Hello! Welcome back to our updates on arbitration law.
The biggest development for Indian arbitration since we last wrote to you has been the Permanent Court of Arbitration’s decision in favour of Vodafone International Holding BV in relation to the retroactive applicability of tax. Naturally, the decision will have some policy implications. The Indian government’s statement has not ruled out seeking legal remedies against the award. It is also considering keeping tax-related issues as non-arbitrable in new bilateral treaties. The provisions of bilateral treaties will also not impede the compulsory licensing of intellectual property rights.
Singapore has introduced a bill to amend the International Arbitration Act, 2002. The bill aims to introduce a default process for appointment of arbitrator(s) in arbitrations with 3 or more parties and to improve the enforcement of confidentiality obligations. India had introduced a statutory confidentiality obligation under Section 42A through the 2015 amendments, but in our view, the said amendment was poorly drafted and failed to take into account even legitimate exceptions to the confidentiality obligations of parties.
The ICC has released the 2021 ICC Arbitration Rules which will enter into effect in January 2021. The new rules include provisions for multi-party arbitrations, disclosure of third-party funding arrangements, and expectedly, remote hearings.
From the Docket
In Dinesh Gupta v. Anand Gupta, the High Court of Delhi has expounded on the scope of the court’s powers under Section 37 of the Arbitration and Conciliation Act, 1996 (“Act”) in relation to an order of the arbitral tribunal under Section 17. The High Court observed that an appeal under Section 37(2) would necessarily conform to the restrictions prescribed by Section 5 of the Act and hence there should be the minimum of intervention from the court. The appeal against an order of the arbitrator under Section 17 is restricted in scope and cannot be treated on par with an appeal under the civil procedure. The Court further held that the power exercised by the arbitrator under Section 17 was discretionary in nature and the only ground for interference was “patent illegality”.
The High Court also held that in so far as the powers of the arbitrator under Section 17(1)(ii)(b) are concerned, the arbitrator is not bound by the words of Order 38, Rule 5 of the Code of Civil Procedure, and yet, cannot decide an application completely contrary to their underlying principles.
The Supreme Court in a recent order in Punjab State Power Corporation v. Emta Coal, has re-emphasised that the power of the writ court to intervene in a matter where the arbitral tribunal dismisses a challenge under Section 16 of the Act, is restricted to those cases where there is a patent lack of jurisdiction. The Court further stated that a cases where there is a patent lack of jurisdiction of the arbitrator the same would qualify as “perversity of the order stares one in the face”.
The Supreme Court in NTPC v. Voith-Hydro has issued a notice on the question of law regarding limitation period with respect to the filing of an appeal under Section 37 of the Act.
In Himachal Pradesh Power Corporation v. HCC, the Delhi High Court has rejected a petition filed by the HPPCL under Sections 14 and 15 of the Act seeking the termination of the mandate of a presiding arbitrator because he had recused himself in another matter involving the same parties (arising out of a different project) on the ground that his (the arbitrator’s) brother had appeared as a counsel for HCC in a proceeding under Section 9 of the Act in that matter. The High Court held that recusal in one matter cannot lead to the conclusion that the arbitrator must recuse himself in another matter.
Thank you for reading. We will be back in your inbox next month with more updates from the world of arbitration law. Till then, stay safe.