Welcome back to our updates from the world of arbitration.
We were eagerly anticipating signs of the new government’s approach to arbitration and so far, we are not disappointed.
The Union Cabinet has approved a bill that if passed by Parliament, will create an independent and autonomous regime for institutionalised domestic and international arbitration. The New Delhi International Arbitration Centre (NDIAC) Bill, 2019 will replace an ordinance issued by the previous government.
To promote arbitration in key government ministries, the government also conducted a training sessionfor key personnel.
Speaking about how India can attract more arbitrations, one author remarked that Singapore’s arbitration dharma, its set of cardinal rules and guiding principles, is the reason it has become the leading destination for dispute resolution.
The Bombay High Court came down hard on the practice of companies appointing the same advocate in hundreds even thousands of disputes as their arbitrator of choice and said that an arbitrator is legally required to set out clearly how many arbitrations he or she has been appointed to. The Court set aside four arbitral decisions of an arbitrator appointed by Tata Capital Financial Services for, among other reasons, failing to disclose that he had been appointed as arbitrator by the company in 252 matters where the company is a claimant.
The Nani Palkhivala Arbitration Centre hosted a workshop on “Damages in Construction Arbitration”. You can watch here, a video from the event where Prof Janet Walker and former Chief Justice of India Dipak Misra were present.
The Permanent Court of Arbitration in Singapore has rejected India’s argument that the court does not have jurisdiction to decide a case brought against India by Japan’s Nissan Motors. Nissan’s legal notice had claimed in 2016 that over Rs 2900 crores in unpaid incentives and Rs 2100 crores in damages, plus interests and other costs, were due from Tamil Nadu for setting up a car manufacturing unit in the state. The Japanese car company brought the case against India for allegedly violating the Comprehensive Economic Partnership Agreement (CEPA) the country has with Japan. The CEPA gives some protections to Japanese firms investing in India and vice versa.
Claims such as the one above were part of the reason behind India’s unilateral termination of bilateral investment treaties on a mass scale and adoption of an inward-looking model BIT that prioritised state interests over the protection to foreign investment. That move however, has been identified as a factor in the decline in FDI growth, despite the well-advertised improvement in India’s ease of doing business rankings.
The 842 cases administered by the International Court of Arbitration of the International Chamber of Commerce in 2018 were the second highest ever.
From the docket
The Bombay High Court in Ramchandra v. Kiran has held that the execution of an award can only be done if the award is registered. Referring to the decision in Sita Ram Bhama v. Ramvata Bhama, the Court held that it was clear from Section 17(1)(b) of the Registration Act, 1908, that any document that was testamentary in nature and purporting to create or declare any title, right, or interest in any immovable property exceeding Rs. 100/- in value, should be registered. Since the award created ownership rights and also mandated the relinquishment of ownership rights in relation to properties, the award could not be executed without registration.
The Delhi Court in Shabnam Dhillon v. Zee Entertainment Enterprises has held that a court acting under Section 37 of the Arbitration and Conciliation Act was not required to interfere with the discretion exercised by an arbitrator in deciding an application under Section 17 of the same Act. The Court held that an arbitrator’s discretion should not be exercised arbitrarily, should maintain the balance between the parties, and should be reasonable. It relied on the decision of the Supreme Court in Wander Ltd. v. Antox India in holding that an appeal challenging the exercise of discretion by the arbitrator can only be an “appeal on principle” and also ruled that Order 38 of the Code of Civil Procedure cannot bind the jurisdiction of the arbitrator as the arbitration process is not bound by that law or by the Evidence Act.
In Tigmanshu Dhulia Films v. Rajya Sabha Television, the Delhi High Court held that the jurisdiction under Section 11(6) of the Arbitration and Conciliation Act only came into the picture when the person entrusted, under the procedure agreed among the parties, with the duty to appoint the arbitrator, had failed to do so. The parties in this case had agreed that the appointing authority of an arbitrator would be the Secretary General of the Rajya Sabha. As the petitioner had not approached the appointing authority however, the cause of action for filing the petition under Section 11(6) had not yet arisen.
These were the updates from the world of arbitration in May. Thank you for reading. We will be in your inbox again next month.