no requirement to await adjudication by another authority. 

82. In any view of the matter, this Court need not dwell on the said  issue in any further detail. In view of the doctrine of kompetenz kompetenz, all issues including those regarding arbitrability of the  disputes as well as regarding the jurisdiction of the Arbitral Tribunal,  are required to be addressed by the Arbitral Tribunal in the first  instance. Unless it is ex-facie established beyond a vestige of doubt that  the Arbitral Tribunal does not have the jurisdiction to decide the dispute  and the claims are deadwood, this Court is required to assist in  constitution of the Arbitral Tribunal

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83. This Court is not required to finally adjudicate controversies  regarding arbitrability of disputes. Suffice it is to state that this is not a  case where this Court can on an intense prima facie scrutiny, finally  conclude that the disputes raised are beyond the scope of the Arbitration  Agreement or that the Arbitral Tribunal would lack the jurisdiction to  decide the disputes.

84. The next question to be examined is whether the disputes sought  to be raised by the petitioners are barred by limitation. In this regard, it  is relevant to briefly examine the rival contentions.

85. It was contended on behalf of the respondents that the disputes  sought to be raised by the petitioners are stale and highly belated. The  cause of action, if any, in respect of the said disputes had arisen as early  as in the year 2011. It was contended that this is established by the facts  as stated hereafter:-

85.1 Pursuant to the execution of the TMNA and FSA, on 10.02.2011,  respondent no. 3 had applied for assignment of the trademark “Hero”, which was registered as Trade Mark No. 235780 in respect of ‘Scooters,  Motorcycles and Parts thereof’ and Trade Mark No. 659053 in respect  of ‘Vehicles and parts thereof, Tractors and parts thereof’, from Hero  Cycles Limited.

85.2 On 05.01.2012, respondent no.1 had showcased an Electric  Vehicle at the Delhi Auto Expo. The same was in the knowledge of the  petitioners, who had also showcased an Electric Vehicle at the same

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Auto Expo, however, the petitioners did not voice any grievance at that  stage. 

85.3 On 29.01.2014, the respondents/F3 Family Group once again  displayed an Electric Vehicle under the trademark “Hero Leap” in an  Auto Expo. The respondents/F3 Family Group had also issued a press  release with the heading reading as, “Leap – India’s First Electric Serial  Hybrid Scooter”.

85.4 On 05.02.2014, the respondents/F3 Family Group issued a press  release in respect of an electric motorcycle named as “Hero  SimplEcity”. 

85.5 On 19.02.2014, the respondents/F3 Family Group sent a  communication to the petitioner no.1 (F1 Family Group) asserting full  rights to use the trademark “Hero” with respect to Electric Vehicles. It  is contended that the same was received by the petitioner no.1 (F1  Family Group) on 26.02.2014 and thus the cause of action, if any, had  arisen on that date. 

85.6 On 13.08.2016, the respondents had showcased another Electric  Vehicle named “Hero Duet” in the Auto Expo 2016. The petitioners  had objected to respondent no.3 using the trademark “Hero” and had  alleged that the same was in violation of the TMNA. However, the  petitioners did not take any precipitative action for redressal of the  disputes, which had clearly arisen. The F3 Family Group, in their  communication dated 23.11.2016, comprehensively denied the claim of  the F1 Family Group, which is now sought to be referred to arbitration.

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85.7 On 27.01.2018, the petitioners filed an application under Section  9 of the A&C Act [being OMP(I)(COMM) No.49/2018],seeking certain  interim reliefs. In an order passed on 30.01.2018 in that petition, the  Court had recorded the respondents’ contentions that the petitioners  were aware of the intended use of the trademark “Hero” in respect of  Electric / Environment Friendly Vehicles since 2012. The said petition  was withdrawn on 15.03.2018. 

86. It was contended on behalf of the respondents that there are also  communications to the effect that the petitioners had waived and  acquiesced the use of the trademark “Hero” by the F3 Family Group in  respect of Electric Vehicles. 

87. The petitioners countered the aforesaid submissions. The  petitioners claim that their dispute is alive and not deadwood as claimed  by the respondents since respondent no.2 has not launched any Electric  Vehicle under the trademark / brand “Hero” or any variant thereof.  Further, it is apparent that the respondents (F3 Family Group) now  intends to proceed to commercially launch an Electric Vehicle under the  brand name “Hero”. 

88. The petitioners also relied on certain communications,  particularly an e-mail dated 11.02.2014 and a letter dated 13.08.2016. They state that in the years 2014, 2016, 2017 and 2019, they were  apprehensive that the respondents may launch Electric Vehicles under  the brand name “Hero” and had objected to the same. It is contended  that the respondents had refrained from commercially launching any

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Electric Vehicle under the brand name “Hero” in view of the opposition  from the F1 Family Group. It is also contended on behalf of the  petitioners that a commercial launch of an Electric Vehicle for the first  time under the brand name “Hero” by respondent no.2, would give rise  to a cause of action that had not arisen earlier and therefore, there is no  question of the disputes being stale or barred by limitation. 

89. It is also claimed that in terms of Article 22.5 of the FSA, a failure  or delay on the part of any Family Group in exercising a right would not  operate as a waiver. It is contended that in terms of the FSA, the  petitioners could not be precluded from agitating their rights under the  FSA on account of delay or laches if any. 

