Aniruddha Bose, J. - (1.) The core dispute in the present suit relates to the construction of an agreement between the plaintiff and the defendant No. 3, and its current status. The plaintiff is an Indian Company engaged in the business of manufacturing and marketing of various types of petroleum products including lubricants. The defendant No. 3 also is a company which appears to be organised and existing under the laws of the Federal Republic of Germany, also engaged in the same line of business. I shall henceforth describe the plaintiff as UPCL and defendant No. 3 as Aral.
(2.) The subject agreement, which is Exhibit "B" is in the nature of a collaboration agreement, and is accompanied with a trade mark and design licensing agreement, which were entered into by and between the plaintiff and defendant No. 3 on 1st November, 1994. This agreement shall be described as the Original Agreement. Under the collaboration agreement. Aral was to grant UPCL exclusive license and right to distribute in India, what has been described as ARAL product lines. UPCL derives from this agreement broadly three categories of rights, comprised in the first three clauses as also in clause 11 thereof, against payment of royalty and discharge of certain other obligations. These clauses are reproduced below: - " 1. Distribution Rights: Aral will grant UPCL an exclusive licence and right to market and distribute Aral product lines of finished automotive and industrial lubricants (Aral Products), including any and all modifications, improvements and additions thereto in India (Distribution Right). 2. Blending Rights: Aral will provide the additive packages (Aral Concentrates) for certain lubricants, which have to be agreed upon, whereas UPCL will supply the base oils. Aral will try to make use of special additive suppliers UPCL has other firm relationship with. UPCL will be entitled to manufacture and market lubricants (Blended Aral Products) under the tradename of Aral in India, provided Aral approves such products by written notice in each individual case.
(3.) Rebranding: UPCL will be permitted to market certain commodity lubricants which, have to be agreed upon. (Rebranded Products) manufactured in accordanee with international specifications under the brandname of Aral in India, provided Aral approves such products by written notice in each individual case. 11. Agreement upon Trademarks and Design: The Distribution Rights shall include the right to use all trademarks, tradenames. service marks, and related copyrights of Aral under the Aral brandname in connection with the marketing and distribution of the Product in India. The use of the registered Aral trademarks and design is being regulated by the "Agreement upon Trademarks and Design" attached hereto and forming an integral part of this Agreement." The basic scheme of this agreement is that Aral would provide the technology of the lubricants as also permit UPCL to use their Trade mark and Design, whereas UPCL would remain obliged to promote and extend the distribution of these products, and pay composite royalty at the stipulated rate, for usage of the brandname of Aral and the marketing and technical support. There is an embargo on Aral from marketing and distributing their products in India during the subsistence of the agreement, contained in Clause 9 of the agreement, entitled "Non-Competition", which runs as follows:- "9. Non-Competition: During the currency of this Agreement, Aral and its subsidiaries or affiliates will not market or distribute the Aral Products within India, nor permit or authorize or support any other person to market or distribute products under the Aral brandname within India. Aral will promptly notify UPCL of any and all inquiries concerning the products from persons or entities located within India and will promptly refer any such person to UPCL. UPCL will, during the currency of this contract, not enter into any collaboration with a national or international corporation for products that are in competition to Aral Products. Blended Aral Products or Rebranded Products. UPCL will inform Aral immediately upon each request coming up from such a competitor." 3. Subsequent to the execution of this agreement, application was made for approval of the Reserve Bank of India, which, it has been submitted by the learned counsel for the plaintiff, was necessary as per (he provisions of section 9 of the Foreign Exchange Regulation Act, 1973 ("FERA" in short) and the approval was granted by the Reserve Bank of India by their letter dated 25th November 1994, which is marked as Exhibit "D". I shall refer to this letter as the "first approval letter.";