Children's Ark
Case BriefsForeign Courts

   

The High Court of Justice (Technology and Construction Court): While deciding the instant matter revolving around the Dispute Resolution Procedure (DRP) in a construction contract between the parties; the Bench of Justice Joanna Smith, DBE, termed the DRP in question to be “unusual and surprising” and observed that the Procedure did not include a sufficiently defined mutual obligation upon the parties in respect to referral of their dispute to the Liaison Committee and the ensuing process, thus, creating an obvious difficulty in determining whether either Children’s Ark Partnership or Kajima Construction had acted in breach.

The Facts of the Case: In June 2004, Children’s Ark Partnership (CAP) entered into an agreement with Sussex University Hospital NHS Trust (Trust) to design, build and finance the redevelopment of the Royal Alexandra Hospital for Sick Children. Subsequently, CAP and Kajima Construction entered into a “construction contract” whereby which Kajima was appointed to design, construct and commission the afore-stated hospital.

The Trust was entitled to make deductions from CAP under the Project Agreement in respect of service failures arising from defects and Kajima Construction would be liable to reimburse those Deductions under the terms of the Construction Contract. Kajima Construction carried out the work between 2004 and 2007.

In September 2018, concerns around cladding and fire-stopping issues were notified to Kajima Construction, which agreed to carry out remedial works at its own cost on a without prejudice basis. The project commenced in December 2018 but had to be sequenced over a long period of time in order to minimize disruption at the Hospital. The parties agreed to a Standstill Agreement dated 29-03-2019, which was subsequently varied on four occasions to protect their mutual positions. The provisions of the standstill agreement made clear that it did not preclude steps being taken under the DRP in the construction contract.

On 30-11-2021, Kajima Construction informed CAP that since its remedial works had now been largely completed, thus it has reasonably met all possible liabilities that could arise from the design and construction of the Hospital and that therefore, it no longer wished to extend the standstill period. However, the Trust informed CAP that the finished work contained “certain design and/or construction defects”.

Trust wanted CAP to remedy the defects but CAP asserted that the defects arose from the failure on the part of Kajima Construction to comply with its obligations under the Construction Contract and/or breach of its tortious duty. Therefore, CAP sought “damages” and/or “sums due” pursuant to the terms of the Construction Contract or in tort.

Relevant Clauses of the Construction Contract

  • Clause 9.7 of the Construction Contract provided that no claim, action or proceedings shall be commenced against Kajima Construction after expiry of twelve years from the Actual Completion Date of the works.

  • Clause 56 contained the agreed contractual machinery for resolution of disputes- a Dispute Resolution Procedure set out in Schedule 26, which would be the only contractually agreed route for dispute resolution.

  • Clause 68 stated that the courts of England and Wales shall have exclusive jurisdiction to hear and settle any action, suit, proceeding or dispute in connection with this contract, subject to the provisions of the Dispute Resolution Procedure.

  • Schedule 26 aka the Dispute Resolution Procedure, stated that procedure set out in the Schedule shall apply to any dispute, claim etc. except where it has been expressly excluded from this procedure; and the DRP shall not impose any precondition on any party or otherwise prevent or delay any party from commencing proceedings in any court of competent jurisdiction to obtain either.

  • Furthermore, Schedule 26 mandated that all Disputes are first to be referred to the Liaison Committee for resolution. Any decision of the Liaison Committee will be final and binding unless the parties otherwise agree. Schedule 26 also provided that the parties “may” refer the dispute to Mediation and Adjudication before dealing with “Court Proceedings”.

Observations: Upon perusal of the facts, contractual terms, relevant law, contentions by the parties and especially the precedents on arbitration, the Court observed that the precedents have not distinguished between mandatory obligations and conditions precedent for the purposes of deciding whether to enforce dispute resolution clauses prior to the commencement of litigation in court. It was noted that DRP, in so far as it concerns the requirement to refer disputes to the Liaison Committee can be properly interpreted as a condition precedent to the commencement of litigation.

As regards the DRP and its enforceability, the Court noted that in order to be enforceable, the Dispute Resolution Procedure aka DRP should be “sufficiently clear and certain by reference to objective criteria…“. However, Construction Contract, when read the Project Agreement, does not comply with the requirement of clarity. The Court reasoned that’

  • There was no meaningful description of the process to be followed. It is unclear as to how the Liaison Committee will “seek to resolve the Dispute”. It is also unclear as to how a dispute between CAP and Kajima should be referred to the Liaison Committee.

  • There is therefore no unequivocal commitment to engage in any particular ADR procedure. “Whilst the word “resolution” in the context of court proceedings means a final determination, it seems to me that it has a rather different meaning in the context of a dispute resolution process which is intended to achieve an amicable outcome. I cannot see how it is possible to “resolve” a dispute between two parties amicably when one is not involved in the process“.

  • There is unclarity as to the impact any decision of the Liaison Committee has on Kajima. The Court also pointed out that when the process of referral to the Liaison Committee comes to such an end such that the dispute is “not finally resolved” it is unclear when the condition precedent is satisfied i.e., it is unclear whether a resolution or decision is required before litigation may ensue.

  • The Court thus observed that although expressed as a condition precedent, the obligation to refer disputes to the Liaison Committee is not defined with sufficient clarity and certainty and therefore cannot constitute a legally effective precondition to the commencement of proceedings.

The Court also observed that the case gives rise to a novel point concerning the expiry of the limitation period, which arises only in the context of the exercise of the court’s discretion. However, in light of DRP’s lack of enforceability, Civil Procedure Rule 11(1) is not engaged. Thus, it is not an appropriate case for the intervention of the Court.

[Children’s Ark Partnerships Ltd. v. Kajima Construction Europe (UK) Ltd., [2022] EWHC 1595 (TCC), decided on 22-06-2022]


*Sucheta Sarkar, Editorial Assistant has prepared this brief.

OpEd by Soumyaa Sharma
Op EdsOP. ED.

   

It is not so surprising to often see the Indian judiciary wearing a cloak of inquisitorial system of justice or be seen involved in activism to instate or reinstate justice and/or means of such justice. One such means, the alternative dispute resolution (ADR) has been majorly developed and promoted by judicial activism. Judiciary has proactively evolved ADR by giving it a true meaning and purport in terms of its implementation.

This article strives to show glimpses in past of judicial activism especially in terms of broadening the spectra of matters to deem fit for reference to ADR and in conclusion briefly discusses and predicts if similar trend of activism will exist in the near future in the light of the pending Mediation Bill, 20212 introduced in Rajya Sabha on 14-12-2021.

Noteworthy traces of such activism can be first seen in the judgment of Hussainara Khatoon v. State of Bihar3, wherein the “right to speedy trial” was recognised as being implicit in Article 21 of the Constitution4. To give effect to the said mandate waking up to the need of the hour, Parliament considered introducing various ADR mechanisms to strengthen the judicial system, which inter alia included:

(i) In 1994, amendment to the Legal Services Authority Act, 19875 was introduced to constitute and organise Lok Adalats.

(ii) In 1996, the Arbitration and Conciliation Act6 (A&C Act) was enacted repealing the obsolete 1940 Arbitration Act. Arbitration as a mode of ADR has gained recognition with the A&C Act being amended several times, noteworthily in 2015 and 2018.

(iii) Introduction of Section 897 dealing with court annexed ADR in the Civil Procedure Code, 1908 (CPC). The said amendment came in effect only on 1-7-2022.

(iv) In parallel to Section 89 CPC, in 1999 (w.e.f. 1-7-2002), Section 168 in the Court Fees Act, 1870 was introduced regarding refund of fees in matters referred under Section 89 CPC.

In the wake of Section 89 CPC, on 27-7-2002, the then Chief Justice of India, formally inaugurated the Ahmedabad Mediation Centre. The CJI called a formal meeting of the Chief Justices of all the High Courts of the Indian States in November 2002 at New Delhi to impress upon them the importance of mediation and the need to implement Section 89 CPC.9

Section 89 CPC, as vital as a statutory step it was, had serious shortfalls in terms of its implementation that were fixed by the Supreme Court. Section 89 CPC had anomalies that were identified by Supreme Court in a series of cases, which are discussed in subsequent paragraphs of this article. Interestingly, till date the legislature has carried out no amendment to Section 89 to fix these anomalies. But Section 89 is very well been used by courts to refer the matters through ADR, though only after the Court supplemented the wording of Section 89 with purposive interpretation. The Supreme Court in fact was aware of its need to step up, which was respectfully nothing short of being called as activism. The Court relevantly while fixing the anomalies stated that:10

9. If Section 89 is to be read and required to be implemented in its literal sense, it will be a trial Judge’s nightmare. It puts the cart before the horse and lays down an impractical, if not impossible, procedure in sub-section (1). It has mixed up the definitions in sub-section (2). In spite of these defects, the object behind Section 89 is laudable and sound. Resort to alternative disputes resolution (for short “ADR”) processes is necessary to give speedy and effective relief to the litigants and to reduce the pendency in and burden upon the courts.

The 2003 three-Judge Bench judgment in Salem Advocate Bar Assn. v. Union of India called as Salem Bar (1)11 finds a special notice in this regard. The Supreme Court in Salem Bar (1)12, directed for a committee to be appointed to frame model rules explaining the procedure for mediation. The amendment in Section 89 was made on the recommendation of the Law Commission of India and Justice Malimath Committee.13 The Law Commission of India, in compliance with the aforesaid judgment, drafted the consultation paper on ADR and Mediation Rules in 2003 which was adopted by several High Courts to formulate their separate Mediation Rules. Later, Justice Malimath Committee14 recommended making it obligatory for the court to refer the dispute, after issues are framed, for settlement either by way of arbitration, conciliation, mediation or judicial settlement or through Lok Adalat. It is only when the parties fail to get their disputes settled through any of the ADR methods that the suit could proceed further. The Chief Justice of India set up the Mediation and Conciliation Project Committee (MCPC) in 2005 for encouraging amicable resolution of disputes pending in the courts in accordance with Section 89 of the Code of Civil Procedure.

In Salem Bar (1)15, the Supreme Court upheld the validity of Section 89 with all its imperfections and referred to a committee, as it hoped that Section 89 would be implemented by surfacing the infirmities in it. Later in 2005, in another subsequent case of Salem Advocate Bar Assn. v. Union of India, known as the Salem Bar (2)16, recognised certain anomalies under Section 89 and gave purposive interpretation thereby making Section 89 CPC workable. The Supreme Court emphasised the need for ADR in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.17 (Afcons case). The judgment firstly acknowledged the anomalies in the understanding of Section 89 while referring to Salem Bar (1)18 and Salem Bar (2)19; and secondly it laid out guidelines for the courts to follow for the effective implementation of Section 89 CPC, which encourages parties to settle their disputes by means of ADR.

In Afcons case, the Court adjudged that reference to ADR is a must and mandatory under Section 89 CPC, “where it appears to the court that elements of settlement exist”20. Even though the Court in Afcons case21 was faced with the issue of adjudging whether mutual consent is necessary for arbitration, the Court made observations with regard to “mutual consent” required or not under all ADR methods recognised under Section 89 CPC. The Court held that mutual consent is required for arbitration and conciliation but not for Lok Adalat, mediation and judicial settlement. Further, an illustrative category of disputes which would be fit and not fit for reference to ADR were also observed.22 In the said list of cases, cases of criminal offences and that of serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion, etc. were held not fit for ADR reference. The Supreme Court in the recent judgments has clarified and limited the scope in cases of fraud. In 2021, the Supreme Court has clarified regarding non-arbitrability of cases involving fraud that “cases involving prosecution for criminal offences, it is also important to remember that the same set of facts may have civil as well as criminal consequences”.23

Through judicial activism the concept and use of ADR has been expanded tremendously. In precedents such as K. Srinivas Rao v. D.A. Deepa24 mediation/ADR was encouraged in matrimonial cases and criminal cases and accepting compromises even in the non-compoundable cases such as Section 498-A25 IPC (though with caution). The Court allowed quashing of complaints on the basis of settlement. Further the Court issued directions re mediation such as setting up pre-litigation desks/clinics; giving them wide publicity and making efforts to settle matrimonial disputes at pre-litigation stage.26 The Court observed:27

44.there exist elements of settlement, it should direct the parties to explore the possibility of settlement through mediation … In this exercise, there is no loss to anyone. If there is settlement, the parties will be saved from the trials and tribulations of a criminal case and that will reduce the burden on the courts which will be in the larger public interest.

The judicial courts have proactively allowed mediation in cases of compoundable offences such as Section 13828 of the NI Act.29 In the 2019 judgment of MTNL v. Canara Bank30 the Supreme Court, while invoking the doctrine of “group companies” permitted a non-signatory to an arbitration agreement to participate in the arbitration proceedings. The Supreme Court observed that a non-signatory may be bound by an arbitration agreement where the parent or holding company, or a member of the group of companies is a signatory to the arbitration agreement and the non-signatory entity on the group has been engaged in the negotiation or performance of the commercial contract, or made statements indicating its intention to be bound by the contract, the non-signatory will also be bound and benefited by the relevant contracts. In the instant case, the Supreme Court observed that there was enough factual background to suggest that the parties intended to bind the non-signatory party to the arbitration proceedings.

Needless to add, countless sets of judgments exist where the Court has stressed on restraint to be practised by the courts in cases of review of arbitral awards under Section 3431 of the Arbitration and Conciliation Act, 1996. These judicial precedents lineage starts from the judgment of Associate Builders v. DDA32 in 2014, followed by certain important judgments such as that of Ssangyong Engg. and Construction Co. Ltd. v. NHAI33 and coming to the judgment in Delhi Airport Metro Express (P) Ltd. v. DMRC34 wherein the Court has clarified that it may not interfere with the arbitral award merely because the other view appears more plausible. Even in one of another judgment, Welspun Specialty Solutions Ltd. v. ONGC Ltd.35the Court set aside the order of the High Court and the Single Judge interfering with the award under Section 34 of the A&C Act and upheld the judgment of the Arbitral Tribunal.

All these landmark cases indicate the heavy weight and trust that our judiciary entrusts with the ADR mechanisms such as arbitration.

In the 2019 judgment of Perry Kansagra v. Smriti Madan Kansagra36 the Supreme Court identified various kinds of disputes where ADR may be a better alternative than litigation, such as cases relating to trade, commerce and contracts including, inter alia, money claims arising out of contracts. Disputes relating to specific performance or disputes between insurer and insured, bankers and customers were also considered to be better resolved through an ADR mechanism rather than litigation.

In the judgment of M.R. Krishna Murthi v. New India Assurance Co. Ltd.37, the Supreme Court directed the Government to consider the feasibility of enacting a Mediation Act.

In background of such events, it is not tough to view the upcoming trend that judiciary might adopt if the pending Mediation Bill of 202138 is enacted in its present state, that has been introduced in Rajya Sabha on 21-12-2021. But will the same provide a wholesome law on mediation and will be putting rest to the era of judicial activism in matters of mediation? May be it is too early to say for sure but at the outset it can be seen that provisions of the Bill incorporate limited power to judicial courts to decide if the matter is fit for mediation and scope for reference. The Bill incorporates a proviso to Section 7, which states:39

Provided that nothing contained herein shall prevent any court, if deemed appropriate, from referring any dispute to mediation relating to compoundable offences or matrimonial offences connected with or arising out of civil proceedings between the parties.

The Bill provides a schedule to compartmentalise cases that are not fit for mediation40, which has inadvertently categorised cases such as that of fraud or criminal offences as not fit for mediation at all. In the few cases noted above this seems to be an obsolete view that has been redefined and yet the Bill fails to incorporate it.

Further, the Bill mechanically proposes to make pre-litigation mediation as mandatory41, and thereby not taking into account the most important criteria of success of any mediation i.e. mutual consent. And importantly the Bill leaves not much power with judicial courts to decide if the matter even if not in the category of “disputes not fit for mediation” may still be unfit for mediation. Only the power to grant some interim relief under Section 842 of pending Bill may be granted by the court or tribunal before commencement or during the mediation proceedings is possible. But in toto such a mechanical approach towards implementation of an ADR mechanism that too of mediation is bound to have its shortfall.

It is indicative that the Bill if passed in its present form indicates that it may eventually call for more activism on the part of the Indian judiciary in giving it purposive interpretation for its effective use in adjudging matters through ADR. It can be said that more surprises await to be unboxed where the judiciary can be seen in action with its fathomable and praiseworthy activism.


† Advocate. Author can be reached at <soumyaasharma@outlook.com>.

2. Mediation Bill 2021 (43 of 2021).

3. (1980) 1 SCC 93.

4. Constitution of India, Art. 21.

5. Legal Services Authority Act, 1987.

6. Arbitration and Conciliation Act, 1996 (26 of 1996).

7. Civil Procedure Code, 1908, S. 89.

8. Court Fees Act, 1870, S. 16.

9. Mediation and Conciliation Project Committee, Supreme Court of India, Delhi, Mediation Training Manual of India, p. 7, available at <https://main.sci.gov.in/pdf/mediation/MT%20MANUAL%20OF%20INDIA.pdf >.

10. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24.

11. (2003) 1 SCC 49.

12. (2003) 1 SCC 49.

