by Zen Webnet | Nov 20, 2023 | Blog
Article by Suchi Rai
Law practice is undergoing a profound transformation thanks to artificial intelligence (AI). Although there is a long history of technologically-driven changes in the way lawyers practice, it is only recently that systems based on large language models, like GPT-3 and GPT-4, have become widely available and are capable of performing complex writing and research tasks that previously required highly skilled individuals.
AI can be employed to write first drafts relatively fast, citing the pertinent case law, putting forth arguments, and answering arguments put out by opposing lawyers. The final drafts will still require human input, but using AI will speed up the process significantly.
Gains:
Take into account one of the most time-consuming litigation jobs, which is the extraction of structure, meaning, and salient data from a sizable collection of documents produced during discovery. This process will be greatly accelerated by AI, which can do tasks that would typically take weeks in a matter of seconds. Or take into account writing motions to submit to a court.
Efficiency:
In general, AI will greatly improve the efficiency with which lawyers can produce highly customized papers, a task that has traditionally taken up a large amount of lawyer time. Contracts, the several varieties of papers filed with a court during litigation, answers to interrogatories, summaries for clients of recent events in a continuing legal matter, graphic exhibits for use in trial, and pitches intended to attract new clients are a few examples. Additionally, during a trial, AI might be employed to review a trial transcript in real-time and give attorneys advice on which witnesses to cross-examine.
Frameworks:
There are other chances to employ AI to deliver legal services in a more fully automated manner. In order to encourage innovation in this field, legal and legislative frameworks will need to be changed. This will also allow for the identification and mitigation of related risks.
Law firms can get the most out of AI tools. AI is most effective when used to complement human capabilities, and people who learn to use this collaboration well will get the most out of AI tools. This requires developing new skills, including knowing how to choose the right AI tool for the task, knowing how to design the right surveys, and assessing the relevance, quality and accuracy of responses (and then updating surveys as needed). and be able to synthesize the overall results into a coherent, functional picture. Lawyers must also ensure that AI tools are used to properly protect confidentiality.
Functioning:
Even with all the AI out there, lawyers will still be just as important as ever. AI can’t sell a case to a judge or jury. It can’t account for all the strategic decisions that are made every day in every litigation case. It can’t replace the human touch in client relationships. And it can’t lead a team of lawyers to do their best work. Basically, it’s a mistake to try to use the incredible advances in AI to downplay the role of the human factor in legal practice. But it’s also a mistake to ignore the role that AI will play in changing the landscape for legal professionals and clients alike.
AI is fundamentally the science of instructing machines to “learn, reason, perceive, infer, communicate, and make decisions like humans do.”. When a machine (a computer) starts to make decisions without a lot of programming, this is referred to as machine learning. Algorithms for machine learning (i.e., “machine learning”) replace the need for manual rule writing by instructing computers how to interpret sets of data. e. The computer can choose the rules on its own with the aid of instructions (e.g., sets of instructions for solving specific problems). Deep learning, which is the next step beyond machine learning, is even more ambitious. Deep learning is used to carry out more abstract tasks, like image recognition, by using more sophisticated algorithms.
To prevent the answers from being overly inclusive, the computer also filters out information as part of the learning process. The lawyer cannot use a computer that returns 10,000 results, for instance. In order to narrow the search results to a manageable number, the computer must learn what is pertinent to the user and make suggestions that can be used. A human teacher and, in the case of deep learning, through propagation—which still requires a human component at first—are the only options since machines do not naturally have the ability to limit the answers.
Issues:
The legal sector can benefit greatly from AI, as was already mentioned, but there are also a number of issues that must be resolved. Data privacy and security are two of these issues. AI solutions need a lot of data to work effectively, which can raise questions about data privacy and security. To reduce the risk of data breaches, legal organizations must make sure they have strong data protection measures in place.
Aiming to avoid unintended consequences like bias or discrimination, AI-powered solutions must be developed and implemented ethically. Organizations engaged in the practice of law must make sure that they have the right governance structures in place to monitor and address ethical issues.
