Memorial for the Claimant

BEFORE THE ARBITRAL TRIBUNAL ARBITRATORS: MISS. NILU FARA, MISS.

AARTHI BHARATHI AND MR. GOKUL SURESH NAIR

MEMORIAL FOR CLAIMANT

IN THE HON’BLE ARBITRAL TRIBUNAL, DELHI

Arbitration Claim Petition
No.:9303 / ACBGET / 10/2022
In the matter of Contract effective from 5th December 2011

Mr. Rashid Khan (Software Developer) ……

Claimant

And

Legacy Software Pvt. Ltd

…...Respondent

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Table of Contents:

Index of Authorities:
Cases……………………………………………………………………………..………4
Statutes……………………….…………………………………………………..………4
Books……………………………………………………………………………..………4
Miscellaneous………………………………………………………………….…………4
Statement of Jurisdiction…………………………………………………….…………5
Description of Parties……………………………………………………………………..6
Statement of Facts…………………………………………………………..…………….6
Issues Raised……………………………………………………..……………………….8
Summary of Arguments…………………………………………………………………..9
Arguments Advanced…………………………………………………...………………..10
Prayer…………………………………………………………………….………………14
Beginning of Exhibits……………………………………………………………………15

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Description of Parties
Claimant:
Mr. Rashid Khan (Software Developer), Street P.O. Box: 116332, DUBAI, ZIP CODE:
11633, PHONE NUMBER: [+971] 97143987654, EMIRATES.

Respondent:
Legacy Software Pvt. Ltd, Janani, Chief Technical Officer (CTO), Andheri, Mumbai,
Maharashtra, India- 400037.

Address For Service is As Above And As

1. Harish B, B.Com. LL.B. (Hons), ADVOCATE, (Enrolment No. Ms. 0027/2000).

Selvaraj Associates
Office No. 2017,
Gandhi Nagar Small Street,
Navalurkuttapatu, Srirangam,
Tamil Nadu- 620014

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Index of Authorities
Cases:
1. Comb v PayPal, N. D. CAL. 2002.
2. Doctors’ Asscos., Inc. v. Casarotto517 U.S. 681. (1996).
3. Ajida Tech., Inc. v. Roos Instruments, Inc104 Cal.Rptr.2d 686 (2001).
4. Oakland-Alameda County Coliseum v. Oakland Raiders, Ltd, 243 Cal.Rptr.300
(1988).
5. State of Rajasthan v. Nav Bharat Construction Co, 2005 (4) RCR (Civil) 473
(SC).
Statutes:
1. Copyright Act, 1957.
2. Indian Contract Act, 1872
3. Arbitration and Conciliation Act, 1996
Books:
1. Law of Arbitration and Conciliation by Avtar Sign.
Miscellaneous
1. E-Commerce in India by Nishith Desai Associates.
2. Unregistered Copyright Infringement by Parson and Goltry
3. Enforcement of Arbitral Award in the United Arab Emirates by Nicholas Sharrat
4. Copyright Protection For Computer Software: An International View.

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Statement of Jurisdiction

It is stated before the honorable arbitration seat that Mr. Rashid Khan, the claimant in the
present case, has the honour to submit this Statement of Claims and invoke the jurisdiction of
this Hon’ble Arbitral Tribunal, in pursuance of the contract entered between the parties to the
contract.

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Statement of Facts
1. The Parties:

Mr. Rashid Khan is a highly qualified software developer from UAE who has years of
experience in developing advanced algorithms and software which has been deemed to be
highly innovative, he is also the holder of multiple copyrights with respect to computer
programs.

M/S Legacy Software Pvt Ltd, is a company situated in Mumbai, Maharastra which is
reputed for its accomplishments in the field of multi-level software engineering and the
QuickProtect software, a new market entrant which is directly related to this case.

2. The Agreement:

As mentioned before, Mr. Khan is a highly qualified software developer from the UAE,
he is held in the highest regard by his peers and is deemed to be one of a kind in the
plethora of software engineers in the world, he also come up with various programs that
has granted him invaluable copyrights and patent rights.

It is no surprise that representatives from Legacy Software Pvt Ltd (to be referred to as
‘Legacy Ltd’ from here onwards) on the day, October. 27 th, 2018 to be precise, contacted
our client Mr. Khan. Surprisingly enough Mr. Khan had just developed a highly advanced
software. We do not know how the company has gotten hold of this information, is this a
case of mere coincidence? I shall leave it to the honorable arbitrators to decide.

Legacy Ltd had initiated an email-conversation with our client Mr. Khan and had most
unexpectedly offered their own security software for online distribution of Mr. Khan’s
software.

Legacy Ltd had alleged that their security software was among the best in world, however
it was still a prototype and was not released to the outside world as of yet. The contract
was carried out successfully and Mr. Khan was provided with access to Legacy’s
software.

