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    ADR Problem Arbitration

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    MitheleshDevaraj
    Clemanti Services PLC, a UK-based software company, entered into an agreement with Dense Bull India Ltd to provide automated trading software. However, a new Indian law restricted sharing sensitive data with foreign entities. Dense was accused of violating this law, while it argued the data was not sensitive. Clemanti initiated arbitration against Dense for alleged breach of contract. Key issues for the arbitration panel include whether the dispute is arbitrable, the validity of the arbitration agreement, and whether Dense breached the agreement.

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    ADR Problem Arbitration

    Uploaded by

    MitheleshDevaraj
    82 views4 pages
    Clemanti Services PLC, a UK-based software company, entered into an agreement with Dense Bull India Ltd to provide automated trading software. However, a new Indian law restricted sharing sensitive data with foreign entities. Dense was accused of violating this law, while it argued the data was not sensitive. Clemanti initiated arbitration against Dense for alleged breach of contract. Key issues for the arbitration panel include whether the dispute is arbitrable, the validity of the arbitration agreement, and whether Dense breached the agreement.

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    Arbitration clauses

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    Clemanti Services PLC, a UK-based software company, entered into an agreement with Dense Bull India Ltd to provide automated trading software. However, a new Indian law restricted sharing sensitive data with foreign entities. Dense was accused of violating this law, while it argued the data was not sensitive. Clemanti initiated arbitration against Dense for alleged breach of contract. Key issues for the arbitration panel include whether the dispute is arbitrable, the validity of the arbitration agreement, and whether Dense breached the agreement.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    82 views4 pages

    ADR Problem Arbitration

    Uploaded by

    MitheleshDevaraj
    Clemanti Services PLC, a UK-based software company, entered into an agreement with Dense Bull India Ltd to provide automated trading software. However, a new Indian law restricted sharing sensitive data with foreign entities. Dense was accused of violating this law, while it argued the data was not sensitive. Clemanti initiated arbitration against Dense for alleged breach of contract. Key issues for the arbitration panel include whether the dispute is arbitrable, the validity of the arbitration agreement, and whether Dense breached the agreement.

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    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Tamil

    Nadu National Law School


    Alternative Dispute Resolution

    Practical Examination Arbitration

    Clemanti Services PLC
    Vs.
    Dense Bull India Ltd.



    1. Clemanti Services PLC (hereinafter, Clemanti) is a London based software provider
    for trading of securities and is incorporated in the United Kingdom. Dense Bull India
    Ltd. (hereinafter, Dense) is a public company incorporated in Indin that provides
    consultancy and brokerage services for trading of securities at the National Stock
    Exchange Indin.

    2. In order to modernize its trading wing, Dense seeks to deploy automated software
    that recommends and analyses securities for effective trading at the National Stock
    Exchange, based on the data entered by the user. Pursuant to this, Dense enters into
    a license agreement with Clemanti (hereinafter, the Agreement) whereby Clemanti
    deploys the automated software on SAAS platform (hosting it on its servers) for Dense
    to access the software. In return, Dense agrees to pay a monthly subscription fee of
    USD 6,000, excluding service tax. The software is also capable of initiating purchases
    of certain eligible securities.

    3. The relevant portions of the Agreement are reproduced below. Please note that
    Clemanti is the Licensor whereas Dense is the Licensee for these purposes:

    Clause 4 Grant of License:
    The Licensor hereby agrees to grant a limited, exclusive, non
    transferrable license to the Licensee to access and use the
    Software according to the terms of this Agreement.

    Clause 12 Usage

    12. 1 The Licensee agrees to deploy and use the software only
    for the purposes and to the extent permitted by law. At no point
    in time shall the Licensee attempt to access or use the Software
    directly or indirectly for any purposes that is illegal or contrary
    to the spirit of law.

    Clause 18 Arbitration

    18.1 The Parties agree that all disputes in relation to this


    Agreement shall be resolved by Arbitration. The Arbitral
    Tribunal shall comprise of two arbitrators where each Party is
    entitled to nominated one arbitrator according to the law. The
    Arbitration shall be conducted at Trichy and in English. In the
    event of conflict between the two arbitrators, the decision of the
    arbitrator appointed by the Claimant shall be final and binding.

    18.2 This agreement shall be governed by the Laws of England.



    4. After six months of the date of execution of the aforesaid Agreement, Indin enacts the
    National Security (Protection of Sensitive Data) Act, whereby transfer of all sensitive
    data that may impact matters of national security and economy is restricted. This Act
    prohibits every Indin national from disclosing any sensitive data pertaining to Indian
    economic affairs to any citizen (individual or corporate) who is a foreigner.

    5. In light of the Act, Dense conducts a board meeting and takes a call that using the
    software services provided by Clemanti does not constitute any illegality under the
    Act. The Board further resolves to challenge the constitutionality of the relevant
    provisions of the Act.

    6. Dense receives summons from the Enforcement Directorate of Indin to wind up all of
    its activities stating that by entering certain data into the automated software, it has
    revealed important data about trading activities at the National Stock Exchange to an
    English Company thereby violating provisions of the National Security (Protection of
    Sensitive Data) Act. Aggrieved, Dense approaches the High Court of Depaca, Indin
    seeking a Writ prohibiting interference by the Enforcement Directorate. Dense also
    alleges that the accusation of the Enforcement Directorate is frivolous and baseless
    since data that that it enters in the software (provided by Clemanti) is not sensitive
    data and has no bearing on impacting national security or economy.

    7. Clemanti learns of these developments and delivers a notice of Arbitration upon
    Dense alleging the breach of Clause 12 of the Agreement. Clemanti claims a damage
    of USD 20,000 on account of such breach as it alleges that using the software for illegal
    purposes by Dense has caused it reputational damage. In the notice of arbitration,
    Clemanti appoints Mr. Mohammed T. Azaad as it arbitrator.

    8. Dense replies to the notice of arbitration reaffirming that it has not used the Software
    for any illegal purposes. Dense further claims that 1) the issue is not arbitrable
    according to the applicable laws since it concerns public interest; and 2) the arbitration
    agreement, particularly Clause 18, is not valid as per the applicable law. In this regard,
    Dense refuses to enter into arbitration with Clemanti on these matters.

    9. Clemanti approaches the High Court of Depaca, Indin and obtains and order from the
    court directing Dense to enter arbitration and settle all of its issues, including those
    relating to validity and arbitrablity, before the competent arbitral panel. Complying
    with this order, Dense appoints Ms. Ruchi T. Singh as its arbitrator.

    10. The arbitral panel now comprises of Mr. Mohammed Azaad and Ms. Ruchi T. Singh.
    Given these facts, you are expected to frame relevant legal issues, prepare arguments
    and present it before the arbitrators. The moot arbitrators are expected to question
    the lawyers/parties on relevant issues, obtain substantial arguments and author an
    enforceable award deciding all of the questions of law and thereby resolving the
    dispute on merits.

    11. The laws of Indin are pari materia with the laws of India. This is a hypothetical problem
    and bears no implication in reality. It is only for educational use. No suggestions or
    viewpoint of the author pertaining to real scenarios may be derived using this
    hypothetical problem as the basis.

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