tag:blogger.com,1999:blog-7635833369256707292024-03-19T18:39:34.302+05:30Council for National and International Commercial Arbitration (CNICA)CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-763583336925670729.post-70505961331686018432012-10-30T11:09:00.002+05:302012-10-30T11:09:15.191+05:30INSTITUTIONAL ARBITRATION HAS SOLUTION FOR REDUCING THE ARBITRATION COST <div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div align="center" class="MsoNormal" style="text-align: center;">
<b><i><span lang="EN-US">Union of <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>
-vs- Singh Builders Syndicate 2009(2) Arb. LR 1 (SC)<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="tab-stops: 13.5pt 32.25pt; text-align: justify;">
<span lang="EN-US">The Supreme Court has held that the cost of arbitration can be high
if the Arbitral Tribunal consists of retired Judge/s. When a retired judge is appointed as
arbitrator in place of serving officers, the government is forced to bear the
high cost of arbitration by way of private arbitrator’s fee even though it had
not consented for the appointment of such non-technical non-serving persons as
arbitrator/s. There is no doubt a
prevalent opinion that the cost of arbitration becomes very high in many cases
where retired judge/s are arbitrators.
The large number of sitting and charging of very high fees per sitting,
with several add-ons, without any ceiling, have many a time resulted in the
cost of arbitration approaching or even exceeding the amount involved in the
dispute or the amount of the award. When
an arbitrator is appointed by a court without indicating fees, either both
parties or at least one party is at a
disadvantage. Firstly, the parties feel
constrained to agree to whatever fees is suggested by the arbitrator, even if
it is high or beyond their capacity.
Secondly, if a high fee is claimed by the arbitrator and one party
agrees to pay such fee, the other party, who is
unable to afford such fee or reluctant to pay such high fee, is put to
an embarrassing position. He will not be
in a position to express his reservation or objection to the high fee, owing to
an apprehension that refusal by him to agree for the fee suggested by the
arbitrator, may prejudice his case or create a bias in favour of the other
party who readily agreed to pay the high fee.
It is necessary to find an urgent solution for this problem to save
arbitration from the arbitration cost.
Institutional arbitration has provided a solution as the arbitrators’
fees is not fixed by the arbitrators
themselves on case-to-case basis, but is governed by a uniform rate prescribed
by the institution under whose aegis the arbitration is held. Another solution is for the court to fix the
fees at the time of appointing the arbitrator, with the consent of parties, if
necessary in consultation with the arbitrator concerned. Third is for the retired judges offering to
serve as arbitrators, to indicate their fee structure to the Registry of the
respective High court so that the parties will have the choice of selecting an
arbitrator whose fees are in their ‘range’
having regard to the stakes involved.
What is found to be objectionable is parties being forced to go to an
arbitrator appointed by the court and then being forced to agree for a fee
fixed by such arbitrator. It is
unfortunate that delays, high cost, frequent and sometimes unwarranted judicial
interruptions at different stages are seriously hampering the growth of
arbitration as an effective dispute resolution process. Delay and high cost are two areas where the
arbitrators by self regulation can bring about marked improvement.</span></div>
<div align="center" class="MsoNormal" style="tab-stops: 13.5pt 32.25pt; text-align: center;">
<i><span lang="EN-US">By<o:p></o:p></span></i></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<i><span lang="EN-US">D.Saravanan, Chairman<o:p></o:p></span></i></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<span lang="EN-US">Council for National and
International Commercial Arbitration (CNICA)</span></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com2tag:blogger.com,1999:blog-763583336925670729.post-8957193081101705872012-10-26T07:13:00.002+05:302012-10-26T07:13:26.092+05:30APPOSITE PERCEPTIVE OF ARBITRATION ACT, 1996<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Supreme Court on 6<sup>th</sup>
September, 2012 had delivered the much awaited Constitutional Bench judgment by
taking a refreshing and encouraging view regarding Arbitration &
Conciliation Act, 1996 (hereinafter referred
to as the ‘Act’) by overruling the earlier views. The earlier observations in
Bhatia International vs Bulk Trading S.A. and Venture Global Engineering vs
Satyam Computer Services Ltd had jeopardized the position of the Foreign
Investors and Corporates and placed India in a bad light with respect to
International Commercial Arbitration. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Before going through the questions of
law raised and the fresh current views of the Constitutional Bench, we need to
understand as to why Alternative Dispute Resolution Mechanism is vital,
especially to commercial disputes. In a developing nation such as India,
economic reforms cannot become fully effective, if the law dealing with
settlement of domestic and international commercial disputes remained out of
sync with such reforms. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">In Bharat Aluminium vs Kaiser
Aluminium, the Constitutional Bench of the Supreme Court headed by Chief
Justice of India has overruled the views taken in Bhatia International and
Venture Global Engineering <i>(supra)</i>
and put to rest the confusion created by those rulings. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">To recap the earlier views, in Bhatia
International and Venture Global Engineering the Supreme Court held that the
Part I of the Act , shall be applicable
even to the arbitration that takes place
outside India. Consequently Indian courts attained jurisdiction to pass interim
reliefs as contemplated under Section 9 of the Act. Further Indian courts
entertained the applications challenging the foreign arbitral award even on
merits contemplated under Part I of the Act. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">In order to reconcile the view of both
the judgments, the Constitutional Bench had analyzed the troubled Sections of
the Act in its fullest length and breadth and carried out a fine comparative
analysis with judgments of other nations. The Constitutional Bench has observed
that Arbitration Act has accepted the ‘territoriality principle’ of the Model
Law and the ‘seat’ is the center of gravity.
<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Part I and Part II of the Act has been
analyzed separately. Let us go through the important aspects and analysis of
the judgment in brief. Sections 1 (2), 2 (1)(e),(2),(4),(5),(7),(20) and
(28)(1)(a) of Part I and Sections 45, 48 (1)(e) of Part II have been analyzed
to understand the scope, object and ambit of the aforementioned sections. It
was observed that the Act is a consolidated Act of three acts namely Protocol
Act, 1937, Foreign Awards Act, 1961 and Arbitration Act, 1940. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">In its judgement on Konkan Railways,
the Supreme Court observed that the Act and the Model Law are not strictly
identical. The model law, judgments, literature are not a guide to
interpretation of the Act. Keeping this in view, it was analyzed that the word
“<i>only</i>” missing in Section 2(2) of the
Act is not an instance of CASUS OMISSUS. It was also observed that it was
neither the judicial option nor a compulsion of the Court to supply the words
and interpret. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Bench further went on to observe
that the seat of arbitration is intended to be its ‘center of gravity’.
However, center of the gravity does not mean that all the arbitration
proceeding must be held in the seat initially agreed by the parties. Any
changes in the seat during the process of the arbitration proceedings will not
affect the status of the “seat” initially agreed by the parties. Hence, the
missing word “only” in Section 2(2) does not detract from the territorial scope
of its application.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The need for interpretation of Section 2(4) & (5) was
the usage of wordings "apply to every arbitration" and "all
arbitrations" respectively and whether these wordings necessarily include
the arbitration that takes place outside India and also on the applicability
of Part I to such arbitrations. The
Bench observed that the phrase "all arbitrations" has to be read as
limited to all arbitrations that takes place within India. The two sub-sections
merely recognize that apart from the arbitrations which are consensual between
the parties, there may be other types of arbitrations which are mandatory by
statutes as it is under the Indian
Telegraph Act, 1886, Electricity Act, 2003 etc. Hence, this cannot be a ground
for applicability of Part I.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">On analysis of Section 2(7) in the
context of Section 2(f), the Bench observed that the term "domestic
award" can be used to distinguish from "International award" and
"foreign award". Domestic Award made in India is purely domestic in
context. "International Award" shall mean an award from an arbitral
tribunal which is domestically seated [in India] for an International
Commercial Arbitration. Further, where the parties select a seat outside India,
an award from such foreign seated arbitral tribunal will be called a
"foreign award".<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Further it was observed that, the term
‘<i>subject matter of arbitration</i>’
cannot be confused with ‘<i>subject matter
of the suit</i>’ as contemplated under Section 2 (1)(e). “<i>The legislature has intentionally given jurisdiction to two courts i.e.
the court which would have jurisdiction where the cause of action is located
and the courts where the arbitration takes place”</i> hence the reference in
the provision is to identify the courts having supervisory control over the
arbitration proceedings. The need for identification of courts is essential
because in an agreement parties may agree at a place which would be neutral to
both the parties. In such a case, the courts where the arbitration takes place
is required to exercise its supervisory control over the arbitral process. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Bench has further clarified and
distinguished the difference between “seat/place” and “venue” in arbitration
while analyzing Section 20 in context with Section 2(2). Firstly “venue” is not
synonymous to “seat” in an arbitration agreement. The ‘seat/place’ of the
arbitration is the place where parties by agreement agree to have the
arbitration proceedings. Further, during the course of the arbitral process the
tribunal may shift from place to place according to arbitrators, witnesses and
parties convenience, for spot visit etc. Apart from the agreed ‘seat/place’,
wherever the arbitral tribunal sits that spots can be called as ‘venue’.
However, the Bench observed that, the change in the place of meeting for
further process or at the convenience of the parties, arbitration and
witnesses, will not change or affect the ‘seat/place’ of the arbitration. “<i>The seat of the arbitration remains the
place initially agreed by or on behalf of the parties</i>”. Hence, even in a
hypothetical situation, if a foreign arbitral tribunal has one or more sitting
in India for their convenience, it would not attract the applicability of Part
I, though one of the parties may be Indian National. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Further it was observed and upheld
from Conflict of Law Rules as quoted in Dicey & Morrirs that, “<i>where the parties have failed to choose the
law governing the arbitration proceedings, those proceedings must be
considered, at any rate prima facie, as being governed by the law of the
country in which the arbitration is held, on the ground that it is the country
most closely connected with the proceedings.</i>” <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Collectively, the Bench observed that,
the ‘seat/place’ is the center of gravity of the arbitration and hence “<i>if the parties</i> <i>choose another country as the seat of arbitration, inevitably they
import an acceptance that the law of that country relating to the conduct and
supervision of arbitrations will apply to the proceedings</i>”. Therefore, if
the parties select ‘seat/place’ outside India for the purpose of arbitral
process, Part I of the Act shall not apply, though the parties might have opted
Indian Law and Arbitration Act, 1996 as their substantive law. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Bench has examined the choice of
substantial law and procedural law in the context of Section 28 of the Act. The
law governing the conduct of the arbitration is usually procedural law or
curial law or the <i>lex fori</i>. The law
governing the contract and the obligation of the parties in whole is
substantial law. The Bench observed that, Section 28 makes a distinction
between domestic arbitrations and international commercial arbitrations, having
its seat in India. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Bench observed that, “<i>Section 28(1)(a) makes it clear that in an
arbitration under Part I to which Section 2(1)(f) does not apply, there is no
choice but for the Tribunal to decide “the dispute” by applying the Indian
“substantive law applicable to the contract”….”On the other hand, where an
arbitration under Part I is an international commercial arbitration within
Section 2(1)(f), the parties would be free to agree to any other “substantive
law” and if not so agreed, the “substantive law” applicable would be as
determined by the Tribunal</i>”. Hence, it was concluded that the Parliament
was not with the intention to give an extra-territorial operation to Part I of
the Arbitration Act, 1996. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<u><span lang="EN-US" style="font-family: "Arial","sans-serif";">Part II of the Act</span></u><span lang="EN-US" style="font-family: "Arial","sans-serif";">:<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">It was observed that the regulation of
arbitration consists of four steps (a) the commencement of arbitration; (b) the
conduct of arbitration; (c) the challenge to the award; and (d) the recognition
or enforcement of the award.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Further it was observed that the Part
II, unlike Part I of the Act, has <i>no </i>provisions
regulating the <i>conduct</i> of arbitration
<i>nor</i> the challenge to the award.
Hence, the regulation of conduct of arbitration and challenge to an award would
have to be done by the courts of the country in which the arbitration is being
conducted. Such a court is then necessarily being the supervisory court which
was possessed of the power to annul the award. It was upheld that, “<i>it follows from this that a choice of seat
for the arbitration must be a choice of forum for remedies seeking to attack
the award”</i><o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">One of the most important aspects in
the judgment, while analyzing Section 48(1) (e) observed that, the country in
which the award was made is “First Alternative” and the courts under the law of
which the award was made is “Second Alternative”. Further, <i>“the words suspended or set aside in Section 48(1)(e) cannot be
interpreted to mean that by necessary implication the foreign award sought to
be enforced in India can also be challenged on merits in Indian Courts”<o:p></o:p></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">Therefore, a foreign arbitral award
shall be recognized and enforced by virtue of Sections 48 and 49 of Part II of
the Act. However, vide this judgment the Supreme Court has made it clear that,
Indian Courts will not have the jurisdiction to challenge the foreign arbitral
award on merits. It is only the courts of the country where the seat of the
arbitration has been held will have the jurisdiction by exercising its
‘supervisory powers’ over the arbitral process.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<u><span lang="EN-US" style="font-family: "Arial","sans-serif";">Interim measures etc. by Indian Courts
where the seat of arbitration is outside India</span></u><span lang="EN-US" style="font-family: "Arial","sans-serif";">:<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">It was observed that, “<i>when parties voluntarily select/choose the
seat of arbitration to be outside India, they are impliedly also understood to
have chosen the necessary incidents and consequences of such choice”.</i>
Hence, the Indian courts cannot import the provisions meant under Part I of the
Act especially Section 9 for any such interim measures, wherein the seat of the
arbitration is outside India. The parties cannot maintain <i>Inter-Parte Suit </i>under the Code of Civil Procedure, 1908 pending
arbitration abroad for interim measures and suit under Specific Relief Act,
1963 for grant of temporary / perpetual injunction since the primary
requirement for filing a suit is a rise of ‘cause of action’ and initiation of
arbitration proceedings cannot be construed as ‘cause of action’. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<u><span lang="EN-US" style="font-family: "Arial","sans-serif";">Conclusion</span></u><span lang="EN-US" style="font-family: "Arial","sans-serif";">:<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">The Constitution Bench concluded that,
the Part I of the Act would have no application to International Commercial
Arbitration held outside India and there can be no overlapping or intermingling
of the provisions contained in Part I with Part II of the Act. The Judgments of
Bhatia International and Venture Global Engineering were overruled. The law
laid down by this judgment shall apply prospectively, to all the arbitration
agreements executed hereafter. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">There are some serious concerns such
as there is no provision for any sort of Interim relief in Part II in the Act
etc. considered by the Supreme Court in this judgment, however the Bench
observed that if at all there is a gap or lacuna, it would be for the
Parliament to rectify the same. Such a task cannot be undertaken by the Court
and thus it is a wake-up call to the Parliament. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif";">To achieve the economic reforms
contemplated by attracting foreign investors it is necessary that the alternate
dispute resolution mechanism both by domestic and international arbitration
should be revisited by making the necessary changes and amending the provisions
of the Act. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Sukumar .A<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Associate at Fox Mandal & Associates,
Bangalore<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Author, Arbitration – Law and Applicability <o:p></o:p></span></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com2tag:blogger.com,1999:blog-763583336925670729.post-68018502186363895862012-10-26T07:11:00.001+05:302012-10-26T07:11:48.554+05:30AN ARBITRATION AWARD RECORDING SETTLEMENT DOES NOT REQUIRE STAMP DUTY OR REGISTRATION<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
<span lang="EN-US">Channulal
Chandrakar –vs- Chhangalal & others 2012(2)Arb.LR 18 (DB) Chhattisgarh</span></div>
<div class="MsoNormal" style="text-indent: 36pt;">
<br /></div>
<div class="MsoNormal" style="tab-stops: 14.25pt; text-align: justify;">
<span lang="EN-US">The parties to the arbitration agreement were real brothers, who
entered into arbitral agreement for distribution/partition of the movable and
immovable properties. The parties had
appointed Arbitrators, who had passed an Award.
The Award was challenged on the ground that it was not properly stamped
and was not registered under Section 17 of the Indian Registration Act,
1908. The award was set aside against which an appeal was preferred before
the Division Bench. The Division Bench
has set aside the order of Court below and passed a judgment in terms of the
Arbitral Award as provided under Section 17 of Arbitration Act, 1940. While passing the judgment in terms of the
Award, the Division Bench has held that the Court below should not have
entertained the application to set aside the Award as it was barred by
limitation. The Division Bench has
further held, by relying upon the judgment of Apex Court, in the case of N.
Khadervali Sagar (Dead) by LRs –vs- N.
