International Conference on
“ARBITRATION IN THE ERA OF GLOBALIZATION”
th th11 & 12 December, 2015New Delhi
ICA ARBITRATION QUARTERLYJanuary-March, 2016
Vol. 188
SPECIAL ISSUE
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016
STATEMENT OF PURPOSEEDITORIAL BOARD
Mr. N. G. Khaitan
Dr. Kirty A Dave
Dr. P. C. Markanda
Mr. R K Sanghi
Mr. Suman Jyoti Khaitan
Mr. Nitin K Parekh
Dr. A Didar Singh
Mr. Arun Chawla
EDITOR
Mr. D. Sengupta
Disclaimer: The views expressed in the articles here are solely those of the authors in his private capacity and do not in any way represent the views of the Indian Council of Arbitration or the Editorial Board of the ICA Arbitration Quarterly.
The ICA Arbitration Quarterly, published by the Indian Council of Arbitration, aims to be a scholarly journal to provide independent platform on issues in internal and international commercial arbitration.
The object of the Quarterly is to ensure in-depth studies of the most important current issues in domestic and international arbitration, giving it even more urgency as a forum for original thinking, threadbare analysis and reporting on regional trends in order to contribute to the promotion and development of ADR and Arbitration practices.
ICA welcomes the contribution on issues relating to domesticand international commercial arbitration and other ADR mechanisms. The persons intending to contribute in the Quarterly may send their articles to:
The EditorICA Arbitration QuarterlyIndian Council of ArbitrationFederation House,Tansen Marg,New Delhi-110001.Email: [email protected]
Note:
The articles, speeches contained in the Quarterly do not necessarily reflect the views of the Editorial Board of ICA.
The submission of article by the intending contributor shall imply automatic transfer of copyright of the author to the publisher of the Quarterly. Any reproduction of the printed article in the Quarterly or any part thereof without the permission of the Council is tantamount to violation of copyright.
Publisher:Indian Council of Arbitration,Federation House, Tansen Marg,New Delhi-110001
The salient features of the amendments are as under:
(I) In order to ensure neutrality of arbitrators, it is proposed to amend Section 12 to the effect that when a person is approached in connection with possible appointment of arbitrator, he shall disclose in writing about existence of any relationship or interest of any kind, which is likely to give rise to justifiable doubts. Further, if a person is having specified relationship, he shall be ineligible to be appointed as an arbitrator.
(ii) Insertion of a new provision that the Arbitral Tribunal shall make its award within a period of 12 months. Parties may extend such period up to six months. Thereafter, it can only be extended by the Court, on sufficient cause. The Court while extending the period may also order reduction of fees of arbitrator(s) not exceeding five percent for each month of delay, if the court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal. If the award is made within a period of six months, arbitrator may get additional fees if the parties may agree.
(iii) It is proposed to insert a provision for fast track procedure for conducting arbitration. Parties to the dispute may agree that their dispute be resolved through fast track procedure. Award in such cases shall be given in six months period.
(iv) Amendment of Section 34 relating to grounds for challenge of an arbitral award, to restrict the term 'Public Policy of India" (as a ground for challenging the award) by explaining that only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against the Public Policy of India.
(v) A new provision to provide that application to challenge the award is to be disposed of by the Court within one year.
(vi) Amendment to Section 36 to the effect that mere filing of an application for challenging the award would not automatically stay execution of the award. Award can only be stayed where the Court passed any specific order on an application filed by the party.
(vii)A new sub-section in Section 11 to be added to the effect that an application for appointment of an Arbitrator shall be disposed of by the High Court or Supreme Court as expeditiously as possible and an endeavour should be made to dispose of the matter within 60 days.
(viii)A new Section 31A is to be added for providing comprehensive provisions for costs regime. It is applicable both to arbitrators as well as related litigation in Court. It will avoid frivolous and meritless litigation/arbitration.
(ix) Section 17 is to be amended for empowering the Arbitral tribunal to grant all kinds of interim measures which the Court is empowered to grant, under Section 9 and such order shall be 'enforceable in the same manner as if it is an order of Court.
Apart from above, amendments in Sections 2(1)(e) , 2(1)(f)(iii), 7(4)(b), 8(1) and (2), 9, 11, 14(1), 23, 24, 25, 28(3), 31(7)(b), 34 (2A) 37, 48, 56 and in Section 57 are also proposed for making the arbitration process more effective.
This law deemed to have come into force from 23rd October 2015.
THE ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2015
PASSED BY THE PARLIAMENT
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016
STATEMENT OF PURPOSEEDITORIAL BOARD
Mr. N. G. Khaitan
Dr. Kirty A Dave
Dr. P. C. Markanda
Mr. R K Sanghi
Mr. Suman Jyoti Khaitan
Mr. Nitin K Parekh
Dr. A Didar Singh
Mr. Arun Chawla
EDITOR
Mr. D. Sengupta
Disclaimer: The views expressed in the articles here are solely those of the authors in his private capacity and do not in any way represent the views of the Indian Council of Arbitration or the Editorial Board of the ICA Arbitration Quarterly.
The ICA Arbitration Quarterly, published by the Indian Council of Arbitration, aims to be a scholarly journal to provide independent platform on issues in internal and international commercial arbitration.
The object of the Quarterly is to ensure in-depth studies of the most important current issues in domestic and international arbitration, giving it even more urgency as a forum for original thinking, threadbare analysis and reporting on regional trends in order to contribute to the promotion and development of ADR and Arbitration practices.
ICA welcomes the contribution on issues relating to domesticand international commercial arbitration and other ADR mechanisms. The persons intending to contribute in the Quarterly may send their articles to:
The EditorICA Arbitration QuarterlyIndian Council of ArbitrationFederation House,Tansen Marg,New Delhi-110001.Email: [email protected]
Note:
The articles, speeches contained in the Quarterly do not necessarily reflect the views of the Editorial Board of ICA.
The submission of article by the intending contributor shall imply automatic transfer of copyright of the author to the publisher of the Quarterly. Any reproduction of the printed article in the Quarterly or any part thereof without the permission of the Council is tantamount to violation of copyright.
Publisher:Indian Council of Arbitration,Federation House, Tansen Marg,New Delhi-110001
The salient features of the amendments are as under:
(I) In order to ensure neutrality of arbitrators, it is proposed to amend Section 12 to the effect that when a person is approached in connection with possible appointment of arbitrator, he shall disclose in writing about existence of any relationship or interest of any kind, which is likely to give rise to justifiable doubts. Further, if a person is having specified relationship, he shall be ineligible to be appointed as an arbitrator.
(ii) Insertion of a new provision that the Arbitral Tribunal shall make its award within a period of 12 months. Parties may extend such period up to six months. Thereafter, it can only be extended by the Court, on sufficient cause. The Court while extending the period may also order reduction of fees of arbitrator(s) not exceeding five percent for each month of delay, if the court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal. If the award is made within a period of six months, arbitrator may get additional fees if the parties may agree.
(iii) It is proposed to insert a provision for fast track procedure for conducting arbitration. Parties to the dispute may agree that their dispute be resolved through fast track procedure. Award in such cases shall be given in six months period.
(iv) Amendment of Section 34 relating to grounds for challenge of an arbitral award, to restrict the term 'Public Policy of India" (as a ground for challenging the award) by explaining that only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against the Public Policy of India.
(v) A new provision to provide that application to challenge the award is to be disposed of by the Court within one year.
(vi) Amendment to Section 36 to the effect that mere filing of an application for challenging the award would not automatically stay execution of the award. Award can only be stayed where the Court passed any specific order on an application filed by the party.
(vii)A new sub-section in Section 11 to be added to the effect that an application for appointment of an Arbitrator shall be disposed of by the High Court or Supreme Court as expeditiously as possible and an endeavour should be made to dispose of the matter within 60 days.
(viii)A new Section 31A is to be added for providing comprehensive provisions for costs regime. It is applicable both to arbitrators as well as related litigation in Court. It will avoid frivolous and meritless litigation/arbitration.
(ix) Section 17 is to be amended for empowering the Arbitral tribunal to grant all kinds of interim measures which the Court is empowered to grant, under Section 9 and such order shall be 'enforceable in the same manner as if it is an order of Court.
Apart from above, amendments in Sections 2(1)(e) , 2(1)(f)(iii), 7(4)(b), 8(1) and (2), 9, 11, 14(1), 23, 24, 25, 28(3), 31(7)(b), 34 (2A) 37, 48, 56 and in Section 57 are also proposed for making the arbitration process more effective.
This law deemed to have come into force from 23rd October 2015.
THE ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2015
PASSED BY THE PARLIAMENT
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016
Editor's Message .........................................................................................................................01
Articles
Attitude Leading to Disputes and Arbitration ......................................................................03
by Mushtaque Merekar
India - Pioneer in Maritime Trade............................................................................................11
by Rajiv Sinha
Arbitration and ADR Round Up .........................................................................................16
Case Highlights........................................................................................................................22
Report on International Conference on Arbitration with photos ......................................29
Re-Act ..........................................................................................................................................49
ICA Extra-Ordinary General Meeting ..............................................................................50
Book-Review .............................................................................................................................50
Comments on new Arbitration Law........................................................................................51
CONTENTS
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 01
To start with, I would like to support my message by quoting the passage of lamentation
expressed by Mr. Warren Burger, Chief Justice of Supreme Court of US in 1984, while
addressing the American Bar Association.
"The entire legal profession has become so mesmerized with the stimulation of the courtroom that we tend to
forget that we ought to be healers of conflicts. For many claims, trials by adversarial contests must in time, go
the way of the ancient trial by battle and blood. Our system is too costly, too painful. As healers of human
conflicts, the obligation of the legal profession is to provide mechanisms that can produce an acceptable result in
the shortest possible time, with the shortest possible expense and the minimum of stress on the participants.
That is what justice is all about."
Over three decades ago, Justice Burger foresaw greater use of alternative dispute resolution
methods as a relief to the burden on conventional litigation. ADR has the potential to
provide such relief and has actually provided it in many jurisdictions.
However, it is a common belief that the full potential of ADR, arbitration in particular, has
not been realized in India. The main importance of arbitration lies in its offering a partial
solution to the problems of high cost and delays in the formal judicial system by way of
which the formal system gets benefitted as its caseload can reduce to maximum.
Everyone knows about our judicial system, which suffers from extensive delays. An efficient,
simple and fairly quick judicial service is generally not available to as wide a spectrum of the
population as possible, which weakens the rule of law. As it does not need to emphasize how
vital is the rule of law in a democracy like India, similarly one knows about how an effective
arbitration can help strengthen the rule of law in India.
But in order to create an effective arbitration mechanism, arbitrators should first follow the
procedure which can be made as simplified as possible to complete arbitration within a short
period with reduced cost. It is towards this purpose that institutionalization of arbitration
should be stressed in India. The institutional arbitration can only help revitalize arbitration in
India.
EDITOR'S MESSAGE
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016
Editor's Message .........................................................................................................................01
Articles
Attitude Leading to Disputes and Arbitration ......................................................................03
by Mushtaque Merekar
India - Pioneer in Maritime Trade............................................................................................11
by Rajiv Sinha
Arbitration and ADR Round Up .........................................................................................16
Case Highlights........................................................................................................................22
Report on International Conference on Arbitration with photos ......................................29
Re-Act ..........................................................................................................................................49
ICA Extra-Ordinary General Meeting ..............................................................................50
Book-Review .............................................................................................................................50
Comments on new Arbitration Law........................................................................................51
CONTENTS
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 01
To start with, I would like to support my message by quoting the passage of lamentation
expressed by Mr. Warren Burger, Chief Justice of Supreme Court of US in 1984, while
addressing the American Bar Association.
"The entire legal profession has become so mesmerized with the stimulation of the courtroom that we tend to
forget that we ought to be healers of conflicts. For many claims, trials by adversarial contests must in time, go
the way of the ancient trial by battle and blood. Our system is too costly, too painful. As healers of human
conflicts, the obligation of the legal profession is to provide mechanisms that can produce an acceptable result in
the shortest possible time, with the shortest possible expense and the minimum of stress on the participants.
That is what justice is all about."
Over three decades ago, Justice Burger foresaw greater use of alternative dispute resolution
methods as a relief to the burden on conventional litigation. ADR has the potential to
provide such relief and has actually provided it in many jurisdictions.
However, it is a common belief that the full potential of ADR, arbitration in particular, has
not been realized in India. The main importance of arbitration lies in its offering a partial
solution to the problems of high cost and delays in the formal judicial system by way of
which the formal system gets benefitted as its caseload can reduce to maximum.
Everyone knows about our judicial system, which suffers from extensive delays. An efficient,
simple and fairly quick judicial service is generally not available to as wide a spectrum of the
population as possible, which weakens the rule of law. As it does not need to emphasize how
vital is the rule of law in a democracy like India, similarly one knows about how an effective
arbitration can help strengthen the rule of law in India.
But in order to create an effective arbitration mechanism, arbitrators should first follow the
procedure which can be made as simplified as possible to complete arbitration within a short
period with reduced cost. It is towards this purpose that institutionalization of arbitration
should be stressed in India. The institutional arbitration can only help revitalize arbitration in
India.
EDITOR'S MESSAGE
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201602
Editor
Anyone, who has an experience with institutional arbitration abroad, can highlight how
different the attitudes in India are and how much they could change with the accountability
of an institution and the benefits of the attendant certainty and efficiency.
It is good news that amid a great fanfare, the Parliament has recently passed the long-awaited
Arbitration and Conciliation Act (Amendment) Bill, 2015. By passing this Bill, it is apparent
that the Government seeks to address the problems, which have caused concern in the past
and instill confidence in investors who had been wary of choosing India as a seat of
arbitration.
While it remains to be seen how these reforms will play out in practice, the process of change
must begin in our minds. The mindset needs to be changed. We must recognize that
arbitration, by its very nature, is meant to be an alternative to courts and a speedier remedy
for dispute resolution. Thus, neither the parties, nor the lawyers concerned, nor the
arbitrators appointed by the parties should enter the fray unless and until they are in a
position to accept and respect this fundamental premise.
As stated, hundreds of arbitration cases involving crores in Indian and foreign currency is
pending in the 240 central Public Sector Undertakings. A need has always been felt for public
sector-specific arbitration forum to resolve these cases speedily. We have reasons to believe
that the forum of ICA, which has experts in its Panel drawn from various Public Sector
Undertakings and the Judiciary, and lots of techno-legal professionals, who can deal with any
nature of disputes, will definitely fill this vacuum.
By the time, this issue of the Quarterly reaches the hands of the readers, the New Year would
have ushered in with celebrations. But New Year wishes cannot be time-barred.
So let us wish a Happy New Year 2016 to you and every reader of this journal.
Cheers!
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 03
Introduction
While addressing a Conference on Road Asset
Management System (RAMS) in Delhi the Hon'ble
Minister for Road Transport and Highways
Shipping expressed concern regarding procedural
delays in the implementation of the project and
cautioned the officials that they should be ready for
'Performance Audit'. He further warned that
Ministry may take out the non performers from the
system. The Hon'ble Minister also pointed out that
the officials feel depressed when the salary is not
credited on the first day of the month but sit on
others' due payment for weeks and months.
(Times of India 2nd October 2015).
On the same lines the Hon'ble Chief Minister of
Maharashtra State while addressing a gathering in
Nagpur hinted on the non co-operation of the
officials at lower level and warned that government
shall initiate action against them. (Times of India
2nd November 2015).
The author would like to salute both the Hon'ble
Ministers since the warning may bring a radical and
drastic change in the attitude of the non-
performing officials at the State and Central level
including PSUs . This would ensure not only in the
speedy implementation of the schemes but also
ensure uninterrupted progress and timely
completion of the infrastructural facilities.
The Hon'ble Ministers have acknowledged the
pinch of the performing contractors and
consultants associated with various project whose
grievance is scarcely heard, rather ignored by the
non-performing, negative attitude officials in
powerful position for due justice. Ultimately this
leads to claims and arbitration award apart from
delay in completion of the project.
General trend and fallout
Though the disputes in an engineering project is
inherent, so the provision is made in the contracts,
the cordial and professional relations between
employers, contractors and the consultants, if not
eliminate the disputes altogether but shall certainly
reduce the gravity and severe consequences for
timely completion of the projects.
While it is not intended to cast aspersions on the
professional outlook of the officials in government
run organizations, the consultants specialized in
the parent field are
normally appointed by the government for
preparing Detailed Project Report, conceptual
designs, drawings, cost estimates, tender
documents, project management and resolving
disputes between the contractor and the
organization, amicably. It is only because of the
nature of assignments, responsibilities and day to
day style of working that the officials are not
exposed to the projects of specialized nature, the
government is not in favour to entrust the entire
responsibility of the project to them with
confidence as compared with the consultants in the
specialized field.
Despite this fact, the officials, to claim their
superiority, dictate the consultants which at times
are nonsensical, in contravention to the conditions
of contract and specifications when the consultants
1By: Mushtaque Merekar*
Attitude Leading to Disputes and Arbitration
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201602
Editor
Anyone, who has an experience with institutional arbitration abroad, can highlight how
different the attitudes in India are and how much they could change with the accountability
of an institution and the benefits of the attendant certainty and efficiency.
It is good news that amid a great fanfare, the Parliament has recently passed the long-awaited
Arbitration and Conciliation Act (Amendment) Bill, 2015. By passing this Bill, it is apparent
that the Government seeks to address the problems, which have caused concern in the past
and instill confidence in investors who had been wary of choosing India as a seat of
arbitration.
While it remains to be seen how these reforms will play out in practice, the process of change
must begin in our minds. The mindset needs to be changed. We must recognize that
arbitration, by its very nature, is meant to be an alternative to courts and a speedier remedy
for dispute resolution. Thus, neither the parties, nor the lawyers concerned, nor the
arbitrators appointed by the parties should enter the fray unless and until they are in a
position to accept and respect this fundamental premise.
As stated, hundreds of arbitration cases involving crores in Indian and foreign currency is
pending in the 240 central Public Sector Undertakings. A need has always been felt for public
sector-specific arbitration forum to resolve these cases speedily. We have reasons to believe
that the forum of ICA, which has experts in its Panel drawn from various Public Sector
Undertakings and the Judiciary, and lots of techno-legal professionals, who can deal with any
nature of disputes, will definitely fill this vacuum.
By the time, this issue of the Quarterly reaches the hands of the readers, the New Year would
have ushered in with celebrations. But New Year wishes cannot be time-barred.
So let us wish a Happy New Year 2016 to you and every reader of this journal.
Cheers!
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 03
Introduction
While addressing a Conference on Road Asset
Management System (RAMS) in Delhi the Hon'ble
Minister for Road Transport and Highways
Shipping expressed concern regarding procedural
delays in the implementation of the project and
cautioned the officials that they should be ready for
'Performance Audit'. He further warned that
Ministry may take out the non performers from the
system. The Hon'ble Minister also pointed out that
the officials feel depressed when the salary is not
credited on the first day of the month but sit on
others' due payment for weeks and months.
(Times of India 2nd October 2015).
On the same lines the Hon'ble Chief Minister of
Maharashtra State while addressing a gathering in
Nagpur hinted on the non co-operation of the
officials at lower level and warned that government
shall initiate action against them. (Times of India
2nd November 2015).
The author would like to salute both the Hon'ble
Ministers since the warning may bring a radical and
drastic change in the attitude of the non-
performing officials at the State and Central level
including PSUs . This would ensure not only in the
speedy implementation of the schemes but also
ensure uninterrupted progress and timely
completion of the infrastructural facilities.
The Hon'ble Ministers have acknowledged the
pinch of the performing contractors and
consultants associated with various project whose
grievance is scarcely heard, rather ignored by the
non-performing, negative attitude officials in
powerful position for due justice. Ultimately this
leads to claims and arbitration award apart from
delay in completion of the project.
General trend and fallout
Though the disputes in an engineering project is
inherent, so the provision is made in the contracts,
the cordial and professional relations between
employers, contractors and the consultants, if not
eliminate the disputes altogether but shall certainly
reduce the gravity and severe consequences for
timely completion of the projects.
While it is not intended to cast aspersions on the
professional outlook of the officials in government
run organizations, the consultants specialized in
the parent field are
normally appointed by the government for
preparing Detailed Project Report, conceptual
designs, drawings, cost estimates, tender
documents, project management and resolving
disputes between the contractor and the
organization, amicably. It is only because of the
nature of assignments, responsibilities and day to
day style of working that the officials are not
exposed to the projects of specialized nature, the
government is not in favour to entrust the entire
responsibility of the project to them with
confidence as compared with the consultants in the
specialized field.
Despite this fact, the officials, to claim their
superiority, dictate the consultants which at times
are nonsensical, in contravention to the conditions
of contract and specifications when the consultants
1By: Mushtaque Merekar*
Attitude Leading to Disputes and Arbitration
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201604
If there is resistance from the contractors the
officials go to the extent of assuring them of the
payment with management approval at later a date
and ask them to proceed with the work as
instructed. This is in his own interest to please the
Appraisal Committee to secure higher elevation in
the management at the cost of disputes, arbitration
when the contractor's claim is not entertained
though assured.
Sometimes the Key person or the Project
Superintendence, particularly in case of PSUs
appointed to oversee the infrastructure project
work from the employer's side belongs to an
engineering disciplines other than a Civil
Engineering. The sub ordinate officials at junior
level who are Civil Engineers then dictate the key
person in all matters. There, the control over the
officials becomes totally impossible. The officials
go on merrily issuing instructions without any
consideration to the contract conditions. In turn, it
leads to disputes and arbitration. It is therefore, for
the managements to form a team of officials under
key person who all should be reasonably exposed to
design, specifications, contract management,
contract conditions and dedicated to the project
work from its inception to completion.
A Case Study Programme and set back
Renowned consultants were appointed for
modernization of ship building
facilities. The project work was comprising of
construction of a wet basin offshore for building
superstructure of the ships, construction of
workshops for building ships modules, stores
building for heavy storage and ancillary works
comprising of construction of water tanks and
compressor house for supply of water and
compressed air, storage building for supply of
processed gas required for ship building. The
project work also included supply of heavy cranes
find difficult to implement the instructions. This is
the stage, the relations get strained between the
consultants and the officials. In order to resolve the
stalemate the consultants ask for written
instructions. However, in absence of delegation of
powers the officials find themselves helpless. In
turn they revolt and start feeling that the consultant
is biased and protects the contractor's interest.
Then the officials attempt to implement the
instructions by directing the contractor
independently bypassing the consultant. However,
the contractor declines to honour the instructions.
This prejudices the officials against the consultant
still more. Thus the relations get more and more
strained not only between the consultants and the
officials but also between the contractor and the
officials.
The officials do not assess that their instructions are
in contravention to the provisions in the contract.
The officials then interfere in all matters which
ultimately stalls the project. The contractor then
submits the claims for idling of manpower, plants &
machineries followed by notice for arbitration etc.
It is therefore imperative, having appointed
consultants and contractors impartially without any
undue favour and in most transparent manner the
organization should demonstrate full faith in the
consultant and imbibe this culture down the lines to
the officials associated with the project.
The officials in key positions are so occupied with
meetings and administrative matters that they
hardly keep a check over the officials under them
and provide guidance as necessary. On the contrary,
they are fully dependent on the sub ordinate
officials who sometimes even dictate their
superiors. The officials thus assume powers that of
CEO, MD, CMD, Chairperson etc. themselves
without assessing likely repercussions, disputes,
claims due to their instructions which are at times
not rational.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 05
for handling materials and heavy equipments in ship
building activity.
Upon acceptance of the Detailed Project Report
and designs, drawings different tenders were invited
for (i) construction of wet basin, (ii) construction
of workshops, stores and ancillary works (iii) supply
of a giant crane for transiting ship modules from
the workshop to the launching pads
(iv) supply of cranes for transiting heavy materials
and equipments within the workshops and (v)
supply of cranes for handling materials for ship
building at wet basin.
The consultant had submitted a programme for
completion of project work with the consideration
that progress on all the works would be concurrent
without affecting the ongoing ship building activity
within the complex. Thus it was imperative to plan
interface in such way that progress on all contract
works including ongoing ship building activity
within the complex would not be impeded.
However, due to procedural delay and funding the
work could not be awarded as per programme.
There was a delay of around 12 to 24 months in
awarding the successive contract works whereas it
was supposed to be awarded with a lead period of 2
months. This upset the programme.
The programme was further affected as the
employer could not release the site for erection of
giant crane for more than 2 years after award of
work. Similarly, release of site for construction of
workshops, stores building and ancillary works etc.
was delayed by around a year.
Though there was no delay in releasing the site for
construction of wet basin the completion was
delayed due to unforeseen site conditions and other
reasons not attributable to the contractor.
On the other hand, award of contract work for
supply of cranes within the workshops and at wet
basin was expedited though neither the workshops
were ready to receive the cranes nor the dock wall
for erection of the cranes at wet basin.
All this, attributed severely in completion of the
project as per programme.
Overpowering the Consultants and setback in
completion
As the contract works could not be commenced as
per Consultant's programme the consultant advised
to defer commencement of fabrication work of the
giant crane till the site is made available. The
consultant also apprised urgency for releasing the
area for construction of workshops, stores building
which was occupied by old scrap all around. But
there was an inordinate delay mainly due to lack of
cooperation of the concerned department.
Similarly, the consultant advised to defer award of
contract for supply of crane within the workshop
and at wet basin as the facilities required for erection
were not ready. However, the organization ignored
the advice and allowed fabrication of giant crane at
various locations spread over the area immediately
after award of work. Thus the area which was to be
released for construction of the workshops, stores
etc. was occupied with fabricated segments of the
giant crane.
