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: ica@ficci.com

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: ica@ficci.com

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.

ICA ARBITRATION QUARTERLY JANUARY-MARCH - 2016 35ICA ARBITRATION QUARTERLY JANUARY-MARCH - 201634

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

Ph.: 91-11-23738760-70, 23319849, 23319760, Fax: 23320714, 23721504E: ica@ficci.com, W: www.icaindia.co.in