| ASPECTS | DETAILS |
| Case Title | LifeForce Cryobank Sciences Inc. vs. Cryoviva Biotech Pvt. Ltd. & Ors. (Arbitration Petition No. 15/2018) |
| Introduction | LifeForce Cryobank Sciences Inc. filed a petition in the Supreme Court of India seeking the appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, based on the arbitration clauses in agreements with Cryobank USA and Cryobank India International Pvt. Ltd. |
| Factual Background | LifeForce Cryobank Sciences Inc. bought the assets of Cryobank USA in a 2010 auction. It claims it assumed Cryobank USA’s position in agreements with Cryoviva Biotech Pvt. Ltd. (Respondent). The agreements contain arbitration clauses, but Cryoviva disputes LifeForce’s claim, arguing that the license agreement was non-assignable, and that no privity of contract exists with LifeForce. |
| Legal Issues |
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| Applicable Law |
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| Analysis | The Court examined that while the arbitration agreement’s existence is not disputed, its applicability to LifeForce is. Based on Khardah Company, obligations under a contract require consent for assignment, while rights can be assigned unless specified otherwise. DLF Power supports that arbitration benefits can be assigned along with the main contract. |
| Conclusion | The Court did not delve into the merits of the contract assignment dispute. It referred the matter to the Delhi International Arbitration Centre for a sole arbitrator appointment, leaving all issues open for arbitral adjudication. |
| Current Scenario | The dispute is set to proceed in arbitration as referred by the Supreme Court to the Delhi International Arbitration Centre. This decision allows both parties to present their case on the assignment and arbitration agreement’s enforceability before the appointed arbitrator. |
CASE SUMMARY – In this case, LifeForce Cryobank Sciences Inc., after acquiring Cryobank USA’s assets, sought to enforce arbitration clauses in agreements between Cryobank USA and Cryoviva Biotech Pvt. Ltd. for resolving disputes. Cryoviva opposed, claiming no privity of contract with LifeForce due to the non-assignable nature of the license agreement. The Supreme Court acknowledged the arbitration clause but left unresolved the issue of contract assignment, referring the case to arbitration. The Court held that contractual obligations require the promisee’s consent to assign, whereas rights can generally be assigned. The matter will proceed with a sole arbitrator to adjudicate on these contractual issues.
“An arbitration agreement is a contract in itself and the assignment of contractual rights does not necessarily transfer the obligations unless the parties consent.”
SOURCE – SUPREME COURT OF INDIA
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