Interface between the contract works
It was originally planned to release part area for
fabrication and assembly of the segments of the
giant crane while the construction of workshops,
stores etc. would be allowed in the remaining areas
and after erection of the giant crane the balance
works in workshops, stores etc. would be
completed. Similarly, the commencement of work
of erection of the cranes within workshop and at
wet basin was envisaged when half the length of the
workshop and half the length of the wall to support
crane at wet basin would be ready.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201604
If there is resistance from the contractors the
officials go to the extent of assuring them of the
payment with management approval at later a date
and ask them to proceed with the work as
instructed. This is in his own interest to please the
Appraisal Committee to secure higher elevation in
the management at the cost of disputes, arbitration
when the contractor's claim is not entertained
though assured.
Sometimes the Key person or the Project
Superintendence, particularly in case of PSUs
appointed to oversee the infrastructure project
work from the employer's side belongs to an
engineering disciplines other than a Civil
Engineering. The sub ordinate officials at junior
level who are Civil Engineers then dictate the key
person in all matters. There, the control over the
officials becomes totally impossible. The officials
go on merrily issuing instructions without any
consideration to the contract conditions. In turn, it
leads to disputes and arbitration. It is therefore, for
the managements to form a team of officials under
key person who all should be reasonably exposed to
design, specifications, contract management,
contract conditions and dedicated to the project
work from its inception to completion.
A Case Study Programme and set back
Renowned consultants were appointed for
modernization of ship building
facilities. The project work was comprising of
construction of a wet basin offshore for building
superstructure of the ships, construction of
workshops for building ships modules, stores
building for heavy storage and ancillary works
comprising of construction of water tanks and
compressor house for supply of water and
compressed air, storage building for supply of
processed gas required for ship building. The
project work also included supply of heavy cranes
find difficult to implement the instructions. This is
the stage, the relations get strained between the
consultants and the officials. In order to resolve the
stalemate the consultants ask for written
instructions. However, in absence of delegation of
powers the officials find themselves helpless. In
turn they revolt and start feeling that the consultant
is biased and protects the contractor's interest.
Then the officials attempt to implement the
instructions by directing the contractor
independently bypassing the consultant. However,
the contractor declines to honour the instructions.
This prejudices the officials against the consultant
still more. Thus the relations get more and more
strained not only between the consultants and the
officials but also between the contractor and the
officials.
The officials do not assess that their instructions are
in contravention to the provisions in the contract.
The officials then interfere in all matters which
ultimately stalls the project. The contractor then
submits the claims for idling of manpower, plants &
machineries followed by notice for arbitration etc.
It is therefore imperative, having appointed
consultants and contractors impartially without any
undue favour and in most transparent manner the
organization should demonstrate full faith in the
consultant and imbibe this culture down the lines to
the officials associated with the project.
The officials in key positions are so occupied with
meetings and administrative matters that they
hardly keep a check over the officials under them
and provide guidance as necessary. On the contrary,
they are fully dependent on the sub ordinate
officials who sometimes even dictate their
superiors. The officials thus assume powers that of
CEO, MD, CMD, Chairperson etc. themselves
without assessing likely repercussions, disputes,
claims due to their instructions which are at times
not rational.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 05
for handling materials and heavy equipments in ship
building activity.
Upon acceptance of the Detailed Project Report
and designs, drawings different tenders were invited
for (i) construction of wet basin, (ii) construction
of workshops, stores and ancillary works (iii) supply
of a giant crane for transiting ship modules from
the workshop to the launching pads
(iv) supply of cranes for transiting heavy materials
and equipments within the workshops and (v)
supply of cranes for handling materials for ship
building at wet basin.
The consultant had submitted a programme for
completion of project work with the consideration
that progress on all the works would be concurrent
without affecting the ongoing ship building activity
within the complex. Thus it was imperative to plan
interface in such way that progress on all contract
works including ongoing ship building activity
within the complex would not be impeded.
However, due to procedural delay and funding the
work could not be awarded as per programme.
There was a delay of around 12 to 24 months in
awarding the successive contract works whereas it
was supposed to be awarded with a lead period of 2
months. This upset the programme.
The programme was further affected as the
employer could not release the site for erection of
giant crane for more than 2 years after award of
work. Similarly, release of site for construction of
workshops, stores building and ancillary works etc.
was delayed by around a year.
Though there was no delay in releasing the site for
construction of wet basin the completion was
delayed due to unforeseen site conditions and other
reasons not attributable to the contractor.
On the other hand, award of contract work for
supply of cranes within the workshops and at wet
basin was expedited though neither the workshops
were ready to receive the cranes nor the dock wall
for erection of the cranes at wet basin.
All this, attributed severely in completion of the
project as per programme.
Overpowering the Consultants and setback in
completion
As the contract works could not be commenced as
per Consultant's programme the consultant advised
to defer commencement of fabrication work of the
giant crane till the site is made available. The
consultant also apprised urgency for releasing the
area for construction of workshops, stores building
which was occupied by old scrap all around. But
there was an inordinate delay mainly due to lack of
cooperation of the concerned department.
Similarly, the consultant advised to defer award of
contract for supply of crane within the workshop
and at wet basin as the facilities required for erection
were not ready. However, the organization ignored
the advice and allowed fabrication of giant crane at
various locations spread over the area immediately
after award of work. Thus the area which was to be
released for construction of the workshops, stores
etc. was occupied with fabricated segments of the
giant crane.
Interface between the contract works
It was originally planned to release part area for
fabrication and assembly of the segments of the
giant crane while the construction of workshops,
stores etc. would be allowed in the remaining areas
and after erection of the giant crane the balance
works in workshops, stores etc. would be
completed. Similarly, the commencement of work
of erection of the cranes within workshop and at
wet basin was envisaged when half the length of the
workshop and half the length of the wall to support
crane at wet basin would be ready.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201606
the employer sought opinion of their in-house legal
department and Solicitors to interpret various
clauses. As the opinion was not in consonance with
the conditions of the contract the consultant did
not agree with the opinion. The employer did not
release the payment even after expiry of Free
Maintenance Period. The contractor therefore
issued notice for arbitration. However,
subsequently based on consultant's decision which
is built-in in the contract, the payment was
ultimately released and the arbitration was avoided.
In case of contract for supply of giant crane, while
granting Extension of Time due to delay in release
of site , the employer passed order with a rider:
'Extension of Time granted without any financial
implications to the employer and without prejudice
to the levy of liquidated damages'
It was in contravention to the condition of contract,
universally.
Similarly, the contractor had indicated the extra cost
involved due to delay not attributable to them even
before commencement of work but the same was
never looked into till expiry of the Free
Maintenance Period. At some stage, the contractor
was to suspend the work and quit the site. However,
the employer pursued completion by cautioning the
contractor that the employer might take it seriously
and proceed with action against them. The
consultant's recommendation and advice not to
levy delay damages and entitlement to payment of
extra cost was ignored. The payment of extra cost is
not decided till date. Therefore, it is likely, the
contractor may issue notice for arbitration, shortly.
In case of cranes within the workshops, though the
employer was responsible for delay, the payment in
the last stage was released only upon granting
Extension of Time a year after completion of work
though the consultant had recommended
As the construction activity in workshops, stores
building and ancillary works commenced
concurrently with ongoing fabrication work of the
giant crane it became impossible to manage the
interface between the two contract works. Even
after release of area for completion of balance
works pursuant to erection of giant crane the
employer changed the priorities in delivery of the
workshops. The approved programme therefore
no more remained valid. All this resulted-in in the
severe delay in erection of giant crane and
consequently delayed completion of workshops,
stores building and ancillary works.
Claim for Extension of Time and extra cost,
arbitration
Obviously, the delay in completion of contract
works was mainly due to release of site for which
the employer was entirely responsible.
The contractors accordingly, submitted their claims
for Extension of Time. However, the officials very
wisely persuaded the contractors to complete the
works early and assured that the management may
have soft corner and consider claim for Extension
of Time favourably if they deliver the works in time
and if it is otherwise, management would not only
recover damages but carry out the works at risk and
cost. The officials raised flimsy queries on the claim
and delayed processing the application for
Extension of Time till works were completed.
Though there is no provision, to play safe, the
officials however, retained an amount equivalent to
maximum delay damages from the interim bills
with confidence that the management would never
be positive in granting Extension of Time.
In case of wet basin contract, though the delay was
entirely due to the employer, the Extension of Time
was not granted. While contract was based on the
FIDIC conditions where there is a collective
wisdom of the technocrats and lawmen globally,
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 07
immediately after claim was raised. The contractors
were to proceed with the arbitration, otherwise.
However, they had no option than to await decision
and approval of the employer who followed the
same strategy and warning when the contractor
hinted arbitration.
However, in case of cranes at wet basin though the
cranes are in use since more than two years and
presently under Free Maintenance Period the
payment in the last stage has not been released till
date. As per their practice, the employer has
retained amount equivalent to the maximum delay
damages against payment in last stage as the claim
for Extension of Time has not been decided. The
consultant had recommended the same upon
receipt of the claim as the delay was mainly due to
release of area for erection of the cranes. The
contractors were advised all along not to pursue for
Extension of Time , releasing the balance payment
and claim for extra cost with the similar warning. It
is understood the contractors have now lost faith
and decided to issue notice for arbitration as there
are no indication of releasing the balance payment
by the employer in near future.
In case of construction of workshops , stores and
ancillary works, though the facilities have been
commissioned since more than a year, the employer
has not decided on the Extension of Time but
retained the amount equivalent to maximum delay
damages from their last bill. It was impossible to
release the site by the employer if the contractor
would not have agreed to remove the scrap on the
oral instructions of the officials. However, their
claim for extra cost incurred in the work has not
been considered till date. Similarly, the contractor
has also indicated that they would submit claim for
extra cost due to idling of machineries. However,
the employer has been following their usual strategy
and discouraging the contractors and advising not
to irritate the management. It is now understood,
the contractor may issue notice for arbitration,
shortly.
There seems an unwritten instruction to the
officials:
'do not delay the completion by a day; let the payment due, is
delayed till doomsday.'
Thus it is to be appreciated that if the employer and
its officials would have been reasonable in their
approach the contractor would have received their
due payment in time and arbitration, awards
including interest would have been avoided.
Undue benefit drawn by the employer
The contractor generally quote the works with a
profit margin of around 10% in case of major
works in this competitive business. However, their
profit is retained by the organizations by way of
delay damages which is also 10% of the contract
price. It is the beauty that the officials during the
progress of work never express doubt in releasing
the amount due but cleverly add 'with the approval
of the competent authority' and back out and
express their helplessness after completion of work
if the payment due is delayed or in worst case not
released by the management which leads to disputes
and arbitration.
The management is happy that they are safe in
hands of their officials down the line and retire
peacefully. They never oppose the action by the
officials under them even if the officials are on
wrong footing and not reasonable. The amount due
to the contractors remains in the coffers of the
employers who enjoy the interest accrued thereon.
However, once the award is declared the amount
due to be paid is multiplied and becomes a burden
on the tax payer. The officials involved are never
held responsible to the award. On the contrary, they
are considered for higher elevation.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201606
the employer sought opinion of their in-house legal
department and Solicitors to interpret various
clauses. As the opinion was not in consonance with
the conditions of the contract the consultant did
not agree with the opinion. The employer did not
release the payment even after expiry of Free
Maintenance Period. The contractor therefore
issued notice for arbitration. However,
subsequently based on consultant's decision which
is built-in in the contract, the payment was
ultimately released and the arbitration was avoided.
In case of contract for supply of giant crane, while
granting Extension of Time due to delay in release
of site , the employer passed order with a rider:
'Extension of Time granted without any financial
implications to the employer and without prejudice
to the levy of liquidated damages'
It was in contravention to the condition of contract,
universally.
Similarly, the contractor had indicated the extra cost
involved due to delay not attributable to them even
before commencement of work but the same was
never looked into till expiry of the Free
Maintenance Period. At some stage, the contractor
was to suspend the work and quit the site. However,
the employer pursued completion by cautioning the
contractor that the employer might take it seriously
and proceed with action against them. The
consultant's recommendation and advice not to
levy delay damages and entitlement to payment of
extra cost was ignored. The payment of extra cost is
not decided till date. Therefore, it is likely, the
contractor may issue notice for arbitration, shortly.
In case of cranes within the workshops, though the
employer was responsible for delay, the payment in
the last stage was released only upon granting
Extension of Time a year after completion of work
though the consultant had recommended
As the construction activity in workshops, stores
building and ancillary works commenced
concurrently with ongoing fabrication work of the
giant crane it became impossible to manage the
interface between the two contract works. Even
after release of area for completion of balance
works pursuant to erection of giant crane the
employer changed the priorities in delivery of the
workshops. The approved programme therefore
no more remained valid. All this resulted-in in the
severe delay in erection of giant crane and
consequently delayed completion of workshops,
stores building and ancillary works.
Claim for Extension of Time and extra cost,
arbitration
Obviously, the delay in completion of contract
works was mainly due to release of site for which
the employer was entirely responsible.
The contractors accordingly, submitted their claims
for Extension of Time. However, the officials very
wisely persuaded the contractors to complete the
works early and assured that the management may
have soft corner and consider claim for Extension
of Time favourably if they deliver the works in time
and if it is otherwise, management would not only
recover damages but carry out the works at risk and
cost. The officials raised flimsy queries on the claim
and delayed processing the application for
Extension of Time till works were completed.
Though there is no provision, to play safe, the
officials however, retained an amount equivalent to
maximum delay damages from the interim bills
with confidence that the management would never
be positive in granting Extension of Time.
In case of wet basin contract, though the delay was
entirely due to the employer, the Extension of Time
was not granted. While contract was based on the
FIDIC conditions where there is a collective
wisdom of the technocrats and lawmen globally,
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 07
immediately after claim was raised. The contractors
were to proceed with the arbitration, otherwise.
However, they had no option than to await decision
and approval of the employer who followed the
same strategy and warning when the contractor
hinted arbitration.
However, in case of cranes at wet basin though the
cranes are in use since more than two years and
presently under Free Maintenance Period the
payment in the last stage has not been released till
date. As per their practice, the employer has
retained amount equivalent to the maximum delay
damages against payment in last stage as the claim
for Extension of Time has not been decided. The
consultant had recommended the same upon
receipt of the claim as the delay was mainly due to
release of area for erection of the cranes. The
contractors were advised all along not to pursue for
Extension of Time , releasing the balance payment
and claim for extra cost with the similar warning. It
is understood the contractors have now lost faith
and decided to issue notice for arbitration as there
are no indication of releasing the balance payment
by the employer in near future.
In case of construction of workshops , stores and
ancillary works, though the facilities have been
commissioned since more than a year, the employer
has not decided on the Extension of Time but
retained the amount equivalent to maximum delay
damages from their last bill. It was impossible to
release the site by the employer if the contractor
would not have agreed to remove the scrap on the
oral instructions of the officials. However, their
claim for extra cost incurred in the work has not
been considered till date. Similarly, the contractor
has also indicated that they would submit claim for
extra cost due to idling of machineries. However,
the employer has been following their usual strategy
and discouraging the contractors and advising not
to irritate the management. It is now understood,
the contractor may issue notice for arbitration,
shortly.
There seems an unwritten instruction to the
officials:
'do not delay the completion by a day; let the payment due, is
delayed till doomsday.'
Thus it is to be appreciated that if the employer and
its officials would have been reasonable in their
approach the contractor would have received their
due payment in time and arbitration, awards
including interest would have been avoided.
Undue benefit drawn by the employer
The contractor generally quote the works with a
profit margin of around 10% in case of major
works in this competitive business. However, their
profit is retained by the organizations by way of
delay damages which is also 10% of the contract
price. It is the beauty that the officials during the
progress of work never express doubt in releasing
the amount due but cleverly add 'with the approval
of the competent authority' and back out and
express their helplessness after completion of work
if the payment due is delayed or in worst case not
released by the management which leads to disputes
and arbitration.
The management is happy that they are safe in
hands of their officials down the line and retire
peacefully. They never oppose the action by the
officials under them even if the officials are on
wrong footing and not reasonable. The amount due
to the contractors remains in the coffers of the
employers who enjoy the interest accrued thereon.
However, once the award is declared the amount
due to be paid is multiplied and becomes a burden
on the tax payer. The officials involved are never
held responsible to the award. On the contrary, they
are considered for higher elevation.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201608
Plight of the Consultant
Though the consultants are the representatives of
the employer they also get the same treatment that
of the contractor when the employer is sure that
they would then be able to handle the project,
independently.
Relevant to the case study, upon completion of
assignment in the design stage, the consultants were
required to deploy the staff for supervision in the
supervision stage at a specified rate depending upon
the work responsibility with suitable escalation in
case the work is delayed.
As there was considerable delay in award of work
the indices provided for payment of escalation on
supervision fee were no more workable. Hence the
consultants proposed an alternative formula for
consideration by the employer. As the employer did
not agree for more than 6 months the consultant
suspended the work as allowed in the contract.
There was no progress on any of the contract
works, then. As the employer was helpless, and had
no option, agreed to pay as proposed but to play
safe, involved a neutral third party to recommend
average annual salary increase for approval by the
employer and the consultant for payment of
escalation on the staff salary.
The staff for supervision works were deployed
gradually as and when the contracts were awarded
and reduced in the same way upon completion of
work under various contracts. Thus staff was
deployed till the work was almost complete.
The employer however disallowed continuing staff
to supervise the balance works without any advance
notice. Therefore, certificate necessary for
obtaining statutory approvals required for
occupation could not be issued, legally. In order to
pressurize the consultant for issuing certificate the
employer withheld the balance payment without
assigning reason or advance notice though the
employer is bound to pay as per contract the
claimant's dues for the services rendered till
termination of the contract.
Even though the staff were disallowed till
completion of the work in all respect the employer
should have kept the contract in force till
completion. However the employer terminated the
contract itself. Consequently, since the staff
engaged for supervision were temporary, project
wise, their services were terminated prematurely
with suitable compensation.
Though the termination of contract should be the
last resort the employers generally fail to
acknowledge this point out of fits to teach a lesson
to the contractor or the consultant. This always
delays the completion, deprives the users of the
facilities for long and results-in in the disputes,
arbitration and extra cost. The relation between the
employer, contractor and the consultant gets
strained forever. It is therefore imperative to strictly
follow the conditions of contract with due
procedure and process otherwise it would lead to
disputes and arbitration. All the signatories should
always bear in mind that they all jointly execute an
agreement which is binding and should never
breach any of the conditions till contract is
concluded. Termination at will and with vengeance
and without any sufficient ground is looked as bad
in law and should be avoided. The judiciary
normally does not protect the interest of the agency
initiating termination if it is bad in law so also does
not consider any counter claims if raised by the
agency.
Similarly, during progress of work the employer had
ordered certain works on the consultant as paid
additional service and assured payment. However,
the same was not paid.
The consultant made several representations during
progress on project work for releasing the payment.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 09
However, to them even the employer used the same
yard stick as used for the contractors. The employer
assured the consultant of the payment and at times
requested the consultant to waive the fees.
However, the employer did not release the payment
till the contract was terminated.
All these matters lead to disputes for which the
employer and its officials were solely responsible.
Short cuts
Generally, the government organization nominates
an official to reply to the claims raised by the
claimants. It becomes frustrating when the official
is not reasonably exposed to the conditions of
contract and not able to interpret the clauses
correctly goes on merrily opposing each and every
claim without any consideration to the prevailing
condition of contract , without consulting seniors
or experienced hands within or any legal expert or
the internal solicitors on panel and without realizing
the repercussion thereof. He is then only concerned
that he should firstly safe guard himself that his
employment is secured and then the oganization as
a whole. None other pays attention on the
communication by him to the claimant to guide him
appropriately as if it is none of their responsibility.
In return, the official indirectly assumes full support
from the management which never objects to what
the official deliberates with the claimant , orally or
in writing. The official indirectly becomes the
deciding authority. As a result, the claimant never
gets justice at ground level itself but results-in in
the disputes and arbitration, finally. It is therefore
important that the selection of the official should
be based on the competency, integrity and
reasonable level of knowledge that the
management may safely entrust the responsibility
with confidence to ensure that the justice is meted
out to the claimant to a great extent which would
ease in resolving disputes through arbitration.
Settlement of disputes and request for
arbitration
The contract between the consultant and the
employer stipulates referring the matters for
mediation if the disputes are not resolved amicably
between them and then by their designated
representatives also. The relevant clause states :
'if the designated representatives of the parties are
unable to reach an agreement on any matter
referred to them, within 14 days or any such period
as the parties may subsequently agree, then that
matter or those matters shall immediately be
referred to a mediator.'
Accordingly, the consultant requested approval of
the employer for appointment of any of the 4
Mediators proposed by them since the designated
representatives were also unable to reach an
agreement. The employer however declined to
agree to the appointment of the Mediator all
together on the pretext that the consultant were
required to refer the disputes to the Mediator within
14 days if the designated representatives were
unable to reach an agreement and as the consultant
failed to propose the mediator within 14 days the
employer cannot agree to the appointment of the
Mediator.
Here, the employer failed to interpret and reiterated
more than once that the designated representatives
were required to reach an agreement within 14 days
and not that the Mediator to be appointed within 14
days if the designated representatives were unable
to reach an agreement.
Perhaps this move may be intentional. The official
appointed as short cut was instrumental to
manipulate the clause to disagree appointing the
mediator. It may only because the officials involved
in mediation proceedings may be squarely held
responsible if the claims are adjudicated as justified.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201608
Plight of the Consultant
Though the consultants are the representatives of
the employer they also get the same treatment that
of the contractor when the employer is sure that
they would then be able to handle the project,
independently.
Relevant to the case study, upon completion of
assignment in the design stage, the consultants were
required to deploy the staff for supervision in the
supervision stage at a specified rate depending upon
the work responsibility with suitable escalation in
case the work is delayed.
As there was considerable delay in award of work
the indices provided for payment of escalation on
supervision fee were no more workable. Hence the
consultants proposed an alternative formula for
consideration by the employer. As the employer did
not agree for more than 6 months the consultant
suspended the work as allowed in the contract.
There was no progress on any of the contract
works, then. As the employer was helpless, and had
no option, agreed to pay as proposed but to play
safe, involved a neutral third party to recommend
average annual salary increase for approval by the
employer and the consultant for payment of
escalation on the staff salary.
The staff for supervision works were deployed
gradually as and when the contracts were awarded
and reduced in the same way upon completion of
work under various contracts. Thus staff was
deployed till the work was almost complete.
The employer however disallowed continuing staff
to supervise the balance works without any advance
notice. Therefore, certificate necessary for
obtaining statutory approvals required for
occupation could not be issued, legally. In order to
pressurize the consultant for issuing certificate the
employer withheld the balance payment without
assigning reason or advance notice though the
employer is bound to pay as per contract the
claimant's dues for the services rendered till
termination of the contract.
Even though the staff were disallowed till
completion of the work in all respect the employer
should have kept the contract in force till
completion. However the employer terminated the
contract itself. Consequently, since the staff
engaged for supervision were temporary, project
wise, their services were terminated prematurely
with suitable compensation.
Though the termination of contract should be the
last resort the employers generally fail to
acknowledge this point out of fits to teach a lesson
to the contractor or the consultant. This always
delays the completion, deprives the users of the
facilities for long and results-in in the disputes,
arbitration and extra cost. The relation between the
employer, contractor and the consultant gets
strained forever. It is therefore imperative to strictly
follow the conditions of contract with due
procedure and process otherwise it would lead to
disputes and arbitration. All the signatories should
always bear in mind that they all jointly execute an
agreement which is binding and should never
breach any of the conditions till contract is
concluded. Termination at will and with vengeance
and without any sufficient ground is looked as bad
in law and should be avoided. The judiciary
normally does not protect the interest of the agency
initiating termination if it is bad in law so also does
not consider any counter claims if raised by the
agency.
Similarly, during progress of work the employer had
ordered certain works on the consultant as paid
additional service and assured payment. However,
the same was not paid.
The consultant made several representations during
progress on project work for releasing the payment.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 09
However, to them even the employer used the same
yard stick as used for the contractors. The employer
assured the consultant of the payment and at times
requested the consultant to waive the fees.
However, the employer did not release the payment
till the contract was terminated.
All these matters lead to disputes for which the
employer and its officials were solely responsible.
Short cuts
Generally, the government organization nominates
an official to reply to the claims raised by the
claimants. It becomes frustrating when the official
is not reasonably exposed to the conditions of
contract and not able to interpret the clauses
correctly goes on merrily opposing each and every
claim without any consideration to the prevailing
condition of contract , without consulting seniors
or experienced hands within or any legal expert or
the internal solicitors on panel and without realizing
the repercussion thereof. He is then only concerned
that he should firstly safe guard himself that his
employment is secured and then the oganization as
a whole. None other pays attention on the
communication by him to the claimant to guide him
appropriately as if it is none of their responsibility.
In return, the official indirectly assumes full support
from the management which never objects to what
the official deliberates with the claimant , orally or
in writing. The official indirectly becomes the
deciding authority. As a result, the claimant never
gets justice at ground level itself but results-in in
the disputes and arbitration, finally. It is therefore
important that the selection of the official should
be based on the competency, integrity and
reasonable level of knowledge that the
management may safely entrust the responsibility
with confidence to ensure that the justice is meted
out to the claimant to a great extent which would
ease in resolving disputes through arbitration.
