@JUDGMENTTAG-ORDER
S. Rajeswaran, J.@mdashThis application has been filed for an order of interim Injunction restraining the respondent, their men, agents, servants and any one claiming under them and acting on their behalf from in any way marketing the EWT, LW 52, Wind Turbines and other future models of EWT Wind Turbine models with a rated capacity of 750 KW to 900 KW directly, or through any other person in any manner whatsoever in India pending disposal of the arbitral proceedings to decide the disputes between, the parties under the Memorandum of Understanding (hereinafter called ''MoU'') dated 4.2.2004.
2. The brief facts are as follows:
The applicant company and the respondent entered into a Memorandum of Understanding (hereinafter called ''the MoU'') dated 4.2.2004 at Chennai. The applicant required Wind Turbines with the capacity in a range of 600 to 900 KW for its various projects in India- The respondent represented that they would be in a position to comply with the supply of such requirement and was ready to appoint the applicant as respondent''s exclusive licensee in India. As per the terms of. the said MoU, the respondent, agreed to execute an exclusive license agreement in favour of the applicant with exclusivity clause. According to the applicant the respondent has been guilty of defaults and obligations which are fundamental and basic in nature. The respondent committed breach of Clause 5.2, 3,3 of the MoU and this was intimated to the respondent by the applicant. But by legal notice dated 9.8.2005 the respondent raised a contention that the MoU dated 4.2.2004 shall be ipso facto terminated with immediate effect. Thus dispute arose between the parties and as per Clause 11.2 of the MoU, the disputes will be referred and solved preferably through mediation or arbitration applicable in India. The applicant has already taken steps to appoint an arbitrator and in the meanwhile they filed the above application u/s 9 of the Act, 1996 for the-above said relief. The reason for filing this application is that the respondent is attempting to market the Wind Turbine by themselves directly and also through others making use of the spade work done by the applicant.
4. The respondent entered appearance and filed their counter affidavit. It is stated in the counter that the MoU dated 4.2.2004 is only an agreement to enter into a further agreement of licence and as per Clause 12.1 of the MoU the period of entering into the proposed licensed agreement has already expired. It is further stated that the MoU was already terminated as early as 9.9.2005 and a& per Clause 7 of the MoU if the termination is without real cause, then damages would be contemplated. It is further stated that it is the applicant who is guilty of fundamental breach and in such circumstances, there is no prima facie case established by the applicant.
5. Heard Mr. T.V. Ramanujan. the learned Senior counsel for the applicant and the learned Counsel for the respondent. I have also perused the documents filed and the judgment referred to by them in support of their submissions.
6. It is not in dispute that the MoU dated 4.2.2004 is the basis for filing the above application. Clause 4.1 of the MoU makes it very clear that parties will enter into the proposed licence agreement subject to both the parties fulfilling their respective obligations. Therefore it is very clear that the MoU is. nothing but an agreement to enter into a future agreement, i.e., the proposed license agreement. In so many clauses in the agreement it was clearly referred that the proposed license agreement shall have to be entered, into on the basis of the MoU. In fact Clause 4.12 of the MoU makes it specifically clear that for the avoidance of doubt, this MoU is not a license agreement and does not grant a, license or any other rights to the applicant and any reference to the license agreement in the MoU is a reference to the proposed license agreement which will be entered into between the parties on fulfilling of the applicant''s obligation of successful implementation of pilot project. Clause 7 deals with default, termination and assignment and as per Clause 7.1 the. termination clause should not be abused without real cause and if it is abused damages would be levied. Clause 11.2 contemplates mediation and arbitration to solve the disputes.
7. A close reading of the entire MoU will make it very clear that it is not a concluded contract and it is only an agreement to enter into a proposed license agreement.
8. In
9. No doubt both parties are accusing each other for the breach of the fundamental clauses of the MoU. If that being so, as per Clause 7.1, the party which abused the termination clause without the real cause is liable for damages.
10. It is admitted by both the parties that steps have been already taken for the appointment of an arbitrator invoking Clause 11.2 of the MoU. Therefore the parties shall approach the arbitral tribunal for resolving the dispute. In the meantime, the prayer as asked for in this application cannot be granted for the reasons that the MoU is not a concluded contract and the balance of convenience is not in favour of the applicant.
11. Therefore I do not find any merits in the Original Application and consequently the same is dismissed. No costs.