90. The petitioners also rely on the decisions of the Supreme Court in  Hari Shankar Singhania & Ors. v. Gaur Hari Singhania & Ors.²², in  support of their contention that a family settlement is required to be  treated differently and technicalities of limitation ought not to be  permitted to obstruct the implementation of a family settlement.  Attention of this Court was drawn to paragraphs 42 and 43 of the said  decision, which reads as under:

“42. Another fact that assumes importance at this stage is  that, a family settlement is treated differently from any  other formal commercial settlement as such settlement in  the eye of the law ensures peace and goodwill among the  family members. Such family settlements generally meet  with approval of the courts. Such settlements are governed  by a special equity principle where the terms are fair and  bona fide, taking into account the well-being of a family.

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43. The concept of “family arrangement or settlement”  and the present one in hand, in our opinion, should be  treated differently. Technicalities of limitation, etc. should  not be put at risk of the implementation of a settlement  drawn by a family, which is essential for maintaining pea  and harmony in a family. Also it can be seen from decided  cases of this Court that, any such arrangement would be  upheld if family settlements were entered into to allay  disputes existing or apprehend and even any dispute or  difference apart, if it was entered into bona fide to maintain  peace or to bring about harmony in the family. Even a  semblance of a claim or some other ground, as say  affection, may suffice as observed by this Court in Ram  Charan Das v. Girjanandini Devi.”

91. The petitioners also relied on the decision of the Supreme Court  in the case of Kale & Ors. v. Deputy Director of Consolidation & Ors.²³, in support of their contention that the Courts should endeavour to uphold  the validity of a Family Settlement. 

92. It is clear that that the issue of limitation is a contentious one. In  the facts of this case, it involves a mixed question of facts and law.  Indisputably, issuing advertisement or showcasing a vehicle under the  trademark, which includes the word mark “Hero” would amount to  using the said trademark. However, prima facie, that may not extinguish  the cause of action arising from a commercial launch of vehicles under  the said trademark. This Court must refrain from adjudicating such  issues as it is clearly beyond the standards of examination under Section  11 of the A&C Act.

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93. In Bharat Sanchar Nigam Limited & Anr. v. Nortel Networks  India Private Limited³⁴, the Supreme Court following its earlier decision in Vidya Drolia v. Durga Trading Corporation¹⁸ had observed  as under: 

“40. The issue of limitation, in essence, goes to  

the maintainability or admissibility of the claim,  

which is to be decided by the Arbitral Tribunal.  

For instance, a challenge that a claim is time

barred, or prohibited until some precondition is  

fulfilled, is a challenge to the admissibility of that  

claim, and not a challenge to the jurisdiction of the  

arbitrator to decide the claim itself.

*** *** ***

44. The issue of limitation which concerns the  

“admissibility” of the claim, must be decided by  

the Arbitral Tribunal either as a preliminary issue,  

or at the final stage after evidence is led by the  

parties.

45. In a recent judgment delivered by a three

Judge Bench in Vidya Drolia v. Durga Trading  

Corpn. [Vidya Drolia v. Durga Trading Corpn.,  

(2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549] , on the  

scope of power under Sections 8 and 11, it has  

been held that the Court must undertake a primary  

first review to weed out “manifestly ex facie non

existent and invalid arbitration agreements, or  

non-arbitrable disputes”. The prima facie review  

at the reference stage is to cut the deadwood,  

where dismissal is barefaced and pellucid, and  

when on the facts and law, the litigation must stop  

at the first stage. Only when the Court is certain  

³⁴ (2021) 5 SCC 738.

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that no valid arbitration agreement exists, or that  the subject-matter is not arbitrable, that reference  may be refused.

45.1. In para 144, the Court observed that the  judgment in Mayavati Trading [Mayavati Trading  (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC  714 : (2019) 4 SCC (Civ) 441] had rightly held  that the judgment in Patel Engg. [SBP &  Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] had  been legislatively overruled. Para 144 reads as:  (Vidya Drolia case [Vidya Drolia v. Durga  Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC  (Civ) 549] , SCC pp. 114-15)

“144. As observed earlier, Patel Engg.  Ltd. [SBP & Co. v. Patel Engg. Ltd.,  (2005) 8 SCC 618] explains and holds  that Sections 8 and 11 are complementary  in nature as both relate to reference to  arbitration. Section 8 applies when  judicial proceeding is pending and an  application is filed for stay of judicial  proceeding and for reference to  arbitration. Amendments to Section 8  vide Act 3 of 2016 have not been omitted.  Section 11 covers the situation where the  parties approach a court for appointment  of an arbitrator. Mayavati Trading (P)  Ltd. [Mayavati Trading (P)  Ltd. v. Pradyuat Deb Burman, (2019) 8  SCC 714 : (2019) 4 SCC (Civ) 441] , in  our humble opinion, rightly holds  thatPatel Engg. Ltd. [SBP & Co. v. Patel  Engg. Ltd., (2005) 8 SCC 618] has been  legislatively overruled and hence would

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not apply even post omission of sub section (6-A) to Section 11 of the  Arbitration Act.Mayavati Trading (P)  Ltd. [Mayavati Trading (P)  Ltd. v. Pradyuat Deb Burman, (2019) 8  SCC 714 : (2019) 4 SCC (Civ) 441] has  elaborated upon the object and purposes  and history of the amendment to Section  11, with reference to sub-section (6-A) to  elucidate that the section, as originally  enacted, was facsimile with Article 11 of  the UNCITRAL Model of law of arbitration  on which the Arbitration Act was drafted  and enacted.”

