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Issues: (i) Whether the petition under Section 9 of the Arbitration and Conciliation Act, 1996 had become infructuous after the termination of the licence agreement; (ii) Whether the licence agreement was determinable in nature so as to bar injunctive relief against termination; (iii) Whether the petitioner was entitled to specific performance or interim protection in respect of the software licence agreement.
Issue (i): Whether the petition under Section 9 of the Arbitration and Conciliation Act, 1996 had become infructuous after the termination of the licence agreement.
Analysis: The termination notice dated 30 April 2015 was brought on record and the Court proceeded to consider the challenge to termination. The mere fact that the agreement had been terminated did not render the Section 9 petition infructuous, though the relief ultimately depended on whether such termination could be interdicted.
Conclusion: The petition had not become infructuous.
Issue (ii): Whether the licence agreement was determinable in nature so as to bar injunctive relief against termination.
Analysis: Clause 5.1 permitted termination by SAP on 30 days' notice upon the licensee's material breach, and the Court treated this as a determinable contractual arrangement. Relying on the principles governing specific enforcement and interim injunctions, the Court held that a contract which is determinable in nature cannot ordinarily be specifically enforced and injunctive relief cannot be granted to prevent its termination. The Court held that the ratio of the governing precedents applied to the present agreement.
Conclusion: The agreement was determinable in nature and injunction against termination was barred.
Issue (iii): Whether the petitioner was entitled to specific performance or interim protection in respect of the software licence agreement.
Analysis: The Court held that the petitioner had not established a case for specific performance. The software licences were not shown to be incapable of substitution in the market, and the petitioner had not pleaded that damages would be inadequate. In view of the contract's determinable character and the statutory bar against injunction to prevent breach of a contract not specifically enforceable, the Court refused interim protection. The merits of the alleged audit findings and alleged breach were left for the arbitral forum.
Conclusion: The petitioner was not entitled to specific performance or interim injunction.
Final Conclusion: The termination could not be stayed in these proceedings, and no interim or specific relief was available to preserve the licence arrangement pending arbitration.
Ratio Decidendi: A determinable commercial contract, particularly one permitting termination on notice for breach, is not specifically enforceable and cannot ordinarily be protected by injunction under Section 9 of the Arbitration and Conciliation Act, 1996 read with the Specific Relief Act, 1963 when damages are an adequate remedy.
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