AKP Dispute Resolution Digest January 05, 2026

We are delighted to share this month's AKP Dispute Resolution Monthly Digest. Please feel free to write to us with your feedback at info@akandpartners.in.

1. Arbitration Law

1.1. Mining and Transportation

1.1.1. Supreme Court rules High Courts cannot re-appreciate evidence or demand strict proof in Section 34 appeal of the Arbitration and Conciliation Act, 1996

The Supreme Court has held that a High Court, while exercising jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), cannot impermissibly re-appreciate evidence or demand a stricter standard of proof than what arbitration law requires. This ruling came in an appeal by Ramesh Kumar Jain against Bharat Aluminium Company Limited (“BALCO”), challenging the High Court’s decision to set aside an arbitral award of INR 3,71,80,584/- (Indian Rupees Three Crore Seventy-one Lakh Eighty Thousand Five Hundred Eighty-four only). The Commercial Court had previously upheld the award. The central issue was whether the High Court could scrutinise the arbitrator's findings on the quantity of transported bauxite and the applicable rates by re-examining the lorry receipts and evidence, effectively treating the appeal as a first appeal. The Court held that, under Section 19 of the Arbitration Act, arbitrators are not bound by the strict rules of the Indian Evidence Act, 1872, and may draw on their own knowledge and experience. It held that the High Court erred by applying a "stricter standard of proof" and substituting its own view for a "possible view" taken by the arbitrator. The Court emphasised that as long as the arbitrator's reasoning is discernible and not absurd, the court cannot interfere merely because the reasoning is brief, ultimately restoring the original award.

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1.2. Manufacturing Industry

1.2.1. Delhi High Court rules arbitrator cannot rewrite contract or award damages on equity without express consent

The High Court of Delhi has held that an arbitrator cannot rewrite the terms of a contract or award damages on the basis of equity and the "national economy" unless expressly authorised by the parties to act as an amiable compositeur. This ruling arose from cross-petitions filed by the Technology Information Forecasting and Assessment Council (“TIFAC”) and Strategic Engineering Pvt. Ltd. (“SEPL”) challenging an arbitral award. TIFAC had provided financial assistance to SEPL under a Technology Development Assistance (“TDA”) agreement, under which repayment was conditional upon the successful commercialisation of the developed technology. Despite finding that the project was not successfully commercialised, a fact that legally absolved SEPL of repayment liability under the TDA, the Sole Arbitrator directed SEPL to refund INR 28,00,000/- (Indian Rupees Twenty-Eight Lakh only), representing 10 per cent (ten per cent) of the disbursed funds. The Arbitrator reasoned that SEPL "could have utilised" the acquired machinery for other business interests and that "taxpayers' money" should not go to waste. The Court set aside the award as "patently illegal," holding that the Arbitrator had exceeded the scope of the contract to impose liability based on his own sense of fairness and potential utility, thereby creating a new contract between the parties. The Court emphasised that an arbitrator is a creature of the contract and cannot disregard specific contractual conditions to award monies on equitable grounds without the parties specific consent.

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2. Consumer Protection Law

2.1. Insurance Law

2.1.1. Supreme Court rules insurer cannot repudiate fire claim by citing theft without strict proof

The Supreme Court has held that exclusion clauses in insurance contracts must be construed strictly against the insurer, and a claim for loss due to fire cannot be repudiated by attributing the shortage of goods to "theft" or "pilferage" without concrete proof that falls within a specific exclusion. This ruling came in an appeal by Cement Corporation of India against ICICI Lombard General Insurance Company Limited. The dispute arose after a fire at the appellant's Bokajan Cement Factory resulted in a significant shortage of coal. The insurer repudiated the claim, relying on a surveyor's report which concluded that the coal had not burnt but was missing due to theft, thereby invoking a general exclusion clause for burglary/theft. The National Consumer Disputes Redressal Commission had dismissed the complaint. The Court held that since "Fire" was a covered peril, the insurer could not rely on an exclusion clause meant for "Riots, Strikes, and Malicious Damage" to deny a fire claim. The Court ruled that exclusions must be read strictly, and the insurer failed to justify the repudiation.

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3. Intellectual Property Law

3.1. Pharmaceutical Industry

3.1.1. Bombay High Court reaffirms principle of overall Phonetic & Visual Similarity in Trademark Disputes, rules in favour of Blue Cross

The High Court of Bombay has held that the dishonest adoption of a trademark deceptively similar to an existing pharmaceutical brand warrants not only a permanent injunction but also the imposition of substantial compensatory costs, even if the defendant chooses not to contest the suit.[1] This ruling was delivered in a commercial suit filed by Blue Cross Laboratories Private Limited against RB Remedies Private Limited and another. The plaintiff, the registered owner of the trademark "CEDON" for its pharmaceutical preparation containing Cefpodoxime, alleged that the defendants had introduced an identical drug under the confusingly similar mark "CEFDON". The central issue was whether the slight variation in spelling was sufficient to distinguish the products in a sector where confusion can have life-threatening consequences. The Court observed that the defendants' mark was phonetically, structurally, and visually similar to the plaintiff’s mark, making confusion inevitable. Furthermore, noting that the defendants failed to appear, the Court inferred that their adoption of the mark was actuated by bad faith and a clear intent to ride on the plaintiff's goodwill. Consequently, the Court decreed the suit and directed each defendant to pay INR 5,00,000 (Indian Rupees Five Lakh only) as compensatory costs under Section 35 of the Code of Civil Procedure, 1908.

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 4. Cyber Law

4.1. Fast-moving consumer goods (FMCG)

4.1.1. Delhi High Court refuses blanket dynamic injunction; mandates judicial oversight for domain blocking

The High Court of Delhi has held that a "dynamic injunction" to block future infringing websites cannot be granted in a manner that completely bypasses judicial oversight, even for a well-known trademark. This ruling came in a suit filed by Dabur India Limited against Ashok Kumar and Ors., seeking to restrain various "John Doe" entities from registering domain names containing its well-known trademark "DABUR" to defraud the public. The plaintiff sought a mechanism whereby it could file an affidavit with Domain Name Registrars (“DNRs”) to automatically block any new domain name containing the word "DABUR". The Court refused to modify its earlier interim order to allow automatic blocking based solely on the plaintiff's affidavit. Instead, it established a distinction between "locking" and "blocking". It held that while DNRs must "lock" (suspend transfer/changes) a suspicious domain immediately upon notice from Dabur India Limited, the plaintiff must subsequently file an application before the Court to obtain a specific order for "blocking" (suspension) the domain. This ensures that genuine users are not arbitrarily deplatformed while still providing the trademark owner with a swift remedy against cybersquatters.

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[1] COMMERCIAL IP SUIT NO. 231 OF 2015

Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details, you may contact:

Mr. Anuroop Omkar

Partner, AK & Partners

info@akandpartners.in