13. Delhi Mediation Centre, available at <https://delhicourts.nic.in/dmc/history.htm> (last visited on 12-5-2022).

14. Report of the Committee on Reforms of Criminal Justice System, (Vol. 1)(March 2003).

15. (2003) 1 SCC 49.

16. (2005) 6 SCC 344.

17. (2010) 8 SCC 24.

18. (2003) 1 SCC 49.

19. (2005) 6 SCC 344.

20. Afcons case, (2010) 8 SCC 24, at para 26.

21. (2010) 8 SCC 24.

22. Afcons case, (2010) 8 SCC 24, at paras 27-28.

23. Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713.

24. (2013) 5 SCC 226.

25. Penal Code, 1860, S. 498-A.

26. K. Srinivas Rao, (2013) 5 SCC 226 at para 46.

27. K. Srinivas Rao, (2013) 5 SCC 226.

28. Negotiable Instruments Act, 1881, S. 138.

29. Dayawati v. Yogesh Kumar Gosain, 2017 SCC OnLine Del 11032.

30. (2020) 12 SCC 767.

31. Arbitration and Conciliation Act, 1996, S. 34.

32. (2015) 3 SCC 49.

33. (2019) 15 SCC 131.

34. 2021 SCC OnLine SC 695.

35. (2022) 2 SCC 382.

36. (2019) 20 SCC 753.

37. (2020) 15 SCC 493.

38. Mediation Bill, 2021.

39. Mediation Bill, 2021, S. 7.

40. Mediation Bill, 2021, First Schedule.

41. Mediation Bill, 2021, S. 6.

42. Mediation Bill, 2021, S. 8.

Call For PapersLaw School News

About the Magazine

Gujarat National Law University’s SRDC ADR Magazine is a quarterly student-run publication which invites submissions from experts, working professionals, academics and students engaged in the field of Alternate Dispute Resolution.

The first edition of the ADR Magazine was launched in May, 2020.

This flagship publication encloses several articles employing a comparative and interdisciplinary approach to analyze and offer comments on the recent developments, judicial decisions and practices of ADR in Indian and several foreign jurisdictions.

SRDC ADR Magazine maintains a double-blind peer review system and regular collaboration with experts and practitioners in the field of ADR who supervise the editorial process to preserve its scholastic appeal and integrity.

 

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GNLU SRDC ADR Magazine is inviting submissions for Volume III, Issue II. Contributions for the magazine are welcome from all academicians, practitioners and law students. ADR Magazine accepts submissions on a rolling basis, subject to the preference for publication in the upcoming issue granted for those submissions made before the prescribed date, i.e. 31st July 2022.

The magazine permits submissions in the nature of Articles, Case Comments, Legislative Comments and Book Reviews falling within the scope of Alternative Dispute Resolution.

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Interviews

Mr Justice Ravi Nath Tilhari is currently a Judge of the Andhra Pradesh High Court. Before sitting on the Bench, he had an illustrious practice of 28 years in litigation. He was appointed as Additional Judge of Allahabad High Court on 12-12-2019 and took oath as a permanent Judge on 26-3-2021. Later on, he was transferred to the Andhra Pradesh High Court on 18-10-2021. Till today Justice has passed some significant judgments, including Badugu Panduranga Rao v. Legal Services Authority[1], where he held that the Legal Services Authorities Act of 1987, does not provide any jurisdiction to appoint a guardian; Amoda Iron Steel Ltd. v. Sneha Anlytics and Scientifics[2], which is a landmark judgment related to Commercial Courts Act; Pattam Gousha Bi v. Pattan John Shaida[3], where he held that when there can be no pronouncement of talaq, contrary to Mahomedan law, orally, it can also not be in the form of writing; Rentapalli Anand Mary v. Kankipati Kalyan Babu[4], where he held that rape is a crime against society and cannot be settled between the parties.

 

He has been interviewed by Ayush Shukla, EBC/SCC Online Student Ambassador who is currently pursuing law from TNNLU.

1. Please tell us about how your journey in the field of law started. Given that you are a 3rd generation lawyer, did you have any choice?

I would trace out the journey in the legal profession in the year 1918, when my grandfather, late Moti Lal Tilhari, joined the Bar and practised in the Commissioner Court of Awadh; in the Chief Court of Awadh at Lucknow, and after the amalgamation of the Chief Court of Awadh in the new High Court he practised in the new High Court at Lucknow. He dreamed that someone from his family, which hails from Tilhar, in District Shahjahanpur, would deliver justice to the poor and needy persons. It came true on the elevation of my father, late Mr Justice Hari Nath Tilhari as a Judge of the Allahabad High Court on 4-2-1992 and later on transferred to the Karnataka High Court.

I joined this noble profession on 23-3-1991. There is no question of any other choice as I entered the profession by my own choice. I never thought of entering any profession or service other than the legal profession. I feel proud, with all humbleness, to say that for more than 100 years, we have been rendering our services in the dispensation of justice as lawyers and as Judges, and the journey is still on.

2. To what extent have your law school or initial days of your practice contributed to what you are today, and from that experience, could you please tell our readers what all things one should remember during those days of their life?

 

My memories are still fresh of my Lucknow University days while studying law. I pay my regards and owe gratitude to my teachers who imparted the knowledge in law to make my basics strong.

The memories are also fresh from the day I entered this profession in the old High Court building campus at Lucknow. I found the Awadh Bar Association a family away from home, which has been through all my thick and thin and helped me grow into what I am today. Many senior advocates of that time extended their valuable guidance to me even in the courtroom while arguing a case when faced with the intricacies of the law. I feel privileged to be a part of one of the strongest and most amicable Bar of the High Courts, the Awadh Bar Association, which is rich in culture and heritage.

The youngsters should focus in their early days on utilising the time they have to read law journals to be acquainted with the latest ones. Spend more time in courtrooms, even if they have no brief of their own. They will learn a lot from the arguments going on in the courtroom, the observations made, and the courtcraft from the senior members.

3. Recently Chief Justice N.V. Ramana inaugurated the International Arbitration and Mediation Centre in Hyderabad, a function in which you were also an esteemed guest. In his speech, while being a strong advocate of the alternate dispute resolution process, Chief Justice Ramana has stated that “people should explore ADR options such as arbitration and mediation first, and approach courts only as a last resort”. So, what are your views about this statement and the alternate resolution mechanism?

 

Let me briefly state about the alternative dispute resolution mechanism. Resort to an alternative dispute resolution mechanism is intended to bring an end to litigation between the parties at an early date and amicably. Section 89 of the Code of Civil Procedure was inserted with this object to see that the court itself need not necessarily decide all the cases filed in court.

There are five types of well-known alternative dispute resolution measures arbitration, conciliation, judicial settlement, settlement through Lok Adalat, and mediation.

Arbitration is an adjudicatory process by a private forum governed by the provisions of the Arbitration and Conciliation Act, 1996. This can be recourse to when there is a pre-existing arbitration agreement between the parties. But, even if there is no pre-existing agreement, the court can refer the parties to the suit proceedings for the resolution of the dispute by the arbitrator with the consent of all the parties. Then, the case goes outside the stream of the court and becomes an independent proceeding before the Arbitral Tribunal, which ends in a decision, subject of course to the judicial proceedings provided under the Arbitration and Conciliation Act, 1996 itself.

The conciliation process is also governed by the Arbitration and Conciliation Act, 1996, for which there can be a valid reference if both the parties to the dispute have consented to negotiation with the help of a third party or third parties.

In conciliation, judicial settlement, or mediation, the dispute would not ipso facto go outside the judicial system, but if, despite efforts, it is not successful, the dispute will ultimately be decided by the court. Suppose the conciliation, mediation, or judicial settlement is successful. In that case, the settlement agreement will have to be placed before the court concerned for recording the settlement and disposal, as these processes are non-adjudicatory.

The Lok Adalats are of two types. One, the Lok Adalat constituted under Section 19 of the Legal Services Authorities Act, 1987. It has no adjudicatory function but discharges a purely conciliatory function. The second is permanent Lok Adalat which is established under Section 22-B(1) of the Act 1987, regarding specified public utility services, having both conciliatory and adjudicatory functions. On failure of conciliation, the permanent Lok Adalat proceeds to adjudicate the dispute on merits.

The awards of the Lok Adalat are also of two kinds: one, made in a direct reference by parties under Section 19(5) of the Act, 1987, without the intervention of the court, and the other made on a reference by a court in a pending proceeding. The award of the Lok Adalat made on a reference by a court has to be placed before the court for recording and disposal in terms of the award. The Lok Adalat award is deemed a decree of a civil court and is executable.

I am also a strong advocate of alternate dispute resolution mechanisms. During my practice days, I was an active member of the Mediation and Conciliation Centre, High Court at Lucknow. My first endeavour has always been to see if the dispute, having regard to its nature, can be amicably settled through an alternative dispute resolution mechanism and if it can be, all the efforts should be made to make it a success. This process helps in maintaining the harmony between the litigating parties and reduces the number of cases in the court that can be amicably resolved. It is cost-effective, less time consuming, and most importantly, particularly in a non-adjudicatory process, results in a win-win situation for both the litigating parties, as the settlement arrived at is voluntary with their consent and of their choice.

Therefore, I strongly believe that the people should explore ADR options before approaching the court. Even after they approach the courts, they should always be ready to take recourse to ADR for an amicable settlement of their dispute.

The establishment of the International Arbitration and Mediation Centre in Hyderabad is a welcome step and will undoubtedly lead to a productive outcome.

 

4. Why do you think we need arbitration centres? What is the importance or need of institutional arbitration, while there are ad hoc arbitrations, which are widely preferred? 

As I have highlighted, in response to the earlier questions, the importance of the alternative dispute resolution measures in the dispensation of timely justice, it is the need of the hour that steps are taken to promote ADR-friendly culture in India. So, setting up arbitration centres is a step towards achieving that objective. The institutional arbitration centres have their set rules and regulations as opposed to the ad hoc arbitration, where these rules and regulations are to be negotiated before the session even starts and which at times becomes a point of dispute in itself. Moreover, the arbitration centres are assisted by a panel of experts in specified fields in which arbitration is to take place, making it more convenient to deal with matters of complexity. It would raise the people’s confidence in the ADR mechanism and make it preferable to the public by their choice.

 

5. Recently in an interview Justice A.K. Sikri (Retd) Judge, Supreme Court of India and an associate member of the 4 Pump Court, London has pointed out that one of the major obstacles in letting foreign companies prefer India as a seat of arbitration is the delay in adjudication of issues related to Section 34 of the Arbitration and Conciliation Act, 1996 which is related to setting aside of arbitral award, by the courts. So, what is your view of this, and how can the judiciary address this issue?

Section 34 of the Arbitration and Conciliation Act, 1996 provides for setting aside an arbitral award by the court on limited grounds contained in its sub-section (2). The recourse for setting aside an arbitral award can be made only by an application confined to the grounds under sub-section (2). The application must be made within three months from the date of receipt of the arbitral award, but an application filed beyond this period may be entertained within a further period of thirty days if the applicant was prevented by sufficient cause. After that, an application for setting aside award cannot be entertained. Further, as per sub-section (5), such an application shall be filed only after issuing a prior notice to the other party. This is to ensure that the time consumed generally in service of notice after the filing of the application is avoided and made good within three months prescribed for filing the application for setting aside the award. Sub-section (6) also provides that an application for setting aside the arbitral award shall be disposed of expeditiously and in any event within one year from the date of service of the notice on the other side.

The challenge to an arbitral award cannot be on merits. There is no power given to the court to modify the award or even remand the matter to the arbitrator after setting aside the award. Suppose the court finds it appropriate and it is so requested. In that case, the court may adjourn the proceeding for a definite period to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or take such other action as, in the opinion of the Arbitral Tribunal, will eliminate the grounds for setting aside the arbitral award.

The appeal under Section 37 is against the order of the court either setting aside or refusing to set aside an arbitral award. Any other order passed in proceedings under Section 34 has not been made appealable.

When it comes to the execution of the arbitral award, the execution court cannot enter any factual enquiry, which may have the effect of nullifying the decree itself. However, it can undertake a limited enquiry regarding jurisdiction issues going to the root of the decree, having the effect of rendering the decree a nullity.

Finality has been attached to the arbitral award even when the award is not enforced. Once an award is made on a subject-matter, no action can be started again on the original claim.

Thus, there are ample safeguards to ensure that the adjudication of issues related to Section 34 is not delayed. The only thing required, in my view, is to adhere to the statutory provisions.

 

6. What steps, according to you, can be taken to promote arbitration-friendly culture in India to make it an attractive seat for arbitration not only for domestic companies but also for foreign companies? Besides judiciary, what, according to you, should be the role of Government in achieving the same? 

Making India a preferable seat for arbitration and developing an arbitration-friendly culture in India is not a one day process. It is a gradual process that will gain pace as the society of India moves forward with education and awareness about arbitration. Undoubtedly, setting up the International Arbitration and Mediation Centre at Hyderabad is a progressive step towards promoting the arbitration culture in India. There are already centres like Delhi International Arbitration Centre (DIAC) and Nani Palkhivala Arbitration Centre (NPAC), which are playing a significant role in strengthening the arbitration in India. Still, we need more such centres to promote healthy arbitration. An arbitration-friendly culture will attract better business opportunities in the country, as big multinational companies prefer arbitration over litigation for speedy remedies. So, if India adopts the arbitration culture, the chances of witnessing more business opportunities will increase. Moreover, the promotion of arbitration culture in India, as I have earlier said, needs awareness, and for this purpose, we must take steps. Here, major efforts should be made by the stakeholders of the legal fraternity.

7. You have been a part of one of India’s oldest and newest High Courts and have witnessed both going from physical to virtual hearing, and in this, you must have witnessed the changes that the system has undergone, which has its own merits and demerits. Could you please tell our readers what, according to you, are the merits and demerits of going virtual? Are there any infrastructural issues that need to be addressed in India?

 

I would like to briefly state the history of the Allahabad High Court. The Allahabad became the seat of the Government of North-Western Provinces, and the High Court was established in 1834. It was shifted to Agra, and then at Agra on 17-3-1866 under the High Courts Act, 1861, the High Court of Judicature for the North-Western Provinces was founded. It was shifted from Agra to Allahabad in 1875, and its name was changed to the High Court of Judicature at Allahabad from 11-3-1919. In Awadh, on 2-11-1925, the Awadh Judicial Commissioner Court was replaced by the Awadh Chief Court at Lucknow, by the Awadh Civil Court Act, 1925, and on 25-2-1948 the Chief Court of Awadh was amalgamated with the High Court of Allahabad, by the United Provinces High Court (Amalgamation) Order, 1948. Thus the new High Court, the present Allahabad High Court, was established with its seats at Allahabad and at Lucknow.

It is my proud privilege to be part of the Allahabad High Court not only because it is the biggest High Court in the country and one of the oldest High Courts but also because it has pronounced many fearless, landmark judgments upholding the Constitution, the democracy independence of the judiciary, the basic structure, as also the dignity of an individual. To mention a few, I may refer to Keshav Singh v. Speaker, Legislative Assembly[5]; Raj Narain v. Indira Nehru Gandhi[6]; and Rahmat Ullah v. State of U.P.[7] (known as Triple Talaq case).

The High Court of Andhra Pradesh was established in 1954 when the State was formed from the earlier Madras Presidency. However, post bifurcation of Andhra Pradesh new High Court was established on 1-1-2019 under the Andhra Pradesh Reorganisation Act, 2014. I cherish my journey from Allahabad High Court to Andhra Pradesh High Court and would work for its glory.

Regarding virtual hearing, I would not name it as “merits” or “demerits” but would prefer to say it as how habitual or familiar people want to be with the new set-up. This all depends upon the approach of the people towards a virtual hearing. The more positively the people react, the fewer demerits we will witness. Also, the merits of virtual hearing are permanent as opposed to its demerits, which are temporary and can be resolved by a change in approach as also with technological advancement. Still, to answer your question as per the present situation of the judiciary, the virtual system has helped a lot of the litigants to avail themselves of the services of many senior advocates, though far away from the court concerned. It has become more convenient for them to address the court without taking the pains of journey as also to connect to various courts in a single day. The difficulties I have experienced sometimes are in appreciating the arguments of counsels due to connectivity issues and seeing the documents referred by the counsels going from one page to another, but these difficulties are due to the introduction of the new system and are only a matter of time. Another issue that I have faced is that the people take unwarranted advantage of this convenient set-up by not following the dress code and not maintaining the discipline and decorum required to be maintained in courts. I am not saying it generally, but there are a few instances, you all know when the court had to take steps to ensure the functioning of the court in a dignified manner.

To sum up, I would like to say that people should be flexible enough to adapt to the changing conditions for proper judicial administration.

8. Finally, what will be your advice to the young law students and lawyers on how they should approach this field of law.

I would like to say that I am confident that the judiciary’s future is in safe hands, as the current generation is given not only academic classroom lectures but also good practical exposure by way of internships and mooting. With the help of online legal research websites and tools, research has become handier and more easily accessible. Today any judgment or journal is just a click away. However, besides all these technological enhancements and being a forever student of law, I would never say that anyone can master this profession because the law is dynamic and ever-evolving. Therefore, my advice to the youngsters will always be to remain updated with all the developments in the law. And for this, one should never stop reading and never shy away from reading voluminous documents and seeking guidance from their senior colloquies at the Bar, maybe on a very common or general point in law.

