ARBITRABILITY OF IPR DISPUTES: WHETHER THE

INDIAN JUDICIARY HAS ACHIEVED THE CORRECT

BALANCE BETWEEN PARTY AUTONOMY AND
RIGHT IN REM?

ALTERNATIVE DISPUTE RESOLUTION-INTERNAL

ASSESSMENT IV: RESEARCH PAPER

SUBMITTED BY: ANWITA BHATTACHARYYA [19010421089]

SAYANTANI DE [19010421088]
 ARBITRABILITY OF IPR DISPUTES: WHETHER THE INDIAN JUDICIARY HAS
ACHIEVED THE CORRECT BALANCE BETWEEN PARTY AUTONOMY AND
RIGHT IN REM?

CHAPTER I: INTRODUCTION

Law, economy, trade and commerce – institutions central to attributing structure to

civilizations, have for generations concerned itself with the tangible. It is thus a
comfortably acknowledged fact that protecting the tangible, ownership thereof and rights
therein, is much easier owing to its inherent nature to be objectively felt, owned, and
exploited. But the modernity of times has made way for an intrinsically knowledge-based
economy1 that rewards, recognises, protects and utilises the intangible. Today, one of the
most valuable and commercially rewarding intangible assets is intellectual property. The
relevance acquired by intellectual property in modern commerce is indeed commendable
but at the same time, has begotten an escalation in intellectual property disputes, in want
of resolution. In such a scenario, the conventional judicial mode of dispute resolution
falls short on various accounts and a need is felt for speedy and efficacious dispute
resolution. Therefore, the question of arbitrability of Intellectual Property Rights disputes
has become increasingly relevant in today’s world.

This paper first seeks to harmonise two conflicting facets of dispute resolution–the party
autonomy awarded by the process of arbitration, and the right in rem that forms the basis
of intellectual property rights. The paper thus delves into the issue of bifurcation of
complex intellectual property disputes into arbitrable and non-arbitrable claims, and
possible arbitration clauses. It seeks to analyse whether such a bifurcation is practically
feasible and if not, what may successfully strike a perfect balance that not only awards
protection to the rights in rem but at the same time, puts in place a ready mechanism for
speedy and effective disposal of ever-increasing intellectual property disputes in the
recent past.

1 Nikita Samdariya, Arbitrability of IP Disputes in India: The Conundrum of Exclusion by Necessary Implication
and Right in Rem, INTERNATIONAL JOURNAL OF LEGAL SCIENCE AND INNOVATION, Volume 2 Issue 3.
 1. LITERATURE REVIEW

● ACADEMIC PAPERS:

Nikita Samdariya, Arbitrability of IP Disputes in India: The Conundrum of

Exclusion by Necessary Implication and Right in Rem (Volume III – Issue I,
2021)2:

The author places the crux of this paper around a careful deliberation regarding the
conundrum of arbitrability of disputes pertaining to intellectual property due to the
exclusion of necessary implication and the right in rem. The author states that intellectual
property in the present-day economy has been regarded as a vital factor and holds a
crucial position in commercial contracts. The author illustrates that due to its adversarial
yet party-friendly approach, arbitration as a mode of dispute resolution is acknowledged
as a quick and relatively efficient in cases relating to intellectual property disputes, due to
the escalation in the rates of IP litigation and other problems faced by the Indian
judiciary. However, the question lies on the arbitrability of IP disputes and the paradox
pertaining to IP disputes being a complicated combination of both rights in rem and
personam. The author reiterates that right in rem is non-arbitrable in nature and can be
adjudicated in a public forum. However, due to their implied statutory exclusion from the
scope of arbitration, some subjects, even though they involve concerns of private rights,
are not arbitrable. The author in this paper exhaustively discusses the obstacles faced in
arbitration of IP disputes and that the position, pro-arbitration is an essential condition or
sine qua non to the current economic development of India shifting towards a
commercialised nation.

Kshama A. Loya and Gowree Gokhale, Arbitrability of Intellectual Property

Disputes: A Perspective from India, (2019, Vol. 14, No. 8)3:

The author in this paper deliberates on the Indian perspective on arbitrability of

intellectual property disputes. The author states that the legal framework that governs
intellectual property pertaining to the landscape on ownership, conduct, exploitation, and
enforcement of IP rights are international conventions such as the TRIPS Agreement and
2 Nikita Samdariya, Arbitrability of IP Disputes in India: The Conundrum of Exclusion by Necessary Implication
and Right in Rem, INTERNATIONAL JOURNAL OF LEGAL SCIENCE AND INNOVATION, Volume 2 Issue 3.

3 Kshama A. Loya and Gowree Gokhale, Arbitrability of intellectual property disputes: a perspective from India,
JOURNAL OF INTELLECTUAL PROPERTY LAW & PRACTICE, 2019, Vol. 14, No. 8.
 other national statutes. Thereafter, in the event of a dispute relating to the issues
mentioned above, the jurisdiction is majorly vested with the national courts to decide
such matters. The variation in disputes relating to IP arises out of IP manifestations and
its various uses by and through the originator. An important guide to disputes related to
issues mentioned above, is the World Intellectual Property Organization (WIPO).

