India

Introduction Today, the world has become a global village, at least in the economic sense. In this increasingly interconnected global economy, corporate distress rarely respects national borders. It is not unknown that every country has multinational enterprises that are operating across various jurisdictions, which inevitably requires that there should be an insolvency regime that cooperates internationally so that there can be preservation of the value of the assets and at the same time there is equitable treatment of the creditor, thereby leading to efficient resolution of cross-border insolvency. The Insolvency and Bankruptcy Code, 2016 (“IBC”) revitalized the domestic insolvency resolution as soon as it was brought into action. Prior to the IBC, the condition of the distressed entities was not so good because there was no consolidated law, but after the arrival of the IBC regime, the resolution process streamlined the insolvency process. While IBC has been appreciated for revitalizing domestic insolvency resolution, it remains silent on a formal mechanism to recognize and cooperate with foreign insolvency proceedings. This lacuna leaves Indian resolution professionals and foreign stakeholders in a precarious position: India benefits from having its Corporate Insolvency Resolution Processes (“CIRPs”) recognized abroad, such as in the recent decision in Singapore in Re Compuage Infocom Ltd. decision. Yet India itself offers no reciprocal framework to foreign proceedings. Current Legal Framework in India The IBC provides a regime for insolvency and bankruptcy of companies, limited liability partnerships, and individuals. It has the main objective of first doing resolution and then liquidation in the domestic proceedings to preserve the value of the assets and balance the interests of all stakeholders while providing a time-bound framework for resolving insolvency cases. However, it incorporates only two provisions addressing cross-border insolvency in a limited, reciprocal manner: Section 234 -Agreements with foreign countries. “(1) The Central Government may enter into an agreement with the Government of any country outside India for enforcing the provisions of this Code. (2) The Central Government may, by notification in the Official Gazette, direct that the application of provisions of this Code in relation to assets or property of corporate debtor or debtor, including a personal guarantor of a corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal arrangements have been made, shall be subject to such conditions as may be specified.” As per this section, the Indian government can make a bilateral treaty with any other country to help enforce the rules of the IBC in that country. Once such an agreement exists, the government can officially notify that the IBC provisions will apply to the assets of the Indian companies or individuals, which includes debtors or guarantors that are located in that foreign country. However, this will only apply if the country agrees to do the same for the Indian authorities, which in simple terms means reciprocity. Section 235: Letter of request to a country outside India in certain cases. “(1) Notwithstanding anything contained in this Code or any law for the time being in force if, in the course of insolvency resolution process, or liquidation or bankruptcy proceedings, as the case may be, under this Code, the resolution professional, liquidator or bankruptcy trustee, as the case may be, is of the opinion that assets of the corporate debtor or debtor, including a personal guarantor of a corporate debtor, are situated in a country outside India with which reciprocal arrangements have been made under section 234, he may make an application to the Adjudicating Authority that evidence or action relating to such assets is required in connection with such process or proceeding. (2) The Adjudicating Authority on receipt of an application under sub-section (1) and, on being satisfied that evidence or action relating to assets under sub-section (1) is required in connection with insolvency resolution process or liquidation or bankruptcy proceeding, may issue a letter of request to a court or an authority of such country competent to deal with such request.” In order to understand what Section 235 says, let's take an example wherein a company undergoing insolvency in India owns a building in Dubai. Now, if India and the UAE have a reciprocal arrangement under Section 234, then the Resolution Professional can apply in NCLT, asking to take action on the Dubai property, and if the tribunal agrees then it can send a formal request to UAE court to take the necessary action, like freezing or selling of the assets. However, even after almost a decade of IBC, no reciprocal agreements under Sections 234–235 have been concluded. Thus, these provisions remain inoperative. Further, in the absence of formal cross-border insolvency legislation, the Indian courts have only way of enforcing an insolvency decree is via section 13 of the Code of Civil Procedure for the recognition and the enforcement of the foreign judgment that relies on the fact that it satisfies the provisions therein. Why Recognition Without Reciprocity Is a Global Trend? The answer to the question as to why recognition without reciprocity is becoming a global trend is simple and identifiable; this is the era of globalized commerce, wherein businesses