Welcome back to our updates from the world of arbitration. While you may have eased into the new year by now, the Indian arbitration scene has had to navigate some choppy legislative waters.

The composition of the Arbitration Council of India, proposed in the Arbitration and Conciliation (Amendment) Bill, 2018 that was passed by the Lok Sabha recently, has come under heavy criticism.

The Lok Sabha has also passed a bill to establish a world-class arbitration centre at New Delhi that will facilitate professionally conducted arbitrations and promote studies in the field of alternative dispute resolution.

A few other countries seem eager to improve their standing in the arbitration community.

While the ultimate outcome of the Brexit negotiations remain uncertain, a withdrawal of the United Kingdom from the European Union will leave Ireland as the only remaining English-speaking common law jurisdiction. As part of the country’s contingency plans in the event of a no-deal, the government has launched a new initiative to make the country a global hub for legal services after Brexit.

Construction

Malaysia’s Asian International Arbitration Centre has issued standard form building contracts for the construction industry. These pre-prepared contracts that consist of common clauses providing for payment, variations, delay damages, and extensions of time, are part of an attempt to reduce the number of construction disputes and to encourage resolution of any disputes through the AIAC.

A tribunal in Singapore has ruled in favor of ONGC Petro Additions Ltd. (OPAL), a petrochemical company owned by the Oil & Natural Gas Corporation, in an arbitration with South Korea’s Daelim Industrial Company Ltd. The dispute had arisen in the context of constructing a plant as part of the Dahej petrochemical complex.

Defence

While it deftly refrained from issuing any interim order restraining AgustaWestland from continuing with arbitration proceedings against the Union government for canceling the controversial helicopter deal, the Delhi High Court has agreed to examine whether arbitral proceedings in the case ought to be terminated, owing to the nature of allegations raised, including corruption and fraud.

Logistics

Private equity firm Blackstone Group LLC has sent an arbitration notice to logistics company Gateway Distriparks Ltd following the company’s failure to buy back Blackstone’s stake in Gateway Distriparks, a subsidiary company.

Pharmaceuticals

A Singapore court has dismissed an appeal filed by former Fortis promoters Malvinder and Shivinder Singh against a Rs. 3,500-crore arbitration award in favor of Daiichi Sankyo. The Japanese drug maker has been enforcing the award in Delhi since January 2018.

Energy

Athena Investments, a firm operating renewable energy plants in Italy and Spain, has announced an arbitral award of EUR 7.4 million in its favor andagainst the government of Italy. The company launched the arbitration under the Energy Charter Treaty (ECT) following changes in the country’s renewable energy legal framework that affected the value of its solar investments.

Other news from the docket

The Arbitration and Conciliation Act, 1996 does not disqualify a former employee from acting as the arbitrator in a dispute involving the employer, the Supreme Court has held in Government of Haryana PWD Haryana (B and R) Branch v. G.F. Toll Road Pvt. Ltd. and Others. In this case, the bar contained in the Fifth Schedule did not apply because the appointment had been made prior to the insertion of the schedule by the 2015 amendments. The Supreme Court however, interpreted the term “other business relationship” in the schedule to exclude past or former employees from the scope of the bar and ruled that even after the amendments, a former employee can act as an arbitrator.

The Jodhpur Bench of the Rajasthan High Court in Doshion Pvt. Ltd. v.Hindustan Zinc Limited and Others has held that the mandate of the arbitrator can be terminated if the arbitrator’s conduct during the proceedings led to doubts about the impartiality of the arbitrator and about prejudice against any party. Following a challenge, a Rajasthan commercial court had reduced the arbitrator’s allegedly exorbitant fee. Aggrieved by the conduct of the arbitrator during the proceedings and thereafter, the petitioner had sought an order under Section 14 of the Arbitration and Conciliation Act, 1996.

An arbitration clause in an agreement cannot limit the jurisdiction of consumer courts under the Consumer Protection Act, 1986, the Supreme Court has reiterated. In a review petition in Emaar MGF Land Limited v. Aftab Singh, the Court held that the 2015 amendments to Section 8 of the Arbitration and Conciliation Act, 1996 cannot be interpreted so widely as to restrict all special legislations where a dispute is held to be not arbitrable. The amendment to Section 8 therefore, would not bar a consumer from having her grievance resolved through consumer courts. The Court clarified that in situations where a special remedy available to a party under a statute has not been opted for, then there is no restriction on refering the dispute to arbitration. But if a party has opted for a special remedy, then the courts can refuse to refer the parties to arbitration.

The Bombay high court has upheld an arbitration tribunal order asking Maharana Infrastructure and Professional Services Ltd (MIPS) to deposit Rupees 190 crore with the arbitrator or to provide a bank guarantee until a final award is passed. MIPS was on the portfolios of private equity firms Matrix Partners and Resurgence, who sought arbitration after finding discrepancies in the accounts of MIPS.

Thank you for reading. We will be in your inbox again next month, with more updates from the world of arbitration.

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