Due to their commercial viability in a world that is becoming increasingly commercial,

alternative dispute resolution mechanisms and forums as a mode of dispute resolution are
gaining popularity through the process of delivering expert expeditious solutions and
adjudication. The author provides that the WIPO Arbitration & Mediation Rules is
important for the worldwide acceptance and shift to alternative dispute settlements as a
mode of dispute resolution in disputes related to IP issues. Among the various modes of
alternative dispute resolution, negotiation, mediation and conciliation help both parties to
arrive at solutions best suited to serve the self interest of both parties that is non-binding
in nature, However, arbitration provides binding decisions that adjudicate upon the rights
and obligations of parties. The author contends that in present-day arbitration plays as a
strong comparison to adjudication through courts.

Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective

(Volume 14, Issue 1 2018)4:

The author, in this paper at the outset highlights that arbitration was essentially led to the
removal of the jurisdiction of civil courts by mutual consent of both parties by way of
jurisdiction conferred to person or persons appointed known as arbitrators for the
peaceful adjudication of a dispute. It is pertinent for states to provide their National
Arbitral Legislations expansive without the restriction on the scope of arbitrability of
disputes, providing grounds for setting aside an arbitral award on account on violation of
public policy of the country as promulgated by International Arbitral Standards. It is
therefore left to the courts to decide the interpretation and extent of the “scope of
arbitrability” of disputes. The author in this paper seeks to determine and establish the
arbitrability in disputes and its scope in the Indian perspective. The paper also includes
the critical analysis of the case of Booz Allen and Hamilton Inc. v. SBI Home Finance
Ltd. This case for the first time highlighted a test of arbitrability of disputes and
mentioned a list of disputes that can be interpreted as being unable to be decided by
arbitration. This paper additionally illustrates and analyses the evolution of the test of
arbitrability by various courts on the Judgment by the Supreme Court.

4 Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, 14(1) ASIAN INT. ARBITR. J.,71,
81(2018).
 Srinivasan Badrinath, Arbitrability of Intellectual Property Disputes in India: A
Critique [ NLS Bus. L. Rev. (2020), Page 29]5

Globally, the field of commerce and disputes arising thereof have found its perfect match
in alternative dispute resolution that has, in the recent past, quite justifiably held the
promise of seamless settlement of disputes. The popularity of alternative dispute
resolution therefore has also led to most arenas of commercial life opening up to the
employment of alternative dispute resolution, as opposed to the choice of traditional court
litigation. It would therefore only be natural for this justifiable trend of a growing
preference for the mutually agreeable settlement of disputes through alternative dispute
resolution mechanisms over the adjudication of disputes by the traditional courts to be
reflected in the area of intellectual property disputes. With the commercial viability of
intellectual property presently occupying paramount significance, intellectual property
rights occupy centre-stage in multitudes of commercial disputes in need of deliberation,
recognition, definition and protection. The high commercial viability of intellectual
property rights therefore also requires a seamless and highly efficient resolution of
disputes that alternative dispute resolution is entirely known to offer. Although the match
of alternative dispute resolution methods with intellectual property disputes do seem
seamless, the adoption of alternative dispute resolution in the field of intellectual property
has not been equally seamless. In the absence of a legislative framework that mandates its
adoption, the employment of alternative dispute resolution methods for the enforcement
of intellectual property rights primarily rests on judicial precedents. The precedence set
on the issue however, has been opined by the author, to not have been in a linear fashion.
The author therefore, pursues an exploration into the judicial trend that India has
showcased in the recent past on the issue of arbitrability of intellectual property disputes
and the employment of alternative dispute resolution mechanisms in the field of
intellectual property.

Singhal, Ankur, and Vasavi Janak Khatri, Recent Developments concerning

Arbitrability in Intellectual Property Rights Disputes in India: a Need of Reform
[Indian Law Review 5(1), 2021, Pages 1-18]6

Similar to various other papers, this paper also recognises the present gap that exists
regarding the effective resolution of intellectual property disputes and seeks to establish
the suitability of arbitration as a method of dispute resolution to bridge this gap. Now,
although arbitration has effectively bridged various gaps in the settlement mechanisms of
commercially popular areas of disputes, the intellectual property disputes and the nature
of rights that it involves pose certain challenges to arbitration assuming centre-stage in its
5 Srinivasan, Badrinath. "Arbitrability of Intellectual Property Disputes in India: A Critique." NLS Bus. L. Rev.
(2020): 29.
6 Singhal, Ankur, and Vasavi Janak Khatri. "Recent developments concerning arbitrability of IPR disputes in India:
a need for reform." Indian Law Review 5.1 (2021): 1-18.
resolution process. The author however places emphasis on the lack of a legislative
framework for arbitration on intellectual property matters as the primary factor in the
comparative lack of employment of arbitration in the resolution of intellectual property
disputes. But this exploration of the author is not a general and wide exploration on the
issue of arbitrability of intellectual property disputes but a specific analysis of the
landmark Supreme Court judgement in the case of Booz Allen and Hamilton v. SBI
Home Finance and the principles it laid down with respect to arbitrability. The author
examines the applicability of these principles in the context of intellectual property
disputes to find that the application of these principles of arbitrability by High Courts are
unfortunately characterised by a lack of uniformity, thereby rendering it difficult to find a
definitive answer to the issue of arbitrability of, specifically, intellectual property
disputes.

