Wipro, ex CFO Dalal referred to arbitration over alleged non-compete clause breach

(Reuters) – Indian IT major Wipro will go into arbitration with its former CFO Jatin Dalal after he joined rival Cognizant, according to a civil court order on Wednesday in the southern Indian city of Bengaluru.

Wipro in November alleged Dalal’s appointment as Cognizant’s CFO violated a non-compete clause, which lists 10 of Wipro’s competitors and states that he cannot work in any capacity with them for 12 months after his exit.

Dalal joined Cognizant on Dec. 1, the day after his last day of employment with Wipro.

In its petition, Wipro asked for 251.5 million rupees ($3.02 million) plus interest in damages, as well as a permanent injunction on Dalal from being able to share company-sensitive details with Cognizant.

Dalal’s agreement with Cognizant has conditions similar to his contract with Wipro.

In response, Dalal said in November that non-compete clauses were in violation of Section 27 of the Indian Contract Act and therefore unenforceable.

He applied for arbitration on the grounds that the agreements he signed allow for dispute resolution via this method.

This is the second such action Wipro has taken against its former senior executives.

Last month, Wipro filed a complaint in the U.S. District Court in New Jersey against the company’s former healthcare and medical devices sector head Mohd Haque, who also joined Cognizant.

Wipro, Cognizant and Dalal did not immediately respond to requests for comment.

($1 = 83.2993 Indian rupees)

(Reporting by Haripriya Suresh and Sai Ishwarbharath B in Bengaluru; Editing by Janane Venkatraman)