ARBITRATION

Meaning of Arbitration: As per OXFORD Advanced Learner’s DICTIONARY, it means the official process of settling an argument or a disagreement by somebody who is not involved.

Arbitration & Conciliation Act, 1996: The Arbitration & Conciliation Act, 1996, consolidated and amended the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards.
This Act is based on the lines of model law on International Commercial Arbitration and Model Conciliation Rules adopted by United Nations Commission on International Trade Law (UNCITRAL).

Why Arbitration is important? Arbitration is less time consuming and less expensive method of settling disputes arising out of a contract. It is preferred and encouraged by court of law. A judicial authority before which an action is brought in a matter, which is subject matter of Arbitration shall refer the Parties to Arbitration. [Sec. 8 of Arbitration & Conciliation Act, 1996]

Who can appointed as an Arbitrator? A person of any nationality may be appointed as an Arbitrator. But the parties may agree to appoint a person of any specific nationality as an Arbitrator. [Sec.11(1) of the Arbitration & Conciliation Act,1996]

The appointment of an Arbitrator can be challenged on the grounds of doubt about the arbitrator’s independence or impartiality. The appointment of an Arbitrator may also be challenged on the ground that he/she does not possess the qualification agreed between the Parties. [Sec.12 of the Arbitration & Conciliation Act,1996]

Number of Arbitrators: The Parties are free to determine the number of Arbitrators but this number shall not be an even number However, the validity of an arbitration Agreement does not depend on the number of arbitrators specified therein.

Language & place of Arbitration: It is very important to specify the language and place of Arbitration in the Arbitration Agreement itself in order to avoid any confusion at later stage. The parties are free to agree upon the language and place of Arbitration. If the parties fail to decide, then Arbitral Tribunal shall decide the same as per the circumstances of the case.

Rule of Procedure: The arbitral tribunal shall neither be bound by the Code of Civil Procedure, 1908 nor by the Indian Evidence Act, 1872. Freedom has been given to the Parties to decide the procedure to be followed by the arbitral tribunal in conducting its proceedings. If the Parties to the Abitration fail, then Arbitration Tribunal may conduct the proceedings in the manner it considers appropiate.

EQUAL TREATMENT TO PARTIES: The Parties to Arbitration shall be treated with equality and each party shall be given a full opportunity to present his/her case.

Role of Court in Arbitration: A party may, before or during arbitral proceedings or at any time after making of the arbitral award but before it is enforced in accordance with S.36 apply to a court for interim measure of Protection. However, there has to be manifest intention on the part of applicant to take recorse of arbitral proceeding at the time of filing application under this provision. The applicant for an order under this provison should be a party to arbitration Agreement. It must be noted that it should not be used to frustrate the arbitration proceedings. [Sec. 9 of the Arbitration & Conciliation Act,1996]

Binding nature of Arbitral Award: An arbitral award shall be final and binding on the Parties. However, an application for set aside the Arbitral award can be made on certain grounds mentioned in Sec.34 of the Arbitration & Conciliation Act, 1996. But once the time to make application is expired or applied but refused by the Court, the Arbitral award shall be enforced as if it were a decree of the Court.

Standard Arbitration Clause:

(a) Any dispute which is not settled by mutual agreement shall be at the option of either party and, upon written notice to the other party, be settled through arbitration and the proceeding shall be held under the provisions of Arbitration and Conciliation Act, 1996.

(b) Except as otherwise provided herein, any Dispute shall be resolved exclusively by binding arbitration in accordance with the India’s Arbitration and Conciliation Act, 1996 and the rules and regulations framed there under, as modified from time to time by three (3) arbitrators. Both Parties shall appoint one (1) arbitrator each, and the two (2) arbitrators so appointed shall appoint the third arbitrator. The seat of arbitration shall be Delhi, India. The language of the arbitration shall be English. The arbitration proceedings shall be completed within a period of thirty (30) days from the date of constitution of the arbitration panel. Notwithstanding the foregoing, before the appointment of the arbitrators and in exceptional circumstances even thereafter, a Party to the Dispute may apply to any court of competent jurisdiction to pursue equitable relief (including immediate, preliminary and permanent injunctive relief) to which it may be entitled, in order to preserve the status quo pending resolution of the Dispute at issue, through arbitration.