Aditi Vyas, Arbitrability of Intellectual Property Disputes [Academia Edu:

36177895]

The author contends that being an intangible asset, intellectual property, it is evident that
there exist trends of both the corporate as well as the non-corporate entities to take
diligent attempts in the protection of such assets. Due to a rise in technical advancement,
the rate of disputes relating to it have also risen. However, due to the complicated and
elaborate process of dispute resolution through the judicial process relating to the subject
matter of intellectual property rights, it has made stakeholders choose alternative modes
of dispute resolution. The author thereafter in his paper establishes arbitration being the
right choice by successfully and efficiently resolving the disputes relating to intellectual
property. Although in the beginning, dispute resolution of intellectual property matters
through the process of arbitration was met with refusal and uncertainty on its
enforceability mostly in cases of international matters, however with the passing of time
arbitration has become a more acceptable mode of dispute resolution for intellectual
property matters. The issue pertaining to the arbitrability of intellectual property rights
presents an important question that whether the subject matter of IPR is arbitrable in
nature is addressed in this paper. It is an admitted fact that arbitration as a mode of
dispute resolution in criminal matters, issues pertaining to the sovereign rights and other
such issues cannot be applied owing to the elaborate judicial and procedural know-how.
Similar challenges are faced during international arbitration of matters relating to
intellectual property rights. The issues of dispute or the essence of disputes that lie within
the framework of the arbitration procedure falls under the ambit of an arbitration
agreement or an arbitration clause entered by disputing parties in a contract. Therefore,
any such dispute the cause of which is not a subject to arbitration may be arbitrated in
case the disputing parties agree at a later stage. However, it must be noted that the
validity of such an arbitration lies with the Court and is thereafter seen on a case-to-case
basis.
 Utkarsh Srivastava, Putting the jigsaw pieces together: an analysis of the
arbitrability of intellectual property right disputes in India (Arbitration
International, Volume 33, Issue 4, December 2017, Pages 631–646)7

The author at the outset of the paper highlights that the laws that govern arbitration as a
mode of dispute resolution differ greatly due to public policy and the laws governing
each jurisdiction. Due to the unavailability of any legislative mandate or any notable
precedent of the Supreme Court of India on the subject matter of arbitration as a mode of
dispute resolution for intellectual property rights, the jurisprudence in India on such
subject matter remains inadequate. Although there have been instances where the High
Courts in India adjudicated matters relating to the arbitrability of IPR disputes, however
the existence of non-uniformity is quite an evident fact. This paper highlights on the key
subject area of arbitration as a mode of dispute resolution in domestic cases, the laws
pertaining thereof and the rules, tests and guidelines that have been laid down by the
Court, especially in matters pertaining to intellectual property rights. This paper shall
thereafter observe the rules, tests and guidelines and apply them in situations dealing with
the subject matter of intellectual property and ascertain whether arbitration is the
appropriate mode of dispute resolution for matters pertaining to intellectual property
rights. The author intends to put together a transparent picture on the highly disputed
subject matter and clear the ambiguity of it.

Bhatia, Nikhil, Amenability of Intellectual Property Rights to Arbitration in India

(SSRN, October 20, 2018)8

In the case of Booz-Allen & Hamilton Inc vs SBI Home Finance Ltd & Ors, the court
observed six types of disputes that were traditionally considered non-arbitral in nature.
Although the types observed by the Court did not expressly mention disputes pertaining
to matters of intellectual property, however, subsequent to the tests that were laid down
by the Court, it is admitted that the question of arbitration as a mode of dispute resolution
for matters concerning intellectual property rights cannot be said to have a remedy that is
either completely positive or completely negative. It has been contented by the author
that when deciding the arbitrability of intellectual property rights matters, the subject
matter of each dispute needs to be considered to ascertain whether such mode of dispute
resolution shall have an effect on the rights of a party qua third parties.

7 Srivastava, Utkarsh. "Putting the jigsaw pieces together: an analysis of the arbitrability of intellectual property
right disputes in India." Arbitration International 33.4 (2017): 631-646.
8 Bhatia, Nikhil. "Amenability of Intellectual Property Rights to Arbitration in India." Available at SSRN 3558494
(2018).
 Following the Booz-Allen case, the High Courts in several cases have considered
arbitration as a mode of dispute resolution for matters relating to intellectual property
rights that have been examined and observed in this paper and a perspective of whether
right in rem or right in personam is affected has been drawn.

Mathew, Daniel, Arbitrating Intellectual Property Disputes in India (Journal of

National Law University, Delhi, Volume 6(2), March 28, 2017, Pages 84-106)9

Although there exists a lack of an exhaustive definition pertaining to intellectual

property, in general intellectual property in several jurisdictions deal with the protection
of such rights which operate erga omnes which means that it operates by way of granting
single ownership of right to the holder or owner of such intellectual property. Due to the
introduction of the monopoly of such rights by the owners, the states have conferred
newer ways to legislate policies regarding intellectual property rights in order to find an
equilibrium between the level of protection that is to be granted to an owner or holder and
the benefits that the is derived by the state from its exploitation. It is admitted that the
existence of the general policies and the erga omnes character that is derived from
intellectual property rights, any dispute that gives rise from such intellectual property are
under the sole control of the Courts in a particular state. The paper seeks to observe
whether the Courts in India provide with a singular mode of dispute resolution i.e.,
litigation or whether newer forms of alternative modes of dispute resolution are
recommended by the Courts for such dispute resolution. Part I of the paper observes the
need for an alternative mode of dispute resolution for intellectual property right matters.
Part II of the paper analyses the concerns and shortcomings of using an alternative mode
of dispute resolution laying special reliance on the method of arbitration for intellectual
property rights matters. Part III of the paper notes the process of arbitration in several
jurisdictions and part IV of the paper mentions the procedure that is adopted by the
Courts in India while dealing with arbitration of intellectual property rights disputes.