operate across jurisdictions and the corporate debtors hold assets and owe obligations not just in one country. Consequently, this gave rise to the need for national insolvency regimes to address the complexity of cross-border insolvency in a manner that is coordinated, efficient, and equitable. We have to understand that at the heart of the global trend lies the principle of modified universalism, which balances the need for a single, centralized insolvency process with the sovereignty and interests of local jurisdictions. This philosophy is embodied in the UNCITRAL Model Law on Cross-Border Insolvency (1997), which has now been adopted, with or without modification, in over 60 states and 63 jurisdictions, including the United States, United Kingdom, Singapore, Australia, Japan, and other multiple jurisdictions, enabling smooth cross-border insolvency. This model law is intentionally neutral on reciprocity, which means that it does not require the adopting countries to condition their recognition of the foreign insolvency proceedings on whether the initiating country would do the same or not. This is basically done with the approach that encourages open coordination and recognizes that the benefits of facilitating the efficient cross-border resolution outweigh the potential cost of asymmetry. However, it must also be recognized that despite the inclusive spirit of the model law there are few jurisdictions, such as Mexico, South Africa, and Romania, that have inserted reciprocity clauses that condition recognition on mutual treatment. These clauses have however been widely criticized for being counterproductive. As discussed in India’s 2018 Insolvency Law Committee (ILC) report and reinforced by comparative academic commentary, reciprocity creates regulatory fragmentation, slows down the legal process, and undermines the very goal of harmonization. Now, considering the Indian perspective, Sections 234 and 235 of the IBC have proven to be a bottleneck. It is to be noted that as of mid-2025, India has not signed any reciprocal agreement which renders the provisions ineffective in practice. The absence of an enacted cross-border insolvency law ultimately means that India remains a passive recipient of the recognition abroad while offering no equivalent legal certainty to the foreign investors or the insolvency practitioners operating in India. Considering the reasons for the recognition without reciprocity, there are three key drivers: 1. Value Preservation and Economic Efficiency: The individuals in these proceedings are obviously commercially driven, which ultimately makes their goal to be the preservation of the value of the assets and at the same time be economically efficient. It is no secret that multiple jurisdictions and local courts will lead to delay in the recognition and can lead to a “race to the courthouse,” where local creditors attempt to seize assets before foreign proceedings are acknowledged. 2. Enhancing Global Credibility and Investment Climate: Jurisdictions that extend recognition to foreign proceedings build their reputation as legally mature, creditor-friendly, and cooperative. 3. Judicial Predictability and Legal Certainty: A harmonized legal regime based on objective criteria simplifies litigation, reduces costs, and enhances procedural fairness. The Model Law’s framework (Articles 15–17) for recognition and relief provides a uniform path forward that is missing from India’s current ad hoc and discretionary mechanisms. The Re Camouflage Case and Its Implications Recently, Singapore High Court’s decision in Re Compuage Infocom Ltd [2025] SGHC 49 marked a moment in cross-border insolvency jurisprudence involving India. For the first time, a Corporate Insolvency Resolution Process was initiated under India’s IBC regime which was formally recognized as a “foreign main proceeding” in a jurisdiction that had adopted the UNCITRAL Model Law on Cross-Border Insolvency. Facts of the case were simple: Compuage Infocom Ltd (CIL), an Indian company, was undergoing CIRP under NCLT Mumbai and the appointed Resolution Professional, Mr. Gajesh Jain, sought recognition of the Indian proceedings in Singapore to access and administer assets held there. The Singapore High Court undertook a detailed examination of the criteria under the Model Law, including the definition of “foreign proceeding,” and considered the status of NCLT as a foreign court and whether India was CIL’s Center of Main Interest. The court of Singapore then concluded affirmatively on all counts that is a. CIRP was collective, judicial, and reorganization-focused; b. NCLT was deemed a competent adjudicatory body; and c. India was the COMI based on operational and managerial control. With this, RP got control over the assets that were situated in Singapore, but it imposed a moratorium on the local enforcement actions. The court withheld the automatic repartition, emphasizing the need to protect local creditors. With this, there was the exercise of modified universalism, which cooperated with the other jurisdiction without sacrificing local interest, which is located and reflected in the heart of the Model Law’s philosophy. It also exposed India’s policy gap: Singapore recognized Indian proceedings, yet India has no reciprocal framework to do the same, owing to its reliance on outdated provisions under Sections 234 and 235 of the IBC, which are dependent on bilateral