(c) The costs and expenses of the arbitration, including, without limitation, the fees of the arbitrators and the Arbitration board, shall be borne equally by each Party to the Dispute or claim and each Party shall pay its own fees, disbursements and other charges of its counsel, except as may be determined by the Arbitration board. The Arbitration board shall have the power to award interest on any sum awarded pursuant to the arbitration proceedings and such sum shall carry interest, if awarded, until the actual payment of such amounts.

(d) Any award made by the Arbitration board shall be final and binding on each of the parties that were parties to the Dispute.


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DISCLAIMER:

The opinions expressed herein are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal advice or opinion. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

(I am thankful to my Seniors and friends for helping me to write this blog.)

FAQs on Power of Attorney

What is Power of Attorney?

Power of Attorney means a formal instrument by which one person empowers another to represent him, or act in his stead, for certain purposes. The donor of the power is called the principal or constituent; the donee is called the attorney or agent. The latter is not entitled to exercise his powers for his personal benefit at any point of time.

This instrument is guided by The Powers of Attorney Act-1882. As per the said Act, Powers of Attorney include any instrument empowering a specified person to act for and in the name of the person executing it.(Sec. 1-A)

What is the rationale behind empowering Power of Attorney?

As man becomes busier it becomes more and more necessary for him to depend on others for getting things done. The hectic activities of Natural persons (i.e. Businessmen/ industrialists) or Legal persons (Companies) have made the execution of Power of Attorney a must for delegation of its function. Thus with the help of this instrument one is given an authority whereby one is set in the place of other to act for him. It is also submitted here that a person need not be a lawyer to hold a Power of Attorney as an agent for someone else.

What are the essential ingredients of a Power of Attorney?

(i) It has to be given voluntarily;

(ii) It should be only for lawful purposes;

(iii) The principal and agent must be competent to contract i.e. parties must be major, of sound-mind; there should be no undue influence, no misrepresentation etc.;

(iv) The Power of Attorney is to be executed on a non-judicial stamp paper of appropriate value as applicable in the respective State, with one extra copy on a plane paper;

(v) Each page of the Power of Attorney and wherever the blanks are filled in should be initiated by the executants;

(vi) Signature of the executants and the Attorney should be attested by a Judicial Magistrate or a Notary Public.

What are the types of Power of Attorney?

There are two types of Power of Attorney: General and Special.

(i) General Power of Attorney (GPA):
Under GPA, principal empowers the agent with the right to carry out all legal acts on his behalf without restricting it to a particular transaction or act. It gives the agent a very broad power to act on behalf of the principal.

(ii) Special Power of Attorney (SPA):
Under SPA, the authority of the agent is restricted to act only in certain matters or only for particular transactions or to carry out a specific legal transaction for the principal as outlined in the deed. The agent’s Power of Attorney expires on the completion of the particular transaction.

Does a Power of Attorney require attestation by witnesses?

Yes, every Power of Attorney needs to be attested by two or more independent witnesses who are adults of sound mind.
Any major can sign as a witness, but it must be mentioned at this point that the witness has signed in his / her individual capacity.

How the wordings of Power of Attorney to be construed?

This depends on the clarity of the wordings employed. The general construction is that the agent is empowered to do or undertake only such acts which he is expressly authorized to do. However, certain incidental powers can be inferred to give effect to the terms contained in the Power of Attorney.

For example – If the PoA confers the power of sale then it can be inferred that it includes necessary powers for completing the sales transaction. But at the same time, unless, specifically authorized, the Agent will not be entitled to mortgage the property.

Can a company grant Power of Attorney?

Yes, a company happens to be a legal person and is very much capable of granting Power of Attorney provided it is so authorized by its Memorandum and Articles of Association.

What are the duties of agent?

There is no exhaustive list of duties to be performed by the agent but an indicative list goes as follows:

(i) Agent should always act in the best interest of the principal;
(ii) Should follow the instructions of principal religiously;
(iii) Should not make any secret profit out of the principal’s transactions;
(iv) Should maintain proper account of all transactions and submit the same to the principal, as and when required.

What should be the extent of authority of an agent?

Agent can act only to the extent authorized by the principal. Scope of the work is normally defined in the instrument in an unambiguous manner and it clearly specifies the nature of duties and responsibilities assigned to agent.

