Wipro, ex Wipro CFO Dalal referred to arbitration

BENGALURU: The Bengaluru Civil Court has referred both the parties former Wipro CFO Jatin Dalal and Wipro to arbitration. Judge Doddegowda K presided over the court proceedings on Wednesday. Dalal can invoke his rights to an arbitral tribunal following an order passed by the Bengaluru Civil Court on Wednesday.

Dalal has filed an application asking the court to refer the matter to arbitration. He says his contracts with Wipro allow for arbitration. His reply notice also states that Wipro is not entitled to damages on the mere apprehension of confidential information being divulged. Arbitration is the use of an arbitrator, instead of a judicial court, to resolve a dispute.

The Arbitration and Conciliation Act mandates that an award has to be passed within one year from the date of constitution of the arbitral tribunal. But the Act provides for the parties to agree to extend the period of the proceedings by six months and thereafter approach the court for extension by showing sufficient cause.

TOI reported last week that Wipro has demanded Dalal to pay Rs 25 crore to the company for breach of contract, according to a suit filed in the civil court in Bengaluru. TOI has obtained a copy of the court papers. The company has also asked the court to restrain Dalal from disclosing confidential information, and soliciting its customers, vendors and employees, and has said it reserves the right to claim additional damages at a later date.

Dalal left Wipro on November 30, and joined Cognizant as CFO the very next day. Wipro's Rs 25 crore claim is based on the value of RSUs (restricted stock units) and PSUs (performance share units) granted to Dalal since he took on the CFO role in 2015. The company says in the court filing that every one of the grants came with the condition that for a period of 12 months after his last date of employment, Dalal could not directly or indirectly engage with a competitor, could not solicit a Wipro customer to move the existing business to another party, and could not solicit a Wipro employee to be associated with a competitor, supplier or customer.

The RSU and PSU agreements, it says, had also listed out 10 of Wipro's competitors, and the list included Cognizant. Wipro's court filing also says Dalal gave an undertaking to Cognizant which is publicly available as a filing on the US SEC which said, "...I am not bound by the terms of any agreement with any previous employer or other party to refrain from competing directly or indirectly, with the business of such previous employer or other party, in any case, that would be violated by my entering into this agreement and/or providing services to Cognizant pursuant to the terms hereof....." Wipro says this undertaking is "patently false" as Dalal continues to be bound by his obligations under the agreements with Wipro.

"As a result, the defendant has caused Cognizant to submit materially false and misleading statements in its SEC filing. The defendant's actions and conduct shows blatant disregard to his contractual and fiduciary obligation," Wipro says. The filing says Dalal has signed a 12 month non compete and non solicitation agreement with Cognizant in the event he were to quit the company, and says it’s "unconscionable" for Dalal to assert that he does not have a similar obligation to Wipro.

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