Delhi High Court Upholds ICC Decision Favoring American Company

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Jan. 19 – In a recent ruling, the Delhi High Court upheld the enforcement of a decision made by the International Chamber of Commerce in Paris, a body that arbitrates disputes between international firms.

The dispute was between the American firm Penn Racquet Sports and an Indian company, Mayor International Limited, and ICC’s decision awarding money to the American firm was enforceable in India under the Arbitration and Conciliation Act signed by India in 1996.

The two companies entered into a Trademark License Agreement, under which the American firm gave the Indian firm the right to use the “Penn” trademark in certain territories and for certain products such as golf balls and inflatable balls. The Indian firm agreed to pay royalty fees annually.

Disputes arose over a perceived breach of contract and were brought to the ICC in Paris for arbitration. The decision made was in favor of the American firm.

The Indian company objected to the ruling, and sought to overturn it, using as its defense the notion that the ruling went against the “public policy of India.”

Under section 34 (Chapter VII, Part I) of the 1996 Act, if an arbitration award that is granted is found in violation of a nation’s domestic public policy, then the nation’s court has a right block the enforcement of that decision.

The High Court decided that the awarding of the arbitration settlement, even if it went against the interests of an Indian company, was not enough to qualify as working against “the public policy of India.”