Settlement of disputes and request for
arbitration
The contract between the consultant and the
employer stipulates referring the matters for
mediation if the disputes are not resolved amicably
between them and then by their designated
representatives also. The relevant clause states :
'if the designated representatives of the parties are
unable to reach an agreement on any matter
referred to them, within 14 days or any such period
as the parties may subsequently agree, then that
matter or those matters shall immediately be
referred to a mediator.'
Accordingly, the consultant requested approval of
the employer for appointment of any of the 4
Mediators proposed by them since the designated
representatives were also unable to reach an
agreement. The employer however declined to
agree to the appointment of the Mediator all
together on the pretext that the consultant were
required to refer the disputes to the Mediator within
14 days if the designated representatives were
unable to reach an agreement and as the consultant
failed to propose the mediator within 14 days the
employer cannot agree to the appointment of the
Mediator.
Here, the employer failed to interpret and reiterated
more than once that the designated representatives
were required to reach an agreement within 14 days
and not that the Mediator to be appointed within 14
days if the designated representatives were unable
to reach an agreement.
Perhaps this move may be intentional. The official
appointed as short cut was instrumental to
manipulate the clause to disagree appointing the
mediator. It may only because the officials involved
in mediation proceedings may be squarely held
responsible if the claims are adjudicated as justified.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201610
The officials would therefore prefer that the
disputes are resolved by way of arbitration since the
officials are scot free if the arbitration award goes in
favour of the claimant as the disputed matters are
then argued by the solicitors appointed by the
employer during arbitration proceedings. However,
it becomes difficult task for the solicitors to defend
the case if the claims would have arisen due to
baseless opposition and illegal termination.
Thus the Mediation which is normally mandatory
before invoking arbitration could not be held
though it was possible to resolve most of the issues
through mediation. Ultimately, the consultant
decided to invoke arbitration as per contract since
the mediation failed.
Conclusion
Summarizing, it may be appreciated that how
damaging the negative attitude of the non
performing officials of the government towards the
contractors and the consultants that leads to
disputes and arbitration. In fact the Government
should introduce a stringent condition while
appointing the officials on the project work that in
case it is established that due to their negative
attitude there were disputes leading to delay in
completion, arbitration and award their services are
liable to be terminated otherwise all the
infrastructure projects shall be suffering a setback
both in completion in time and extra burden on to
the genuine tax payers of the country.
*FIE, FICA
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 11
There is a proverb that "one who rules waves, rules
the world". It is very difficult to disagree with this
saying if we look back into the history of the world.
Even today, naval power, naval influence and naval
capability is determining factor to evoke respect and
superiority among nations. If world is a market then
'reach' to this market is one outstanding reason for
economic prosperity and most relevant concern to
any nation today. Today 90% of the International
Trade and Commerce is heavily depending on the
carriage through sea routes.
How old may be seas and ocean mercantile regime,
is difficult to say. There is no straight forward record
to speak on the issue. However, it is said that the
foundation of global economy could have been laid
way back to 5000 BC in Egypt and flowed to other
major civilisations, causing for international trade
and merchandise. Some civilisations such as
Phoenicia, in Mediterranean, a recognizable
maritime nation with extensive trading system
lacked regulations governing maritime commerce
while Greek civilisation administered proper
regulations on the lien of unpaid freight.
T hey deve loped a s y s t em to r e so lve
maritime/commercial disputes through well
appointed judges/tribunals. This was somewhere
400 BC
Is it old enough? Answer may not be difficult if we
look in to history of Indian maritime activities
which goes back to Vedic age. Vedic culture was a
maritime culture; the Vedic people lived by the sea
for some time before the hymes of Rig Vedas were
composed. The Indian built ships, navigated the sea
route and land route. Indian literature furnishes
evidence with innumerable references to sea
voyages and sea-borne trade and the constant use
of the ocean as the great high way of international
trade, commerce and intercourse. The oldest
evidence on record is found in Rig Veda, which
contains several references to sea voyages
undertaken for commercial purpose. A passage
speaks about merchants whose field of activity
known no bounds, who go anywhere in pursuit of
gain, and frequent every port of sea. [Foreign
Trade and Commerce in Ancient India-
Prakash Charan Prasad]
Brahmanda Purana provides the best and most
detailed description of world map drawn on a flat
surface using an accurate scale. Padma Purana says
that world maps were prepared and maintained in
book form and kept with care and safety in chests.
[A Tribute to Hinduism- Sea Faring in Ancient
India]. Some Puranas say that the map making had
great practical value for the administrative,
navigational and military purposes. HARIVAMSA
informs that the first geographical survey of the
world was performed during the period of
Vaivasvata. The Purana also furnish references to
merchants engaged in sea-borne trade. [A Tribute
to Hinduism- Sea Faring in Ancient India]
Gorden Childe, a noted Historian had observed
that "The most startling feature of pre-historic
Indian trade is that manufactured goods were
exported to Mesopotamia. After 1700 BC the
traders of India lost commercial contact with the
traders of Mesopotamia."Another noted Historian
By: Rajiv Sinha*
2 India - Pioneer In Maritime Trade
"Given the sophistication of the corporations that utilise international arbitration, there is a certain level of
competition between arbitral jurisdictions. Potential seats take active measures to promote their approach to
arbitration; otherwise they risk marginalisation in the competitive global marketplace. Failing to present
attractively may have significantly adverse consequences, particularly in terms of the development of a jurisdiction's
international legal expertise, and the involvement of its legal and other professionals in international trade and
commerce. Success in this respect is, of course, not only dependent on arbitrators and arbitration practitioners. The
whole process must be well supported by arbitral institutions and, importantly, the courts. All concerned must play
their part in maintaining the quality of arbitral processes and outcomes, and in reducing delay and expense."
- Hon'ble Justice Clyde Croft
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201610
The officials would therefore prefer that the
disputes are resolved by way of arbitration since the
officials are scot free if the arbitration award goes in
favour of the claimant as the disputed matters are
then argued by the solicitors appointed by the
employer during arbitration proceedings. However,
it becomes difficult task for the solicitors to defend
the case if the claims would have arisen due to
baseless opposition and illegal termination.
Thus the Mediation which is normally mandatory
before invoking arbitration could not be held
though it was possible to resolve most of the issues
through mediation. Ultimately, the consultant
decided to invoke arbitration as per contract since
the mediation failed.
Conclusion
Summarizing, it may be appreciated that how
damaging the negative attitude of the non
performing officials of the government towards the
contractors and the consultants that leads to
disputes and arbitration. In fact the Government
should introduce a stringent condition while
appointing the officials on the project work that in
case it is established that due to their negative
attitude there were disputes leading to delay in
completion, arbitration and award their services are
liable to be terminated otherwise all the
infrastructure projects shall be suffering a setback
both in completion in time and extra burden on to
the genuine tax payers of the country.
*FIE, FICA
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 11
There is a proverb that "one who rules waves, rules
the world". It is very difficult to disagree with this
saying if we look back into the history of the world.
Even today, naval power, naval influence and naval
capability is determining factor to evoke respect and
superiority among nations. If world is a market then
'reach' to this market is one outstanding reason for
economic prosperity and most relevant concern to
any nation today. Today 90% of the International
Trade and Commerce is heavily depending on the
carriage through sea routes.
How old may be seas and ocean mercantile regime,
is difficult to say. There is no straight forward record
to speak on the issue. However, it is said that the
foundation of global economy could have been laid
way back to 5000 BC in Egypt and flowed to other
major civilisations, causing for international trade
and merchandise. Some civilisations such as
Phoenicia, in Mediterranean, a recognizable
maritime nation with extensive trading system
lacked regulations governing maritime commerce
while Greek civilisation administered proper
regulations on the lien of unpaid freight.
T hey deve loped a s y s t em to r e so lve
maritime/commercial disputes through well
appointed judges/tribunals. This was somewhere
400 BC
Is it old enough? Answer may not be difficult if we
look in to history of Indian maritime activities
which goes back to Vedic age. Vedic culture was a
maritime culture; the Vedic people lived by the sea
for some time before the hymes of Rig Vedas were
composed. The Indian built ships, navigated the sea
route and land route. Indian literature furnishes
evidence with innumerable references to sea
voyages and sea-borne trade and the constant use
of the ocean as the great high way of international
trade, commerce and intercourse. The oldest
evidence on record is found in Rig Veda, which
contains several references to sea voyages
undertaken for commercial purpose. A passage
speaks about merchants whose field of activity
known no bounds, who go anywhere in pursuit of
gain, and frequent every port of sea. [Foreign
Trade and Commerce in Ancient India-
Prakash Charan Prasad]
Brahmanda Purana provides the best and most
detailed description of world map drawn on a flat
surface using an accurate scale. Padma Purana says
that world maps were prepared and maintained in
book form and kept with care and safety in chests.
[A Tribute to Hinduism- Sea Faring in Ancient
India]. Some Puranas say that the map making had
great practical value for the administrative,
navigational and military purposes. HARIVAMSA
informs that the first geographical survey of the
world was performed during the period of
Vaivasvata. The Purana also furnish references to
merchants engaged in sea-borne trade. [A Tribute
to Hinduism- Sea Faring in Ancient India]
Gorden Childe, a noted Historian had observed
that "The most startling feature of pre-historic
Indian trade is that manufactured goods were
exported to Mesopotamia. After 1700 BC the
traders of India lost commercial contact with the
traders of Mesopotamia."Another noted Historian
By: Rajiv Sinha*
2 India - Pioneer In Maritime Trade
"Given the sophistication of the corporations that utilise international arbitration, there is a certain level of
competition between arbitral jurisdictions. Potential seats take active measures to promote their approach to
arbitration; otherwise they risk marginalisation in the competitive global marketplace. Failing to present
attractively may have significantly adverse consequences, particularly in terms of the development of a jurisdiction's
international legal expertise, and the involvement of its legal and other professionals in international trade and
commerce. Success in this respect is, of course, not only dependent on arbitrators and arbitration practitioners. The
whole process must be well supported by arbitral institutions and, importantly, the courts. All concerned must play
their part in maintaining the quality of arbitral processes and outcomes, and in reducing delay and expense."
- Hon'ble Justice Clyde Croft
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201612
Mr. S.R.Rao says that Indian traders first settled in
Bahrain. Later on, different section of Indian
merchants colonized the different cities of
Mesopotamia. Indian traders sailed their ships not
only to Indian Ocean and the Persian Gulf, they also
ventured into Red Sea and even into Mediterranean.
India was center of spices and scented ointments.
Beauty products and other cosmetics were being
chiefly imported from India to Egypt and West
particularly south-east European nations.
Some very definite and convincing allusions to sea
voyages and sea-borne trade are also contained in
the vast body of Buddhist literature known as 'Jatak'
which are generally taken to relate themselves to a
period of one thousand years beginning from 500
BC. The 'BaveruJatak' without doubt points to the
existence of commercial intercourse between India
and Babylon in pre-Ashokan days.
At a time, economic prosperity of India was
unparalleled andultra-advanced in the world. One
can understand that India's superior place in world
trade was a well acknowledged contribution of its
shipping industries rolling out formidable
mercantile and military vessels in various centuries
throughout. Sea merchandise and shipping industry
was no novice to Indian governance. Buddhist
Jataka stories wrote about large Indian ships
carrying seven hundred people. Professor Max
Duncker, author of History of Antiquity, says
that the ship building was known in ancient India
about 2000 BC. It is clear that Hindus navigated the
oceans from the earliest time and that they carried
on trade on extensive scale with all the important
nations of whole world.
India is one of the oldest civilisations in the world.
Indian continent, over the centuries, is known to all
for its social, economic, cultural, spiritual,
educational, philosophical and administrative
fineness. When the society and humanity attained
such a high pedestal and all round developments
were ongoing process it is natural that trade and
commerce was effectively regulated and
administered in very high professional way in
successive centuries. Primarily, voyages were
intended to human quest for new world and new
civilisations. Other reasons may be to spread
religion and spirituality as also to look for new
markets for products and resources.
On a look in ancient history we find there were
voyages for neighboring countries but were not
limited only to close by regions. Voyages were
basically aimed to invent new world markets and
new civilizations. In a Pali book Questions of
Milindaa merchant is described as having sailed to
Alexandria, Burma, Malaya and China and
Zanzibar. [Hinduism: Its Contribution to
Science and Civilization- By Prabhakar
Balwant Machwe]. Trade related voyages were
made on trusted sea routes with ships of adequate
capabilities. There was well developed sea route
network between India and South-east Asia and
Indian mariners were aware of trade centers, ports
and navigational risks and skills which prompted
them to take advantage and expand trade.
Jatak story indicate that the Vanias of Western India
undertook trading voyages to the source of Persian
Gulf and its rivers in 5th. and 6th. century BC. Jatak
stories also have description of voyages to distant
lands and perilous adventure by sea in which the
names of very ancient western ports of Suparaka-
Supara and Bharukachcha-Broach are occasionally
mentioned. [Indian Shipping; A History of the
Sea-borne Trade and Maritime Activity of the
Indians from Earliest Time- R.K. Mookerjee]
Dr. Caldwell says: "it appears certain from notices
contained in the Vedas that Aryans of the age of
Soloman practiced foreign trade in ocean-going
vessels."
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 13
large. A Board of Admiralty was one of the six
Boards which comprised of his war office.
Superintendent of Ships headed Board of
Admiralty; his duties include almost every maritime
activities such as navigation of oceans and rivers,
port levies, harbor regulations, safety measures of
boats and ships in docks and in open seas. During
Mauryan's rule there were specific regulations for
compensation, freight payment and cargo lien. In
the Kautilya Arthashastra a mention is made about
the Board of Shipping and Commissioner of
shipping who supervised sea-traffic.
Before trade with the Roman Empire, India carried
on her trade chiefly with Egypt; whose king
Ptolemy (285-247 BC) with whom Ashoka the
Great had regular commercial intercourses which
caused for commercial hub, known as Alexandria,
between East and West. There are evidences that
commodities like wood, resin, ebony, ivory, gold,
precious stones, cinnamon, incense, eye-coloring,
textile and medicinal herbs etc. were prime exports
to Egypt from India.
The volume of export trade from India to Roman
Empire may be estimated from well-known passage
of Pliny, a noted Roman historian in first century
AD, in which he recorded that India drained the
Roman Empire of fifty million sesterces every year.
All the Rome's coffers were being emptied into
India to satisfy Roman demand for translucent
Indian muslins. Pliny's statement is corroborated by
the discovery, in India, of innumerable gold coins
of Roman Emperors, which must have come in the
course of trade. The wealth of Roman Empire
reached India through western and south Indian
ports.
India never lagged behind the time since the land
was ably administered by visionary rulers who were
guided by ancient rules of governance and old
testaments of procedures, regulations and laws
Different civilisations prospered at different places
and in different times. They were fully developed in
a sense but trade, commerce and interchange
between them brought rich cultural heritage and
economic well-being. Indian art had accompanied
Indian religion across straits and frontiers into
Sri Lanka, Java, Cambodia, Siam, Burma, Tibet,
Turkestan, Mongolia, China, Korea and Japan.
Excavation finds of Anuradhapura (Sri Lanka)
indicate that the Brahmi script was introduced in
Sri Lanka by Indian traders in the 5th.-4th.century
BC prior to the introduction of Buddhism.
Similarly, Damili script used in northern Sri Lanka is
originally from Bengal and Orissa.
Maritime contacts between India and South-east
Asia could be dated back as to the 4th.-3rd.century
BC at that time the trade was mainly on barter
system. Cultural, religious, spiritual and educational
interchanges which were natural consequences to
economic and commercial activities, in core,
resulted in to development of global trade between
major civilisations. Buddhist monks and traders
introduced Indian culture, script, language and
religion on the foreign soil. Some of the rituals are
very familiar and identical even today.
We are reasons to feel proud about first ever and
earliest codification concerning maritime
regulations was effectively done during the reign of
Emperor Chandragupta Maurya in 321 BC.Board
of Admiralty was formed; shipmaster was formal
custodian and Registrar of merchant vessels. The
import-export was carried through under well-
defined laws though applied to Indian trade but in
due course these rules were barrowed and applied in
other trade territories with suitable modifications.
Chandragupta Maurya was the first Indian Emperor
to visualize the importance of navy. In the age of
Mauryas ship building in India was a regular and
flourishing industry of which the output was quite
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201612
Mr. S.R.Rao says that Indian traders first settled in
Bahrain. Later on, different section of Indian
merchants colonized the different cities of
Mesopotamia. Indian traders sailed their ships not
only to Indian Ocean and the Persian Gulf, they also
ventured into Red Sea and even into Mediterranean.
India was center of spices and scented ointments.
Beauty products and other cosmetics were being
chiefly imported from India to Egypt and West
particularly south-east European nations.
Some very definite and convincing allusions to sea
voyages and sea-borne trade are also contained in
the vast body of Buddhist literature known as 'Jatak'
which are generally taken to relate themselves to a
period of one thousand years beginning from 500
BC. The 'BaveruJatak' without doubt points to the
existence of commercial intercourse between India
and Babylon in pre-Ashokan days.
At a time, economic prosperity of India was
unparalleled andultra-advanced in the world. One
can understand that India's superior place in world
trade was a well acknowledged contribution of its
shipping industries rolling out formidable
mercantile and military vessels in various centuries
throughout. Sea merchandise and shipping industry
was no novice to Indian governance. Buddhist
Jataka stories wrote about large Indian ships
carrying seven hundred people. Professor Max
Duncker, author of History of Antiquity, says
that the ship building was known in ancient India
about 2000 BC. It is clear that Hindus navigated the
oceans from the earliest time and that they carried
on trade on extensive scale with all the important
nations of whole world.
India is one of the oldest civilisations in the world.
Indian continent, over the centuries, is known to all
for its social, economic, cultural, spiritual,
educational, philosophical and administrative
fineness. When the society and humanity attained
such a high pedestal and all round developments
were ongoing process it is natural that trade and
commerce was effectively regulated and
administered in very high professional way in
successive centuries. Primarily, voyages were
intended to human quest for new world and new
civilisations. Other reasons may be to spread
religion and spirituality as also to look for new
markets for products and resources.
On a look in ancient history we find there were
voyages for neighboring countries but were not
limited only to close by regions. Voyages were
basically aimed to invent new world markets and
new civilizations. In a Pali book Questions of
Milindaa merchant is described as having sailed to
Alexandria, Burma, Malaya and China and
Zanzibar. [Hinduism: Its Contribution to
Science and Civilization- By Prabhakar
Balwant Machwe]. Trade related voyages were
made on trusted sea routes with ships of adequate
capabilities. There was well developed sea route
network between India and South-east Asia and
Indian mariners were aware of trade centers, ports
and navigational risks and skills which prompted
them to take advantage and expand trade.
Jatak story indicate that the Vanias of Western India
undertook trading voyages to the source of Persian
Gulf and its rivers in 5th. and 6th. century BC. Jatak
stories also have description of voyages to distant
lands and perilous adventure by sea in which the
names of very ancient western ports of Suparaka-
Supara and Bharukachcha-Broach are occasionally
mentioned. [Indian Shipping; A History of the
Sea-borne Trade and Maritime Activity of the
Indians from Earliest Time- R.K. Mookerjee]
Dr. Caldwell says: "it appears certain from notices
contained in the Vedas that Aryans of the age of
Soloman practiced foreign trade in ocean-going
vessels."
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 13
large. A Board of Admiralty was one of the six
Boards which comprised of his war office.
Superintendent of Ships headed Board of
Admiralty; his duties include almost every maritime
activities such as navigation of oceans and rivers,
port levies, harbor regulations, safety measures of
boats and ships in docks and in open seas. During
Mauryan's rule there were specific regulations for
compensation, freight payment and cargo lien. In
the Kautilya Arthashastra a mention is made about
the Board of Shipping and Commissioner of
shipping who supervised sea-traffic.
Before trade with the Roman Empire, India carried
on her trade chiefly with Egypt; whose king
Ptolemy (285-247 BC) with whom Ashoka the
Great had regular commercial intercourses which
caused for commercial hub, known as Alexandria,
between East and West. There are evidences that
commodities like wood, resin, ebony, ivory, gold,
precious stones, cinnamon, incense, eye-coloring,
textile and medicinal herbs etc. were prime exports
to Egypt from India.
The volume of export trade from India to Roman
Empire may be estimated from well-known passage
of Pliny, a noted Roman historian in first century
AD, in which he recorded that India drained the
Roman Empire of fifty million sesterces every year.
All the Rome's coffers were being emptied into
India to satisfy Roman demand for translucent
Indian muslins. Pliny's statement is corroborated by
the discovery, in India, of innumerable gold coins
of Roman Emperors, which must have come in the
course of trade. The wealth of Roman Empire
reached India through western and south Indian
ports.
India never lagged behind the time since the land
was ably administered by visionary rulers who were
guided by ancient rules of governance and old
testaments of procedures, regulations and laws
Different civilisations prospered at different places
and in different times. They were fully developed in
a sense but trade, commerce and interchange
between them brought rich cultural heritage and
economic well-being. Indian art had accompanied
Indian religion across straits and frontiers into
Sri Lanka, Java, Cambodia, Siam, Burma, Tibet,
Turkestan, Mongolia, China, Korea and Japan.
Excavation finds of Anuradhapura (Sri Lanka)
indicate that the Brahmi script was introduced in
Sri Lanka by Indian traders in the 5th.-4th.century
BC prior to the introduction of Buddhism.
Similarly, Damili script used in northern Sri Lanka is
originally from Bengal and Orissa.
Maritime contacts between India and South-east
Asia could be dated back as to the 4th.-3rd.century
BC at that time the trade was mainly on barter
system. Cultural, religious, spiritual and educational
interchanges which were natural consequences to
economic and commercial activities, in core,
resulted in to development of global trade between
major civilisations. Buddhist monks and traders
introduced Indian culture, script, language and
religion on the foreign soil. Some of the rituals are
very familiar and identical even today.
We are reasons to feel proud about first ever and
earliest codification concerning maritime
regulations was effectively done during the reign of
Emperor Chandragupta Maurya in 321 BC.Board
of Admiralty was formed; shipmaster was formal
custodian and Registrar of merchant vessels. The
import-export was carried through under well-
defined laws though applied to Indian trade but in
due course these rules were barrowed and applied in
other trade territories with suitable modifications.
Chandragupta Maurya was the first Indian Emperor
to visualize the importance of navy. In the age of
Mauryas ship building in India was a regular and
flourishing industry of which the output was quite
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201614
enriched with customs and practices. Indian
thinkers, philosophers and preachers were
outstanding who devoted their lives in the welfare
and well being of mankind. They always enjoyed
privilege to speak fearlessly and governance had
always given due weightage to their words. Though
agriculture and small crafts were primary
occupation but trading activities and commercial
pursuits were not akin to that period. Even royal
navy was entrusted with responsibility to secure sea-
routes from pirates. Government at those times
were keenly interested in updating and improving
commercial activities at ports and enacted
regulations to streamline sea traffic and growing
merchandise.
Manu Smriti is considered oldest law book in the
whole world. It lays down laws to govern
commercial disputes having references to sea-
borne traffic as well as inland trading and
commerce. This age-old law code was so elaborate
as to cover "interest rate on the amount lent on
bottamry". For sake of practicality this was left to be
determined by experienced specialists. This code
has adequately covered concern related with
'marine insurance', discussing therein rights and
obligations of cargo owners and sailors. Even force
majeure conditions were also specified to reduce
unwarranted disputes.
Dispute resolution through King's Court and
outside resolution through traditional conciliation
was well accepted and prevelant. The whole system
was ordered and efficiently managed in several
centuries. Even in medieval period during muslim
rules that judicial system was highly developed as
also the legislative functioning was vibrant and
responsive to situation.
Roman Empire is known to its vastness and
powerful administration possibly somewhere
around 100 AD. Naval power was pre-dominant
factor in pursuits of Roman Kings to expand their
empire as the sea waves were to be conquered first.
Sovereignty over seas was to be established and
protected to advance commercial and trade
interests in foreign soils. Romans skillfully drafted
regulations to streamline almost all concerns related
with overseas mercantile trade such as custody,
safety, carriage and delivery of cargo. Other
important concerns were financing of sea voyage,
ship building and maintenance, sailors financial
security, register of merchant vessels, jurisdiction
and administrative control of port authorities. With
such developed administrative structure Romans
also provided effective machinery for resolvement
of disputes under a system of marine jurisdiction
and proceedings. Their maritime and admiralty
system of dispensing justice stood the test of time
and efficiency.
Down the line many countries in Mediterranean
such as Portugal, France, Germany and Baltic
worked upon and drafted their own set of maritime
codes and implemented for certainties in
transactions. It is Britain that has taken a lead in
drafting a comprehensive legislation in the form of
"law of Merchant" in 1283. This legislation was
sourced upon customary maritime practices and
established usages. Hallmark of this piece of
legislation was emphasis over quick and speedy
settlement of commercial disputes. English Legal
History suggests that before Seventeen century
causes and disputes were neither frequent nor
complex in terms. As volume and activities grew in
and after Seventeen century maritime and merchant
law was updated and re-enacted to address all
important concerns. This was time for
standardization of prevalent regulations and
statutes.
India during the period of British governance and
dominance seems to lost its identity on legislative
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 15
acquire now 1149 vessels ( 830 coastal ships and 364
over seas ships) still Transchart (A wing of Ministry
of Transport and Shipping, Government of India)
who is largest hirer of commercial vessels in the
world is under compulsion to engage foreign flag
vessels to meet the requirement. India may be
having a fleet of about 10% of total number of
vessels round the world but India's fleet is ageing
one and mostly driven by obsolete technology. We
may remember that India is covered by sea in three
sides and is having a coast line running for 4800
k.m. but we have only 12 major ports which are
mostly inadequate to handle volume of business.
