On April 4, the Division Bench of the Delhi High Court had set aside its November 2018 order in the case of ecommerce platform ShopClues vs US-based headphone maker SkullCandy and French personal care company L\u2019Oreal. The HC further directed Justice Pratibha Singh to reinvestigate and present the case again in a hearing on May 6, 2019.\u00a0\r\n\r\nThe Delhi High Court\u2019s earlier order had denied ShopClues protection under Section 79 of the IT Act, which offers safe harbour to intermediaries (or marketplaces, in this case). Also, the court had restrained the ecommerce platform and other online sellers from selling counterfeit products. \r\n\r\nThe Division Bench comprising of Justice Muralidhar and Justice I.S. Mehta has now noted that its earlier order was passed without following the complete court procedure. The bench also noted that the judgement was made without giving a fair opportunity to ShopClues to present its case. \r\n\r\nIn response to this order, ShopClues said, "ShopClues welcomes the Delhi High Court\u2019s order and believes that it will benefit all ecommerce players who operate a marketplace platform.\u201d\r\nShopClues Vs L\u2019Oreal And SkullCandy\r\nIn November 2018, a judgment was passed by Justice Pratibha Singh in lawsuits filed by \u00a0L\u2019Oreal and SkullCandy against ShopClues. The lawsuit has alleged ShopClues of selling counterfeit products on its platform. ShopClues filed two appeals to the Delhi High Court. The matter was first heard on January 14, 2019 in respect of L\u2019Oreal appeal and on February 1, 2019 in relation to the Skullcandy appeal. \r\n\r\nAmong other arguments, ShopClues had said in its appeal that it was not given an opportunity to present its case and thus, the judgment which was passed without following the due procedure of law was erroneous and needed to be set aside.\r\n\r\nGurugram-based ecommerce platform ShopClues was founded in 2011 by Sanjay Sethi and Radhika Ghai. The company claims to have 100 Mn monthly visitors and 28 Mn listing on its platform. ShopClues has over 600K merchants on its platform spread across 31.5K pin codes across India. The company became a Unicorn in 2016 with a Series E funding round led by Sovereign Wealth Fund GIC Pte Ltd. Other investors such as Tiger Global Management LLC, Helion Venture Partners & Nexus Venture Partners also participated in the round. \r\nOther Similar Cases\r\nThere have been similar lawsuits against ecommerce companies in the past. In 2015, a saree distributor Shree Meena Creations had also filed a lawsuit against ecommerce majors including Flipkart, Amazon and eBay, along with about two dozen of their online sellers for allegedly selling replicas of their apparel.\r\n\r\nAnother saree brand Nalli Sarees had also served a cease and desist order to Snapdeal\u00a0for allegedly using Nalli\u2019s registered trademark and claiming to have original Nalli sarees on their portal.\r\n\r\nFurther in 2017, a German luxury products maker Montblanc had sued ecommerce platform digaaz.com for selling counterfeit pens manufactured by the company at lower rates.\r\n\r\nAfter this Delhi High Court judgment of banning ecommerce website ShopClues from selling counterfeit products, the All India Online Vendors Association (AIOVA) had also asked the consumers affairs ministry and the Department of Industrial Policy and Promotion (DIPP) to widen the ruling to all ecommerce retailers operating in the country.\r\nIntermediary Liability \r\nThis is not the first case which has questioned the intermediary liability in India. This week, Chinese video-sharing app TikTok was banned by the Madras High Court. The Court had cited\u00a0objectionable user content as the reason for this ban, while TikTok argued that it is an intermediary in this matter.\u00a0 \r\n\r\nIn December 2018, MeitY had also released draft intermediary guidelines which proposed that the guidelines be amended to require intermediaries to trace and report the origin of government deemed defamatory messages within 72 hours of receiving a complaint.\r\n\r\nUpdate 1: April 18, 2019 | 3:08 PM\r\n\r\nThe contending party L'Oreal said in a media statement, "The intermediary\u00a0status of ShopClues still stands quashed as on date. This is\u00a0because of 2 reasons - (a) The Division Bench in its order nowhere quashes Para 19 of the Order of\u00a0the Single Judge and in fact it is para 19 which contains the point regarding intermediary status; (b) Vide a separate judgment (after trial and evidence), the\u00a0Saket District Court has again in parallel proceedings declared ShopClues to not be an intermediary (judgment attached - highlighted in yellow). ShopClues has appealed from this judgment and not got stay from the High Court."\r\n\r\nUpdate 2: April 18, 2019 | 3:08 PM\r\n\r\nPost's title was changed from 'Delhi HC Stays Its 2018 Order To Restore ShopClues' Intermediary Status' to 'After ShopClues' Plea, Delhi HC Sets Aside Its 2018 Order'.