Arbitration Law Update: Gag Order Under Section 9 Of The Arbitration Act Can Be Granted For Protecting Reputation

Background:

The Hon'ble High Court of Bombay in the matter Wonderchef Home Appliances Pvt. Ltd. v. Shree Swaminarayan Pty Ltd. held that a gag order under Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act") can be granted, pending resolution of disputes between the parties, if the contractual obligation between the parties stipulates to protect the party's reputation and not otherwise.

Facts:

The Respondent is a distributor of the Petitioner in Australia. The Respondent has been sending out e-mails to various parties, including other distributors of the Petitioner in other jurisdictions and various statutory addressees such as Government Officers and prospective financial investors, complaining about the Petitioner's product having demonstrated defects, the poor treatment of the Respondent by the Petitioner, and the manner in which the relationship is being handled. Accordingly, in light of the Distribution Agreement dated 26 December 2017 ("Ag