Gudu Sahib (Dead) 2003(1) Arb. LR 647 (SC) wherein it was held that the
document which records the settlement, an award, does not require registration
under Section 17 of the Registration Act,
1908 since the document does not transfer or assign interest in any asset and
hence there is no question of payment of stamp duty. In the instant case, it was held that since it was the settlement of the properties
between parties who were real brothers, no stamp duty or registration was
required.</span></div>
<div align="center" class="MsoNoSpacing" style="text-align: center;">
<b><span lang="EN-US">BY<o:p></o:p></span></b></div>
<div align="center" class="MsoNoSpacing" style="text-align: center;">
<b><span lang="EN-US">D. SARAVANAN<o:p></o:p></span></b></div>
<div align="center" class="MsoNoSpacing" style="text-align: center;">
<b><span lang="EN-US">CHAIRMAN<o:p></o:p></span></b></div>
<div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><span lang="EN-US">COUNCIL
FOR NATIONAL AND INTERNATIONAL COMMERCIAL ARBITRATION (CNICA)<o:p></o:p></span></b></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-69072330323051583652012-10-24T15:33:00.002+05:302012-10-24T15:33:53.584+05:30DELHI HIGH COURT HAS SET ASIDE THE FOREIGN AWARD AS THE ARBITRATOR HAD FAILED TO DISCLOSE HIS PREVIOUS APPOINTMENT AS ARBITRATOR BY ONE OF THE PARTIES<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="text-align: justify;">
<b><u><span lang="EN-US">M/S.SHKTI
BHOG FOODS LTD., VS. KOLA SHIPPING LTD., </span></u></b><span lang="EN-US"> </span></div>
<div class="MsoNormal" style="line-height: 150%; tab-stops: 15.75pt 55.5pt; text-align: justify;">
<span lang="EN-US"> </span></div>
<div class="MsoNormal" style="line-height: 150%; tab-stops: 15.75pt 55.5pt; text-align: justify;">
<span lang="EN-US">The Shakti Bhog Foods Ltd., hereinafter referred to as “Petitioner” filed
a suit before the III Additional District and Sessions Court, <st1:city w:st="on"><st1:place w:st="on">Kakinada</st1:place></st1:city>, Andhra Pradesh claiming damages against
M/s.Kola Shipping Ltd., hereinafter referred to as “Respondent”. The Respondent issued a notice appointing Mr.Alan
Okley as their Arbitrator. The Petitioner sent a communication to the
Respondent denying the existence of agreement and declined to appoint an
Arbitrator. Thereafter, the Respondent
filed an application u/s 45 of Arbitration and Conciliation Act, 1996 to refer
the parties to arbitration in <st1:city w:st="on"><st1:place w:st="on">London</st1:place></st1:city>. Thereafter, the Respondent requested the
Petitioner to appoint an Arbitrator and in the event of failing to appoint an
Arbitrator, Mr. Alan Okley would be the Sole Arbitrator. The District Court allowed the application
filed u/s 45 and referred the parties to arbitration in <st1:city w:st="on"><st1:place w:st="on">London</st1:place></st1:city>.
Against which the Petitioner preferred a Civil Revision Petition before
the High Court of Andhra Pradesh which
came to be dismissed. Thereafter, the
Respondent sent a letter to the Arbitrator Mr. Alan Okley requesting him to act
as a Sole Arbitrator as the Petitioner was not willing to appoint his
Arbitrator. Against the order of
dismissal of Civil Revision Petition, the Petitioner filed a Special Leave
Petition before the Supreme Court of India.
That be so, the Respondent filed a statement of claim before the
appointed Arbitrator Mr. Alan Okley.
Upon which, the Arbitrator Mr.Alan Okley sent a communication to the
Petitioner directing the Petitioner to file a statement of defense. Upon which, the Petitioner’s Advocate sent a
letter to the Arbitrator Mr. Alan Okley requesting for extension of time for
filing the statement of defense.
Thereafter, the Petitioner sent a communication to the Respondent that
the arbitration proceedings should not be continued pending S.L.P. Finally, the Supreme Court dismissed the
S.L.P. filed by the Petitioner and directed the parties to go for arbitration
in <st1:city w:st="on"><st1:place w:st="on">London</st1:place></st1:city>. Thereafter, the Petitioner nominated Mr.
Ramaswamy as Arbitrator, which was disputed by the Respondent. Thereafter, the Respondent sent a letter to
the Arbitrator Mr. Alan Okley requesting him to reconfirm his appointment as
Sole Arbitrator. Upon which, the
Arbitrator Mr. Alan Okley sent a communication to the Petitioner confirming
that he has accepted the appointment as
Sole Arbitrator and that he has ordered the Petitioner to file the defense
submissions within a particular day failing which the final and voluntary order
would result which would carry severe sanctions. Upon which, the Petitioner sent a
communication to the Counsel for the Respondent disputing the validity of
appointment of Mr. Alan Okley as Sole Arbitrator which communication was marked
to the Arbitrator Mr. Alan Okley. To
which the Arbitrator Mr. Alan Okley replied stating that his appointment as a
Sole Arbitrator was in accordance with the law and agreement. Thereafter, the Petitioner made an
application challenging the constitution of Arbitral Tribunal. Thereafter, the Petitioner filed an
application Section 14 r/w Sections 17(3) and section 24 of the Arbitration and
Conciliation Act, 1996 before the Court for terminating the mandate of the
arbitrator Mr. Alan Okley. The said
application was contested by the Respondent stating that the Petitioner has
subjected himself to the arbitration by seeking time to file the statement of
defense. The Arbitrator Mr. Alan Okley
rejected the application of the Petitioner and stated that he would be
proceeding to the final arbitral award, if the Respondent would make an
application. Upon which, the Respondent
requested the Arbitrator Mr. Alan Okley to pass pre-emptory order directing the Petitioner to serve the
defense and counter claim. However, the
Petitioner requested the Arbitrator Mr. Alan Okley to avoid decision of the
Court in the application made by them u/s 14 r/w with sec.17 (3) and 24 of
Arbitration and Conciliation Act, 1996 for terminating the mandate of
Arbitrator. However, on the same day, the
arbitrator Mr. Alan Okley passed final and pre-emptory order as requested by the
Respondent. Thereafter, the Arbitrator Mr.
Alan Okley fixed the hearing in <st1:city w:st="on"><st1:place w:st="on">London</st1:place></st1:city>. The Petitioner did not participate in the
arbitration proceedings. On the other
hand, the Respondent filed his written submission which was not provided to the
Petitioner. Based on the written
submissions and evidence provided by the Respondent and upon oral hearings, the
Arbitrator Mr. Alan Okley proceeded with the arbitration proceedings and passed
an Award of 11.02.2009. The said Award
was challenged before the Delhi High Court on various grounds, including the
contention that the Arbitrator Mr. Alan Okley failed to disclose that he had
acted as Co-Arbitrator of the Respondent in a related dispute between the
Respondent and the head owner of the vessel.
Finally, the Delhi High Court was pleased to hold that the constitution of
Arbitral Tribunal with Mr. Alan Okley
was invalid and such award is liable to
be set aside u/s 34(2)(a)(v) of the Arbitration and Conciliation Act, 1996 as
the Arbitrator Mr. Alan Okley failed to disclose the material fact concerning
his appointment as the Arbitrator involving the Respondent which gives rise to
justifiable doubts as to his independence on a collective reading Section 12(3),
13(5), (34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996. </span></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-36446242459912438862012-10-24T06:17:00.001+05:302012-10-24T06:17:54.732+05:30MANADATE OF ARBITRATOR IS TERMINABLE BY EFFLUX OF TIME<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
<span lang="EN-US">(Bharat Omen
Refineries Ltd., -vs- Mantecn Consultant, 2012(2) Arb. LR 482 (DB) BOMBAY)</span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span lang="EN-US">The Arbitration Agreement specifically contemplates that the Award
should be made in writing and published by the arbitrator within two years
after entering upon the reference or within such extended time not extending
further twelve months. The parties to
the arbitration had advanced their arguments on 21.04.2006. After a considerable delay, the Arbitrator
wrote a letter on 14.03.2006 to the respondent that he is trying to publish the
Award by 31.03.2006 and in any case latest by 30.04.2006 and that the
Arbitrator requested the respondent to send him a Stamp Paper of Maharashtra
State for Rs.100/- preferably by 23.03.2006 to publish the Award. The Arbitrator wrote another letter on 19.05.2006
to the parties stating that he had received a call from the respondent who had
requested the Arbitrator to publish the Award as quickly as possible. By the said letter the Arbitrator stated that
he could not publish the Award within 30.04.2006 as he had drafted the Award in
respect of certain claims and he is expected to complete the Award of other claims
shortly and publish the final Award on 31.03.2006. Thereafter, the Arbitrator published the
Award on 17.08.2006. The said Award was
challenged by the respondent u/s 34 of the Arbitration and Conciliation Act,
1996 and that the learned single Judge was pleased to set aside the Award on
the ground that the Arbitrator becomes <i>functus officio</i> as the Award was
not made within the stipulated time as mandated under the arbitration
agreement. Against which an appeal was
preferred before the Division Bench of Bombay High Court wherein the Division
Bench was pleased to confirm the order of the learned single Judge holding <i>inter-alia
</i>that the jurisdiction of Arbitrator depends upon the Arbitration Clause in
agreement itself; after conclusion of arguments, sending a stamp paper to
Arbitrator is nothing but a ministerial act on the part of the respondent and
it cannot be said to be effective
participation in arbitration proceedings; simply because the respondent has provided a
stamp paper or might have entered into telephonic conversation with Arbitrator
itself cannot be treated as an act of waiver or it cannot be construed as an
active participation in judicial proceedings before the Arbitrator; the Award of Arbitrator is against the
mandate given to the Arbitrator in the agreement and the subsequent proceeding
after conclusion of arguments cannot be said to be legal and valid; Arbitrator looses his jurisdiction as per the
mandate of Section 14 and 15 once agreed
time is lapsed and the said defect is incurable unless both the parties agreed
by a fresh agreement in writing giving authority to the Arbitrator to declare
the Award even after the stipulated time in furtherance of the original
agreement; implied consent cannot confer
jurisdiction once the agreed period is lapsed;
once the agreed period is lapsed, the Arbitrator could have and/or might
have refused to pass the Award or terminate the arbitral proceedings <i>suo moto</i>;
or could have asked the consent of parties for extension of time; the delay by the Arbitrator in passing the
Award itself is misconduct; parties
cannot be deprived of their right to challenge the Award on the ground that
there is a delay of 2 years and 4 months and Award as declared after such a
long period can be challenged u/s 34 and finally the Division Bench dismissed
the appeal confirming the order of setting aside the Award by relying upon the
judgment reported in the Judgment of Supreme Court of India in the case of
N.B.C.C. Ltd., -vs- J.G. Engineering Private Ltd. [2010(1) Arb.LR 165 S.C]</span></div>
<div align="center" class="MsoNormal" style="tab-stops: 88.5pt; text-align: center;">
<b><i><span lang="EN-US">BY<o:p></o:p></span></i></b></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b><i><span lang="EN-US">D.SARAVANAN<o:p></o:p></span></i></b></div>
<div align="center" class="MsoNormal" style="tab-stops: 88.5pt; text-align: center;">
<b><i>CHAIRMAN</i></b></div>
<div align="center" class="MsoNormal" style="tab-stops: 88.5pt; text-align: center;">
<b><span lang="EN-US">COUNCIL FOR NATIONAL AND INTERNATIONAL COMMERCIAL ARBITRATION (CNICA)<o:p></o:p></span></b></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com2tag:blogger.com,1999:blog-763583336925670729.post-28194302464793250232012-10-22T10:45:00.001+05:302012-10-22T10:45:28.817+05:30ARBITRATION TO SURVIVE AFTER THE DEMISE OF THE NAMED ARBITRATOR<div dir="ltr" style="text-align: left;" trbidi="on">
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="background-color: #eeeecc; border-collapse: collapse; border: none; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; text-align: left;"><tbody>
<tr><td style="border: 1pt solid windowtext; padding: 0cm 5.4pt; width: 91.63333129882813px;" valign="top" width="25%"><div class="MsoNormal" style="margin-bottom: 0cm;">
<b><u><span style="font-family: 'Times New Roman', serif; font-size: 10pt; text-transform: uppercase;">COURT :<o:p></o:p></span></u></b></div>
</td><td style="border: 1pt solid windowtext; padding: 0cm 5.4pt; width: 289.6333312988281px;" valign="top" width="74%"><div class="MsoNormal" style="margin-bottom: 0cm;">
<span style="font-family: 'Times New Roman', serif; font-size: 10pt; text-transform: uppercase;">THE SUPREME COURT OF INDIA<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0cm;">
<br /></div>
</td></tr>
<tr><td style="border: 1pt solid windowtext; padding: 0cm 5.4pt; width: 91.63333129882813px;" valign="top" width="25%"><div class="MsoNormal" style="margin-bottom: 0cm;">
<b><u><span style="font-family: 'Times New Roman', serif; font-size: 10pt; text-transform: uppercase;">JUDGMENT :<o:p></o:p></span></u></b></div>
</td><td style="border-bottom-color: windowtext; border-bottom-width: 1pt; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid solid none; padding: 0cm 5.4pt; width: 289.6333312988281px;" valign="top" width="74%"><div class="MsoNormal">
<span style="font-family: 'Times New Roman', serif; font-size: 10pt;">ACC Limited (formerly known as the Associated Cement Co. Ltd.) Vs. Global Cements Ltd.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0cm;">
<br /></div>
</td></tr>
<tr><td style="border: 1pt solid windowtext; padding: 0cm 5.4pt; width: 91.63333129882813px;" valign="top" width="25%"><div class="MsoNormal" style="margin-bottom: 0cm;">
<b><u><span style="font-family: 'Times New Roman', serif; font-size: 10pt; text-transform: uppercase;">JUDGES::<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="margin-bottom: 0cm;">
<br /></div>
</td><td style="border-bottom-color: windowtext; border-bottom-width: 1pt; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid solid none; padding: 0cm 5.4pt; width: 289.6333312988281px;" valign="top" width="74%"><div class="MsoNormal" style="margin-bottom: 0cm;">
<span style="font-family: 'Times New Roman', serif; font-size: 10pt;">Their Lordship Justice Mr.K.S. Radhakrishnan and<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0cm;">
<span style="font-family: 'Times New Roman', serif; font-size: 10pt;">Mr.Jagdish Singh Khehar.JJ<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0cm;">
<br /></div>
</td></tr>
</tbody></table>
<br />
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px;">
<br /></div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px;">
<b><u>BRIEF FACTS :<o:p></o:p></u></b></div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; text-align: justify;">
The parities to the dispute entered into an agreement dated 16.12.1989 which contained the following arbitration clause "21. If any question or difference or dispute shall arise between the parties hereto or their representatives at any time in relation to or with respect to the meaning or effect of these presents or with respect to the rights and liabilities of the parties hereto then such question or dispute shall be referred either to Mr. N.A. Palkhivala or Mr. D.S. Seth, whose decision in the matter shall be final and binding on both the parties."</div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; text-align: justify;">
A dispute arose between the parties after the demise of both the named Arbitrators. The named arbitrators were Chairman and Directors respectively of the company. They were appointed considering their eminence, impartiality and familiarity of commercial transactions and commercial laws. They can not be replaced by any other person was the argument placed by the appellant in the application preferred under section 11 of the Arbitration and Conciliation Act 1996 by the respondent before the Hon’ble High Court at Bombay.</div>
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The Hon’ble Bombay High Court took the view that the arbitration clause constitutes was valid and that the court cannot, when there is no express prohibition, presume that a vacancy of the named arbitrator cannot supplied by the Court under section 11 of the Act. </div>
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<span style="text-transform: uppercase;">L<b><u>AW LAID DOWN:</u></b><o:p></o:p></span></div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; text-align: justify;">
The Apex Court after going through the facts of the case, Sections 14 and 15 of the Act and various the judicial precedence came to the following conclusions:-</div>
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a)<span style="font-size: 7pt;"> </span>The words “at any time” has to be interpreted contextually and reasonably taking note of the intention of the parties.</div>
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b)<span style="font-size: 7pt;"> </span>In the present arbitration agreement the words “at any time” had nexus to the reference of dispute and not to the life time of the named arbitrators.</div>
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c)<span style="font-size: 7pt;"> </span>Further clause 21 of the agreement did not prohibit or debar the parties in approaching the court for substituting an arbitrator on the vacancy of the name arbitrators. </div>
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d)<span style="font-size: 7pt;"> </span>The view of the Bombay High Court was upheld.</div>
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<span style="line-height: 18.899999618530273px; text-indent: -18pt;"><br /></span></div>
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<span style="line-height: 18.899999618530273px; text-indent: -18pt;"><br /></span></div>
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<span style="line-height: 18.899999618530273px; text-indent: -18pt;"><br /></span></div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; margin: 0cm 0cm 0cm 39pt; text-align: justify; text-indent: -18pt;">
<span style="line-height: 18.899999618530273px; text-indent: -18pt;">BY G.Ashokapathy </span></div>
<div class="MsoNormal" style="background-color: #eeeecc; color: #333333; font-family: 'Trebuchet MS', Verdana, Arial, sans-serif; font-size: 13px; line-height: 18.899999618530273px; margin: 0cm 0cm 0cm 39pt; text-align: justify; text-indent: -18pt;">
Secretary General and Co Founder</div>
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CNICA </div>
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<br /></div>
</div>
CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com1tag:blogger.com,1999:blog-763583336925670729.post-83086040792252767542012-07-04T11:27:00.000+05:302012-07-04T11:29:17.680+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: center;">
<span style="font-size: x-large;">
</span><span style="font-size: large;"><span style="font-family: Verdana, sans-serif;"><span style="font-family: Verdana, sans-serif;"><span style="font-family: "Book Antiqua","serif"; mso-bidi-font-family: "Book Antiqua";"><span style="font-family: Verdana, sans-serif;">Fostering Cultural Intelligence </span></span><span style="font-family: "Book Antiqua","serif"; mso-bidi-font-family: "Book Antiqua";"><span style="font-family: Verdana, sans-serif;">and</span> </span></span><span style="font-family: "Book Antiqua","serif"; mso-bidi-font-family: "Book Antiqua";"><span style="font-family: Verdana, sans-serif;">the
Art of ADR</span> </span></span></span></h2>
<h2 class="MsoNormal" style="line-height: 150%; margin: 0cm 0cm 10pt; text-align: center; text-justify: inter-ideograph;">
<span style="font-family: "Book Antiqua","serif"; mso-bidi-font-family: "Book Antiqua";"><span style="font-family: Verdana, sans-serif;">A Synopsis<o:p></o:p></span></span></h2>
<br />
<div class="MsoBodyText" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span style="font-family: Book Antiqua; font-size: large;">Cultural intelligence is inherent to an individual. There
should be a reason to improve cultural intelligence on a general notion. The
inherent skills, which are determined by one’s culture, equip the individual
with unique and exclusive qualities. Cultural inheritance influences social
change to a greater extent. Thriving hard in one’s own culture most often
results in unknown practices while the others who slightly stay detached from
the hardcore cultural practices, experience a better slot adapting to the
social standards in general. The skills of ADR come as a technique fostered by
the cultural intelligence on most occasions. </span></div>
<div style="text-align: justify;">
<span style="font-size: large;">
</span></div>
<div class="MsoNormal" style="line-height: 150%; margin: 0cm 0cm 10pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-size: large;"><span style="font-family: "Book Antiqua","serif"; mso-bidi-font-family: "Book Antiqua";">Although cultural intelligence comes as a natural instinct,
there is a wider scope to understand and inherit the cultural intelligence by
learning such trait from others by generally observing and focusing them on
low-pressure situations. Being judgmental in most occasions might end up being
inaccurate and stereotypic. The trait of inculcating a very high standard set
of ADR skills will not only render a status of resolved disputes but on the