treaties that have not materialized. With this comes practical and reputational consequences for India which are as follows: a. First, Indian RPs can benefit from global recognition, but foreign insolvency professionals cannot access Indian jurisdictions with equivalent clarity or certainty. b. Second, while the ruling enhances confidence in India’s domestic procedures, it may also pressure India to adopt the Draft Part Z based on the Model Law, currently pending legislative action. Missed Opportunities in Indian Jurisprudence It is undeniable that the insolvency regime in India has improved significantly, but with regard to the cross-border insolvency regime, it still lacks, and here are the missed opportunities in Indian jurisprudence: a. The insolvency bankruptcy code was enacted in 2016, and soon after that, the need for cross-border was realized, and therefore, the Insolvency Law Committee recommended Draft Part Z’s inclusion to address the complexities of insolvency cases involving assets and creditors across different countries. Although Draft Part Z promised structured recognition of both foreign main and non-main proceedings, automatic moratoria, and clear standards for cooperation, it remains unnotified nearly seven years on, forcing stakeholders into ad hoc bilateral protocols rather than a uniform statutory regime. b. Second, the Jet Airways case, which depicts the judicial hesitation to embrace cross-border coordination. In this case the Mumbai NCLT initially rejected the Dutch trustee’s recognition, but the NCLAT partially rectified this by admitting the trustee “without voting rights” and sanctioning a bespoke Cross-Border Insolvency Protocol . This case highlighted the potential for cooperation and the risk that, absent clear law, courts will default to a territorialist posture, delaying asset pooling and value maximization. c. Third, in Videocon Industries, the NCLT sought to “lift the veil” over four foreign subsidiaries to include their assets, but the NCLAT stayed that order and, in effect, excluded significant overseas value from the resolution pool. Now this happens because there is no explicit statutory authority to administer. d. Fourth, India’s reliance on Sections 234–235 IBC (reciprocal treaties and letters of request) continues to be sterile, as there have been no bilateral agreements concluded, rendering these provisions dormant. India’s Draft Framework and Why It Remains Stalled India’s Draft cross-border insolvency framework is based on the UNCITRAL Model Law and remains inexplicably stalled despite growing global integration and increased foreign investment. The delay is not just about the bureaucratic sluggishness; it highlights other issues such as India's persistent consciousness towards relinquishing control in the transnational insolvency matters. The government has hesitated to implement it, citing concerns over judicial discretion, regulatory overlap, and potential misuse. However, one major reason is the fear of giving too much power to the foreign courts in matters involving Indian creditors and assets. Also, the Draft lacks certain clarity on the reciprocity that triggers the uneasiness about enforcing the Indian judgments abroad which might lead to the gap between the global north and global south as well. The Indian government might also be focused upon the sovereign rights that it can realize while keeping the insolvency regime to itself, particularly safeguarding the public interest. Without stronger political will and trust in institutional mechanisms, India risks remaining an outlier in global insolvency cooperation, which is repulsive to investor confidence and cross-border trade. Conclusion The global trend toward recognition without reciprocity reflects an international consensus that efficient cross-border insolvency mechanisms are relevant to economic stability, investor protection, and legal predictability. By continuing to insist on reciprocity and bilateral treaties, India risks isolating itself from this cooperative framework because legislative inertia not only hampers Indian creditors’ ability to recover abroad but also disincentivizes foreign participation in Indian restructurings. It is, therefore, essential that India align itself with the Model Law’s principles and become a proactive contributor to the global insolvency architecture. While at the same time protecting the local and the domestic interests of the creditors. Authored by Mr. Vipul Maheshwari, Managing Partner

The Promotion and Regulation of Online Gaming Bill, 2025 was passed by the Parliament on August 21, 2025, and received Presidential assent on August 22, 2025, thereby becoming the Promotion and Regulation of Online Gaming Act, 2025 (“ Online Gaming Act ”). This marks a significant step towards regulating the online gaming sector in India. The Online Gaming Act will come into force once notified by the Ministry of Electronics and Information Technology. While positioning online gaming as one of the most dynamic and fastest-growing segments of the digital and creative economy, the Online Gaming Act simultaneously imposes for a blanket ban on online money gaming. The industry, presently valued at USD 3.7 billion and has been projected to expand to USD 9.1 billion by the year 2029, is expected to undergo significant restructuring, as the prohibition on online money gaming may curtail a large segment of the market.