The Bombay High Court has made a significant ruling, emphasizing that confidentiality clauses in commercial agreements cannot obstruct the court-mandated disclosure of information. This decision was particularly highlighted in the context of evaluating an alleged breach of non-compete obligations within a joint venture agreement. The case in question is Oil Field Instrumentation India Pvt Ltd v. Xcalibur Multiphysics Group S.L. & Ors.
Justice Somasekhar Sundaresan overturned an arbitral tribunal’s interim measures order under Section 17, which had previously allowed Xcalibur Multiphysics Group to avoid disclosing its contract with the Bhutan government. This was despite a prior directive from the High Court to present the contract and relevant documents.
The judge stated, “I find it difficult to accept that it is reasonable to allow a litigant to claim that it will not part with relevant underlying material directed to be produced by a Court on the ground that it has a contractual obligation in another commercial contract not to produce it.” This underscores the principle that court-imposed disclosure obligations should not be thwarted by invoking confidentiality clauses.
Justice Sundaresan further noted that commercial confidentiality agreements are generally crafted to comply with statutory and regulatory disclosure requirements. Parties usually work out redactions and confidentiality arrangements rather than entirely blocking disclosure.
The judgment, dated June 8, emphasized, “If the approach when adjudicating an alleged breach of a non-compete provision is to simply excuse the production of the very document that is vital to adjudicate the dispute, any alleged breach of such non-compete obligation would become immune from scrutiny merely by claiming that a confidentiality clause is contained in the very allegedly offensive agreement by which the non-compete obligation is said to have been breached.”
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The case was brought by Oil Field Instrumentation (India) Pvt Ltd, the Indian promoter in a joint venture with Xcalibur Multiphysics Group. Their agreement, dated October 17, 2022, was designed to be the exclusive vehicle for airborne geophysical survey business in a designated territory, including India and neighboring countries, with Iraq as a non-exclusive area.
Clause 18.3 of the agreement outlined a broad non-compete clause, prohibiting both shareholders from engaging in competing businesses and mandating the termination of existing partnerships with other airborne survey providers in the region.
The Indian promoter alleged that Xcalibur, through its Australian affiliate, violated the non-compete clause by securing a geophysical survey project in Bhutan. In May 2025, the High Court provided interim protection by allowing the Bhutan project to proceed but insisted on disclosing the project contract and supporting documents to assess any breach.
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Despite this, the arbitral tribunal previously sided with Xcalibur’s claim that Bhutan’s confidentiality policies prevented disclosure, relying on two heavily redacted letters as evidence. Consequently, the tribunal denied interim relief to the Indian promoter, requiring a prima facie breach to be demonstrated before shifting the onus to the investor.
Justice Sundaresan criticized the tribunal’s reasoning as weak, refusing to halt the Bhutan project but remanding the Section 17 application back to the tribunal. The court ordered Xcalibur to provide the full, unredacted Bhutan contract and directed the tribunal to reconsider the plea for interim relief to preserve the joint venture’s exclusivity and any potential claims for damages.
Representing Oil Field Instrumentation India were senior advocate JP Sen, along with advocates Piyush Raheja, Pranav Narsaria, Vishesh Malviya, Anuja Bhansali, and Dev Menghani, briefed by Rashmikant & Partners. Advocates Ninad Deshpande, Aishwarya Darda, and Shreyas Deshpande represented Xcalibur Multiphysics.