other hand results in a day to day solution of harmony. It is important that
one understands the new environment in true sense to focus on the situation
more accurately. Hanging on to a wrong foot, miscommunication or
misinterpretation ends up in an awkward move and perhaps, the ways and means to
avoid this is to interact effectively with an utmost sense of clarity. Trust
building is the most useful concept, which stands throughout the process of
dispute settlement and helps parties by paving way to reach their goals.</span><span style="font-family: Cambria;">
<span style="font-family: "Times New Roman","serif";"><o:p></o:p></span></span></span></div>
<div style="text-align: justify;">
<span style="font-size: large;">
</span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt;">
This synopsis shall form the base for the study session to be held on 13/07/2012 and chaired by Ms. Harshitha Ram</div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-82480745591013065482012-06-06T13:43:00.000+05:302012-06-06T13:43:33.472+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: center;">
<span style="font-size: x-large;">No Service-Tax on Individual Advocates, GTA etc w.e.f. 1.7.2012</span></h2>
<div style="text-align: justify;">
Vide <strong></strong><strong>Notification No.15/2012-Service Tax</strong> dated 17.03.2012, the Ministry of Finance had specified that in respect of services provided by an individual <span class="IL_AD" id="IL_AD4">advocate</span>, Goods Transport Agency, Insurance Agent, services provided or agreed to be provided by way of <span class="IL_AD" id="IL_AD5">sponsorship</span> to any business entity, in respect of services provided or agreed to be provided by an <span class="IL_AD" id="IL_AD6">arbitral</span> tribunal etc, the service-tax payable shall be Nil and that the person receiving the service shall pay 100% of the tax. This <span class="IL_AD" id="IL_AD1">Notification</span> is to come into force from the date on which section 66B of the Finance Act, 1994 comes into effect. S. 66B of the Finance Act, 1994 has been <span class="IL_AD" id="IL_AD7">inserted</span> by clause 143 (F) of the Finance Bill 2012. Vide <strong>Notification No. 19/2012 dated 5.6.2012</strong>, 1.7.2012 has been appointed as the date on which s. 143(F) of the Finance Act 2012 shall come into force. The result is that Notification No. No.15/2012-<span class="IL_AD" id="IL_AD2">Service Tax</span> dated 17.3.2012 shall come into effect on 1.7.2012.</div>
<div style="text-align: justify;">
<span id="more-50494"></span></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<strong>Negative List of Services Applicable from 01.07.2012</strong></div>
<div style="text-align: justify;">
Central Government has appointed July 1, 2012 (vide Notification No. 19/2012-ST dated 5.6.2012) as the effective date from which Negative List based service tax will come into operation. Now no need to classify the services under any particular category for taxing purpose. Any activity carried out by one person for another for a consideration, unless covered by <span class="IL_AD" id="IL_AD8">the Negative</span> List or by some exemption Notification, will be liable to service tax. Many transactions/activities which were hitherto out of the scope of service tax may now be liable to service tax. We expect corresponding changes in Cenvat Credit Rules, 2004, Place of Provision of Services Rules, 2012, Point of Taxation Rules, 2011 and Service Tax Rules, 1994 to align these with the Negative List based service tax regime in next few days. Now more activities will be covered by Service Tax Law, so it become Important to analyse existing and future transactions afresh to ascertain the applicability of service tax or otherwise.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<strong>Notified Date for Insertion of New Sections 65B, 66B, 66C, 66D, 66E, 66F &amp; <span class="IL_AD" id="IL_AD3">Amendment</span> In Section 67/68</strong></div>
Following new sections have been inserted for governing the Service Tax Legislature:<br />
1.<strong> Section 65B</strong> – Definitions<br />
2. <strong>Section 66B</strong> – Charge of Service Tax<br />
3. <strong>Section 66C</strong> – Determination of Place of Provision of Service<br />
4. <strong>Section 66D - </strong>Negative list of Services <br />
5. <strong>Section 66E</strong> – Declared services<br />
<div style="text-align: justify;">
6. <strong>Section 66F</strong> – Principles of interpretation of specified description of Services or bundled Services</div>
—————————————<br />
<br />
<strong>FINANCE ACT, 2012 – NOTIFIED DATE FOR INSERTION OF NEW SECTIONS 65B, 66B TO 66F AND AMENDMENT IN SECTION 67/68</strong><br />
<strong>NOTIFICATION NO. 19/2012-SERVICE TAX, DATED 5-6-2012</strong><br />
In exercise of the powers conferred by clauses (C), (F), (G) and (I) of section 143 of the Finance Act, 2012 (23 of 2012), the Central Government hereby appoints the 1st day of July, 2012 as the date from which the provisions of clauses (C), (F), (G) and (I) of the said section of the said Act shall come into force.<br />
<div align="right">
[F. No. 334 /1 /2012-TRU]</div>
<div align="right">
(Rajkumar Digvijay)</div>
<div align="right">
Under Secretary to the Government of India</div>
<div align="right">
<br /></div>
<div align="justify">
<br /></div>
<div align="justify">
This information was taken from the following website:</div>
<div align="justify">
<br /></div>
<div align="justify">
<a href="http://taxguru.in/service-tax/servicetax-individual-advocates-gta-wef-172012-notified-date-insertion-sections-65b-66b-66f-amendment-section-6768.html">http://taxguru.in/service-tax/servicetax-individual-advocates-gta-wef-172012-notified-date-insertion-sections-65b-66b-66f-amendment-section-6768.html</a></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-58335151386068550532012-05-31T16:42:00.000+05:302012-06-06T13:44:01.030+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 align="center" class="MsoNormal" style="line-height: 200%; margin: 0cm 0cm 10pt; text-align: center;">
<span style="font-family: Verdana, sans-serif;">
<span style="font-size: x-large;">INDIA’S BILATERAL INVESTMENT
TREATIES: AN INVITATION TO INVESTMENT ARBITRATIONS<o:p></o:p></span></span></h2>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div style="line-height: 200%; text-align: justify; text-indent: 36pt;">
<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">Bilateral Investment Treaties being paramount in the present economy
it is necessary to have a carefully well-worded investment treaty to avoid
potential disputes. India as of today has signed Bilateral Treaties with 82
countries out of which 72 have come into force.</span><a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">[1]</span></span></span></span></a><span style="font-family: Verdana, sans-serif;">
Many countries including India being lured by the concept of economic growth
have signed many Investment Treaties to attract Foreign Direct Investments so
as to develop its economy. They are under a blind perception that signing
investment treaties will increase investments. Hence they enter into bilateral
treaties without taking cognizance of any legal implications that would follow.
</span></span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div class="MsoNormal" style="line-height: 200%; margin: 0cm 0cm 10pt; text-align: justify; text-indent: 36pt;">
<span lang="EN-IN" style="background: white; line-height: 200%;"><span style="font-family: Verdana, sans-serif;">BITs can have far-reaching and
typically negative implications for host country governments and citizens,
because of the sweeping protections afforded to investors at the cost of
domestic socio-economic rights and environmental standards.</span><a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="background: white; font-family: Verdana, sans-serif; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[2]</span></span></span></span></a><span style="font-family: Verdana, sans-serif;"><span class="apple-converted-space"> </span>One of the major problems with BITs is
it allows private companies to file cases against governments, and consequently
subject the countries to the risk of litigation by corporations from another
country which is a signatory to the same agreement.<span class="apple-converted-space"> </span></span></span><span lang="EN-IN" style="line-height: 200%;"><span style="font-family: Verdana, sans-serif;">India
should initiate a comprehensive review of its existing investment treaties
since recent cases have shattered the myth that its investment treaties are
adequate to protect the interests of investors, their rights and
responsibilities.</span><a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn3" name="_ftnref3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[3]</span></span></span></span></a><o:p></o:p></span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div class="MsoNormal" style="line-height: 200%; margin: 0cm 0cm 10pt; text-align: justify; text-indent: 36pt;">
<span style="font-family: Verdana, sans-serif;"><span lang="EN-IN" style="background: white; line-height: 200%;">India has recently lost its first
ever and the only international arbitration that it faced under a BIT till date
where</span><span lang="EN-IN" style="line-height: 200%;"> White Industries initiated Arbitration
against in India by using the “Dispute Settlement Clause” provided under
Article 12 of BIPA between India and Australia. <span style="background: white;">The
tribunal found India guilty of violating the India-Australia BIT because<span class="apple-converted-space"> </span>the delay by Indian courts violated
India’s obligation to provide White Industries with an “effective means’ for
enforcing their rights.”<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn4" name="_ftnref4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="background: white; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[4]</span></span></span></span></a>
</span>White Industries invoked the ‘Most Favoured Nations’ Clause (MFN) from
India-Australia BIT which obliged India to provide effective means for
enforcing rights in relation to investment. MFN <span style="background: white;">assures
equally favourable treatment to the investments by the nationals and companies
of a contracting country, as the Government of the investee country would
accord to the investors of any other country under any other BIT.<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn5" name="_ftnref5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="background: white; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[5]</span></span></span></span></a>
</span>White Industries imported 'effective means' provision from India-Kuwait BIT through MFN in India-Australia BIT to use it against
India.<span style="background: white;"> An important repercussion of this ruling
is that undue delays in Indian courts in disposing matters related to a foreign
investor can, potentially, violate India’s BIT obligations not due to the
violation of ‘denial of justice,’ but due to a violation of the ‘effective means’
standard, which requires a lower threshold than ‘denial of justice.’<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn6" name="_ftnref6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="background: white; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[6]</span></span></span></span></a><o:p></o:p></span></span></span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div class="MsoNormal" style="line-height: 200%; margin: 0cm 0cm 10pt; text-align: justify; text-indent: 36pt;">
<span lang="EN-IN" style="background: white; line-height: 200%;"><span style="font-family: Verdana, sans-serif;">Similarly Vodafone has threatened
to initiate Arbitration against India under the India-Netherlands BIT owing to
the retrospective tax laws that was proposed by the Indian Government.<span style="mso-spacerun: yes;"> </span>The press release posed by Vodafone on 17<span style="font-size: small;"><sup>th</sup>
April 2012 says that “the retrospective tax proposals amount to a denial of
justice and a breach of the Indian government’s obligations under the BIT to
accord fair and equitable treatment to investors.” In addition our country has
felt the impact of cancellation of 2G licences authorised by A. Raja in 2008.
Companies like Telenor and Sistema which have suffered huge losses as a result
of cancellation have served notices to our Government seeking a huge compensation
for their losses. Failure to resolve the issues through negotiations or
discussions would only lead to arbitrations under the respective BITs being
signed with the countries.<o:p></o:p></span></span></span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div class="MsoNormal" style="line-height: 200%; margin: 0cm 0cm 10pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><span lang="EN-IN" style="background: white; line-height: 200%;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span></span><span lang="EN-IN" style="line-height: 200%;">There
are major problems with India’s old-style investment treaties and the similar
investor-state dispute settlement system.<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftn7" name="_ftnref7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[7]</span></span></span></span></a> It
is high time that India should depart from the traditional old-style investment
treaty model which has lead to the many problems discussed above. Consequently
India must draft foolproof Bilateral Investment Treaties which would favour the
policy goals of our Government and prevent future arbitrations against India.
Provisions such as “Most Favoured Nations” and “Dispute Settlement Clauses”
must be carefully scrutinized before inclusion so as to prevent other Countries
to invoke such provisions against our Government.<o:p></o:p></span></span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div style="line-height: 200%; text-align: justify;">
<span lang="EN-IN" style="font-family: Verdana, sans-serif;"> Even if India
adopts a strong investment treaty model, it will not solve its problems with
existing bilateral treaties. Hence India must seek suitable amendments in the
existing treaties through bilateral negotiations so as to improve the same. If
such amendments prove to be time consuming, a notification could be sent by our
Government of its interpretation of various standards contained in the
treaties. </span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div style="line-height: 200%; text-align: justify; text-indent: 36pt;">
<span lang="EN-IN" style="font-family: Verdana, sans-serif;">Certain modifications are necessary in our BITs to shield our
Government from the adverse affects which could be created by our Bilateral
Treaties with other nations. Our policymakers should not permit investor-state
dispute settlement mechanisms in BITs through which a foreign investor can instigate
an international arbitration against India. Furthermore India must altogether
remove provisions such as MFN in future treaties or at least forbid the
possibility of importing such clauses from earlier treaties signed by India. In
addition ambiguous clauses which give wide scope for interpretation must be
avoided as the same would give rise to unwarranted disputes which would
ultimately strain the relationship between countries. </span></div>
<span style="font-family: Verdana, sans-serif;"><br /></span><br />
<div style="line-height: 200%; text-align: justify; text-indent: 36pt;">
<span lang="EN-IN" style="font-family: Verdana, sans-serif;">It is true that all countries including India that have signed an
investment treaty is at risk of being sued. Dispute Settlement clauses are
proving to be an invitation for other Countries to initiate arbitration against
India. Therefore India will have to assess the various risks and benefits that
arise out of its Bilateral Treaties. Recent cases have showed the risks
involved are far higher than the merits such treaties have envisaged. Our
Government must recognise the downside of these treaties and amend the same to
avoid future complexities. Only through creations of effective Investment
treaties can India avoid the catena of cases that might arise in the near
future. </span></div>
<div style="mso-element: footnote-list;">
<span style="font-family: Verdana, sans-serif;"><br clear="all" /></span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;"><hr align="left" size="1" width="33%" />
</span><br />
<div id="ftn1" style="mso-element: footnote;">
<div class="MsoFootnoteText" style="margin: 0cm 0cm 12pt; text-align: justify;">
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[1]</span></span></span></span></span></a><span style="font-family: Verdana, sans-serif;"><span style="font-size: x-small;"><span lang="EN-IN"> </span><span style="mso-ansi-language: EN-US;">Ministry
of Finance: Government of India [</span><span lang="EN-IN">http://finmin.nic.in/bipa/bipa_index.asp]</span></span></span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[2]</span></span></span></span></span></a><span style="font-family: Verdana, sans-serif;"><span style="font-size: x-small;"><span lang="EN-IN"> <span style="background: white; mso-bidi-font-weight: bold;">India's Bilateral Investment
Treaties: Worst fears realised, </span><span style="background: white;">Jayati
Ghosh, Frontline, Volume 29 - Issue 5, March 10-23, 2012</span></span></span></span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[3]</span></span></span></span></span></a><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small;"> <span style="mso-bidi-font-weight: bold;">ECONOMIC ANALYSIS: India's "Bilateral
Investment Treaties": A New Form of Colonialism?, Kavaljit Singh, </span>Global
Research, April 30, 2012</span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref4" name="_ftn4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[4]</span></span></span></span></span></a><span style="font-family: Verdana, sans-serif;"><span style="font-size: x-small;"><span lang="EN-IN"> </span><span style="mso-ansi-language: EN-US;">White
Industries Australia Ltd. (Claimant) v. The Republic of India (Respondent),
Final Award, 30 November 2011</span></span></span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref5" name="_ftn5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-weight: normal; mso-bidi-font-weight: bold;"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN; mso-font-kerning: 18.0pt;">[5]</span></span></span></span></span></a><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; font-weight: normal; mso-bidi-font-weight: bold;"> India’s Battle Under Bilateral Investment Treaties, <span style="background: white;">Alishan Naqvee, <span style="border: 1pt windowtext; mso-border-alt: none windowtext 0cm; padding: 0cm;">LexCounsel Law Offices</span></span>,
<span style="background: white;">April 2nd, 2012</span></span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref6" name="_ftn6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-weight: normal; mso-bidi-font-weight: bold;"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN; mso-font-kerning: 18.0pt;">[6]</span></span></span></span></span></a><span style="font-family: Verdana, sans-serif;"><span style="font-size: x-small;"><span lang="EN-IN" style="font-weight: normal; mso-bidi-font-weight: bold;"> The White Industries Arbitration: Implications for India’s Investment
Treaty Program, </span><strong><span lang="EN-IN" style="background: white; border: 1pt windowtext; font-weight: normal; mso-border-alt: none windowtext 0cm; padding: 0cm;">Prabhash Ranjan, Investment Treaty News, </span></strong><span lang="EN-IN" style="background: white; font-weight: normal; mso-bidi-font-weight: bold;">April 13, 2012</span></span></span><br />
<a href="http://www.blogger.com/blogger.g?blogID=763583336925670729#_ftnref7" name="_ftn7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span lang="EN-IN"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small; line-height: 115%; mso-ansi-language: EN-IN; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[7]</span></span></span></span></span></a><span lang="EN-IN" style="font-family: Verdana, sans-serif; font-size: x-small;"> India’s Many
Investment Treaties Make it Vulnerable, IISD Commentary, January 2012, pg.2</span></div>
</div>
<div id="ftn7" style="mso-element: footnote;">
<div class="MsoFootnoteText" style="margin: 0cm 0cm 12pt; text-align: justify;">
<br /></div>
<div class="MsoFootnoteText" style="margin: 0cm 0cm 12pt; text-align: justify;">
<span style="font-size: x-small;"><span lang="EN-IN" style="font-family: "Times New Roman","serif";"><span style="font-size: small;"><span style="font-family: Georgia, "Times New Roman", serif;">This article was</span> <span style="font-family: Georgia, "Times New Roman", serif;">writen by Mr. B. Deepak Narayanan and Ms. K. Priyadarshini, interns at CNICA.</span> </span></span></span></div>
</div>
</div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com3tag:blogger.com,1999:blog-763583336925670729.post-2876149886185836632012-05-18T14:17:00.004+05:302012-05-18T14:17:53.053+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: center;">
Fly In Fly Out Policy for International Law Firms </h2>
<br />
International law firms are having to fight tooth and nail for the right to
practise in India<br />
<br />
India has been high on foreign firms’ lists of target countries for decades,
but has also been a source of frustration. While the global legal market has
been steadily opening up to international players - South Korea is the latest
to allow foreigners in - India has remained stubbornly closed. And if some of
the country’s lawyers got their way, it would become even harder for
international firms to do business there.<br />
<br />
At present the international firms operate ’India desks’ from their home jurisdictions.