(emphasis supplied)

While exercising jurisdiction under Section 11 as  the judicial forum, the court may exercise the  prima facie test to screen and knockdown ex facie  meritless, frivolous, and dishonest litigation.  Limited jurisdiction of the courts would ensure  expeditious and efficient disposal at the referral  stage. At the referral stage, the Court can interfere  “only” when it is “manifest” that the claims are ex  facie time-barred and dead, or there is no  subsisting dispute. Para 148 of the judgment reads  as follows : (Vidya Drolia case [Vidya  Drolia v. Durga Trading Corpn., (2021) 2 SCC 1  : (2021) 1 SCC (Civ) 549] , SCC p. 119)

“148. Section 43(1) of the Arbitration  Act states that the Limitation Act, 1963  shall apply to arbitrations as it applies to  court proceedings. Sub-section (2)  states that for the purposes of the  Arbitration Act and the Limitation Act,

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arbitration shall be deemed to have  commenced on the date referred to in  Section 21. Limitation law is procedural  and normally disputes, being factual,  would be for the arbitrator to decide  guided by the facts found and the law  applicable. The court at the referral  stage can interfere only when it is  manifest that the claims are ex facie  time-barred and dead, or there is no  subsisting dispute. All other cases  should be referred to the Arbitral  Tribunal for decision on merits. Similar  would be the position in case of  disputed “no-claim certificate” or  defence on the plea of novation and  “accord and satisfaction”. As observed  in Premium Nafta Products Ltd. [Fili  Shipping Co. Ltd. v. Premium Nafta  Products Ltd., 2007 UKHL 40 : 2007  Bus LR 1719 (HL)] , it is not to be  expected that commercial men while  entering transactions inter se would  knowingly create a system which would  require that the court should first decide  whether the contract should be rectified  or avoided or rescinded, as the case may  be, and then if the contract is held to be  valid, it would require the arbitrator to  resolve the issues that have arisen.”

(emphasis supplied)

45.2. In para 154.4, it has been concluded that :  (Vidya Drolia case [Vidya Drolia v. Durga

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Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC  (Civ) 549] , SCC p. 121)

“154.4. Rarely as a demurrer the court  may interfere at Sections 8 or 11 stage  when it is manifestly and ex facie  certain that the arbitration agreement is  non-existent, invalid or the disputes are  non-arbitrable, though the nature and  facet of non-arbitrability would, to  some extent, determine the level and  nature of judicial scrutiny. The  restricted and limited review is to check  and protect parties from being forced to  arbitrate when the matter is  demonstrably “non-arbitrable” and to  cut off the deadwood. The court by  default would refer the matter when  contentions relating to non-arbitrability  are plainly arguable; when  consideration in summary proceedings  would be insufficient and inconclusive;  when facts are contested; when the party  opposing arbitration adopts delaying  tactics or impairs conduct of arbitration  proceedings. This is not the stage for the  court to enter into a mini trial or  elaborate review so as to usurp the  jurisdiction of the Arbitral Tribunal but  to affirm and uphold integrity and  efficacy of arbitration as an alternative  dispute resolution mechanism.”

(emphasis supplied)

45.3. In para 244.4 it was concluded that :  (Vidya Drolia case [Vidya Drolia v. Durga

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Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC  (Civ) 549] , SCC p. 162)

“244.4. The court should refer a matter  if the validity of the arbitration  agreement cannot be determined on a  prima facie basis, as laid down above  i.e. “when in doubt, do refer”.”

(emphasis supplied)

46. The upshot of the judgment in Vidya  Drolia [Vidya Drolia v. Durga Trading Corpn.,  (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549] is  affirmation of the position of law expounded  in Duro Felguera [Duro Felguera,  S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729  : (2017) 4 SCC (Civ) 764] and Mayavati  Trading [Mayavati Trading (P) Ltd. v. Pradyuat  Deb Burman, (2019) 8 SCC 714 : (2019) 4 SCC  (Civ) 441] , which continue to hold the field. It  must be understood clearly that Vidya  Drolia [Vidya Drolia v. Durga Trading Corpn.,  (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549] has not  resurrected the pre-amendment position on the  scope of power as held in SBP & Co. v. Patel  Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd., (2005)  8 SCC 618]

47. It is only in the very limited category of  cases, where there is not even a vestige of doubt  that the claim is ex facie time-barred, or that the  dispute is non-arbitrable, that the court may  decline to make the reference. However, if there is  even the slightest doubt, the rule is to refer the  disputes to arbitration, otherwise it would  encroach upon what is essentially a matter to be  determined by the tribunal.”

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94. The aforesaid decision makes it amply clear that the standards of  examination under Section 11 of the A&C Act are limited and as  explained by the Supreme Court, it is only in cases where there is not  even a vestige of doubt that the claims are barred by limitation, that the  Court could decline to refer the disputes to arbitration. 

