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Introduction

In Utracon Corporation Pte Ltd v. Ucon PT Structural System Pvt. Ltd. & Ors., CS(COMM) 661/2024, the Delhi High Court (Purushaindra Kumar Kaurav, J.) held on 28 October 2026 that, prima facie, a licensor’s dispute with its ex-licensee over post-expiry use of the UTRACON marks falls within the arbitration clause in their Licence Agreement and is essentially in personam, not ex facie non-arbitrable. It allowed the ex-licensee’s application under Section 8 of the Arbitration and Conciliation Act, 1996 (“A&C Act”) and referred the parties to arbitration.

Facts of the Case

Utracon Corporation, a Singapore company, claims to have adopted “UTRACON” in 1998 and to be its registered proprietor in India in Class 37 from 14 August 2012. Defendant No. 1 was incorporated in Chennai in 2004 as its wholly owned subsidiary. According to Defendant No. 1, on 22 March 2012 a Sale of Shares Agreement (“SOS Agreement”) was signed, under which Defendant No. 2 bought 90% of its shares, and a Licence Agreement allowed it to use the marks for ten years against royalty. The licence expired, per the plaintiff, on 31 March 2021. The plaintiff relies on Clauses 3.5, 3.6 and 8.4, which it says oblige Defendant No. 1 to stop using the marks after the term and change its corporate name. Clause 14 of the Licence Agreement provided for arbitration under SIAC Rules with Singapore as the venue; Clause 18 of the SOS Agreement, for arbitration in Chennai under the A&C Act.

In May 2022, Defendant No. 1 asserted that the licence had been extended and sought five more years; the plaintiff denies any extension. According to the plaintiff, Defendants No. 5 to 7 are affiliated or sister concerns using “UTRACON” in their names. Defendants No. 2 to 4 are directors of Defendant No. 1, and Defendant No. 8 is a domain registrar and pro forma party. After a cease-and-desist notice of 30 May 2024, Defendant No. 1 invoked arbitration under Clause 14.1 on 30 July 2024 but on 6 August 2024 recalled that notice insofar as it invoked arbitration under the Licence Agreement. On 7 August 2024, the Court granted the plaintiff an ex parte ad interim injunction against Defendants No. 1 to 7.

The Madras High Court dismissed Defendant No. 1’s Section 9 petition on 9 October 2024, clarifying on 2 April 2025 that its observations would not affect or influence the arbitration. Defendant No. 1 then invoked Clause 18 of the SOS Agreement and petitioned the Supreme Court under Section 11. On 30 April 2026, the Supreme Court appointed a sole arbitrator for disputes arising out of the SOS Agreement, without prejudice to the suit.

Argument in Favour

Defendant No. 1, the applicant, argued that the two agreements formed one composite transaction. Relying on Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1, and Magma Leasing & Finance Ltd. v. Potluri Madhavilata, (2009) 10 SCC 103, among others, it said Section 8 permits only a prima facie inquiry and that the clause survives expiry. It argued that infringement labels do not change the contractual foundation (Ameet Lalchand Shah v. Rishabh Enterprises, (2018) 15 SCC 678; Cox and Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1), and that, as no prayer concerned grant, registration or cancellation of a mark, the action was in personam (Liberty Footwear Co. v. Liberty International, 2023 SCC OnLine Del 83; Hero Electric Vehicles (P) Ltd. v. Lectro E-Mobility (P) Ltd., 2021 SCC OnLine Del 1058; Sanjay Mehra v. Sharad Mehra, 2023 SCC OnLine Del 2205). Citing Cox and Kings, it said impleading affiliates could not defeat arbitration.

Argument Against

The plaintiff argued that Defendants No. 2 to 8 had no arbitration agreement with it and faced distinct causes of action. It said infringement and passing off affect rights in rem and must be decided by a competent court, relying on J. Nithyanandham v. M/s M.V.S. Gramany & Sons, 2026 SCC OnLine Mad 2281. It argued that the suit could not be bifurcated (Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, (2003) 5 SCC 531; Tirupati Vancom Pvt. Ltd. v. James Glendye & Co. Pvt. Ltd., 2026 SCC OnLine Cal 1598), that the two arbitration clauses conflicted, and that Defendant No. 1 had selectively relied on the SOS Agreement to invoke Section 8 and avoid Section 45 scrutiny of the Licence Agreement. It added that Licence Agreement claims were time-barred.