When Indian advice is required, they turn to Indian firms; when foreign advice
is needed for Indian clients, they pick it up. Naturally, there is a need for
lawyers to see clients for both inward and outward deals on the ground, so
foreign lawyers ’fly in and fly out’ of India to do so.<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<strong>Protection racket</strong></div>
<br />
But this way of doing business has always been controversial in some
quarters of the Indian legal profession. In late 2009 the Bombay High Court
ruled against foreign firms in a case brought by a group of Indian advocates,
the Lawyers Collective, finding that the foreign firms should not have been
allowed to set up liaison offices in India. The ruling led Ashurst to close
its Delhi branch and international firms were forced to look for alternative
ways of working in India.<br />
<br />
However, less than a year after the Bombay decision, a further challenge to
foreign law firms was launched, this time in the Madras High Court in Chennai.<br />
<br />
The petition, filed by lawyer AK Balaji, asked the Indian government, the
Reserve Bank of India and the Bar Council of India (BCI) to “take appropriate
action” against a large group of named foreign firms plus “any other foreign
law firms or foreign lawyers who are illegally practising the profession of law
in India and forbear them from having any legal practice, either on the
litigation side or in the field of non-litigation and commercial transactions,
in any manner within the territory of India”.<br />
<br />
The case took far less time to reach court than the 14 years between the
filing of the petition and judgment in Bombay. In February this year Chief
Justice Eqbal and Mr Justice Sivagnanam handed down their decision, which
clarifies that “fly-in, fly-out” does not contravene India’s Advocates Act
1961.<br />
<br />
The petition argued that there was “absolutely no scope” for foreign lawyers
to practise law in India under the act or to enrol as advocates with any state
bar, thus escaping regulatory oversight in the country. It also suggested that
by flying in and out, foreign firms were earning client money while on
visitors’ visas and were violating income tax laws.<br />
<br />
The petitioner said foreign law firms treated the practice of law as
“nothing short of a trade or business, far different from the nobility
attributed to it by Indian lawyers”, noting that Indian firms are prohibited
from advertising and marketing their services, whereas international firms
routinely do so. He argued that even though Indian lawyers are able to practise
in the UK and US, doing so incurs a significant cost and time burden.<br />
<br />
<strong>Firms’ rebuke</strong><br />
<br />
The foreign law firms named as respondents by the petitioner included all of
the magic circle, Ashurst, Eversheds, Norton Rose, Slaughter and May and a
large group of US firms, including Arnold & Porter, Covington &
Burling, Shearman & Sterling and White & Case. Australia’s Clayton Utz
and Freehills were also named.<br />
<br />
The firms’ responses to the petition were fairly uniform. All the firms
pointed out that they did not have offices in India and did not practise
Indian law; nor did they have any intention of practising Indian law. They
also noted that, contrary to the petitioner’s claims, it remains fairly
straightforward for Indian lawyers to set up representative offices in the UK
and US or to requalify as UK solicitors or US attorneys.<br />
<br />
The respondents also made the argument that restricting the fly-in, fly-out
practice could have a detrimental effect on the Indian economy. Speaking for
eight US firms, counsel Abhishek Manu Singhvi said that advising on foreign
law was not banned by the Advocates Act.<br />
<br />
“According to the learned counsel, by the present writ petition,” said the
judgment, “the petitioner wants a ban by way of judicial legislation on the
entry of foreign law firms in India, especially when there is no statutory ban
in this behalf. This, he states, would have serious consequences on foreign
investment in the country in this ever-expanding era of global economy.”<br />
<br />
<strong>Arbitration creation</strong><br />
<br />
The growing importance of arbitration to India was also discussed by the
court. The Indian government has stated that it wants to make India a hub for
arbitration, but counsel pointed out that if foreign lawyers were not allowed
to come into the country to advise on international issues related to a
dispute, the arbitrations would have to go elsewhere.<br />
<br />
“We find force in the submission made by the learned counsel appearing for
the foreign law firms that if foreign law firms are not allowed to take part in
negotiations, for settling up documents and conducting arbitrations in India,
it will have a counterproductive effect on the aim of the government to make
India a hub of international arbitration,” agreed the judges, who also called
this a “far-fetched and dangerous proposition”.<br />
<br />
Similarly, the judges agreed that if foreigners were banned from coming into
India to advise on their own laws, this would create a “manifestly absurd
situation”, as Indian lawyers are trained only in domestic law and not in any
foreign law.<br />
<br />
Concluding, they dismissed the petition and said there was nothing in Indian
legislation preventing international firms from flying in and out, nor anything
stopping an outsourcing company such as Integreon, which was named in the
petition, from providing non-legal services out of India.<br />
<br />
The decision was welcomed by the foreign firms as well as a number of Indian
lawyers. Dua Associates partner R Senthil Kumar, who acted for the group of US
firms led by White & Case, thinks in principle most Indians accept the
practice.<br />
<br />
“The bulk of people in law firms who actually have a practice that involves
foreign laws are okay with foreign lawyers flying in and out to practise
foreign law,” Kumar says.<br />
<br />
<strong>What’s the problem?</strong><br />
<br />
Foreign lawyers agree that to date there have been few issues on the ground
in India.<br />
<br />
“We’ve not encountered people having difficulties with us being in India on
that basis,” reports Herbert Smith executive partner Chris Parsons, who heads
the firm’s India group. “On the contrary, we’ve found Indian lawyers to be very
welcoming and I hope pleased to see us and others.”<br />
<br />
But at the end of April the BCI filed an appeal to the Supreme Court of
India. Indian legal news websites reported that the BCI’s counsel, Ardhendumauli
Kumar Prasad, said the issues should not have arisen in Madras as they had
already been dealt with in Bombay - something that the Madras judges disagreed
with. The BCI did not answer The Lawyer’s request for comment on the matter.<br />
<br />
Quite how long the case will take to get to appeal is uncertain, with the
Indian court system not renowned for being particularly speedy.<br />
<br />
<strong>Brit grit</strong><br />
<br />
Another possible aspect of appeal could come from Clifford Chance, which was
grouped in the case alongside Ashurst, Bird & Bird, Clyde & Co,
Eversheds and Linklaters. Partner Sumesh Sawhney says the judgment was unclear
on whether foreign lawyers are banned from practising non-Indian law in India.<br />
<br />
“If that’s the case, we consider it to be unnecessarily and unreasonably
restrictive and we believe it would be a misreading of the Advocates Act, which
we don’t believe was ever intended to address the question of the practice of
non-Indian law,” says Sawhney. “We’re currently considering whether an appeal
to get clarity on these points is appropriate.<br />
<br />
“What also remains to be addressed by the Indian authorities is the bigger
issue of collaboration and partnership between Indian lawyers and international
law firms, and of international firms advising on Indian as well as non-Indian
law.”<br />
<br />
Clasis Law partner Sakate Khaitan says he welcomes the judgment as a
clarification of what many firms are already doing. Clasis formed an
association with Clyde & Co in April 2011 and has its own London office in
the UK firm’s City building. Khaitan himself is based at the UK office and is
dual-qualified in India and the UK, but agrees with the Madras judges that
Indian lawyers working in India are not in a position to provide foreign
advice.<br />
<br />
“I don’t know of any Indian lawyer residing in India and practising Indian
law who has the ability to advise on UK or US law as proficiently as an
international firm,” Khaitan states.<br />
<br />
He adds that stopping the fly-in, fly-out practice would not benefit India
on a global scale.<br />
<br />
“It would be very difficult for a lot of the multinational clients operating
in India if the Supreme Court were to stop fly-in, fly-out. Clients would need
to travel, making it more expensive for Indian corporates,” Khaitan points out.<br />
<br />
While in the short term he thinks it would benefit firms with UK offices,
such as Clasis, ALMT Legal and Fox Mandal, ultimately Khaitan, like much of the
market, hopes the Supreme Court upholds the Madras judgment.<br />
<br />
<strong>Road to nowhere?</strong><br />
<br />
However, the longer-term goal of an opening-up of the Indian market and
permission for international firms to launch offices there still seems a long
way off.<br />
<br />
“We continue to believe that the removal of restrictive barriers in the
Indian legal market will bring direct benefits to the Indian economy and to
Indian businesses and bring positive advantages to the profession
domestically, and we look forward to a time when the Indian government is ready
to take concrete steps in this direction,” says Clifford Chance’s Sawhney
optimistically.<br />
<br />
—<br />
<br />
<strong>In brief</strong><br />
<br />
Everybody wants to be in India, but a battle continues to be fought over
the extent to which foreign lawyers can work there. A recent judgment in the
Madras High Court was set to rubber-stamp the practice of flying in to offer
foreign advice, but with an appeal pending, what does it mean for international
business in this key market?<br />
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-56121548332897530842012-05-11T11:06:00.001+05:302012-05-11T11:06:30.179+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja7oIgtmzHhtmYCh2XHhCBo93XHZeJ5B6kVFysyJPt38lfehyphenhyphenTCdlfMzFEnpB3cZc9V_1XaTSlkdpRJJ83V9pRMVZ5BRdNq2_wgyvvYry80G3hXnnX6ItD481V-NEOGCdBWfBCFcxkcdA/s1600/Slide1.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja7oIgtmzHhtmYCh2XHhCBo93XHZeJ5B6kVFysyJPt38lfehyphenhyphenTCdlfMzFEnpB3cZc9V_1XaTSlkdpRJJ83V9pRMVZ5BRdNq2_wgyvvYry80G3hXnnX6ItD481V-NEOGCdBWfBCFcxkcdA/s1600/Slide1.JPG" /></a></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-73438692214927887882012-04-19T09:33:00.002+05:302012-04-19T09:33:49.300+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h1 style="margin: 0.67em 0in;">
Indian Government declares China (including the Hong Kong SAR) as a
territory to which the New York Convention applies</h1>
<br />
The Indian Government has declared that China (including the Hong Kong SAR)
is a territory to which the New York Convention applies under the Indian
Arbitration and Conciliation Act 1996 (“<strong>the Act</strong>“). We
understand that the notification will be published in the official <em>Gazette
of India</em> shortly, following an announcement by the Hong Kong Department of
Justice last week.<br />
<br />
Both India and China are signatories to the New York Convention, which they
ratified in 1960 and 1987 respectively. However, Part II of the Act, which
governs the enforcement of New York Convention awards in India, only applies to
awards rendered in jurisdictions notified by the Indian Government in the
official <em>Gazette</em> as jurisdictions in which the New York Convention
applies. Whilst most of the major international arbitration centres lie within
such jurisdictions, the most notable exception was Hong Kong which, until now,
had not been notified. This was a significant omission and had encouraged
parties in India-related contracts to choose a seat of arbitration other than
Hong Kong. This should no longer be the case.<br />
<br />
This notification will provide clients with long-awaited clarity regarding
the enforcement of Hong Kong awards in India and, therefore, an additional
choice of seat for India-related commercial contracts. Given the increasing
volume of Sino-India trade, Hong Kong is likely to now prove a popular seat of
arbitration for disputes arising out of those transactions, not least due to
its pro-arbitration legal system and strong record on independence. Therefore,
the decision by the Indian Government is a welcome one.<br />
<br />
<em>by Justin D’Agostino, Head of Greater China International Arbitration
Practice, Herbert Smith</em><br />
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-74472151598789199812012-03-27T11:32:00.002+05:302012-04-06T17:00:40.988+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: center;">
<span style="font-family: Georgia, serif;"><span style="font-size: x-large;">Appointment by Mutual Consent</span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<div style="text-align: center;">
By G.Ashokapathy, Secretary General CNICA. </div>
</div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Georgia, serif; font-size: 12pt;"><br /></span><br />
<span style="font-family: Georgia, serif; font-size: 12pt;">An
arbitrator is created out of an arbitration clause or an agreement. So his
appointment should be strictly in accordance to the agreement/ clause. The
clause relating appointment of arbitrator on mutual consent came up for
consideration before the Honourable High Court at Delhi in the case of <b style="mso-bidi-font-weight: normal;">Rajesh Batra v. Ranbir Singh Ahlawat 2011(4)
Arb LR 371 (Delhi).</b><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Georgia, serif; font-size: 12pt;">In
this case the parties entered into an agreement wherein they agreed to resolve
their disputes through arbitration process by mutually appointing an
arbitrator. Dispute arose and the claimant appointed an arbitrator. Respondent
had nor consented for the same. The arbitrator with out obtaining the consent from
the respondent assumed office and posted the case for hearing. After several
hearings the respondent had appeared and sought time on two occasions and on the
second occasion, further time was refused by the arbitrator. The respondent sent
a letter challenging that he had not consented for the appointment of the arbitrator
and that the arbitrator had no jurisdiction. The arbitrator took a view that
since the respondent appeared for two hearings he had consented on the
appointment of the arbitrator. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Georgia, serif; font-size: 12pt;">The
arbitrator seems to have relied on section 16(2) of the arbitration and conciliation
act in coming to such conclusion. Section reads as follows:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">16.Competence of
arbitral tribunal to rule on its jurisdiction.-<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;"> (1) The arbitral tribunal may rule on its own
jurisdiction, including ruling on any objections with respect to the existence
or validity of the arbitration agreement, and for that purpose,- <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(a) an arbitration
clause which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract; and<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(b) a decision by the
arbitral tribunal that the contract is null and void shall not entail ipso jure
the invalidity of the arbitration clause.<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(2) A plea that the
arbitral tribunal does not have jurisdiction shall be raised not later than the
submission of the statement of defence; however, a party shall not be precluded
from raising such a plea merely because that he has appointed , or participated
in the appointment of, an arbitrator. <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(3) A plea that the
arbitral tribunal is exceeding the scope of its authority shall he raised as
soon as the matter alleged to be beyond the scope of its authority is raised
during the arbitral proceedings. <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(4) The arbitral
tribunal may, in either of the cases referred to in sub-section (2) or
sub-section (3), admit a later plea if it considers the delay justified. <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(5) The arbitral tribunal
shall decide on a plea referred to in sub-section (2) or sub-section (3) and,
where the arbitral tribunal takes a decision rejecting the plea, continue with
the arbitral proceedings and make an arbitral award. <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia, serif; font-size: 12pt;">(6) A party aggrieved by
such an arbitral award may make an application for setting aside such an
arbitral award in accordance with section 34. <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Georgia, serif; font-size: 12pt;">Section
16(2) states that objection relating to jurisdiction shall be raised before the
filling of the statement of defence. In the case under discussion it is seen
that the statement of defence was yet to be filed. At the out set the
arbitrator ought not to have assumed office with out receiving the consent from
the respondent. In clauses where arbitrator is to be appointed by mutual consent,
the consent of parties is the foremost requirement and without this the arbitrator
cannot act. Hence the arbitrator ought not to have proceeded having proceeded he
should have at the least withdrawn after the respondent had raised serious objection
as to consent and consequential jurisdiction. In
theses circumstance the High Court had come down heavily on the arbitrator’s
action and had ordered cost on the arbitrator.<o:p></o:p></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-28428836145161955882012-03-08T16:07:00.003+05:302012-03-08T16:07:49.126+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 10pt; text-align: center;">
<b><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 14pt; line-height: 115%;">CNICA’s
Inaugural Study Session – 3<sup>rd</sup> March 2012<o:p></o:p></span></b></div>
<span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 14pt; line-height: 115%;"><o:p> </o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 12pt; line-height: 115%;">The
inaugural study session of Council for National and International Commercial
Arbitration (CNICA) was held at 5.45 pm on the 3<sup>rd</sup> of March
2012 at Andhra Mahila Sabha, Mylapore, Chennai. Hon’ble Mr. Justice V.
