Khaitan & Co Represented Bitcipher Labs And Nextgendev Solutions Before The Bombay High Court In Landmark Arbitration-Related Proceedings
Khaitan & Co represented Bitcipher Labs and Nextgendev Solutions before the Bombay High Court in landmark arbitration-related proceedings
The leading law firm in India, Khaitan & Co, successfully represented Bitcipher Labs LLP and Nextgendev Solutions Private Limited before the Bombay High Court in a key arbitration dispute concerning virtual digital assets, force majeure implications, and obligations arising under digital platform agreements.
High Court Order
In its order dated 7 October 2025, Justice Somasekhar Sundaresan dismissed petitions filed by Zanmai Labs Pvt. Ltd. (operator of WazirX) under Section 37 of the Arbitration and Conciliation Act, 1996, thereby upholding the Arbitral Tribunal’s directions requiring Zanmai to secure Bitcipher and Nextgendev’s cryptocurrency assets held on WazirX through bank guarantees and/or escrow deposits.
Background of the Dispute
The dispute concerned an alleged cyberattack on WazirX in July 2024 which purportedly led to the theft of ERC-20 tokens worth approximately USD 235 million.
Rejecting Zanmai’s contention that the losses could be “socialised” across users by way of a scheme of arrangement proposed by its parent company, Zettai Pte. Ltd., in Singapore, the Bombay High Court held that Zanmai (WazirX), under its Broker Agreements with Bitcipher and Nextgendev, remained responsible for safeguarding user assets, and that force majeure could not justify redistribution of losses.
Court’s Observations on Custodial Responsibility
The Bombay High Court also made observations regarding the lack of privity between Zettai and Bitcipher and Nextgendev, as well as other users of WazirX. In response to Zanmai’s contention that Binance, the largest cryptocurrency exchange in the world, was responsible for users’ assets, the Court noted that there was no clarity on Binance’s purported role in this regard.
Significance of the Ruling
The ruling reinforces custodial accountability in virtual digital asset operations and upholds the Tribunal’s balanced protective measures.
Representation
Bitcipher Labs LLP and Nextgendev Solutions Private Limited were represented by Ravitej Chilumuri (Partner), Aafreen Noor (Senior Associate), Ishita Mundhra (Associate), along with Senior Counsel Venkatesh Dhond and Counsel Shyam Kapadia from Khaitan & Co.
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