Conclusion:
Through the automation of repetitive tasks, the improvement of legal research, and the provision of predictive analytics, artificial intelligence is revolutionizing the legal sector. Even though implementing AI has its difficulties, there are many legal departments in corporations already benefiting from its advantages. Legal organizations can use AI to enhance their productivity, accuracy, and standard of work by carefully weighing the costs and advantages of its implementation and addressing ethical and data privacy concerns. Those who embrace AI will be well-positioned for success as AI technology develops further and the legal sector undoubtedly continues to transform and innovate.
by Zen Webnet | Oct 10, 2023 | Blog
Article by Divya Kashyap
Institutional Arbitration in India: Brief Overview
The growth of arbitration as a dispute resolution mechanism has been exponential in the recent times. It is one of the most preferred choice of dispute resolution, especially when parties are in a long and continuing relationship such as in infrastructure contracts, supply contracts, shareholder agreements, investment contracts etc. However, the growth of institutional arbitration has been far from equal in the Indian regime. Ad-hoc arbitrations are still the preferable mode of arbitration, despite its shortcomings such as delayed proceedings, unprofessional arbitrators, poor quality of awards etc. On the other hand, institutional arbitration, which enables parties to submit their disputes to an institution has various advantages such as pre-established rules, efficient administration, qualified arbitrators and established format.
Taking note of the lack of good institutions to administer arbitration in India and looking at the institutionalized framework at the global level, the legislature brought some important amendments to the Arbitration and Conciliation Act, 1996 in the year 2015 and 2019.
The aim was to improve the institutionalization of administration of arbitrations and to improve the existing infrastructure for such institutionalization so as to make India a center for international arbitration. The global institutions like Singapore International Arbitration Centre (“SIAC”), London Court of International Arbitration Centre (“LCIA”), Hong Kong International Arbitration Centre (“HKIAC”) and International Chamber of Commerce (“ICC”) are some of the most successful institutions which have paved the way for India to develop its institutional arbitration and become an arbitration friendly nation and further impose confidence in the foreign investors.
Enactment of the New Delhi International Arbitration Centre Act, 2019
The promulgation of the New Delhi International Arbitration Centre Act, 2019 (“NDIAC Act”) sought to provide a further impetus towards the aforementioned intention. The Act was notified on September 26, 2019 with the objective of providing for the establishment of an institution namely, The New Delhi International Arbitration Centre (“The NDIAC”), for the purpose of creating an independent autonomous regime for institutionalized arbitration.
It further sought for better management of arbitration so as to make it a hub for institutional arbitration and to declare the NDIAC as an institution of national importance. The aim of enacting this legislation was to incorporate a robust institution for domestic and international arbitration which inspires confidence and credibility among the litigants of the commercial disputes, to expedite the settlement of disputes and basically to overcome the shortcomings of the International Centre for Alternative Dispute Resolution set up in 1995.[1]
The NDIAC consists of seven-member body headed by a former judge of Supreme Court or High Court or any other eminent person. The NDIAC was created to provide cost effective and timely services for the conduct of arbitration and conciliation at national and international level, facilitate conduct of international and domestic arbitration and conciliation and impart training in alternative dispute resolution and related matters in the field of arbitration, conciliation and mediation.[2]
Its purpose is to bring reforms in the field of arbitration and conciliation and to develop it as a flagship institution for both domestic and international arbitration. It will facilitate and provide administrative assistance for conduct of arbitration and conciliation proceedings in a professional and a time-bound manner and in the most cost-effective way. It will also set up an arbitration chamber to empanel professional arbitrators at national and international level and set up an Arbitration Academy to train arbitrators in India, so as to empower them to compete on par with reputed arbitral institutions in the world.[3]
Subsequently, the name of the institution has been changed to The India International Arbitration Centre (“The IIAC”) by way of the New Delhi International Arbitration Centre (Amendment) Act, 2022 (No. 23 of 2022). [4]
The IIAC comprises of a chairperson, who is designated by the Central Government in conjunction with the Chief Justice of India and is a retired Supreme Court or High Court judge. There would be two full-time members possessed with substantial knowledge and experience in the regime of arbitration. These members will be appointed by the Central Government. A part-time member to be appointed as Secretary and Financial Advisor. A Chief Executive Officer is also to be appointed to keep a check on the Centre’s administrative activities. A Registrar would also to be appointed to supervise the activities of the Centre.[5]
As per Section 14 of the Act, the objects of the Centre are (a) to bring targeted reforms to develop itself as a flagship institution for conducting international and domestic arbitration; (b) to promote research and study, providing teaching and training, and organising conferences and seminars in arbitration, conciliation, mediation and other alternative dispute resolution matters; (c) to provide facilities and administrative assistance for conciliation, mediation and arbitral proceedings; (d) to maintain panels of accredited arbitrators, conciliators and mediators both at national and international level or specialists such as surveyors and investigators; (e) to collaborate with other national and international institutions and organisations for ensuring credibility of the Centre as a specialised institution in arbitration and conciliation; (f) to set up facilities in India and abroad to promote the activities of the Centre; (g) to lay down parameters for different modes of alternative dispute resolution mechanisms being adopted by the Centre; and (h) such other objectives as it may deem fit with the approval of the Central Government.[6]
The Act provides for the establishment of chamber of arbitration under Section 28, who would appoint arbitrator and also review the application for admission to the panel of arbitrators. Section 29 of the Act deals with establishing an arbitration academy for providing training to the arbitrator(s).[7] Further, one of the objectives of the Act is to also promote facilities and administrative assistance for mediation and conciliation.