Court’s Decision

Section 8(1), as amended by Act 3 of 2016, requires reference unless, prima facie, no valid arbitration agreement exists. The Court noted that the Supreme Court treats this as mandatory and the review as prima facie: Vidya Drolia summed up the approach as “when in doubt, do refer”, and K. Mangayarkarasi v. N.J. Sundaresan, (2025) 8 SCC 299, which also arose from a commercial suit for an injunction against use of trade marks, held that the court has no discretion to refuse reference once an arbitration agreement covers the subject matter.

Whether an ex-licensee may keep using the marks, and whether it complied with Clauses 3.5, 3.6 and 8.4, is plainly a dispute regarding the Licence Agreement, whose Clause 14 requires arbitration. Recalling the notice was no waiver, and the plaintiff could not rely on the Licence Agreement while avoiding its dispute clause. Under Magma Leasing, expiry does not make the clause inoperative, and limitation questions turning on disputed facts were left to the tribunal, the claims not being ex facie time-barred. Neither the Supreme Court’s order of 30 April 2026, which concerned only the SOS Agreement, nor the Madras High Court’s dismissal of the Section 9 petition precluded the reference.

Clause 14.1 names Singapore as the venue. If the arbitration is seated outside India, the reference would strictly fall under Section 45 rather than Section 8, but the plaintiff had not shown the agreement to be, even prima facie, null and void, inoperative or incapable of being performed. Since citing a wrong provision does not deprive a court of power it otherwise has (N. Mani v. Sangeetha Theatres, (2004) 12 SCC 278), the outcome would be the same under either Section. The Court expressed no opinion on the seat.

Vidya Drolia held that the labels in rem and in personam may not by themselves be decisive, that a claim for infringement of copyright against a particular person is arbitrable, and that grant and registration of marks, being sovereign functions, are not. The Court held that Section 134 of the Trade Marks Act, 1999 and Section 62 of the Copyright Act, 1957 merely specify the court within the hierarchy of civil courts for infringement suits, create no special forum and do not prohibit arbitration. It noted that this Court had allowed Section 8 applications in suits of this kind in Liberty Footwear, Hero Electric and Sanjay Mehra. J. Nithyanandham did not help the plaintiff, since the passage relied on itself treats the proceedings as in personam, and the Court was bound by Vidya Drolia and K. Mangayarkarasi.

The Court found that the plaint, read as a whole, seeks no grant, registration, rectification or cancellation of a mark, and that its reliefs are directed against the defendants, so the dispute is essentially in personam. The declaration of well-known status sought is not the foundation of the suit, and the plaintiff remains free to seek that status before the Registrar of Trade Marks under Rule 124 of the Trade Marks Rules, 2017.

Amended Section 8(1) covers persons “claiming through or under” a party, and Cox and Kings left it to the tribunal to decide whether a non-signatory is bound. On the plaintiff’s own pleadings, Defendants No. 1 to 7 are a “single economic unit”, and Defendants No. 2 to 7 are prima facie persons claiming through or under Defendant No. 1. The bifurcation concern in Sukanya Holdings and Tirupati Vancom therefore did not arise, the entire subject matter being referred; whether Defendants No. 2 to 7 are bound is for the tribunal.

Conclusion

The Delhi High Court allowed I.A. 41705/2024, referred the parties to arbitration in accordance with Clause 14 of the Licence Agreement dated 22 March 2012, and disposed of the suit with all pending applications. Its observations are prima facie, confined to the application, and express no opinion on the merits.

The Court treated a dispute between identified parties over contractual use of a trade mark as essentially in personam and not ex facie non-arbitrable, even though pleaded as infringement and passing off. It held that a plaintiff bound by an arbitration agreement cannot defeat it by impleading affiliates and directors of the other contracting party, while leaving to the tribunal whether they are bound, and noted that an arbitral tribunal cannot grant, register, rectify or invalidate a trade mark so as to bind the world at large.