95. The respondents had relied upon the decision of this Court in M/s  KSR Brothers, through its Partner Jaswinder Singh v. IGNOU,  through its Vice Chancellor³⁵, in support of their contention that the  present petition is liable to be dismissed as the claims are barred by  limitation. The said decision is not applicable to the facts of the present  case as it is apparent that the issue of limitation is a contentious one.  Admittedly, the respondents have not launched an Electric Vehicle  commercially. According to the respondents, respondent no.2 intends  to do so shortly. The petitioners claim that the respondents cannot  market and sell the same under any trademark containing the word  “Hero” or any variant thereof. The question whether showcasing of an  Electric Scooter at an auto exhibition extinguishes the petitioners  remedy to object to commercial exploitation of the trademarks in  connection with Electric Vehicles, is clearly a question that requires  adjudication. As stated above, the petition can be rejected only in cases  where there is even a vestige of doubt that the claims are barred by  limitation.

³⁵ 2021 SCC OnLine Del 5018.

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96. The next question to be examined is whether the arbitration  agreement under the TMNA stood discharged. It was contended on  behalf of respondent nos. 1 and 3 that the TMNA has been performed,  as each of the Family Groups had undertaken actions to implement the  material terms of the TMNA. It was stated that the F3 Family Group  had applied for being recorded as a subsequent proprietor of the  registered Trade Mark nos. 235780 and 659053 being the trademark  “Hero” for ‘scooters, motorcycles and parts thereof’ and for ‘vehicle in  parts thereof, tractors and parts thereof’, respectively. 

97. It is also contended that the F1 Family Group had withdrawn their  applications for registration in respect of certain marks containing the  word “Hero”. Respondent nos. 1 and 3 also rely on an email dated  04.06.2013 whereby the F1 Family Group had confirmed that the F1  Family Group would be entitled to use the mark “Hero Electric” for  Electric Vehicles and the F3 Family Group could continue to use the  mark “Hero” in any form or manner, with any prefix or suffix, other  than “Hero Electric” for electric bikes scooters and/or environmental  friendly vehicles. It is submitted that pursuant to the Power of Attorney  executed by petitioner no. 1 and the consensus between the Family  Groups, the Registrar of Trademarks had passed an order dated  31.01.2014 and directed respondent no. 3 to be the registered proprietor  for the Trade Mark nos. 235780 and 659053 for the mark “Hero”. 

98. The petitioners dispute the above. It is their case that they had not  accepted that the F3 Family Group could use the trademark “Hero” in  any form in respect of Electric Vehicles. They contend that a

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confirmation letter was sought but it was not signed by petitioner no.1.  On the contrary, the F1 Family Group had declined to confer any other  right in favour of the F3 Family Group. 

99. Respondent nos. 1 and 3 also contend on the strength of the  factual averments, that the F1 Family Group had acquiesced in the  entitlement of the F3 Family Group to use any mark other than the mark  “Hero Electric” in respect of Electric Vehicles. The petitioners have  countered the aforesaid submissions. They assert to the contrary and  contend that the F1 Family Group had objected to the F3 Family Group  for using the trademark “Hero” or any variant thereof in respect of  Electric Vehicles and, the respondents had refrained from commercially  launching any Electric Vehicle under the brand name “Hero” or any  variant thereof. 

100. It is not apposite for this Court to adjudicate any of the aforesaid  issues in these proceedings. 

101. The contention that the present petition is liable to be dismissed  as the other parties to the FSA and TMNA have not been joined as  parties, is unmerited. The petitioners have arrayed the head of the F3  Family Group and two entities allocated to the F3 Family Group as the  disputes are essentially against the F3 Family Group. The parties  against which no relief is sought are not necessary parties.

102. The next question to be examined is whether petitioner no. 2 and,  respondent nos. 2 and 3 can be included as parties in the arbitration  proceedings. Petitioner no. 2 was incorporated by the F1 Family Group

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after the Munjal Group had entered into the FSA and TMNA. However,  it is not disputed that petitioner no. 2 is claiming its rights through the  F1 Family Group, which is admittedly a party to the Arbitration  Agreements. 

103. Respondent nos. 2 and 3 are non-signatories to the FSA and the  TMNA. However, it is not disputed that respondent no. 3 had executed  a Deed of Adherence in terms of Article VIII of the FSA. Article VIII  of the FSA is set out below:

“Article VIII 

Deed of Adherence

8.1 Each of the Patriarchs states and confirms that the  Family Settlement recorded herein has been arrived at  after full discussions with and consent, and approval and  authorisation of Munjal Family Members comprised in his  Family Group and agrees and undertakes to cause each  member of his Family Group to enter into a Deed of  Adherence substantially in form and content as at  Schedule 8A hereto in token reiteration thereof.

8.2 The Parties agree that they shall cause each Munjal  Group Entity to agree to and be bound by the Family  Settlement recorded herein and shall accordingly cause  each Munjal Group Entity to execute and enter into a Deed  of Adherence substantially in form and content as at  Schedule 8B hereto.”