IIAC (Conduct of Arbitration) Regulations, 2023
Recently, in exercise of the powers conferred by clause (f) of sub-section (2) of section 31 of the Act, the IIAC has notified the India International Arbitration Centre (Conduct of Arbitration Proceedings) Regulations, 2023 (“Regulations”). These Regulations have provided for the procedure and conduct of arbitral proceedings, appointment of arbitrators and passing of Award. Some of the key highlights of the Regulations are as under:
- Regulation 4 provides for the procedure for request for arbitration by a party and necessary documents required in the process, followed by Regulation 5 which provides for response by the other party within fourteen days of request.
- Regulation 6 provides that any notice or communication shall be in writing, and delivery of such written communications may be made personally or by registered post or by a courier service, or transmitted by any form of electronic means or delivered by any other means that provides a record of its transmission.
- Regulation 7 provides for joinder of additional parties in the arbitration proceedings after constitution of the arbitral tribunal; whereas Regulation 8 provides for consolidation of arbitrations, subject to inter-alia agreement of the parties.
- Regulation 11 talks about appointment and confirmation of arbitrators, where Regulation 12 deals with appointment of sole arbitrator and Regulation 13 talks about appointment of arbitral tribunal comprising of three arbitrators. Regulation 14 provides for multi-party appointment of arbitrator.
- Regulation 17 provides for fast track procedure for resolving disputes. In such a case, the disputes have to be resolved within six months from the date of intimation by the Registrar to the parties, of the constitution of the arbitral tribunal.
- Regulation 18 provides for appointment of emergency arbitrator within three days of the receipt of the application by the Registrar. It also provides for the time limit of fifteen days for completion of the entire arbitration proceedings from his date of appointment, which can be extended by the Registrar in exceptional circumstances.
- Regulation 28 provides for place/seat of arbitration and allows the arbitral tribunal to hold proceedings either physically, virtually or in a hybrid manner.
Conclusion
A perusal of these Regulations unveil that they are in line with the intention of the government to boost the arbitration regime in India. They also aim to bring the IIAC at par with the globally popular arbitral institutions like SIAC, LCIA etc. by adopting the best practices followed therein and to resolve commercial disputes smoothly. It however, will be a matter of time for IIAC to provide the same level of effectiveness and efficiency as offered by the global institutions like SIAC, LCIA etc. and provide state of the art procedural framework for resolution of international disputes. Be that as it may, these steps will certainly augment the intention behind the 2015 and 2019 amendments to the Arbitration and Conciliation Act, 1996 to push model arbitration proceedings in India.
[1]https://legalaffairs.gov.in/sites/default/files/The%20New%20Delhi%20International%20Arbitration%20Centre%20Act%2C%202019.pdf
[2]https://legalaffairs.gov.in/new-delhi-international-arbitration-centre
[3] Id.