How to attach liability for different actions of agent?

Every act performed by the agent within the authority of the Power of Attorney is legally binding upon the principal granting it. Therefore, it is always suggested that this instrument should be given only to a trustworthy person, and only when absolutely necessary.

If the agent acts without the principal’s knowledge, or outside the power given to him in the document, the principal reserves the right to confirm or disown the act later. If the principal confirms it, then it becomes within the latter's extent of authority, otherwise the agent happens to be solely responsible for all consequences of his act. Under normal circumstances, as a fair practice, the agent should not go beyond whatever is prescribed in the instrument itself.

What is sub-delegation?

The transfer of authority by one person to another is termed as delegation of power. The person in whose favour the said authority is transferred is known as Delegate. When this Delegate transfers the authority to someone it is termed as Sub – delegation.

As per the maxim- ‘DELEGATUS NON POTEST DELEGARE’- Delegation cannot be made by a delegate. A delegated power cannot be further delegated.

Though we have sufficient examples of sub-delegation of power under administrative laws, the Powers of Attorney Act 1882 itself is silent on this. Therefore a holistic understanding can be developed by reading this Act with the Law of Agency and latest judgments of Hon’ble Apex Court. If we appreciate the same in the light of emerging exigencies in commerce and trade , then it appears that it is settled that without sub-delegation, probably things would not move as per desired pace.

Therefore, Sub-delegation is possible and very much correct also, provided the express provision for the same has been made in the PoA itself.

What can be the extent of sub-delegation?

If the express provision is made then Delegate can sub-delegate its power in consonance with the Power of Attorney through authorization letter. But in any case this power is limited to the power which has been delegated to him and the part of which he has been empowered to sub-delegate. He is not authorized to sub-delegate the power which is not vested in him at all.

Is Notarization necessary for PoA?

No, Signature of the executants and the Attorney can be attested either by a Judicial Magistrate or a Notary Public; but notarization is always easier process and people go for the same.

Is Registration necessary for PoA?

Requirement of registration of Power of Attorney deed is very limited. All PoAs (GPA or SPA) are not required to be registered under Registration Act-1908. However, the PoA providing power for transfer of immovable properties would require registration under Registration Act-1908. Section 17 of the said Act deals with the document of which registration is compulsory and Section 18 deals with such documents where it is optional.

What is revocation of Power of Attorney?

When the principal desires to withdraw the Power of Attorney granted to the agent, it is termed as revocation of Power of Attorney. It is done normally by issuing a notice of revocation to the agent personally.

An indicative list, when PoA stands revoked is as follows:
(i) principal himself revokes it;
(ii) agent renounces his right under the Power of Attorney;
(ii) principal dies or becomes insane or becomes bankrupt;
(iii) business for which the agent was appointed is over;
(iv) With the mutual consent of principal and agent;

YOUR COMMENTS & SUGGESTIONS:

Comments and suggestions are read and very welcome. We really appreaciate your time. Thanks in advance.

DISCLAIMER:

The opinions expressed herein are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal advice or opinion. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

(I am thankful to my Seniors and friends for helping me to write this blog.)

TRADEMARK REGISTRATION IN INDIA

What is a Trademark?

A trademark is a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person form those of others and may include shape of goods, their packaging and colours. [Sec. 2 (zb), The Trademarks Act, 1999]

Mark includes a device, brand, heading, label, ticket, name, signature, word, letter, numerals, shape of goods, packaging or combination of colour thereof. [Sec. 2 (m), The Trademarks Act, 1999]

Application for Registration: The application for registration of trademark for various purposes shall be made in various forms prescribed in the Trademarks Rules, 2002.

For example:-

TM-1: Application to register a trade mark for a specification of goods or services included in one class.

TM-2: Application for registration of a trade mark from convention country (other than a collective mark or a certification trade mark)

TM-3: Application for registration of a collective mark

TM-4: Application for registration of a certification trade mark.

Who may apply: Registration of a mark under the Trademark is optional. Any person claiming to be the owner /proprietor of a Trademark may apply for registration.