Ramasubramanian, Judge, High Court, Madras presided over the session. Welcome
address was delivered by Mr. G. Ashokapathy, Advocate and Secretary General of
CNICA. The welcome address provided the intent of conducting study sessions in
view of various developments in arbitration law and practice; and the statistical
achievements of CNICA in resolving disputes through Arbitration, Mediation and
Conciliation including the remarkable conciliated settlement over two Motor
Accident Claims in a short span of time; its present and future plans, tie ups
with International Organisations to provide training in Alternative Dispute
Resolution mechanisms.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 12pt; line-height: 115%;">The
welcome address was followed by the Hon’ble Judge’s speech on the
topic <b style="mso-bidi-font-weight: normal;">“Is Arbitration Indispensable?” </b>The
Hon’ble Judge commenced his address with the quote <i style="mso-bidi-font-style: normal;">“Education is the progressive discovery of one’s own ignorance” </i>of
Will Durant, a famous American Philosopher and Writer, and explained the
importance of study circles for the legal fraternity including the Judges. The
Hon’ble Judge proceeded to explain the indispensability of arbitration recalling
the history of arbitration laws; the statutory backing behind arbitration; case
laws; the various shapes of arbitration laws that have taken place in states
like Gujarat, Madhya Pradesh and Kerala. The Hon’ble Judge was of the view that
the use of <i style="mso-bidi-font-style: normal;">metaphors</i> in judgements to
explain greater legal contents as done in the West would help the legal
fraternity in India. The Hon’ble Judge concluded on the lines that <i style="mso-bidi-font-style: normal;">“precedents offer old solutions for new
problems, but we need new solutions for new problems”.</i><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 12pt; line-height: 115%;">The
Hon’ble Judge was felicitated by Mr. D. Saravanan, Advocate and Chairman of
CNICA. Vote of thanks was delivered by Mr. Raghav Ravindran, Registrar at
CNICA. The programme concluded with National Anthem around 7.00 pm in the
evening.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<br /></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-29912878687859321922012-02-22T11:52:00.003+05:302012-02-22T11:52:58.742+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: center;">
<span style="font-family: Verdana, sans-serif; font-size: large;">CNICA welcomes you to the <strong>Inauguration</strong> of its </span></div>
<div style="text-align: center;">
<span style="font-family: Verdana, sans-serif; font-size: large;">Study Circle meet </span></div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<span style="font-family: Verdana, sans-serif; font-size: large;">Inaugural Address by </span></div>
<div style="text-align: center;">
<strong><span style="font-family: Verdana, sans-serif; font-size: large;">Hon'ble Mr. Justice </span><span style="font-family: Verdana, sans-serif; font-size: large;">V. Ramasubramanian</span></strong></div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<span style="font-family: Verdana, sans-serif; font-size: large;">For more information see the invitation below</span></div>
<div style="text-align: center;">
<br /></div>
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<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<strong><span style="font-family: Georgia, "Times New Roman", serif;">Event Time and Location</span></strong></div>
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<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<strong><span style="font-family: Georgia, "Times New Roman", serif;">Saturday - 03.03.2012</span></strong></div>
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<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<strong><span style="font-family: Georgia, "Times New Roman", serif;">Andhra Mahila Sabha (Near Nageshwar Rao Park)</span></strong></div>
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<strong><span style="font-family: Georgia, "Times New Roman", serif;">Luz Church Road</span></strong></div>
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<strong><span style="font-family: Georgia, "Times New Roman", serif;">Mylapore</span></strong></div>
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<strong><span style="font-family: Georgia, "Times New Roman", serif;">Chennai - 600 004</span></strong></div>
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</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-12072358954107889062012-02-20T10:49:00.003+05:302012-02-20T10:49:37.154+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: center;">
<span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><strong><span style="font-size: large;">Take-it-or-leave-it
arbitration clause is fine if the underlying agreement is fair</span></strong>
<br />
by THE HR SPECIALIST: CALIFORNIA EMPLOYMENT LAW on FEBRUARY 19, 2012 1:00AM<br />
in EMPLOYMENT LAW, HUMAN RESOURCES<br />
</span></div>
<div style="text-align: justify;">
<span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The Court of Appeal of California has handed a significant victory to employers
that use arbitration agreements as a condition of employment.<br />
<br />
As long as the underlying terms of the agreement are fair and the arbitration
process impartial, the court will send a case to arbitration even if the
employee had no choice but to sign the agreement.<br />
<br />
Recent case: When Jennifer Hicks was offered a job at a Hilton spa in San
Diego, she quit her job in Minnesota, sold her possessions and moved west. When
she arrived in California, her new employer presented her with a
take-it-or-leave-it arbitration agreement buried in an employment application.
She was told she had to accept all the terms to start work.<br />
<br />
Years later, Hicks sued over alleged pregnancy discrimination. She claimed she
was told she would lose her job if she took time off for post-partum
depression.<br />
<br />
Hilton asked the court to send the case to arbitration. Hicks argued that the
way she had to sign the arbitration agreement was unconscionable.The Court of
Appeal of California has handed a significant victory to employers that use
arbitration agreements as a condition of employment.<br />
<br />
As long as the underlying terms of the agreement are fair and the arbitration
process impartial, the court will send a case to arbitration even if the
employee had no choice but to sign the agreement.<br />
<br />
Recent case: When Jennifer Hicks was offered a job at a Hilton spa in San
Diego, she quit her job in Minnesota, sold her possessions and moved west. When
she arrived in California, her new employer presented her with a
take-it-or-leave-it arbitration agreement buried in an employment application.
She was told she had to accept all the terms to start work.<br />
<br />
Years later, Hicks sued over alleged pregnancy discrimination. She claimed she
was told she would lose her job if she took time off for post-partum
depression.<br />
<br />
Hilton asked the court to send the case to arbitration. Hicks argued that the
way she had to sign the arbitration agreement was unconscionable.<br />
<br />
The court disagreed, concluding that as long as the actual arbitration would be
fair and impartial, it didn’t matter if Hicks signed under duress. (Hicks v.
Mission Bay Management, No. D058683, Court of Appeal of California, 4th
Appellate District, 2011)</span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-40476930888475011752012-02-14T16:46:00.001+05:302012-02-14T16:46:24.779+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">R.GEORGE PEREIRA<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Vs<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">ST.JOSEPH'S
INTERNATIONAL ACADEMY<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">on 8 May, 2009<b><o:p></o:p></b></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The following was in pursuance of an
application under section 11(6) of the Arbitration and Conciliation Act, 1996
and the Scheme for Appointment of an Arbitrator by the Chief Justice of the
Kerala High Court. The application seeks appointment of an independent and
impartial arbitrator for adjudicating upon the various claims of the applicant
against the respondent.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Facts of the case:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The applicant was a contractor of the
respondent for the construction of a school building at Kumbalam in Kollam
under the name and style "St. Joseph International Academy". It was
alleged that disputes and differences arose between the parties on account of
what is described as the obstinate attitude of the respondent to allow the
applicant to complete the work, which had neared completion. It was claimed
that the applicant had carried out works in seven part bills whereas the
respondent had paid only two third. The balance amount was due under the bill.
Since the balance amount remained unpaid, the windows, which had been supplied
by the applicant to the respondent, had to be taken back and deducting the
value of those windows, the balance amount was due to the applicant. According
to the applicant, in order to avoid payment of the due amount the respondent
sought to terminate the contract. The disputes and differences, which were thus
arisen, are to be settled by resorting to arbitration proceedings.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">If there are any dispute relating to any
matter regarding the construction of the building or any matter related to this
contract, the Manager, St.Joseph's International Academy, Kollam will be the
sole Arbitrator for such purpose and his decision shall be final, and the
second party will have no right to challenge this decision in the court of
law". It was submitted that as per clause 17, the Manager of the
respondent is to be the sole arbitrator. However, since disputes have arisen on
account of the actions and inactions of the Manager himself, he is not entitled
to function as arbitrator since the same will be against the fundamental
principle of natural justice, nemo debet esse judex in propria causa (no one
shall be a judge in his own cause). <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">It was under such circumstances that the
applicant sent a letter indicating a panel of three names for selection of one
among them as arbitrator by the respondent. The respondent's Advocate sent a
reply without selecting any of the nominee arbitrators but suggesting for
appointment of two Civil Engineers, one to be appointed by each party who could
jointly verify the records and files and assess the quantity and quality of the
work done in order to avoid litigation and to come to a fair settlement.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The applicant obliged and appointed his
nominee. The respondent also appointed its Engineer. The applicant requested
both the Engineers to take up the assignment and pave way for a settlement.
However, the applicant called for nominee Engineer of the respondent, furnished
all measurement books, and connected records and made necessary follow up,
nothing materialized. Meanwhile, the applicant's nominee Engineer met with an
accident and passed away. Hence, no useful purpose will be served by waiting
further and that is the circumstances under which the applicant has filed this
application under section 11(6) of the Arbitration and Conciliation Act, 1996
invoking the statutory appointment procedure of arbitrators.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The contentions of the respondent are as
follows: <o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The arbitrator who was appointed by the court
under the order (Sri. E.K. Muraleedharan, Retired District and Sessions Judge)
was incapable of acting as arbitrator between the parties in the light of the
legal bar under the provisions of the Arbitration and Conciliation Act, 1996.
It was submitted that contrary to what has been projected the Manager envisaged
under the arbitration clause who was to act, as the sole arbitrator in the
event of disputes and the signatory to the agreement are the same person. In
order to convince the court that the Manager of St.Joseph’s International
Academy and the executants to the agreement are the same, the applicant has
produced an agreement, but that does not contain the last page of the
agreement. The last page will disclose that the Manager was not the executant
of the agreement. On the contrary, the executant of the agreement was the
General Manager. It was pointed out that it will be seen that there was a
typing mistake where the first party was indicated and instead of General Manager,
the word Manager was mistakenly used. Since the party noticed the mistake at
the time of execution of the agreement, the first party to the agreement, the
General Manager, St.Joseph's International Academy did not sign and instead he
signed as the General Manager only where the first party was indicated. This
was deliberately and intentionally done in order to avoid confusion as the Manager;
St.Joseph's International Academy was appointed as the arbitrator under agreement.
It was submitted that there was absolute consensus with regard to the
arbitrator by both parties to the agreement. It was then contended that the
General Manager and the Manager of St.Joseph's International Academy are two
different persons. A certificate issued by Mr.Joseph J. who was the Manager of
St.Joseph Academy during the period of five years was produced. The present
Manager of St.Joseph Academy was one S.Sundaresan and a certificate issued by
him was produced.</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">During which, the respondent was claiming a
sum from the applicant on various counts and requested that if the claim was
disputed the matter be referred to the Manager, St, Joseph's International
Academy who was the sole arbitrator. In the reply affidavit filed by the respondent
to the counter filed by the applicant, it was submitted that the respondent has
never acted in a capacity as the Manager of St. Joseph's International Academy
at any stage. This was because of the fact that at the time of construction of
the school, the organization was at a very nascent stage and therefore the
respondent was styled as General Manager and later as Managing Director/Director.
Similarly the then Manager Joseph John was styled as Manager and subsequently
he continued as Manager who was also styled as Administrator. He continued to
be the Manager as well as Administrator. It was submitted that the respondent
(applicant) was trying to take advantage of a typing mistake made in the
agreement wherein the word Manager was used in the last page instead of General
Manager. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The contentions of the applicants are as
follows: <o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">However, it was submitted that there is no
scope for such confusion as in the last page; it was the General Manager who
had signed at the portion where the first party is indicated. In the agreement,
the first party is described as General Manager. Hence, there is no scope for
confusion. Referring to the correspondence produced by the respondent it is
submitted that the Manager Mr.Joseph John had signed on behalf of the General
Manager and not in his capacity as the Manager of the school. It was reported
that Joseph John has functioned only as Manager and that the respondent has
never styled or functioned as Manager. It was further pointed out that the
present Manager was not Joseph John but Mr. S. Sundareswaran and therefore
there was no question of any prejudice being caused to the respondent.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The applicant counsel submitted that the
non-production of the last page of Annexure was not fatal. The Arbitration
Scheme and the Kerala Arbitration Rules required production of the arbitration
agreement only along with the arbitration request and not the whole contract
agreement. Reference was made to Section 7(2) of the Arbitration and
Conciliation Act in this context. According to the applicant counsel, this was
why the applicant produced only clause 17, which is the arbitration clause. It
was submitted that on behalf of the applicant it has been made clear that it
was Sri. George Fernandez who signed the agreement in the capacity of the Manager,
first party and disputes have arisen on account of actions and inactions on the
part of Sri. George Fernandez, the signatory which were denied.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Respondent maintained that the agreement was
signed by the Managing Director and that the arbitrator was Manager. Mr. Varghese
(applicant counsel) submitted that the witness Joseph.J. was only the
Administrator and his full name Joseph John is indicated and highlighted that
in the reply affidavit it is admitted that Joseph. J. alias Joseph John turned
to be the administrator. The letter pad shows that he was only
"administrator" and not "Manager". If so, his successor,
the signatory also can be only an administrator and not the Manager, which
means that there was no Manager to function as arbitrator. This according to
Mr. Varghese is precisely the reason why the respondent said that the matter /
all relevant papers would be placed before the arbitrator and the matter will
be decided by him. He submitted that those documents are fabricated and cooked
up. He pointed out that the title "to whom it may concern" (sic) is
conspicuous. He submitted that the same mistake is repeated, though created and
signed on different dates. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">By issuing such certificates both the
signatories to prove their allegiance to respondent, making themselves
disqualified to be independent and impartial arbitrator which is required under
section 11(8)(b) of the Act even assuming that any one of them can be
considered as arbitrator. Mr. Varghese argued that actual bias is not necessary
to be proved and that the knowledge at the time of appointment does not debar
from applying on the ground that the arbitrator to be appointed in terms of the
agreement may not be impartial. For this proposition, he relied on the Law of
Practice of Commercial Arbitration by Mustill and Byod. He further relied on
commentaries contained in Comparative International Commercial Arbitration by
Julian D M Lew QC and others. He relied on the judgments of the Supreme Court
in ACE Pipeline Contracts (P) Ltd. v. Bharat Petroleum Corp. Ltd. (2007), Bihar
State Mineral Development Corp. and others. v. Encon Builders (I) (P) Ltd. (2003)
and in Tata Cellular v. UOI (1994) in support of various propositions canvassed
by him.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Sri. Madhu Radhakrishnan, learned counsel for
the respondent relied on the judgment of the Calcutta High Court in Pragati
Engineering (P) Ltd. v. T.N. Water Supply & Drainage Board, AIR 1992
Calcutta 139 to argue that where the parties entered into a contract with their
eyes open and knew that the nominated arbitrator is an employee of one of the
parties, none of the parties to the agreement should be allowed to allege that
such nominated arbitrator being an officer of one of the parties to the
contract, would be biased or is likely to be biased. Mr. Madhu Radhakrishnan
relied on the judgment of the Supreme Court in International Airport Authority
of India v. K.D. Bali, (1988) to argue that the apprehension of bias must be
judged from a healthy, reasonable and average point of view and the request for
removal of the appointed arbitrator is not to be granted lightly. Mr. Madhu
Radhakrishnan placed reliance on the judgment of the Supreme Court in Jain
Studios Ltd. v. Shin Satellite Public Co. Ltd., (2006) also. The provisions
contained in sections 12 and 13 of the Arbitration and Conciliation Act
incorporate grounds for challenge and the challenge procedure against and in respect
of arbitrators will reveal that partiality and bias or circumstances giving
rise to justifiable doubts regarding the impartiality and independence can be valid
grounds for challenging the appointment given to a certain persons as
arbitrator. At the same time, a party should not be allowed to wriggle easily
out of agreements entered into by them with open eyes. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Judge Held:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">The submissions from both sides were heard. In
the instant case, it was seen that the applicant had agreed to the appointment
of a person in the service of the opposite party as an arbitrator in the event
of disputes. That being the position the Judge would have been ordinarily
reluctant to accept the opposition of the applicant to the appointment of the
nominated arbitrator on ground of bias and partiality. After all, it was a
quasi-judicial function, which was being discharged by the arbitrator whose
proceedings will be regulated by the provisions of the Arbitration and
Conciliation Act. His award will be subjected to judicial scrutiny though on
limited grounds and to a limited extent. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">However, in the instant case the Judge was
not inclined to dismiss the arbitration request and to appoint the nominated
arbitrator as the arbitrator for resolving the disputes, which have admittedly
arisen between the parties because it is seen that the respondent also became
agreeable to the idea of the disputes between the parties being resolved by
persons other than the arbitrator nominated under the agreement. The parties
had nominated an Engineer each and were willing to have the disputes between
them resolved by a joint perusal of the relevant records by these two
Engineers. To that extent, the Judge opined the respondent has waived his right
to insist that the arbitrator to be appointed has to be the arbitrator
nominated under the agreement. Moreover, in his opinion no prejudice whatsoever
will be occasioned to the respondent by appointing a Retired Judicial Officer
known for his learning and integrity as the arbitrator for resolving the disputes,
which admittedly subsist. Therefore, without deciding the issue whether
appointment of the nominated arbitrator will be vitiated due to reasons of bias
and partiality he allowed the arbitration request and appointed Sri.E.K.Muraleedharan,
Retired District and Sessions Judge, presently at Ernakulum as arbitrator for
settling all the claims and counter claims raised by the applicant and the
respondent in the arbitration request. The arbitrator will enter on arbitration,
make, and publish his award without undue delay.</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"><o:p></o:p></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-7937489618507232872012-02-07T11:24:00.004+05:302012-02-07T11:24:46.524+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<span style="font-size: large;"><b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><o:p>A</o:p></span></b><b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">fcons Infrastructure
Ltd. &amp; Anr.</span></b></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<span style="font-size: large;"><b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"> Vs.</span></b></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<span style="font-size: large;"><b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span>Cherian Varkey Construction
Co. (P)<o:p></o:p></span></b></span></div>
<div style="text-align: center;">
</div>
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><o:p> </o:p></span></b><b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><o:p> </o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Facts:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span>The second respondent entrusted the
work of construction of certain bridges and roads to the appellants under an
agreement. The appellants sub-contracted a part of the said work to the first
respondent under an agreement. It is not in dispute that the agreement between
the appellants and the first respondent did not contain any provision for
reference of the disputes to arbitration. The first respondent filed a suit
against the appellants for recovery of dues from the appellants and their
assets. In the said suit an order of attachment for recovery of dues was awarded.
