Arbitral Award against Nuziveedu Seeds Ltd. Awarded to Mahyco Monsanto Biotech [Read Judgement]

The Bombay High Court, on 23 July 2020, held in the case Nuziveedu Seeds Ltd. V. Mahyco Monsanto Biotech (India) Pvt. Ltd that the Competition Commission of India (CCI) and the Arbitral Tribunal Act, 1996, are not the same and are very different and distinct in nature. The judgment was held by Justice R.D. Dhanuka. 

The facts of the case: 

Commercial Arbitration Petition No. 737 of 2019 was brought before the Arbitral Tribunal. The petitioner was of the opinion that the respondent had grown cotton seeds with Bt. genes that generated endotoxin, which is virulent to cotton bollworms. The petitioner and the respondent signed a Sub-License Agreement (SLA) on 20 January 2004. Under this agreement, the Respondent provided 50 cotton seeds of a transgenic variety with Bt. traits to the petitioner enabling the production of new varieties of cotton seeds, granting the right to market hybrid cotton seeds for 10 years. 

The agreement was extended to 10 March 2015, under the name of the Bollgard Technology license agreement, and both parties agreed to continue the rights under the SLA, 2004. 

Judgment: 

The Court noted that the Arbitral Tribunal permitted only the monetary claims made by the respondent. The Judgement stated, “The tribunal rightly held that the adjudication by the tribunal shall be in the nature of the right and liability of the parties to the agreement and would relate to right in personam and not right in rem. In the proceedings before the CCI, whatever may be the outcome, the respondent would not be able to get any effective relief or decree or award directing the petitioner herein to pay the particular amount to the respondent. It was rightly held by the Arbitral Tribunal that the respondent had certain rights under the 2015 SLA and thus it must also have a remedy for enforcement of such rights.” 

The court ruled that the jurisdictions of the CCI and the Arbitral Tribunal are of a different nature. Since the CCI does not have the power to grant monetary claims under the SLA in 2015, the Civil Court or the Arbitral Tribunal had the jurisdiction to consider the claims of the respondent. 

The Court stated, “In so far as the reliance placed by the learned senior counsel on Section- 61 of the Competition Act in support of the submission that the powers of the Civil Court or the Arbitral Tribunal, as the case may be, are excluded under the said provision to determine any matter which the CCI or the Appellate Tribunal is empowered to determine under the provision of the Competition Act is concerned, in my view, reliance placed on the said provision to exclude the powers of the arbitral tribunal to decide the monetary claim, in this case, is totally misplaced. The arbitral tribunal cannot decide the issue whether the said 2015 SLA was anti-competitive or was in violation of Section- 3 of the Competition Act or not and deserves to be declared as void or required modification but has the power to award monetary claim under such agreement.” 

 [Read Judgement]