9 Mathew, Daniel. "Arbitrating Intellectual Property Disputes in India." Journal of National Law University Delhi
6.2 (2019): 84-106.
 2. STATEMENT OF PROBLEM

The modern day is characterised by a general consciousness of the indispensability of time as

well as autonomy. Now, as the fastest growing economy of the world, the Indian market
showcases rampant cross-border transactions; a large part of which involves the gold mine of
intangible assets– intellectual property. As a result, we witness the continual emergence of
intellectual property disputes, in need for speedy and commercially viable resolution. The
claimants of such resolution, more often than not, measure efficacy in terms of time consumed in
and autonomy exercised over the process of dispute resolution. Naturally therefore, arbitration as
the dispute resolution mechanism for intellectual property disputes shows the apparent promise
to be a match made in heaven. But we are yet to see a trend of significant arbitral intervention in
resolving intellectual property disputes. The reason is rooted in the complete absence of any
statutory provision that mandates arbitration for intellectual property disputes. The onus to
coincide the area of intellectual property with that of arbitration therefore rests on the judiciary
and its attempts to formulate an effective test of arbitrability. It is in examining this judicial
initiative that this paper analyses the arbitrability of intellectual property disputes, with special
emphasis on the nature of rights involved: rights in rem and rights in personam. Such analysis
paves the way for an investigation into the possibility of the bifurcation of complex intellectual
property disputes into arbitrable and non-arbitrable claims. Furthermore, based on the judicial
trend regarding the arbitrability of intellectual property disputes, this paper places special
emphasis on the formulation and adoption of carefully crafted arbitration clauses in contracts
relating to intellectual property.

3. RESEARCH HYPOTHESIS

The present paper seeks to establish that the bifurcation of complex intellectual property disputes
into arbitrable and non-arbitrable claims is possible through the careful formulation,
incorporation and implementation of arbitration clauses with the potential to prevent the blanket
ousting of arbitration as a mode of dispute resolution with respect to any intellectual property
dispute that simultaneously involves both arbitrable and non-arbitrable claims.
 4. OBJECTIVES

i. The present paper first seeks to explore and establish the need for arbitration as a prevalent
mode of dispute resolution with respect to intellectual property disputes.
ii. Thereafter, the paper seeks to explore the different nature of rights involved with respect to
intellectual property disputes-rights in rem and rights in personam, and the direct impact of both
in any determination of the arbitrability of an intellectual property dispute.
iii. The paper then seeks to further explore the arbitrability of complex industrial disputes that
give rise to both arbitrable as well as non-arbitrable claims and hence, investigate the possibility
of constructing a bifurcation of arbitrable and non-arbitrable claims with the aid of arbitration
clauses.

6. RESEARCH METHODOLOGY

The present paper conducts doctrinal research to first and foremost scope out the need and
suitability of arbitration as a mode of dispute resolution for intellectual property rights disputes.
Then, the paper investigates the arbitrability of intellectual property rights disputes in the context
of rights in rem vis-a-vis rights in personam. Such investigation further leads the paper into an
exploration of complex intellectual property rights disputes and the possible modes of bifurcation
of arbitrable and non-arbitrable claims to effectively widen the scope of arbitration in relation to
intellectual property rights disputes.

7. CHAPTERISATION

Chapter 1: Introduction
Chapter 2: Need for Arbitration in Intellectual Property Rights Disputes
Chapter 3: The Concept of Arbitrability and its Theories in the context of Intellectual
Property Rights
Chapter 4: Arbitrability of Intellectual Property Rights Disputes- Rights in Rem and
Rights in Personam
Chapter 5: Bifurcation of Intellectual Property Disputes into Arbitrable and Non-
arbitrable Claims.
Chapter 6: Conclusion.
 CHAPTER II: NEED FOR ARBITRATION IN INTELLECTUAL
PROPERTY RIGHTS DISPUTES.