Please remember that this profession’s nobility lies in serving society and helping the poor and the needy. The profession deserves the utmost sincerity, decency, honesty, and hard work. There is no substitute for hard work and no shortcut to success.

The youngsters should also do some “pro bono” considering that the traditional litigation is from the weaker section of society.

Always be fair to your client, your opponent as well, and the most to the court. The future is yours.

Let this chariot of justice reach every corner and to one and all to deliver justice. 


[1] 2022 SCC OnLine AP 739

[2] 2022 SCC OnLine AP 136

[3] 2022 SCC OnLine AP 1020

[4] 2021 SCC OnLine AP 3989

[5] 1965 SCC OnLine All 355

[6] 1974 SCC OnLine All 287

[7] 1994 SCC OnLine All 1072

Experts CornerTariq Khan

For many years, alternative dispute resolution (ADR) has been used to describe arbitration, conciliation and mediation as alternatives to litigation. The idea behind calling these methods of dispute resolution “alternate”, is that litigation has been, and will always be the primary mode of dispute resolution. However, in the last one decade, we have seen a paradigm shift in this approach. Young lawyers, general counsel, micro, small and medium enterprises (MSMEs) as well as companies are moving away from protracted litigation and accepting ADR as primary modes of dispute resolution. Litigation is a time-consuming and costly affair. Pursuing a case in court may result in loss of time, efforts and money whereas resolving a dispute by ADR can be quicker and cheaper. Another reason why ADR gained popularity is perhaps the dissatisfaction created by the litigation process. However, it cannot be denied that formal adjudication system will always be there as there will always be certain disputes that can only be resolved through it. Barring such disputes, all other disputes that one can resolve without burdening the court system, can be efficaciously resolved through ADR.

 

Over the last decade, ADR has gained traction in India. Both legislative framework as well as judicial precedents have aimed at promoting ADR as a preferred mode of dispute resolution rather than a mere substitute or alternative to the formal judicial system. In particular, the Arbitration and Conciliation Act, 1996 (Arbitration Act) has been amended[1] time and again with the view of keeping at par with other legal regimes and making India an arbitration-friendly jurisdiction. This has been buttressed by the Indian judiciary which has also actively adopted and recommended a minimal intervention approach, such that confidence is instilled in the arbitral process, amongst parties.

 

Particularly, with the current arbitration regime in place in India, the arbitral process is party friendly, time bound and confidential. The courts are slow in granting anti-arbitration injunctions, interfering with foreign awards, and a challenge to an arbitral award is now available to a party on limited grounds. This has allowed parties to attain a final and binding decision in a shorter timeline as against long-drawn battles before judicial fora.

 

The global business community has reaped benefits of ADR, both for containment of disputes as well as quick resolution. Across various sectors, the growing trend now, particularly in relation to commercial contracts, is to opt for an arbitration clause or med-arb clause for dispute resolution to ensure access to justice in reduced time and cost and in an efficient and satisfactory manner.

 

While the course of arbitration in India has been flourishing, mediation in India has been slowly gaining recognition. Mr Justice N.V. Ramana, the Chief Justice of India, recently said that prescribing mediation as a mandatory first step for resolution of every allowable dispute will go a long way in promoting mediation[2].

 

The primary reason for slow growth of mediation in India was the lack of awareness and its acceptance as a mode of dispute resolution. Other reasons why mediation could not gain popularity include lack of domain experts and suitable infrastructure. Recently, the Mediation Bill, 2021 (Mediation Bill) has been introduced with the aim of promoting domestic and international mediation in India, including online mediation, and is currently pending before the Rajya Sabha.

 

In April 2022, the Ministry of Law and Justice, India, indicated that the cases pending before the Supreme Court of India are 70,154, before various High Courts are 58,90,726 and 4,09,85,490 before District and Subordinate Courts, as of March 2022[3]. Further, on 15-4-2022, the Chief Justice of India while addressing the inaugural session of Telangana State Judicial Officers Conference, 2022 said that the judiciary is overburdened.[4]

 

In view of this surmounting pendency, adopting ADR as a primary mode of dispute resolution, as opposed to a mere alternative, is now the need of the hour. This will also result in decongesting the court system and bring about much-needed relief to the judiciary, which is overburdened.

 


Legislative Framework and Other Initiatives


Section 89 of the Code of Civil Procedure 1908 (CPC) was introduced in 2002 with the objective of promoting non-judicial dispute resolution. Section 89 contemplates reference of a dispute to arbitration, conciliation, judicial settlement through Lok Adalat or mediation, where there exists an element of settlement in the opinion of the court.

 

In 2018, Section 12-A was introduced in the Commercial Courts Act, 2015, mandating mediation before a party can approach a commercial court with a suit. The exception to pre-litigation mediation is cases where urgent interim relief is being sought. Thereafter, the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 were notified, which enumerate the manner in which the mediation proceedings would be conducted for reconciling and settling commercial disputes between the parties.

 

The Arbitration Act, from its inception, has endorsed a minimum interference approach. Recently, the judiciary has also strongly adopted a minimal intervention approach to encourage more parties to arbitrate. The key amendments introduced to the Arbitration Act in 2015 and 2019 are also in keeping with the objective of promoting arbitration as well the minimal interference approach, such that India can be transformed into a global hub for arbitration.

 

Before the 2015 Amendment, in relation to Section 34 proceedings, certain High Courts had the practice of allowing new evidence, documentary as well as oral, at the stage of challenge which was akin to a trial. With the amendment in 2015, this practice is now eliminated, and challenge proceedings are strictly summary in nature, requiring parties to establish a challenge based on the arbitral record filed before the Arbitral Tribunal.

 

The 2019 Amendment also provided for establishing an independent body, the Arbitration Council of India (ACI). ACI’s envisaged duties include promoting alternative dispute resolution, policy making, operation and maintenance of uniform professional standards, grading arbitral institutions and accrediting arbitrators.

 

Additionally, the real estate sector, recognising the benefits to parties of a quick and cost-effective resolution of disputes, has adopted conciliation as a mode of dispute resolution. In 2016, the Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted with the aim of protecting homebuyers from unscrupulous real estate developers and to provide quick dispute resolution. RERA has established a Real Estate Regulatory Authority (Authority) in each State for regulation of the real estate sector, which also acts as an adjudicating body for dispute redressal. Section 32(g) of the RERA provides for measures to be taken by the Authority to facilitate amicable conciliation of disputes between the promoters and the allottees through dispute settlement forums comprising of representatives from consumers and promoters associations. In line with this provision, several States have set up conciliation forums.

 

The Mediation Bill seeks to set up a Mediation Council of India (MCI) to promote and regulate domestic and international mediation in India, including online mediation. The Mediation Bill contemplates pre-litigation mediation or a subsequent reference, at the request of the parties, at any stage of the proceeding before a forum. The mediation proceedings envisaged are time bound, to be completed within 180 days, which is further extendable with the consent of the parties by another 180 days. The mediation settlement agreement, being a culmination of the disputes, is envisaged to be final, binding and enforceable in the same manner as courts judgments.

 

The First Schedule of the Mediation Bill enlists the disputes or matters which are not fit for mediation. Further, the Second Schedule enumerates an extensive list of matters which cannot be subjected to mediation. In cases where the Government is a party, the reference is confined to commercial disputes. Although the provisions in the Mediation Bill suggest that these are indicative, the legislature has adopted a restrictive approach and has failed to appreciate that there is a need to make the mediation process more inclusive and that only certain categories of proceedings should be reserved for adjudication by the judicial system, as a matter of public policy. In this regard, the principles set out in the decision of the Supreme Court in Vidya Drolia v. Durga Trading Corpn.[5] on arbitrability of disputes can be a yardstick to determine whether disputes can be referred to mediation or not.

 

The advancement and adoption of technology, as well as the shift towards online dispute resolution, has resulted in popularisation of online mediation. Online mediation has the potential to revolutionise the justice-delivery system by promising simple and affordable justice for all[6]. This shift will likely depend on the legislative framework, which is ultimately adopted by India and steps taken for its enforcement.

 

In a step forward, the Law Department of the Government of Telangana has issued an order dated 17-3-2022 designating the International Arbitration and Mediation Center, Hyderabad (IAMC) as the arbitral or mediation institution (as the case may be) in cases where ministries, departments, public sector companies, or other entities controlled or managed by the Government of Telangana are a party and where the value of the dispute is more than Rs 3 crores. In relation to existing contracts where the contract value is Rs 10 crores or above, parties have been directed to consider amending the dispute resolution clause, in consultation with the other parties to the contract, to designate IAMC.

 


Recommendations


All stakeholders have a role to play to pave the way for ADR to become more seamless, time and cost-efficient, and as such, a preferred and complete system for accessing justice.

 

The non-intervention approach adopted and recommended time and again by the Supreme Court of India should be followed by High Courts as well as lower courts as a rule. In addition, an active role by courts to recognise ADR and encourage parties to mandatorily explore settlement through mediation, before litigation can proceed, could result in early resolution of cases that are fit for settlement.

 

The promptness with which arbitration-related litigation, which comes before a court, either before, during or after the conclusion of the arbitral proceedings, is disposed of by courts is also crucial to increase the efficacy of arbitration as a dispute resolution method.

 

Particularly, expeditious disposal of challenge proceedings under Section 34 of the Arbitration Act, which applies to arbitral proceedings where the legal or juridical seat of arbitration is India. Although, challenge proceedings are now summary in nature and time bound, delays are inevitable in view of an overburdened judiciary. In addition, an appeal lies from an order setting aside or refusing to set aside an arbitral award, under Section 37 of the Arbitration Act, making it a two-tier challenge. The legislature could consider doing away with a Section 37 appeal currently in place, in order to ensure that awards attain finality at the earliest and enforcement can proceed. Additionally, heavy costs should be imposed on litigants where the court finds that the challenge proceedings have simply been preferred as a delay tactic to stall the enforcement of an award.

 

The State Governments could take steps to support and promote institutional arbitration and mediation in a similar manner as the State of Telangana. Both development and promotion of institutional forums for resolution of disputes have the potential of converting India into a global hub for arbitration and mediation, like London and Singapore.

 

In addition, strengthening the pool of arbitrators and professionals conducting mediation proceedings to ensure effective dispute resolution, and in case of arbitration, to reduce the susceptibility of awards to legal challenges is also of significance.

 

Lastly, while there is recognition and public awareness amongst individuals in relation to arbitration as a mode of dispute resolution, the awareness and understanding of ADR as a whole system is lacking. The role of legal professionals, therefore, assumes relevance both for promoting ADR as well as advising on the non-judicial options available to parties.

 


Conclusion


A rapid paradigm shift is the need of the hour where stakeholders start accepting arbitration, conciliation and mediation as primary modes of dispute resolution (PDR). The journey from ADR to PDR is underway and with the efforts of the Supreme Court of India and the legislature, the gap between the two is diminishing. Whether arbitration, conciliation and mediation will become the primary mode of dispute resolution or not will depend on the implementation and enforcement of the existing framework. The implementation must be in line with the overall objective i.e. minimum judicial interference, meeting the interests of disputing parties, cost-effective and speedy justice. Moreover, apart from creating an appropriate regulatory framework for arbitration and mediation, promoting awareness amongst stakeholders is crucial. Further, developing capacities both in terms of infrastructure as well as professionals with the required skill set and specialisation for successfully administering ADR mechanisms for dispute resolution is also critical. The phrase alternative dispute resolution is going to stay but we hope that in times to come it will be used as a reference to litigation at least in commercial disputes.


† Registrar, International Arbitration and Mediation Centre.

†† Advocate.

[1] Arbitration and Conciliation (Amendment) Act, 2015; the Arbitration and Conciliation (Amendment) Act, 2019.

[2]Mediation for Everyone: Realising Mediation’s Potential in India, India-Singapore Mediation Summit, 2021.

[3]Government of India Ministry of Law and Justice, Answer to Unstarred Question No. 5042, Lok Sabha.

[4] See HERE .

[5] (2019) 20 SCC 406.

[6] Speech delivered by Chief Justice of India Shri N.V. Ramana at Mediation and Information Technology Conference, 9-4-2022.

Op EdsOP. ED.

Introduction

Arbitration, as an alternative dispute resolution mechanism, was brought in to overcome the difficulties of pursuing litigation. Among several factors like cost-effectiveness and speedy justice, one of the foremost reasons for parties to choose arbitration is confidentiality of the arbitral proceedings.1 The promise of confidentiality ensures that business strategies and other sensitive information is not divulged to the public at large. Although confidentiality is not always guaranteed, most countries as well as institutional rules provide for the same.

A primer to confidentiality in arbitration proceedings

Confidentiality is an obligation on the part of the parties “to not disclose information concerning the arbitration to third parties or the public”.2 This obligation often extends to non-disclosure of the hearing transcripts, written pleadings, evidence, materials produced during disclosure and the arbitral award(s) and orders, to third parties.3

I. Provisions for confidentiality in the national laws and institutional rules

National laws

India

The Arbitration and Conciliation Act, 19964 (hereinafter “the 1996 Act”) has undergone multiple amendments since its inception. The Arbitration and Conciliation (Amendment) Act, 20195 (hereinafter “the 2019 Amendment”) officially laid down the ground for confidentiality in arbitral proceedings. Before the 2019 Amendment, the principle of “confidentiality” was only applicable to conciliation under Section 756. Following the recommendations of the 2017 High-Level Committee headed by Justice B.N. Srikrishna7, Section 42-A was introduced by the 2019 Amendment8. Section 42-A is identical to Section 75, but for arbitration. It imposes the liability of maintaining confidentiality on the parties, the arbitrators and the arbitral institution.

While it can be seen that confidentiality plays a pivotal role, it is surprising to note that even the 1996 Act does not have a provision imposing punitive measures in case of a breach. Confidentiality must also be imposed upon other persons present in the arbitral proceedings such as witnesses, stenographers and clerks.

Singapore

The laws of Singapore are one of the few that elaborate upon the obligation of confidentiality imposed. It is assumed that the proceedings will be heard in open court unless either of the parties requests otherwise.9 The Arbitral Tribunal has the power to enforce any obligation of confidentiality.10 There are restrictions on reporting the proceedings heard in courts other than the ones in open court.11 Further, on application of any party, the court can give directions as to whether any and, if so, what information relating to the proceedings will be made available to the public.12 Information will only be published in two circumstances. First, if the parties agree13 and second, if the court is of the opinion that such information published with directions will not reveal any confidential details.14 Nonetheless, the court may direct publication of the judgment if it deals with a substantial question of law involving the interpretation of the said section.15 Even then, information may be concealed at the request of any party.16

United Kingdom

The UK Arbitration Act, 1996 does not specify anything at all with regards to maintaining confidentiality during the arbitral proceedings. However, an implied obligation of maintaining confidentiality has been imposed.17

Institutional arbitrations

Indian Institutional Rules

The Delhi International Arbitration Centre18 and the Mumbai Centre for International Arbitration19 under Rules 36.2 and 35.2 of their institutional rules respectively, lay down the exceptions in which the party or the arbitrator may reveal confidential information to a third party. Apart from such exceptions, disclosure cannot be made without prior written consent of all parties.

Singapore International Arbitration Centre (hereinafter “SIAC”)

Under the SIAC Rule 24.4,20 unless the parties wish to waive off confidentiality, all the proceedings and the documents related to the arbitral proceedings will remain confidential. Furthermore, the confidentiality obligations will be on the “Emergency Arbitrator” as well.21 Disclosure to a third party is subject to prior consent of the parties and limited to matters such as application for enforcement, challenge to the award,22 subpoena issued23, etc. Interestingly, the Tribunal can impose measures such as sanctions or costs in case of any breach by a party.24

The London Court of International Arbitration (hereinafter “LCIA”)

The LCIA Arbitration Rules under Article 30 levy the obligation of confidentiality on the parties and on anyone else included in thearbitration.25Except for in cases as provided by the LCIA Rules or the applicable law, the confidentiality requirement will continue to apply.26 No award will be published without prior written consent of all the parties and the Tribunal.27

ii. Need for confidentiality

A host of reasons are responsible for making confidentiality so important to the parties. During the arbitral proceedings, submissions are made in the form of documentary and oral evidence. Such supporting evidence, depending on the nature and content matter of the dispute, can reveal a variety of private information, which if disclosed could have negative repercussions. Trade secrets and sensitive information such as pricing information, business plans, manufacturing knowhow, plans, sketches, and other corporate records are extremely confidential.28 If such information becomes public knowledge, it can negatively impact the reputation of such party. It can also lead to a media trial. More importantly, competing organisations being privy to such information can threaten the very existence of a business.

Confidentiality, on the presumption of which arbitration is invoked, is guaranteed only for the duration of the arbitral proceedings. The key factor for analysis is what happens when a party appeals against the award granted in such proceedings or seeks enforcement of such an award in a court of law.