India is losing precious foreign exchange because
of delays in loading/discharging cargo in ports,
lesser number of berths or dedicated berths
increasing waiting time to the detriment of hirer of
vessel. India is compelled to hire foreign flag vessels
and causing outflow of valuable forex. Two fold
improvement is felt, one to upgrade existing fleet
with latest technology as also to increase size of
fleet. The other urgent requirement is to improve
infrastructure of existing ports and make new ports
by inviting foreign equity participation or on public
private participation basis.
Let us hope that Government is clearly focused on
economic priorities, nation is desperately looking
for.
instinct. Almost every legislation of land was
replaced with borrowed Act or Regulation. English
legislations were drafted with a view to facilitate
British rule and increase revenue. They were not
primarily intended to take care of interest and
welfare of poor peasants. Many Acts are more than
hundred years old and lost relevance long back but
still continuing. Even basic laws and procedural
laws are carried forward with scores of
amendments. Is it a right way of governance? There
is urgent need to enact progressive legislations for
advancement of society, effective and responsive
governance which may be conducive to all round
growth and development. Prime Minister
Mr. Narendra Modi once remarked that India is
carrying huge bag load of legislations that lost their
relevance long back. I wish I may repeal at least one
such legislations every day. The least we have to
realise.
India's glorious past should not go waste and we
should move to lead rather than to be led by others.
If India is again to become manufacturing and
export hub we have to transform our shipping
industry one of the most modern in the world and
maritime regulations and legislations should not lag
behind. In 1947 when India became sovereign
republic there were 59 ships on the maritime
register of India. Though we steadily grown to
*Legal Consultant
"All the criticism of arbitration is at least not as valid when it comes to international commercial arbitration, and
especially when the parties are businesses that have willingly submitted to arbitration. In fact, arbitration can
provide the fairest process under certain circumstances. But the strongest arguments in favor of allowing parties to
submit to international commercial arbitration are simply that both parties should have the authority to choose
how to settle disputes, and both parties should be bound to do what they agreed to do." (Ronald Allen Yue)
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201614
enriched with customs and practices. Indian
thinkers, philosophers and preachers were
outstanding who devoted their lives in the welfare
and well being of mankind. They always enjoyed
privilege to speak fearlessly and governance had
always given due weightage to their words. Though
agriculture and small crafts were primary
occupation but trading activities and commercial
pursuits were not akin to that period. Even royal
navy was entrusted with responsibility to secure sea-
routes from pirates. Government at those times
were keenly interested in updating and improving
commercial activities at ports and enacted
regulations to streamline sea traffic and growing
merchandise.
Manu Smriti is considered oldest law book in the
whole world. It lays down laws to govern
commercial disputes having references to sea-
borne traffic as well as inland trading and
commerce. This age-old law code was so elaborate
as to cover "interest rate on the amount lent on
bottamry". For sake of practicality this was left to be
determined by experienced specialists. This code
has adequately covered concern related with
'marine insurance', discussing therein rights and
obligations of cargo owners and sailors. Even force
majeure conditions were also specified to reduce
unwarranted disputes.
Dispute resolution through King's Court and
outside resolution through traditional conciliation
was well accepted and prevelant. The whole system
was ordered and efficiently managed in several
centuries. Even in medieval period during muslim
rules that judicial system was highly developed as
also the legislative functioning was vibrant and
responsive to situation.
Roman Empire is known to its vastness and
powerful administration possibly somewhere
around 100 AD. Naval power was pre-dominant
factor in pursuits of Roman Kings to expand their
empire as the sea waves were to be conquered first.
Sovereignty over seas was to be established and
protected to advance commercial and trade
interests in foreign soils. Romans skillfully drafted
regulations to streamline almost all concerns related
with overseas mercantile trade such as custody,
safety, carriage and delivery of cargo. Other
important concerns were financing of sea voyage,
ship building and maintenance, sailors financial
security, register of merchant vessels, jurisdiction
and administrative control of port authorities. With
such developed administrative structure Romans
also provided effective machinery for resolvement
of disputes under a system of marine jurisdiction
and proceedings. Their maritime and admiralty
system of dispensing justice stood the test of time
and efficiency.
Down the line many countries in Mediterranean
such as Portugal, France, Germany and Baltic
worked upon and drafted their own set of maritime
codes and implemented for certainties in
transactions. It is Britain that has taken a lead in
drafting a comprehensive legislation in the form of
"law of Merchant" in 1283. This legislation was
sourced upon customary maritime practices and
established usages. Hallmark of this piece of
legislation was emphasis over quick and speedy
settlement of commercial disputes. English Legal
History suggests that before Seventeen century
causes and disputes were neither frequent nor
complex in terms. As volume and activities grew in
and after Seventeen century maritime and merchant
law was updated and re-enacted to address all
important concerns. This was time for
standardization of prevalent regulations and
statutes.
India during the period of British governance and
dominance seems to lost its identity on legislative
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 15
acquire now 1149 vessels ( 830 coastal ships and 364
over seas ships) still Transchart (A wing of Ministry
of Transport and Shipping, Government of India)
who is largest hirer of commercial vessels in the
world is under compulsion to engage foreign flag
vessels to meet the requirement. India may be
having a fleet of about 10% of total number of
vessels round the world but India's fleet is ageing
one and mostly driven by obsolete technology. We
may remember that India is covered by sea in three
sides and is having a coast line running for 4800
k.m. but we have only 12 major ports which are
mostly inadequate to handle volume of business.
India is losing precious foreign exchange because
of delays in loading/discharging cargo in ports,
lesser number of berths or dedicated berths
increasing waiting time to the detriment of hirer of
vessel. India is compelled to hire foreign flag vessels
and causing outflow of valuable forex. Two fold
improvement is felt, one to upgrade existing fleet
with latest technology as also to increase size of
fleet. The other urgent requirement is to improve
infrastructure of existing ports and make new ports
by inviting foreign equity participation or on public
private participation basis.
Let us hope that Government is clearly focused on
economic priorities, nation is desperately looking
for.
instinct. Almost every legislation of land was
replaced with borrowed Act or Regulation. English
legislations were drafted with a view to facilitate
British rule and increase revenue. They were not
primarily intended to take care of interest and
welfare of poor peasants. Many Acts are more than
hundred years old and lost relevance long back but
still continuing. Even basic laws and procedural
laws are carried forward with scores of
amendments. Is it a right way of governance? There
is urgent need to enact progressive legislations for
advancement of society, effective and responsive
governance which may be conducive to all round
growth and development. Prime Minister
Mr. Narendra Modi once remarked that India is
carrying huge bag load of legislations that lost their
relevance long back. I wish I may repeal at least one
such legislations every day. The least we have to
realise.
India's glorious past should not go waste and we
should move to lead rather than to be led by others.
If India is again to become manufacturing and
export hub we have to transform our shipping
industry one of the most modern in the world and
maritime regulations and legislations should not lag
behind. In 1947 when India became sovereign
republic there were 59 ships on the maritime
register of India. Though we steadily grown to
*Legal Consultant
"All the criticism of arbitration is at least not as valid when it comes to international commercial arbitration, and
especially when the parties are businesses that have willingly submitted to arbitration. In fact, arbitration can
provide the fairest process under certain circumstances. But the strongest arguments in favor of allowing parties to
submit to international commercial arbitration are simply that both parties should have the authority to choose
how to settle disputes, and both parties should be bound to do what they agreed to do." (Ronald Allen Yue)
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201616
ARBITRATION & ADR ROUND-UP
1. Commercial Courts Act comes into
force
The Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts
Bill, 2015 and Amendments to Arbitration and
Conciliation Act, which got passed in Rajya Sabha
on December 23rd, 2015, is notified in the official
gazette. This law deemed to have come into force
from 23rd October 2015 and they replace the
ordinances.
Commercial Courts, Commercial Divisions and
Commercial Appellate Divisions The Commercial
Courts, Commercial Division and Commercial
Appellate Division of High Courts Bill, 2015 Act is
enacted to provide for the constitution of
Commercial Courts, Commercial Division and
Commercial Appellate Division in the High Courts
for adjudicating commercial disputes of specified
value and matters connected therewith or incidental
thereto.
Commercial Courts are a courts equivalent to
District Courts and will adjudicate commercial
disputes. Appellate Division in High Courts would
hear the appeals from orders and judgments from
the Commercial courts. Suits of a value of Rs. One
Crore or more that are pending in the high court/
District courts will now be transferred to the
commercial division/would be transferred to the
commercial court. Commercial divisions may be set
up in those high courts which exercise ordinary
original civil jurisdiction, that is, the High Courts of
Delhi, Bombay, Calcutta and Madras.
The Act also says that appeals to High Court from
the orders passed by tribunals like Competition
Appellate Tribunal, Debt Recovery Appellate
Tribunal, Intellectual Property Appellate Board,
Company Law Board or the National Company
Law Tribunal, Securities Appellate Tribunal and
Telecom Dispute Settlement and Appellate tribunal
may be heard by the commercial appellate division
of the high court if it relates to a commercial
dispute. This Act replaces the ordinance which was
promulgated in October 2015. The Delhi High
Court had Delhi High Court has already set up six
commercial division courts and four commercial
appellate division courts for adjudicating
commercial disputes of a specified value of which
is above Rs.1 Crore.
Source: Live Law
2. SC announces new norms for
Arbitration
The Supreme Courtannounced new norms for
hearing arbitrationpetitions in view of the
Arbitration and Conciliation Amendment
Ordinance, which came into force in October.
Justice Ranjan Gogoi, who was designated by the
Chief Justice of India (CJI) to decide on arbitration
petitions, said in future these norms would be
followed. Gogoi sent all 24 cases listed before him,
including the dispute between Reliance Industries
and the Central government over the KG basin, to
the CJI, who will decide the bench before which
they will be listed. The new law uses 'court' in place
of 'designated judge'. This means a bench
constituted by the chief justice.
Earlier, one judge designated by CJI in case of
international arbitration, or chief justice of the
respective high courts in domestic arbitration, was
assigned the petitions.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 17
The letter quotes Modi's comments to the City of
London and goes on to say, "However, as you are
aware, Cairn Energy's outstanding retrospective tax
issue is yet to be resolved… The matter has been
ongoing for almost two years and is having a major
detrimental impact on our business and to our UK
and international shareholders."
While invoking its arbitration against the central
government in September this year, Cairn Energy
had pointed to how, after its money got stuck in
India, the firm had to let go 40% of its workforce as
it did not have the money to fund other exploration
activities. After the sale, Cairn Energy had held on
to $1 billion worth shares of Cairn India which the
latter was in the process of buying back when the
taxman froze the sale.
Prior to selling its Indian arm to the Vedanta Group,
Cairn had invested $5 billion in India and Cairn
India today produces over 30% of India's annual
crude oil output.
"I would be grateful," the letter goes on to say, "if
you could please clarify the position on Cairn's
retrospective tax case."
While the arbitration with the government will pick
up pace now that the Centre has also appointed its
arbitrator, Cairn has also approached the finance
ministry's dispute resolution panel. While the
arbitration could take anywhere from a year or two
depending on whether the umpire arbitrator is
appointed quickly, the reason for approaching the
DRP is that even if Cairn does win the arbitration,
there is no certainty as to whether it will be able to
invoke the award - doing so can take years and, in
the case of White Industries, has been pending
since 2002. The other reason for approaching the
DRP is that, as of now, there is only a draft tax
assessment, not a final one.
That was the norm according to the Arbitration Act
1986. After the new law, this practice will have to be
abandoned as the ordinance uses the word 'court' in
place of 'designated judge'. Court would mean a
bench constituted by the chief justice, not one
judge.
Another clause has brought about significant
change in the conduct of the proceedings.
According to the amended law, once there is an
arbitration clause in the agreement, disputes go
directly to the arbitration tribunal. Arbitration in
such cases is independent of the involvement of the
court. This reduces the role of courts to a great
extent and will speed up arbitration, which is often
stalled in courts.
For instance, the Reliance arbitration case in the gas
row has been pending for several years in the
Supreme Court. Two arbitrators have been named,
but the whole process in the international
arbitration is stalled over the third and the presiding
arbitrator. The new norms, issued by the registrar,
might keep out the hurdles in this case.
Source: Business Standard
3. Cairn writes to PM Narendra Modi on
tax case
Cairn Energy CEO Simon Thomson has written to
Prime Minister Narendra Modi asking him to help
resolve the Rs 10,247-crore case that has been
dragging on for almost two years now.
The letter, which follows several meetings with
finance minister Arun Jaitley and senior finance
ministry officials, refers to Modi's visit to the UK
last month where he assured investors the
retrospective tax amendment would not be used
against investors.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201616
ARBITRATION & ADR ROUND-UP
1. Commercial Courts Act comes into
force
The Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts
Bill, 2015 and Amendments to Arbitration and
Conciliation Act, which got passed in Rajya Sabha
on December 23rd, 2015, is notified in the official
gazette. This law deemed to have come into force
from 23rd October 2015 and they replace the
ordinances.
Commercial Courts, Commercial Divisions and
Commercial Appellate Divisions The Commercial
Courts, Commercial Division and Commercial
Appellate Division of High Courts Bill, 2015 Act is
enacted to provide for the constitution of
Commercial Courts, Commercial Division and
Commercial Appellate Division in the High Courts
for adjudicating commercial disputes of specified
value and matters connected therewith or incidental
thereto.
Commercial Courts are a courts equivalent to
District Courts and will adjudicate commercial
disputes. Appellate Division in High Courts would
hear the appeals from orders and judgments from
the Commercial courts. Suits of a value of Rs. One
Crore or more that are pending in the high court/
District courts will now be transferred to the
commercial division/would be transferred to the
commercial court. Commercial divisions may be set
up in those high courts which exercise ordinary
original civil jurisdiction, that is, the High Courts of
Delhi, Bombay, Calcutta and Madras.
The Act also says that appeals to High Court from
the orders passed by tribunals like Competition
Appellate Tribunal, Debt Recovery Appellate
Tribunal, Intellectual Property Appellate Board,
Company Law Board or the National Company
Law Tribunal, Securities Appellate Tribunal and
Telecom Dispute Settlement and Appellate tribunal
may be heard by the commercial appellate division
of the high court if it relates to a commercial
dispute. This Act replaces the ordinance which was
promulgated in October 2015. The Delhi High
Court had Delhi High Court has already set up six
commercial division courts and four commercial
appellate division courts for adjudicating
commercial disputes of a specified value of which
is above Rs.1 Crore.
Source: Live Law
2. SC announces new norms for
Arbitration
The Supreme Courtannounced new norms for
hearing arbitrationpetitions in view of the
Arbitration and Conciliation Amendment
Ordinance, which came into force in October.
Justice Ranjan Gogoi, who was designated by the
Chief Justice of India (CJI) to decide on arbitration
petitions, said in future these norms would be
followed. Gogoi sent all 24 cases listed before him,
including the dispute between Reliance Industries
and the Central government over the KG basin, to
the CJI, who will decide the bench before which
they will be listed. The new law uses 'court' in place
of 'designated judge'. This means a bench
constituted by the chief justice.
Earlier, one judge designated by CJI in case of
international arbitration, or chief justice of the
respective high courts in domestic arbitration, was
assigned the petitions.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 17
The letter quotes Modi's comments to the City of
London and goes on to say, "However, as you are
aware, Cairn Energy's outstanding retrospective tax
issue is yet to be resolved… The matter has been
ongoing for almost two years and is having a major
detrimental impact on our business and to our UK
and international shareholders."
While invoking its arbitration against the central
government in September this year, Cairn Energy
had pointed to how, after its money got stuck in
India, the firm had to let go 40% of its workforce as
it did not have the money to fund other exploration
activities. After the sale, Cairn Energy had held on
to $1 billion worth shares of Cairn India which the
latter was in the process of buying back when the
taxman froze the sale.
Prior to selling its Indian arm to the Vedanta Group,
Cairn had invested $5 billion in India and Cairn
India today produces over 30% of India's annual
crude oil output.
"I would be grateful," the letter goes on to say, "if
you could please clarify the position on Cairn's
retrospective tax case."
While the arbitration with the government will pick
up pace now that the Centre has also appointed its
arbitrator, Cairn has also approached the finance
ministry's dispute resolution panel. While the
arbitration could take anywhere from a year or two
depending on whether the umpire arbitrator is
appointed quickly, the reason for approaching the
DRP is that even if Cairn does win the arbitration,
there is no certainty as to whether it will be able to
invoke the award - doing so can take years and, in
the case of White Industries, has been pending
since 2002. The other reason for approaching the
DRP is that, as of now, there is only a draft tax
assessment, not a final one.
That was the norm according to the Arbitration Act
1986. After the new law, this practice will have to be
abandoned as the ordinance uses the word 'court' in
place of 'designated judge'. Court would mean a
bench constituted by the chief justice, not one
judge.
Another clause has brought about significant
change in the conduct of the proceedings.
According to the amended law, once there is an
arbitration clause in the agreement, disputes go
directly to the arbitration tribunal. Arbitration in
such cases is independent of the involvement of the
court. This reduces the role of courts to a great
extent and will speed up arbitration, which is often
stalled in courts.
For instance, the Reliance arbitration case in the gas
row has been pending for several years in the
Supreme Court. Two arbitrators have been named,
but the whole process in the international
arbitration is stalled over the third and the presiding
arbitrator. The new norms, issued by the registrar,
might keep out the hurdles in this case.
Source: Business Standard
3. Cairn writes to PM Narendra Modi on
tax case
Cairn Energy CEO Simon Thomson has written to
Prime Minister Narendra Modi asking him to help
resolve the Rs 10,247-crore case that has been
dragging on for almost two years now.
The letter, which follows several meetings with
finance minister Arun Jaitley and senior finance
ministry officials, refers to Modi's visit to the UK
last month where he assured investors the
retrospective tax amendment would not be used
against investors.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201618
UK-based parent Cairn has said that while its Indian
interests were owned by various overseas
subsidiaries, in 2006 it decided to transfer them to
Cairn India prior to the public issue.
While arguing against the use of the retrospective
tax, Cairn argues that even if, for the sake of
argument, the taxable gain was said to have accrued
in India, there was no transaction that resulted in a
possible capital gains tax - no money changed hands
when the shares were transferred, the only time a
capital gains tax arose was when the shares were
sold to Vedanta and a tax was paid on that. "Any
funds realised by CIL (Cairn India Ltd) in the course
of an IPO may reflect the value of the downstream
assets but it does not give rise to any taxable
transaction," Cairn has written to the DRP.
Source: Financial Express
4. IFFCO knocks Joe over with a legal
win
IFFCO that towers over cooperative giants has
rubbed the nose of Mining entrepreneur Joe
Gutnick and his company Legend International
Holdings in it, in a case that started in Singapore and
ended finally in the Supreme Court of Victoria in
Australia.
IFFCO had appealed to the Supreme Court of
Victoria to enforce a final award issued in Singapore
on May 7, 2015 by the Singapore International
Arbitration Centre after Mr. Gutnick and Legend
International refused to pay the money awarded to
the fertilizer group.
In 2008 Mr Gutnick and his business partners
announced a $103 million deal to supply
Queensland phosphate to IFFCO for its Paradeep
plant. Under the deal, IFFCO was to invest the $103
million over two years through shares and options
in Legend International, reported The Sydney
Morning Herald.
Dr Awasthi also congratulated the Singapore legal
team, who dedicatedly worked with IFFCO for this
legal victory. Dr. Awasthi also congratulated
Director (HR & Legal) Mr. R P Singh and his team
for the legal victory over Legend. He also said that
that this legal victory of IFFCO over Legend
International signifies true professionalism in its
working and dedication towards farmers and
cooperators.
Source: Indian Cooperative
5. Is new Arbitration Law a ray of hope
for construction sector?
The freshly enacted Arbitration Act is likely to lift
any impediments from the flow of capital into the
construction industry by enabling a quicker
resolution of disputes. Mostly awarded by the
Centre and state governments, around 5 lakh crore
has been stuck in arbitration that involves EPC
projects, as per the statement made by a leading
Chamber of Commerce.
'The passage of the Arbitration and Conciliation
(Amendment) Bill, 2015 is a great step forward for
India's legal system. The Bill will allow the speedy
resolution of arbitration cases and will also
significantly help to make India a more attractive
place to do business. India stands at the forefront to
become a centre for International Arbitrations,' as
stated by Sarosh Zaiwalla, Founder & Senior
Partner, Zaiwalla & Co.
The real estate sector has a glimmer of hope thanks
to the enactment of new arbitration law which has
been initiated by the government and has been
cleared by the Government recently.
Source: India Infoline News Service
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 19
commencing international arbitration, and limiting
the power of the tribunal to awarding monetary
compensation alone.
"The model excludes matters such as government
procurement, taxation, subsidies, compulsory
licenses and national security to preserve the
regulatory authority for the Government," said the
Cabinet.
Source: Knowledge & News Network
7. Draft International Arbitration Bill in
South Africa
A draft International Arbitration bill is presently
with the Department of Justice, for review, having
been approved by the Law Development
Commission. The bill, it is understood, is based on
the UNCITRAL Model Law for International
Arbitrations (that having been the Law
Commission's proposal in 1997). The bill will be
submitted to Parliament for approval next year.
It is a matter of speculation as to what extent the
Model Law will be adjusted or tampered with, what
is known is that the Law Commission had, in
putting its proposal to the Department of Justice
(as long ago as 1997), stressed the need promote
two main threads, these being:
nthe liberalisation of International Arbitration
by limiting the role of domestic courts; and
nthe emphasizing of party autonomy by
allowing parties the freedom to choose how
disputes should be determined
The existing Arbitration Act of 1965 allows parties
recourse to our courts in the course of arbitration
proceedings on a large number of procedural
matters. This of course detracts from the essence
of arbitration proceedings and so the new bill is
eagerly awaited.
6. Govt. approves revised Model Text for
Indian Bilateral Investment Treaty
With the view to boost investment in the country,
the Union Cabinet chaired by Prime Minister
Narendra Modi has given its nod for the revised
Model Text for the Bilateral Investment Treaty
(BIT) which will provide appropriate protection to
foreign investors in India and Indian investors in
the foreign country.
The revised Indian model text for BIT will replace
the existing Indian Model BIT. The revised BIT will
be used for re-negotiation of existing BITs and
negotiation of future BITs and investment chapters
in Comprehensive Economic Cooperation
Agreements (CECAs)/ Comprehensive Economic
Partnership Agreements (CEPAs) / Free Trade
Agreements (FTAs).
The new model of BIT will provide protections to
both the foreign and domestic investors in the light
of relevant international precedents and practices,
while maintaining a balance between the investor's
rights and the Government obligations, the Union
Cabinet said.
"A BIT increases the comfort level and boosts the
confidence of investors by assuring a level playing
field and non-discrimination in all matters while
providing for an independent forum for dispute
settlement by arbitration. In turn, BITs help project
India as a preferred foreign direct investment (FDI)
destination as well as protect outbound Indian
FDI," Cabinet said in an official statement.
The revised BIT will include an "enterprise" based
definition of investment, non-discriminatory
treatment through due process, national treatment,
protections against expropriation, a refined
Investor State Dispute Settlement (ISDS) provision
requiring investors to exhaust local remedies before
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201618
UK-based parent Cairn has said that while its Indian
interests were owned by various overseas
subsidiaries, in 2006 it decided to transfer them to
Cairn India prior to the public issue.
While arguing against the use of the retrospective
tax, Cairn argues that even if, for the sake of
argument, the taxable gain was said to have accrued
in India, there was no transaction that resulted in a
possible capital gains tax - no money changed hands
when the shares were transferred, the only time a
capital gains tax arose was when the shares were
sold to Vedanta and a tax was paid on that. "Any
funds realised by CIL (Cairn India Ltd) in the course
of an IPO may reflect the value of the downstream
assets but it does not give rise to any taxable
transaction," Cairn has written to the DRP.
Source: Financial Express
4. IFFCO knocks Joe over with a legal
win
IFFCO that towers over cooperative giants has
rubbed the nose of Mining entrepreneur Joe
Gutnick and his company Legend International
Holdings in it, in a case that started in Singapore and
ended finally in the Supreme Court of Victoria in
Australia.
IFFCO had appealed to the Supreme Court of
Victoria to enforce a final award issued in Singapore
on May 7, 2015 by the Singapore International
Arbitration Centre after Mr. Gutnick and Legend
International refused to pay the money awarded to
the fertilizer group.
In 2008 Mr Gutnick and his business partners
announced a $103 million deal to supply
Queensland phosphate to IFFCO for its Paradeep
plant. Under the deal, IFFCO was to invest the $103
million over two years through shares and options
in Legend International, reported The Sydney
Morning Herald.
Dr Awasthi also congratulated the Singapore legal
team, who dedicatedly worked with IFFCO for this
legal victory. Dr. Awasthi also congratulated
Director (HR & Legal) Mr. R P Singh and his team
for the legal victory over Legend. He also said that
that this legal victory of IFFCO over Legend
International signifies true professionalism in its
working and dedication towards farmers and
cooperators.
Source: Indian Cooperative
5. Is new Arbitration Law a ray of hope
for construction sector?
The freshly enacted Arbitration Act is likely to lift
any impediments from the flow of capital into the
construction industry by enabling a quicker
resolution of disputes. Mostly awarded by the
Centre and state governments, around 5 lakh crore
has been stuck in arbitration that involves EPC
projects, as per the statement made by a leading
Chamber of Commerce.