Requirements for making an application:

(i) C.D. or e-mail of the Logo
(ii) List of goods or services in respect of which the registration is sought
(iii) The name & constitution (of Company, Partnership etc.).
(iv) Full name, description with address of the applicant.
(v) Date of first usage of marks
(vi) The details of person who sign the application such as- name in full, father’s name, age, occupation and address.

(Note: Information required will be provided based on each type of assignment separately.)

Where to file application: Trademark registries have been established for the purpose of Trademark registration. Appropriate office is determined on the basis of principal place of business of the applicant.

Essentials of good Trademark:
(i) It must be DISTINCTIVE.
(ii) It must not be DECEPTIVE.

Time Limit:

The time limit for acceptance of Trademark Application and publication in Journal is approximately 6 to 9 months from the date of making application.

For obtaining the registration certificate, an average time of 3 years from the date of application is required, unless the matter is held up in contested proceedings.

The number of objections raised by the officials, the oppositions raised by the existing users, the time required for arbitration proceedings for concluding the rights and liabilities of applicant and other existing users may also affect the above mentioned duration.

Duration:
The period of registration of the Trademark is ten years after which it may be renewed from time to time.

Advantages of Trade Mark Registration:

(i) A registered trade mark makes it easy to get easy name availability under Section 21 of the Companies Act, 1956 for group Companies.

(ii) A registered trade Mark helps in creating and protecting a brand image in the market.

(iii) Trademarks are categorized as Intellectual property and are valued at a high price, thus creating a higher valuation of the Company.

(iv) Trademarks give a right to initiate criminal and/or civil proceedings in case of its infringement.

(v) Any name or trademark similar to the registered trademark will be rejected by the Registrar of Companies.

YOUR COMMENTS & SUGGESTIONS:

Comments and suggestions are read and very welcome. We really appreaciate your time. Thanks in advance.


DISCLAIMER:

The opinions expressed herein are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal advice or opinion. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

(I am thankful to my Seniors and friends for helping me to write this blog.)

Non-disclosure Agreement (NDA)

A Non-disclosure Agreement ("NDA") has gained significant importance in day-to- day business. In some industries, any conversation beyond pleasantries requires an NDA.
An NDA is also known as Confidentiality Agreement, ¬ Proprietary Information Agreement or Secrecy Agreement etc.

PURPOSE OF ENTERING INTO AN NDA: PREVENTION IS BETTER THAN CURE
Prior to entering into any Agreement, a party an disclose certain confidential information to the other party so as to enable other party to evaluate or ascertain or determine or find out the difficulties in the proposed Agreement etc. The parties may further go ahead with the some definite agreement or it is also possible that the party will not be able to go ahead for further definite Agreement.
Regardless of whether the parties enter in to the definite Agreement or not it is necessary to protect those confidential information. Hence, it is necessary to enter into an NDA.
[Note: The Party disclosing information shall hereinafter be referred to as the “Disclosing Party” and the Party receiving such information shall be referred to as the “Receiving Party”.]

IMPORTANT ASPECTS OF AN NDA

Purpose of enterening into an NDA: An NDA that the confidential information disclosed must be used for specific purpose only. This means that if the confidential information is being used for some other purpose not intended by the Disclosing Party then it’s a breach of the NDA.

For example: If a Company XYZ shares some confidential information to VEPRO, a software development company, to develop a software for the internal purpose of the XYZ then to protect the confidential information XYZ may enter into an NDA with VEPRO. By virtue of the NDA entered into, VEPRO shall be liable to not to use those information for any purpose other than developing those software as desired by XYZ.
Further, an NDA should also define who shall use the confidential information.

Types of NDA: An NDA can be mutual or binding unilaterally. A mutual NDA is one, wherein both the parties share confidential information to other party and both parties are wants to keep their information confidential. However, in some cases, only one party disclose the information and other party receives it, in such case, the parties can enter into an NDA wherein the obligation to keep the information disclosed in only on the receiving party.


What is Confidential information: One the most important clause of any NDA is “Definition of Confidential Information”. The Confidential information, which a party has disclosed to the other party or intending to disclose must be defined without any ambiguity. However, at the time of entering into an NDA, parties are not sure of what kind of information they may share with other Party during the period of the Agreement, hence it is suggested that “Confidential information” should be defined in such a manner that it includes into the definition of Confidential information those information which due to its character and nature, a reasonable person under like circumstances would treat as confidential.