[1] Concerns over online money gaming, including threats to public safety and national security like youth addiction, mental health issues, financial losses that have led to suicide in extreme cases, and the potential abuse of gaming platforms for money laundering or terrorism financing, prompted the introduction of the Online Gaming  Act. Despite being home to an estimated 400-420 million gamers and gaming platforms[2], India presently lacks a uniform regulatory environment, resulting in numerous policy, legal and consumer protection concerns. The Online Gaming Act seeks to establish a comprehensive legal framework for India's online gaming sector by formally recognising e-Sports and online social games, while prohibiting and criminalising online money gaming services in line with constitutional provisions such as Article 21 (Right to Life and Personal Liberty) and Article 47 (Duty of the State to raise the level of nutrition and the standard of living and to improve public health). Key definitions The Online Gaming Act rests on a precise set of definitions, the interpretation of which is crucial to effectively demarcate boundaries and the structure proposed by the legislature. It defines an "Online Game" as any game played on an electronic or digital device and managed through the internet or other technology facilitating electronic communication. This broad definition covers a wide range of digital gaming experiences, irrespective of format or genre, while drawing a clear distinction between "e-Sports", "Online social games", and "online money games." "e-Sports" are defined as online games that form part of multi-sport events, involving organised competition conducted under predefined rules, where outcomes are determined by participants' skills. Importantly, this definition specifically excludes any element of monetary stakes such as betting or wagering. In contrast, an "Online Money Game" has been defined as any digital game that involves a payment or stake (in money or its equivalent) with the expectation of winning a monetary return. Notably, e-Sports are explicitly excluded from this definition. The Online Gaming Act further brings within its ambit all "Persons", a term that extends to include individuals, companies, and foreign entities offering services to Indian users. It is pertinent to note that, until recently, courts and local gaming laws permitted games of skill but forbade games of chance. Once notified into force, all Online Money Games, whether they are skill-based or chance-based will stand completely prohibited. Salient Features of the Online Gaming Act As part of a policy shift that strikes a balance between prohibition, regulation, and promotion, the Online Gaming Act recognises e-Sports, while restricting Online Money Games. It also creates an enabling framework for the government to promote and regulate the industry. Blanket Ban on Online Money Games, Online Money Gaming Services and any related Advertisements The Online Gaming Act provides that no Person shall provide, aid, abet, induce or otherwise facilitate the provision of Online Money Gaming Services. This provision covers not only direct operators, but also third-party intermediaries and facilitators that provide assistance in any shape or form. The prohibition also applies to aiding, abetting, inducing, or otherwise facilitating the making of any advertisement which in any medium of communication, including electronic communication, directly or indirectly invites or induces a person to play or participate in Online Money Games. As per the Online Gaming Act, any information generated, transmitted, received or hosted in any computer resource in relation to an Online Money Gaming Service in contravention of the provisions of the Online Gaming Act will be blocked for access by the public under the Information Technology Act, 2000. Promotion of e-Sports In contrast to its strict stance on Online Money Games, the Online Gaming Act expressly recognizes e-Sports as a legitimate competitive sport. It empowers the Central Government to frame guidelines for the promotion and development of e-Sports which include establishing academies and research centers, implementing incentive schemes for e-Sports innovation and coordinating with state governments and sporting federations. This marks a significant shift in policy, positioning e-Sports as an organized and regulated sector. The official recognition and growth of e-Sports presents tremendous opportunities, opening an emerging market and encouraging investment in sports infrastructure to support its growth, even though the ban on online money games will cause enormous economic losses. Prohibition on Transfer of Funds The Online Gaming Act places restrictions not only on Online Gaming Platforms, but also on financial intermediaries. Banks, financial institutions and any other Person involved in the facilitation of transactions or authorisation of funds pertaining to Online Money Games would all be seen to permit, aid, abet or induce those prohibited activities. Hence, they will be brought directly within the scope of regulatory and penal provisions. Establishment of a Central Authority A cornerstone of the Online Gaming Act provides for the establishment of a central authority to supervise the online gaming industry. In 2023, the Ministry of Electronics and Information technology introduced provisions under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, for the appointment of self-regulatory bodies (“ SRBs ”) to oversee online games. However, no such SRBs have been appointed till date.