The rights awarded by Indian Intellectual Property Laws to owners of intellectual

property creates a statutory monopoly over the concerned property. 10 The intellectual property
exists for the statutorily exclusive enjoyment and exploitation of its owner. Naturally, these
rights have been protected and ensured by remedies of various kinds, be it civil, criminal,
administrative, procedural or even in accordance with common law. 11 However, the mere
existence of statutory provisions is an incomplete measure if not accompanied by a stringent,
efficient forum of enforcement. Lately, the Indian Judiciary has been failing this test of efficacy,
owing to its high pendency of cases, unreasonable delays, and high costs. Arbitration therefore is
a refreshing alternative.12 §89 of the Civil Procedure Code (“CPC”) affords legislative
recognition of alternative dispute resolution mechanisms in the spirit of promoting party
autonomy and minimal judicial intervention. Now, Arbitration effectively facilitates party
autonomy at every step of the process by making the parties to the dispute the supreme
navigators of the dispute.13 Intellectual property is a niche field of law and disputes thereof
would be best adjudicated by one possessing a certain level of specific expertise. Owing to the
party autonomy in arbitration, the parties can therefore choose arbitrators with expertise in the
subject matter, an aspect entirely beyond the parties’ control in litigation. The ambit of control
exercisable by parties in arbitration also aids them in choosing a mutually convenient place of
arbitration,14 thereby putting an end to any jurisdictional issues that may have arisen in the case
of international disputes. Moreover, it is a fact already established that in comparison to
litigation, arbitration effectuates speedy delivery of justice. 15 Now, this expeditiousness holds
greater value in the case of intellectual property disputes as these disputes revolve around certain
protected products that have a shelf life in terms of their ‘marketability’.16

It is no secret that global businesses and international commerce – both heavily

reliant on intellectual property – is founded upon a certain level of confidentiality. Therefore, it
may be quite reasonably assumed that parties to a given intellectual property dispute may prefer
resolution in private confidence, as has also been held in the case of Swapnil Tripathi v. Supreme
Court of India.17 This need for confidence is yet again fulfilled by arbitration. It can therefore be
inferred that the party autonomy, expeditiousness, confidentiality and informality that arbitration
brings forth is not only a general flag bearer of modern, effective dispute resolution, but seems to
be a perfectly tailored match for intellectual property disputes. The obvious question therefore is
why the present day has not witnessed a seamless and overwhelming arbitral intervention in
10 Saniya Mirani, Mihika Poddar, Arbitrability of IP Disputes in India- A Blanket Bar?, KLUWER
ARBITRATION
11 Samdariya, supra Note 1.
12 Why Arbitration in Intellectual Property? WIPO, September 8, 2020. Available at
https://www.wipo.int/amc/en/arbitration/why-is-arb.html (Last Visited on February 16, 2022)
13 Mia Louise Livingstone, Party Autonomy in International Commercial Arbitration: Popular Fallacy or Proven
Fact? 25(5) J. INT’L ARB. 529 529 (2008)
14 UNCITRAL Model Law of International Commercial Arbitration Art.20 §1; Arbitration and Conciliation Act
1996 §20(2)
15 Samdariya, supra Note 1.
16 Ankur Singhal, Vasavi Janak Khatri, Recent Developments Concerning Arbitrability of IPR Disputes in India: A
Need for Reform, INDIAN LAW REVIEW (2020)
17 Swapnil Tripathi v. Supreme Court of India, AIR 2018 SC 4806
intellectual property disputes. This question however can only be answered with a thorough
exploration of the arbitrability of intellectual property rights.

CHAPTER III: THE CONCEPT OF ARBITRABILITY AND ITS THEORIES IN THE

CONTEXT OF INTELLECTUAL PROPERTY RIGHTS

Arbitrability, in its simplest sense, refers to the potential of a dispute to be

resolved through arbitration. It must be understood however that this potential attached to any
dispute is not innate but rather attributed by entities that can wield such agency over the dispute.
These entities with the requisite agency to determine the arbitrability of a dispute are, in every
case, either the parties to the dispute or the state. Now, what is interesting to note is the mode of
such determination. the arbitrability of a dispute is circumscribed by various considerations such
as: whether the parties have incorporated the concerned dispute within the ambit of their
arbitration agreement and if the concerned dispute indeed falls within the ambit of their
arbitration agreement, whether they make the active choice of referring such dispute for
arbitration or whether the dispute is of such nature or involves such subject matter that its
resolution through arbitration is a purely consistent exercise with the laws of the state. While the
first two considerations center around the parties being the active determinants of arbitrability,
the third consideration places the State in the said role duly substantiated by statutory provisions.
For instance, Section 2(3) of the Arbitration and Conciliation Act, 1996 clarifies that no
provision contained in Part I of the Act would apply to disputes- the resolution of which, have
been expressly excluded from the ambit of arbitration by any law of the State. Therefore,
arbitrability must be understood as an attribute that, if not afforded to a dispute, does hold the
definite potential of leading to the setting aside of domestic arbitral awards, and refusal to
enforce foreign arbitral awards under the statutory mandate of the Arbitration and Conciliation
Act, 1996.

Now, if one specifically explores arbitrability in the context of intellectual property rights
disputes, the same has been an issue of exploration and debate worldwide with different legal
jurisdictions taking widely different stances and positing widely different theories 18. One extreme
theory regarding the arbitrability of intellectual property is too unambiguous in its staunch view
that intellectual property disputes as a whole class of disputes are entirely unfit for arbitration.
One legal jurisdiction that has been reported to squarely believe in the non-arbitrability of
intellectual property disputes is South Africa. 19 Another theory of arbitrability of intellectual
property disputes aims to differentiate between such disputes by virtue of their private or public
nature, thereby bringing all private contractual intellectual property disputes within the realm of
arbitrability. The notion of arbitrability of intellectual property disputes explored in the present
paper also reflects a similar bifurcation among intellectual property disputes. Yet another
approach to arbitrability of intellectual property disputes seeks to make a bifurcation at the stage
of enforcement of the arbitral award wherein although all disputes are opened up to arbitral
intervention, arbitral awards with respect to disputes of a public nature are made binding only on
18 Srinivasan, Badrinath. "Arbitrability of Intellectual Property Disputes in India: A Critique." NLS Bus. L. Rev.
(2020): 29.
19 Dario Moura Vicente, 'Arbitrability of Intellectual Property Disputes: A Comparative Survey' (2015) 31
Arbitration International 151, 153.
the parties involved. The last approach is obvious as it holds up the other polar end of this issue
of arbitrability effectively bringing all intellectual property disputes within the realm of
arbitration suspending any need for bifurcation at any of its stages. While there exists different
trends in adopting arbitration for the resolution of intellectual property disputes, the main focus
of this paper is to explore the judicial trend showcased by India with respect to the arbitrability
of intellectual property rights.

