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Moot Problem IPL01

Mr. Paresh and Mr. Harish founded ABC LLP and launched a mobile app, ABC Real, allowing users to bet on sporting events for monetary rewards, which led to significant revenue but also economic hardship for users. Following a partnership dispute, ABC merged with XYZ Co. Ltd., which included a limitation of liability clause and an arbitration agreement. A lawsuit was filed by Mr. Rohtash against XYZ for non-payment of winnings, raising issues regarding the suit's maintainability, the enforceability of the agreement, and the entitlement of the plaintiff to any amount.

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Md Mujtaba
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22 views

Moot Problem IPL01

Mr. Paresh and Mr. Harish founded ABC LLP and launched a mobile app, ABC Real, allowing users to bet on sporting events for monetary rewards, which led to significant revenue but also economic hardship for users. Following a partnership dispute, ABC merged with XYZ Co. Ltd., which included a limitation of liability clause and an arbitration agreement. A lawsuit was filed by Mr. Rohtash against XYZ for non-payment of winnings, raising issues regarding the suit's maintainability, the enforceability of the agreement, and the entitlement of the plaintiff to any amount.

Uploaded by

Md Mujtaba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MOOT COURT PROBLEM FOR IPL 01

1. In the state of Bahalika in the Union of Kidia, Mr. Paresh and Mr. Harish
were two friends who got a Limited Liability Partnership (LLP)
incorporated on 01.03.2022 with the name “ABC LLP” (hereinafter
referred to as „ABC‟), wherein each of them contributed Rs. 10,000.
Their liabilities and obligations in ABC were also to be equal. In order to
increase the accessibility and marketability of ABC, they launched a
mobile-based application (hereinafter referred to as „App‟) on
01.04.2022 by the name “ABC Real.”

2. The App provided a platform to its users where, with respect to real
world sporting events, certain questions were posted with limited options
as probable answers. The users were free to either choose just one option
or, in certain cases, more than one option as a possible outcome and put
his/her bid on the selected answer. If the actual outcome of the
culminated real world sporting event was to be the one that was chosen
by the user, he was to get certain predetermined monetary rewards. In
any other case, the user had to forfeit his money.

3. Instantly since its launch in 2022, the App became hugely famous
among its users, attracting their attention with the proposed rewards to a
winner, and the number of users skyrocketed. The App started
generating high revenues for Mr. Paresh and Mr. Harish but conversely,
its popular usage caused severe economic hardships for the users who
could not win the same profits as the App was giving to winners. ABC
claimed in a social media post circulated by it through its various social
media handles that only skilful users – skilful enough to assess the
possible outcome of a real world sporting event – can win the rewards on
the App.

4. Within 2 years of its launch, the App started bringing in staggering


amounts of revenue. However, in November 2023, Mr. Paresh and Mr.
Harish had certain differences of opinion, and consequently, it led to Mr.
Paresh pulling out of the LLP, leaving Mr. Harish to manage it.

5. Mr. Rohan Das was a businessman who had experience in managing


such body corporates as ABC. He, with 3 other people, had incorporated
a company with the name “XYZ Co. Ltd.” (hereinafter referred to as
XYZ) with similar objects and services as ABC in 2019 in the state of
Bahalika. He proposed to Mr. Harish to merge his LLP in XYZ.

6. After several rounds of negotiation, an agreement was executed between


ABC and XYZ in 01.04.2024, by which ABC got merged into XYZ.
Inter alia, the agreement had the following clause in it:

Clause 11: “Limitation of Liability: That XYZ’s


aggregate monetary liability for any loss, cost, claim,
or injury for any conduct of ABC, which arose before
the execution of this Agreement, shall not exceed INR 5
Lakhs (Indian National Rupees Five Lakhs). XYZ shall
not be liable for any indirect, special, or punitive
damages incurred by anyone for the conduct of ABC
before the execution of this Agreement.”

7. During the negotiation rounds, at the insistence of XYZ, ABC revised


several terms of use of their App, which were to come into effect from
the date of execution of the aforesaid agreement. These terms governed
the relationship between the user and the App. However, the App
continued with the name as ABC Real. The changed terms of use came
into effect from the execution date of the merger agreement of ABC and
XYZ.

8. The revised terms did not change the following clause, and it was agreed
that this clause will apply mutatis mutandis, i.e., LLP is to be read as the
Company from the date of execution of the aforesaid agreement:

Clause 19 “Arbitration: That if at any time any dispute


or difference shall arise between the LLP and its User,
the same shall be referred to arbitration. The said
dispute or difference shall be referred to arbitration if
both the parties at the time of dispute or arisal of
difference consent to resolve the dispute via arbitration,
and the arbitrator shall be appointed by the LLP and
the User with their mutual consent. This clause will
come into force only if the User stays dissatisfied with
the solution provided by the Internal Complaints
Department of the LLP.”

9. On 20.10.2024, XYZ received a legal notice, pertaining to a suit filed


against it, from the District Court, Bahalika. Along with the notice, a
copy of the plaint filed in the suit was also attached. The plaint provided
that:

a. On 23.10.2022, one Mr. Rohtash had bid on the following


question on the App:

“India to win the match against Pakistan on 23rd October, 2022:

Yes (Rs. 10 for Rs. 2)

No (Rs. 10 for Rs. 8)”


b. Mr. Rohtash selected “Yes” and paid Rs. 60 Lakhs.

c. The match was won by India, and Mr. Rohtash won Rs. 3 Crores
(out of which 2% of the gross winning amount had to be deducted
as Platform Fees by the App).

d. Thereafter, he allegedly made several requests and complaints to


the Internal Complaints Department of ABC for withdrawal of the
winning amount but in vain. On 03.11.2022, ABC refused to
disburse the amount.

e. Mr. Rohtash sued XYZ for specific performance of the agreement


and disbursal of his due winning amount.

10. XYZ contacted a renowned law firm, PQR Associates, to seek legal
advice. Inter alia, PQR Associates told XYZ that the suit is not
maintainable as there exists an arbitration agreement. Also, the
agreement between Mr. Rohtash and ABC is void as it is a wagering
agreement in nature, so the specific performance can easily be avoided.
Additionally, the limitation of liability clause in the merger agreement
will be beneficial for XYZ. Therefore, it will be an easy case for them.
In these meetings, Mr. Harish also mentioned that his liability cannot be
more than INR 10,000 as an erstwhile partner of ABC, an LLP. PQR
Associates appeared for XYZ and submitted the written statements.

11. After going through the pleadings of both parties, the court formulated
the following issues:

I. Whether the suit is maintainable?

II. Whether the agreement between Mr. Rohtash and ABC is enforceable
in law?
III. Whether specific performance is to be awarded for the agreement
mentioned in issue II?

IV. Whether the plaintiff is entitled to any amount? If yes, then what is
the amount the plaintiff is entitled to receive, and who is liable to pay
the same?

Kindly note that the laws of the Union of Kidia are in pari materia to the laws
of Union of India and the jurisdiction of courts in Bahalika is the same as that
of the courts in Delhi, India.

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