There after in March 2005, the first respondent filed an application under
section 89 of the Code before the trial court praying that the court may
formulate the terms of settlement and refer the matter to arbitration. The
appellants filed a counter to the application submitting that they were not
agreeable for referring the matter to arbitration or any of the other ADR
processes under section 89 of the Code. In the meanwhile, the High Court of
Kerala by order allowed the appeal filed by the appellants against the order of
attachment and raised the attachment granted by the trial court subject to
certain conditions. While doing so, the High Court also directed the trial
court to consider and dispose of the application filed by the first respondent
under section 89 of the Code. The High Court held that the concept of pre
existing arbitration agreement which was necessary for reference to arbitration
under the provisions of the Arbitration and Conciliation Act, 1996 was inapplicable
to references under section 89 of the Code.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">From the predicaments
stated above the appellants moved to Supreme Court seeking inapplicability of
sec 89 of civil procedure code due to non existence of arbitration agreement. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">What is wrong with section 89 of
the Code?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span></span></b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span>Primarily the definitions of
‘mediation’ and ‘judicial settlement’ are interchanged in sec 89 of civil
procedure code. When words are universally understood in a particular sense,
and have been assigned a particular meaning in common Parlance, the definitions
of those words in section 89 with interchanged meanings has led to confusion,
complications and difficulties in implementation.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>The
second anomaly is that sub-section (1) of section 89 imports the final stage of
conciliation referred to in section 73(1) of the AC Act into the pre-ADR
reference stage under section 89 of the Code. If sub-section (1) of Section 89
is to be literally followed, every Trial Judge before framing issues, is
required to ascertain whether there exists any elements of settlement which may
be acceptable to the parties, formulate the terms of settlement, give them to
parties for observations and then reformulate the terms of a possible settlement
before referring it to arbitration, conciliation, judicial settlement, Lok
Adalat or mediation. There is nothing that is left to be done by the
alternative dispute resolution forum. If all these have to be done by the trial
court before referring the parties to alternative dispute resolution processes,
the court itself may as well proceed to record the settlement as nothing more
is required to be done by ADR process.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Section 89 has to be
read with Rule 1-A of Order 10 which requires the court to direct the parties
to opt for any of the five modes of alternative dispute resolution processes
and on their option refer the matter. The said rule does not require the court to
either formulate the terms of settlement or make available such terms of
settlement to the parties or to reformulate the terms of possible settlement
after receiving the observations of the parties. Therefore the only practical
way of reading Section 89 and Order 10, Rule 1-A is that after the pleadings
are complete and after seeking admission/denials wherever required, and before
framing issues, the court will have recourse to section 89 of the Code. Such
recourse requires the court to consider and record the nature of the dispute,
inform the parties about the five options available and take note of their
preferences and then refer them to one of the alternative dispute resolution
processes.</span><span style="font-family: "Times-Roman","serif"; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;"> </span><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">It is sufficient if
the court merely describes the nature of dispute and makes reference to ADR. It
would be unnecessary to discuss the issue of the case.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Whether the arbitration can be
enforced on an unwilling party?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Rule 1A of Order 10
requires the court to give the option to the parties, to choose any of the ADR processes.
This does not mean an individual option, but a joint option or consensus about
the choice of the ADR process. On the other hand, section 89 vests the choice
of reference to the court. This is course of no inconsistency. Section 89 of
the Code gives the jurisdiction to refer to ADR process and Rules 1A to IC of
Order 10 lay down the manner in which the said jurisdiction is to be exercised.
The scheme is that the court explains the choices available regarding ADR
process to the parties, permits them to opt for a process by consensus, and if there
is no consensus, proceeds to choose the process.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">A court has no power,
authority or jurisdiction to refer unwilling parties to arbitration, if there
is no arbitration agreement. This Court has consistently held that though
section 89 of the Code mandates reference to ADR processes, reference to
arbitration under section 89 of the Code could only be with the consent of both
sides or not otherwise.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">Conclusion<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Times-Roman; mso-bidi-language: TA;">From the above
mentioned views of the honorable judge a civil court exercising power under
Section 89 of the Code cannot refer a suit to arbitration unless all the parties
to the suit agree for such reference, and also this appeal is allowed as the
order of the trial court referring the matter to arbitration and the order of
the High Court affirming the said reference are set aside. The Trial Court will
now consider and decide upon a non-adjudicatory ADR process.<o:p></o:p></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-72544627116466222382012-02-01T15:19:00.003+05:302012-02-01T15:21:16.471+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<b><span style="background: white; color: black; font-family: "Georgia","serif"; font-size: 13.5pt;"><span style="mso-spacerun: yes;"><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif"; font-size: 14pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Bhatia International vs.
Bulk Trading S. A. </span> </span></span></b><b><span style="background: white; color: black; font-family: "Georgia","serif"; font-size: 13.5pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span></span></b></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif"; font-size: 13.5pt;"></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Facts:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span>The Appellant entered into a
contract with the 1st Respondent which contained an arbitration clause which
provided that arbitration was to be as per the rules of the International
Chamber of Commerce. Parties agreed that the arbitration be held in Paris,
France. 1st Respondent filed an application under Section 9 of the Arbitration
and Conciliation Act, 1996 (hereinafter called the said Act) before the IIIrd
Additional District Judge, <st1:city w:st="on"><st1:place w:st="on">Indore</st1:place></st1:city>,
M.P. against the Appellant and the 2nd Respondent. One of the interim relief’s
sought was an order of injunction restraining these parties from alienating,
transferring and/or creating third party right, disposing of, dealing with
and/or selling their business assets and properties. The Appellant raised the
plea of maintainability of such an application. The Appellant contended that Part
I of the said Act would not apply to arbitrations where the place of
arbitration is not in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>.
This application was dismissed by the IIIrd Additional District Judge. The
Appellant filed a Writ Petition before the High Court of Madhya Pradesh, Indore
Bench. The said Writ Petition has been dismissed by the impugned Judgment. Appellants
relied on sub-section (2) Section 2 of the said Act which provides that Part I
shall apply where the place of arbitration is in India. He submits that
sub-section (2) of Section 2 makes it clear that the provisions of Part I do
not apply where the place of arbitration is not in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>. <span class="apple-converted-space"> </span>The said Act is based on UNCITRAL
Model Law on International Commercial Arbitration. He points out that Article
1(2) of UNCITRAL Model Law provides that the law would apply only if the
Arbitration takes place in the territory of the State. It was also<span style="mso-spacerun: yes;"> </span>submited that while framing the said Act the
Legislature has purposely not adopted Article 1(2) of the UNCITRAL Model Law. <span style="mso-spacerun: yes;"> </span>Appellant further submits that sub-sections
(3), (4) and (5) of Section 2 would necessarily only apply to arbitration which
take place in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>.
He submits that, therefore, even though the sub-section (4) of Section 2 uses
the words "every arbitration" and sub-section (5) of Section 2 uses
the words "all arbitrations and to all proceedings relating thereto",
they must necessarily refer only to arbitrations which take place in India. Arbitrations
whose place of arbitration is not in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>, then Sub section (2) of
Section 2 will not fit. Sections 9 and 17 would not apply and cannot be used in
cases where the place of arbitration is not in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> it’s from part I.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span>By the said facts, appellants
moved to Supreme Court as it was submitted by appellants following issues were
raised :<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Whether Part
I of the Arbitration and Conciliation Act, 1996 will apply to arbitrations
which take place outside India?<o:p></o:p></span></b></div>
<br />
<div style="text-align: justify;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span>Appellants affirmed that<span style="mso-spacerun: yes;"> </span>provisions for enforcement of foreign awards
are contained in Sections 48, 49, 57 and 58. He submits that it is very
significant that Section 9 does not talk of enforcement of the award in accordance
with Sections 48, 49, 57 and 58and it is<span style="mso-spacerun: yes;">
</span>also clear that the provisions of Part I of the said Act do not apply to
arbitrations which do not take place in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>. Court in <st1:city w:st="on"><st1:place w:st="on">Indore</st1:place></st1:city> and the High Court were wrong in
rejecting the application of the Appellant and in holding that the Court had
jurisdiction. Actually, Madhya Pradesh High Court, is the only one<span style="mso-spacerun: yes;"> </span>which states that Part I applies to
arbitrations which take place outside <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>, which has so held by the
impugned Judgment.<o:p></o:p></span></div>
<div style="text-align: justify;">
</div>
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Whether undoubtedly
sub-section (2) of Section 2 states that Part I is to apply where the place of
arbitration is in India and Part II applies to foreign arbitration?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></span></b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Appellants
affirms that it would<span style="mso-spacerun: yes;"> </span>lead to an
anomalous situation, inasmuch Part I would apply to Jammu and Kashmir in all
international commercial arbitrations but Part I would not apply to the rest of
India if the arbitration takes place out of India, and it will also instigates
a conflict between sub-section (2) of Section 2 on one hand and sub-sections
(4) and (5) of Section 2. Further sub- section (2) of Section 2 would also be
in conflict with Section 1 which provides that the Act extends to the whole of <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>. It leaves
a party remediless inasmuch as in international commercial arbitrations and it would
not be able to apply for interim relief in <st1:country-region w:st="on">India</st1:country-region>
even though the properties and assets are in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>. Thus a party may not be able
to get any interim relief at all.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span>On the other hand, the act is not
providing that Part I shall not apply where the place of arbitration is not in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>.
It is also not providing that Part I will "only" apply where the
place of arbitration is in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region><span class="apple-converted-space"> .</span> Thus Article 1(2) of UNCITRAL Model
Laws uses the word "only" to emphasize that the provisions of that
Law are to apply if the place of arbitration is in the territory of that State.
Significantly in Section 2(2) the word "only" has been omitted. The
omission of this word changes the whole complexion of the sentence. The
omission of the word "only" in Section 2(2) indicates that this
sub-section is only an inclusive and wider provision. As stated above it is not
providing that provisions of Part I do not apply to arbitration which take
place outside <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>.
Thus there was no necessity of separately providing that Section 9 would apply.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Whether foreign
awards from arbitration settlement can be enforced<span style="mso-spacerun: yes;"> </span>by Indian courts?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span>Under Section 9 a party could apply to
the court before, during arbitral proceedings or after the making of the
arbitral award but before it is enforced in accordance with Section 36. The
words "in accordance with Section 36" can only go with the words
"after the making of the arbitral award". It is clear that the words
"in accordance with Section 36" can have no reference to an
application made "before" or "during the arbitral
proceedings". Thus it is clear that an application for interim measure can
be made to Courts in <st1:country-region w:st="on">India</st1:country-region>,
whether or not the arbitration takes place in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>, before or during arbitral
proceedings. Once an Award is passed, then that award itself can be executed.
Sections 49 and 58 provide that awards covered by Part II are deemed to be a
decree of the Court. Thus "foreign awards" which are enforceable in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> are
deemed to be decrees. A domestic award has to be enforced under the provisions
of Civil Procedure Code. All that Section 36 provides is that an enforcement of
a domestic award is to take place after the time to make an application to set
aside the award has expired or such an application has been refused. Section 9
does suggest that once an award is made an application for interim measure can
only be made if the award is a "domestic award" as defined in Section
2(7) of the said Act. <span style="mso-spacerun: yes;"> </span>Thus there cannot
be applications under Section 9 for stay of arbitral proceedings or to
challenge the existence or validity of arbitration agreements or the
jurisdiction of the arbitral tribunal. All such challenges would have to be
made before the arbitral tribunal under the said Act</span><span style="background: white; color: black; font-family: "Georgia","serif"; mso-ansi-language: EN-US;">. </span><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">In any event, an award passed in arbitral
proceedings held in a non-convention country could not be enforced. Thus such a
party would be left completely remediless. Appellants hold that the provisions
of Part I would apply to all arbitrations and to all proceedings relating
thereto. Where such arbitration is held in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> the provisions of Part I
would compulsory apply and parties are free to deviate only to the extent permitted
by the derogable provisions of Part I. In cases of international commercial
arbitrations held out of <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>
provisions of Part I It would apply unless the parties by agreement express or
implied, exclude all or any of its provisions<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">Conclusion<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";"><span style="mso-spacerun: yes;"> </span></span></b><span lang="EN-GB" style="background: white; color: black; font-family: "Georgia","serif";">However, in
our view a proper and conjoint reading of all the provisions indicates that
Part I is to apply also to international commercial arbitrations which take
place out of <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>,
unless the parties by agreement, express or implied exclude it or any of its
provisions. Such an interpretation does not lead to any conflict between any of
the provisions of the said Act. On this interpretation there are no lacunae in
the said Act. This interpretation also does not leave a party remediless.<b><o:p></o:p></b></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-29065342596381753652012-01-30T12:56:00.001+05:302012-01-30T12:56:51.181+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Booz, Allen and Hamilton Inc.<span style="mso-spacerun: yes;"> </span>(Appellants)<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">vs<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: center;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">SBI Home Finance Ltd. & Ors.<span style="mso-spacerun: yes;"> </span>(Respondents)<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">FACTS:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;"><span style="mso-spacerun: yes;"> </span>Capstone Investment Co. Pvt.
Ltd (R2) and Real Value Appliances Pvt. Ltd (R3) are the owners of the suit
property. Capstone and RV Appliances had borrowed loans from SBI Home Finance
Ltd. under two loan agreements by securing the said property in favour of SBI.
The Appellants and Capstone & RV appliances signed two leave and license
agreements and the Respondents confirmed the same. Following which they entered
a tripartite deposit agreement and paid refundable deposit as consideration.