[4]https://legalaffairs.gov.in/sites/default/files/NDIAC_Amendment_Act_2022.pdf
[5]https://legalaffairs.gov.in/sites/default/files/The%20New%20Delhi%20International%20Arbitration%20Centre%20Act%2C%202019.pdf
[6] Section 14 of the New Delhi International Arbitration Centre Act, 2019
[7] https://timesofindia.indiatimes.com/blogs/voices/road-to-institutionalised-arbitration-indian-approach/
by Zen Webnet | Oct 9, 2023 | Blog
Article by Kumar Shashwat Singh Sawno and Ankur Mishra
Beyond contractual enablement, the legal validity of third-party litigation funding (“TPLF”) in India is an open-ended question. While the courts recognize the increased access to justice offered by TPLF, there is an aversion to TPLF based on the understanding of common law principles of maintenance and champerty. This is despite maintenance and champerty not being part of Indian law.[1] In other common law jurisdictions, the conflict between maintenance and champerty vis-à-vis TPLF has been resolved.[2] The Hon’ble Supreme Court in Bar Council of India v. A.K. Balaji[3] has noted that there is no bar for any third party to fund the litigation process, however, the advocates could not fund the litigation or have any interest attached to the matter on behalf of the Client. This recognition is in fact a recognition of the contractual structure that underlies the TPLF and not the substantive framework of TPLF itself.
In this backdrop, the Hon’ble Delhi High Court in Tomorrow Sales Agency Private Limited v. SBS Holdings, INC[4] (“Tomorrow Sales Agency”) ruled that no interim relief can be granted for payment of cost awarded by arbitral award against the litigation funder who was not impleaded and against whom no order for payment has been made by the arbitral award. In United Kingdom, UK Supreme Court has in R (on the application of PACCAR Inc and Others) v. Competition Appeal Tribunal and Others [5] (“R v. Competition Appeal Tribunal”) ruled that a funding arrangement wherein the funder’s remuneration was in the form of a share in the damages recovered through the claim were unenforceable under Section 58AA of the Courts and Legal Services Act, 1990.
This Article analyzes the decision of Delhi High Court and UK Supreme Court in detail as far as it impacts the framework of law governing TLPF in India and abroad.
Analysis of the Judgment
In the Tomorrow Sales Agency, the arbitral dispute was raised by the Claimant with the financial support of the Appellant against the Respondent before the arbitral tribunal constituted under the aegis of SIAC. Admittedly, the arbitral dispute did not implead the Appellant as a party to the Dispute.
The Appellant’s role was limited to providing financial assistance to the Claimant in terms of the Bespoke Financing Agreement. The Court in Tomorrow Sales Agency interpreted and enforced the Bespoke Financing Agreement as any other commercial contract. Whereas in R v. Competition Appeal Tribunal, the conclusion of non-enforceability of funding arrangement was drawn based on interpretation of funding arrangement as “Damages based Agreement” under Section 58AA of the Courts and Legal Services Act, 1990.
Litigation Funder as Party: Identification as beneficiary
The first approach under which the Delhi High Court looked at the liability of the Litigation funder was through impleadment as non-signatory to the award. This was on the basis that Litigation funder, as was argued, was the real beneficiary to the claims raised by the Claimant in arbitration. Under Code of Civil Procedure, 1908 (“CPC”), Order I Rule 10 provides that the court may add any person as party at any stage of the proceedings, if the person whose presence before the court is necessary in order to enable the court effectively and completely adjudicate upon and settle all the questions involved in the suit. The Delhi High Court observed that the question in issue is not whether, in a given circumstance, a non-signatory can be bound by the arbitration agreement, it is whether a person who is not a party to the arbitral proceedings or the award, rendered in respect of disputes inter-se the parties to the arbitration, can be forced to pay the amount awarded against a party to the arbitration.
The Delhi High Court correctly limited the impleadment of non-signatory to the confines of compelling arbitration and not to enforcing of arbitral award. A key point on this count was that the SBS had not during the arbitration impleaded the Appellant as a party to the dispute. This was despite adequate disclosure as to the existence of third-party funding being made before the Hon’ble Arbitral Tribunal. In Kasturi v. Uyyamperumal,[6] the Supreme Court has ruled that there are two tests that must be satisfied for determining the questions of who is a necessary party: firstly, there must be a right to some relief against such party in respect of the controversies involved in the proceedings and, secondly, no effective decree can be passed in the absence of such party. However, merely being affected by the judgement is not a sufficient ground for being impleaded as party to the litigation.[7] The party must have a defined, subsisting, direct and substantive interests in the litigation which is cognizable in law as either legal or equitable.[8] In this backdrop, the Delhi High Court ruled that a third party may be bound by the arbitral award only if it has been compelled to arbitrate and is a party to the arbitration proceedings. The Delhi High Court added that even a signatory to an arbitration agreement against whom an arbitration agreement is not invoked and is not joined as a party to the arbitral proceedings, would not be bound by the arbitral award rendered pursuant to the said proceedings. In light of the same, the Delhi High Court refuted enforcement of arbitral award against a non-signatory who was not a party to the arbitral proceedings.