[3] Under the Online Money Gaming Act, the Central Government is empowered to vest such the Online Gaming Authority (which is yet to be established), or any such pre-existing body so designated, with the responsibility of performing the following functions, namely registering and classifying online games, issuing operating and compliance guidelines, determining whether a game is an online money game, managing complaints, and ensuring compliance in the industry by providing an industry-wide unified and transparent regulatory framework. The establishment of a central authority is a positive development and brings a much-needed consistency to the online gaming space that has been inconsistent to date due to different state level policies. Offences and Penalties Violation of the provisions of the Online Gaming Act will attract strict criminal liability and substantial monetary penalties. A Person who offers any Online Money Gaming Service may face imprisonment of up to 3 (Three) years and/or a fine which may extend to INR 10 million (USD 1,14,611). Further, any Person who makes or causes to make an advertisement in contravention of the provisions of the Online Gaming Act in any media faces imprisonment of up to 2 (Two) years and/or a fine which may extend up to INR 5 million (USD 57,310). Banks, financial institutions or any Person enabling Online Money Games or financial transactions will be subject to imprisonment for a term of up to 3 (Three) years and/or a fine of up to INR 10 million (USD 1,14,611). The Online Gaming Act also provides for harsher penalties for repeat offenders. Companies will also be included in the scope of liability, as every individual who is in charge of, or who is responsible for, the conduct of the company at the time of the offence will also be liable to punishment. According to the Online Gaming Act, anyone who provides an online money gaming service or game, as well as any bank, financial institution, or intermediary that provides funds for such activities, will be deemed guilty of an offence that is both cognisable and non-bailable. This gives the police the authority to register, investigate, and make an arrest without a warrant, with bail being entirely up to the court's discretion. Existing Laws Governing Gaming Prior to the enactment of the Online Gaming Act, India's legal framework on gaming was fragmented and outdated. Gambling is assigned as a state subject in Entries 34 and 62 of the State List, and regulations varied widely on a state-by-state basis, creating ambiguity. The only central law was the Public Gambling Act, 1867 "PGA", which focused on physical gaming houses and was unfit for digital platforms. Although the PGA allowed for games of "mere skill" to be exempt from consideration, with the rise of online gaming, these gaps became stark. States like Nagaland and Sikkim introduced licensing laws for online skill games, but their effect remained territorially limited. Judicial interpretations on key questions, such as the classification of rummy, poker, or fantasy sports remained varied, with different High Courts and the Supreme Court offering divergent rulings on what constituted a game of skill. The interplay between the current state-level gaming laws and the federal framework is still up for debate. However, since online gaming is not limited to a single territorial jurisdiction and by its very nature operates across state borders, it is anticipated that central legislation will prevail guaranteeing consistent regulation and enforcement throughout India. Conclusion Industry stakeholders like the All-India Gaming Federation, E-Gaming Federation, and the Federation of India Fantasy Sports, have raised serious concerns over the blanket ban on online money gaming and warned that such a law, once brought into force, could cause considerable damage to what they claim is a legitimate, job-creating industry. The Online Gaming Act is poised to spark a constitutional showdown in India. By providing for a ban on Online Money Gaming, it intends to change the established jurisprudence on game of skill vs. chance. One will have to wait and watch whether this legislation threatens prominent gaming companies and jeopardizes India's broader fintech industry or if it practically realises the objectives it professes, such as to establish a safe, innovative, and robust online gaming environment. It will be critical for the financial intermediaries like banks and financial institutions to prepare for and implement appropriate checks and balances to ensure they are not implicated in the prohibited activities. Disclaimer: The contents of this article are as on August 23, 2025, and may change subject to further notifications or updates issued by the Government of India. [1] https://www.indiatoday.in/business/story/game-over-for-online-gaming-firms-industry-in-shock-over-proposed-blanket-ban-2773881-2025-08-20#:~:text=India's%20online%20gaming%20market%20is,to%20%249.1%20billion%20by%202029. [2] https://gamingshow.in/gamingindustry.php [3]https://www.hindustantimes.com/india-news/online-gaming-rules-are-not-enforceable-govt-tells-court-101743202910764.html Author: Rahul Deodhar, Partner and Rencie Rodrigues, Associate

