The Delhi High Court on March 27 restrained tech giant Google from removing approved advertisements of Startupwala. The court also raised concerns about the arbitral clause in Google's Advertisement Terms stating that in case of a dispute, the arbitration will be held in California.
The HC questioned Google as to how small companies that avail of its advertisement services would be able to avail of the arbitration clause if the proceedings were to take place in California.
Startupwala offers services such as company incorporation, secretarial compliances and taxation filings among other things for startups.
Startupwala had filed a plea against Google asking the court to restrain the tech giant from removing its advertisements arbitrarily. The Pune-based company, which utilises Google's advertisement services contended that it had to mandatorily accept the tech giant's terms and conditions.
According to the plea, reviewed by Moneycontrol, some of their ads were disapproved by Google in August 2023 over alleged policy violations but were later reinstated after clarifications in the communication. However, in December 2023, similar ads were again disapproved by the tech giant.
Startupwala claimed that they were not able to get any response from Google as to why they were disapproved and only got automated responses. So, the company, intending to initiate arbitral proceedings filed a plea under Section 9 of the arbitration act seeking protection from their ads being arbitrarily taken down.
Startupwala was represented by lawyer Devashish Marwah and law firms Sarvada Legal and the guild.
Google's lawyer contended that as per their policy, documents such as certificates for incorporation and taxation compliances are issued by the government since the company's ads claimed to be getting them on behalf of the company, they were disapproved.
The court therefore issued notice to Google in the plea and granted it 10 days to file their response. The court asked Google to respond to why these ads which were first disapproved were then let to be published and then disapproved in December 2023.
The court said, "Taking in view the economic loss and principles of interim injunction, all ads of Startupwala which have been marked as eligible (Limited) will not be disapproved or blocked or removed by Google till the next date of hearing."
Justice Prathiba Singh, who heard the case, observed that the arbitration clause in the Advertisement Terms states the seat of arbitration California, and the court will have to consider if such a clause hampers the Petitioners’ right to legal remedy.
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