CHAPTER IV: ARBITRABILITY OF INTELLECTUAL PROPERTY RIGHTS:

RIGHTS IN REM AND RIGHTS IN PERSONAM.

Arbitration for Intellectual Property Rights Disputes has not been statutorily
mandated by Indian laws, be it the Arbitration and Conciliation Act, 1996 or the statutes relating
to Intellectual Property. Hence arbitration– a widely preferred mode of dispute resolution in the
present day– can only attain paramount efficacy if aided effectively by the judiciary. Thus, the
pressing need is for a liberal judicial interpretation that lays down an expansive test of
arbitrability. It is a common notion that most civil disputes that are fit for litigation may also be
referred to arbitration. However, the keyword being ‘most’ indicates that the acquiescence of
certain subject matters to arbitration is barred if it is deemed that the nature of dispute warrants a
settlement that can only be offered by a public court of law, if the subject matter has been
statutorily ousted from the ambit of arbitration, 20 or if referring such matter to arbitration would
contravene public policy.21 Presently, however, the issue of arbitrability of intellectual property
disputes would only be perceived through the lens of the nature of rights involved: rights in rem
and rights in personam. A right in rem is a right exercisable against the world at large while
right in personam is only exercisable against certain specific individuals. Now, a right in rem
and any infringement thereof would necessarily require a judgement in rem which clearly is not
consistent with the private ambit of arbitration. The Supreme Court’s landmark judgement in the
case of Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.22 becomes relevant as the Court
for the first time deliberated upon the implications of §34(2)(b) of the Arbitration and
Conciliation Act, and took actions in rem outside the purview of arbitration. It was held that
rights in personam which do not affect the rights of third persons may be subjected to arbitration.
At this juncture, one must note that the original rights in rem vested in the owners of intellectual
property give rise to subordinate rights in personam against specific individuals.23 For instance,
the owner of a copyright may exercise his right in rem by entering into a licensing contract and
long form agreement with another person for the distribution of his films. 24 Such a contract
would give rise to certain subordinate rights exercisable only against the party to the contract in
the event of a dispute, such as non-execution of said long form agreement. Such subordinate

20Arbitration and Conciliation Act 1996, §2(3)

21 Kshama A. Loya and Gowree Gokhale, Arbitrability of intellectual property disputes: a perspective from India,
JOOURNAL OF INTELLECTUAL PROPERTY LAW & PRACTICE, 2019, Vol. 14, No. 8
22 Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., AIR 2011 SC 2507
23 Loya & Gokhale, supra Note 12.
24 Eros International Media Ltd. v. Telemax Links India Pvt. Ltd., (2016) 6 Bom CR 32
rights impacting only distinct parties to the contract quite rightly attracts arbitral intervention, 25
and has been held by the Bombay High Court in the case of Eros International Media Ltd. v.
Telemax Links India Pvt. Ltd.26

It must also be acknowledged that the issue of arbitrability is not merely

dependent on the nature of rights involved but is also influenced by the nature of remedies
sought. A dispute involving a right in personam may only be arbitrable if the relief sought is
deliverable by the private forum of arbitration. Therefore, a case of copyright infringement that
essentially involved a subordinate right in personam was still excluded from the arena of
arbitration, as opined by the Bombay High Court in the case of Indian Performing Right Society
Limited (IPRS) v. Entertainment Network.27 It was reasoned that the remedies of injunction or
damages warranted by such infringement can only be conferred by a court. 28 Moreover, the
running judicial discourse on arbitrability have also witnessed blanket denial of arbitrability
where the Supreme Court had enlisted copyright, trademark and patent disputes to be completely
outside the ambit of arbitration, in the cases of A. Ayyasamy v. A. Paramasivam, 29 and Steel
Authority of India v. SKS Ispat and Power Ltd.30 Such denial is indicative of the initial reluctance
of the judiciary to curtail its own ambit of jurisdiction. Lately however, the judicial trend has
begun to indicate an inclusive approach towards arbitration. The Supreme Court in the case of
Afcons Infrastructure Ltd. v. Cherian Varkey Construction promoted the enthusiastic adoption of
ADR mechanisms as mandated by §89 of the CPC. 31 The court also made considerable efforts in
curtailing judicial intervention in foreign seated arbitrations in Bharat Aluminium Company and
Ors. v. Kaiser Aluminium Technical Service, Inc. and Ors, 32 and made public policy-based
exclusion of arbitration less stringent in the case of Shri Lal Mahal Ltd. v. Progetto Grano Spa.33
In light of the reasonable appeal that arbitration holds and the growing judicial acceptance of the
supplementary role of arbitration, the test of arbitrability distinguishing rights in personam from
rights in rem shows promise of a perfect balance. The problem however lies in the fact that this
test of arbitrability and underlying distinction is based on an assumption. The assumption is that
there exist only two kinds of intellectual property disputes completely separate from one another;
one that involves the original right in rem and another which involves subordinate rights in
personam, based on a contract. This assumption however does not take into account the very real
possibility of disputes that simultaneously involve both rights in rem and personam. The author
now seeks to analyse the real possibility of contracts that give rise to both arbitrable as well non-
arbitrable disputes in an attempt to understand whether a bifurcation is feasible.