'The passage of the Arbitration and Conciliation
(Amendment) Bill, 2015 is a great step forward for
India's legal system. The Bill will allow the speedy
resolution of arbitration cases and will also
significantly help to make India a more attractive
place to do business. India stands at the forefront to
become a centre for International Arbitrations,' as
stated by Sarosh Zaiwalla, Founder & Senior
Partner, Zaiwalla & Co.
The real estate sector has a glimmer of hope thanks
to the enactment of new arbitration law which has
been initiated by the government and has been
cleared by the Government recently.
Source: India Infoline News Service
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 19
commencing international arbitration, and limiting
the power of the tribunal to awarding monetary
compensation alone.
"The model excludes matters such as government
procurement, taxation, subsidies, compulsory
licenses and national security to preserve the
regulatory authority for the Government," said the
Cabinet.
Source: Knowledge & News Network
7. Draft International Arbitration Bill in
South Africa
A draft International Arbitration bill is presently
with the Department of Justice, for review, having
been approved by the Law Development
Commission. The bill, it is understood, is based on
the UNCITRAL Model Law for International
Arbitrations (that having been the Law
Commission's proposal in 1997). The bill will be
submitted to Parliament for approval next year.
It is a matter of speculation as to what extent the
Model Law will be adjusted or tampered with, what
is known is that the Law Commission had, in
putting its proposal to the Department of Justice
(as long ago as 1997), stressed the need promote
two main threads, these being:
nthe liberalisation of International Arbitration
by limiting the role of domestic courts; and
nthe emphasizing of party autonomy by
allowing parties the freedom to choose how
disputes should be determined
The existing Arbitration Act of 1965 allows parties
recourse to our courts in the course of arbitration
proceedings on a large number of procedural
matters. This of course detracts from the essence
of arbitration proceedings and so the new bill is
eagerly awaited.
6. Govt. approves revised Model Text for
Indian Bilateral Investment Treaty
With the view to boost investment in the country,
the Union Cabinet chaired by Prime Minister
Narendra Modi has given its nod for the revised
Model Text for the Bilateral Investment Treaty
(BIT) which will provide appropriate protection to
foreign investors in India and Indian investors in
the foreign country.
The revised Indian model text for BIT will replace
the existing Indian Model BIT. The revised BIT will
be used for re-negotiation of existing BITs and
negotiation of future BITs and investment chapters
in Comprehensive Economic Cooperation
Agreements (CECAs)/ Comprehensive Economic
Partnership Agreements (CEPAs) / Free Trade
Agreements (FTAs).
The new model of BIT will provide protections to
both the foreign and domestic investors in the light
of relevant international precedents and practices,
while maintaining a balance between the investor's
rights and the Government obligations, the Union
Cabinet said.
"A BIT increases the comfort level and boosts the
confidence of investors by assuring a level playing
field and non-discrimination in all matters while
providing for an independent forum for dispute
settlement by arbitration. In turn, BITs help project
India as a preferred foreign direct investment (FDI)
destination as well as protect outbound Indian
FDI," Cabinet said in an official statement.
The revised BIT will include an "enterprise" based
definition of investment, non-discriminatory
treatment through due process, national treatment,
protections against expropriation, a refined
Investor State Dispute Settlement (ISDS) provision
requiring investors to exhaust local remedies before
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201620
In addition to the fact that the Department of
Justice is currently reviewing the draft bill, there
have in the last four or five years been a number of
decisions of our courts which reveal an
appreciation of the role of arbitration in modern
society. These decisions have supported the sanctity
of arbitration agreements and proceedings, and
have limited in those respective matters,
intervention by the court in arbitration proceedings,
as also the review of arbitral awards. The courts
have gone so far as to say:
"The South African courts not only have a legal, but
a socio-economic and political duty to encourage
the selection of South Africa as a venue for
international arbitrations. International arbitrations
in South Africa will not only foster our comity
among the nations of the world, as well as
international trade but will also bring about the
influx of foreign spending to our country (Zhongi
Development Construction Engineering Company
Limited vs Kamoto Copper Company SARL (2014)
4 ALL SA 614(SCA))."
These developments should be of interest to all
involved in cross border disputes, from the points
of view of predictability in the resolution of
disputes, ease of enforcement of arbitral awards,
and curtailment of judicial review of arbitral
awards.
Source: Lexology
8. Scrap one-size-fits-all approach for
public-private projects: Kelkar Panel
The one-size-fits-all approach to decide an
allocation of risks for stake holders under PPP
Model Concession Agreements (MCAs) needs to
be scrapped, according to the report of a
committee tasked with reviewing the public private
partnership (PPP) model to execute infrastructure
projects.
The panel, headed by former finance secretary Vijay
Kelkar, was set up after finance minister Arun
Jaitley in the budget speech in 2015 announced a
complete overhaul of the PPP model. The panel
had submitted its report which was made public on
28th December last.
Here are some relevant takeaways from the
Kelkar panel report:
nIt welcomed the changes to the Arbitration
Act, especially the time limits on hearing.
World Bank data suggest that the length of
arbitration in India is 569 days, compared
with the OECD average of 335 days.
nThe committee also stipulated PPP contracts
to have clearly articulated dispute resolution
structures so that cases are resolved in a
timely manner
Source: VCCIRCLE
9. A New Dispute Resolut ion
Mechanism in Dredging Contracts
To settle disputes, ports may incorporate a new
mechanism in tenders by setting up a panel under
the chairmanship of the port chairman with chief
engineer, financial advisor and chief accounts
officer and the deputy port conservator of the port
as members. The panel will examine the dispute and
give its recommendation to the board of trustees. If
the row is not settled amicably, it will be referred to
arbitration.
India's state-owed ports will require extensive
dredging to implement the so-called Sagarmala
project which seeks to develop ports on a large scale
by improving existing ports and creating new ports
and also development of the inland water transport
sector.
Source: Live Mint
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 21
10. LCIA closing its India office
LCIA India opened its doors for business in 2009.
Its purpose was to promote the use of arbitration
and ADR through an Indian arbitral institution
which would offer institutionally administered
arbitration based on India-specific rules. Over the
past six years many potential users have indicated an
interest in LCIA India Rules based arbitration.
However, after six years, it is found that there are
insufficient adopters of LCIA India clauses to
justify a continuation of the LCIA India Rules as a
separate offering. This situation is not expected to
change in the near term. Accordingly, the LCIA has
concluded that the best way for it to serve the Indian
market is to do so from London, as it has
traditionally done.
The LCIA will fully support existing cases. From 1
June 2016 these cases will be administered from
London. Similarly, new referrals under the LCIA
India Rules based on existing contracts and
arbitration and mediation clauses (as at 1 June 2016)
will be administered from London on the basis of
the LCIA India Rules. Going forward, referrals
based on contracts concluded after 1 June 2016,
which contain clauses referring to LCIA India, will
not be accepted for administration and the LCIA
India Rules will be amended to that effect. The
LCIA would of course be willing to administer such
cases using the LCIA Rules if the parties agree.
Source: Global Arbitration Review
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201620
In addition to the fact that the Department of
Justice is currently reviewing the draft bill, there
have in the last four or five years been a number of
decisions of our courts which reveal an
appreciation of the role of arbitration in modern
society. These decisions have supported the sanctity
of arbitration agreements and proceedings, and
have limited in those respective matters,
intervention by the court in arbitration proceedings,
as also the review of arbitral awards. The courts
have gone so far as to say:
"The South African courts not only have a legal, but
a socio-economic and political duty to encourage
the selection of South Africa as a venue for
international arbitrations. International arbitrations
in South Africa will not only foster our comity
among the nations of the world, as well as
international trade but will also bring about the
influx of foreign spending to our country (Zhongi
Development Construction Engineering Company
Limited vs Kamoto Copper Company SARL (2014)
4 ALL SA 614(SCA))."
These developments should be of interest to all
involved in cross border disputes, from the points
of view of predictability in the resolution of
disputes, ease of enforcement of arbitral awards,
and curtailment of judicial review of arbitral
awards.
Source: Lexology
8. Scrap one-size-fits-all approach for
public-private projects: Kelkar Panel
The one-size-fits-all approach to decide an
allocation of risks for stake holders under PPP
Model Concession Agreements (MCAs) needs to
be scrapped, according to the report of a
committee tasked with reviewing the public private
partnership (PPP) model to execute infrastructure
projects.
The panel, headed by former finance secretary Vijay
Kelkar, was set up after finance minister Arun
Jaitley in the budget speech in 2015 announced a
complete overhaul of the PPP model. The panel
had submitted its report which was made public on
28th December last.
Here are some relevant takeaways from the
Kelkar panel report:
nIt welcomed the changes to the Arbitration
Act, especially the time limits on hearing.
World Bank data suggest that the length of
arbitration in India is 569 days, compared
with the OECD average of 335 days.
nThe committee also stipulated PPP contracts
to have clearly articulated dispute resolution
structures so that cases are resolved in a
timely manner
Source: VCCIRCLE
9. A New Dispute Resolut ion
Mechanism in Dredging Contracts
To settle disputes, ports may incorporate a new
mechanism in tenders by setting up a panel under
the chairmanship of the port chairman with chief
engineer, financial advisor and chief accounts
officer and the deputy port conservator of the port
as members. The panel will examine the dispute and
give its recommendation to the board of trustees. If
the row is not settled amicably, it will be referred to
arbitration.
India's state-owed ports will require extensive
dredging to implement the so-called Sagarmala
project which seeks to develop ports on a large scale
by improving existing ports and creating new ports
and also development of the inland water transport
sector.
Source: Live Mint
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 21
10. LCIA closing its India office
LCIA India opened its doors for business in 2009.
Its purpose was to promote the use of arbitration
and ADR through an Indian arbitral institution
which would offer institutionally administered
arbitration based on India-specific rules. Over the
past six years many potential users have indicated an
interest in LCIA India Rules based arbitration.
However, after six years, it is found that there are
insufficient adopters of LCIA India clauses to
justify a continuation of the LCIA India Rules as a
separate offering. This situation is not expected to
change in the near term. Accordingly, the LCIA has
concluded that the best way for it to serve the Indian
market is to do so from London, as it has
traditionally done.
The LCIA will fully support existing cases. From 1
June 2016 these cases will be administered from
London. Similarly, new referrals under the LCIA
India Rules based on existing contracts and
arbitration and mediation clauses (as at 1 June 2016)
will be administered from London on the basis of
the LCIA India Rules. Going forward, referrals
based on contracts concluded after 1 June 2016,
which contain clauses referring to LCIA India, will
not be accepted for administration and the LCIA
India Rules will be amended to that effect. The
LCIA would of course be willing to administer such
cases using the LCIA Rules if the parties agree.
Source: Global Arbitration Review
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 23ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201622
the Delhi High Court for an anti-arbitration
injunction under Order 39 Rule 1 & 2 CPC.
To begin with, the defendants challenged the
jurisdiction of the Court to entertain this petition as
the same was barred in view of Section 5 of the
Arbitration Act which restricts judicial intervention
and prohibits any challenge to the validity of the
arbitration agreement except in accordance with
law. Furthermore, it was contended that the validity
of the arbitration agreement could only be
ascertained in two cases by the Court where an
application under Section 45 was preferred by one
of the Parties to the arbitration agreement
requesting a reference to arbitration, or under
Section 48 of the Act when the enforcement of an
award is sought. Reliance was also placed on the
doctrine of negative competence-competence,
which prevents courts from adjudicating upon the
validity of the arbitration agreement in the first
instance.
Thus, in this case any interference by the Court
would lead to an abuse of the process of law since
the Plaintiffs themselves had accepted the validity
of the arbitration agreement by filing a petition
under Section 9 of the arbitration Act. The only
remedy available to the Plaintiffs was to argue lack
of jurisdiction before the arbitral tribunal.
The Court rejected these arguments and ruled that
it had the jurisdiction to entertain this application
based on the judgement of the Supreme Court in
World Sport Group (Mauritius) Ltd. V. MSM
Satellite (Singapore) Pte. Ltd. To re-affirm this
position the Court relied on Rakesh Malhotra vs.
Rajinder Kumar Malhotra to state that disputes
under Section 397 to 402 which pertain to
oppression and mismanagement, are not referable
to arbitration and therefore, the jurisdiction of the
Court cannot be ousted. This reasoning is severely
Case No. 2:
Vikram Bakshi & Anr vs McDonalds India Pvt
Ltd & Ors: decided by the Delhi High Court
McDonalds India Pvt. Ltd. (MCD) and Mr. Vikram
Bakshi entered into a Joint Venture Agreement
dated 31.03.1995 through which they established a
Joint venture company, Connaught Plaza
Restaurants Pvt Ltd (CPRL). Subsequently, CPRL
also became a party to the JVA along with a
company incorporated by Mr. Bakshi, Bakshi
Holdings Pvt Ltd (BHPL). The JVA was governed
by an arbitration clause which read, "...this
Agreement shall be submitted for arbitration to be
administered by the London Court of International
Arbitration (The "LCIA"). Such arbitration
proceedings shall be conducted in London,
England and shall be conducted before a panel of
three (3) arbitrators and shall be conducted in
accordance with the then current commercial
arbitration rules of the LCIA for international
arbitrations."
Disputes arose between the parties in the present
case when MCD removed Mr. Bakshi as Managing
Director of CRPL and sought to change the share -
holding pattern of CRPL by exercising its right of
call option and acquiring the shares held by
Mr. Bakshi and BHPL. In response, BHPL and
Mr. Bakshi commenced proceeding with the
C o m p a n y L aw B o a r d ( C L B ) a l l e g i n g
mismanagement of the JV Company as well as
oppression of management. The CLB ordered all
parties to maintain status quo. Subsequently, MCD
filed a Section 45 application with the CLB asking
them to refer the dispute to arbitration. However,
they withdrew this application before the CLB
could decide on this matter. MCD, then, terminated
the JVA and commenced proceeding with LCIA, in
response to which Mr. Bakshi and BHPL applied to
CASE HIGHLIGHTS
INDIAN CASES:
Case No. 1
Ashapura Mine-chem Ltd. Vs. Gujarat
Mineral Development Corporation:
decided by the Supreme Court of India
In the present case, Ashapura Mine-Chem Ltd.
("Appel lant") and the Gujarat Mineral
Development Corporation ("Respondent") entered
into a Memorandum of Understanding ("MoU") to
constitute a joint venture along with Chinese
Company namely; "M/s. Qing TongXiaAluminium
Group Company Ltd., Ningxia of China for the
purpose of setting up an alumina plant in the Kutch
District of Gujarat. The MoU also recorded that
the Government of Gujarat had agreed to
encourage and support the proposed joint venture
for setting up of the alumina plant.
Subsequent to the execution of the MoU, a new
Mineral Policy was introduced by the Government
of Gujarat. In the light of the said new Mineral
Policy various modifications in the terms and
conditions of the MoU were required to be made by
the parties.
Eventually, the Respondent decided to forthwith
cancel the MoU in view of failure on part of the
Appellant in complying with various terms and
conditions of the MoU.
The Appellant invoked clause 27 ("Arbitration
Clause") of the MoU and approached the High
Court of Gujarat ("Gujarat High Court") under
Section 11 of Arbitration and Conciliation Act,
1996 ("Arbitration Act") for appointment of an
arbitrator.
The Gujarat High Court upon hearing both the
parties observed that the parties had no consensus
ad idem even with reference to the terms and
conditions of the MoU and in these circumstances,
there was no scope left to apply the relevant clauses
to invoke arbitration under the MoU.
Aggrieved by the judgment of the Gujarat High
Court, the Appellant approached the Supreme
Court of India ("Supreme Court"). The primary
issue before the Supreme Court was whether the
MoU fructified into a full-fledged agreement or
not and secondly whether the Arbitration
Clause mentioned in the MoU survives and
continues to bind the parties as a separate
clause different from MoU."
The Supreme Court while deciding the matter, set
aside the judgment of the Gujrat High Court and
held that the Gujarat High Court failed to
appreciate the legal position with respect to the
validity of an arbitration agreement in the MoU,
irrespective of the failure of the parties to reach a
full-fledged agreement with respect to the various
terms and conditions contained in the MoU for a
joint venture. The Supreme Court observed that the
Arbitration Clause contained in the MoU was an
independent Arbitration Agreement and, therefore,
even if the Respondent had chosen to terminate the
MoU, the Arbitration Agreement would continue to
be valid and consequently the parties were entitled
to invoke the said Arbitration Clause. The Supreme
Court emphasized on the concept of separability of
the Arbitration Clause/Agreement and determined
that it is a necessity to ensure that the intention of
the parties to resolve the disputes by arbitration
does not extinguishes with every challenge to the
legality, validity, finality or breach of the underlying
contract.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 23ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201622
the Delhi High Court for an anti-arbitration
injunction under Order 39 Rule 1 & 2 CPC.
To begin with, the defendants challenged the
jurisdiction of the Court to entertain this petition as
the same was barred in view of Section 5 of the
Arbitration Act which restricts judicial intervention
and prohibits any challenge to the validity of the
arbitration agreement except in accordance with
law. Furthermore, it was contended that the validity
of the arbitration agreement could only be
ascertained in two cases by the Court where an
application under Section 45 was preferred by one
of the Parties to the arbitration agreement
requesting a reference to arbitration, or under
Section 48 of the Act when the enforcement of an
award is sought. Reliance was also placed on the
doctrine of negative competence-competence,
which prevents courts from adjudicating upon the
validity of the arbitration agreement in the first
instance.
Thus, in this case any interference by the Court
would lead to an abuse of the process of law since
the Plaintiffs themselves had accepted the validity
of the arbitration agreement by filing a petition
under Section 9 of the arbitration Act. The only
remedy available to the Plaintiffs was to argue lack
of jurisdiction before the arbitral tribunal.
The Court rejected these arguments and ruled that
it had the jurisdiction to entertain this application
based on the judgement of the Supreme Court in
World Sport Group (Mauritius) Ltd. V. MSM
Satellite (Singapore) Pte. Ltd. To re-affirm this
position the Court relied on Rakesh Malhotra vs.
Rajinder Kumar Malhotra to state that disputes
under Section 397 to 402 which pertain to
oppression and mismanagement, are not referable
to arbitration and therefore, the jurisdiction of the
Court cannot be ousted. This reasoning is severely
Case No. 2:
Vikram Bakshi & Anr vs McDonalds India Pvt
Ltd & Ors: decided by the Delhi High Court
McDonalds India Pvt. Ltd. (MCD) and Mr. Vikram
Bakshi entered into a Joint Venture Agreement
dated 31.03.1995 through which they established a
Joint venture company, Connaught Plaza
Restaurants Pvt Ltd (CPRL). Subsequently, CPRL
also became a party to the JVA along with a
company incorporated by Mr. Bakshi, Bakshi
Holdings Pvt Ltd (BHPL). The JVA was governed
by an arbitration clause which read, "...this
Agreement shall be submitted for arbitration to be
administered by the London Court of International
Arbitration (The "LCIA"). Such arbitration
proceedings shall be conducted in London,
England and shall be conducted before a panel of
three (3) arbitrators and shall be conducted in
accordance with the then current commercial
arbitration rules of the LCIA for international
arbitrations."
Disputes arose between the parties in the present
case when MCD removed Mr. Bakshi as Managing
Director of CRPL and sought to change the share -
holding pattern of CRPL by exercising its right of
call option and acquiring the shares held by
Mr. Bakshi and BHPL. In response, BHPL and
Mr. Bakshi commenced proceeding with the
C o m p a n y L aw B o a r d ( C L B ) a l l e g i n g
mismanagement of the JV Company as well as
oppression of management. The CLB ordered all
parties to maintain status quo. Subsequently, MCD
filed a Section 45 application with the CLB asking
them to refer the dispute to arbitration. However,
they withdrew this application before the CLB
could decide on this matter. MCD, then, terminated
the JVA and commenced proceeding with LCIA, in
response to which Mr. Bakshi and BHPL applied to
CASE HIGHLIGHTS
INDIAN CASES:
Case No. 1
Ashapura Mine-chem Ltd. Vs. Gujarat
Mineral Development Corporation:
decided by the Supreme Court of India
In the present case, Ashapura Mine-Chem Ltd.
("Appel lant") and the Gujarat Mineral
Development Corporation ("Respondent") entered
into a Memorandum of Understanding ("MoU") to
constitute a joint venture along with Chinese
Company namely; "M/s. Qing TongXiaAluminium
Group Company Ltd., Ningxia of China for the
purpose of setting up an alumina plant in the Kutch
District of Gujarat. The MoU also recorded that
the Government of Gujarat had agreed to
encourage and support the proposed joint venture
for setting up of the alumina plant.
Subsequent to the execution of the MoU, a new
Mineral Policy was introduced by the Government
of Gujarat. In the light of the said new Mineral
Policy various modifications in the terms and
conditions of the MoU were required to be made by
the parties.
Eventually, the Respondent decided to forthwith
cancel the MoU in view of failure on part of the
Appellant in complying with various terms and
conditions of the MoU.
The Appellant invoked clause 27 ("Arbitration
Clause") of the MoU and approached the High
Court of Gujarat ("Gujarat High Court") under
Section 11 of Arbitration and Conciliation Act,
1996 ("Arbitration Act") for appointment of an
arbitrator.
The Gujarat High Court upon hearing both the
parties observed that the parties had no consensus
ad idem even with reference to the terms and
conditions of the MoU and in these circumstances,
there was no scope left to apply the relevant clauses
to invoke arbitration under the MoU.
Aggrieved by the judgment of the Gujarat High
Court, the Appellant approached the Supreme
Court of India ("Supreme Court"). The primary
issue before the Supreme Court was whether the
MoU fructified into a full-fledged agreement or
not and secondly whether the Arbitration
Clause mentioned in the MoU survives and
continues to bind the parties as a separate
clause different from MoU."
The Supreme Court while deciding the matter, set
aside the judgment of the Gujrat High Court and
held that the Gujarat High Court failed to
appreciate the legal position with respect to the
validity of an arbitration agreement in the MoU,
irrespective of the failure of the parties to reach a
full-fledged agreement with respect to the various
terms and conditions contained in the MoU for a
joint venture. The Supreme Court observed that the
Arbitration Clause contained in the MoU was an
independent Arbitration Agreement and, therefore,
even if the Respondent had chosen to terminate the
MoU, the Arbitration Agreement would continue to
be valid and consequently the parties were entitled
to invoke the said Arbitration Clause. The Supreme
Court emphasized on the concept of separability of
the Arbitration Clause/Agreement and determined
that it is a necessity to ensure that the intention of
the parties to resolve the disputes by arbitration
does not extinguishes with every challenge to the
legality, validity, finality or breach of the underlying
contract.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 25ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201624
arbitration was subject to English curial law, the
Arbitrator was still invalidly appointed as sole
arbitrator.
nIssue (1): whether arbitration under the Fixture
Note was subject to English or Hong Kong
curial law
Hamblen J noted that Clause 23 was clearly a
dispute resolution clause. The most natural and
obvious meaning of its two limbs was that it
intended to address (1) where and how disputes
were to be determined (arbitration in Hong Kong)
and (2) the law governing determination of such
disputes (English law). Agreeing that an arbitration
is "to be held" in a particular country suggests that
all aspects of the arbitration process are to take
place there, which would include any supervisory
court proceedings. As for the provision "English
law to be applied", parties frequently make express
in their dispute resolution clause their choice of
substantive law to govern disputes between them,
and the expression "is to be applied" is a common
means of expressing such choice.
Hamblen J noted that, by contrast, it is far less usual
to express a choice of curial law. That is often
simply left to be inferred from the chosen place of
arbitration. When a choice of curial law is made
express, it is usually done by referring to the
governing arbitration statute.
Daewoo argued that it made good commercial
sense for the same country's law to govern both
substance and procedure, given in particular the
potential need to employ two sets of lawyers and to
prove foreign law as a matter of fact, and that a
bifurcation between the two was unlikely to be
intended. Hamblen J, however, noted that such a
bifurcation is by no means uncommon, and that a
bifurcation between the place of arbitration and the
curial law is in fact far more uncommon.
Clause 19(a) provides, inter alia, for arbitration in
London in accordance with English law.
Daewoo commenced arbitration proceedings
against Shagang in London. Daewoo purportedly
gave notice of appointment of a sole arbitrator (the
"Arbitrator"), then purportedly appointed the
Arbitrator as sole arbitrator after Shagang failed to
respond. Shagang subsequently queried the
Arbitrator's appointment and his jurisdiction, but
the Arbitrator determined in an award dated 8 July
2014 (the "Award") that the arbitration was subject
to the English Act, that Gencon clause 19(a) was
applicable, and that he had accordingly been
properly appointed as sole arbitrator.
Shagang then made an application in the English
Commercial Court under section 67 of the English
Act (1) to set aside the Award and (2) for a
declaration that the Tribunal was not properly
constituted. Shagang's case was that clause 23
provided for arbitration in Hong Kong subject to
the curial law there, being the Hong Kong
Ordinance. If clause 23 did make the arbitration
subject to the English Act, then Shagang's
alternative case was that the Arbitrator's
appointment was not valid since it was made on the
basis of clause 19 rather than by reference to the
applicable requirements of the English Act.
Daewoo's case was that clause 23, when read
together with clause 19, provided for Hong Kong to
be the geographical location for the arbitration but
for the arbitration to be subject to English curial law.
Alternatively, Daewoo submitted that the same
conclusion followed on the proper construction of
clause 23.
Hamblen J found for Shagang on both issues. He
held that:
nIssue (1): the arbitration was subject to Hong
Kong not English curial law. Issue (2): if the
flawed because the decision in Rakesh Malhotra vs.
Rajinder Kumar Malhotra was subject to a caveat.