104. Clauses 1 and 2 of the format of the Deed of Adherence annexed  as Schedule 8B reads as under:-

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“NOW THEREFORE THE [F1] FAMILY MEMBER  DECLARES AND THIS DEED OF ADHERENCE  WITNESSETH AS FOLLOWS:

1. The [F1] Family Member hereby declares and  confirms that the Patriarch of [F1] Family Group has  entered into the Family Settlement Agreement with the  consent and approval of all [F1] Family Group members  including the [F1] Family member and after satisfactory  discussions of the proposals with the [F1] Family Group  members including the [F1] Family Member. 

2. The [F1] Family Member hereby acknowledges that  he/she has received a copy of the Family Settlement  Agreement and Shri………………………., the  husband/father/son of the [F1] Family Member has read  and explained to the [F1] Family Member fully and in  detail the Family Settlement Agreement and he/she has  understood fully the contents and implications of the  Family Settlement Agreement and agrees and confirms  that the Family Settlement Agreement is in the best  interests of the [F1] Family Member and he/she shall be  bound by the provisions of the Family Settlement  Agreement as of the date thereof as if he/she were an  original Party thereto and the Family Settlement  Agreement shall have full force and effect on him/her and  the same shall be read and constituted to be binding on  him/her and enforceable against him/her in accordance  with the terms of the Family Settlement Agreement.”³⁶

105. Thus, undeniably, respondent no.3 had agreed to be bound by the  provisions of the FSA as if it was an original party thereto. 

³⁶ Clauses 1 and 2 of Schedule 8B annexed to the FSA.

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106. It is also claimed that Hero Cycles Limited had assigned the  trademark “Hero” in favour of respondent no.3 in furtherance of the  FSA and TMNA. Respondent no.3 is thus, also the beneficiary of the  FSA and TMNA. Admittedly, it is also a Munjal Group Entity. Prima  facie, respondent no.3 would also be bound by the Arbitration  Agreement under the FSA and TMNA. 

107. Respondent no.2 claims that it is neither a signatory nor has it  executed a Deed of Adherence as required under Article VIII of the  FSA. This is stoutly disputed by the petitioners. The petitioners point  out that in proceedings³⁷ under Section 9 of the A&C Act that were  instituted by the petitioners, respondent no.2 had admitted that it had  also executed a Deed of Adherence and therefore, it is now not open for  respondent no.2 to contend to the contrary. 

108. This Court had pointedly asked Dr Singhvi, learned senior  counsel who appeared on behalf of respondent no.1, as to the respondent  no.1’s stand whether respondent no.2 is bound by the FSA or TMNA.  He had initially avoided answering the question and finally stated that  he had no instructions to answer the same. Clearly, the intention being  to sit on the fence. Undisputedly, it was respondent no.1’s obligation to  ensure that respondent no.2 files the Deed of Adherence and its failure  to ensure the same would give justifiable grounds to allege that  respondent no.1 breached the terms of the FSA. In this context, the stand  of respondent no.1 to not squarely answer the questions put from the 

³⁷ OMP (I) (COMM) 49/2018 (Delhi High Court).

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Court is, prima facie, reflective of a less than honest intent. 

109. Be that as it may, it is not disputed that respondent no.2 is a part  of the Munjal Group Entities that was allocated to the share of the F3  Family Group under the FSA. It is also not disputed that the members  of the F3 Family Group control respondent no.2 in their capacity of  substantial shareholders. Additionally, certain members of the F3  Family Group including respondent no.1 are principal officers of  respondent no.2. 

110. Respondent no.2 is also an indirect beneficiary of the FSA and  now claims that it is entitled to use the trademark “Hero” through  respondent no.3. 

111. It is clearly not open for the F3 Family Group to claim that it is  entitled to control respondent no.2 company to the exclusion of the  other Family Groups pursuant to the FSA and, at the same time contend  that respondent no.2 is not bound by the terms of the FSA. 

112. It is also relevant to refer to Section 7(4)(c) of the A&C Act, which expressly provides that assertion of an arbitration agreement in a  Statement of Claims, which is not denied would constitute an arbitration  agreement. In the present case, it is not disputed that respondent no.2  had admitted that it had executed a Deed of Adherence which, as stated  above, required the Munjal Group Entities to assert that it should be  bound by the FSA as if it was a party to it. Thus, on an analogy of  Section 7(4) of the A&C Act, it may not be possible for respondent no.2  to deny the existence of an arbitration agreement.

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113. In addition, there are various principles on the basis of which a  non-signatory may be compelled to arbitrate. These include cases where  a non-signatory is an alter ego signatory³⁸; the non-signatory is found  to be a party by lifting the corporate veil³⁹; the non-signatory is a part  of the same group of companies⁴⁰; the non-signatory is a party to a  composite transaction⁴¹; the non-signatory’s consent is implied⁴²; the  non-signatory is estopped from avoiding arbitration where it knowingly  received benefits under the agreement.⁴³

114. Undeniably, the F3 Family Group intends to carry on the business  of manufacturing Electric Vehicles through respondent no.2 which is  allocated in their package under Schedule 7 of the FSA. 