Contrasting principle of open justice

Contrary to the principles of confidentiality and privacy, common law courts are based on the principle of open justice. As Jeremy Bentham stated, “Publicity is the very soul of justice, it is to publicity more than to everything else put together, that the English system of procedure owes its being the least bad system yet extant, instead of being the worst.” The heart of this principle is “justice must not only be done, it must manifestly be seen to be done”.29

The principle of “open justice” has a number of precepts:

  1. the entitlement of an interested person to attend court as a spectator;
  2. the promotion of full, fair and accurate reporting of court proceedings;
  3. the duty of Judges to give reasoned decisions;30and
  4. public access to judgments of courts31.

Although, the origin of this doctrine is unknown, courts all across common law jurisdictions have provided various reasons elaborating on the importance of this principle. These include:

  • Judicial accountability

According to Bentham, publicity is “the keenest spur to exertion and surest of all guards against improbity. It keeps the Judge himself while trying under trial (in the sense that) the security of securities is publicity”. The position of a Judge, in most common law countries is tenured. These Judges are unlikely to be removed or dismissed unless grave injustice has been caused. For such grave injustice to be apparent, it is essential for the public to have access to court proceedings and judgments. Hence, it is very important to keep a check on judicial behaviour which can be done effectively through a system of open courts.32

  • Evolution of jurisprudence

Judicial precedents form an essential part of all legal systems which derive their roots from the common law system. In common law countries, case laws i.e. past judicial decisions have the bearing of binding law itself. In light of this, the laws of a country keep evolving with new judgments laying down new legal principles. Hence, it is essential for judgments to be available to all so that the public is well aware of the evolution of jurisprudence. In India, it has been established that access to evolution of law, as a result of adjudication of cases, is an important facet of the citizen’s right to know under Article 19(1)(a) of the Constitution of India33.34

  • Public interest

A system of open courts is pivotal to societal advancement as it is essential for citizens to be aware about judicial procedures and basic legal principles. Through several judicial decisions, courts have recognised the importance of open courtrooms as a means of allowing the public to view the process of rendering of justice. First-hand access to court hearings enables the public and litigants to witness the dialogue between the Judges and the advocates and to form an informed opinion about the judicial process.35 Hence, a system of open courts furthers legal awareness in society.

Open justice versus confidentiality: A critical analysis

It is evident that there exists a conflict between the confidentiality of arbitration and the system of open courts. In order to reconcile this conflict, there are various legal questions which need to be answered.

  • Independent nature of court proceedings

Although the mechanism of arbitration was introduced, inter alia, to reduce the burden on civil courts and provide speedy justice, there are various post-award steps such as enforcement and setting aside of awards which often involve a court of law. Involvement of courts in arbitrations is not just limited to the post-award stage. Parties often approach courts for interim reliefs during the pendency of arbitration proceedings, appointment of arbitrator(s), [if the parties are mutually unable to appoint arbitrator(s)], and even to merely refer parties to arbitration when they have contractually agreed to arbitrate a specific dispute.

Hence, the primary question which needs to be answered in this conflict between open justice and confidentiality is whether court proceedings can be completely bifurcated from the arbitral proceedings they arise out of. It is important to determine whether the principles applicable to arbitral proceedings could be carried forward to the court proceedings arising out of them.

The Supreme Court of India has a very clear stance on this issue. While dealing with the Arbitration and Conciliation (Amendment) Act, 201536 (hereinafter “the 2015 Amendment”), the Court opined that the scheme of the 1996 Act post the 2015 Amendment is one which bifurcates between court proceedings and the corresponding arbitration.37A new Section 8738 was introduced into the 1996 Act by the 2019 Amendment which took a contrary stance and insinuated that court proceedings are “merely parasitical” to the underlying arbitration. By striking down Section 87, the SupremeCourt has ensured that such a bifurcating scheme introduced by the 2015 Amendment continues to apply post the 2019 Amendment as well.39

Therefore, the principles which apply to the original arbitral proceedings might not necessarily apply to the court proceedings arising out of that arbitration.

  • Adjudicating arbitration matters in an open court: A violation of parties’ consent

Another aspect which needs to be dealt with while debating between confidentiality and open justice is that of parties’ consent. Arbitration in its very essence is a consensual dispute resolution mechanism. Parties, via contracts, choose to arbitrate certain disputes rather than litigating them. Similarly, parties via their contracts or even merely submitting a dispute to arbitration agree to keep the subject-matter and relevant evidence confidential. Hence, another factor for consideration is whether implementing a system of open courts while adjudicating arbitration matters would be a violation of parties’ consent.

The English Court of Appeal has opined that “arbitration claims brought to court are no longer consensual. The possibility of pursuing them exists in the public interest. The courts, in such cases, are acting as a branch of the State, not as a mere extension of the consensual arbitral process”.40By stating this, the Court of Appeal has made it clear that once civil courts are involved in arbitration claims, an argument for violation of parties’ consent cannot be made. This is because the consent of parties to keep the proceedings confidential is limited to the arbitration proceedings itself. Thus, court proceedings arising out of arbitrations are non-consensual in nature and the parties’ agreement to keep arbitration proceedings confidential does not bar the court from applying the principle of open justice.

  • Barring appeals

An avenue to ensure confidentiality of proceedings is barring appeals against an arbitral award itself. Some institutional rules allow the parties to waive their right to appeal against the arbitral award, making the award final and binding. An example of such a provision is Article 26.8 of the LCIA Rules, 2020.41These provisions were originally introduced to ensure speedy justice which is often lost when parties appeal to a court of law. They can also be used to ensure that the proceedings remain confidential by avoiding the interference of courts in the arbitral award. Nonetheless, this might not be possible in all scenarios as appeals form an essential part of the arbitration regime and it is not always recommended to waive off such a right to appeal. In fact, such a waiver would render the concept of seat of arbitration redundant by taking away the courts’ supervisory jurisdiction over arbitral proceedings.

  • Implementation of confidentiality in courts: A balancing Act

As stated earlier, the principle of confidentiality might not necessarily apply to court proceedings arising out of corresponding arbitration by virtue of them being distinct. However, courts in certain situations have carried forward the principle of confidentiality from the original arbitration to the court proceedings. An argument may be made that this is only possible in certain jurisdictions, which have express provisions for maintaining privacy in arbitration appeals.42When such an express provision of maintaining confidentiality is missing in the applicable law, a balance of interest test must be applied.

The balance of interest test entails that when two conflicting legal principles apply to the same proceedings, the court must determine which principle outweighs the other and to what extent. In the context of the current conflict, the court must determine if the principle of confidentiality is sufficiently significant to override the foremost principle of open justice.

The principle of open justice will override the principle of confidentiality, unless it can be established that a party will be substantially prejudiced if the proceedings are not kept confidential.43 Even in such a scenario, the English Court of Appeal has stated that it will only do the bare minimum necessary for protecting the interest of parties in order to preserve the indispensable principle of open justice.44

Conclusion

In this age-old battle between confidentiality and open justice, we see that the determination of the overriding principle amongst the two is a matter of fact which varies on a case-by-case basis. It is crucial for the court to strike a balance between the two in order to make sure that no party is substantially prejudiced by the decision of the court.45Without such a balance, one of the parties or the general public at large will always be at a significant disadvantage. Moreover, the law in this regard is not settled when it comes to jurisdictions like India. Implementing the principles laid down in the various judgments of other jurisdictions can thus, prove to be of immense importance in developing the jurisprudence around confidentiality in India.


*Penultimate year law students, Government Law College, Mumbai. Authors can be reached at jaindrasti23@gmail.com and aryandeshmukh17@gmail.com.

1Gary Born, International Commercial Arbitration 3001 (3rd Edn., Kluwer Law International 2020).

2Gary Born, International Commercial Arbitration 3001 (3rd Edn., Kluwer Law International 2020).

3Gary Born, International Commercial Arbitration 3001 (3rd Edn., Kluwer Law International 2020).

4Arbitration and Conciliation Act, 1996.

5Arbitration and Conciliation (Amendment) Act, 2019.

6Arbitration and Conciliation Act, 1996, S. 75.

7Department of Legal Affairs, p. 71, <https://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf>.

8Arbitration and Conciliation (Amendment) Act, 2019, S. 42-A.

9International Arbitration Act, 1994, S. 22 (Singapore).

10International Arbitration Act, 1994, S. 12(1)(j) (Singapore).

11International Arbitration Act, 1994, S. 23(1) (Singapore).

12International Arbitration Act, 1994, S. 23(2) (Singapore).

13International Arbitration Act, 1994, S. 23(3)(a) (Singapore).

14International Arbitration Act, 1994, S. 23(3)(b) (Singapore).

15International Arbitration Act, 1994, S. 23(4) (Singapore).

16International Arbitration Act 1994, S. 23(4)(a) (Singapore).

17John Forster Emmott v. Michael Wilson & Partners Ltd., [2008] Bus LR 1361 : 2008 EWCA (Civ) 184

18Delhi International Arbitration Centre (Arbitration Proceedings) Rules, 2018, R. 36.2.

19Mumbai Centre for International Arbitration Rules, 2016, R. 35.2,

20Singapore International Arbitration Centre Rules, 2016, R. 24.4.

21Singapore International Arbitration Centre Rules, 2016, R. 39.1.

22Singapore International Arbitration Centre Rules, R. 39.2(a).

23Singapore International Arbitration Centre Rules, R. 39.2(b).

24Singapore International Arbitration Centre Rules, 2016, R. 39.4.

25London Court of International Arbitration Rules, 2020, Art. 30.1.

26London Court of International Arbitration Rules, 2020, Art. 30.2.

27London Court of International Arbitration Rules, 2020, Art. 30.3.

28DomitilleBaizeau and Juliette Richard, Addressing the Issue of Confidentiality in Arbitration Proceedings: How is This Done in Practice?(ASA Special Series No. 43), <https://www.lalive.law/data/publications/08-Chapter_4.pdf>

29R. v. Sussex Justices, [1923] EWHC KB 1.

30Swapnil Tripathi v. Supreme Court of India, (2018) 10 SCC 639.

31Cunliffe, Emma, Open Justice: Concepts and Judicial Approaches, (2012) 40 Fed L Rev 385.

32Scott v. Scott,1913 AC 417 (HL); Naresh Shridhar Mirajkar v. State of Maharashtra, AIR 1967 SC 12.

33Constitution of India, Art. 19(1)(a).

34Swapnil Tripathi v. Supreme Court of India, (2018) 10 SCC 639.

35Mohd. Shahabuddin v. State of Bihar, (2010) 4 SCC 653.

36Arbitration and Conciliation (Amendment) Act, 2015.

37Board of Control for Cricket in India v. Kochi Cricket (P) Ltd., (2018) 6 SCC 287.

38Arbitration and Conciliation Act, 1996, S. 87. .

39Hindustan Construction Co. Ltd. v. Union of India, (2020) 17 SCC 324.

40 Department of Economics, Policy and Development of the City of Moscow  v. Bankers Trust Co., [2005] QB 207 : 2004 EWCA (Civ) 314.

41London Court of International Arbitration Rules, 2020, Art. 26.8.

42Civil Procedure Rules, 1998, R. 62.10 (UK); International Arbitration Act, 1994, S. 22 (Singapore).

43MN v. OP, 2019 EWCA (Civ) 679.

44MN v. OP, 2019 EWCA (Civ) 679.

45Cape Intermediate Holdings Ltd. v. Dring, [2019] 3 WLR 429 : 2019 UKSC 38.

Law School NewsLive Blogging

A Tournament on ADR shall be conducted by the Alternative Dispute Resolution Society of Amity Law School, Noida with the aim to bridge the gap between the theoretical and practical application of concepts. Alternative Dispute Resolution (ADR) provides a substitute to the conventional methods of resolving disputes. It offers to resolve various types of matters including civil, commercial, industrial, and family etc., where litigation takes years to settle the disputes. It also provides the parties with a channel to initiate a dialogue and reach the settlement expeditiously and cost-effectively. Generally, ADR uses a neutral third party who helps the parties to communicate, discuss the differences and resolve the dispute. It is a method which enables individuals and groups to maintain co-operation, social order and provides opportunity to reduce hostility.

The main objective of this tournament is to bring out the latent talents of students, providing them with a learning experience and building their competitive spirit. It seeks to encourage them to explore the various aspects of dispute resolution, understand its intricacies and receive a more practical understanding of the alternate methods of dispute settlement out of court, which will ultimately promote the various mechanisms of ADR.

The ADR Society of Amity Law School, Noida is proud to announce that we are organizing the 5th Amity National ADR Tournament on the 3rd and 4th of March 2022. 75 teams and 150 participants from across the nation are going to take part in the event that will include Negotiation Competition, Mediation-Arbitration Competition, and Client-Counselling Competition. We have invited great dignitaries from across the nation to be the honorable judges for the competitions. The event will include total of 4 rounds, preliminaries, quarterfinals, semi-finals, and finals. On 3rd March, a training session will be conducted by SCC Online for all the participants to enhance their skills in Alternate Dispute Resolution.

 

DAY 1

 

10:00hrs. : the time to shine bright is here and has marked the beginning of the Preliminary Round 1 of the qualifying rounds of the coveted  5th Amity ADR Tournament (Virtual)  ,2022 has officially begun .The competitions that are being held  under this tournament is:

  1. The Mediation Arbitration Competition  : it  is a dispute resolution process that combines both Mediation and Arbitration .On initial state it starts in the form of mediation settlement and if these issues are not resolved through mediation then an Arbitrator i.e. . the same person who acted as a Mediator , makes the decisions for the party . Each team consist of 2 participants. Neutral party is adopted for mediation and if failed the party must go for Arbitration .
  2. Negotiation Competition :it is a dispute resolution process where people try to resolve there dispute amicably through discussion .Each teams consists of 2 participants of which one shall be the attorney and the other will be the client ,who negotiates
  3. Client Counselling Competition : each team here consists of 2 members. The Competition simulates a law office consultation in which 2 law students act as lawyers and are presented with a hypothetical dispute brought before them by a client – actor .

“Taste the relish to be found in competition — in having put forth the best within you.” — Henry Kaiser

 

 

 

 

“If you’re not making mistakes, you’re not taking risks, and that means you’re not going anywhere. The key is to make mistakes faster than  the competition, so you have more changes to learn and win.” — John W. Holt, Jr., Xochi manufacturing

 

 

 

 

 

“Competition whose motive is merely to compete, to drive some other fellow out, never carries very far. The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.” — Henry Ford

 

 

 

 

 

13:34hrs : Results for CCI have  been Declared

Congratulations to all the Qualifying Teams!
Room 1 CC19
Room 2 CC11
Room 3 CC1
Room 4 CC15
Room 5 CC6
Room 6 CC7
Room 7 CC9
Room 8 CC2
13:46hrs : Results for the Negotiations have been Declared
Congratulations to all the Qualifying Teams !
Room 1 NG22 VS NG26
Room 2 NG25 VS NG27
Room 3 NG5 VS NG9
Room 4 NG21 VS NG29
13:55hrs : Results foe the Mediation and Arbitration have been Declared
Congratulations to all the Qualifying teams!
Room 1 MA6 VS MA12
Room 2 MA9 VS MA7
Room 3 MA16 VS MA1
Room 4 MA3 VS MA2
Quarter Finals 
14:00hrs : beginning of the Quarter Finals  for Client Counselling Competition   of the qualifying rounds of the coveted 5th Amity ADR Tournament (Virtual)  ,2022
“Courage is grace under pressure.” — Ernest Hemingway
CLIENT COUNSELLING – QUARTER FINALS 

14:35hrs: beginning of the Quarter Finals  for the Mediation and Arbitration  Competition  as well as Negotiation Competition  of the qualifying rounds of the coveted 5th Amity ADR Tournament (Virtual)  ,2022

 

 

“It does not matter how slowly you go, so long as you do not stop.”
– Confucius

 

 

NEGOTIATION – QUARTER FINALS 

“The difference between winning and losing is most often not quitting.”
– Walt Disney
MEDIATION AND ARBITRATION – QUARTER FINALS

 

 

17:41hrs : Results for CCI have  been Declared

Congratulations to all the qualifying teams!
Room 1 CC1
Room 2 CC6
Room 3 CC7
Room 4 CC19
Results of Negotiation have been Declared
Congratulations to all the qualifying teams!
Room 1 NG27 VS NG21
Room 2 NG26 VS NG9
Results of Mediation and Arbitration have been Declared
Congratulations to all the qualifying teams!
Room 1 MA12 VS MA16
Room 2 MA26 VS MA2
DAY 2

“The future belongs to those who believe in the beauty of their dreams.”

-Eleanor Roosevelt

 

 

 

“Real success requires step after step after step after step. It requires choice after choice, it demands education and passion and commitment and persistence and hunger and patience.” – Jesmyn Ward

 

The Alternative Dispute  Resolution System has brought about major changes towards achieving a more flexible solution in the process of dispute resolution in India . Our  legal system has beautified and provided support in the working process of ADR . However, our nation has to become the venue for international arbitration cases which require few changes to be made in our current laws as well as the Institutionalized contrivance that deals with it .We hope, that such tournaments help the young minds of India to inculcate the art of using these Alternative Dispute Resolution mediums to its fullest and nurture them to face the challenges that awaits in the relims of the outside world. 