Litigation Funder as outsider to Dispute: Non-imposition of cost
The Delhi High Court also ruled that the Appellant had no obligations to pay any amount under the Arbitral award as the award of cost was made against the Claimant and not the Appellant. Given that the Appellant was not a party to the arbitration and that no award was made against him, the Hon’ble Delhi High Court ruled that the Appellant cannot be treated as a judgment-debtor under the Arbitral Award if it is enforced as a decree, as required under Section 46(1) of the Arbitration and Conciliation Act, 1996. As the Appellant cannot be treated as a judgment-debtor, the Hon’ble Delhi High Court ruled that the application under Section 9 of the Act for securing the amount in dispute against the Appellant was also not maintainable. The Delhi High Court also rightly emphasized that SBS was seeking interim measures in aid of enforcement of the Arbitral Award and not costs against third parties in a suit. Thus, the powers of the court to award costs in a trial would have no relevance for determining whether the awarded amounts can be recovered from a person who is not a party to the arbitral proceedings or the arbitral award.
Imposition of Cost on third parties: Lack of Framework in India
Cost is defined as the “pecuniary allowance made to the successful party (recoverable from the losing party) for his expenses in prosecuting or defending a suit or a distinct proceeding within a suit.”[9]
The Delhi High Court referred to Rule 48.2 of the Civil Procedure Rules introduced by Civil Procedure Act, 1997 of United Kingdom (UK) which provided for the procedure for costs order in favor or against non-parties. Pertinently, Rule 46.2 of Section A of the Civil Procedure Rules, 1908 provided that where the Court makes a costs order against a person who is not a party to proceedings, that person must be added as a party to the proceedings for the purposes of cost only and that such person must be given a reasonable opportunity to attend a hearing at which the Court will consider the question of cost order. There is an element of natural justice since a person who is not a party to the dispute cannot be laden with the liability of cost awarded without being afforded an opportunity to present his case.
In Arkin v. Borchard Lines,[10] the UK Court of Appeals laid down the principle that the liability of the claimant’s funders to pay the costs of a successful defendant will be limited to the value of their funding. However, the rule is flexible in cases of unusual nature of the funding arrangements.[11] However, the recent judgment of R v. Competition Appeal Tribunal requires that Funding Arrangement with third party cannot be based on returns being calculated as a share of damages awarded against the claims made by the Party.
In India, Section 35 of the CPC provides for imposition of cost by the Court. Section 35 provides for General costs, Miscellaneous cost, Compensatory Cost and cost for causing delay.
However, in the present context, unlike UK the cost imposed does not follow the event especially in matters involving TPLF. The Hon’ble Delhi High Court ruled that the questions relating to whether the costs are required to be imposed; what is the quantum of costs; who are the parties that are required to bear the costs; and in what proportion, are matters that are required to be determined by the Trial Court. These questions cannot be determined without hearing the person affected by such determination. However, there are no rules applicable to proceedings for awarding costs against third parties. There are however state amendments to Order XXV Rule 1 and 3 in Maharashtra, Gujarat, Madhya Pradesh that recognize the right of the plaintiff to transfer right in suit property to a financier in civil suits. There is no procedure for impleading third parties for the limited purpose of determining the costs. Order XXA of (“CPC”) provides that cost shall be in accordance with the rules as the High Court may make in that behalf.
Conclusion
The ruling of the Delhi High Court in Tomorrow Sales Agency is progressive since it clarifies the role of third-party litigation funder vis-à-vis liability to make payment towards cost awarded by the arbitral tribunal. However, it must be noted that the role played by third party litigation funder is based on contractual arrangement and the same may be subject to interpretation by the Courts. The importance of contractual basis of funding arrangement and their interaction with other statutory law was shown in R v. Competition Appeal Tribunal.
The ruling in Tomorrow Sales Agency is crucial as it creates settled norms for participation of third-party litigation funder in the litigations funded by them. The ruling by referring to Order XXV of CPC also highlighted the lacuna in the existing law when it comes to addressing the specific challenges of TPLF. However, as shown by R v. Competition Appeal Tribunal, progressive TPLF framework depends on factors beyond recognition of funding arrangement and enforcement action would depend upon how laws are interpreted to define the scope of operation for TPLF.