3. The mode of acceptance:

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Until this day no tangible, printed form of the said contractual document was ever
provided to Mr. Khan, the only proof of their agreement is the emails that they had
exchanged four years ago, the counsels here will have to question the sincerity and
eagerness that was displayed by Legacy Ltd to keep their promises to Mr. Khan.

In other words, the acceptance was merely an extension of a click-wrap agreement, a

click-warp agreement for a multi-million-dollar deal. Even after repeated requests by Mr.
Khan to provide him with a tangible document, Legacy Ltd has turned a deaf ear to our
client.

4. Unauthorized Access by third parties:

Mr. Khan placed his trust on Legacy Ltd and their words of assurance upon the safety of
his software, however Legacy Ltd has failed horribly in the protection of this software,
their own security program has proved to be an abject failure and has cost the mental
health of Mr. Khan and all the time that he had spent on the research and development of
his software. I shall enumerate on the amount of damages that were suffered by Mr. Khan
in the near future.

5. Arbitration Clause:

The said email has also contained a arbitration clause, I will have to go on a limb and
state that this clause was forced upon Mr. Khan by Legacy Ltd, I shall enumerate upon
the same when I submit my issues for this session.

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Issues Raised

1. Since the contract was put forth by a body with unreasonable bargaining power, is the
contract actually valid?

2. Whether Legacy Ltd has indirectly led to the loss of a potential chance of copyright
the software by Mr. Khan?

3. Is Mr. Khan is in all his right entitled to liquidated damages for loss of business,
mental health and breach of contract?

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Summary of Arguments

1. Since the contract was put forth by a body with unreasonable bargaining power, is
the contract actually valid?
We also take this opportunity to challenge the validity of the contract, Legacy Ltd is a quite a
wealthy and powerful country, when compared to Mr. Khan it is quite evident that they have
unreasonable bargaining power over Mr. Khan and have forced him to take part in this
contract, against his wishes. We must also remember that it was a multi-million-dollar worth
software, we also have reason to believe that Mr. Khan was coerced into using Legacy’s
security software.
2. Whether Legacy Ltd has indirectly led to the loss of a potential chance of copyright
the software by Mr. Khan?
The honorable arbitration seat has to understand that the software developed by Mr. Khan
was highly advanced and its implications in the industry were pathbreaking. Mr. Khan was
eager to register the same as a copyright but it was Legacy Ltd and its representatives who
convinced him otherwise. Publishing the software for sale before giving the owner an
opportunity apply for protection has been a grave error on the part of Legacy Ltd, moreover,
an unregistered copyright will receive much less damages and such compensation will be
awarded in a limited manner.
3. Is Mr. Khan is in all his right entitled to liquidated damages for loss of business,
mental health and breach of contract?
It is quite foreseeable that the third parties gaining access to Mr. Khan’s security software has
directly affected his business, his mental health has also been affected in a drastic manner,
moreover Legacy Ltd has failed to protect his software, the promise that was made during the
contractual stage. We hereby conclude that Mr. Khan is entitled to full, liquidated damages.

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Arguments Advanced

1. Since the contract was put forth by a body with unreasonable bargaining power, is
the contract actually valid?
I as a counsel would once again like to reiterate that Mr. Rashid Khan has a better chance of
winning the case if he were to approach a court within the UAE jurisdiction, but he chose to
honor the contract which stipulated that he has no choice but to only use arbitration as his
singular method of dispute resolution.
Since this is an online agreement concluded over an e-mail, I shall be using case laws that
dealt with the same issue rather than using traditional contract legislations.
i. Incompetence of Legacy Ltd to handle a large customer base.
Comb v PayPal1, is very famous case, it involved the famous online-payment company called
PayPal, we need to understand the working of the PayPal program which is employed for
payment of the required funds. An account holder starts by informing PayPal of the intent
recipient, the amount is sent by employing a designated funding sources used by the holder.
We have reasons to believe the Legacy Ltd’s security software functions on a similar method,
based on Mr. Khan’s allegations Legacy Ltd uses a standard method to provide access to its
customers and it is not foolproof as they claim it to be, the online-security measures provided
by the company can be easily exploited during the purchase as it has many loopholes, the
company moreover has ignored the advice of various experts who warned the company of it
improper security systems, their interactions are provided in exhibit 4.
Moreover, the Legacy Ltd only expected up to 10,000 to 20,000 customers but ended up
catering up to the needs of over a million customers, it is eerily similar to the PayPal case,
the number of customers went up but the capacity of the company to handle them remained
the same, the company is simply not capable of handling over a million customers and their
lapse in judgement has reflected in the poor security management.
ii. Party with higher bargaining power:
The parties in the PayPal case were forced to take up arbitration since it was in agreement
with the online contract entered into by them. The court however held that the contract was
formulated by a party with higher bargaining power and had set aside the arbitration clause,
allowing them to take up the case in court.
I would like to bring to the attention of this honorable seat that Legacy Ltd is no different,
they have higher bargaining power over Mr. Khan and have abused this business relationship,
forcing him to take up arbitration.
1
N. D. CAL. 2002.