Furthermore, in this case the arbitration pertained
to the termination of the joint venture, not
oppression and mismanagement. Since the JVA had
been terminated, there was no merit in the company
law petition and the petition was merely a tool to
prevent arbitration.
It was argued by the Petitioners that the forum of
LCIA is a forum non convenience. It is on account
of the fact that the plaintiff No.1 is an Indian and
plaintiff No.2 is a company incorporated in India.
Similarly, the defendant Nos.1 & 2 are incorporated
in India.
This argument was accepted by the Court. While it
was and can still be argued that the agreement was
signed by the Petitioners with their eyes open,
Indian law is not clear on the right of Indian
nationals to choose a foreign seat of arbitration.
The reasoning of the Court is reflective of this
confusion.
Withdrawal of the application under Section 45 of
the Arbitration and Conciliation Act, 1996, was
interpreted by the Court as waiver by the
Respondents of the arbitration clause. Further
more, the fact that the Respondent did not press the
Section 9 application filed by them was also
interpreted as tacit acquiescence to the jurisdiction
of the Company Law Board.
The Court granted the injunction for the above
mentioned reasons and concluded that the
Petitioners had satisfied the three requirements for
grant of ad interim injunction namely:
nThe petitioner had a prima facie good case
nThe Balance of Convenience Is In Favour of
the Petitioners
nThe petitioner will suffer irreparable loss in case
ad interim injunction against the respondents
from continuing with the arbitration
proceedings is not granted.
nThe arbitration agreement is prima facie
inoperative or incapable of performance
because the petitioner has already filed a suit for
oppression and mismanagement in Company
Law Board and that petition will have
overlapping disputes with the disputes sought
to be raised in arbitration.
FOREIGN CASES
Case No. 1:
Shagang South-Asia (Hong Kong)
Trading Co Ltd v Daewoo Logistics
[2015] EWHC 194 (Comm): decided by
the English Commercial Court
The underlying dispute arose under a Fixture Note
dated 17 April 2008 pursuant to which the
Defendant ("Daewoo") agreed to charter a vessel to
the Claimant ("Shagang"). The Fixture Note
provided, inter alia, as follows:
"23. Arbitration: Arbitration to be held in Hong
Kong. English law to be applied.
Other terms/conditions and charter party details
base on Gencon 1994 Charter Party."
Part I of the Gencon 1994 form (the "Gencon
form") consists of numbered boxes to be filled in.
Box 25 is to be filled in according to the following
instructions:
"Law and Arbitration (state 19(a), 19(b) or 19(c) of
Cl.19; if 19(c) agreed also state Place of
Arbitration)(if not filled in 19(a) shall apply
(Cl 19)."
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 25ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201624
arbitration was subject to English curial law, the
Arbitrator was still invalidly appointed as sole
arbitrator.
nIssue (1): whether arbitration under the Fixture
Note was subject to English or Hong Kong
curial law
Hamblen J noted that Clause 23 was clearly a
dispute resolution clause. The most natural and
obvious meaning of its two limbs was that it
intended to address (1) where and how disputes
were to be determined (arbitration in Hong Kong)
and (2) the law governing determination of such
disputes (English law). Agreeing that an arbitration
is "to be held" in a particular country suggests that
all aspects of the arbitration process are to take
place there, which would include any supervisory
court proceedings. As for the provision "English
law to be applied", parties frequently make express
in their dispute resolution clause their choice of
substantive law to govern disputes between them,
and the expression "is to be applied" is a common
means of expressing such choice.
Hamblen J noted that, by contrast, it is far less usual
to express a choice of curial law. That is often
simply left to be inferred from the chosen place of
arbitration. When a choice of curial law is made
express, it is usually done by referring to the
governing arbitration statute.
Daewoo argued that it made good commercial
sense for the same country's law to govern both
substance and procedure, given in particular the
potential need to employ two sets of lawyers and to
prove foreign law as a matter of fact, and that a
bifurcation between the two was unlikely to be
intended. Hamblen J, however, noted that such a
bifurcation is by no means uncommon, and that a
bifurcation between the place of arbitration and the
curial law is in fact far more uncommon.
Clause 19(a) provides, inter alia, for arbitration in
London in accordance with English law.
Daewoo commenced arbitration proceedings
against Shagang in London. Daewoo purportedly
gave notice of appointment of a sole arbitrator (the
"Arbitrator"), then purportedly appointed the
Arbitrator as sole arbitrator after Shagang failed to
respond. Shagang subsequently queried the
Arbitrator's appointment and his jurisdiction, but
the Arbitrator determined in an award dated 8 July
2014 (the "Award") that the arbitration was subject
to the English Act, that Gencon clause 19(a) was
applicable, and that he had accordingly been
properly appointed as sole arbitrator.
Shagang then made an application in the English
Commercial Court under section 67 of the English
Act (1) to set aside the Award and (2) for a
declaration that the Tribunal was not properly
constituted. Shagang's case was that clause 23
provided for arbitration in Hong Kong subject to
the curial law there, being the Hong Kong
Ordinance. If clause 23 did make the arbitration
subject to the English Act, then Shagang's
alternative case was that the Arbitrator's
appointment was not valid since it was made on the
basis of clause 19 rather than by reference to the
applicable requirements of the English Act.
Daewoo's case was that clause 23, when read
together with clause 19, provided for Hong Kong to
be the geographical location for the arbitration but
for the arbitration to be subject to English curial law.
Alternatively, Daewoo submitted that the same
conclusion followed on the proper construction of
clause 23.
Hamblen J found for Shagang on both issues. He
held that:
nIssue (1): the arbitration was subject to Hong
Kong not English curial law. Issue (2): if the
flawed because the decision in Rakesh Malhotra vs.
Rajinder Kumar Malhotra was subject to a caveat.
Furthermore, in this case the arbitration pertained
to the termination of the joint venture, not
oppression and mismanagement. Since the JVA had
been terminated, there was no merit in the company
law petition and the petition was merely a tool to
prevent arbitration.
It was argued by the Petitioners that the forum of
LCIA is a forum non convenience. It is on account
of the fact that the plaintiff No.1 is an Indian and
plaintiff No.2 is a company incorporated in India.
Similarly, the defendant Nos.1 & 2 are incorporated
in India.
This argument was accepted by the Court. While it
was and can still be argued that the agreement was
signed by the Petitioners with their eyes open,
Indian law is not clear on the right of Indian
nationals to choose a foreign seat of arbitration.
The reasoning of the Court is reflective of this
confusion.
Withdrawal of the application under Section 45 of
the Arbitration and Conciliation Act, 1996, was
interpreted by the Court as waiver by the
Respondents of the arbitration clause. Further
more, the fact that the Respondent did not press the
Section 9 application filed by them was also
interpreted as tacit acquiescence to the jurisdiction
of the Company Law Board.
The Court granted the injunction for the above
mentioned reasons and concluded that the
Petitioners had satisfied the three requirements for
grant of ad interim injunction namely:
nThe petitioner had a prima facie good case
nThe Balance of Convenience Is In Favour of
the Petitioners
nThe petitioner will suffer irreparable loss in case
ad interim injunction against the respondents
from continuing with the arbitration
proceedings is not granted.
nThe arbitration agreement is prima facie
inoperative or incapable of performance
because the petitioner has already filed a suit for
oppression and mismanagement in Company
Law Board and that petition will have
overlapping disputes with the disputes sought
to be raised in arbitration.
FOREIGN CASES
Case No. 1:
Shagang South-Asia (Hong Kong)
Trading Co Ltd v Daewoo Logistics
[2015] EWHC 194 (Comm): decided by
the English Commercial Court
The underlying dispute arose under a Fixture Note
dated 17 April 2008 pursuant to which the
Defendant ("Daewoo") agreed to charter a vessel to
the Claimant ("Shagang"). The Fixture Note
provided, inter alia, as follows:
"23. Arbitration: Arbitration to be held in Hong
Kong. English law to be applied.
Other terms/conditions and charter party details
base on Gencon 1994 Charter Party."
Part I of the Gencon 1994 form (the "Gencon
form") consists of numbered boxes to be filled in.
Box 25 is to be filled in according to the following
instructions:
"Law and Arbitration (state 19(a), 19(b) or 19(c) of
Cl.19; if 19(c) agreed also state Place of
Arbitration)(if not filled in 19(a) shall apply
(Cl 19)."
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 27ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201626
Hamblen J accordingly found that, even if he was
wrong on Issue (1), the Arbitrator had not been
validly appointed as a sole arbitrator under the
English Act.
Case No. 2:
Amtrust Europe Ltd v Trust Risk Group SPA
[2014] EWHC 4169 (Comm): decided by High
Court of Justice, Queen's Bench Division,
Commercial Court, UK
The defendant Italian broker placed medical
malpractice insurance with the claimant UK insurer.
The claimant alleged that the defendant had
misappropriated premiums received from insured
persons which were to be paid into a trust account
for the benefit of the claimant. The claimant sought
an injunction requiring the defendant to pay the
sums into the trust account.
The parties' relationship was governed in part by a
2010 Terms of Business Agreement (TOBA),
which was subject to English law and jurisdiction,
and a 2011 Framework Agreement, which was
governed by Italian law and provided for disputes to
be determined by arbitration in Milan.
One matter to be decided was whether the High
Court had jurisdiction to grant the injunction, as it
was unclear whether the dispute should be settled
by arbitration in Milan pursuant to the Framework
Agreement, or in the English courts under the
TOBA.
The claimant argued that the English court had
jurisdiction to grant the injunction sought, because
the dispute arose under the TOBA. The TOBA and
Framework Agreement dealt with different aspects
of the relationship between the parties, and the
dispute in question was governed by the TOBA.
The defendant argued that, upon its inception, the
Framework Agreement supplanted the TOBA and
Novorissiysk Shipping Co. (the 'Petr Shmidt')
[1995] 1 Lloyd's Rep 202.
The case of Braes of Doune Wind Farm v. Alfred
McAlpine Business Services [2008] 1 Lloyd's Rep
608 was the only reported example of a clause
choosing a curial law different to that of the place
of arbitration. In that case, although the seat of the
arbitration was in Glasgow, the arbitration
agreement was expressly made subject to English
law and it was agreed that any reference to
arbitration was to be deemed one within the English
Act. Hamblen J noted that this decision was
considered and distinguished in both Shashou v
Sharma and the Enercon case.
Hamblen J concluded that he did not consider that
any of the arguments or cases relied on by Daewoo
showed that there was in this case clear wording or
other contrary indicia sufficient to displace the
prima facie conclusion that the agreement that the
arbitration was "to be held in Hong Kong" carried
with it an implied choice of Hong Kong as the seat
of the arbitration and of the application of Hong
Kong law as the curial law.
Issue (2): if the arbitration was subject to English
curial law, whether the Arbitrator's appointment
was valid
Daewoo had appointed the Arbitrator pursuant to
clause 19(a) of the Gencom form. If, as Hamblen J
had found, that clause was inapplicable, then the
Arbitrator could not have been validly appointed
thereunder. In the absence of party agreement in
clause 23 as to the number of arbitrators, under
section 15(3) the English Act the tribunal was to be
a sole arbitrator appointed in accordance with the
procedure in section 16(3) of the English Act.
There had been no attempt to follow that
procedure, or to invoke the court's powers to
appoint an arbitrator under section 18 of the
English Act.
The judge noted that the latter type of bifurcation
invites jurisdictional complications and issues as to
the relative roles of the local court and the chosen
foreign court in relation to the arbitration. In this
case, for example, there was evidence that if the
matter was before the Hong Kong court it would
apply the Hong Kong Ordinance because its
application to arbitrations taking place in Hong
Kong is mandatory.
The reason why choice of place generally carries
with it an implied choice of governing procedure is
the close link which exists between the place of
arbitration and the procedure governing the
arbitration.
Hamblen J considered there to be no doubt in light
of the relevant authorities that clear words are
necessary for the parties to choose a seat of
arbitration which differs from the place of
arbitration. In his judgment, it was appropriate in
this case to adopt the approach of Cooke J in
Shashoua v Sharma [2009] 2 Lloyd's Rep 376, which
was agreed and followed in U&M Mining Zambia
Ltd. V Konkola [2013] 2 Lloyd's Rep 2018 and in
Enercon GmbH v Enercon (India) Ltd [2012] 1
Lloyds Rep 519.
In Shashoua v Sharma, the parties agreed that "the
venue of the arbitration shall be London, United
Kingdom" whilst providing that the arbitration
proceedings should be conducted in English in
accordance with the ICC Rules and that the
governing law of the agreement would be Indian
law. Cooke J held that London had been chosen as
the seat and English law as the curial law.
The Enercon case concerned an arbitration clause
which provided that "the venue of the arbitration
proceedings shall be London" and that "the
provisions of the Indian Arbitration and
Conciliation Act, 1996 shall apply". Eder J held the
seat to be London. He identified the issue as being
whether the provision referring to the India Act was
to be regarded as "significant contrary indicia"
(using the language of Cooke J in Shashou v
Sharma) so as to place the seat of the arbitration in
India. He concluded that it was not.
Daewoo sought to distinguish these cases on the
grounds that clause 23 did not refer to “venue" or
"place" or other word which might be regarded as
referring to the "seat". It also argued that, unlike
London in those cases, Hong Kong was a
convenient place for the arbitration given the
parties were based in the Far East, and therefore
may well have been chosen simply as a convenient
geographical location for hearings.
Hamblen J found there was no meaningful
distinction to be drawn between (a) choosing a place
as a "venue" or "place" for the arbitration and (b)
choosing it as the place where the arbitration was
"to be held". He did not consider that the
inconvenience of London as a geographical
location was a determining factor in either Shashou
v Sharma or Enercon, and noted that, whilst Hong
Kong was no doubt geographically convenient to
the parties in this case, it was also a well-known and
respected arbitration forum.
Daewoo's central submission was that clause 19(a)
of the Gencon form constituted clear contrary
agreement to an implied choice of Hong Kong law
as the curial law. Hamblen J rejected this argument
on the basis that clause 23 was inconsistent with
clause 19. The three options offered in clause 19
were all "one shop" options, each providing for the
law of the place of the arbitration to be the curial
and substantive law. Hamblen J concluded that the
parties had not intended to incorporate clause 19 of
the Gencon form. He noted that a similar
conclusion had been reached in the broadly
comparable case of Swiss Bank Corp v
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 27ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201626
Hamblen J accordingly found that, even if he was
wrong on Issue (1), the Arbitrator had not been
validly appointed as a sole arbitrator under the
English Act.
Case No. 2:
Amtrust Europe Ltd v Trust Risk Group SPA
[2014] EWHC 4169 (Comm): decided by High
Court of Justice, Queen's Bench Division,
Commercial Court, UK
The defendant Italian broker placed medical
malpractice insurance with the claimant UK insurer.
The claimant alleged that the defendant had
misappropriated premiums received from insured
persons which were to be paid into a trust account
for the benefit of the claimant. The claimant sought
an injunction requiring the defendant to pay the
sums into the trust account.
The parties' relationship was governed in part by a
2010 Terms of Business Agreement (TOBA),
which was subject to English law and jurisdiction,
and a 2011 Framework Agreement, which was
governed by Italian law and provided for disputes to
be determined by arbitration in Milan.
One matter to be decided was whether the High
Court had jurisdiction to grant the injunction, as it
was unclear whether the dispute should be settled
by arbitration in Milan pursuant to the Framework
Agreement, or in the English courts under the
TOBA.
The claimant argued that the English court had
jurisdiction to grant the injunction sought, because
the dispute arose under the TOBA. The TOBA and
Framework Agreement dealt with different aspects
of the relationship between the parties, and the
dispute in question was governed by the TOBA.
The defendant argued that, upon its inception, the
Framework Agreement supplanted the TOBA and
Novorissiysk Shipping Co. (the 'Petr Shmidt')
[1995] 1 Lloyd's Rep 202.
The case of Braes of Doune Wind Farm v. Alfred
McAlpine Business Services [2008] 1 Lloyd's Rep
608 was the only reported example of a clause
choosing a curial law different to that of the place
of arbitration. In that case, although the seat of the
arbitration was in Glasgow, the arbitration
agreement was expressly made subject to English
law and it was agreed that any reference to
arbitration was to be deemed one within the English
Act. Hamblen J noted that this decision was
considered and distinguished in both Shashou v
Sharma and the Enercon case.
Hamblen J concluded that he did not consider that
any of the arguments or cases relied on by Daewoo
showed that there was in this case clear wording or
other contrary indicia sufficient to displace the
prima facie conclusion that the agreement that the
arbitration was "to be held in Hong Kong" carried
with it an implied choice of Hong Kong as the seat
of the arbitration and of the application of Hong
Kong law as the curial law.
Issue (2): if the arbitration was subject to English
curial law, whether the Arbitrator's appointment
was valid
Daewoo had appointed the Arbitrator pursuant to
clause 19(a) of the Gencom form. If, as Hamblen J
had found, that clause was inapplicable, then the
Arbitrator could not have been validly appointed
thereunder. In the absence of party agreement in
clause 23 as to the number of arbitrators, under
section 15(3) the English Act the tribunal was to be
a sole arbitrator appointed in accordance with the
procedure in section 16(3) of the English Act.
There had been no attempt to follow that
procedure, or to invoke the court's powers to
appoint an arbitrator under section 18 of the
English Act.
The judge noted that the latter type of bifurcation
invites jurisdictional complications and issues as to
the relative roles of the local court and the chosen
foreign court in relation to the arbitration. In this
case, for example, there was evidence that if the
matter was before the Hong Kong court it would
apply the Hong Kong Ordinance because its
application to arbitrations taking place in Hong
Kong is mandatory.
The reason why choice of place generally carries
with it an implied choice of governing procedure is
the close link which exists between the place of
arbitration and the procedure governing the
arbitration.
Hamblen J considered there to be no doubt in light
of the relevant authorities that clear words are
necessary for the parties to choose a seat of
arbitration which differs from the place of
arbitration. In his judgment, it was appropriate in
this case to adopt the approach of Cooke J in
Shashoua v Sharma [2009] 2 Lloyd's Rep 376, which
was agreed and followed in U&M Mining Zambia
Ltd. V Konkola [2013] 2 Lloyd's Rep 2018 and in
Enercon GmbH v Enercon (India) Ltd [2012] 1
Lloyds Rep 519.
In Shashoua v Sharma, the parties agreed that "the
venue of the arbitration shall be London, United
Kingdom" whilst providing that the arbitration
proceedings should be conducted in English in
accordance with the ICC Rules and that the
governing law of the agreement would be Indian
law. Cooke J held that London had been chosen as
the seat and English law as the curial law.
The Enercon case concerned an arbitration clause
which provided that "the venue of the arbitration
proceedings shall be London" and that "the
provisions of the Indian Arbitration and
Conciliation Act, 1996 shall apply". Eder J held the
seat to be London. He identified the issue as being
whether the provision referring to the India Act was
to be regarded as "significant contrary indicia"
(using the language of Cooke J in Shashou v
Sharma) so as to place the seat of the arbitration in
India. He concluded that it was not.
Daewoo sought to distinguish these cases on the
grounds that clause 23 did not refer to “venue" or
"place" or other word which might be regarded as
referring to the "seat". It also argued that, unlike
London in those cases, Hong Kong was a
convenient place for the arbitration given the
parties were based in the Far East, and therefore
may well have been chosen simply as a convenient
geographical location for hearings.
Hamblen J found there was no meaningful
distinction to be drawn between (a) choosing a place
as a "venue" or "place" for the arbitration and (b)
choosing it as the place where the arbitration was
"to be held". He did not consider that the
inconvenience of London as a geographical
location was a determining factor in either Shashou
v Sharma or Enercon, and noted that, whilst Hong
Kong was no doubt geographically convenient to
the parties in this case, it was also a well-known and
respected arbitration forum.
Daewoo's central submission was that clause 19(a)
of the Gencon form constituted clear contrary
agreement to an implied choice of Hong Kong law
as the curial law. Hamblen J rejected this argument
on the basis that clause 23 was inconsistent with
clause 19. The three options offered in clause 19
were all "one shop" options, each providing for the
law of the place of the arbitration to be the curial
and substantive law. Hamblen J concluded that the
parties had not intended to incorporate clause 19 of
the Gencon form. He noted that a similar
conclusion had been reached in the broadly
comparable case of Swiss Bank Corp v
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 29ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201628
On the occasion of its Golden Jubilee Year, the Indian Council of Arbitration (ICA), organized an International Conference on "Arbitration in the Era of Globalization" on 11th & 12th December, 2015 at New Delhi with the support of FICCI, to provide a meaningful coverage on common trends in the field of domestic and international arbitration with a special reference to dynamic economy of India. The Conference highlighted India's stake and potential to grow as arbitration-friendly nation in the Asia-Pacific region and deliberated on the complex issues which are still challenging its dispute resolution mechanisms.
INAUGURAL SESSION
Hon'ble Mr. Justice T S Thakur, Chief Justice, Supreme Court of India, while delivering inaugural address, called for establishing a robust arbitration which, according to him, depends on impeccable integrity and honesty of the arbitrator. Justice Thakur said that as an emerging economy, India is bound to face challenges from different directions in this competitive commercial world. He commented that arbitration is also a challenge for India, as the country had to evolve itself in line with the various developments in the field taking place in different parts of the world. Speaking on court's role in arbitration, he said that by following the UNCITRAL Rules, 1996 Act had brought in many provisions which paved way for judicial interference. Coming to the point of India's stake in holding international arbitration, Justice Thakur felt what
distinguishes between certain well established arbitration hubs and India is mainly the difference in professional approach of all the stakeholders of arbitration.
Mr. Justice S S Nijjar, Former Judge of Supreme Court of India and Member, Governing Body, ICA, in his special address, said that while the judiciary was encouraging arbitration to lessen the burden of adjudication and solve business disputes, the interference of the courts at every step of arbitration is making the fast-track dispute resolution mechanism time consuming. He added that the stringent conditions being applied to arbitrators were a deterrent for the system.
the parties intended, from then on, for their
relationship to be subject to Italian law and
arbitration.
The parties agreed on the principles for
determining jurisdiction when there is an alleged
conflict between jurisdiction and arbitration clauses
in different agreements, namely:
nthe party seeking to invoke the English court's
jurisdiction must show that it has a good
arguable case that the English court has
jurisdiction (Canada Trust &ors v Stolzenburg
and ors (No 2) [1997] EWCA Civ 2592);
na "good arguable case" does not require proof
on the balance of probabilities that the court
has jurisdiction, because that would require a
trial. However, it is a higher test than "whether
there is a serious issue to be tried";
nconstruction of an arbitration clause should
start from the assumption that the parties are
likely to have intended that any dispute arising
out of the relationship into which they have
entered be decided by the same tribunal. This is
known as the Fiona Trust presumption (per
Fiona Trust & Holding Corp & ors v Privalov &
ors [2007] EWCA Civ 20); and
nparties may agree to resolution by different
tribunals where, for example, different
agreements deal with distinct aspects of their
relationship, or where it is convenient to apply a
particular dispute resolution regime to some
aspect of their relationship.
Blair J accepted that the Fiona Trust presumption
carries considerable weight, but can be displaced by
a "rational reason" for there being different dispute
resolution clauses.
The claimant had shown, to the "good arguable
case" standard, that the TOBA continued in force
after the Framework Agreement. The Framework
Agreement said that, upon termination "The
Agreements including the TOBA shall be
modified…", suggesting that the TOBA continued
in existence, contrary to the defendant's claims that
the TOBA had been supplanted by the Framework
Agreement.
Blair J held that the TOBA and Framework
Agreement dealt with different aspects of the
parties' relationship. The TOBA dealt with, for
example, the payment of premiums, whereas the
Framework Agreement dealt with the parties'
exclusive placing arrangement. Different dispute
resolution clauses were a "rational" choice in this
situation because each agreement dealt with
different aspects of the parties' relationship. As a
result, the English court had jurisdiction under
TOBA to grant the injunction in respect of the trust
account as this was a matter that was specifically
covered by the TOBA.
“If arbitration is to commit suicide, it will do so of its own choosing, because the parties have chosen to make it
more expensive, time-consuming and more like litigation.”
- Joseph R Profaizer,
Partner, Litigation Practice, Paul Hastings, Washington D.C.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 29ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201628
On the occasion of its Golden Jubilee Year, the Indian Council of Arbitration (ICA), organized an International Conference on "Arbitration in the Era of Globalization" on 11th & 12th December, 2015 at New Delhi with the support of FICCI, to provide a meaningful coverage on common trends in the field of domestic and international arbitration with a special reference to dynamic economy of India. The Conference highlighted India's stake and potential to grow as arbitration-friendly nation in the Asia-Pacific region and deliberated on the complex issues which are still challenging its dispute resolution mechanisms.
INAUGURAL SESSION
Hon'ble Mr. Justice T S Thakur, Chief Justice, Supreme Court of India, while delivering inaugural address, called for establishing a robust arbitration which, according to him, depends on impeccable integrity and honesty of the arbitrator. Justice Thakur said that as an emerging economy, India is bound to face challenges from different directions in this competitive commercial world. He commented that arbitration is also a challenge for India, as the country had to evolve itself in line with the various developments in the field taking place in different parts of the world. Speaking on court's role in arbitration, he said that by following the UNCITRAL Rules, 1996 Act had brought in many provisions which paved way for judicial interference. Coming to the point of India's stake in holding international arbitration, Justice Thakur felt what
distinguishes between certain well established arbitration hubs and India is mainly the difference in professional approach of all the stakeholders of arbitration.
