BENGALURU: The Bengaluru civil court has directed both parties – the former Wipro CFO Jatin Dalal and Wipro – on the arbitration process. Judge Doddegowda K presided over the court proceedings on Wednesday.
Dalal can assert his rights in an arbitration tribunal after the Bengaluru Civil Court passed an order on Wednesday.
Dalal has filed an application with the court to refer the matter to arbitration. He says his contracts with Wipro provide for arbitration. Its reply also states that Wipro is not entitled to any damages for merely assuming disclosure of confidential information.
Arbitration is the use of an arbitrator instead of a court to resolve a dispute.
The Arbitration and Conciliation Act stipulates that an arbitral award must be made within one year from the date of constitution of the arbitral tribunal. However, the law requires the parties to agree to an extension of the duration of the proceedings by six months and then apply to the court for an extension by showing sufficient reason.
TOI reported last week that Wipro had asked Dalal to pay Rs 25 crore to the company for breach of contract, according to a complaint filed in the civil court in Bengaluru. TOI has obtained a copy of the court documents. The company has also asked the court to stop Dalal from disclosing confidential information and poaching its customers, suppliers and employees, and has said it reserves the right to seek additional damages at a later date.
Dalal left and joined Wipro on November 30 Cognitive appointed CFO the very next day.
Wipro's entitlement to Rs 25 crore, based on the value of RSUs (Restricted Stock Units) and PSUs (Performance Share Units) granted to Dalal since he took over as CFO in 2015, was conditional on Dalal staying for a period of time not to work directly or indirectly with a competitor for a period of 12 months from his last date of employment, not to solicit a Wipro customer to transfer the existing business to another party, and not to recruit Wipro employees in connection with a competitor, supplier or customer bring.
Ten of Wipro's competitors, including Cognizant, were also listed in the RSU and PSU agreements.
Wipro's court filing also states that Dalal made a commitment to Cognizant – which is publicly available as a filing with the US Securities and Exchange Commission – which states: “… I am not bound by the terms of an agreement with a previous employer or any other party to refrain from doing so.” I may not, directly or indirectly, compete with the business of that former employer or any other party that would in any event be in breach if I enter into this Agreement and/or provide services to Cognizant shall provide services pursuant to the terms and conditions of this Agreement…”
Wipro says this commitment is “manifestly false” as Dalal remains bound by its obligations under the agreements with Wipro.
“As a result, defendant caused Cognizant to make materially false and misleading statements in its filings with the SEC. “The defendant’s actions and conduct demonstrate a blatant disregard for its contractual and fiduciary duties,” Wipro said.
The filing said Dalal had signed a 12-month non-compete and non-solicitation agreement with Cognizant should he leave the company, and it was “unconscionable” for Dalal to claim that he had no similar obligation to Wipro.
Dalal can assert his rights in an arbitration tribunal after the Bengaluru Civil Court passed an order on Wednesday.
Dalal has filed an application with the court to refer the matter to arbitration. He says his contracts with Wipro provide for arbitration. Its reply also states that Wipro is not entitled to any damages for merely assuming disclosure of confidential information.
Arbitration is the use of an arbitrator instead of a court to resolve a dispute.
The Arbitration and Conciliation Act stipulates that an arbitral award must be made within one year from the date of constitution of the arbitral tribunal. However, the law requires the parties to agree to an extension of the duration of the proceedings by six months and then apply to the court for an extension by showing sufficient reason.
TOI reported last week that Wipro had asked Dalal to pay Rs 25 crore to the company for breach of contract, according to a complaint filed in the civil court in Bengaluru. TOI has obtained a copy of the court documents. The company has also asked the court to stop Dalal from disclosing confidential information and poaching its customers, suppliers and employees, and has said it reserves the right to seek additional damages at a later date.
Dalal left and joined Wipro on November 30 Cognitive appointed CFO the very next day.
Wipro's entitlement to Rs 25 crore, based on the value of RSUs (Restricted Stock Units) and PSUs (Performance Share Units) granted to Dalal since he took over as CFO in 2015, was conditional on Dalal staying for a period of time not to work directly or indirectly with a competitor for a period of 12 months from his last date of employment, not to solicit a Wipro customer to transfer the existing business to another party, and not to recruit Wipro employees in connection with a competitor, supplier or customer bring.
Ten of Wipro's competitors, including Cognizant, were also listed in the RSU and PSU agreements.
Wipro's court filing also states that Dalal made a commitment to Cognizant – which is publicly available as a filing with the US Securities and Exchange Commission – which states: “… I am not bound by the terms of an agreement with a previous employer or any other party to refrain from doing so.” I may not, directly or indirectly, compete with the business of that former employer or any other party that would in any event be in breach if I enter into this Agreement and/or provide services to Cognizant shall provide services pursuant to the terms and conditions of this Agreement…”
Wipro says this commitment is “manifestly false” as Dalal remains bound by its obligations under the agreements with Wipro.
“As a result, defendant caused Cognizant to make materially false and misleading statements in its filings with the SEC. “The defendant’s actions and conduct demonstrate a blatant disregard for its contractual and fiduciary duties,” Wipro said.
The filing said Dalal had signed a 12-month non-compete and non-solicitation agreement with Cognizant should he leave the company, and it was “unconscionable” for Dalal to claim that he had no similar obligation to Wipro.
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