[1] Ram Coomar Coondoo v. Chunder Canto Mukherjee, 1876 SCC OnLine PC 19. Re. Mr. ‘G’, A Senior Advocate, 1955 1 SCR 490. Valluri Ramanamma v. Marina Viranna (1931) 33 BOMLR 960, Re. Mr. ‘G’, A Senior Advocate, 1955 1 SCR 490.
[2] R. v. Secretary of State for Transport (UK), Cannonway Consultants Ltd v. Kenworth Engineering Ltd. (Hong Kong). Civil Law Act (1999) (amended 2017) (Sing.); Civil Law (Third-Party Funding) Regulations (2017) (Sing.)
[3] Bar Council of India v. A.K. Balaji (2018) 5 SCC 379.
[4] Tomorrow Sales Agency Private Limited v. SBS Holdings, INC. And Ors, FAO(OS)(COMM) No. 59 of 2023.
[5] R(on the application of PACCAR Inc and others) v. Competition Appeal Tribunal and Others, [2023] UKSC 28.
[6] Kasturi v. Uyyamperumal and Others, (2005) 6 SCC 733.
[7] Antony Devaraj v. Aralvaimozhi (Kurusadi) Devasahayam Mount Oor and Thuya Viagula, Annai Church rep by the Trustee, 2004 (2) C.T.C. 183.
[8] Mahadeva Rice & Oil Mills v. Chennimalai Gounder, AIR 1968 Mad. 287.
[9] Replevin, Black’s Law Dictionary (10th ed. 2014).
[10] Arkin v. Borchard Lines, [2005] EWCA Civ 655.
[11] Chapelgate Credit Opportunity Master Fund Ltd v Money [2020] EWCA Civ 246, [2020] 1 WLR 1751
by Zen Webnet | Oct 7, 2023 | Blog
Article by Samridh Ahuja
‘Hermès of Paris’ or ‘Hermès’ has been consistently ranked as the world’s most valuable luxury brand in different valuation and ranking studies published by leading consultancies.
According to global brand valuation firm Interbrand, Hermès came in 23rd amongst the Best Global Brands 2022 with a brand valuation of USD 27.4 billion.[1]
The best example to demonstrate the popularity of Hermès products is a ‘Birkin’ bag. The resale value of a Birkin bag can be as high as 80-90% of its original retail price, according to luxury reseller The RealReal. This means that owning a Birkin bag can actually be a profitable investment if they are bought with a long-term view in mind.
In 2008, Hermès launched in India, with its flagship stores each in Mumbai and New Delhi.
Being a luxury brand like Hermès in India comes with many hurdles and challenges when there exists rampant infringement owing to presence of various counterfeits in the Indian Market.
HERMÈS v. CRIMZON
In a recent case, Hermès International filed a suit in the Hon’ble Delhi High Court against Crimzon Fashion Accessories Private Limited [2] alleging trademark infringement, against Crimzon Fashion Accessories Private Limited for using a deceptively similar mark.
In the suit for permanent injunction, Hermès claimed that Crimzon had infringing listings on its website using Hermès’ “” mark. It was further submitted that Hermès is a ‘well-known’ brand with stores set up in Mumbai and Delhi where the products of the plaintiff are displayed with their famous “H” / “” mark. On December 23, 2022, the Hon’ble Delhi High Court permanently restrained Crimzon Fashion from using the mark and directed it to remove infringing listings from its website. However, the issue of “whether ‘H’ is a well-known mark” was left undecided.
THE FIVE FACTOR TEST:
As cited under Section 11(6) of The Trade Marks Act, 1999, the Trade Marks law sets out five factors which are to be taken into consideration while determining whether a mark is a well-known trademark in India:
- The knowledge or recognition of that trademark in the relevant section of the public including knowledge in India obtained as a result of the promotion of the trademark – The Counsel for Hermès submitted that products bearing the trademark are displayed at the stores in Mumbai & Delhi, revenue is generated by sales, and articles & reviews are published about the products bearing the mark by several well-known magazines such as Vogue, Harpar Bazaar etc.