The transactions were made as indicated by the Respondents. By virtue of which
said loan amount of Capstone was paid but the RV appliances debt remained
outstanding as result of which the property was secured by SBI. Eventually the
official liquidator retained the asset. The deposit agreement contained clause
for arbitration. SBI filed mortgage suit in the High Court of Bombay on 28.10.1999
against Appellant, Capstone and RV Appliances in regard to the mortgaged
property and also prayed for eviction of Appellant from the premises. Court
issued an order allowing the Appellants to continue its occupation and ceased
the other respondents from a third party interest.<span style="mso-spacerun: yes;"> </span>The Appellant filed a detailed reply to the
said notice of motion and contended that SBI had a contractual obligation
towards the Appellant as it had agreed for the continuance of Appellant
occupation till refund of the deposit. The High Court dismissed the plea for
arbitration as the dispute which is the subject matter cannot be adjudicated by
a private forum. The application under section 8 of the Act was filed on
10.10.2001 nearly 20 months thereafter, during which period the Appellant had
subjected itself to the jurisdiction of the High Court and due to excessive
delay they were refused to grant relief. The Appellants contended that the
parties to the agreement were aware of the arbitration clause hence the dispute
is arbitrable, to which Respondents also agreed.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">The case
mentioned above gave rise to the following questions:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Whether the
subject matter of the suit fell within the scope of the arbitration agreement
contained in clause 16 of the deposit agreement?<o:p></o:p></span></b></div>
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></b><br />
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;"><span style="mso-spacerun: yes;"> </span></span></b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">The parties to
the suit agreement affirmed themselves to resolve disputes which are mentioned
below to be adjudicated by arbitration.<o:p></o:p></span><br />
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;"><span style="mso-spacerun: yes;"> </span></span></b><br />
<div class="MsoListParagraphCxSpFirst" style="line-height: normal; margin: 0in 0in 0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: 0in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Georgia; mso-bidi-language: HI; mso-fareast-font-family: Georgia;"><span style="mso-list: Ignore;">(a)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Disputes with respect to creation
of charge over the shares and flats; <o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpLast" style="line-height: normal; margin: 0in 0in 0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: 0in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Georgia; mso-bidi-language: HI; mso-fareast-font-family: Georgia;"><span style="mso-list: Ignore;">(b)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Disputes with respect to
enforcement of the charge over the shares and flats and<span style="mso-spacerun: yes;"> </span>realization of sale proceeds there from; <o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="line-height: normal; margin: 0in 0in 0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: 0in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Georgia; mso-bidi-language: HI; mso-fareast-font-family: Georgia;"><span style="mso-list: Ignore;">(c)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Application of the sale proceeds
towards discharge of liability of Capstone and RV Appliances to the Appellant;
and<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin: 0in 0in 0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: 0in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Georgia; mso-bidi-language: HI; mso-fareast-font-family: Georgia;"><span style="mso-list: Ignore;">(d)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Disputes relating to exercise of
right of the Appellant to continue to occupy the <span style="mso-spacerun: yes;"> </span>flats until the entire dues as stated in
clauses 9 and 10 of the deposit agreement are realized by the Appellant.<b> </b><o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin: 0in 0in 0pt; mso-add-space: auto; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">The subject matter of the dispute falls within the
scope of arbitration clause. So the suit can be mandated under sec 8 of the
act.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Whether the Appellant
had submitted his first statement on the substance of the dispute before filing
the application under section 8 of the Act?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">According to the act, filling any statement by defendants prior to the
filing the application under section 8 of the Act will be construed as
‘submission of a statement on the substance of the dispute’, if by filing such
statement/application/affidavit, the defendant shows his intention to submit
himself to the jurisdiction of the court and waive his right to seek reference
to arbitration. <u>But filing of a reply by a defendant, to an application for
temporary injunction/attachment before Judgment/appointment of Receiver, cannot
be considered as submission of statement on the substance of the dispute, as
that is done to avoid an interim order being made against him.</u> Obviously in
the present suit the Appellants filled counter affidavit against an interim
injunction which is to be awarded by the court. By virtue of which the Appellant
has not waived their right to seek reference through arbitration.<b><o:p></o:p></b></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Whether the
application under section 8 was liable to be rejected as it was filed nearly 20
months after entering appearance in the suit?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: HI;">Since the sec 8 of the act does not mentions the time limit for filling an
application under the same but it affirms that a party right to seek through
arbitration can only be determined by its conduct. The party waives its right
to seek arbitration only when it submits a written statement to the court or
submits itself to the jurisdiction of the court as mentioned earlier. As per
the current suit the plaintiff were seeking for an interim order by the court
for which the defendants have to submit a counter statement to avoid ex parte
order. As mentioned earlier filling an counter statement does not implies that
the parties have waived their right to seek through arbitration and as for the
excess time lapse concerned, the parties tried to settle the dispute outside
the court on failing which the Appellants filled the said application.</span><span lang="EN-GB" style="font-family: TimesNewRomanPSMT; font-size: 14pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;"> </span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">The unamended
Rule 1 of Order VIII of the Code did not prescribe any time limit for filing
written statement. Henceforth the High Court has faulted rejecting the
application on the ground of delay.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Whether the
subject matter of the suit is ‘arbitrable’, that is capable of being
adjudicated by a private forum (arbitral tribunal); and whether the High Court
ought to have referred the parties to the suit to arbitration under section 8
of the Act?<o:p></o:p></span></b></div>
<br />
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;"> Basically a suit seeking to refer arbitration can only be adjudicated by
the court if the there was an arbitration agreement among the parties.<span style="mso-spacerun: yes;"> </span>Though there is such a stipulation in the
agreement it is up to the court to decide the dispute is arbitrable or not.
However the court confers authority to arbitration on certain civil disputes which
is mentioned in the act. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<u><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Russell on
Arbitration [22nd Edition] observed thus</span></u><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">: “Not all
matters are capable of being referred to arbitration. As a matter of English
law certain matters are reserved for the court alone and if a tribunal purports
to deal with them the resulting award will be unenforceable. These include
matters where the type of remedy required is not one which an arbitral tribunal
is empowered to give. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Courts grants authority to arbitration only to disputes which is of
interests protected solely against specific individuals so called <i>in
personum</i> and forfeits to affirm cases which is a</span><span lang="EN-GB" style="font-family: TimesNewRomanPSMT; font-size: 14pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;"> </span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">right
exercisable against the world at large so called<i> in rem.</i></span><span lang="EN-GB" style="font-family: TimesNewRomanPSMT; font-size: 14pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;"> </span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Sections 34(2)(b)
and 48(2) of the 1996 Act makes it clear that an arbitral award will be set
aside if the court finds that “the subject-matter of the dispute is not capable
of settlement by arbitration under the law for the time being in force”. In the
aforementioned case, an agreement to sell or an agreement to mortgage does not
involve any transfer of right </span><i><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-language: TA;">in rem </span></i><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">but create only
a personal obligation. Therefore if specific performance is sought either in
regard to an agreement to sell or an agreement to mortgage, the claim for
specific performance will be arbitrable. On the other side the agreement to
mortgage is a right <i>in rem </i><span style="mso-bidi-font-style: italic;">a</span>
suit for enforcement of a mortgage being the enforcement of a right </span><i><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-language: TA;">in rem, </span></i><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">will have to be
decided by courts of law and not by arbitral tribunals. The scheme relating to
adjudication of mortgage suits contained in Order 34 of the Code of Civil
Procedure, replaces some of the repealed provisions of Transfer of Property
Act, 1882 relating to suits on mortgages (section 85 to 90, 97 and 99) and also
provides for implementation of some25 of the other provisions of that Act
(section 92 to 94 and 96). Order 34 of the Code does not relate to execution of
decrees, but provides for preliminary and final decrees to satisfy the
substantive rights of mortgagees with reference to their mortgage security. The
provisions of Transfer of Property Act read with Order 34 of the Code, relating
to the procedure prescribed for adjudication of the mortgage suits, the rights
of mortgagees and mortgagors, the parties to a mortgage suit, and the powers of
a court adjudicating a mortgage suit, make it clear that such suits are
intended to be decided by public forum (Courts) and therefore, impliedly barred
from being referred to or decided by private forum (Arbitral Tribunals).
Consequently, it opines that the court where the mortgage suit is pending
should not refer the parties to arbitration.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<b><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Conclusion<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-language: TA;">Having regard
to our finding on questions as to be held that the suit being one for
enforcement of a mortgage by sale, it should be tried by the court and not by
an arbitral tribunal. Therefore the court upheld the dismissal of the
application under section 8 of the Act.<b><o:p></o:p></b></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-91891222003814243812012-01-29T21:45:00.000+05:302012-01-29T21:45:15.523+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "Georgia","serif";"><strong><span style="font-size: large;">Consultation paper on the proposed amendments to the Arbitration
and conciliation act 1996 - A Brief Note</span></strong></span><br />
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt;">Introduction:<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The Act is based on the
Model Law adopted by the United Nations Commission on International Trade Law
(UNCITRAL) in 1985. The object and basis of the said Act is to speedy disposal
with least court intervention. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The objects, as
mentioned in the Statement of Objects and Reasons for the Arbitration and
Conciliation Bill, 1995 were (a) to comprehensively cover international
commercial arbitration and conciliation as also domestic arbitration and
conciliation;(b) to minimize the supervisory role of courts in the arbitral
process;(c) to provide that every final arbitral award is enforced in the same
manner as if it were a decree of court.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt;">Arbitration and
Conciliation (Amendment) Bill 2003 <o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Accordingly the
Arbitration and Conciliation (Amendment) Bill 2003 was introduced in Rajya
Sabha on 22<sup>nd</sup> December, 2003.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">In July 2004, Government
constituted a Committee under the Chairmanship of Justice Dr. B. P. Saraf to
make in-depth study of the implications of the recommendations of the Law
Commission made in its 176<sup>th</sup> Report and all aspects relating to the
Arbitration and Conciliation (Amendment) Bill, 2003.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The Committee
(Departmental Related Standing Committee) was of the view that the provisions
of the Bill gave room for excessive intervention by the Courts in the arbitration
proceedings and emphasized upon the need for establishing an institution in
India which would measure up to international standards and for popularizing
institutionalized arbitration.<span style="mso-spacerun: yes;"> </span>The
Committee further expressed the view that since many provisions of the Bill was
contentious, the Bill may be withdrawn and a fresh legislation may be brought
after considering the recommendations of the Committee. The said Bill was
withdrawn from the Rajya Sabha.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Main purpose of the 1996
Act is to encourage an ADR method for resolving disputes speedy and without
much interference of the Courts which Section 5 of the Act provides for. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;"><span style="mso-spacerun: yes;"> </span>In the (Dominant Offset Pvt. Ltd. Vs.
Adamouske Strojirny AS,(1997) 68 DLT 157 the parties having developed a
dispute, a petition was filed in the High Court of Delhi with a prayer for
reference to arbitration in terms of the Arbitration Clause for enforcement of
the agreement.<span style="mso-spacerun: yes;"> </span>The Court held that Part
I of the Act applies to International Commercial arbitration conducted outside
India. Court added that courts should be extremely cautious in granting interim
relief in cases where the venue of arbitration is outside India and both
parties are foreigners.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt;">Recommendation regarding
the applicability of Part I<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The Supreme Court
observed that if the part I of the Act is not made applicable to arbitration
held outside India it would have serious consequences. It made certain
observations in respect of International commercial arbitration which take
place in a non-convention country. The Court further observed that
international commercial arbitration may be held in a non-convention country.
Part II only applies to arbitrations which take place in a convention country. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">An international
commercial arbitration may be held in a country which is a signatory to either
the New York Convention or the Geneva Convention (hereinafter called “the
convention country”). An international commercial arbitration may be held in a
non-convention country.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The Supreme Court also
observed that Sections 44 and 53 define foreign award as being award covered by
arbitrations under the New York Convention and the Geneva Convention
respectively. The provision in Part I dealing with these aspects will not apply
to such foreign awards. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The court concluded that
the provisions of Part I would apply to all arbitrations and proceedings
relating thereto. Where such arbitration is held in India the provisions of
Part I would compulsorily apply. In cases of international commercial
arbitrations held out of India provisions of Part I would apply unless the parties
by agreement express or implied, exclude all or any of its provisions. In that
case the laws or rules chosen by the parties would prevail. Any provision, in
Part I, which is contrary to or excluded by that law or rules, will not apply.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The reason, which
persuaded the court that a challenge to foreign award can lay in India, was the
fact that an award, which is otherwise opposed to Public Policy of India and
thus not enforceable even under the New York Convention, can be enforced, by a
party by seeking its enforcement of such an award in another country.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The Supreme Court in
Indtel Technical Services (P) Ltd. v. W.S. Atkins Rail Ltd.,(2008) 10 SCC 308,
while referring Bhatia International observed – As per Bhatia International
(Supra) and Satyam Computers, in cases of international commercial arbitrations
held out of India provisions of Part I would apply unless the parties by
agreement exclude all or any of its provisions. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The result is that all
the provisions of Part I including provisions relating to appointment of
arbitrator (Section11), challenge of arbitration award (Section 34) would also
be applicable to International Commercial Arbitration where seat of arbitration
is not in India. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">However, in view of the
observations made by the Supreme Court in Shreejee Traco(I) Pvt. Ltd. Vs. Paper
Line International Inc (2003) 9 SCC 79, no provisions of Part I would apply to
cases where the place of arbitration is not in India. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt;">Foreign awards: <o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">We may point out that an
award to be a ‘foreign award’ has to be made in the territory of a foreign
State notified by the Central Government as having made a reciprocal provision
for enforcement of New York Convention or Geneva Convention. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">The provisions of the
aforesaid statute, foreign awards and foreign judgments based upon awards are
enforceable in India on the same grounds and in the same circumstances in which
they are enforceable in England under the common law on grounds of justice,
equity and good conscience.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">It is well established
that the awards rendered in countries with which India does not have reciprocal
arrangements cannot be enforced in India as if it were a decree.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Clause (3) of Article 1
of New York convention on the Recognition and Enforcement of Arbitral Awards
permits the signing, ratifying or acceding State to declare on the basis of
reciprocity that it will apply the convention made only in the territory of
another contracting State.<span style="mso-spacerun: yes;"> </span>India has made
reservation and declared that convention will apply only on the basis of
reciprocity.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Therefore, when an
International arbitral award is made in a country or territory in respect of
which there is no reciprocal arrangement between Central Government and
Government of that country, it cannot be enforced under the Arbitration and
Conciliation Act, 1996. For the purpose of enforcement of such an arbitral
award party has to file a civil suit in India.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Provisions of Sections 9
and 27 shall also apply to international commercial arbitration where the place
of arbitration is not in India if an award made in such place is enforceable
and recognized under Part II of this Act.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;"><span style="mso-spacerun: yes;"> </span><b>A proposal for amendment in Section 11 <o:p></o:p></b></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">A Bench of two learned
Judges (</span><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Adur Samia (P) Ltd Vs Peekay
Holdings Ltd.) </span><span style="font-family: "Georgia","serif"; font-size: 12pt;">of
the Supreme Court held that the Chief Justice or any person or institution
designated by him acts in administrative capacity under section 11 of the Act
and hence an order passed in exercise of such power, does not attract the
provisions of the Article 136 of the Constitution. The same was reaffirmed by a
three judges (</span><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Konkan Railway corp. Ltd. Vs
Mehul Construction Co</span><span style="font-family: "Georgia","serif"; font-size: 12pt;">)
bench which held that the order passed by the Chief Justice or his designate
under section 11 of the Act was an administrative order not amenable to the
jurisdiction of the court under Article 136.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt;">Thereafter, a
Constitution Bench consisting of five learned Judges affirmed the decision of
the three Judge Bench. <span style="mso-spacerun: yes;"> </span></span><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Subsequently, the decision of the Constitution
Bench has been reconsidered by the larger Bench consisting of seven-Judges. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Court overruled the decision in Konkan Railway Corp.
Ltd. Vs Rani Construction (P) Ltd. rendered by five learned Judges and held
that the power exercised by the Chief Justice of the High Courts or the Chief
Justice of India under Section 11(6) of the Act is judicial power and not an
administrative power and that such power, in its entirety, could be delegated
only to another Judge of that Court.</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"> <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Supreme Court held that the Chief Justice or
the designated Judge will have the right to decide preliminary aspects as
regards his own jurisdiction to entertain the request, existence of a valid
arbitral agreement, the existence or otherwise of a live claim, the existence
of the conditions for the exercise of the power and on the qualifications of
the Arbitrator. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The decision of the Supreme Court has rendered the
provisions contained in sub-section (4), (5), (7), (8) and (9) of Section 11
with regard to appointment of Arbitrators by any person or institution designated
by the Chief Justice of India and totally ineffective.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">This is clearly contrary to the objective of the
Act that is, to encourage litigants to take recourse to the alternative dispute
resolution mechanism by Arbitration. The parties may stipulate in the
arbitration agreement to refer an arbitral dispute between them for resolution
to a particular institution. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Chief Justice instead of choosing an arbitrator
may choose an Institute and the said institute shall refer the matter to one or
more arbitrator from their panel.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Various proposals to amend to the limited extent</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"> </span><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">of the Section 11 of the Arbitration and
Conciliation Act, 1996 have been made. Almost all the sections from 4 to 12 and
28 have been prescribed for an amendment. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<b><span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Law Commission in 176th Report<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Law Commission in 176th Report considered the
question whether it was desirable to provide for an appeal under section 37 to
court against decision of the arbitral tribunal rejecting the plea of bias or
disqualification under section 13. After due deliberation, the Law Commission was
of the view that there should not be an immediate right of appeal under section
37 against the decision of the tribunal rejecting the plea of bias or
disqualification under section 13. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Section 34 does not enable the parties to question
the decision of the arbitral tribunal made under Section 13 (2) rejecting a
plea of bias or to question the decision of the said tribunal made under
Section 16 (2) or (3) rejecting a plea of want of jurisdiction on the part of
the arbitral tribunal. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Though the existence of these remedies was referred
to in Sections 13 (5) and 16 (6), these remedies were not included in Section
34 and further the use of the word ‘only’ in section 34 (1) contradicted what
was stated in sections 13 and 16. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Therefore, the Law Commission, recommended
insertion of a clarification in section 34 by way of an explanation that an applicant,
while seeking to set aside the award, can attack the interlocutory order of the
arbitral tribunal rejecting a plea of want of jurisdiction, as permitted by
section 16(6).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">Law Commission while suggesting amendment in
Section 34 also recommended that in case of domestic arbitration, new ground
for challenges viz. mistake appearing on face of award may be made available.