115. The decision in Atul Singh¹² and Vimal Kishor Shah¹³ are not  applicable in the facts of this case. In Atul Singh’s case heirs of one  Rajendara Prasd Singh (R) had challenged a partnership deed dated  17.2.1992 as illegal and void. R was neither a signatory nor a partner  under the 17.02.1992 partnership deed. In this context the court found 

³⁸ Chloro Controls (India) (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641  [hereafter ‘Chloro Control’]; Barcelona Traction, Light and Power Company Ltd.: (1970) ICJ Rep.  3 [hereafter ‘Barcelona Traction’].

³⁹ Ibid [Barcelona Traction]; Builders Federal (Hong Kong) v. Turner Const.: 655 F. Supp. 1400,  1406 (S.D.N.Y. 1987); Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc.: 933 F.2d  131, 32, 32 Fed. R. Evid. Serv. 1218 (2d Cir. 1991); Thomson-CSF, S.A. v. American Arbitration  Association: 64 F.3d 773 (2d Cir. 1995).

⁴⁰ Ibid [Chloro Controls]; Mahanagr Telephone Nigam Ltd. v. Canara Bank, (2020) 12 SCC 767 [hereafter ‘Canara Bank’]; Dow Chemical v. Isover-Saint-Gobain (1984) Rev Arb 137); GE Energy  Powe Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC: 140 S.Ct. 1637, 1640  (2020).

⁴¹ Ibid [Canara Bank].

⁴² Gvozdenovic v. United Air Lines, Inc.,: 933 F.2d 1100, 1105 (2d. Cir. 1991). ⁴³ Life Techs Corp.v. AB Sciex Prop. Ltd: 803 F.Supp.2d 270, 273-74 (S.D.N.Y. 2011); Deloitte  Noraudit v. Deloitte Haskins Sells: 9 F.3d 1060 (2d Cir. 1993); Avila Group Inc. v. Norma J. of  California: 426 F. Supp. 537 (S.D.N.Y. 1977).

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that an arbitration agreement did not exist between R (or heirs of R and  the other parties). In addition, the application under section 8 of the  A&C Act was not accompanied by a certified copy of the arbitration  agreement. In Vimal Kishor Shah’s case the principal question was  whether a arbitration clause in a trust deed constituted an agreements  between the trustees. The court held that the trust deed was a declaration  by the settlor and did not amount to an agreement inter se the trustees.

116. The reliance placed by respondent no.2 to the decision of the  Supreme Court in Reliance Natural Resources Limited v Reliance  Industries Limited¹⁷ is not apposite. Whilst the observations that the  doctrine of identification may be applicable only in respect of small  undertakings and personalities of large public companies cannot be  considered as the personalities of the persons involved⁴⁴ are relevant;  the present case does not rest on the premise that respondent no.2 is an  alter ego of respondent no.1 or the F3 Family Group. It is also material  to note that Supreme Court held that “suitable arrangement” as required  to be made under the family MOU in that case was made. The other  issues involved were materially different from the ones in this case. 

117. In view of the aforesaid, this Court is of the view that prima facie, respondent nos. 2 and 3 are required to be joined in the arbitral  proceedings as parties, even though, they may not be signatories to the  FSA or TMNA. 

118. Having stated the above, it is also necessary for this Court to  ⁴⁴ Paragraph 56

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clarify that the view expressed by this Court regarding existence of an  arbitration agreement insofar as petitioner no.2, respondent nos. 2 and  3 are concerned, is a prima facie view and, the parties are not precluded  from raising their respective contentions in respect of the existence of  the arbitration agreement before the Arbitral Tribunal. 

119. In Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.⁴⁵ B.N.  Krishna, J. had, observed as under:-

“74. …Even if the court takes the view that the arbitral  agreement is not vitiated or that it is not invalid,  inoperative or unenforceable, based upon purely a prima  facie view, nothing prevents the arbitrator from trying the  issue fully and rendering a final decision thereupon.

75….. Even after the court takes a prima facie view that  the arbitration agreement is not vitiated on account factors  enumerated in Section 45, and the arbitrator upon a full  trial holds that there is no vitiating factor in the arbitration  agreement and makes an award, such an award can be  challenged under Section 48(1)(a). The award will be set  aside if the party against whom it is invoked satisfies the  court inter alia that the agreement was not valid under the  law to which the parties had subjected it or under the law  of the country where the award was made. The two basic  requirements, namely, expedition at the pre-reference  stage, and a fair opportunity to contest the award after full  trial, would be fully satisfied by interpreting Section 45 as  enabling the court to act on a prima facie view. ”

120. The Law Commission of India in its 246^th Report had  ⁴⁵ (2005) 7 SCC 234.

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recommended as under:-

“32. In relation to the nature of intervention, the exposition  of the law is to be found in the decision of the Supreme  Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre  Ltd. [Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.,  (2005) 7 SCC 234] , (in the context of Section 45 of the  Act), where the Supreme Court has ruled in favour of  looking at the issues/controversy only prima facie.