Mr. Justice S S Nijjar, Former Judge of Supreme Court of India and Member, Governing Body, ICA, in his special address, said that while the judiciary was encouraging arbitration to lessen the burden of adjudication and solve business disputes, the interference of the courts at every step of arbitration is making the fast-track dispute resolution mechanism time consuming. He added that the stringent conditions being applied to arbitrators were a deterrent for the system.
the parties intended, from then on, for their
relationship to be subject to Italian law and
arbitration.
The parties agreed on the principles for
determining jurisdiction when there is an alleged
conflict between jurisdiction and arbitration clauses
in different agreements, namely:
nthe party seeking to invoke the English court's
jurisdiction must show that it has a good
arguable case that the English court has
jurisdiction (Canada Trust &ors v Stolzenburg
and ors (No 2) [1997] EWCA Civ 2592);
na "good arguable case" does not require proof
on the balance of probabilities that the court
has jurisdiction, because that would require a
trial. However, it is a higher test than "whether
there is a serious issue to be tried";
nconstruction of an arbitration clause should
start from the assumption that the parties are
likely to have intended that any dispute arising
out of the relationship into which they have
entered be decided by the same tribunal. This is
known as the Fiona Trust presumption (per
Fiona Trust & Holding Corp & ors v Privalov &
ors [2007] EWCA Civ 20); and
nparties may agree to resolution by different
tribunals where, for example, different
agreements deal with distinct aspects of their
relationship, or where it is convenient to apply a
particular dispute resolution regime to some
aspect of their relationship.
Blair J accepted that the Fiona Trust presumption
carries considerable weight, but can be displaced by
a "rational reason" for there being different dispute
resolution clauses.
The claimant had shown, to the "good arguable
case" standard, that the TOBA continued in force
after the Framework Agreement. The Framework
Agreement said that, upon termination "The
Agreements including the TOBA shall be
modified…", suggesting that the TOBA continued
in existence, contrary to the defendant's claims that
the TOBA had been supplanted by the Framework
Agreement.
Blair J held that the TOBA and Framework
Agreement dealt with different aspects of the
parties' relationship. The TOBA dealt with, for
example, the payment of premiums, whereas the
Framework Agreement dealt with the parties'
exclusive placing arrangement. Different dispute
resolution clauses were a "rational" choice in this
situation because each agreement dealt with
different aspects of the parties' relationship. As a
result, the English court had jurisdiction under
TOBA to grant the injunction in respect of the trust
account as this was a matter that was specifically
covered by the TOBA.
“If arbitration is to commit suicide, it will do so of its own choosing, because the parties have chosen to make it
more expensive, time-consuming and more like litigation.”
- Joseph R Profaizer,
Partner, Litigation Practice, Paul Hastings, Washington D.C.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 31ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201630
Speaker 1: Mr. Salim Moollan, Barrister, Essex Court Chambers, London, UK
Mr. Moollan pointed out that a BIT (Bilateral Investment Treaty) does not provide for absolute protection to the investors and that the same should not be confused with other mechanisms where a guarantee is given for the protection of investments. He further shared his experience as the counsel on behalf of India in the White Industries case. Commenting on the approach adopted by the arbitral tribunal in deciding the case, he mentioned that some of the provisions from the India-Kuwait BIT were relied upon to decide the dispute. He further appreciated the efforts made by the Law Commission of India in its 260th Report to address the lacunas in the model BIT of 2015. Moreover, he observed that the said model BIT is an over-reaction on part of India against the
decision in the White Industries case and must be amended accordingly, as per the recommendations provided by the Law Commission. In reference to the proposed Transatlantic Trade and Investment Partnership between European Union and the United States, where the prevailing ISDS (Investor-State Dispute Settlement) mechanism is under scrutiny, he was of the opinion that parties should find a multilateral mechanism to put the debate at rest.
Speaker 2: Ms. Andrea J Menaker, Partner, White & Case LLP, Washington, USA
Mrs. Menaker primarily dealt with the issue of taxes under the investment regime. While recognizing the legitimacy of imposition of taxes on part of the government of the host state, she pointed out her concern about the retrospective application of certain tax measures in the light of Vodafone incident. In relation to a situation where benefits from secondary BITs are provided to party while interpreting the provisions of primary BIT, she stated that most of the treaties now provide for express exclusion of benefit of provisions from other treaties, which can be explored while amending the model BIT of 2015.
Speaker 3: Mr. Audley Sheppard, QC, Global Head of Arbitration, Clifford Chance, London, UK
Mr. Sheppard spoke about India's attempt to frame BITs in a chronological manner and made a comparative analysis between the provisions of the 1994 model BIT and the one prepared in the year 2004. He commented that no fundamental change can be observed except the exclusion of full protection and security clause. However, he further stated that the 2015 model BIT came up with substantial changes. Fair and Equitable Treatment provision has been removed and in reaction to the White Industries case, MFN clause also does not find a mention. While appreciating the attempt made by the Law Commission of India (260th Report), he was of the opinion that the same must be
taken into account while finalizing the BIT as the present draft is not balanced and favours the state in terms of its power to regulate.
Dr. Jyotsna Suri, President, FICCI, felicitating the Chief Justice of India, stated that in this competitive world of business and trade, disputes are bound to occur. Therefore, she felt that the commercial world should have a well oriented mechanism for expeditious settlement of dispute as the business wants smooth performance of trade.
Mr. N G Khaitan, President, Indian Council of Arbitration, commending the revised section 11 of the Act, said that this would allow the arbitral institutions to act as an appointing authority, which is a welcome change in terms of promotion of institutional arbitration in India. He felt that for arbitration to flourish as a preferred mode of dispute resolution; there needs to be the constant support of judiciary and Government.
According to him, India has great potential for becoming an arbitration hub. However, he felt that the Indian parties going abroad for arbitration is a serious concern and recent amendments in the 1996 Act is an attempt to effectively address this problem. He stated that arbitration as a mechanism of dispute settlement is indeed a divine function. Lastly,
he stated that aspect of party autonomy and minimum judicial intervention must be seriously taken into account in order to promote healthy arbitration.
TECHNICAL SESSION - 1: BILATERAL INVESTMENT TREATY AWARDS: THE INDIAN CONTEXT
Chairperson: Honb'le Mr. Justice A K Sikri, Judge, Supreme Court of India
Justice Sikri gave an enlightening overview of the BIT regime and mentioned that there is a considerable increase in the number of cases filed before the ICSID (International Centre for Settlement of Investment Disputes). Citing few cases of investment arbitration, he explained and highlighted the ongoing debate at the global level regarding legitimacy of arbitral tribunals (dealing with cases where state is a party) and the inherent role of sovereign courts. He further observed that most countries have started reformulating the provisions of their model BITs, with carefully negotiated rights and obligations where state's right to regulate in public interest is duly recognised.
Justice Sikri wrapped up by mentioning the relevance of new hybrid form of arbitration, i.e. 'Med-Arb'. According to him, this new technique also has the potential of settling disputes in a speedy and cost-efficient manner.
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Speaker 1: Mr. Salim Moollan, Barrister, Essex Court Chambers, London, UK
Mr. Moollan pointed out that a BIT (Bilateral Investment Treaty) does not provide for absolute protection to the investors and that the same should not be confused with other mechanisms where a guarantee is given for the protection of investments. He further shared his experience as the counsel on behalf of India in the White Industries case. Commenting on the approach adopted by the arbitral tribunal in deciding the case, he mentioned that some of the provisions from the India-Kuwait BIT were relied upon to decide the dispute. He further appreciated the efforts made by the Law Commission of India in its 260th Report to address the lacunas in the model BIT of 2015. Moreover, he observed that the said model BIT is an over-reaction on part of India against the
decision in the White Industries case and must be amended accordingly, as per the recommendations provided by the Law Commission. In reference to the proposed Transatlantic Trade and Investment Partnership between European Union and the United States, where the prevailing ISDS (Investor-State Dispute Settlement) mechanism is under scrutiny, he was of the opinion that parties should find a multilateral mechanism to put the debate at rest.
Speaker 2: Ms. Andrea J Menaker, Partner, White & Case LLP, Washington, USA
Mrs. Menaker primarily dealt with the issue of taxes under the investment regime. While recognizing the legitimacy of imposition of taxes on part of the government of the host state, she pointed out her concern about the retrospective application of certain tax measures in the light of Vodafone incident. In relation to a situation where benefits from secondary BITs are provided to party while interpreting the provisions of primary BIT, she stated that most of the treaties now provide for express exclusion of benefit of provisions from other treaties, which can be explored while amending the model BIT of 2015.
Speaker 3: Mr. Audley Sheppard, QC, Global Head of Arbitration, Clifford Chance, London, UK
Mr. Sheppard spoke about India's attempt to frame BITs in a chronological manner and made a comparative analysis between the provisions of the 1994 model BIT and the one prepared in the year 2004. He commented that no fundamental change can be observed except the exclusion of full protection and security clause. However, he further stated that the 2015 model BIT came up with substantial changes. Fair and Equitable Treatment provision has been removed and in reaction to the White Industries case, MFN clause also does not find a mention. While appreciating the attempt made by the Law Commission of India (260th Report), he was of the opinion that the same must be
taken into account while finalizing the BIT as the present draft is not balanced and favours the state in terms of its power to regulate.
Dr. Jyotsna Suri, President, FICCI, felicitating the Chief Justice of India, stated that in this competitive world of business and trade, disputes are bound to occur. Therefore, she felt that the commercial world should have a well oriented mechanism for expeditious settlement of dispute as the business wants smooth performance of trade.
Mr. N G Khaitan, President, Indian Council of Arbitration, commending the revised section 11 of the Act, said that this would allow the arbitral institutions to act as an appointing authority, which is a welcome change in terms of promotion of institutional arbitration in India. He felt that for arbitration to flourish as a preferred mode of dispute resolution; there needs to be the constant support of judiciary and Government.
According to him, India has great potential for becoming an arbitration hub. However, he felt that the Indian parties going abroad for arbitration is a serious concern and recent amendments in the 1996 Act is an attempt to effectively address this problem. He stated that arbitration as a mechanism of dispute settlement is indeed a divine function. Lastly,
he stated that aspect of party autonomy and minimum judicial intervention must be seriously taken into account in order to promote healthy arbitration.
TECHNICAL SESSION - 1: BILATERAL INVESTMENT TREATY AWARDS: THE INDIAN CONTEXT
Chairperson: Honb'le Mr. Justice A K Sikri, Judge, Supreme Court of India
Justice Sikri gave an enlightening overview of the BIT regime and mentioned that there is a considerable increase in the number of cases filed before the ICSID (International Centre for Settlement of Investment Disputes). Citing few cases of investment arbitration, he explained and highlighted the ongoing debate at the global level regarding legitimacy of arbitral tribunals (dealing with cases where state is a party) and the inherent role of sovereign courts. He further observed that most countries have started reformulating the provisions of their model BITs, with carefully negotiated rights and obligations where state's right to regulate in public interest is duly recognised.
Justice Sikri wrapped up by mentioning the relevance of new hybrid form of arbitration, i.e. 'Med-Arb'. According to him, this new technique also has the potential of settling disputes in a speedy and cost-efficient manner.
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Speaker 3: Mr. Brandon J Malone, Chairman, Scottish Arbitration Centre, Edinburgh, Scotland
Mr. Malone commenced his address by making certain observations regarding mediation. He observed that mediation, in general, is considered as a weak dispute resolution mechanism as compared to arbitration for various issues like enforcement, apprehension of loss of time and money because of its non-binding nature etc. However, according to him, introduction of mediation on a compulsory basis can lead to great benefits. In the context of investor-state and state-state disputes, mediation must be made a part of multilateral agreements, he added. Coming on to the new mechanism of 'Arb-Med-Arb', he pointed out that an award out of the same (consent
award) could face challenges in enforceability in terms of varying interpretations of the New York Convention adopted by different jurisdictions. He further added that the proposed convention on enforcement of mediation decisions would resolve the issue of unenforceability. Moreover, he mentioned the following best practices to be followed for creating fair arbitration regime:nArbitration law must strike a balance between confidentiality and transparencynSeparate arbitration Bar comprising of independent and competent practitioners nA specialized course on Arbitration should be introduced in the curriculamnOpening-up of legal sector, i.e. the removal of policy hurdles for international practitionersnProvisions for immunity to the arbitrators for actions taken in good faithnAppropriate use of technology should be made for the purposes of document management, examining
witnesses through video conferencing etc.
TECHNICAL SESSION - 3: CHANGING FACE OF ARBITRATION IN INDIA
Chairperson: Hon'ble Mr. Justice Madan B Lokur, Judge, Supreme Court of India
Justice Lokur started by identifying some of the drawbacks in the new Ordinance and stated that legislative inaction in the parliament gave rise to the need of making amendments through an Ordinance. He further mentioned that lack of efficiency and increasing judicial intervention in arbitration matters forced even Indian parties to go for foreign seated arbitrations at a foreign venue. However, he recognized the importance of recent amendments for aligning arbitration laws in India at par with the global standards. He further expected the development of a regular Arbitration Bar.
However, he added that, for the development of arbitration in India, professional attitude on part of the stakeholders is inevitable. Lastly, he felt the need of effective institutional arbitration mechanism of international standards in the country with a view to providing best alternative mechanism for resolution of international commercial disputes.
TECHNICAL SESSION - 2: BEST ARBITRATION PRACTICES ACROSS BORDERS
Chairperson: Honb'le Mr. Justice Uday Umesh Lalit, Judge, Supreme Court of India
Justice Lalit opened his speech by making an observation that arbitration as a dispute resolution mechanism gradually evolved in the country as a choice for settling disputes by elitists, as opposed to its core objective of making the mechanism cost-effective and speedy. However, he was of the opinion that the recent amendments in the 1996 Act through an Ordinance is a welcome move as the same would ensure effective dispute resolution. Talking about establishment of a successful arbitration regime, he mentioned that following pre-requisites are inevitable:
n Appropriate provisions for the recognition of awards
nProvisions for the enforcement of both, domestic and foreign awards
nClarity and certainty in the procedure for the conduct of arbitral proceedings
nMechanism to ensure impartiality of arbitrators
nCommitment on part of all the stakeholders to abide by the provisions
Speaker 1: Mr. Peter Hirst, Partner, Clyde & Co., London, UK
Mr. Hirst, while speaking about modern arbitration, stated that it traces its origin from the New York Convention of 1958. He commented that some of the biggest benefits of arbitration like cost-effectiveness and speedy resolution of disputes are slowly being eroded. He further stressed that there is a need to improve the existing situation of arbitration and suggested for creating an Arbitration Bar so as to develop an understanding amongst practitioners on how to resolve disputes harmoniously. Referring to rules framed by the IBA (International Bar Association), he opined that arbitrators should resort to these rules for the purpose of avoiding procedural complexities. However, realizing the need and importance of flexibility and some
discretion in any adjudication process, he felt the laws be carefully drafted as over-prescriptive rules put hurdles in flexibility.
Speaker 2: Mr. Joachim Knoll, Partner, LAlive, Geneva, Switzerland
Mr. Knoll focused on the differences between arbitration practices of common law and civil law jurisdictions. As regards examination of witnesses, he pointed out that arbitration in civil law jurisdictions give less weightage to cross-examination as opposed to the common law system. He also mentioned that emphasis on oral hearings is very limited in civil law jurisdictions. He suggested that the adherence to IBA rules relating to production of documents and examination of witnesses can be a better option for the purpose of bringing uniformity and certainty in arbitral proceedings.
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Speaker 3: Mr. Brandon J Malone, Chairman, Scottish Arbitration Centre, Edinburgh, Scotland
Mr. Malone commenced his address by making certain observations regarding mediation. He observed that mediation, in general, is considered as a weak dispute resolution mechanism as compared to arbitration for various issues like enforcement, apprehension of loss of time and money because of its non-binding nature etc. However, according to him, introduction of mediation on a compulsory basis can lead to great benefits. In the context of investor-state and state-state disputes, mediation must be made a part of multilateral agreements, he added. Coming on to the new mechanism of 'Arb-Med-Arb', he pointed out that an award out of the same (consent
award) could face challenges in enforceability in terms of varying interpretations of the New York Convention adopted by different jurisdictions. He further added that the proposed convention on enforcement of mediation decisions would resolve the issue of unenforceability. Moreover, he mentioned the following best practices to be followed for creating fair arbitration regime:nArbitration law must strike a balance between confidentiality and transparencynSeparate arbitration Bar comprising of independent and competent practitioners nA specialized course on Arbitration should be introduced in the curriculamnOpening-up of legal sector, i.e. the removal of policy hurdles for international practitionersnProvisions for immunity to the arbitrators for actions taken in good faithnAppropriate use of technology should be made for the purposes of document management, examining
witnesses through video conferencing etc.
TECHNICAL SESSION - 3: CHANGING FACE OF ARBITRATION IN INDIA
Chairperson: Hon'ble Mr. Justice Madan B Lokur, Judge, Supreme Court of India
Justice Lokur started by identifying some of the drawbacks in the new Ordinance and stated that legislative inaction in the parliament gave rise to the need of making amendments through an Ordinance. He further mentioned that lack of efficiency and increasing judicial intervention in arbitration matters forced even Indian parties to go for foreign seated arbitrations at a foreign venue. However, he recognized the importance of recent amendments for aligning arbitration laws in India at par with the global standards. He further expected the development of a regular Arbitration Bar.
However, he added that, for the development of arbitration in India, professional attitude on part of the stakeholders is inevitable. Lastly, he felt the need of effective institutional arbitration mechanism of international standards in the country with a view to providing best alternative mechanism for resolution of international commercial disputes.
TECHNICAL SESSION - 2: BEST ARBITRATION PRACTICES ACROSS BORDERS
Chairperson: Honb'le Mr. Justice Uday Umesh Lalit, Judge, Supreme Court of India
Justice Lalit opened his speech by making an observation that arbitration as a dispute resolution mechanism gradually evolved in the country as a choice for settling disputes by elitists, as opposed to its core objective of making the mechanism cost-effective and speedy. However, he was of the opinion that the recent amendments in the 1996 Act through an Ordinance is a welcome move as the same would ensure effective dispute resolution. Talking about establishment of a successful arbitration regime, he mentioned that following pre-requisites are inevitable:
n Appropriate provisions for the recognition of awards
nProvisions for the enforcement of both, domestic and foreign awards
nClarity and certainty in the procedure for the conduct of arbitral proceedings
nMechanism to ensure impartiality of arbitrators
nCommitment on part of all the stakeholders to abide by the provisions
Speaker 1: Mr. Peter Hirst, Partner, Clyde & Co., London, UK
Mr. Hirst, while speaking about modern arbitration, stated that it traces its origin from the New York Convention of 1958. He commented that some of the biggest benefits of arbitration like cost-effectiveness and speedy resolution of disputes are slowly being eroded. He further stressed that there is a need to improve the existing situation of arbitration and suggested for creating an Arbitration Bar so as to develop an understanding amongst practitioners on how to resolve disputes harmoniously. Referring to rules framed by the IBA (International Bar Association), he opined that arbitrators should resort to these rules for the purpose of avoiding procedural complexities. However, realizing the need and importance of flexibility and some
discretion in any adjudication process, he felt the laws be carefully drafted as over-prescriptive rules put hurdles in flexibility.
Speaker 2: Mr. Joachim Knoll, Partner, LAlive, Geneva, Switzerland
Mr. Knoll focused on the differences between arbitration practices of common law and civil law jurisdictions. As regards examination of witnesses, he pointed out that arbitration in civil law jurisdictions give less weightage to cross-examination as opposed to the common law system. He also mentioned that emphasis on oral hearings is very limited in civil law jurisdictions. He suggested that the adherence to IBA rules relating to production of documents and examination of witnesses can be a better option for the purpose of bringing uniformity and certainty in arbitral proceedings.
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TECHNICAL SESSION - 4: ENFORCEMENT OF ARBITRAL AWARDS: INDIA AND THE GLOBAL SCENARIO
Chairperson: Hon'ble Mr. Justice R.F. Nariman, Judge, Supreme Court of India
Mr. Justice Nariman dwelt upon the topic by expressing his observations on the term 'public policy', as a ground for setting aside an arbitral award or for the purpose of evading enforcement. He referred to some of the cases delivered by the Supreme Court of India and said that narrowing down the scope of 'public policy' was required in order to avoid open ended challenges due to vaguely worded provisions in the law. He appreciated the recent amendments and was of the opinion that the same is a welcome step towards making India an arbitration hub.
Speaker 1: Mr. Alec Emmerson, CEO & Trustee, DIFC Arbitration Institute, Dubai, UAE
While appreciating the attempt on part of India to properly draft public policy provisions, Mr. Emmerson stated that such provisions could lead to differential treatment in terms of enforcement of arbitral awards. Drafting must be done in a precise manner, as stated by him. Quoting the Dubai example, he introduced the three-tier public policy conundrum (public policy at the federal level i.e. of UAE, public policy of Dubai and the public policy of Dubai International Finance Centre, a federal financial free zone with independent jurisdiction) and stated that careful drafting would
ultimately avoid varying interpretations.
Speaker 2: Mr. Francis Xavier S.C., PBM Regional Head, Dispute Practices, Rajah & Tann LLP, Singapore
Mr. Xavier, while launching his speech, remarked that Indian arbitration scenario is being watched by the world. While comparing public policy provisions of some of the jurisdictions with that of India, he mentioned that public policy provisions are generally wide in nature so as to ensure flexibility in case of unforeseen developments in the domestic scenario of enforcing state. In reference to speedy disposal of arbitration cases, he was of the opinion that specialist judges in this area are required because their approach towards a particular situation would be more appropriate.
Speaker 3: Ms. Pallavi Shroff, Managing Partner, Shardul Amarchand Managaldas & Co.
In reference to 'Commercial Courts Ordinance', Ms. Shroff stated that the same is a welcome step. She further added that specialised Bar and Bench would bring certainty and clarity in the approach to be adopted while dealing with arbitration matters. Further, she highlighted the issue of enforceability in cases of emergency arbitrations, which does not find a mention in the 'Arbitration Ordinance'. With regard to delay in disposal of cases, she appreciated the provisions relating to time-limits. Lastly, she mentioned about the requirement of imposition of costs in appropriate cases.
Speaker 1: Ms. Sheila L Shadmand, Partner-in-Charge, Jones Day, Dubai, UAE
Referring to legislative measures, she said some imperfections would always exist but they should not act as a roadblock. She felt that for reforming the arbitration scenario in India, all the stakeholders should bear the collective responsibility. She further stated that institutional arbitration, due to some of its strong features like set frame of rules, timely hearings etc., is more suitable over ad hoc arbitration. Speaking on the procedural issues, she found imposition of time-limits a good idea. She also prescribed for ensuring independence to arbitrators as, according to her, it is equally important for healthy arbitration. As strongly mooted by her, the power of the arbitral tribunal to grant
interim measures, wherever required, also cannot be ignored and provisions must be made for the same while framing laws.
Speaker 2: Mr. James P Duffy IV, Partner, K & L Gates, New York, USA
Mr. Duffy, at the outset, gave a brief but enlightening overview of the arbitration scenario in India from a historical perspective. He mentioned that judicial intervention and delay in deciding matters in India made arbitration less friendly for the litigants. While appreciating the findings of the Supreme Court of India in the matters of BALCO and Reliance Industries, he stated that a pro-arbitration stance had now been adopted by the Indian judiciary and recent legislative efforts to reform arbitration in the country had sent a positive message globally. However, he found some of the provisions (like fixing of time limit in international arbitration cases) in the Ordinance as
overambitious. Referring to the observations of the Madras High Court in the case of A.K. Balaji v. Union of India, where the Court held that foreign lawyers for the purpose of arbitration are allowed to consult their clients on 'fly-in and fly-out basis', he added that the same is a positive step in the terms of opening up of legal sector in India. Lastly, he added that the presence of global arbitral institutions in India would provide litigants a good range of option for settling their disputes.
Speaker 3: Mr. Mustafa S Doctor, Senior Advocate, Bombay High Court, IndiaMr. Doctor felt that the changing face of arbitration in India is more of a hope rather than the reality. He said that mind-set of the stakeholders first needs to be changed for realizing the advantages of arbitration, in practice. Referring to the applicability of procedural rules in arbitration, he mentioned that arbitrators in India (dominated mostly by retired judges) create procedural complexities which go against the very objective of arbitration. For better results in arbitration, he suggested for minimisation of procedural technicalities and conduct of hearings in a simplified manner. He further added that creation of a separate Arbitration Bar is the need of the hour. He also argued for the promotion of technological advancement in terms of recording of evidence etc. during arbitration proceedings for the purpose of saving time. Lastly, in reference to the
education system, he mentioned that specialised training in the area of arbitration must be introduced and the same should be treated and nurtured as a separate branch of law.
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TECHNICAL SESSION - 4: ENFORCEMENT OF ARBITRAL AWARDS: INDIA AND THE GLOBAL SCENARIO
Chairperson: Hon'ble Mr. Justice R.F. Nariman, Judge, Supreme Court of India
Mr. Justice Nariman dwelt upon the topic by expressing his observations on the term 'public policy', as a ground for setting aside an arbitral award or for the purpose of evading enforcement. He referred to some of the cases delivered by the Supreme Court of India and said that narrowing down the scope of 'public policy' was required in order to avoid open ended challenges due to vaguely worded provisions in the law. He appreciated the recent amendments and was of the opinion that the same is a welcome step towards making India an arbitration hub.
Speaker 1: Mr. Alec Emmerson, CEO & Trustee, DIFC Arbitration Institute, Dubai, UAE
While appreciating the attempt on part of India to properly draft public policy provisions, Mr. Emmerson stated that such provisions could lead to differential treatment in terms of enforcement of arbitral awards. Drafting must be done in a precise manner, as stated by him. Quoting the Dubai example, he introduced the three-tier public policy conundrum (public policy at the federal level i.e. of UAE, public policy of Dubai and the public policy of Dubai International Finance Centre, a federal financial free zone with independent jurisdiction) and stated that careful drafting would
ultimately avoid varying interpretations.