The Bombay High Court in Harkisandas Tulsidas Pabari & Anr. v. Rajendra Anandrao Acharya & Ors[1]. exercised its jurisdiction under Section 37 of Arbitration & Conciliation Act, 1996 (“Act”) to dismiss the Arbitration Appeals filed by the Appellants and upheld the Order passed by the Single Judge under Section 34 of the Act which set aside Arbitral Award dated September 21, 2005 (“Impugned Award”) on the grounds that the (i) Arbitrator lacked authorisation to recommence the arbitral proceedings; (ii) Memorandum of Understanding dated July 20, 1994 (“MoU”) did not constitute a concluded contract between the parties and (iii) MoU was impossible of being specifically performed through execution of the Impugned Award. Brief Facts: A MoU was executed between the parties whereunder the Respondents agreed to sell their respective undivided shares, title and interest in the property to the Appellants for a consideration. The Respondents terminated the MoU on account of the Appellants’ failure to pay the balance consideration and breaches of the MoU committed by them. The Appellants referred the disputes under the MoU to a Sole Arbitrator (“Arbitrator”) who passed an arbitral award in favour of the Appellants on April 1, 1998 (“1st Award”). The Bombay High Court (“Court”) set aside the 1st Award on September 28, 1998 on the ground that notice of closure of arbitral proceedings was not given to the Respondents. The Court further sent the original record of the arbitral proceedings back to the Arbitrator and directed the parties to commence the arbitral proceedings afresh with the intervening time being excluded under Section 43(4) of the Act (“Remand Order”). The Appellants approached the same Arbitrator who fixed dates for hearings in the arbitral proceedings. The Respondents objected to the continuation of the arbitral proceedings before the same Arbitrator but the same were rejected by him. The Arbitrator passed the Impugned Award in favour of the Appellants holding that MOU is binding on the parties. Pursuant to a challenge raised by the Respondents under Section 34 of the Act, the Court set aside the Impugned Award. The Appellants challenged the said order in Section 37 of the Act before the Court on the ground that the Single Judge exceeded its jurisdiction under Section 34 of the Act to set aside the Impugned Award. Arguments advanced by the parties concerned:     The Appellants contended that the Single Judge, by acting as an Appellate Authority over the Impugned Award, exceeded its jurisdiction under Section 34 of Act. The terms of the MoU were ignored to hold that there was no concluded contract between the parties and that the MoU could not be specifically performed. The Single Judge erroneously held that there was non-compliance of the provisions of Section 21 of the Act on account of the Appellants’ failure to give notice before proceeding with the arbitral proceedings. It was further contended that the provisions of Section 21 of the Act are not mandatory and that the requirements can be clearly waived. On the other hand, the Respondents contended that the Impugned Award was rightly set aside as the same was passed in ignorance of contractual and statutory provisions. The Impugned Award was either based on no-evidence or ignored vital evidence which demonstrated the breach of MoU by the Appellants. There was no concluded contract between the parties as it was neither a development agreement nor an agreement for sale. The Impugned Award suffered from absence of jurisdiction as the Arbitrator unilaterally assumed jurisdiction after passing of the Remand Order. Since the reference of the Arbitrator had come to an end, the Appellants ought to have issued notice under Section 21 of the Act for commencing the arbitral proceedings, which they failed to do so. The Court’s findings:  Lack of authorisation to same Ld. Arbitrator to recommence the arbitral proceedings- The Appellants as well as the Arbitrator erroneously presumed that the Court vide Remand Order remitted the arbitral proceedings back to the same Arbitrator whereas in actuality, the Remand Order warranted commencement of arbitral proceedings afresh. The power of remanding the matter to the same Arbitrator under Sections 33 and 34(4) of the Act can be exercised before an award is set aside and is not permissible after the 1st Award was set aside. Mere remittance of the original records to the Arbitrator did not mean that he had the mandate to resume/recommence the arbitral proceedings. The granting of liberty to the parties to ‘move afresh’ along with Court’s specific direction that the intervening period would be saved by virtue of provisions of Section 43(4) of the Act made it clear that the arbitral proceedings had to commence afresh. For commencing the arbitral proceedings by taking benefit of limitation under Section 43(4) of the Act, the procedure under Section 21 became mandatory. Non-compliance with Section 21- The Appellants unilaterally wrote to the same Ld. Arbitrator for resumption of arbitral proceedings. The Appellants did not follow the procedure mandated in Section 21 of the Act and erroneously presumed that the Court directed remission of proceedings to the same Ld. Arbitrator.. MOU was not a concluded contract and hence impossible to specifically perform- Since the proposed course of action of either reconstructing the building or constructing additional floors was not clearly set out, there was no concluded contract between the parties. This vital material was excluded by the Arbitrator who merely concentrated on acceptance of part consideration by the Respondents. The specific performance of the MoU was impossible and MOU did not constitute a concluded contract. Therefore, setting aside of an arbitral award warrants compliance of Section 21 and commencement of arbitral proceedings afresh and not a resumption of the arbitration proceedings by the same Arbitrator. [1] Arbitration Appeal No.62 of 2007 Authored by Ms. Prachi Garg, Associate Partner, DSK Legal & Ms. Prerna Verma, Senior Associate, DSK Legal