 

9:50hrs : beginning of the the Semi – final Rounds   of the coveted 5th Amity ADR Tournament (Virtual)  ,2022

 

 

 

“The study of law can be disappointing at times, a matter of applying narrow rules and arcane procedure to an uncooperative reality; a sort of glorified accounting that serves to regulate the affairs of those who have power—and that all too often seeks to explain, to those who do not, the ultimate wisdom and justness of their condition. But that’s not all the law is. The law is also memory; the law also records a long-running conversation, a nation arguing with its conscience.”
– Barack Obama 

 

CLIENT COUNSELLING – SEMI – FINALS 

 

 

 

“The greatest glory in living lies not in never falling, but in rising every time we fall.” -Nelson Mandela

 

 

 

NEGOTIATION  – SEMI –  FINALS 

 

 

 

“Success seems to be connected with action. Successful people keep moving. They make mistakes but they don’t quit.” -Conrad Hilton

 

 

MEDIATION AND ARBITRATION – SEMI –  FINALS 

 

12:52hrs : Results for CCI have been Declared

congratulations to all the qualifying teams !

Room 1 CC1

Room 2 CC19

 Results of Negotiation have been Declared

Room: NG26 VS NG21

Results of Mediation And Arbitration have been Declared

Room – MA16 VS MA 2

14:00hrs : beginning of the Final Rounds for CCI & Mediation and Arbitration    of the coveted 5th Amity ADR Tournament (Virtual)  ,2022

14:30hrs : beginning of the Final Rounds for Negotiation of the coveted 5th Amity ADR Tournament (Virtual)  ,2022

 

 

 

“The real test is not whether you avoid this failure, because you won’t. It’s whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.” -Barack Obama

 

 

CLIENT COUNSELLING FINALS 

 

    NEGOTIATION –  FINALS 

 

MEDIATION AND ARBITRATION – FINALS 

 

 

 

VALEDICTORY CEREMONY

 

 

16:00hrs :Marks the beginning  of the valedictory Ceremony by the lightning of lamp and prayers which is followed by presenting the Tulsi sapling to our esteemed guests by Dr. D.K. Bandyopadhyay ( Chairman ,Amity Law Schools) ; Dr. Balvinder Shukla (V.C. Amity University ) Dr. Aditya Tomar ( ADD. Director & Joint H.O.I , ALSN ) ; Prof. (Dr) Shelafi Raizada ( ADD. Director & Joint H.O.I , ALSN ) ; Ms. Priyanka Ghai ( Faculty Convener , ADR Society ) ; Mr. Rituraj Sinha( Faculty  Co- Convener , ADR Society ) ; Ms. Richa Yadav ( Faculty  Co- Convener , ADR Society ) 

 

 

16:19hrs : welcome speech being delivered by Dr. Aditya Tomar ( ADD. Director & Joint H.O.I , ALSN ) ; Prof. (Dr) Shelafi Raizada ( ADD. Director & Joint H.O.I , ALSN ) :Dr. D.K. Bandyopadhyay ( Chairman ,Amity Law Schools)

16:36 hrs : Introduction of our esteemed guests by Miss. Khuloos Aziz Chawla (President) of the ADR Society  Amity Law School ,Noida ;which is then being followed by valuable insights being shared by Adv. Ramesh Gupta  who listed infront of us the challenges that the justice system is facing currently and highlighted the rate of pendency of cases in India while concluding the perks of ADR system,  he then handed over the baton to Adv. Tariq Khan who shares his insight on the entire process of ADR and suggests the need of Young Arbitration Bar to enhance the skills of students .

Mr. Joseph M. Mattheus form U.S.A shared his input on the event and discussed the International importance of ADR. ( few of the the guests were not able to put forth their  speech due to connectivity issues )

Justice Mohammad Abdul Halim from Bangladesh talked  about  ADR being a new approach and pointed out the basics of Justice System and also the delay that tags along with a court case .

Adv. Kiran Bhardwaj extended her warm wishes and regards to the participants, students and all the other guests present with us as panelists. She highlighted the importance of ADR and talked about Lok Adalat’s and Legal Services in India. She concluded by saying that ADR has become not only a part of the day to day dispute resolution but also has  been included into the course of students for skill enhancement from an early stage. ADR according to her is an inexpensive way and a much time saving option that one must consider before going in for litigation .

Justice Mukete Tahle who hails from Republic of Cameroon briefly explained the pros of ADR. Justice Rajesh Tandon  reminisced about his days at Amity Noida as a previous V.C and appreciated the efforts by our Founder Ashok K. Chauhan while he also talked about the need of ADR events being hosted and practiced in Law Schools. Continuing with his speech he also addressed the Indian Status of ADR methods .

17:26hrs : Our Founder Sir, Dr. Ashok k. Chauhan praised all our panelists and thanked them for  their gracious presence with us today. And appreciated the commendable efforts made by the ADR society and also discussed  about the creation of an ADR center.

17:37hrs : Our Host Ms. Sumitra Singh ( Faculty Advisor ) Amity Law School, Noida handed over the mic to Justice Rekha Palli who then appreciated the visions of our Founder Sir and mentioned her personal experience with students from Amity. She then concluded on a very positive note by wishing the participants with her best regards.

17:44hrs: Reading of Citations in the honors of:

Mr. Tariq Khan
Ms. Kiran Bhardwaj
Mr. Ramesh Gupta
Mr. Pradeep Rai
Hon’ble Mr. Justice Mohammad Abdul Halim
Hon’ble Mr. Justice Mukete Tahle
Hon’ble Ms. Justice Rekha Palli

 

17:52hrs:

Results for the FINAL ROUNDS
CCI 
Winner CC1 (NLU JODHPUR)
Runners-up CC19 (NUJS)
NEGOTIATION 
Winner NG26 (HPNLU)
Runners-up NG21 (LAW  COLLEGE DEHRADHUN )
MEDIATION & ARBITRATION  
Winner MA2 (NLU JODHPUR)
Runners-up MA16 ( V.M SALGOCAR COLLEGE OF LAW )
ADR TOURNAMENT PRIZE – NLU JODHPUR
THANKING YOU – ADR SOCIETY , AMITY LAW SCHOOL NOIDA 
Call For PapersLaw School News

ABOUT HPNLU, SHIMLA: 

The Himachal Pradesh National Law University, Shimla was established by an Act of the Himachal Pradesh Legislative Assembly in the year 2016 (Act 16 of 2016). In the four years of its foundation, HPNLU, Shimla has seen tremendous growth and has undertaken a good number of innovative measures to enhance the academic potential of its faculty members, students, and research scholars. Led by the visionary scholar of law, the Vice-Chancellor Professor (Dr.) Nishtha Jaswal, the University has been very proactive despite the spread of the ongoing COVID-19 pandemic and the ensuing lockdown, HPNLU, Shimla has been at the forefront of using digital platforms to raise awareness about issues as far spread as Fundamental Duties, Reproductive Rights of Women, Human Rights and Access to Justice, etc.

 

ABOUT THE CENTRE FOR ADR AND PROFESSIONAL SKILLS: 

The Centre for Alternative Dispute Resolutions and Professional Skills aims to promote research in the field of dispute resolution mechanisms in India. To find out the further concerns for research in ADR, it is necessary to analyze the existing structure and reasons for not being able to cater to the needs of emerging diversified disputes among persons and institutions. The Adjudicatory mechanism and win-loss conclusions, reached by traditional dispute resolution bodies, on several occasions, results in further intensifying the disagreements rather than resolving them forever. It is one of the biggest achievements that all forms of ADR, i.e., Arbitration, Mediation, and Conciliation, do not leave the party aggrieved but satisfied. It is like a win-win situation for both parties. ADR successfully bridges the gap left by traditional adjudicatory institutions.

 

ABOUT THE NEWSLETTER: 

To carry forward the objectives of the Centre, the Centre decided to start a quarterly e-Newsletter whose primary aim is to catalyze the awareness about alternative dispute resolution and to foster ADR culture with the participation of students in research avenues. The e-newsletter will also disseminate knowledge relating to current affairs and legal news in the field of ADR. The e-Newsletter will have 5 sections and intends to include articles and case comments from students, experts, academicians, and reputed legal professionals practising in the field of ADR.

Click here to access the previous Issues.

 

THEME

  1. The Article/Essay should be written around the themes:
  •        Role Of Indian Courts In ADR OR
  • Need Of Mediation Laws In India 

The author can write on either of the themes or on any related sub-themes.

  1. The case comment should deal with a relevant and recent judgment (after 2020) concerning Alternate Dispute Resolution, at both national as well as international levels and must, provide the author’s take on the issue, explaining the legal background succinctly and clearly.

 

SUBMISSION GUIDELINES

All the submissions must follow these guidelines: –

  • Articles/Essays: 2000 – 3000 Words. Articles should be confined to the topic above mentioned.
  • Case Comment: 1500 – 2500 Words.
  • The word limit is inclusive of footnotes and is flexible at the discretion of the Editorial Board.
  • Co-authorship is allowed up to a maximum of 2 authors only.
  • The main submission must not contain the credentials of the author(s) or the name of their institution. A separate cover letter containing the specifications of the author(s) must be attached to the e-mail. The Article must be submitted in the .doc/.docx file only.
  • The submissions must be original works and should not have been published elsewhere.
  • All submissions are subject to a plagiarism check if the work is found to be plagiarized the submission will be rejected. Minimum plagiarism allowed 15%.

 

FORMATTING AND CITATION STYLE

The submission should be free from all grammatical & spelling errors.

The content of the submission must be in the Times New Roman font with the font size 12, line spacing 1.5, and the text should be justified.

The Bluebook Uniform System of Citation (20th edition) shall be strictly adhered to. The footnotes shall be in Times New Roman font, the font size 10, and line spacing of 1.0.

 

MODE OF SUBMISSIONS

All submissions must be made in the electronic form to *GOOGLE LINK*  with the name of the file being “Title of the Article/Essay/Case-Comment” latest by 15th October 2021 (11:59 PM). Upon the selections, author(s) will be notified by e-mail and the CERTIFICATE OF PUBLICATION for the same will be provided to all the selected author(s) after the publication of the newsletter.

 

For more details, refer Call For Papers – 15th October 2021

 

CONTACT INFORMATION

For any queries or clarifications, write to us at “cadr[at]hpnlu.ac.in” or contact:

Alternate Dispute ResolutionOp EdsOP. ED.

Introduction

Climate change and global warming are the two crucial issues that need the instant attention of people. It is being noticed that global warming is increasing with each passing day. It is necessary to keep up with the protection of the environment along with fulfilling our needs. There have been many neglected ways that can prove to be a significant factor in curbing global warming. When arbitration is discussed, it is well known to many of the people that are being chosen for various reasons. Commercial cases, investment treaties, and many other kinds of matters are being decided through arbitration and other alternate dispute resolution mechanism. Till now, commercial and other sectors of arbitration were being chosen for simplified process, speedy decisions, convenience, etc. so cases get resolved as soon as possible.

While we connect climate changes with international arbitration, it is not shocking to know that, like commercial issues, climate change issues are also in priority. There have been various steps taken by the arbitration institutions which are evident to prove that international arbitration is extending its approach to deal with the issue of global warming. Not only the awards passed by the tribunals but, the implementation of various treaties and campaigns are equally important to curb the major environmental issues. The matters of climate change are of public importance and thus attract the interest of arbitrators too. While we notice that arbitration has been gaining importance from last years, will the steps being taken concerning climate change also come out as fruitful decisions? The steps that have been taken till now are not questionable but, for how long will they be effective?

The questions will be raised for ensuring the effectiveness. However, analysis of the strides made by the arbitration sector will give a proper understanding of the same. The Paris Agreement of 2016[1] is not in direct connection to arbitration but, the arbitration proceedings being held along with it will manage the climatic changes. It is necessary to relate the aspects to get better results out of them.

Correlation of Paris Agreement and International Commercial Arbitration

In 2015 United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement was adopted for the first time that all nations were committed to ambitious efforts to combat climate change and adapt to its effects. The Paris Agreement aim is to lower the global temperature by 2 degrees celsius above pre-industrial levels i.e., mitigation and to enhance the ability of the nations to deal with the impacts of climate change that is to adapt to climate changes. Paris Agreement also aims to support the developing nations and the nations who are in danger to adopt such changes. The task force of ICC had a broader view foreseeing the climate change-related disputes and tried to include any dispute arising out of or concerning the effect of climate change and its policies. [2]

As per the IPCC Special Report on Global Warming of 1.5 degrees Celsius published in 2018, it stated that climate change is one of the biggest challenges of all time. Therefore, to combat this challenge all they require is rapid and far-reaching transitions in energy, urban infrastructure, land, industrial systems to avoid the worst effects of climate change.[3] So as the new rapid changes to land, infrastructure, and industrial systems that are arising out from the global response to climate change will give a new scope of investment and contracts, accordingly, this will give a rise to contractual legal dispute. Such disputes can be categorised as:[4]

  1. Contracts concerning specific transition, adaptation, or mitigation contracts

Here the contract can be executed between the investor, industry body, funder, State, etc. in conformity with the Paris Agreement commitments. These contractual terms are can be reinforced through appropriate and effective dispute mechanisms. The contacts shall be expressly made with a clause relating to UNFCCC such as Green Climate Fund (GFC), agreements reacted to low emission projects.[5]

  1. Contracts not concerning specific transition, adaptation, or mitigation contracts

As every business activity and contractual relationship is capable of being impacted by energy and other systems transition, mitigation, or adaptation measures and/or the environmental impacts of global warming, those contracts that have no direct impact on climate change or have no specific climate-related purpose may predate the Paris Agreement.

The correlation that has been created with the Paris Convention would help the arbitration institutions to reach their goals too. The goal to reach “greener arbitration” is concerning the goal of the Paris Convention. Therefore, working on both of them would bring out better results from both ends. It would not only facilitate but, also encourage other associations to do the same.

The potential steps by ICC in climate change-related disputes

The Task Force’s mandate is first to explore how ICC Arbitration and alternative dispute resolution (ADR) services are currently used to resolve disputes that potentially engage climate change and related environmental issues. As the Paris Agreement and the Intergovernmental Panel on Climate Change (IPCC) Special Report are relatively recent, disputes arising out of “rapid and far-reaching transitions in energy, land, urban and infrastructure, and industrial systems” are not yet reflected in past and existing ICC cases. Nevertheless, three important aspects of existing ICC cases are instructive:[6]

(i) ICC Arbitration and ADR are frequently adopted in commercial contracts concerning energy, land use, urban and infrastructure, and industry with these sectors representing a large portion of ICC cases;

(ii) climate change-related investment is rapidly increasing and system transition of the scale proposed by IPCC will recalibrate regulatory risk and investment strategy in sectors where ICC Arbitration and ADR are already prevalent; and

(iii) climate change mitigation and adaptation, and systems transition as a whole, may cause environmental impact, and ICC Arbitration and ADR are increasingly being used to resolve environmental claims.

These steps taken by ICC promote the goal of the institution widely. The implementation of the task force is evident that apart from resolving the disputes, arbitration has paved a way to safeguard the environment. The process of curbing global warming is not simplified, yet not complicated. It could be time taking but, with collective efforts in different ways by the arbitration sector will come out to be successful.

CGA: A pathway to greener arbitration

Lucy Greenwood in 2019 founded the Campaign for Greener Arbitrations (CGA) 2019 intending to reduce the carbon footprint on international arbitrations. This campaign is led by a Steering Committee from the arbitration community. This campaign runs on the set of protocols so that the goal of developing practical steps which could be implemented to accomplish the Campaigns Guiding Principles. There are several green protocols suggested and some are as under:[7]

  1. The green protocol for arbitral proceedings

This protocol suggests the measures to conduct arbitral proceedings in a more environmental-friendly manner. This protocol can be initiated by the parties or by the tribunal a well.  Here the parties can do remote proceedings, less use of travel, avoiding printings on paper, etc.

  1. The green protocol for law firms and legal service provides.

This protocol has focused on the firm’s day-to-day operations. Here the firms are required to motivate their employees to work eco-friendlier. The firm shall make  “Green Ambassadors” who shall make new policies on working of firms do that the environment depletion can be reduced. Firms shall also use incentive programmes for the employees so that they can be encouraged to use this protocol.

  1. The green protocol for arbitrators

Here the independent arbitrators are required to seek guidance from this protocol. They are expected to reduce travel, energy, etc. so that the wastage of resources can be reduced. The arbitrators expected to integrate the conduct rules with green protocols.

  1. The green protocol for arbitration institutions.

In the protocol, the institutional representatives are required to guide both internal and external operations of the firm. The institutions shall try to motivate the parties and arbitrators to conduct the proceedings remotely and try to provide such infrastructures as well.

  1. The arbitration hearing venues

The facilitators of conducting arbitral proceedings are required to adopt this protocol. They are encouraged to use technological platforms to promote digital representations of cases and file sharing so that the paper works can be reduced. They shall also use clean energy while conducting such proceedings.

So, this campaign can successfully be achieved by only implementing rules i.e. reduce the hard copy bundles and travel least as possible. The Campaign also plans to expand its research to consider the usage of e-mails and energy consumption, as well as other aspects of an international arbitration practice beyond those analysed in the initial impact assessment.

