Kinetic Green Energy and Power Solutions Limited v. Saera Electric Auto Limited
Background
Kinetic Green and Saera Electric Auto had entered into manufacturing, supply-distribution and IP agreements under which Saera was to exclusively manufacture vehicles for Kinetic, with non-compete obligations. A dispute arose after Saera began manufacturing and selling its own "Mayuri" branded three-wheelers, which Kinetic said breached the exclusivity clause. Kinetic obtained an interim injunction from the Commercial Court restraining Saera from making or selling the Mayuri vehicles and from launching new products, but on Saera's appeal, the High Court of Karnataka stayed that injunction, finding that the joint venture had never really "taken off" and that Saera had been selling some of these vehicles since 2023.
Decision Breakdown
At the hearing before the Supreme Court, both sides agreed to resolve their dispute through arbitration and jointly proposed Justice R.V. Raveendran (a former Supreme Court judge) as sole arbitrator instead of the three-member tribunal originally contemplated. The Court appointed him as sole arbitrator, set aside/modified both the Commercial Court's and the High Court's orders, and directed that Saera would not manufacture or launch the specific vehicles described in the agreement (modifying the High Court's broader restriction) until the arbitrator decides any interim-relief application filed under Section 17 of the Arbitration Act. The Court made clear the arbitrator should decide that application uninfluenced by the observations in the lower court orders.
Lesson Learnt
When commercial parties in an arbitration-bound contract are willing to agree on a sole arbitrator, courts will readily facilitate that agreement and let the arbitral tribunal itself take over interim relief, rather than continuing to litigate stay applications through multiple court levels.