Accordingly it recommended for inserting a new Section 34A.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">The Law Commission in their Report had observed
that parties are filing applications to set aside the award even though there
is no substance whatsoever in such applications and, to put a stop to this
practice, proposed the amendment of section 36 by deleting the words which say
that the award will not be enforced once an application is filed under
sub-section (1) of section 34.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; mso-bidi-font-family: Arial; mso-bidi-language: TA;">To give effect to the above recommendation of the
Law Commission, the Amendment Bill of 2003 sought to substitute the existing
section 36.That was is a very good provision. It will have a salutary effect on
the expeditious execution of the awards. Standing Committee of the Parliament
in its report on the Arbitration and Conciliation (Amendment) Bill, 2003 has
recommended promoting institutional arbitration.<o:p></o:p></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-20209471206720645602012-01-25T15:54:00.001+05:302012-01-27T14:14:51.705+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-size: large;">Proposed Amendment of Section 89 of Civil Procedure Code, 1908 </span><br />
<br />
<br />
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB;">Backdrop to section 89<o:p></o:p></span></b></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB;">The
objective of the 129<sup>th</sup> report of the law commission is to make
Alternative Dispute Resolution effective and obligatory in courts.<span style="mso-spacerun: yes;"> </span>When the parties fail to settle their
disputes by means of an alternate dispute resolution settlement then they may
proceed with the section under which the suit was originally filed.<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";">Clause 7 seeks to insert a new section 89
in the Code in order to provide for alternate dispute resolution which
facilitates for the settlement of disputes outside the court. The provisions
of clause 7 are based on the recommendations made by Law Commission of
India and Malimath Committee. It was recommended by the Law Commission of
India that the court may require attendance of any party to the suit or
proceedings to appear in person with a view to arriving at a feasible settlement
of dispute between the parties. </span><span lang="EN-GB" style="font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-language: TA;">It
was further suggested by the Malimath Committee to make it obligatory for the
court to refer the dispute, for settlement after issues are framed, either
by way of arbitration, conciliation, mediation, judicial settlement or through
Lok Adalat. When the parties fail to get their disputes settled through any of
the alternative dispute resolution methods then the suit could proceed
further.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";">129<sup>th</sup> report of the
law commission of India</span></b><span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";"> </span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">referred to</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Order XXVII of </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">the CPC</span></span><span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";"> r</span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">ule
5B which provides that in</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">a
suit to which</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">it
applies, it should be the </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">duty of the court to make every endeavour where it is possible to do so with
the nature and circumstances of the case to assist the parties in arriving at a
settlement </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">of
the dispute.</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Where
the court is</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">of
the opinion</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">that </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">there is a reasonable possibility of
a settlement between the parties to the suit, the proceedings may be adjourned
for such period as it thinks fit to enable attempts to be made to effect such settlement.</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> In
fact the rule 5B turns out to be a limitation </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">which </span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">expects</span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> the</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">court before</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">which the</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">suit is</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">pending to</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">itself attempt to </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">conciliate the dispute</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">. <b><o:p></o:p></b></span></span></div>
<span class="apple-converted-space"><b><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"><o:p> </o:p></span></b></span><br />
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span class="apple-converted-space"><b><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Section
89 in Afcons case<o:p></o:p></span></b></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";">Section 89 enacted with a lofty objective,
has revealed manifest drafting errors, which in turn
gave rise to complexities in understanding its true scope and purpose. The
Supreme Court observed in</span><span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";"> <span style="letter-spacing: -0.75pt;">Afcons Infrastructure</span> <span style="letter-spacing: -0.75pt;">Case that the correct interpretation and
understanding of the provision has become difficult for the judges to
interpret. <o:p></o:p></span></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";">The court observed that the sub-section requires
formulating the terms of settlement and placing them before the parties and
then reformulating the terms after observation by the parties of a possible
settlement. It further shows that on such reformulation, the court shall have
to refer the dispute for one of the five ADR methods, which is absurd.<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">This report briefly
explains the errors in Section 89 of Civil Procedure Code which was also
observed by the Supreme Court in Afcons Infrastructure case that there are many
drafting errors in Section 89 and suggested amendments to the Section</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">which may be considered</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">by Law Commission</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">of India.</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> T</span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">o facilitate the remo</span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">val of the</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l8"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">deficiencies in</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Section 89</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l8"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">which is</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l7"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">a significant</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l8"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">provision</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l8"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">for </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">facilitating dispute
resolution in civil matters and to make it more simple and straightforward, the
Law Commission has earlier proposed amendments to Section 89 CPC as well as</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Order X Rules 1-A</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="l6"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">to 1-C.</span></span><span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> </span></span><span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"> <o:p></o:p></span></span></div>
<span class="apple-converted-space"><b><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"><o:p> </o:p></span></b></span><br />
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span class="apple-converted-space"><b><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Refund
of the court fee<o:p></o:p></span></b></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span class="apple-converted-space"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; letter-spacing: -0.75pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">With
regard to the amendment of Section 21 of the Legal service Authorities act,
wherein the court fee shall be considered for refund to the plaintiff, only
when the ADR has derived at an award for the dispute, otherwise the plaintiff’s
case will be adjudged for cost by the court when the ADR does not grant an
award or the parties to the dispute.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<span class="a"><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;"><o:p> </o:p></span></span><br />
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span class="a"><b><span lang="EN-GB" style="background: white; border: 1pt windowtext; color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-font-family: "Times New Roman"; mso-border-alt: none windowtext 0in; padding: 0in;">Conclusion</span></b></span><span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-GB" style="color: black; font-family: "Georgia","serif"; font-size: 12pt; mso-ansi-language: EN-GB; mso-bidi-language: TA; mso-fareast-font-family: "Times New Roman";">The
foremost reason for the misinterpretation of the Section 89 of the CPC is primarily
due to the drafting errors in that section which is abstractly understood by
its readers. Secondly, the incorporation of the two sub-sections (i.e. Section
89 (c) (d)) has been erroneous which has in fact made it difficult even for the
layman to interpret. Since sub-sections a and b of section 89 are governed by
the Arbitration and conciliation Act of 1996, its understanding has become
rather effortless, but the other two sub-sections do not have any specific acts
which govern them, not to forget that there are general laws and acts which aid
them, so the court should persuade parties to resolve their disputes by ADR
where the proceedings in the courts have not been commenced and the issues have
been framed.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<br />
<div style="text-align: left;">
<span style="font-size: large;">The complete proposal is available for reading from this webpage. </span></div>
<span style="font-size: large;"><a href="http://www.scribd.com/fullscreen/79323880?access_key=key-jaih12ykexptx9zefnf">http://www.scribd.com/fullscreen/79323880?access_key=key-jaih12ykexptx9zefnf</a></span></div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-77712255472269136182012-01-23T17:03:00.000+05:302012-01-23T17:03:50.902+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 14pt; line-height: 115%;">ICADR
International Conference on Mediation and Conciliation, Chennai 2012<o:p></o:p></span></b></div>
<br />
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 12pt; line-height: 115%;">This post shall be updated shortly<o:p></o:p></span></div>
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-15582831614949986862012-01-20T18:13:00.000+05:302012-01-20T18:13:57.394+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 14.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Applicability of National laws in Arbitral
Proceedings </span></b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"><o:p></o:p></span></div>
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<b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 14.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"><br /></span></b></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Settlement of disputes through reference to third
party is a part of the volkgiest of India since time immemorial. The Indian
epics and folklore are replete with examples of consensual procedures for the
settlement of disputes at the grassroots level. Making such a procedure legal,
was the solution to end the increasing number of cases in the courts of the
nation, vexatious litigation and delayed justice. Thus, the Arbitration and
Conciliation Act, 1996 was enacted with a view to relieve the technical
difficulties faced by the parties in the court proceedings and to ensure speedy
disposal of cases. This is to help parties solve their disputes amicably
through mutual understanding and reduced cost and by way of a trusted
arbitration procedure. This revolutionary enactment meant cutting down on the
stringent legal procedures and bureaucratic red tapes. One of the important
sections that is an exemplification of this desideratum is section 19 of the
Act.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"> Section 19 of
the Arbitration and Conciliation Act, 1996 states as under:<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Determination of rules of procedure.- <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">(1) The arbitral tribunal shall not be bound
by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">(2) Subject to this Part, the parties are free
to agree on the procedure to be followed by the arbitral tribunal in conducting
its proceedings.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">(3) Failing any agreement referred to in
sub-section (2), the arbitral tribunal may, subject to this Part, conduct the
proceedings in the manner it considers appropriate.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">(4) The power of the arbitral tribunal under
sub-section (3) includes the power to determine the admissibility, relevance,
materiality and weight of any evidence.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">This essay would take its focal point to be Clause
(1) of section 19, Arbitration and Conciliation act, 1996. Clause (1) of
Section 19 states very clearly that any arbitration procedure is not bound by
the Civil Procedure code, 1908 or The Indian Evidence Act, 1872. <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Before making a headway into the merits of the
clause, I would like to highlight the difference between two situations one
wherein the parties are not "bound" and in the other where they are
"prohibited by law". When it is said that the parties are not bound,
it translates to the parties not being under legal or moral obligation to do or
abstain from doing a particular act. That is, they are not constrained or
fettered by the provisions/clauses of the act. <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Whereas, “prohibited" from doing an act,
means to be barred from doing it. Performance of such an act would be treated unlawful,
illegal or will render any agreement based on it void. There is an element of
inherent restraint.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">In my humble view, while Section 19 of the
Arbitration and Conciliation Act, 1996 (henceforth referred to as the act) does
not bind the parties to follow The Civil Procedure code, 1908, it doesn't
prohibit them from doing so. Meaning, the parties, by their own will may decide
whether or not to follow the act. It is true that when the parties choose to
take recourse to the usual proceedings despite having the leeway not to do so,
the benefits and attractiveness of arbitration mechanism gets significantly
diminished. But, in any suit, and nonetheless in an arbitration, the point of
concentration should be skewed towards delivery of speedy equitable justice
than on procedures. Failure to do this may militate against the requirements of
fair trial and vitiate the resulting award. This view has been upheld by the
recent judgement in the case of:<o:p></o:p></span></div>
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<b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Gammon India Ltd vs. Sankaranarayana
Construction (Bangalore)</span></b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"><o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">Wherein, the bench declared that an arbitral
tribunal, in its discretion, may adopt principles of Civil Procedure Code. The learned judges
have declared that while the arbitration panel as permitted by Sec. 19 (1) is not bound by the CPC or evidence act, in the absence of an agreed specific
procedure by the opposing parties, there are no fetters placed on the panel to
adopt the principles and procedures of CPC or Evidence Act. The panel is free to conduct the proceedings
in a manner which it considers appropriate.
However, the principle of 'res-judicata' would apply.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: 'Bookman Old Style', serif; font-size: 13pt;">I would like to reiterate here
that this judgement complements my view that the referred section provides the
freedom to arbitration bodies to follow the 'National Laws, albeit under
certain conditions'. In my opinion, here it has been expressly declared that
'Shall not be' bound doesn't mean 'it is prohibited from. Of course, the
arbitration option is given to the parties to unshackle themselves from the
procedural fetters of the existing laws. At the same time, it doesn't prohibit
or take away from the parties the freedom to adopt or invoke the same laws if
they are comfortable with the same. That is, if the parties refer to a given
law on Civil Procedure or Evidence, such law would be applicable by virtue of
their choice and not by virtue of being a national law. <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: 'Bookman Old Style', serif; font-size: 13pt;">Also, it follows, that, in the
absence of a specific agreement between the parties on the laws, rules and
procedures to be applied during arbitration, the tribunal may formulate its own
procedure or adopt the national laws, namely, CPC, Evidence Act etc. <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: 'Bookman Old Style', serif; font-size: 13pt;">Once the issue of whether the
arbitration panel has the powers to adopt and pass orders under CPC or Evidence
Act is settled, the power of the panel to pass an interim award exercising
those powers would also logically derive.
<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: 'Bookman Old Style', serif; font-size: 13pt;">In the above case questioning the
decision of the learned single judge, the learned counsel for the
Appellant/Petitioner had also tried to establish that the power to pass an
interim award can be invoked only if there is an admission and it should be a
clear, unambiguous and unequivocal admission <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: 'Bookman Old Style', serif; font-size: 13pt;">Towards this the learned counsel
for the Petitioner/appellant relied on <b>Numero Uno International Ltd. vs.
Prasad Bharati. </b>The learned counsel
for the petitioner had tried to interpret the judgement as one which vested
with the counsel the right to contest the powers of the arbitrator to grant an
interim award, even if not contested earlier, and such a contest later would
also render the interim award unenforceable.
Inherent in this argument is the reasoning that the contest would take
the trait of an objection which would negate the condition of 'clear, unambiguous
and unequivocal admission' for grant of interim award. However, the learned single judge has
rejected argument quoting from the same citation that an interim reward cannot
be interfered with, simply because the other party has made a counter claim or
because it had raised a point which is outside, or is independent of the areas
covered by the interim award. <o:p></o:p></span></div>
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<b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"> </span></b><span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">The judgement of the
Madras division bench in Gammon<b> India Ltd vs.
Sankaranarayana Construction (Bangalore)</b> has thus provided interpretative
clarity to article 19 of the Arbitration and Conciliation Act, 1996 by which
elements of flexibility have been fused with procedural discipline.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;"><br /></span></div>
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<span style="font-family: 'Bookman Old Style', serif;"><span style="font-size: 17px;"><b><br /></b></span></span></div>
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<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri;">This is article was written by Ms. Varsha Raghavan, while interning at CNICA. She is studying </span><span style="font-family: 'Bookman Old Style', serif; font-size: 13pt; line-height: 115%; text-align: center;">B.A.LLB., at </span><span style="font-family: 'Bookman Old Style', serif; font-size: 13pt; line-height: 115%; text-align: center;">School of Law, SASTRA
University.</span></div>
<span lang="EN-GB" style="font-family: "Bookman Old Style","serif"; font-size: 13.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-fareast;"> </span><br />
</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0tag:blogger.com,1999:blog-763583336925670729.post-8926366968991562842012-01-20T16:25:00.000+05:302012-01-20T18:18:03.238+05:30<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="font-family: 'Bookman Old Style', serif; font-size: 14pt; line-height: 115%;">International
Commercial Arbitration and Foreign Arbitral Awards in India – an overview<o:p></o:p></span></b><br />
<b><span style="font-family: 'Bookman Old Style', serif; font-size: 14pt; line-height: 115%;"><br /></span></b></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">International
commercial arbitration is the process of resolving disputes between parties
that arise out of international commercial transactions, whether contractual or
not, through the use of one or more arbitrators. Agreement of the parties
is a necessary prerequisite. An arbitration clause is usually part of the
contract between parties that decide to be adjudicated before a sole arbitrator
or a panel of arbitrators. The decision of the arbitrator(s) is usually binding
on the parties.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><br /></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">In India <b>The Arbitration
and Conciliation Act, 1996</b> section 2(1)(f) of the Act defines
"International Commercial Arbitration" as arbitration relating to
disputes arising out of legal relationships, whether contractual or not,
considered as commercial under the law in force in India where at least one of
the parties is: </span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">a.<span style="font: normal normal normal 7pt/normal 'Times New Roman';">
</span></span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">an individual who is a national of, or
habitually resident in any country other than India; or </span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">b.<span style="font: normal normal normal 7pt/normal 'Times New Roman';">
</span></span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">a body corporate which is incorporated
in any country other than India; or </span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">c.<span style="font: normal normal normal 7pt/normal 'Times New Roman';"> </span></span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">a company or an association or a body
of individuals whose central management and control is exercised in any country
other than India; or </span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">d.<span style="font: normal normal normal 7pt/normal 'Times New Roman';">
</span></span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">the Government of a foreign country.</span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;"><br /></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">One of the advantages
of International Commercial Arbitration is that parties appoint arbitrators of
their choice. This reduces the distrust. If the same matter would have been
taken before a foreign Court of Law, there would be cultural differences,
differences in interpretation of law or facts, leading to an impasse and loss
of faith in the system. International Commercial Arbitration alleviates such
problems and provides faster results, as awards are usually binding on the parties. <o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">All this said and
done the question of enforceability arises. One of the advantages of
International Commercial Arbitration is its enforceability. More than 140
countries have signed the <b>Convention on the Recognition and Enforcement
of Foreign Arbitral Awards </b>or the
New York convention of 1958. This ensures that foreign arbitral awards are
enforceable in one’s own jurisdiction. <b> </b><o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">In India foreign arbitral
awards can be enforced under both the New York convention of 1958 or under the
Geneva convention of 1927. Sections 44 to 60 of the Arbitration and
Conciliation Act, 1996 provides for the various conditions for enforcement of
foreign arbitral awards. <o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="margin-bottom: 7.5pt; margin-left: 0in; margin-right: 0in; margin-top: 3.0pt; text-align: justify;">
<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">One of the conditions states that</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> the Central Government, by
notification in the Official Gazette, declare </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">these </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">to be territories to which the said
Convention applies.</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">
Any </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">party
applying for the enforcement of a foreign award shall, at the time of the
application, produce before the court----<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(a) the original award or a copy
thereof, duly authenticated in the manner required by the law of the country in
which it was made;<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(b) the original agreement for
arbitration or a duly certified copy thereof; and<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(c) such evidence as may be necessary
to prove that the aware is a foreign </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">a</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">ward.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">The act also provides the conditions for non-e</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">nforcement
of foreign award</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">s.
These are<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> (a) incapacity of the </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">parties
to the agreement</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(b) the
party against whom the award is invoked was not given proper notice </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(c) the award deals with matters beyond
the scope of the submission to arbitration.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(d) the
composition of the arbitral authority or the arbitral procedure was not in
accordance with the agreement of the parties, or, failing such agreement, was
not in accordance with the law of the country w</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">here the arbitration took place. </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(e) the award has not yet become
binding on the parties, or has been set aside or suspended by a competent
authority of the country in which, or under the law of which, that award was
made.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> (f</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">) the
subject -matter of the difference is not capable of settlement by arbitration
under the law of India; or<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">(g</span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">) the enforcement of the award would be
contrary to the public policy of India.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">Sections 49 and 58 of the Arbitration and Conciliation, 1996
provide that </span><span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;"> Where the Court is satisfied that the foreign
award is enforceable, the award shall be deemed to be a decree of that Court.<o:p></o:p></span></div>
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<span style="font-family: 'Bookman Old Style', serif; font-size: 12pt; line-height: 115%;">Thus a basic picture of International
Commercial Arbitration and enforceability of Foreign Arbitral Awards in India
has been portrayed. <o:p></o:p></span></div>
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</div>CNICAhttp://www.blogger.com/profile/08688608911061511444noreply@blogger.com0