33. It is in this context, the Commission has recommended  amendments to sections 8 and 11 of the Arbitration and  Conciliation Act, 1996. The scope of the judicial  intervention is only restricted to situations where the  Court/Judicial Authority finds that the arbitration  agreement does not exist or is null and void. In so far as  the nature of intervention is concerned, it is recommended  that in the event the Court/Judicial Authority is prima facie  satisfied against the argument challenging the arbitration  agreement, it shall appoint the arbitrator and/or refer the  parties to arbitration, as the case may be. The amendment  envisages that the judicial authority shall not refer the  parties to arbitration only if it finds that there does not exist  an arbitration agreement or that it is null and void. If the  judicial authority is of the opinion that prima facie the  arbitration agreement exists, then it shall refer the dispute  to arbitration, and leave the existence of the arbitration  agreement to be finally determined by the arbitral tribunal.  However, if the judicial authority concludes that the  agreement does not exist, then the conclusion will be final  and not prima facie. The amendment also envisages that  there shall be a conclusive determination as to whether the  arbitration agreement is null and void. In the event that the  judicial authority refers the dispute to arbitration and/or  appoints an arbitrator, under sections 8 and 11  respectively, such a decision will be final and non appealable. An appeal can be maintained under section 37

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only in the event of refusal to refer parties to arbitration, or  refusal to appoint an arbitrator.”⁴⁶

121. In a recent decision of the Supreme Court in InterContinental  Hotels Group (India) Pvt. Ltd. & Anr. v. Waterline Hotels Pvt. Ltd⁴⁷,  the Supreme Court observed as under:

“18. At the outset, we need to state that this Court’s  jurisdiction to adjudicate issues at the pre-appointment  stage has been the subject matter of numerous cases before  this Court as well as High Courts. The initial interpretation  provided by this Court to examine issues extensively, was  recognized as being against the pro-arbitration stance  envisaged by the 1996 Act. Case by case, Courts restricted  themselves in occupying the space provided for the  arbitrators, in line with party autonomy that has been  reiterated by this Court in Vidya Drolia v. Durga Trading  Corporation, (2021) 2 SCC 1, which clearly expounds that  Courts had very limited jurisdiction under Section 11(6) of  the Act. Courts are to take a ‘prima facie’ view, as  explained therein, on issues relating to existence of the  arbitration agreement. Usually, issues of  arbitrability/validity are matters to be adjudicated upon by  arbitrators. The only narrow exception carved out was that  Courts could adjudicate to ‘cut the deadwood’. Ultimately  the Court held that the watch word for the Courts is ‘when  in doubt, do refer’.”

122. In Mohammed Masroor Shaikh v. Bharat Bhushan Gupta &  Ors.⁴⁸ while referring to the decision in Vidya Drolia v. Durga Trading  Corporation¹⁸, the Supreme Court held that “the Court by default would 

⁴⁶ Law Commission of India Report No. 246, dated 05.08.2015 at paragraphs 32 and 33. ⁴⁷ Arbitration Petition (Civil) No. 12 of 2019, decided on 25.01.2022 (Supreme Court of India).  ⁴⁸ Civil Appeal No. 874 of 2022, decided on 02.02.2022 (Supreme Court of India).

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refer the matter when contentions relating to non-arbitrability are  plainly arguable.”

123. This Court is refraining from examining other issues regarding  the merits of the dispute in view of the principles as set out above. 

124. The last remaining question to be addressed is whether the  petition is liable to be dismissed as the petitioner’s request for  arbitration is not in terms of the Arbitration Agreement. It is contended  that it was necessary for the petitioners to have entered into a mediation  process before the Facilitator prior to the invocation of the Arbitration  Clauses under the FSA and the TMNA. It is further submitted that the  arbitration was required to be conducted by an Arbitral Tribunal  comprising of a Facilitator and two other members to be jointly  appointed by the four patriarchs of the Munjal Family Group. It is stated  that in variance with the said procedure, the petitioners had nominated  an arbitrator and had called upon the respondents to nominate its  arbitrator. This was not the agreed procedure under the Arbitration  Agreements. 

125. Mr Satish Bansal, the named Facilitator and the Arbitrator is  stated to be ineligible to be appointed as an arbitrator under Section 12  (5) of the A&C Act. It is not disputed that Mr Satish Bansal has accepted  remunerative assignments from the Munjal Family Groups. He had also  provided evidence to the F4 Family Group in an arbitration proceeding  between the F1 and F4 Family Groups. It is not seriously disputed that  Mr Satish Bansal is ineligible to act as an arbitrator, as circumstances

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as set out in the Seventh Schedule to the A&C Act exist. 

126. The other two members of the Arbitral Tribunal were required to  be jointly appointed by the four patriarchs of the Munjal Family Groups.  However, the petitioners claim that it is not possible for the four  patriarchs to jointly agree on the names of the other two members of the  Arbitral Tribunal as there are already disputes between the F1 Family  Group and two of the other Family Groups. In addition, it is stated that  the business of one of the Family Groups is now aligned with the  business of the F3 Family Group. 

127. The contention that Mr Bansal was known to all the Family  Groups and therefore, the four patriarchs must be bound by the  agreement to refer the disputes to an Arbitral Tribunal presided by him,  is unmerited. The FSA and TMNA were entered into prior to the  enactment of the Arbitration and Conciliation (Amendment) Act, 2015.  After the said Act came into force, a person is ineligible to be appointed  as an arbitrator if circumstances as set out in the Seventh Schedule exist.  Unless, the parties waive their objections, in writing in terms of the  proviso to Section 12 (5) of the A&C Act after the disputes have arisen,  there is no question of a person who is ineligible to be so appointed as  an arbitrator.⁴⁹ 

128. This Court is also of the view that if one of the persons, who is  required to act jointly with other persons to appoint arbitrators, states that it is jointly impossible for him to jointly concur with the other 

⁴⁹ See: Bharat Broadband Network Limited v. United Telecoms Limited: (2019) 5 SCC 755.

