Arbitration Clause survives through conti

Bombay HC – Arbitration Clause survives through the doctrine of continuity of Employment Agreements and the Service even after transfer of business to another Company – Section 9 Interim Restrains on former employee from misuse of Confidential & Proprietary data and preservation of the same through the Court Receiver

Bombay HC Upholds Arbitration Clause between Company & former Employee for Interim Protection & Protection of Company data / information from its misuse

Bombay HC – Interim Injunction against former employees from misuing, disclosing or exploiting the employer- petitioner’s confidential / proprietary  data and information –

Bombay HC  – Interim Relief directing the former employees Respondents to preserve devices, disclose storage media and the file affidavits of projects executed using petitioner – employer company’s data and information. Court Receiver to continue symbolic possession of the seized electronic data.

the Judgment dated 21.7.2026 of the High Court of Bombay (OS) in Arbitration Petition No.611 of 2025 with Court Receiver Report No.342 of 2025 of Sarla Advantech Private Limited  Vs.  Anil Mehta and others

Section 9 petition is for interim reliefs against the respondents from using and disclosing the confidential and proprietary information, approach clients and employees in breach of the contractual obligations with the petitioner.

Respondent no.1 was employed with Parekh Marketing Limited from 20.8.1998 with arbitration clause in the employment agreement.  He was in charge of business of Sarla Technologies – one of the divisions of Parekh Marketing. On 1.9.2027, Sarla Technologies was merged with the petitioner – subsidiary of ATS Global.

The employment of the respondent no.1 came to an end on 22.11.2023.

Thereafter, the petitioner was appointed as Managing Director and CER of the petitioner with the fresh employment agreement dated 21.9.2017 which did not contain arbitration clause.

real controversy is whether the parties intended to substitute the earlier employment contract or whether they merely continued the existing employment under another company after transfer of the business. This question cannot be answered by reading one clause in isolation. Both agreements, the surrounding circumstances and the conduct of the parties are required to be considered together before arriving at any prima facie conclusion.

One more provision in the Employment Agreement dated 21 September 2017 appears significant. Clause 2.2 records that leave balance, provident fund balance, insurance cover and other accrued benefits standing with Parekh Marketing Limited would stand transferred to the petitioner. It further provides that respondent No.1’s date of joining would continue to remain 1 August 1998 for the purpose of calculating continuous service and all service benefits, including gratuity. Therefore, respondent No.1 was not treated as a fresh employee from September 2017. On the contrary, continuity of service from the year 1998 was specifically preserved.