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iii. Invalidation of arbitration agreement:

In the case of Doctors’ Asscos., Inc. v. Casarotto2, the court had held that generally
applicable contract defenses such as fraud, duress and unconscionability can be applied to
invalidate an arbitration agreement.
Moreover, in another case by the name of Ajida Tech., Inc. v. Roos Instruments, Inc 3, the
court held that parties need not submit to arbitration clause for any dispute which it had not
agreed to submit to.
Even though Mr. Khan’s acceptance to the contract would mean acceptance of the arbitration
clause, I humbly submit before this seat that he had never explicitly agreed to settle for
arbitration for instances where the company has committed such grave defaults that affect
him in such a drastic manner.
Moreover, Legacy Ltd has defrauded Mr. Khan by claiming that their security measures are
indeed up to date and their claims of this software having the ability to fend off even the most
advance cyber attacks are all untrue and has defrauded my client, looking at the above cited
case laws, I believe that the arbitration clause in this agreement must be invalidated on all
grounds.
iv. Ambiguous use of language in the contract:
A look at ‘Exhibit 1’ would allow the bench to look at screenshots of the emails that led to
the agreement between Mr. Khan and Legacy Ltd, please note the arbitrary use of the word
‘any’, in the sentence ‘any dispute faced by the party in the course of their business will
settled using arbitration.’
What does the term ‘any’ here signify here? The contract is also silent on the nature of
offences that will be subject to arbitration or the seriousness of the same.
In the case of Oakland-Alameda County Coliseum v. Oakland Raiders, Ltd4 the court
examined the usage of the word ‘term’ in the contract clause, the court also went on to
criticize the arbitrary use of this term stating that it did not intend to have a single, precise
definition and was deemed arbitrary. Hence the said contract is not valid.
Respected arbitrators, the counsel brings to your attention an Indian case law by the name of
State of Rajasthan v. Nav Bharat Construction Co 5 the court held that in cases where the
words in the contract was ambiguous, it was up to the arbitrators to give his own
interpretation or interpret it as a reasonable man would.
v. Arbitrary and unilateral powers at the hands of Legacy Ltd:

2
517 U.S. 681. (1996).
3
104 Cal.Rptr.2d 686 (2001).
4
243 Cal.Rptr.300 (1988).
5
2005 (4) RCR (Civil) 473 (SC).

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Mr. Khan has also alleged that Legacy Ltd has sole discretion, it can control who purchases
and who places order for their Mr. Khan’s software programs, he also alleged that it is the
company that makes the final decision. Moreover, we also have evidences (exhibit 2 and 3)
which suggest that Legacy Ltd has used its contacts to freeze Mr. Khan’s account multiple
times, thereby threatening him and putting him in a state of mental agony.
vi. Duration of contract:
The respondents have alleged that the said contract is over and hence a liability in
infringement of contract will not arise, however, as pointed before the contract is ambiguous
in nature and has nothing which points out to the duration or period of the said contractual
agreement.
Moreover, under section 63 of the Indian Contract Act, 1872, a contract will come to an only
when both parties have completed all the tasks that have been agreed under the contract, in
the other words performance of all obligations. Moreover, the active trade conducted by
Legacy Ltd with Mr. Khan’s products indicate that the contract still stands.

2. Whether Legacy Ltd has indirectly led to the loss of a potential chance of copyright
the software by Mr. Khan?

i. The potential held by Mr. Khan’s software:

I would once again like to stress upon the importance of Mr. Khan software, it is a ground
breaking program which reap innumerable profits to the party which deals in its sale. When
representatives of Legacy Ltd contacted Mr. Khan on the 27 th of October, 2018, they
expressly prevented him from filing for a copyright application, hence Mr. Khan’s software is
an unregistered copyright.
The acts of third parties who gained unauthorized access to Mr. Khan’s software have
infringed sec 52 (1) (ad)6, which reads as ‘the making of copies or adaptation of the computer
programme from a personally legally obtained copy for non-commercial personal use;]’.
There is no doubt that Mr. Khan’s software is currently being sold illegally across the
internet, pressing charges against the third parties is our primary concern. However, I also
submit that for the final damages to be awarded to Mr. Khan, this honorable seat of
arbitration must also take into consideration the loss caused to Mr. Khan for the possible
profits he might have accrued due to the copyright.
It is also submitted that the seat must take into consideration the loss of business suffered by
Mr. Khan when most of his clients did not contact him regarding his newer software since it
was already available on the internet for free.
ii. Failure to Protect Data:

6
Copyright Act, 1957, Sec. 52, No. 14, Acts of Parliament, 1957.

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I would like to submit before this honorable seat that Legacy Ltd has failed to protect the data
that they promised to protect and have contravened section 43A 7 of the Information
Technology Act, 2000. The data we refer to here is the source code which was created by Mr.
Khan for the functioning of the software.
Legacy Ltd comes under the explanation clause of Sec 43A 8. Hence the company will have to
be made liable to pay the damages as stated under the act to Mr. Khan.