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persons for appointment of an arbitrator, it would clearly be an exercise  in futility to relegate the party to undertake that exercise. Petitioner no.1  has clearly stated that it would not be possible for him to concur on any  names of any arbitrator with the other three patriarchs and therefore, it  must be accepted that the mechanism for appointing two members of  the Arbitral Tribunal jointly by the four patriarchs fails. 

129. Although, the parties had contemplated that they would endeavor to resolve the disputes for mediation in the first instance, it is necessary  to bear in mind that mediation is a voluntary process. The parties must  engage voluntarily. If circumstances exists where mediation is  perceived to be not feasible – as is asserted by the petitioners in this  case – the precondition to attempt resolution through mediation cannot

obstruct or impede reference of disputes to arbitration. In the present  case, there is material to indicate that a mediation before the Facilitator  is not feasible. The named Facilitator may have enjoyed the confidence  of the four Family Groups at the material time, however, he does not do  so now. It is not in dispute that he has rendered assistance to one of the  Family Groups in arbitration proceedings where the F1 Family Group  is involved. It is also not disputed that he has accepted remunerative  assignments. 

130. The reference to the decision in the case of Iron and Steel  Company Limited v. Tiwari Road Lines¹⁶ by the respondents is not  apposite. In that case, the parties had agreed to resolve the disputes in  accordance with the Rules of Arbitration of the Indian Council of  Arbitration and therefore, the Court held that provisions of Sub-sections

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(3), (4) and (5) of Section 11 of the A&C Act had no application. There  was ground to justify that the procedure as agreed was not feasible or  had failed.

131. In the present case, there is no agreement between the parties  accepting that the arbitration must be conducted under the rules of any  arbitration institution or specialized body. The parties had agreed that  in terms of Clause 5.6 of the TMNA and Clause 19.5 of the FSA, the  Facilitator would act as a mediator and on failure of the mediation  process, the Family Groups would submit to arbitration. The arbitration  would be conducted by Mr Satish Bansal (the named Facilitator) as the  Presiding Arbitrator and two other arbitrators to be appointed by the  four patriarchs. 

132. As stated above, conciliation is a voluntary process. The  conciliation proceedings can be determined by any party declaring the  same to be terminated.⁵⁰

133. It is also relevant to mention that under Section 80(b) of the A&C  Act, a Conciliator cannot be presented by the parties as a witness in any  arbitral or judicial proceedings. In this case, it is stated that the  Facilitator has already filed statements, which have been used in  evidence in another arbitral proceedings. The provisions of Section  80(b) of the A&C Act may not apply stricto sensu but the underlying  principles certainly do. The requirement of independence and  impartiality of Mediators and Arbitrators, is sacrosanct and must be 

⁵⁰ Section 76(d) of the Arbitration and Conciliation Act, 1996.

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met. 

134. It is conceded that the disputes between the parties have been  festering for some time. However, it is clear that they have been unable  to resolve the disputes. It is also the case of the petitioners that it is not  possible to resolve the disputes through mediation. In this view, it would  not be apposite to relegate the parties to mediation. The process of  referring disputes to arbitration cannot be turned into an obstacle  course.

135. During the course of the proceedings, this Court had elicited a response from the respondents, whether a sole arbitrator could be  appointed. However, the learned counsel appearing for the respondent  nos. 1 and 3 had stated that the said respondents would insist on an  Arbitral Tribunal of three members and in terms of the Arbitration  Clause. 

136. In view of the above, this Court considers it apposite to allow the  petition and appoint an Arbitral Tribunal of three members to adjudicate  the disputes between the parties. Accordingly, Justice (Retired) Dipak  Misra, former Chief Justice of India; Justice (Retired) Indermeet Kaur,  a former Judge of this Court; and Justice (Retired) Indu Malhotra,  former Judge of the Supreme Court are appointed as the Arbitrators to  constitute the Arbitral Tribunal to adjudicate the disputes in terms of the  Arbitration Agreements under the FSA and TMNA. This is subject to  the members of the Arbitral Tribunal making the necessary disclosure  as required under Section 12 (1) of the A&C Act and not being

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ineligible under Section 12(5) of the A&C Act. 

137. The parties are at liberty to approach the learned Members of the  Arbitral Tribunal for further proceedings. 

138. It is clarified that all contentions of the parties are reserved. The observations made by this Court are solely for the purposes of this  petition and the Arbitral Tribunal shall decide all disputes uninfluenced  by any observations made in this order. 

139. The petition is disposed of in the aforesaid terms. All pending  applications are also disposed of. 

 VIBHU BAKHRU, J

FEBRUARY 17, 2022

GSR/PKV/RK/v

* Note: Corrected by the order dated 09.03.2022 passed in IA No.  3819/2022.

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