The intersection of fashion and intellectual property (IP) presents a complex and often contradictory legal landscape. In contemporary fashion, the cyclical emergence of trends poses complex challenges for legal protection, particularly in the context of intellectual property (IP). A central and on-going question in this context is whether a design can be so "trendy" or common that it cannot receive trademark protection. This inquiry examines the main principles of trademark law, particularly the ideas of distinctiveness and aesthetic functionality. It also highlights the risky situation for a design that suffers from its own commercial success. Trademark Law in Fashion: Foundational Principles Trademark law is vital in the fashion world, serving as a legal mechanism that safeguards distinctive elements, like a brand’s name, logo, or design that differentiate its offerings from others. However, its scope is limited; it does not extend to every creative aspect, but rather focuses on protecting identifiers that signify brand origin. Instead, it aims to help consumers consistently recognize the origin of goods and services based on distinctive signs, safeguarding both consumer trust and commercial goodwill. Each creation represents an intangible asset that, if not adequately protected, may be vulnerable to imitations, counterfeiting, and strategic information leaks that could compromise the company’s position. India’s trademark system operates under the provisions of the Trademark Act enacted in 1999. It enables designers to secure legal rights over brand names, logos, emblems, or even distinctive visual elements that define their fashion lines. Trademark law in fashion is anchored in several core principles. First, a mark must possess distinctiveness, to be recognized as identifying a specific source. Secondly, the non-functionality rule ensures that utilitarian features. To secure legal protection, trademarks must be actively utilized in the marketplace. This entails their visible presence on products or within advertising materials, serving to identify and distinguish the source of goods or services. Mere registration without genuine commercial use does not suffice; continuous and lawful use is essential to establish and maintain trademark rights. Finally, trademark law provides protection against consumer confusion, allowing fashion brands to take action against imitators whose products may mislead consumers about their origin. Why Most Fashion Designs Don't Qualify for Trademarks Fashion designs, despite their inherent creativity, rarely secure trademark protection due to specific legal criteria. Trademark law primarily guards’ elements that uniquely identify a product's source. Most clothing designs—be it particular cuts, silhouettes, or aesthetic details—are perceived as decorative or functional rather than brand identifiers. Unless a design achieves singular, widespread recognition as originating from one specific company (e.g., Burberry's distinct check), it falls short of this core trademark purpose. A key hurdle is distinctiveness. Designs must either be inherently unique or gain consumer association with a single source through extensive, exclusive use, as exemplified by Louis Vuitton's renowned monogram. However, fashion trends, by their very nature, are widely adopted and imitated, rapidly diluting any potential distinctiveness and preventing them from serving as reliable source indicators. Furthermore, trademark law excludes features that are primarily functional or essential to a product's use, such as a basic garment construction. Similarly, purely ornamental elements that don't convey commercial origin, like generic patterns, are not eligible for trademark status. This framework also aims to preserve the "fashion commons," preventing perpetual monopolies over design elements crucial for the industry's artistic and economic dynamism, thereby fostering continuous innovation rather than hindering it. The Impact of Trendiness on Trademark Eligibility A fashion design that is too trendy is often, by nature, fleeting and widely adopted by many actors in the industry. This widespread adoption undermines its distinctiveness—a core requirement for trademark registration. When a trend is generic, ephemeral, or lacking in source-identifying function, trademark protection is inappropriate: Furthermore, when a design becomes popularized across the market, it risks being viewed as a common style rather than a proprietary mark. As a result, the more a fashion feature blends into a trend, the less likely it is to qualify for trademark protection, as it may fail to signal a single source or avoid consumer confusion. In Aditya Birla Fashion and Retail Ltd. v. Manish Johar,[1] Aditya Birla Fashion, owner of the “ALLEN