Microsoft Corporation V. Zoai Founder: How an Arbitrator’s Self-Praise and Improper Research Led to Setting Aside a Domain Dispute Award

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Sep 1, 2023, 5:51:36 AMSep 1
We are pleased to bring to you a guest post by Akshay Ajayakumar on the Delhi High Court’s order in Microsoft Corporation v. Zoai Founder. Akshay is a graduate of National Law University, Jodhpur, and has an LL.M in IP and Competition Law from the Munich Intellectual Property Law Center (MIPLC). He is currently a consultant for domain name disputes at Sim and San, Attorneys At Law. His previous posts can be accessed here. Views expressed here are those of the author. He represents/has represented clients in domain name disputes.

Microsoft Corporation V. Zoai Founder: How an Arbitrator’s Self-Praise and Improper Research Led to Setting Aside a Domain Dispute Award

Akshay Ajayakumar

Microsoft filed a domain name dispute complaint before the National Internet Exchange of India (NIXI) concerning the domain name, <> claiming that it owns the trademark “Zo”, under which an AI chatbot was launched in December 2016. As the Respondent did not enter appearance it proceeded ex parte. Thereafter, the Arbitrator passed the award rejecting the complaint on the ground that the complainant failed to establish that the Respondent had no legitimate interest in the domain name and the domain name was registered and used in bad faith. This award was challenged by the Complainant (Microsoft Corporation), before the Delhi High Court on the grounds of patent illegality (see paras 26 to 30 Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India) in Microsoft Corporation V. Zoai Founder.


Primarily, the award was contested under the ground of patent illegality, available under Section 34(2A) of the Arbitration and Conciliation Act (‘Arbitration Act’) stating that, inter alia:

  1. The Arbitrator was biased; and
  2. The Arbitrator has undertaken independent research without providing an opportunity for the Complainant to rebut.

Whether the Arbitrator was Biased?

The Arbitrator ran a blog regarding .in Domain Name Dispute Resolution Policy (‘INDRP’) domain disputes on <> (which seems to be taken down) and in the blog the Arbitrator was included in the “Hall of Fame” for denying the maximum number of complaints under the INDRP domain name dispute mechanism.  This form of self-appreciation was not condoned by the court and the Court held that the “arbitrator’s inclusion of his name in a “Hall of Fame”, based on his decisions against the complainants in four INDRP disputes, does give rise to such a justifiable apprehension as to his neutrality.”

According to WIPO statistics, over 91% of domain name disputes filed at the WIPO Arbitration and Mediation Center (“WIPO”) resulted in transfer or cancellation, while only around 9% resulted in denial. This indicates that domain disputes favour the Complainant (i.e. the trade mark owners). Thus, the likelihood of denying a complaint is very low; Arbitrators rarely draft awards denying complaints. Since Arbitrators also represent parties in domain name dispute proceedings (currently prohibited by the NIXI), having awards denying Complaints could enhance their market value as representatives (especially for respondents) in domain disputes.

Although the current INDRP Code of Ethical Conduct for Arbitrators forbids empanelled arbitrators from representing parties before the NIXI domain dispute proceeding, this was not always the case. Moreover, such an arbitrator can still represent before other domain dispute resolution providers (like WIPO). Thus, the Arbitrator in this dispute, by ranking himself as a “Hall of Fame” Arbitrator, seems to have done so to increase his perceived value as a representative for domain disputes at the expense of his neutrality as an Arbitrator.

The court affirmed the bias of the Arbitrator by stating that the “inclusion of the name of the learned Arbitrator in the “Hall of Fame” is based upon the fact that he has denied the maximum number of INDRP complaints. This is not a general comment on applicable law or policy, but a specific indication on how such cases should be finally decided. The learned Arbitrator has expressed a view that denial of INDRP complaints is per se a positive achievement, without reference to the applicable law, policy, or evidence. The very least that a litigant is entitled to expect is that an arbitrator would be agnostic to the result of the arbitral proceedings, whatever his or her predisposition may be on particular points which arise for adjudication.

How Much Independent Research is Allowed?

As per INDRP Rules of Procedure, the Arbitrator is bound to conduct the proceeding under the Arbitration Act, Dispute Resolution Policy, the Rules of Procedure and any by-laws, rules and guidelines (Rule 13).  It also requires the Arbitrator to treat the Parties equally and provide each of them with a fair opportunity to present their case. It follows that the Arbitrator will have to provide an opportunity to the respondent to controvert if he has unearthed any evidence by himself.

It is common in INDRP and Uniform Domain Name Dispute Resolution Policy (UDRP) Proceedings for the Arbitrator/Panel to undertake limited independent research to arrive at an award. Rule 10 of the Rules for UDRP (the “Rules”) requires equal treatment of the parties and fair opportunity for each party to present its case. Therefore, the panel can conduct private research, but only if it does not compromise these principles (see Ford Motor Company, Ford Motor Company of Canada, Limited v. Domain Admin, Whois Protection / Domain Administrator, Radio plus, spol.s r.o. (WIPO Case No. D2022-0954)).

Furthermore, the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview ”), section 4.8, summarizes that the Panels may do limited factual research on public records to help decide the case merits. The WIPO Overview further states that independent research may involve:

  • checking the website linked to the disputed domain name,
  • reviewing historical sources such as the Internet Archive,
  • consulting dictionaries or encyclopaedias, or
  • searching trademark databases.

It further suggests that if a panel relies on information outside the pleadings, it may issue a procedural order to let the parties comment on it, especially if it is not widely known or easily accessible.

In the present instance, the Arbitrator had also undertaken independent Google research, looked up in the dictionary, and <>. The Complainant alleged that the Arbitrator used independent and uncontroverted research to draw factual and legal conclusions. Such factual conclusions include findings such as “the choice of the words Zo.Ai maybe incidental on the disputed domain, and mainly to indicate AI technology rather than the Complainant’s product”  and “as on date Complainant mark hasn’t gained that much popularity/reputation.”

There have been different instances of Arbitrators doing independent research. In Rahmath Pathipagam (Chennai) Private Limited v. Rahmath Publications Private Limited (WIPO Case No. D2022-0736 ), the panel denied the Complaint after stating that the case was unsuitable for resolution under the UDRP Policy after making an independent search at the Trade Marks Registry despite the Respondent not responding. Also, in Bright Simons V. Sproxil, Inc & Anr., the award was challenged because the Arbitrator fetched the correct application from evidence instead of relying on the wrong application number provided by the Complainant was not allowed. Meanwhile, in Rational Intellectual Holdings Ltd. vs. Sunny Karira, and Ors. where the Arbitrator did substantial research at the Trade Marks Registry,  the Court held that the Arbitral Tribunal was required to give each party a full opportunity to present its case and since such an opportunity was not provided, it was set aside.

Therefore, the issue here is not the Arbitrator’s independent research, but the Arbitrator’s failure to allow such research to go uncontroverted. Considering the above, the court held that an Arbitral Tribunal cannot use its research to provide evidence that an absent respondent failed to submit. This principle of fairness, which requires the Arbitrator to share any evidence he/she obtained with the affected party, is part of Section 18 of the Arbitration Act. The court specifically relied on Ssangyong, to hold that where materials are taken behind the back of the parties by the Tribunal, on which the parties have had no opportunity to comment, the ground under Section 34(2)(a)(iii) of the Arbitration Act would be made out. The court reaffirmed the established principle that an Arbitrator cannot introduce uncontroverted evidence against any party (see Rational Intellectual Holdings Ltd. vs. Sunny Karira, and Ors).

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