 Conclusion

The issue of climate change is crucial, and the steps taken by the arbitral institutions are paramount. It has been known so far, the arbitration resolves the issues related to climate change issues but, the self-contribution in making arbitration greener is a new concept. It would take time for the adaption of this mechanism completely in the field but, would have essential contributions towards nature. This will also increase the importance of arbitration globally. As arbitration will be labelled as a mechanism to resolve one more problem. These steps will gain more importance shortly. Also, this will lead to the opening of doors for news initiatives in the field of international arbitration.


*Advocate, High Court of Chhattisgarh.

**Student, Semester VIII, BA LLB(Hons.), Amity Law School, Amity University, Chhattisgarh.

[1]http://www.scconline.com/DocumentLink/Oz50zWNo.

[2]Melissa Denchak, Paris Climate Agreement: Everything you need to know, NRDC, 10-2-2021

[3]The IPCC Special Report, Global Warming of 1.5˚C (October 2018), p. 15.

[4]In-depth Q&A: The IPCC’s Special Report on Climate Change at 1.5°C, Carbon Brief, 8-10-2018

https://www.carbonbrief.org/in-depth-qa-ipccs-special-report-on-climate-change-at-one-point-five-c.

[5] Green Climate Fund Proposal Toolkit (2017), p. 3.

[6]Kirsten Odynski, The Role of ICC Arbitration in Resolving Climate Change Disputes, White and Case, 29-1-2020

   https://www.whitecase.com/publications/alert/role-icc-arbitration-resolving-climate-change-disputes.

[7]Chetna Alagh and Sejal Makkad, Arbitration and climate: Steps taken by arbitration associations to curb global warming, The Daily Guardian, 30-4-2021

https://thedailyguardian.com/arbitration-and-climate-steps-taken-by-arbitration-associations-to-curb-global-warming/.

Op EdsOP. ED.

Introduction

Dr B.R. Ambedkar while presenting the Indian Constitution, 1950[1], in the Constituent Assembly, said that every generation is a nation of its own.  It is this perennial change in generational thought that demands the law to be adaptive[2]. With the rapid advancement upon the advent of the internet has allowed us to possess goods or services with a click of a button. Now more than ever before, we need the law to clearly state guidelines to allow the smooth functioning of e-commerce transactions. The purpose of the law should be to present solutions to resolve the probability of miscommunication, that could arise, because of the barrier caused by physical distance.

The term “e-commerce” is a common abbreviation used for “electronic commerce”. It includes carrying out business activities electronically, rather than abiding by the conventional method of physical shopping. With different stages involved in online shopping, it is realistic to say that in case of a dispute it will be extremely difficult to decide which court will have a jurisdiction in the matter, due to the multifaceted jurisdictional nature of such transactions. Sections 15-20 of the Code of Civil Procedure, 19082 (hereinafter “CPC”) deals with different types of jurisdiction and the “place of suing”. In simple terms, it specifies the venue of a particular case that is triable before a court.3 Jurisdiction is of three types – pecuniary, territorial, and subject-matter jurisdiction. To exercise territorial jurisdiction more effectively, the law segregates products that can be purchased into two categories – immovable properties and movable properties. Immovable as the word suggests means a property that cannot be moved from one place to another because it is fixed to the ground. Sections 16-18 of CPC deals with such properties, and the law applied is simple since the jurisdiction of a court, in case of immovable property, lies where the property is located.4 However, it should be noted that in cases of a parties only wanting to have benefit on property, different rules are applied.

This article aims to focus on the second category at hand, which is movable property. Through this piece, I shall explore the various statutory templates that are followed by courts in adjudicating jurisdictional disputes involving moveable property, particularly in the field of e-commerce matters. Subsequently, I shall analyse the impact of foreign judgments on cross-border jurisdictions followed by a brief examination of alternative mechanisms that can be utilised to resolve such disputes.

The term “movable property” is defined as property which can be transferred from one place to another. Sections 19 and 20 of the CPC lays down the law according to which courts shall have jurisdiction in cases concerning movable properties. The two places where the law provides for a jurisdiction to file for the suit depends on:

(a) the person who is aggrieved files a case that is where the cause of action happens; and

(b) where the defendant/perpetrator of the grievance carried on his business that is where the breach took place.5

The concept of “exclusive jurisdiction contracts” complicates the concept of place of suing in case of movable property. In such cases, it should be kept in mind that the contract exists between the company and the customer and that the manufacturers are not involved in case of any dispute.

The establishment of the e-commerce market has given birth to companies like Amazon, Nykaa, etc. – which have become popular, not just regionally, but throughout the world. Such online business companies insert exclusive jurisdiction clauses into their contracts which instructs that only courts, of a specific place/State/region, shall have the jurisdiction to settle potential disputes. This is in accordance with Official Trustee v. Sachindra Nath Chatterjee6 where the Supreme Court observed that before a court can be held to have jurisdiction to decide a particular matter, it must not merely have the jurisdiction to try the suit brought before it. It must also have the authority to pass the order sought for. Hence, there is no scope to create a new jurisdiction that does not exist at the first place.7

Tests to decide jurisdiction in e-commerce matters

As it has already been established, with the advent of e-commerce transactions, there is plenty of scope for confusion regarding the jurisdiction of courts. This varies with the nature of good in question, as well as place where the suit is filed. In India, civil matters intertwined with aspects of e-commerce are traditionally governed by Sections 15-19 of the CPC. At times, the issue(s) gets intermingled with complications due to the nature of business, wherein a specific territory cannot be ascertained to settle a jurisdictional dispute.

It is pertinent to mention that this legal vacuum has not gone unrecognised by the courts. To fill this gap in the current absence of a decisive law, courts have employed several tests to determine jurisdiction in e-commerce matters. One such test is the purposeful availment test as given by a 2011 US Supreme Court decision8 and affirmed by a 2009 Delhi High Court judgment of Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy9, and further explained via another 2017 Delhi High Court judgment of Impresario Entertainment & Hospitality (P) Ltd. v. S&D Hospitality10. The US Supreme Court laid down the interpretation of the purposeful availment test. The Court held that this test could be understood as the placing of goods into the stream of commerce, by the defendant, with the expectation that they will be purchased by consumers within the forum of the State. They further elucidated this concept by explaining that this, however, did not amend the rule of personam jurisdiction11. It was merely an observation that a defendant may then be subjected to a certain jurisdiction without ever entering the certain forum. The real test was associated with the defendant’s “intentionality” and whether their activities were intended to submit to the power of that sovereign.12

The Banyan Tree case, as decided by the Delhi High Court, expounded on this further considering e-commerce disputes. They deliberated on the issue of mere accessibility versus purposeful usage and held that:

…to establish jurisdiction in cases where the defendant does not reside/carry on business in the forum state but the website in question is “universally accessible”, the plaintiff will have to show that the defendant purposefully availed the jurisdiction of the forum court.13

In other words what was required to establish jurisdiction was the defendant’s intention to engage in a commercial transaction specifically at a forum state. In the Impresario Entertainment case14, the High Court further clarified this position by differentiating between the purposeful availment test from the purposeful avoidance test. The Court explained that to decide jurisdiction, it was not enough for the defendant to show that he had avoided the forum state but rather essential for the plaintiff to prove that the defendant had purposely availed the jurisdiction of the forum state.

Another test that can be used to decide jurisdiction in e-commerce matters is the forum convenience test. This is a test derived from the general doctrine of forum non conveniens which pertains to all civil matters. The general principle is that a court can recognise that a select forum is inconvenient for the parties involved in a suit and can, in accordance with that recognition, send the case to a more appropriate court. This change is to be made in the interests of all the parties and intent of reaching end of justice. 15

In the Supreme Court’s decision in Kusum Ingots & Alloys Ltd. v. Union of India16, this principle was legitimised and allowed in the Indian context when it laid down that in appropriate cases as it deemed fit, the Court could refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum convenience. Part of cause of action arising in a certain territorial jurisdiction cannot compel the relevant court to decide the case conclusively. Instead, they can choose to exercise this principle to concede and confer jurisdiction. In light of this, it is reasonable to infer that this principle can be applied to e-commerce matters, when appropriate, as well. Considering this is a legitimate principle under the law and has been affirmed by the Supreme Court, there is no reason why it cannot be applied.

While Indian courts have not adopted a specific manner of adjudication, there are many more available tests derived from law across the world that can be applied and derived for deciding jurisdiction in e-commerce disputes. One such significant example is the minimum contacts test. This is a test based on a theory first instituted in the US Supreme Court’s decision in International Shoe Co. v. Washington 17. It governs personam jurisdiction in a forum state when parties are “non-residents”. Curiously, this theory works where the personam jurisdiction is derived from connections and contacts to forum state. It can be applied if the court feels that a person has “sufficient minimum contacts” – which may be the defendant’s physical presence, conferred jurisdiction through a contract, a stream of commerce, etc.

More tests like the substantial connection test18, zippo test19 and the effects test20 are also continually being adopted for e-commerce cases abroad. Clearly, there is a substantial number of precedents available internationally, regarding jurisdiction in e-commerce. Ultimately, it is up to Indian courts to decide which test is most suitable for them or to come up with a new test altogether. 

Analysing Indian judicial precedents

With the advent of the internet and e-commerce, Indian courts as well as courts around the world are having a difficult time in deciding the place where a person can sue, or which courts shall have the requisite jurisdiction. This becomes increasingly complicated because e-commerce is not like the traditional business transaction. It involves various intermediaries before the final product reaches the beneficiary. When there are more people involved, things get even more complicated as far as exact jurisdiction, and the power of courts are concerned. This section of the paper will try and analyse Indian case laws to provide some clarity in cases pertaining to e-commerce.

Naturally, the question that arises is why it is necessary to delve into a discourse pertaining to the jurisdictions of courts. Ergo, this discussion would entail exploring the implications of a court not having any jurisdiction. In Kiran Singh v. Chaman Paswan21, the court held that any decision passed by courts without having a proper jurisdiction to adjudicate the suit would end up as a nullity. A defect in jurisdiction can be of anything – meaning territorial, pecuniary, or even subject-matter. Therefore, if the court does not have proper jurisdiction, then it loses all its power to decide a case. Even if both parties consent to a particular court’s jurisdiction, the law will strike down the authority of the court, in such a case.22

Initially when the courts were not experienced while dealing with questions of jurisdiction in cases dealing with transactions over the internet, certain incorrect judgments were made. One of them is Casio (I) Co. Ltd. v. Ashita Tele Systems (P) Ltd.23. The court in this case held that only because the plaintiff was able to use the internet from a particular place, the court had the requisite jurisdiction to adjudicate upon the matter.24 This case is perhaps against the interest of the defendants which the CPC would certainly not endorse. Perhaps the court did not envisage the wrong precedent it was setting up because if this case were to be applied in the current times where any website could be virtually accessed from anywhere, then according to this judgment every court would have competent jurisdiction.

After this the Banyan Tree25 case removed the inadequacy with the Casio (I) Co. Ltd.26 judgment. In Banyan Tree27, the defendant challenged the jurisdiction of the High Court of Delhi. The plaintiff argued relying on the Casio28 case that since the internet is accessible to everyone in India, therefore, the question of jurisdiction should not be entertained. This argument of the plaintiff is completely erroneous, and the court rightfully rejected this claim of the plaintiffs. The court held that plaintiff either must show that he or she carried on a business within the jurisdiction of the court and if not, he or she should show that the injury arose within the jurisdiction of the court where the plaintiff has filed the case. This case was the very few ones who set a right precedent and tried to bring in some objectivity in absence of any previous judgments.

Things get quite perplexing as one cannot possibly fathom what the term “carrying business” encompasses. In today’s times with large e-commerce companies spread across several jurisdictions, it is difficult to specify where exactly the customer can sue a particular e-commerce company. For further clarity, we can refer to Dhodha House v. S.K. Maingi29. In this case, the court clarified the meaning of the term “carrying business”. A mere presence of an agent at a particular place, say X, does not mean that the firm carries out its business at the place X. For example: Amazon has various agents across the country which deliver its packages to many places. Just because its agents deliver packages to various places it cannot be said that Amazon carries out its business from all those places. One would have to look at that branch of Amazon which regularly receives orders and initiates the transactions. This place does not have to be the head branch necessarily. If we go by the reasoning of the Dhodha House case30, Amazon can be sued even those places where there are sub-branches. However, it should be shown that the specific branch does in fact carry out substantial business of Amazon.

Indian laws and precedents still do not provide a clear picture specifically in cases involving business to customer transactions (B2C). Indian laws were enacted without considering the numerous complexities that the internet creates. It is highly recommended that there should be separate legislation in the form of a statute specifically dedicated to e-commerce transactions or if not, then certain additions must be made to the CPC so that there is no room for confusion when dealing with such transactions. Although there is some clarity regarding B2B transactions, issues arise when there are multiple intermediaries and consumers are involved.

Understanding the impact of foreign judgments on cross-border jurisdictions

Indian statutory provisions accommodate and acknowledge the applicability of certain rulings that are in compliance with the judgments of international courts. The implication of international rulings on courts within the Indian jurisdiction is laid down in Section 13 of the CPC31. This provision also allows for judicial compliance in all situations, except for a few scenarios wherein the courts would have to delve further to ascertain the court’s jurisdiction. In certain cases, courts have noted that if there was a mutual arrangement to accede to a particular court’s jurisdiction, then the court would be officially recognised as having presiding authority over the issue at hand. As a result, its final verdict would be binding upon both parties.32

The role of legislation holds utmost importance especially with regards to decisions of foreign tribunals concerning internet-related conflicts. The Indian judiciary does not refuse to implement the decision of a foreign court. It can only maintain that the decision of a foreign court is incomplete when it does not comply with the requirements specified under Section 13 of the CPC.33 Hence, if a judgment is issued against such a citizen of India in consequence of any egregious infringement of some other country’s laws, the judgment would be implemented against such an Indian citizen within the subcontinent, given that they do not have to bear any of the maladies laid down in Section 13 of the Code of Civil Procedure.34 When it becomes an issue of who shall be vested with the “primary jurisdiction” over the internet, the legal precedents examined would strongly suggest that the Indian courts will have no reservation in endorsing a rational judgment of a foreign court, in the instance of such a court passing an extra-territorial judgment to be enforced against an Indian citizen.35

Understanding the corpus of private international law (PIL) and alternative dispute resolution (ADR)

Private international law, which is referred to as a dispute of laws in more common law-based countries, is a corpus of statutes that aims to address any issues stemming from the existence of an external factor in contractual relationships.36 Upon the emergence of the internet, cross-border ties gradually escalated, creating increasingly complicated issues of purview and relevant legislation. A variety of unique features of internet-based operations has also introduced fresh complexities. The fundamental challenge in dealing with legal relations involving international facets arises from the fact that the legal structures of more than a few nations can be observed to have a correlation with each other.37 Thus, the implementation of the regulations from one regulatory regime, instead of the latter, would, for most cases, yield different outcomes.38

Theory of harmonisation and reaching a middle ground

A proposed solution to this issue seems to be the option of choosing, on the basis on some parameters between the multiple presumably practicable systems, the legislation of a one specific legal framework to regulate the contractual relationship. This would mean the process of deciding the relevant legislation could take place under private international law. This also happens to be the approach that has the minimum impact on existing national legislation, since it does not entail any amendments to it to tackle the issue presented by way of inclusion of a foreign factor.39

Concepts of private international law are acknowledged in the Indian subcontinent. The Supreme Court held in 1964 that India follows the very well-established concept of private international law that the “law of the forum”, in which the litigation is commenced, regulates all issues of procedural practice.40 It is left at the discretion of the parties to consent and select one or more appropriate court systems to resolve their differences. If the respondents and plaintiffs specifically agree, in compliance according to their own arrangement, that their case be heard by a specific court, the two parties shall be obliged by the “forum selection” provision in their contract.41

The other approach, that is far more invasive to established domestic law, would be to attempt via a mechanism of “harmonization”, to eliminate the root cause of the issue by removing the discrepancies that arise amongst the law and regulations of a nation. “Harmonization” can be implemented via the conciliation process between nations by way of treaties instituting uniform policy and following ratification by the participating nations of the foreign conventions concerned. The results in the adjustment of state laws to harmonise them into conformity with the provisions of the requisite convention.42

Conclusion

Not only can e-commerce platforms have revolutionary multidisciplinary facilities, but also well-functioning information systems including appropriate data protection and precautions for individuals. The clauses of the agreement, based on the location of the products, must not be generic, but instead should be specific in nature in order to avoid jurisdiction discrepancies in the event of disputes. These must be drawn to the customer’s appropriate attention and should even provide them with a sufficient chance to read, review and then finally accept the conditions given. It will indicate that perhaps the concerns continue to be properly dealt with or that at minimum e-commerce platforms have a resolute plan in place to tackle such issues with ease and efficiency.


Undergraduate student enrolled in the BA, LLB (Hons.) course at Jindal Global Law School (Authored on 10-11-2020), e-mail: 18jgls-raghav.sg@jgu.edu.in.

[1] <http://www.scconline.com/DocumentLink/Uei3bEDC>.