SOLLY” brand, discovered that Manish Johar was manufacturing and selling counterfeit goods bearing deceptively similar branding. These products were also being circulated online. The Hon’ble Saket District Court recognized plaintiff’s trademark rights and found that the defendant’s goods were intended to deceive consumers. Permanent injunctive relief was granted, and the Hon’ble Court ordered that counterfeit stock be seized and destroyed. This ruling showcased Indian court’s increasing attention to impose stringent remedies against counterfeiting, including injunctions and destructions of infringing products, thereby protecting consumer trust and brand’s goodwill. In the case of Ritika Private Limited v. BIBA Apparels Private Limited[2], owner of the celebrated “RITU KUMAR” label sued BIBA Apparels. Ritika alleged that BIBA had copied its garment designs. However, the Hon’ble Delhi High Court clarified that once an artistic work is industrially applied and reproduced more than 50 times, copyright protection discontinues as per Section 15(2) of the Copyright Act unless the design is registered under the Designs Act, 2000. Since, Ritika’s designs were unregistered, its claim failed. Similarly, in the case of Microfibres Inc. v. Girdhar & Co.,[3] Microfibres, a textile manufacturer claimed that Girdhar & Co. had copied its upholstery fabric designs. The plaintiff pleaded that the patterns should be protected as artistic works under the Copyright Act. The Hon’ble Delhi High Court emphasized that once an artistic work is applied to an industrial product; it ceases to qualify for copyright and falls within the ambit of the Designs Act. Since Microfibres had not registered its designs, no protection was available. The Hon’ble Supreme Court later affirmed this decision underlining the legislative intent to prevent dual protection and harmonize the two statutes. In the case of Rajesh Masrani v. Tahiliani Design Private Ltd.,[4] Rajesh Masrani alleged that Tarun Tahiliani’s fashion house had copied his fabric prints. The defense argued that the works were unregistered designs, and hence not enforceable under the Designs Act. The Hon’ble Delhi High Court held that the plainitff’s prints were original artistic works as per Section 2(c) of the Copyright Act, and therefore protectable since the designs had not been mass produced beyond the threshold of Section 15(2), copyright subsisted. The defendant’s appeal was dismissed. Aesthetic Functionality Doctrine A significant obstacle in securing trademark protection for fashion designs lies in the doctrine of aesthetic functionality. This principle holds that a feature cannot be monopolized as a trademark if it is primary appeal lies in its aesthetic value or if it confers a competitive advantage of source identification. The rationale is to ensure that no single brand can claim exclusivity over design elements that consumer are drawn to for their beauty or style, rather than for brand association. Courts frequently reply on competitive necessity test to determine whether a feature qualifies as aesthetic functionality. The more a design reflects a prevailing trend, the greater the likelihood that it will be regarded as an aesthetic choice necessary for the competitors to adopt freely. In such circumstances, trademark protection is denied to avoid restricting legitimate competition in the marketplace. A recent and instructive example of Indian jurisprudence can be found in the case of Royal Country of Berkshire Polo Club Ltd & Ors v. Lifestyle Equities C V & Ors[5], also known as Beverly Hills Polo Club (BHPC) case. In early 2025, the Hon’ble Delhi High Court ordered an Amazon subsidiary to pay USD 39 Million (approximately INR 340 Crore) in damages for selling apparel featuring a logo nearly indistinguishable from the BHPC trademark. The Hon’ble Delhi High Court’s ruling emphasized that brand identifying elements, regardless of aesthetic appeal are entitled to protection where they serve as strong indicators of source and reputation. Unlike cases involving purely decorative motifs that fail to signal origin and thus fall prey to the doctrine of aesthetic functionality, BHPC’s logo had achieved brand distinctiveness and consumer recognition. The Hon’ble Delhi High Court’s approach reinforces that courts will protect decorative designs when they play a clear source identifying role, reaffirming that distinctiveness, not ornamentally, remains the guiding principle in trademark enforcement. For fashion and lifestyle brands, the BHPC decision provides a compelling blueprint i.e., registering and cultivating distinctive, recognizable designs is essential to ensuring legal protection, not just foe aesthetic merit, but as embodiments of brand identity. Conclusion A design cannot be deemed “too trendy” to trademark in the legal sense; rather, trendiness itself is antithetical to the distinctiveness and source-indicating function necessary for trademark protection. Trend-driven, short-lived designs usually enter the public domain, available for all to use, unless and until they gain sufficient secondary meaning to become inextricably linked with a single brand. For fashion innovators, robust protection lies in a layered IP strategy involving design registration, trademark cultivation, and copyright protection. [1] TM No. 7/2017 [2] CS(OS) No. 182/2011 [3] 128 (2006) DLT 238 [4] FAO (OS) No. 393/2008 [5] 2023 SCC OnLine Del 5347