- The duration, extent and geographical area of any use of that trademark – The Counsel for Hermès submitted that “H” / “” mark had trans-border reputation due to extensive use and promotion, since 1997. Several events conducted in India where the products bearing the mark were showcased. Several celebrities have also been using the products bearing the trademark in India.
- The duration, extent and geographical area of any promotion of the trademark, including advertising or publicity and presentation, at fairs or exhibitions of the goods or services to which the trademark applies- The Counsel for Hermès submitted that the plaintiff has been promoting its products bearing the “H” / “” extensively and continuously since 1997 including international magazines, websites & publications, published product catalogues, in-store advertising etc.
- The duration and geographical area of any registration of or any application for registration of that trademark under this Act to the extent they reflect the use or recognition of the trade mark- The Counsel for Hermès submitted that Hermès has filed for and obtained registration of the trademark in India & in over 93 countries such as France, Canada, Switzerland, Singapore, Australia, the UAE etc.
- The record of successful enforcement of the rights in that trademark; in particular, the extent to which the trade mark has been recognized as a well-known trade mark by any court or Registrar under that record- The Counsel for Hermès submitted that Hermès has been active in protecting & enforcing its rights against third parties including obtaining injunction orders before the German courts & obtaining undertakings from third parties.
In addition to above, the Counsel for Hermès also submitted that – “relevant section of the public” must be interpreted to mean the relevant section of the public where goods in question are intended to cater i.e. the fashion industry in the present case.
THE VERDICT
The Hon’ble Delhi High Court conquered with the submissions made by the Counsel for Hermès and agreed that the Five Factor Test was indeed satisfied and therefore declared the stylized logo , as a well-known trade mark under Section 2(z) (g) of the Trade Marks Act, 1999 vide its judgement dated February 8, 2023.
[1] Best Global Brands 2022, Interbrand, also available at https://interbrand.com/best-global-brands/hermes/
[2]HERMES INTERNATIONAL & ANR. V. CRIMZON FASHION ACCESSORIES PRIVATE LIMITED, 2023/DHC/000961.
by Zen Webnet | Jul 20, 2022 | Blog
In terms of existing provision of the Foreign Exchange Management Act, 1999 (‘FEMA’), Indian Rupee is not a freely convertible currency.
The Reserve Bank of India (RBI) vide Circular No. 10 dated July 11, 2022, has permitted international trade invoices and payments and settlements of exports/import to be made in Indian Rupees (INR) for encouraging trade as under:
- Indian importers shall now make payments in Indian Rupees, to be credited to the Special Indian Rupee Vostro Account of the correspondent bank of the partner country.
- In case of exports, Indian exporters shall be paid the export proceeds in INR from the balances in the partner country’s designated Vostro account.
The Circular has laid down the mechanism cross border trade transactions in INR, which is described as under:
- The export/import undertaken and settled shall be subject to usual documentation and reporting requirements. Letter of Credit (LC) and other trade related documentation to be decided mutually between banks of the partner trading countries under the overall framework of Uniform Customs and Practice for Documentary Credits (UCPDC) and incoterms.
- Indian exporters can also receive advance payment against exports from overseas importers in Indian rupees. Before allowing any receipt of such advance payment, Indian Banks shall ensure that available funds in accounts are first used towards payment obligations arising out of already executed export orders / export payments in the pipeline.
- In order to ensure that the advance is released only as per the instructions of the overseas importer, the Indian bank maintaining the Special Vostro account of its correspondent bank, shall verify the claim of the exporter with the advice received from the correspondent bank before releasing the advance.
- Facility of ‘Set-off’ of export receivables against import payables in respect of the same overseas buyer and supplier allowed subject to specified conditions.
- Issue of Bank Guarantee for trade transactions, undertaken through such arrangement is permitted subject to adherence to provisions under FEMA read with the updated Notifications.
- Rupee surplus balance held may be used for permissible capital and current account transactions.
- Reporting of cross-border transactions required to be done in terms of the guidelines under FEMA.
- Bank of a partner country can approach an Authorized Dealers (‘AD’) bank in India for opening of Special INR VOSTRO account. AD bank shall seek approval from the RBI with details of the arrangement. AD bank maintaining the special Vostro Account shall ensure that the correspondent bank is not from a country or jurisdiction in the updated Financial Action Task Force(‘FATF’), Public Statement on High Risk and Non-Co-operative Jurisdictions on which FATF has called for counter measures.
