The recent judgment by the High Court of Karnataka in the case of Sanjay Kumar v/s Elior India Food Services LLP; Writ Petition No.2584 of 2023 has brought to light an important aspect of commercial disputes.
The case pertains to a writ petition filed by Mr. Sanjay Kumar (the petitioner) against Elior India Food Services LLP (the respondent). The petitioner sought to restrain the Commercial Court from proceeding further in the matter.
The Hon’ble Court held that the claim of the petitioner is the incentive that was assured in the agreement and such agreement is an offshoot of the Employment Agreement. Therefore, it cannot but be held to be a contract of employment or a contract of incentive, but a money claim arising out of an Employment Agreement, meaning the same cannot be said to be a commercial dispute. An employment contract cannot be given the colour of a commercial dispute by dressing it to be a provision of services. The view of the Hon’ble Court in this regard was fortified by the judgment of the Apex Court in the case of Ambalal Sarabhai Enterprises Ltd. v/s K.S. Infraspace LLP wherein the Apex Court interprets what is and what could be a commercial dispute within several enumerations under Section 2(1)(c) of the Act.
The Hon’ble Court further observed that if every Employment Agreement of the kind that is the subject matter in the case at hand is brought within the ambit of commercial dispute, it would then be opening a pandora’s box or will be opening flood gates of litigation before the commercial Court/s that would clog the said Court. This in effect would defeat the very reason why the commercial Court was constituted.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

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