25 Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, 14(1) ASIAN INT. ARBITR.
J.,71, 81(2018)
26 Eros International Media Ltd. v. Telemax Links India Pvt. Ltd., (2016) 6 Bom CR 32
27 Indian Performing Right Society Limited (IPRS) v. Entertainment Network 2016 SCC Bom 5893
28Radhika Dubey, Aman Singhania, Arbitrable or Not – India at Crossroads?, Available at
https://www.cyrilshroff.com/arbitrable-or-not-india-at-crossroads/
29 A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386
30 Steel Authority of India v. SKS Ispat and Power Ltd., 2014 SCC OnLine Bom 4875
31 Afcons Infrastructure Ltd. v. Cherian Varkey Constructions, 8 SCC 24 (2010).
32 Bharat Aluminium Company and Ors. v. Kaiser Aluminium Technical Service, Inc. and Ors., (2012) 9 SCC 552
(India).
33 Shri Lal Mahal Ltd. v. Progetto Grano Spa, (2014) 2 SCC 433 (India).
 CHAPTER V: BIFURCATION OF INTELLECTUAL PROPERTY
DISPUTES INTO ARBITRABLE AND THE NON-ARBITRABLE
CLAIMS.

As has been mentioned earlier, it is the unrestricted singular exercise of the right
in rem that generates a network of contractual relationships relating to intellectual property
involving various third parties. The general impact of these contracts is the establishment of
numerous stakes and rights in the intellectual property held by numerous parties. Moreover, in
this age of fast trade and commerce, most parties are interested in a speedy resolution mechanism
and therefore provide for arbitration in case of disputes under said contracts. 34 But the interplay
of arbitrable and non-arbitrable rights between the parties may give rise to a scenario where the
dispute simultaneously involves issues specifically provided for arbitral intervention along with
issues which are not arbitrable. In such a scenario, even though the contract warrants arbitration,
the entire dispute may be rendered non-arbitrable. In the case of Sukanya Holdings Pvt. Ltd. v.
Jayesh H. Pandya,35 the Supreme Court held that there exists no provision in the Arbitration and
Conciliation Act that allows a dispute, that also involves issues beyond the scope of the existent
arbitration clause, to be entirely referred to arbitration. At the same time, the splitting of causes
of action to enable the subject matter covered by the arbitration clause to be separately referred
to arbitration is not permissible. In such a case, the entire dispute would be brought within the
purview of the courts, irrespective of the arbitration clause. In the case of R.K. Productions
Private Limited v. N.K. Theatres Pvt. Ltd,36 two issues of copyright infringement and non-
payment of consideration formed the subject matter of the dispute, only part of which fell within
the scope of arbitration. It was held by the court that the two issues were inextricably linked.
Therefore, following the Sukanya Holdings judgement the entire dispute would fall beyond the
scope of arbitration as bifurcation is not permissible. 37 Therefore, the mere incorporation of an
arbitration clause to regulate intellectual property disputes arising out of contractual relationships
would not suffice in the present day. In order to ensure subject matter arbitrability of intellectual
property disputes, the parties to the contract must pay scrupulous attention to the arbitration
clause. The arbitrability of a particular dispute is dependent entirely on the scope of the
arbitration clause.38 An arbitration clause is logically interpreted to include only those issues that
both parties to the dispute have consented for reference to arbitration. Naturally therefore, any
issue beyond the scope of said clause would be interpreted as the conscious intentional exclusion
from the ambit of arbitration. This limited scope of arbitration clause however sometimes renders
the entire clause useless when the issues within the scope of arbitration are too intricately linked
with issues kept outside its purview.39 In such cases, the entire dispute is compelled to be
restricted within the purview of the courts. Therefore, the adoption of an arbitration clause must
also be accompanied by the specific inclusion of all issues that the parties consent to make
amenable to arbitration. Attention to detail must be employed to ascertain whether any such issue
is intricately related to issues that are statutorily ousted from arbitral intervention. Moreover,
since bifurcation of arbitrable and non-arbitrable claims, or splitting of causes of action at the

34 Loya & Gokhale, supra Note 12.

35 Sukanya Holdings Pvt. Ltd. v Jayesh H. Pandya AIR (2003) SC 2252.
36 R.K. Productions Pvt. Ltd. v NK Theatres Pvt. Ltd. (2014) (1) ArbLR 34 (Madras).
37 Sukanya Holdings Pvt. Ltd. v Jayesh H. Pandya AIR (2003) SC 2252
38 Loya & Gokhale, supra Note 12.
39 Id.
stage of seeking redressal is impermissible, a conscious bifurcation can be made in the
arbitration clause. An arbitration clause may incorporate a provisio to safeguard the right to seek
certain reliefs that are deliverable only by a public court of law while keeping the expansiveness
of its scope intact. The choice to refer the dispute to arbitration or if need be, claim the specific
reliefs safeguarded by the provisio to such arbitration clause would then entirely rest upon the
parties to the dispute. It however must be kept in mind that the arbitration clause would be of no
impact if it includes issues and rights that are either by way of its very nature or by statutory
mandate, non-arbitrable.