3. Whether Mr. Khan is entitled to liquidated damages from Legacy Ltd.?

In the event of a breach of contract, the party at default must pay liquidated damages and
penalty to the aggrieved party under Section 74 of the Indian Contract Act, 1872. For
claiming liquidated damages, proof of the loss or damage, and there is proof of loss and
damage in violating the contract. As agreed, upon in the license, the company failed to
provide protection to my client. My client has suffered damages, his software has gone in
vain. He has laboriously spent on developing an important software which concerns security
with his blood, sweat and tears as well as his hard-earned money. My client has also suffered
mental trauma as a result of his hard work gone in vain. Even though a provision exists in the
Indian Contract Act to claim damages for mental trauma, we choose not to use that provision
as we have already claimed liquidated damages under Section 74. Since the damages have
not been pre-determined or assessed in advance, I request the Tribunal to determine the
amount recoverable as the contract has been breached, and render justice to my client

7
Information Technology Act, 2002, Sec. 43A, No. 21, Acts of Parliament, 2002.
8
(i) "body corporate" means any company and includes a firm, sole proprietorship or other association of
individuals engaged in commercial or professional activities.

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PRAYER
In the light of the above submissions, the claimant requests the tribunal to:
DECLARE that:

1. The tribunal has jurisdiction to hear the present dispute

ADJUDGE that:
1. The contract between claimant and respondent is invalid.
2. The arbitration clause in the contract is not valid by any means.
3. Mr. Rashid Khan has lost a lot of money since he was not allowed to file for a copyright.
4. The loss of business suffered by Mr. Khan
5. Mr. Khan is entitled to damages as calculated in the contents of the memorial.

AND/OR
Pass any other order, direction, or relief that the Hon’ble Tribunal may be pleased to grant in
the best interests of justice, fairness, equity, and good conscience.
And for this act of kindness, the Respondents shall forever duty-bound ever-humble pray.
Date: December 6, 2022
Respectfully submitted,
Counsel on behalf of defendant

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EXHIBIT 1

Here is a screenshot of the email that was sent to Mr. Rashid Khan

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EXHIBIT 2

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EXHIBIT 3

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EXHIBIT 4

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Screenshot of Email between the software engineer and Legacy Ltd who tried to warm the
company.

EXHIBIT 5

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Capitalized software costs of Mr. Rashid

Exhibit-6
This Agreement is entered into on 5th day of December 2011 between a software developer
named MR. Rashid Khan working in UAE and Legacy Software Pvt Limited registered under

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the Indian Companies Act, 2013, and having its registered office at Andheri, Mumbai,
Maharashtra, India- 400037 hereinafter referred to as legacy software.
The contract is for the sale of a computer software named “QuickProtect” in order to protect
their computer from unauthorised access. So, the foreign developer has agreed to appoint
Legacy Software Pvt Ltd as the seller of the software.
The parties to the contract have consensually agreed to the below:
1. Legacy Software will furnish to the Mr. Rashid Khan all the know-how. including any
literature, drawings as to the Installation and working of the said software programme
2. Legacy Software will give full training to the technicians (not more than one month )
deputed by software developer as to the Installation mechanism and working of the
said machinery. The costs of such persons deputed by Mr. Rashid Khan by way of
their salaries. boarding and lodging and travelling will be borne and paid by Mr.
Rashid Khan separately or by adding it to the cost of the machinery supplied him.
3. Mr. Rashid Khan will be entitled to sell the software to any customer in India at such
additional price (over and above the price paid by the Indian Company to the Foreign
Company) as it thinks fit but consistent with the demand and market position.
4. In case of any dispute arising between the UAE based software developer, Mr. Rashid
Khan and the Indian company, Legacy Software pvt. ltd. should be resolved under the
Arbitration and Conciliation Act, 1996.
5. If after the machinery is supplied to Mr. Khan any improvements, additions or
alterations are made by the him, the same will be immediately conveyed to the Indian
Company, legacy software pvt. ltd. If necessary, the legacy software will depute its
technicians to carry out such improvements additions or alterations. The machinery to
be supplied from time to time by the Foreign Company will be up to date in all
respects as to new inventions and improvements made therein.

Legacy Software Pvt. Ltd. Mr. Rashid Khan

(Signature) (Signature)

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