Disclosure of Confidential information in certain situation: There is no straightjacket to restrict the use of confidential Information. There are certain situation in which a confidenial information can be disclosed by the receiving party. For ex- those information is required to be disclosed under any relevant law, regulation or order of court. It is always expected from the other party that the effected Party is given prompt notice of disclosure.

Non- Obligation: It should be outrightly mentioned in the Agreement that nothing in the Agreement shall obligate either party to proceed with any transaction between them, and each party reserves the right, in its sole discretion, to terminate the discussions contemplated by this agreement.

Return or destruction of Confidential Information: The Disclosing Party may give confidential information to Receiving Party by various means ex- CD, Floopy, documents etc. The disclosing party must ensure that all the document or other tangible objects including the copy of the same, containing or representing confidential information are promptly returned or destroyed followed by the delivery of a certificate of destruction once the term of the NDA has expired or terminated earlier. In some exceptional cases, parties may insist that the confidential information should be destroyed only in the presence of their authorised representative.

No grant of any right: Since the Disclosing Party is disclosing their cofidential information, any party shall intend to grant any rights to the other party under any patent, mask work right or copyright of the Disclosing Party. A separate clause shall expressly mention this intention of the Disclosing Party.

Rights and remedies available to the disclosing party: Un-authorised disclosure of Confidential information by the Receiving Party cause irreparable damage to the disclosing party. Hence, it is advised that in addition to the indemnification clause the NDA should also contain a clause stating that “Without prejudice to other rights and remedies available to the disclosing party, the disclosing party shall be entitled to seek injunctive relief in case of violation or threatned violation of NDA”.

Dispute resolution: There is no specific formula or trick for resolving any dispute which may arise out of an NDA. However, it is always suggested to take recourse of Arbitration at the first instance. This allows to avoid a lawsuit. Further, Arbitration is cheaper and faster than a lawsuit, so it’s usually a good idea to include this provision.

Protection of Confidential information: How are you protecting your confidential information? Disclosing Party should make it very clear to the Receiving party that Receiving Party shall take at least those measures that it takes to protect its own most highly confidential information and shall also ensure that its employees who have access to Confidential Information of Disclosing Party have signed a non-use and non-disclosure agreement in content similar to the provisions hereof, prior to any disclosure of Confidential Information to such employees.

It’s always in the interest of the party to an NDA to take following steps:

(i) Mark the confidential information as “CONFIDENTIAL”.
(ii) Keep track of all confidential information shared with the other party.
(iii) Check the history of the person with whom confidential information is being shared.
(iv) Also try to know from the other party how they are going to protect your confidential information and if necessary, help or suggest how they should keep the confidential information.
(v) Inform the other party of the legal course avaiable with you in case of un-authorised use of confidential information; it shall act as a deterrent.

Term or Period of NDA: The clause pertaing to the term of the Agreement is the most difficult part of any NDA. The party disclosing the information wants to keep the term as long as possible and most of the time “in Perpetuity” at the same time the party receiving the information wants to keep the term as short as possible. Since there is no straightjacket to restrict the revelation of any confidential information, it is suggested that to keep the term not unreasonably long but it should be enough to suffice the purpose, say- 3 to 5 years.

The terms and conditions of an NDA depends upon the facts, circumstances & the negotiation between the parties. Hence, please dicuss with your lawyer before entering into NDA with other party.

Anti Competitive effects of NDA: When two indirect competitors sign an NDA while doing a deal. One Party may disclose a future business or product plan to other Party under the NDA. If any party aborts to go ahead with the proposed business then even if the other Party proceeds legitimately with any third party then it has significantly more risk.

Conclusion: An NDA is a piece of Paper and can only act as a deterrent and in case of unautorised disclosure, it shall avail you the right to take action against the defaulting party. But at times disclosure of confidential information can lead to irreparable damages. Hence, it is advised that in addtion to enter into the NDA, parties should be vigilent and make sure that there information is in safe custody.

YOUR COMMENTS & SUGGESTIONS:

Comments and suggestions are read and very welcome. We really appreaciate your time. Thanks in advance.


DISCLAIMER:

The opinions expressed herein are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal advice or opinion. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

(I am thankful to my Seniors and friends for helping me to write this blog.)