The Delhi High Court recently passed an order directing a Korean telecom equipment manufacturer to deposit INR 290 Crore as an interim security in a patent infringement dispute filed by a Canadian company. Taking a look at the decision, S. Sri Ganesh Prasad explains the Court’s rationale and looks at some of the other previous decisions where the courts have directed for such an interim relief. Ganesh is a third-year B.A. LL.B. (Hons.) student at the West Bengal National University of Juridical Sciences (WBNUJS), Kolkata. He is interested in a wide range of private and commercial law subjects, including arbitration, intellectual property, and competition law. He particularly enjoys engaging with the discourse around the market implications of IP, its strategic use as a competitive tool, and the broader intersections of tech policy and public welfare.
Delhi HC Orders ₹290 Cr Interim Deposit In A Patent Dispute
S. Sri Ganesh Prasad
In a rare move, the Delhi High Court on July 1 ordered Korean telecom equipment manufacturer Ace Technologies Corp to furnish a ₹290 crore bank guarantee or fixed deposit as interim security in a patent infringement suit initiated by Communication Components Antenna Inc (CCA). The order passed by Justice Saurabh Banerjee is possibly the largest ever pre-decree deposit mandated in an Indian IP litigation. In this post, I’ll look at the rationale behind the order and some of the notable cases where similar deposits have been directed by the courts.
Background
CCA, a Canadian telecom equipment company, holds Indian Patent No. 240893 covering advanced base station antennae. It filed suit in 2018 against Ace Technologies (Korea), Shin Ah Ltd., its Hong Kong distributor, and Indian subsidiaries for infringing this patent by selling antennae to Reliance Jio.
In July 2019, given that Ace, a South Korean entity, did not possess any assets in India, the Court conditioned the continuation of its Indian sales on a financial safeguard. Specifically, Ace was directed to furnish a bank guarantee of ₹40 crores, reflecting 10% of ₹437.95 crores, the total value of sales made in India prior to the institution of the suit. In addition, Ace was required to deposit ₹14.5 crores in cash, corresponding to 10% of ₹148.47 crores in sales made during the pendency of the litigation
These interim directions were challenged all the way up to the Supreme Court, which declined to interfere, noting in particular that Ace is a foreign-domiciled company with no assets in India (see here for the DB order and here for the SC order). With the suit still at the evidence stage, CC has now applied for an additional ₹290 crores, which is 25% of the total ₹1160 crores claimed in damages. This application is made under Section 151 of the Civil Procedure Code (CPC), which allows courts to exercise their inherent powers where necessary to ensure justice or prevent misuse of legal process. Although section 151 cannot override specific provisions of the CPC, it fills procedural gaps when there exists no other remedy. CCA argues that fresh risks have arisen and that additional security is necessary, especially since enforcing any future decree against a foreign party without assets in India could be difficult.
Rationale for the Court’s Decision
First, Ace is incorporated in South Korea, and its co-defendant, Shin Ah Ltd, is based in Hong Kong; neither country is a “reciprocating territory” under section 44A CPC. Therefore, a future decree from the Indian court cannot be automatically enforced in either jurisdiction. The court explicitly referred to Article 217 of the Korean Civil Procedure Act, which makes enforcement conditional on mutual guarantee or reciprocity, which India lacks. “There would, thus, be no sanctity to a decree passed by a Court of Law in India.” [¶38]
Second, Ace’s own affidavit (dated 12.11.2024) disclosed:
- Only ₹5.68 crores in Indian cash holdings
- ₹4–5 crores in depreciating equipment
- Land self-valued at ₹18 crores
This falls drastically short of the ₹1160 crores in damages claimed. This was coupled with the fact that Ace ceased business operations in India, with no ongoing revenue, which meant that by the time this litigation concludes, there is a serious risk that the defendant would not be in a position to satisfy any decree “The financial position of defendant no.1… is indeed in a precarious state.” [¶42] Therefore, the earlier ₹54.5 crores already deposited had lost its protective edge due to changed facts.
Third, the Court found that Order XXXVIII Rule 5 CPC (which allows a plaintiff to seek attachment of a defendant’s property to prevent the frustration of a decree), was inapplicable since it presupposes the existence of attachable property within India, which is absent here. Therefore, only Section 151 CPC could be invoked to prevent the litigation from becoming a futile exercise. To ground its exercise of discretion, the Court turned to well-established precedent. The starting point was Deoraj v. State of Maharashtra (2004), where the Supreme Court held that even interim reliefs resembling final relief may be granted in rare cases where denying such protection would “prick the conscience of the Court” and make any final order effectively meaningless.
Additionally, the Court noted its own recent judgments in Nokia Technologies v. Oppo and RxPrism v. Canva, which showed that courts may require interim monetary deposits even outside the conventional CPC framework, especially from foreign defendants with no local enforcement risk mitigation.
The Court found that the claim of ₹1160 crores was not arbitrarily inflated and was supported by documentation and material on record. it accepted the figure as plausible and ordered ₹290 crores, approximately 25% of the claim, to be deposited. Justice Banerjee didn’t explain why it was 25% in particular (as opposed to, say, 10% or 50%), but it is clear from the text that this figure was proposed by the plaintiff and the Court found it reasonable, given the scale of the risk and the credibility of the claim, especially given that previous orders in the same litigation had pegged interim security (in 2019) at 10% of infringing sales figures. This time, the 25% figure reflected not merely a higher claim, but a more acute risk profile.
Is ₹290 Crores Too Much?
This order is definitely unprecedented. But is it excessive? Perhaps not. As outlined earlier, a prima facie case of irreparable harm has been made out and Ace had exited the Indian market, declared negligible local assets, and is domiciled in a country with no reciprocal enforcement
Still, the order sets a high watermark for interim relief in non standard essential patent (SEP) disputes contexts. Comparable precedents are hard to find in the UK, EU, or US, where security is typically limited to undertakings or modest bonds. Even in Germany, large deposits like the €646.75 million in Nokia v. Amazon have been linked to enabling injunctions, not preserving enforceability during trial. If any reader is aware of a larger or similar order in a non-SEP context, it would be worth examining how proportionality was handled there.
The challenge, however, lies in the fact-specific nature of such orders; a deep look into past cases and the financial health of such defendants might be helpful, but the line would still remain unclear. This raises a crucial question: by what metric or threshold should courts determine when an interim deposit crosses the line from protective to excessive?
India’s move is bold. It reflects a pragmatic commitment to ensuring that cross-border litigation does not collapse at the enforcement stage. But the bar is now high, and future courts must tread carefully to avoid turning interim security into a gatekeeping tool that deters legitimate foreign claimants.