What are the consequences of breach by an employee of a bond given by him to work with us for three years? If the employee leaves before completing three years, can we bring in an action against him and his new employer?

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Indian courts have held that an employer has no proprietary interest in the bare service of an employee, and is, therefore, not entitled to protection for the continuation of services by the employee. However, if the bond is breached by the employee, you can bring action for damages. If the bond provides for a sum of money to be paid on its breach, you can sue the employee for that sum of money as agreed liquidated damages. If there are sufficient grounds, you may also bring an action against the new employer for the tort of inducement of breach of contract. However, apart from cases of conspiracy to injure, acts of a third party lawful in themselves do not constitute an actionable interference with contractual rights merely because they bring about a breach of contract. It must be proved conclusively that the new employer without justification used unlawful means and with predominant purpose to injure your company.

Our company entered into an equipment lease agreement with another company, which defaulted in the payment of lease rentals. The defaulting company filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator under the agreement's arbitration clause, which is pending before the High Court. Can we file a suit for recovery of the lease money and possession of equipment?

Under Section 9 of the Arbitration and Conciliation Act, 1996, a party to an arbitration agreement can, before or during the arbitral proceedings, apply to the court for interim measures, including: (i) preservation, interim custody, or sale of any goods that are the subject matter of the arbitration agreement, (ii) securing the amount in dispute in the arbitration, (iii) interim injunction or the appointment of a receiver, and (iv) such other measure of protection as may appear to the court to be just and convenient. As the defaulting company has already invoked the arbitration clause, you cannot file a suit for recovery of the lease money, as this will be determined by the arbitrator pursuant to arbitration. You can, however, as an interim measure, file an arbitration petition with the high court for the appointment of a receiver for the leased equipment.

We have contracted a software development company to develop specialised software for our company. How can we ensure that ownership of intellectual property rights (IPR) in the developed software, including the source code, will vest with our company?

Under Indian IPR laws, the first ownership of copyright in software lies with its author. The author is the person who causes the work to be created. However, where the author is employed under a contract of service, the first ownership of a work created by the author belongs to the employer. Thus, to vest exclusive ownership of the source code of the developed software in your company, you should enter into an agreement with the software company, which should specifically provide that the software developed has been specially commissioned by your company under a contract of service, and that to the extent the software developed is not considered ''commissioned'' work, the software developing company fully assigns ownership of copyright in the software, including the source codes to your company. The agreement should also contain a description of the rights assigned, including the exclusive power to do and authorise the doing of specific acts in respect of the software including the source code. You should also procure that the software company obtain agreements from its employees whereunder all rights to ownership of copyright in the software developed by them are also assigned to your company.

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