[2] Misra, J.P., and J.P. Mishra, Dr B.R. Ambedkar and the Constitution – Making in India, Proceedings of the Indian History Congress 52 (1991): 534-41, accessed 17-10-2020. <http://www.jstor.org/stable/44142653>.

3 Mishra, Sachin, 2020, Determining Jurisdiction over E-Commerce Disputes in India, docs.manupatra.in, accessed October 8 <http://docs.manupatra.in/newsline/articles/Upload/FE4BA350-DBEF-49DA-97D4-09E54ED8B813.pdf>.

4 India, Legal, 2020, Jurisdiction of Civil Court and Place of Suing, legalservicesindia.com, accessed October 9 <http://www.legalservicesindia.com/article/1780/Jurisdiction-of-Civil-Court-and-Place-of-Suing.html>.

5 India, Legal, 2020. Jurisdictional Challenges in Online Transactions, legalservicesindia.com, accessed October 13 <http://www.legalservicesindia.com/article/2268/Jurisdictional-Challenges-in-Online-Transactions.html>.

6 (1969) 3 SCR 92

7 Ibid.

8 J. McIntyre Machinery Ltd. v. Nicastro, 2011 SCC OnLine US SC 122: 564 US 873 (2011) 

9 2009 SCC OnLine Del 3780

10 2018 SCC OnLine Del 6392

11 Ibid.

12 Ibid.

13 Banyan Tree Holding (P) Ltd., supra note 9.

14 2018 SCC OnLine Del 6392

15 Bryan A. Garner and Henry Campbell Black, Black’s Law Dictionary (St. Paul, Minn. West Group, 1999).

16 (2004) 6 SCC 254

17 1945 SCC OnLine US SC 158 : 326 US 310 (1945) 

18 Douglas De Savoye v. Morguard Investments Ltd., 1990 SCC OnLine Can SC 124 : (1990) 3 SCR 1077 

19 Zippo Mfg. Co. v. Zippo Dot Com Inc., 952 F Supp 1119 (WD Pa 1997).

20 Calder v. Jones, 1984 SCC OnLine US SC 58 : 465 US 783 (1984)

21 (1955) 1 SCR 117

22 Ibid.

23 2003 SCC OnLine Del 833

24 Ibid.

25 2009 SCC OnLine Del 3780

26 2003 SCC OnLine Del 833

27 2009 SCC OnLine Del 3780

28 2003 SCC OnLine Del 833

29 (2006) 9 SCC 41

30 (2006) 9 SCC 41

31 <http://www.scconline.com/DocumentLink/Mw0TY9U5>.

32 Narhari Shivram Shet Narvekar v. Pannalal Umediram, (1976) 3 SCC 203

33 Ibid.

34 Lalji Raja and Sons v. Firm Hansraj Nathuram, (1971) 1 SCC 721

35 O.P. Verma v. Gehrilal, 1960 SCC OnLine Raj 89

36 Dr Verschraegen Bea, Private International Law, 1st edn., (Kluwer Law International, 2001)

37 Malcolm N. Shaw, International Law 573 (Cambridge University Press, 5th edn. 2003).

38 Ibid.

39 S.C. Symeonides, Private International Law Bibliography 2017: US and Foreign Sources in English, American Journal of Comparative Law, 66 (2018), No. 2, pp. 89-100.

40 Ramanathan Chettiar v. Somasundaram Chettiar, 1963 SCC OnLine Mad 187

41 Ibid.

42 P. Hay, P.J. Borchers and R.D. Freer, Conflict of Laws: Private International Law: Cases and Materials, St. Paul, MN, Foundation Press, 2017.

Op EdsOP. ED.

The success of any dispute resolution system depends greatly on the effectiveness of the enforcement mechanism which it prescribes. Arbitration could emerge as a successful alternative dispute redressal mechanism in India purely because of the ease with which an arbitral award can be enforced. An arbitral award could be enforced by the courts in the same manner as if it were a decree of the court. Since the enforcement of an award is similar to enforcement of a decree of a court, the same is broadly governed by the principles laid down by the Code of Civil Procedure, 1908[1] (CPC), but with some minor differences.

Although an award passed by an arbitral tribunal is treated as a decree of the court, yet there exists no legal presumption by which an arbitral tribunal is treated as a court for the purpose of enforcement. This scenario poses various practical difficulties in enforcement of an arbitral award, which the article endeavours to highlight.

In order to fully appreciate the whole gamut of controversy, the authors have briefly dealt with the provisions of CPC that deal with jurisdiction of court at the stage of institution of suit and at execution of decree, how these provisions were made applicable to the regime under the Arbitration Act, 1940[2] (the 1940 Act), the sudden shift brought by India’s adoption to the UNCITRAL Model Law on International Commercial Arbitration[3] (the UNCITRAL Model Law) by enacting the Arbitration and Conciliation Act, 1996[4] (the 1996 Act) and subsequent amendments made to the 1996 Act. The article focuses on provisions of the 1996 Act that deal with jurisdiction of court and the enforcement of an arbitral award and their interplay especially in view of the amendments made to these provisions by the Arbitration and Conciliation (Amendment) Act, 2015[5] (the Amending Act, 2015). In the course of discussion, the authors have analysed the judgments of the Supreme Court which have settled the various controversies surrounding the laws of arbitration in India and how there still exists ambiguity with respect to certain aspects of the legislation.

JURISDICTION OF COURTS AS PER THE CODE OF CIVIL PROCEDURE, 1908

Jurisdiction of court under CPC is subject-matter centric. Civil proceedings are instituted in courts within whose local limits the defendant resides or the subject property is situated or cause of action has arisen. Sections 15 to 21[6] CPC deal with jurisdiction of the court in which a suit can be instituted.

Once a decree is passed, it is either enforced by a court which has passed the decree or is transferred to a court which exercises jurisdiction over the person against whom the decree is passed or within whose jurisdiction the property is situated which would be sufficient to satisfy such decree. Sections 36 to 74[7] contained in Part II of the CPC deal with execution of decree and orders.

Provisions relating to transfer of decree are provided in Sections 39 to 45[8]. A court which has passed the decree may on an application of the decree-holder, send the decree for execution to another court if the person against whom the decree is passed, resides or carries on business within the local limits of jurisdiction of that court, or if such person has no property within the local limits of the jurisdiction of the court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other court, or if the decree directs the sale or delivery of immovable property situated outside the local limits of the jurisdiction or for any other reason which the court may think fit. In addition to the aforesaid, under Section 46[9], the court which has passed the decree, upon an application filed by the decree-holder, may issue a percept to any other court which would be competent to execute such decree to attach any property belonging to the judgment debtor and specified in the percept.

Order 21 Rules 26[10] and 29[11] are also relevant in the present context as they lay down the circumstances in which execution of decree may be stayed. A decree may be stayed for reasonable time inter alia to enable the judgment debtor to file an appeal. It can also be stayed on such terms as to security, if a suit is pending in any court against the decree- holder of such court or of a decree which is being executed by such court. The appellate court can also grant the stay to the execution proceeding.

The aforesaid provisions, with some modifications were adopted by the legislature while enacting the Arbitration Act, 1940.

JURISDICTION OF COURTS UNDER THE ARBITRATION ACT, 1940

The 1940 Act provided for application of the Code of Civil Procedure to all proceedings before the court and to all appeals under the 1940 Act, subject to the provisions of the 1940 Act (Section 41[12]). The definition of “court” under the 1940 Act was more or less the same as the court under CPC. As per Section 2(c)[13] court meant a civil court having jurisdiction to decide the question forming the subject-matter of reference if the same had been the subject-matter of suit but did not include a small cause court except for the purposes of arbitration proceedings under Section 21[14].

One of the key features of the 1940 Act which was done away in the 1996 Act was that an award under the 1940 Act did not become final and binding on the parties. Under the 1940 Act, an arbitral award once passed had to be filed in court and the court had to give notice to the parties. The parties were entitled to file their objection to the award. The court had power to modify or correct the award and also to remit the award to the arbitrators for reconsideration, if any issues were left undetermined, or where the award was so indefinite to be incapable of execution, or where objection to legality of award is apparent upon the face of it. In case, the court found no cause to remit the award and the time period for making application to set aside the award had expired or such application had been refused, the court would proceed to pronounce the judgment according to the award and upon the judgment so pronounced a decree shall follow and the award will become effective.

Section 31 of the 1940 Act[15] dealt with jurisdiction. As per this Section, an award had to be filed in court having jurisdiction in the matter to which the reference relates. The concept of jurisdictional seat in the 1940 Act was conspicuous by its absence. A holistic reading of the 1940 Act would indicate that it was the subject-matter of dispute that formed the basis of jurisdiction of court just like jurisdiction under CPC.

The enforcement of arbitral award also had to be done as per the provisions of CPC. This practice prevailed in India till the enactment of the 1996 Act, which was based on UNCITRAL Model law.

UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION

The need for improvement and harmonisation of domestic laws dealing with arbitration, especially international commercial arbitration, led to the United Nations Commission on International Trade law adopting the UNCITRAL Model Law in the year 1985. This was ratified by India in the form of the 1996 Act. The 1996 Act overhauled its predecessor and ushered in a new era of dispute resolution through arbitration.

Article 20 of the UNCITRAL Model Law provides that the parties are free to agree on the place of arbitration. In case parties fail to do so, the arbitral tribunal, having regard to the circumstances of the case and the convenience of parties, can determine the place of arbitration. Article 20(2) is a non obstante clause which provides that notwithstanding anything contained in Article 20(1), the arbitral tribunal can hold meeting at any place, unless otherwise agreed by the parties. Thus, Article 20 contemplates two places  – one is the seat, which the parties have agreed as per the agreement or the Tribunal has determined, the other is the venue, where the Tribunal can hold any of its meeting irrespective of that place not being seat as chosen by the parties or determined by the Arbitral Tribunal. The Model Law mandates the award to contain the date and the place of arbitration (Article 31). Thus, the “place” where the award was made gained significance under the UNCITRAL Model Law.

An arbitral award can be set aside by the court only if the grounds mentioned in Article 34 are satisfied. Article 35 deals with recognition and enforcement of arbitral award as per which, an arbitral award, irrespective of the country in which it was made, shall be recognised as binding and upon application in writing to the competent court, shall be enforced subject to the provisions of Articles 35 and 36. Article 35 is a significant departure from the practice that was followed by Courts in India due to the 1940 Act. Unlike the 1940 Act, under the UNCITRAL Model Law, an arbitral award is binding on parties and capable of enforcement i.e. an award was treated as a decree capable of enforcement. It does not require approval of the jurisdictional civil court for its enforcement.

Article 36 deals with the grounds for refusing recognition and enforcement of arbitral award, irrespective of the country in which it was made. Just like Article 34, the grounds for refusal to recognise and enforce the arbitral award are limited. Article 36(2) is of vital importance. As per this provision, in case, an application for setting aside or suspension of award is made in a court of the country in which, or under the law of which the award was made, then the court where the recognition or enforcement of award is sought, may, if it considers proper, adjourn its decision. It may also, on an application of the party claiming recognition or enforcement of the award, order the other party to provide appropriate security. Thus, a discretionary power has been granted to the court where recognition or enforcement is sought to defer its decision.

Although the UNCITRAL Model Law underwent amendment in 2006, the aforesaid articles remained intact.

THE ARBITRATION AND CONCILIATION ACT, 1996 AND THE SUBSEQUENT AMENDMENTS

As mentioned in the foregoing paragraph, the 1996 Act is modelled on the UNCITRAL Model Law. Part I of the 1996 Act applies where the place of arbitration is in India, Part II applies where the place of arbitration is outside India.[16] In this article we are concerned with Part I of the Act.

The 1996 Act defines court in Section 2(1)(e) to mean the principal civil court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit but does not include any civil court of a grade inferior to such principal civil court or any court of small causes.

The definition of court has been subject-matter of various deliberations and judgments as this definition along with Sections 20, 31(4) and 42 are critical in determining which court shall have jurisdiction to hear applications arising out of arbitration agreement and arbitral proceedings.

The language of Sections 20, 21, 31, 32 and 34 of the 1996 Act have been borrowed from the UNCITRAL Model Law without any material change.

Concept of Juridical Seat

Section 20 of the 1996 Act, just like Article 20 of the UNCITRAL Model law deals with place of arbitration and contemplates a situation where arbitration proceedings can be held at a place different from the place decided by the parties to the arbitration agreement or as determined by the Arbitral Tribunal. It differentiates between juridical seat and venue.

In the early years of coming into force of the 1996 Act, the concept of “seat” and “venue” were not very clear. The Indian courts in various judgment held that the 1996 Act is “subject-matter centric”. The concept of parties choosing a neutral place for arbitration, which was well established in other parts of the world, especially in International Commercial Arbitrations, was alien to India. It was not before 2012, in the decision in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (BALCO)[17], that a Constitutional Bench of the Supreme Court drew a distinction between venue and seat and held that arbitrations are anchored to the seat and that seat is the centre of gravity. In holding so, the Constitutional Bench clarified that the term “subject-matter of arbitration” used in the definition of court in Section 2(1)(e) cannot be confused with the term “subject-matter of the suit”. The subject-matter of arbitration is arbitration itself and hence, the term court would mean the court of the seat of arbitration. The court also took note of Section 20 of the Act, a statutory provision in support of party autonomy and observed that any other interpretation would leave the provision nugatory. Thus, came the concept of supervisory court.

It must be pointed out that although in para 96 of the judgment, the Supreme Court recognises supervisory court, it holds that the legislature has intentionally given jurisdiction to two courts – (i) the court which would have jurisdiction where the cause of action is located and (ii) the supervisory court.  An isolated reading of para 96 of the judgment reveals that courts have concurrent jurisdiction and parties can either choose the court where the cause of action has arisen or the court exercising supervisory jurisdiction over the arbitral proceedings. Many courts in India followed this approach. However, a holistic reading of the judgment makes it clear that the courts at seat alone will have jurisdiction to challenge arbitral award. This observation of the authors is supported by a recent judgment of the Supreme Court in BGS SGS Soma JV v. NHPC Ltd.[18] (BGS SGS Soma JV).

The Supreme Court in Indus Mobile Distribution (P) Ltd v. Datawind Innovations (P) Ltd.,[19] while analysing in detail the effect of Section 20 of the 1996 Act on the jurisdiction of court held that the place chosen by the parties in the arbitration agreement to hold arbitral proceedings, may not in the classical sense have jurisdiction, i.e. no part of the cause of action may have arisen at such a place, however, in arbitration law, the moment such a place is chosen, it becomes the juridical seat, which is akin to exclusive jurisdiction clause. Thus, jurisdiction of court under the arbitration law is seat-centric.

Section 21 deals with commencement of arbitral proceedings from the date on which request for dispute to be referred to arbitration is received by the respondent and as per Section 32, it terminates when the Tribunal has made the final award. Just like the UNCITRAL Model Law, Section 31(4) of the 1996 Act also mandates the award to mention the date and the place of arbitration. These provisions were not subjected to any amendments.

Challenge to Arbitral Award

An arbitral award can only be challenged before the court within whose jurisdiction an award is made. Section 34 deals with application for setting aside the arbitral award. The grounds for setting aside an award are confined to those provided in the Section. As per Section 34(3), the time period to challenge the arbitral award is three months. Section 34 underwent some change in 2015 and the grounds for challenge were further limited. In order to make the dispute resolution process effective, sub-clause (6) was introduced which mandated the courts to dispose of Section 34 application within a period of one year from the date of service of  notice.

Finality of Award and its Enforcement

Section 35 deals with finality of arbitral awards. An award is final and binding on the parties and persons claiming under them. Section 36 deals with enforcement of arbitral award. As per this section, where the time for making an application to set aside the arbitral award has expired, or such application having been made, it has been refused, the award shall be enforced under the CPC in the same as it were a decree of the court. This is significantly different from the position contemplated in the 1940 Act where the arbitral award by itself was not final, binding and enforceable and required approval from the court by way of judgment and decree to make it enforceable.

Position under the 1996 Act distinct from that under the UNCITRAL Model Law

A bare reading of Articles 36 of the UNCITRAL Model Law and Section 36 of the 1996 Act would suggest that contrary to Article 36 of the UNCITRAL Model Law, where a discretion has been granted to the executing court to stay or not to stay the execution of arbitral award till the pendency of proceedings challenging the arbitral award, no such discretion vests with the Courts under Section 36 of the 1996 Act.

Judgments of the Court and the position of law prior to the Amending Act of 2015

The aforesaid position has been subject-matter of various judgments in the past. The Supreme Court in National Buildings Construction Corpn. Ltd. v. Lloyds Insulation (India) Ltd.[20] and Fiza Developers and Inter-trade (P) Ltd. v. AMCI (India) (P) Ltd. .[21] held that the very filing and pendency of application under 34 operates as a stay of enforcement of the award. Similar stand was taken in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd.[22] , however, the Court was quick to add that automatic suspension of the execution of arbitral award defeats the very purpose of arbitration. This suggestion of the Supreme Court was accepted by the 246th Law Commission[23], which in its report recommended insertion of the following:

Section 36(1) will be subject to Section 36(2);

36(2) where an application to set aside the arbitral award has been filed in the Court under Section 34, the filing of such an application shall not by itself render the award unenforceable, unless upon a separate application made for that purpose, the court grants stay of the operation of the award in accordance with the provisions of sub-section (3) hereof;

36(3) upon filing of the separate application under sub-section (2) for stay of the operation of the award, the court may, subject to such conditions as it may deem fit, grant stay of the operation of the award for reasons to be recorded in writing:

Provided that the Court shall while considering the grant of stay, in the case of an award for money shall have due regard to the provisions for grant of stay of money decrees under the Code of Civil Procedure, 1908.

