Delhi High Court Orders Google India To Maintain Advertisements Status Quo, Citing Potential Irreparable Loss

Delhi High Court Orders Google India To Maintain Advertisements Status Quo, Citing Potential Irreparable Loss

The Delhi High Court has instructed Google India to preserve the existing state of affairs regarding advertisements exhibited on its platforms. The court noted that the primary source of revenue for a party in an advertisement agreement stems from ad revenue, and indiscriminate blocking of ads could lead to irreparable financial losses for that party.

Justice Prathiba M. Singh additionally reaffirmed that a Section 9 petition would be valid in an arbitration where the seat of arbitration is located outside of India.

Startupwala Pvt. Ltd. (petitioner) engaged in an agreement with Google India Pvt. Ltd. (respondent) to utilize its digital advertising services in 2020.

The agreement was governed by the respondent's advertising program terms, which encompass policies accessible on its website. Additionally, it included an arbitration clause, with the seat of arbitration situated in the United States of America (USA).

The agreement was governed by the Advertising Program Terms of the Respondent, which comprised policies accessible on its website. Additionally, it included an arbitration clause, with the seat of arbitration situated in the United States of America (USA).

Starting from August 2023, the respondent began rejecting certain advertisements from the petitioner, citing a policy referred to as 'government documents and official services'.

The petitioner, operating in the field of corporate and management consulting services, heavily depends on these advertisements for revenue. Despite numerous communications between August 2023 and February 2024, the respondent's responses were automated and did not offer specific reasons for the disapproval. Consequently aggrieved, the petitioner invoked the arbitration clause and approached the High Court to seek interim reliefs under Section 9 of the Arbitration and Conciliation Act (A&C Act).

The petitioner submitted that the advertisements are crucial for their revenue and asserted that Google's actions were causing significant financial losses. Additionally, they stated that, despite being in continuous correspondence with the respondent from August 2023 to February 2024, the responses received were unsatisfactory.

The respondent objected to the maintainability of the petition, arguing that since the seat of arbitration is in the US, the petition is not tenable.

The Court reviewed the arbitration clause, which specified arbitration in Santa Clara County, California, USA, through the International Center for Dispute Resolution of the American Arbitration Association.

The Court rejected the argument by noting that a Section 9 petition remains valid even in arbitrations with a foreign seat.

The Court noted that although certain advertisements are categorized as 'not-eligible' or 'eligible (limited)', the reasons for such disapproval or limited eligibility were not disclosed. Acknowledging the possible irreparable harm to the petitioner and its business, the court ordered that advertisements labelled as 'Eligible (limited)' must not be blocked or removed until the next hearing.