Case Title:Wonderchef Home Appliances Pvt. Ltd. v. Shree Swaminarayanan Pty Ltd.
Date of Order:January 27, 2025
Case Number:COMM. ARBITRATION PETITION NO. 791 OF 2024
Neutral Citation:2025:BHC-OS:1340
Court Name:High Court of Judicature at Bombay
Judge:Justice Somasekhar Sundaresan
Facts of the Case:
The dispute arises from a Distribution Agreement dated December 26, 2017, which included an arbitration clause.
Wonderchef Home Appliances Pvt. Ltd., the petitioner, sought an injunction against its distributor, Shree Swaminarayanan Pty Ltd. (Australia), for making disparaging statements.
The respondent had allegedly sent emails criticizing Wonderchef’s products and the handling of their business relationship, potentially damaging the brand’s reputation.
Wonderchef argued that these statements violated Clause 12.2(c) of the Agreement, which required the distributor to maintain a favorable image of the brand.
Issues Raised:
1. Whether the respondent’s emails constituted disparagement and breach of contract.
2. Whether an interim injunction (gag order) could be issued under Section 9 of the Arbitration and Conciliation Act, 1996.
3. How to balance commercial free speech with contractual obligations of maintaining brand reputation.
Reasoning & Analysis by the Court:
Free Speech vs. Contractual Obligation: The court acknowledged that commercial speech is part of free speech and cannot be easily curtailed.
Lack of Concrete Evidence of Damage: The judge noted that Wonderchef, being a reputed brand promoted by a celebrity chef, was unlikely to suffer significant harm from the respondent’s emails.
Scope of Section 9 Powers: The court agreed that interim relief could be granted to protect the subject matter of arbitration, particularly since Clause 12.2(c) explicitly required the respondent to maintain a positive brand image.
Past Arbitration Attempts: The court observed that the respondent had proposed arbitration in 2023, but Wonderchef had not responded positively.
Decision of the Judge:
The court granted an interim injunction for 90 days, restraining the respondent from making any statements that would violate Clause 12.2(c) of the Agreement.
The injunction was conditional, emphasizing that Wonderchef should initiate arbitration within this period.
The arbitral tribunal would have full authority to assess the truthfulness of the respondent’s claims and decide on further actions.
The court declined to impose permanent restrictions on the respondent’s speech, emphasizing that arbitration should resolve the dispute.