Speaker 2: Mr. Francis Xavier S.C., PBM Regional Head, Dispute Practices, Rajah & Tann LLP, Singapore
Mr. Xavier, while launching his speech, remarked that Indian arbitration scenario is being watched by the world. While comparing public policy provisions of some of the jurisdictions with that of India, he mentioned that public policy provisions are generally wide in nature so as to ensure flexibility in case of unforeseen developments in the domestic scenario of enforcing state. In reference to speedy disposal of arbitration cases, he was of the opinion that specialist judges in this area are required because their approach towards a particular situation would be more appropriate.
Speaker 3: Ms. Pallavi Shroff, Managing Partner, Shardul Amarchand Managaldas & Co.
In reference to 'Commercial Courts Ordinance', Ms. Shroff stated that the same is a welcome step. She further added that specialised Bar and Bench would bring certainty and clarity in the approach to be adopted while dealing with arbitration matters. Further, she highlighted the issue of enforceability in cases of emergency arbitrations, which does not find a mention in the 'Arbitration Ordinance'. With regard to delay in disposal of cases, she appreciated the provisions relating to time-limits. Lastly, she mentioned about the requirement of imposition of costs in appropriate cases.
Speaker 1: Ms. Sheila L Shadmand, Partner-in-Charge, Jones Day, Dubai, UAE
Referring to legislative measures, she said some imperfections would always exist but they should not act as a roadblock. She felt that for reforming the arbitration scenario in India, all the stakeholders should bear the collective responsibility. She further stated that institutional arbitration, due to some of its strong features like set frame of rules, timely hearings etc., is more suitable over ad hoc arbitration. Speaking on the procedural issues, she found imposition of time-limits a good idea. She also prescribed for ensuring independence to arbitrators as, according to her, it is equally important for healthy arbitration. As strongly mooted by her, the power of the arbitral tribunal to grant
interim measures, wherever required, also cannot be ignored and provisions must be made for the same while framing laws.
Speaker 2: Mr. James P Duffy IV, Partner, K & L Gates, New York, USA
Mr. Duffy, at the outset, gave a brief but enlightening overview of the arbitration scenario in India from a historical perspective. He mentioned that judicial intervention and delay in deciding matters in India made arbitration less friendly for the litigants. While appreciating the findings of the Supreme Court of India in the matters of BALCO and Reliance Industries, he stated that a pro-arbitration stance had now been adopted by the Indian judiciary and recent legislative efforts to reform arbitration in the country had sent a positive message globally. However, he found some of the provisions (like fixing of time limit in international arbitration cases) in the Ordinance as
overambitious. Referring to the observations of the Madras High Court in the case of A.K. Balaji v. Union of India, where the Court held that foreign lawyers for the purpose of arbitration are allowed to consult their clients on 'fly-in and fly-out basis', he added that the same is a positive step in the terms of opening up of legal sector in India. Lastly, he added that the presence of global arbitral institutions in India would provide litigants a good range of option for settling their disputes.
Speaker 3: Mr. Mustafa S Doctor, Senior Advocate, Bombay High Court, IndiaMr. Doctor felt that the changing face of arbitration in India is more of a hope rather than the reality. He said that mind-set of the stakeholders first needs to be changed for realizing the advantages of arbitration, in practice. Referring to the applicability of procedural rules in arbitration, he mentioned that arbitrators in India (dominated mostly by retired judges) create procedural complexities which go against the very objective of arbitration. For better results in arbitration, he suggested for minimisation of procedural technicalities and conduct of hearings in a simplified manner. He further added that creation of a separate Arbitration Bar is the need of the hour. He also argued for the promotion of technological advancement in terms of recording of evidence etc. during arbitration proceedings for the purpose of saving time. Lastly, in reference to the
education system, he mentioned that specialised training in the area of arbitration must be introduced and the same should be treated and nurtured as a separate branch of law.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 37ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201636
Golden Moments of Conference
DAY : 1
Registration counter abuzz with activities
Justice Nijjar, Former Judge, Supreme Court of India, welcomed by Dr. Jyotsna Suri, President, FICCI, Mr. N. G. Khaitan, President, ICA and
Dr. A. Didar Singh, Director General, ICA
Hon'ble Chief Justice of India Mr. T. S. Thakur,
Ms. Geeta Luthra, Vice President, ICA Mr. N. G. Khaitan, President, ICA and Justice Thakur greeted by Dr. Jyotsna Suri
TECHNICAL SESSION - 5:ARBITRATION: IS IT THE BEST RECOURSE FOR BUSINESS DISPUTES
Speaker 1: Dr. G Narayana Raju, ILS, Secretary, Legislative Department, Ministry of Law & Justice, Govt. of India
Dr. Raju gave a brief overview of the Alternative Dispute Resolution Mechanism in India. He mentioned that some of the characteristics like speedy settlement of disputes and procedural flexibility are the reasons for switching to ADR even in the strong presence of traditional courts. He further stated that there was a need to amend the 1996 Act, especially after considering the increase in investments and rising commercial disputes. He commended the legislative efforts made in this regard.
Speaker 2: Mr. Badrinath Durvasula, Vice President (Legal), Adani Group, Gujarat, India
Mr. Durvasula focused on the topic from the view point of a commercial entity as a stakeholder in the prevailing arbitration regime. He stated that speedy disposal of a case and cost effectiveness are the main concerns of any investor intending to invest in India. He suggested for the introduction of mandatory consultation/mediation process before going for arbitration, as according to his experience, most of the disputes get resolved at this stage itself.
Mr. Mukul Rohatgi, Senior Advocate & Attorney General of IndiaMr. Rohatgi observed that foreign companies are reluctant to approach the Indian courts for the settlement of their disputes because of several well-known reasons. He stated that arbitration in India is not conducted in a professional manner. In reference to delay in disposal of cases in arbitration, he mentioned the need for a separate Arbitration Bar, as lawyers after normal court hours are not in a position to devote the required amount of time and attention to a case. Moreover, he was of the opinion that retired judges acting as arbitrators cause delay as they are accustomed to following long procedures. In reference to institutional arbitration, he said that all arbitrations must be done through an institution and arbitrators appointed for the adjudication of a case should not have the same nationality as
either of the parties to the case. For courts, he suggested that the judiciary must not sit as an appellate body while deciding the validity of an award or an interim measure. Rather, a more supervisory role must be adopted in order to respect party autonomy. In relation to arbitration agreements, he stated that they should be precise in nature so as to avoid conflicts. He was of the opinion that a large number of disputes can be avoided if agreements are carefully drafted. With regard to the recent amendments, he stated that though impartiality provisions appear to be stringent, a hit and trial approach must be taken. Moreover, to ensure reasonable cost of adjudication, he suggested that global arbitral institutions must reflect on the possibility of giving differential treatment to parties from developing or underdeveloped economies, as they cannot be equated with a part to the case belonging to a developed economy.
VALEDICTORY SESSION
The concluding address was made by Ms. Geeta Luthra, Senior Advocate & Vice President, ICA. The Inaugural and Technical Sessions both were moderated by Mr. Arun Chawla, Advisor, ICA. The Conference was a resounding success with over 1000 people converged at the inaugural session of the Conference and over 300 delegates participated in the technical sessions of the event, which set a new attendance record. Every topic of the Technical Sessions was interesting and informative, but most of all, the participants loved learning from experts who know so much about all of arbitration. The reading material distributed among the participants was versatile. The participants enjoyed both learning and as well as leaving social with all people from offered walks of professions and fields.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 37ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201636
Golden Moments of Conference
DAY : 1
Registration counter abuzz with activities
Justice Nijjar, Former Judge, Supreme Court of India, welcomed by Dr. Jyotsna Suri, President, FICCI, Mr. N. G. Khaitan, President, ICA and
Dr. A. Didar Singh, Director General, ICA
Hon'ble Chief Justice of India Mr. T. S. Thakur,
Ms. Geeta Luthra, Vice President, ICA Mr. N. G. Khaitan, President, ICA and Justice Thakur greeted by Dr. Jyotsna Suri
TECHNICAL SESSION - 5:ARBITRATION: IS IT THE BEST RECOURSE FOR BUSINESS DISPUTES
Speaker 1: Dr. G Narayana Raju, ILS, Secretary, Legislative Department, Ministry of Law & Justice, Govt. of India
Dr. Raju gave a brief overview of the Alternative Dispute Resolution Mechanism in India. He mentioned that some of the characteristics like speedy settlement of disputes and procedural flexibility are the reasons for switching to ADR even in the strong presence of traditional courts. He further stated that there was a need to amend the 1996 Act, especially after considering the increase in investments and rising commercial disputes. He commended the legislative efforts made in this regard.
Speaker 2: Mr. Badrinath Durvasula, Vice President (Legal), Adani Group, Gujarat, India
Mr. Durvasula focused on the topic from the view point of a commercial entity as a stakeholder in the prevailing arbitration regime. He stated that speedy disposal of a case and cost effectiveness are the main concerns of any investor intending to invest in India. He suggested for the introduction of mandatory consultation/mediation process before going for arbitration, as according to his experience, most of the disputes get resolved at this stage itself.
Mr. Mukul Rohatgi, Senior Advocate & Attorney General of IndiaMr. Rohatgi observed that foreign companies are reluctant to approach the Indian courts for the settlement of their disputes because of several well-known reasons. He stated that arbitration in India is not conducted in a professional manner. In reference to delay in disposal of cases in arbitration, he mentioned the need for a separate Arbitration Bar, as lawyers after normal court hours are not in a position to devote the required amount of time and attention to a case. Moreover, he was of the opinion that retired judges acting as arbitrators cause delay as they are accustomed to following long procedures. In reference to institutional arbitration, he said that all arbitrations must be done through an institution and arbitrators appointed for the adjudication of a case should not have the same nationality as
either of the parties to the case. For courts, he suggested that the judiciary must not sit as an appellate body while deciding the validity of an award or an interim measure. Rather, a more supervisory role must be adopted in order to respect party autonomy. In relation to arbitration agreements, he stated that they should be precise in nature so as to avoid conflicts. He was of the opinion that a large number of disputes can be avoided if agreements are carefully drafted. With regard to the recent amendments, he stated that though impartiality provisions appear to be stringent, a hit and trial approach must be taken. Moreover, to ensure reasonable cost of adjudication, he suggested that global arbitral institutions must reflect on the possibility of giving differential treatment to parties from developing or underdeveloped economies, as they cannot be equated with a part to the case belonging to a developed economy.
VALEDICTORY SESSION
The concluding address was made by Ms. Geeta Luthra, Senior Advocate & Vice President, ICA. The Inaugural and Technical Sessions both were moderated by Mr. Arun Chawla, Advisor, ICA. The Conference was a resounding success with over 1000 people converged at the inaugural session of the Conference and over 300 delegates participated in the technical sessions of the event, which set a new attendance record. Every topic of the Technical Sessions was interesting and informative, but most of all, the participants loved learning from experts who know so much about all of arbitration. The reading material distributed among the participants was versatile. The participants enjoyed both learning and as well as leaving social with all people from offered walks of professions and fields.
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 39ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201638
Justice Nijjar delivers special address Justice Thakur delivers inaugural address
Dr. Didar Singh makes concluding remarks Justice Thakur and Mr. Khaitan
A section of distinguished invitees Valued presence of distinguished Judges and overseas invitees
Justice Thakur is escorted to the FICCI Auditorium Justice Thakur enters the Auditorium
Justice Thakur welcomed to the Stage Mr. Arun Chawla, Advisor, ICA,
makes introductory remarks
Justice Thakur is presented with Green Certificate Mr. Khaitan delivers welcome address
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 39ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201638
Justice Nijjar delivers special address Justice Thakur delivers inaugural address
Dr. Didar Singh makes concluding remarks Justice Thakur and Mr. Khaitan
A section of distinguished invitees Valued presence of distinguished Judges and overseas invitees
Justice Thakur is escorted to the FICCI Auditorium Justice Thakur enters the Auditorium
Justice Thakur welcomed to the Stage Mr. Arun Chawla, Advisor, ICA,
makes introductory remarks
Justice Thakur is presented with Green Certificate Mr. Khaitan delivers welcome address
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201640 ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 41
Mr. James Duffy in a lighter mood with Mr. Chawla
Mr. Joachim Knoll exchanges pleasantries with Ms. Luthra
Heavy rush at registration counter
DAY 2
A huge assembly of knowledgeable crowd in the inaugural session
Remarkable presence of ICA Governing Body members
Governing Body members relax during dinner time Crowd spills over to the adjacent lawn
Dinner rush Mr. Chawla engaged in serious conversation
Ambassador Talmiz Ahmad (Retd.) and Mr. T N Tiwari
Conference gives the participants an opportunity for personal interaction and socialization
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201640 ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 41
Mr. James Duffy in a lighter mood with Mr. Chawla
Mr. Joachim Knoll exchanges pleasantries with Ms. Luthra
Heavy rush at registration counter
DAY 2
A huge assembly of knowledgeable crowd in the inaugural session
Remarkable presence of ICA Governing Body members
Governing Body members relax during dinner time Crowd spills over to the adjacent lawn
Dinner rush Mr. Chawla engaged in serious conversation
Ambassador Talmiz Ahmad (Retd.) and Mr. T N Tiwari
Conference gives the participants an opportunity for personal interaction and socialization
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 43ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201642
Hon'ble Mr. Justice M B Lokur is flanked by (L to R): Mr. Chawla, Mr. Duffy, Ms. Shadmand and
Mr. Mustafa Doctor at Session 3
Students of law school raise thought-provoking questions
Delegates participate in the questionnaire session Practitioners and academicians join debates
Hon'ble Justice Mr. U Lalit is flanked by (L to R): Mr. Hirst, Mr. Malone and Mr. Knoll at Session 2
Session attended by seasoned lawyers and bureaucrats
Justice Sikri is flanked by (L to R): Ms. Luthra, Ms. Menaker, Mr. Sheppard and Mr. Moollan at 1 SessionA section of audience
Participants – a mix of senior professionals, promising juniors and students of law
A part of audience with Hon'ble Justice Mr. Umesh Lalit sitting in the front
Hon'ble Justice S. K. Sikri enters the venue Justice Sikri greeted by distinguished speakers
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 43ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201642
Hon'ble Mr. Justice M B Lokur is flanked by (L to R): Mr. Chawla, Mr. Duffy, Ms. Shadmand and
Mr. Mustafa Doctor at Session 3
Students of law school raise thought-provoking questions
Delegates participate in the questionnaire session Practitioners and academicians join debates
Hon'ble Justice Mr. U Lalit is flanked by (L to R): Mr. Hirst, Mr. Malone and Mr. Knoll at Session 2
Session attended by seasoned lawyers and bureaucrats
Justice Sikri is flanked by (L to R): Ms. Luthra, Ms. Menaker, Mr. Sheppard and Mr. Moollan at 1 SessionA section of audience
Participants – a mix of senior professionals, promising juniors and students of law
A part of audience with Hon'ble Justice Mr. Umesh Lalit sitting in the front
Hon'ble Justice S. K. Sikri enters the venue Justice Sikri greeted by distinguished speakers
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 45ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201644
TEA BREAK
A student of law school advocates for ODR
Hon'ble Mr. Justice Nariman is flanked by (L to R): Ms. Luthra, Mr. Emmerson,
Ms. Pallavi Shroff and Mr. Xavier at Session 4
Justice Nariman converses with fellow speaker, Mr Alec Emmerson
Justice Lokur and Justice Nariman
Justice Nariman greeted by fellow speakers Justice Nariman in company of Justice Nijjar and Mr. Khaitan
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 45ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201644
TEA BREAK
A student of law school advocates for ODR
Hon'ble Mr. Justice Nariman is flanked by (L to R): Ms. Luthra, Mr. Emmerson,
Ms. Pallavi Shroff and Mr. Xavier at Session 4
Justice Nariman converses with fellow speaker, Mr Alec Emmerson
Justice Lokur and Justice Nariman
Justice Nariman greeted by fellow speakers Justice Nariman in company of Justice Nijjar and Mr. Khaitan
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 47ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201646
GALA DINNER
Mr. Mukul Rohatgi, Attorney General of India, greeted by Justice Nijjar and Mr. Khaitan
Dr. Narayana Raju flanked by Ms. Luthra and Mr. Durvasula at Session 5
Mr. Rohatgi among other distinguished speakers Mr. Rohatgi flanked by (L to R): Mr. Chawla,
Mr. Khaitan and Ms. Luthra at Valedictory Session
Mr. Mukul Rohatgi, Attorney-General of India, delivering the Valedictory Address
Mr. Rohatgi is seen off by the members of the ICA Governing Body
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 47ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201646
GALA DINNER
Mr. Mukul Rohatgi, Attorney General of India, greeted by Justice Nijjar and Mr. Khaitan
Dr. Narayana Raju flanked by Ms. Luthra and Mr. Durvasula at Session 5
Mr. Rohatgi among other distinguished speakers Mr. Rohatgi flanked by (L to R): Mr. Chawla,
Mr. Khaitan and Ms. Luthra at Valedictory Session
Mr. Mukul Rohatgi, Attorney-General of India, delivering the Valedictory Address
Mr. Rohatgi is seen off by the members of the ICA Governing Body
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 49ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201648
Re ActThe EditorICA Arbitration Quarterly
Dear Editor,
I want to congratulate the entire ICA Team + the FICCI Team for the successful hosting of the Conference which was truly 'International'. We will cherish its fond memories for years to come. We look forward to the ' repeat performance' in your future endeavours.
Thanking you & with kind regards,
Nishikant DeshpandePune
...............................................................................................................................................................................................
Dear Editor,
Please accept my New Year greetings.
The International Conference on Arbitration held recently in New Delhi is a milestone in the history of arbitration not only in India, but in the entire world. Congratulations.
The recent en masse amendments to the Arbitration and Conciliation Act, 1996 is a revolution in the field of alternative dispute resolution and the ICA played a key role in the process.
The Conference gave a great source of inspirations for me and to all other participants as well.
Sincerely
M S B Chalapathi RaoHyderabad
..............................................................................................................................................................................................
Dear Editor:
I am speaking on the behalf of ODRways. We are currently building a portal which will provide arbitration and mediation services online. The whole purpose is to make ADR services more accessible to people.
This concept is known as Online Dispute Resolution (ODR). It is still at a nascent stage in India. We believe that this is going to change the way disputes are resolved in India.
I was one of the participants in the International Conference on "Arbitration in the Era of Globalization" and deliberated on the above subject.
May I request you to frame a resolution paper after the above Conference, which includes the following clause?
"Delegates in the Conference agree to the proposition of exploring the potential of Online Dispute Resolution (ODR) in India."
Regards
Pranjal SinhaStudent Delegate-NUJS, Kolkata
Steering Committee Members of the Conference
Conference Secretariat
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 49ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201648
Re ActThe EditorICA Arbitration Quarterly
Dear Editor,
I want to congratulate the entire ICA Team + the FICCI Team for the successful hosting of the Conference which was truly 'International'. We will cherish its fond memories for years to come. We look forward to the ' repeat performance' in your future endeavours.
Thanking you & with kind regards,
Nishikant DeshpandePune
...............................................................................................................................................................................................
Dear Editor,
Please accept my New Year greetings.
The International Conference on Arbitration held recently in New Delhi is a milestone in the history of arbitration not only in India, but in the entire world. Congratulations.
The recent en masse amendments to the Arbitration and Conciliation Act, 1996 is a revolution in the field of alternative dispute resolution and the ICA played a key role in the process.
The Conference gave a great source of inspirations for me and to all other participants as well.
Sincerely
M S B Chalapathi RaoHyderabad
..............................................................................................................................................................................................
Dear Editor:
I am speaking on the behalf of ODRways. We are currently building a portal which will provide arbitration and mediation services online. The whole purpose is to make ADR services more accessible to people.
This concept is known as Online Dispute Resolution (ODR). It is still at a nascent stage in India. We believe that this is going to change the way disputes are resolved in India.
I was one of the participants in the International Conference on "Arbitration in the Era of Globalization" and deliberated on the above subject.
May I request you to frame a resolution paper after the above Conference, which includes the following clause?
"Delegates in the Conference agree to the proposition of exploring the potential of Online Dispute Resolution (ODR) in India."
Regards
Pranjal SinhaStudent Delegate-NUJS, Kolkata
Steering Committee Members of the Conference
Conference Secretariat
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 51ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201650
What they say about "The Arbitration and Conciliation (Amendments) Bill, 2015
"This will positively impact the existing framework of arbitration law in India as it addresses the various concerns regarding delay and excessive intervention by the courts, explains public policy, permits interim relief in foreign seated arbitration, and emphasises neutrality of arbitrators."
(Pallavi S Shroff, Managing Partner, Shardul Amarchand Mangaldas & Co)
"Having worked in arbitration cases, both internationally and in India, for over 30 years, I believe that this is a positive step forward and would be welcome to foreign investors. Enforcement of commercial contracts in India by arbitration should be easier, for both here and elsewhere."
(Sarosh Zaiwalla, Founder & Senior Partner, Zaiwalla & Co. Solicitors)
“The reforms will not only restore investor confidence in the Indian judicial system - but it also has the potential to transform India into a preferred arbitration hub, globally. However, the government should also introduce administrative reforms to set up credible arbitral institutions nation-wide - quite in the model of the Delhi High Court International Arbitration Centre - which will certainly facilitate the ease of doing business in India by resolving disputes in a speedy, efficacious and economic manner."
(Krishnayan Sen,Partner, VERUS Advocates)
"A new regime which combines the right blend of the carrot and the stick was the catalyst that Indian commercial dispute resolution was waiting for. The reforms to the arbitration regime are expected to provide this fillip that was the need of the hour. Broadly speaking, these amendments aim at creating an ambience which offers certainty, neutrality, reduces judicial interventions and incentivizes compliance."
(Anirudh Krishnan, Advocate, Madras High Court)
COMMENTS ON NEW ARBITRATION LAW
Sports Arbitration: A Coach for Other Players? - Edited by Elliott Geisinger& Elena Trabaldo-de Mestral
It is not about sports arbitration. The reader may thus ask: Well, what is it about? Arbitration can take inspiration from other human activities, for instance sports. Does it follow that the arbitration, in general, can take inspiration from sports arbitration? Can sports arbitration serve as an example, be it for better or worse? And if so, what are the limits of this?
These questions are highly topical in today's world of arbitration. Faced with the increased duration and costs of arbitral proceedings, and with the perception that litigators instead of business people have taken over the process, more and more users are calling for a return to fast, inexpensive forms of dispute resolution that are conducted by persons of the trade. This has resulted in a series of initiatives to introduce trade-specific forms of dispute resolution based on fast-track arbitration proceedings in a wide range of business sectors.
BOOK REVIEW
ICA Extra-Ordinary General Meeting 18th December, 2015 at New Delhi
ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 51ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201650
What they say about "The Arbitration and Conciliation (Amendments) Bill, 2015
"This will positively impact the existing framework of arbitration law in India as it addresses the various concerns regarding delay and excessive intervention by the courts, explains public policy, permits interim relief in foreign seated arbitration, and emphasises neutrality of arbitrators."
(Pallavi S Shroff, Managing Partner, Shardul Amarchand Mangaldas & Co)
"Having worked in arbitration cases, both internationally and in India, for over 30 years, I believe that this is a positive step forward and would be welcome to foreign investors. Enforcement of commercial contracts in India by arbitration should be easier, for both here and elsewhere."
(Sarosh Zaiwalla, Founder & Senior Partner, Zaiwalla & Co. Solicitors)
“The reforms will not only restore investor confidence in the Indian judicial system - but it also has the potential to transform India into a preferred arbitration hub, globally. However, the government should also introduce administrative reforms to set up credible arbitral institutions nation-wide - quite in the model of the Delhi High Court International Arbitration Centre - which will certainly facilitate the ease of doing business in India by resolving disputes in a speedy, efficacious and economic manner."
(Krishnayan Sen,Partner, VERUS Advocates)
"A new regime which combines the right blend of the carrot and the stick was the catalyst that Indian commercial dispute resolution was waiting for. The reforms to the arbitration regime are expected to provide this fillip that was the need of the hour. Broadly speaking, these amendments aim at creating an ambience which offers certainty, neutrality, reduces judicial interventions and incentivizes compliance."
(Anirudh Krishnan, Advocate, Madras High Court)
COMMENTS ON NEW ARBITRATION LAW
Sports Arbitration: A Coach for Other Players? - Edited by Elliott Geisinger& Elena Trabaldo-de Mestral
It is not about sports arbitration. The reader may thus ask: Well, what is it about? Arbitration can take inspiration from other human activities, for instance sports. Does it follow that the arbitration, in general, can take inspiration from sports arbitration? Can sports arbitration serve as an example, be it for better or worse? And if so, what are the limits of this?
These questions are highly topical in today's world of arbitration. Faced with the increased duration and costs of arbitral proceedings, and with the perception that litigators instead of business people have taken over the process, more and more users are calling for a return to fast, inexpensive forms of dispute resolution that are conducted by persons of the trade. This has resulted in a series of initiatives to introduce trade-specific forms of dispute resolution based on fast-track arbitration proceedings in a wide range of business sectors.
BOOK REVIEW
ICA Extra-Ordinary General Meeting 18th December, 2015 at New Delhi
Indian Council of ArbitrationFederation House, Tansen Marg, New Delhi – 110 001
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