Wipro’s Legal Battle with Former CFO Jatin Dalal Shifts to Arbitration Over Non-Compete Clause Dispute

Wipro Ltd has encountered a legal skirmish with its former Chief Financial Officer, Jatin Dalal, as the company opposed Dalal’s plea for arbitration concerning an alleged breach of a non-compete clause. Wipro aimed to resolve the matter in a city court, challenging the arbitration clause in their agreement. However, Justice K. Doddegowda ruled that the dispute should proceed to arbitration, in accordance with the arbitration agreements between the parties.

The court order, dated January 3, emphasized that when there is an arbitration clause in an agreement, the court must refer the parties to arbitration as per the agreement. Wipro contended that the arbitration clause in their agreement with Dalal was flawed, asserting a preference for Bengaluru courts over arbitration. Justice Doddegowda dismissed this argument, noting that all but one agreement featured an arbitration resolution clause. The case will be governed by the Arbitration and Conciliation (Amendment) Act, 2015, with both parties consenting to appoint a sole arbitrator in Bengaluru.

Arbitration, a legal dispute resolution process, involves an impartial third party settling a dispute between parties without resorting to court litigation. The dispute arose from Dalal’s resignation from Wipro in September 2023, followed by his appointment as CFO at Cognizant. Wipro filed a complaint, alleging Dalal breached his contract, which included a clause preventing him from joining competitors for a year. Seeking ₹25.1 crore in damages, Wipro’s legal action exemplifies the intricacies of employment contracts and non-compete clauses, particularly in the competitive IT sector.

The specifics of Dalal’s departure and the arbitration proceedings, including the choice of arbitrator, remain undisclosed. Wipro and Dalal have not responded to requests for comments, underscoring the complexity and confidentiality of such legal battles in the corporate landscape.