CHAPTER VI: CONCLUSION

The absence of any statutory provision mandating arbitral intervention in intellectual

property disputes poses an impediment in attaining the epitome of efficiency in dispute
resolution. The test of arbitrability laid down by the Booz Allen case, and clarified by the Eros
International case, showcases a hearty attempt in achieving a balance between party autonomy
and right in rem. However, the test is too simplistic to be completely effective in ascertaining the
arbitrability of complex disputes simultaneously involving both rights in rem as well as
personam. Moreover, the impossibility of bifurcation of such a dispute into arbitrable and non-
arbitrable claims warranting different dispute resolution mechanisms, places the onus of
increasing arbitral intervention upon arbitration clauses. Carefully tailored arbitration clauses
specifically inclusive of arbitrable issues while simultaneously safeguarding certain reliefs that
may be claimed before a public court of law seems to be the need of the hour.
 8. REFERENCES

● Nikita Samdariya, Arbitrability of IP Disputes in India: The Conundrum of Exclusion by Necessary

Implication and Right in Rem, INTERNATIONAL JOURNAL OF LEGAL SCIENCE AND
INNOVATION, Volume 2 Issue 3.

● Kshama A. Loya and Gowree Gokhale, Arbitrability of intellectual property disputes: a perspective from
India, JOURNAL OF INTELLECTUAL PROPERTY LAW & PRACTICE, 2019, Vol. 14, No. 8.

● Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, 14(1) ASIAN INT.
ARBITR. J.,71, 81(2018).

● Srinivasan, Badrinath. "Arbitrability of Intellectual Property Disputes in India: A Critique." NLS Bus. L.
Rev. (2020): 29.

● Singhal, Ankur, and Vasavi Janak Khatri. "Recent developments concerning arbitrability of IPR disputes in
India: a need for reform." Indian Law Review 5.1 (2021): 1-18.

● Srivastava, Utkarsh. "Putting the jigsaw pieces together: an analysis of the arbitrability of intellectual
property right disputes in India." Arbitration International 33.4 (2017): 631-646.

● Bhatia, Nikhil. "Amenability of Intellectual Property Rights to Arbitration in India." Available at SSRN
3558494 (2018).

● Mathew, Daniel. "Arbitrating Intellectual Property Disputes in India." Journal of National Law University
Delhi 6.2 (2019): 84-106.

● Saniya Mirani, Mihika Poddar, Arbitrability of IP Disputes in India- A Blanket Bar?, KLUWER
ARBITRATION

● Why Arbitration in Intellectual Property? WIPO, September 8, 2020. Available at

https://www.wipo.int/amc/en/arbitration/why-is-arb.html (Last Visited on February 16, 2022)

● Mia Louise Livingstone, Party Autonomy in International Commercial Arbitration: Popular Fallacy or
Proven Fact? 25(5) J. INT’L ARB. 529 529 (2008)

● Ankur Singhal, Vasavi Janak Khatri, Recent Developments Concerning Arbitrability of IPR Disputes in
India: A Need for Reform, INDIAN LAW REVIEW (2020)

● Dario Moura Vicente, 'Arbitrability of Intellectual Property Disputes: A Comparative Survey' (2015) 31
Arbitration International 151, 153.

● Radhika Dubey, Aman Singhania, Arbitrable or Not – India at Crossroads?, Available at

https://www.cyrilshroff.com/arbitrable-or-not-india-at-crossroads/
 CASES
● Swapnil Tripathi v. Supreme Court of India, AIR 2018 SC 4806

● Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., AIR 2011 SC 2507

● Eros International Media Ltd. v. Telemax Links India Pvt. Ltd., (2016) 6 Bom CR 32

● Indian Performing Right Society Limited (IPRS) v. Entertainment Network 2016 SCC Bom 5893

● A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386

● Steel Authority of India v. SKS Ispat and Power Ltd., 2014 SCC OnLine Bom 4875

● Afcons Infrastructure Ltd. v. Cherian Varkey Constructions, 8 SCC 24 (2010).

● Bharat Aluminium Company and Ors. v. Kaiser Aluminium Technical Service, Inc. and Ors., (2012) 9 SCC
552 (India).

● Shri Lal Mahal Ltd. v. Progetto Grano Spa, (2014) 2 SCC 433 (India).

● Sukanya Holdings Pvt. Ltd. v Jayesh H. Pandya AIR (2003) SC 2252

● R.K. Productions Pvt. Ltd. v NK Theatres Pvt. Ltd. (2014) (1) ArbLR 34 (Madras).

STATUTES AND CONVENTIONS

● The Arbitration and Conciliation Act 1996

● UNCITRAL Model Law of International Commercial Arbitration