The aforesaid recommendation was duly incorporated in the 1996 Act by the Amending Act of 2015. Thus, post the Amending Act of 2015, mere filing of Section 34 application will not in itself render the arbitral award non-executable.

Position post the Amending Act of 2015: Judgment in Board of Control for Cricket in India v. Kochhi Cricket (P) Ltd.

After the amendment,  there were conflicting decisions passed by the various High Courts regarding whether the amendment made to the 1996 Act by the Amending Act of 2015 shall apply to pending court proceedings or not. The position was finally settled by the Supreme Court in Board of Control for Cricket in India v. Kochhi Cricket (P) Ltd. [24]. The issue before the Court was whether the amended Section 36, would apply in relation to proceedings initiated prior to coming into force of the amendment. The question required interpretation of Section 26 of the Amending Act of 2015 as per which the amendment was to apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act and would apply to the arbitral proceedings which commenced before the commencement of this Act only if the parties agreed to its application.

The Court held that the era of automatic stay was over. Section 36 being procedural in nature, the amendment would be applicable to pending court proceedings as well. Consequently, in order to stay enforcement of arbitral award, application to that effect under Section 36(2) will have to be filed before the competent court and that mere challenge to arbitral award will not make the arbitral award non-executable. However, the issue that whether Section 36 proceedings are independent of Section 34 proceedings was not decided despite being raised by the parties.

It will not be out of place to mention that a press note dated 7 March 2018 was brought to the notice of court as per which a new Section 87 was proposed to be inserted to clarify that unless parties agree otherwise the 2015 Amendment shall not apply to

  • Arbitral proceedings which have commenced before the commencement of the 2015 Amendment Act; and
  • Court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the 2015 Amendment Act.

Shall apply only to

  • Arbitral proceedings commenced on or after the commencement of the 2015 Amendment Act; and
  • To court proceedings arising out of or in relation to such arbitral proceedings.

The Supreme Court took note of the press note and advised the Central Government to keep in the mind the very object of the enactment of the 2015 Amendment Act as the proposed Section 87 would defeat the very purpose for which the amendment was made to the 1996 Act.

Parliament ignored the advice of the Supreme Court and went ahead and introduced Section 87 to the 1996 Act by way of Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019[25].

Section 87 of the 1996 Act was challenged in a batch of petition before the Supreme Court in Hindustan Construction Co. Ltd. v. Union of India.[26] The Supreme Court struck down the insertion of Section 87 by the Amending Act, 2019 as well as deletion of Section 26 of the Amending Act, 2015. This judgment, although a landmark, suffers from some errors; only time will tell whether the errors are glaring enough to take away the precedential value of this judgment.

Jurisdiction of Court: Section 42 of the 1996 Act

Another crucial provision of the 1996 Act which has been a subject-matter of various controversies is Section 42 which deals with jurisdiction. A bare perusal of Section 42 would suggest that Section 42 has an overriding effect over all other provisions of the Act.

As per Section 42, the court where the first application emanating from the arbitration agreement or arbitral proceedings is made, shall have jurisdiction over the arbitral proceedings and will have exclusive jurisdiction over all other future court proceedings. Reading Section 42 in isolation would suggest that in a case where the cause of action arose in city  A, and the arbitration was seated in city B, if a party files an application before courts in city A, the courts in city A alone will exercise jurisdiction over future court proceedings emanating from the arbitration agreement. These readings of the section run counter to the concept of seat and supervisory jurisdiction which is etched deeply in the UNCITRAL Model Law based on which the 1996 Arbitration Act is modelled. Therefore, in order to understand the true import of Section 42, the same has to be read together with Section 2(1)(e) and Section 20. The aforesaid position, with a similar example was discussed in BGS SGS Soma JV[27], where the Court observed that the moment a seat is chosen by the parties, the Court of the seat is conferred with exclusive jurisdiction to decide the proceedings emanating from the arbitration agreement.

In para 62 of the judgment, the Court held that the decision of High Court of Delhi in Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd.[28] (Antrix Corpn.) is incorrect. The High Court of Delhi in Antrix Corpn.[29] by relying on para 96 of BALCO[30] had concluded that the two courts can have concurrent jurisdiction and that merely choosing a seat cannot amount to exercising such a right of exclusive forum selection. The High Court of Delhi in Antrix Corpn.[31] was of the opinion that holding otherwise would in effect render Section 42 of the 1996 Act ineffective. The Supreme Court concluded that Section 42 of the 1996 Act is meant to avoid conflicts in jurisdiction of courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one court exclusively. The Court further observed that in cases where it is found on facts that no seat is designated by the agreement or the so-called seat is only a convenient venue and that several courts may have jurisdiction as part of the cause of action have arisen within their jurisdiction, then the court where the earliest application is filed, will be the court that shall exercise exclusive jurisdiction under Section 42.

Interplay between Sections 36 and 42 of the 1996 Act

We have in the initial paragraphs of this article discussed in detail how a decree is executed under CPC. As per Section 38 CPC, a decree may be executed either by the court which has passed the decree or the court to which the decree may be sent for execution. An arbitral award, unlike a judgment and order, is passed by an Arbitral Tribunal which does not have power of execution of decree and thus, the first part of Section 38 that deals with execution of decree by the court which has passed it does not apply in the case of arbitral award. The second part of Section 38 that deals with execution by court to which decree is sent also does not get attracted in the case of execution as there exists no deeming fiction to hold that the court within whose jurisdiction the arbitral award was passed should be taken to be the court which passed the decree. It is for the same reason, why Section 39 CPC can also not be fully applied to execution of an arbitral award as there exists no court from where a decree has been transferred for execution. However, Section 39 comes to the rescue in determining which court will have jurisdiction to execute an award as it marks out certain indicators needed to determine the appropriate court where an execution petition may be filed.

Thus, an arbitral award may be executed at any place having a close nexus with a judgment debtor or his assets or properties or both. As such, a person in whose favour the award is passed is not required to file an execution petition before the District Court within whose jurisdiction the award was passed and then seeks its transfer to the court where inter alia the assets or properties of a judgment debtor lie.[32]

Position of law clarified by the judgment in Sundaram Finance Ltd. v. Abdul Samad

The Supreme Court in Sundaram Finance Ltd. v. Abdul Samad (Sundaram Finance)[33] clarified the position of law on this point by holding that the enforcement of an award through its execution can be filed anywhere in the country where such a decree can be executed and there is no requirement for obtaining a transfer of decree from the court, which would have jurisdiction over the arbitral award.

The Supreme Court in Sundaram Finance[34]  while holding so also took note of the relevance of Section 42 of the 1996 Act in determining jurisdiction of executing court and concluded that Section 42 will not get attracted in case of execution proceedings. The Court observed that when final award is made, of which execution is sought, the arbitral proceedings already stand terminated (Section 32) and thus, Section 42 of the Act, which deals with jurisdiction issue in respect of arbitral proceedings, will have no relevance.

The judgment in Sundaram Finance[35]  although seems to have settled the position of law relating to execution of arbitral awards, however, certain parts of the judgment could have been more elaborative to avoid any ambiguity in future. The Court by holding that Section 42 will not get attracted in case of execution of award under Section 36 has taken into account only those cases where a final award has been passed by the Tribunal and not an interim award. Similarly, while referring to Section 46 CPC, which deals with issuance of percept, the Court has failed to hold which court will be competent to issue precepts – does it mean that an execution petition may be filed, as a matter of principle, in a court where Section 34 application is pending and necessary direction may be issued by that court to the court which otherwise under CPC would be the competent court to execute the decree? One problem that may emerge from the ambiguity is that litigants may rely on para 10 of Sundaram Finance judgment[36] to maintain their petition before a court which otherwise lacks territorial jurisdiction to enforce the arbitral award.

The lack of clarity in the aforesaid issue is problematic as even the obiter of the Supreme Court is binding on lower courts. An ambiguous obiter may pose a different level of problems as we have seen in the past.[37]

CONCLUSION

From the foregoing discussion, one thing is clear that although the legislature and the judiciary have come a long way in streamlining the dispute settlement process through arbitration, yet there continues to exist an ambiguity with respect to certain aspects of the Arbitration and Conciliation Act, 1996. The amendments brought by the Amending Act of 2015 have definitely aided in changing the outlook of the international community towards India as an arbitration friendly nation, however, the lack of clarity that has crept in because of the divergent judicial pronouncements subsequent to these amendment poses a greater challenge which needs to be overcome soon.

One of the areas which need clarity is the interplay between Sections 34 and 36 of the 1996 Act.  The Amending Act, 2015 has intertwined these Sections. As per the amended Act, in order to obtain a stay on the execution of an arbitral award, an application challenging the arbitral award under Section 34 of the Act has to be accompanied by a separate application seeking stay of the arbitral award under Section 36(2).  Only when the competent court passes an order of stay of the award, on the application made under Section 36(2), the arbitral award becomes unenforceable. The court while hearing the application for stay of the arbitral award may impose certain conditions on the judgment debtor. One of these conditions may include payment of money as well in case of a money decree.  In such a situation, a question arises as to whether such an action of the supervisory court, i.e. imposition of condition involving payment of money amounts to deemed execution of award or not. The courts are yet to examine this issue. One of the standpoint from which the court will have to examine this issue is that unlike jurisdiction under CPC, the jurisdiction of courts under the 1996 Act is not subject-matter centric. A court, under the 1996 Act, exercises supervisory jurisdiction over arbitration purely because of the fact that the arbitration was conducted within its local limits. There can be a situation where the supervisory court has absolutely no nexus with the subject-matter of dispute. In such a situation, whether by conferring the power to stay the execution of an award by imposing conditions involving payment of money, has the legislature not transgressed the settled principles of law relating to jurisdiction of court at the time of execution of a decree.

The aforesaid issue gives rise to another practical problem. Assuming the court stays the award and directs the judgment debtor to deposit a certain portion of arbitral amount and at the same time, allows the decree-holder to withdraw that amount upon an application being made by him, then whether such an order would amount to deemed enforcement of award. Also, which court would be responsible to see whether the proper stamp duty has been paid or not on an arbitral award as per the judgment laid down in M. Anasuya Devi. v M. Manik Reddy[38], since the issue of stamp duty has to be seen at the stage of enforcement.

Another issue that will require examination is whether the court under Section 34 while staying the arbitral award are deemed to be the court “which has passed the decree” as per Section 37 of the CPC, 1908 so as to make certain sections of the CPC while enforcing the decree workable like precepts. This issue, although was discussed in Sundaram Finance[39], has not been tested.

In order to make the dispute resolution through arbitration reach its full potential, the courts will have to address the aforementioned issues and ensure that the judgments in future provide a solution keeping in mind the practical realities of dispute resolution in India.


Advocate on Record, Supreme Court of India.

† † LLM, National University of Singapore, Advocate practicing at Supreme Court of India.

[1] Code of Civil Procedure, 1908. 

[2] Arbitration Act, 1940.

[3] UNCITRAL Model Law on International Commercial Arbitration. 

[4] Arbitration and Conciliation Act, 1996. 

[5] Arbitration and Conciliation (Amendment) Act, 2015. 

[6] Sections 15 to 21 CPC 

[7] Sections 36 to 74 CPC 

[8] Sections 39 to 45 CPC 

[9] Section 46 CPC 

[10] Order 21 Rules 26 CPC 

[11] Order 21 Rules 29 CPC 

[12] Section 41 of the Arbitration Act, 1940 

[13] Section 2(c) of the Arbitration Act, 1940 

[14] Section 21 of the Arbitration Act, 1940 

[15] Section 31 of the Arbitration Act, 1940 

[16] Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 

[17] Ibid.

[18] (2020) 4 SCC 234  — Whether a three-Judge Bench in SGS Soma could have clarified the judgment passed by a Constitution Bench in BALCO, supra Note 16 is something which requires further deliberation.

[19] (2017) 7 SCC 678 

[20] (2005) 2 SCC 367, para 6

[21] (2009) 17 SCC 796, para 20

[22] (2004) 1 SCC 540 

[23]Law Commission of India, Report No. 246 on Amendments to the Arbitration and Conciliation Act, 1996 (August 2014).

[24] (2018) 6 SCC 287. 

[25] Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019

[26] 2019 SCC OnLine SC 1520 

[27] Supra Note 18.

[28] 2018 SCC OnLine Del 9338 

[29] Ibid.

[30] Supra Note 16.

[31] Supra Note 28.

[32] Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd., 2009 SCC OnLine Del 511 — “A money award, can be enforced through courts of the place wheresoever the money or any property of the party liable to pay is situated”; Indusind Bank Ltd. v. Bhullar Transport Co., 2012 SCC OnLine P&H 21674 .

[33] (2018) 3 SCC 622.

[34] Ibid.

[35] Ibid.

[36] Ibid.

[37] Para 96 of  BALCO, supra Note 16 (elaborated in the foregoing paragraphs of this paper).

[38] (2003) 8 SCC 565 .

[39] Supra Note 33.

Law School NewsLive Blogging

Welcome to the Madhyastham UPES ADR Fest, 2021, University of Petroleum and Energy Studies, Dehradun.

The Alternate Dispute Resolution Association of UPES School of Law is proud to organize “Madhyastham UPES ADR Fest, 2021. Due to the risk associated with a novel Corona Virus (COVID-19) outbreak, this Competition will be organized in Online Mode only. UPES School of Law is a private school that was established in 2007 in Dehradun. UPES is one of the constituent schools of the University of Petroleum and Energy Studies (UPES) and is recognized by the University Grants Commission (UGC). UPES is the first Indian University to partner with UK-based The University of Law for legal studies.

Alternative Dispute Resolution or ADR as it is commonly known is almost a movement that has quickly gained momentum in the Indian as well as the International Legal Fraternity. Dispute Resolution is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute. It is a bargaining process between parties when both seek to reach an agreement that settles a matter of mutual concern or resolves a conflict.

“Madhyastham UPES ADR Fest’21” will be held in February from 25th-28th. This fest will witness three national competitions:

  • 3rdNational Mediation Competition 
  • 1stNational Negotiation Competition 
  • 1stNational Arbitral Award Writing Competition 

BRIEF ITINERARY OF THE EVENT:

Day 1– 25th February 2021: Inaugural Ceremony [6:00 PM]

Day 2– 26th February 2021:

  • Preliminary Round of 1st National Negotiation Competition [9:00 AM]
  • Quarter-Final Round of 1st National Negotiation Competition [2:00 PM]
  • Semi-Final Round of 1st National Negotiation Competition [5:30 PM]

Day 3: 27th February 2021:

  • Final Round of 1st National Negotiation Competition [10:00 AM]
  • Preliminary Round of 3rd National Mediation Competition [2:00 PM]
  • Quarter-Final Round of 3rd National Mediation Competition [6:30 PM]

Day 4: 28th February 2021:

  • Semi-Final Round of 3rd National Mediation Competition [10:30 AM]
  • Final Round of 3rd National Mediation Competition [2:00 PM]
  • Valedictory Ceremony [6:00 PM]

INAUGURAL CEREMONY

06:00 PM: The inaugural ceremony commences. It commenced with the introduction by the hosts Mr. Nishant and Ms. Simran. They briefed about the University, ADR Association, and the Event (Madhyastam’21).

06:05 PM: The hosts thanked all the collaborations and to the Dean, UPES School of Law, Prof. (Dr.) Vijay Kumar Singh.

06:10 PM: Prof. (Dr.) Vijay Kumar Singh motivated the participants and imparted knowledge about the importance of ADR mechanism.

06:15 PM: The hosts thanked our faculty coordinators; Mr. Afkar Ahmed, Ms. Aprajita Singh and Mr. Shashank Pathak.

06:17 PM: Mr. Shashank Pathak wished all the students all the best and appreciated the efforts of the entire ADR Association for organizing the event.

06:20 PM: The session was concluded by the hosts and the student convener Ms. Nishtha Kansal, ADR Association, and wished all the participants the best of luck for the competition.

06:23 PM: The inaugural ceremony hereby ends.

 

1st National Negotiation Competition 2021

PRELIMINARY ROUND:

10:00 AM: Judges Briefing 

The Judges for the preliminary round of the 1st National Negotiation Competition were briefed about the facts by the core members of the committee.

11:00 AM: Preliminary Round

1st Negotiation Competition has started. Every participant poured their skills and knowledge into the competition. The low temperature of winter just faded with the highly competitive atmosphere.

12:00 AM: Result of the Preliminary Round

The result of the preliminary round of the 1st National Negotiation Competition is here.
The teams that have qualified for the quarter-finals are :
TC – 101
TC – 107
TC – 118
TC – 111
TC – 106
TC – 112
TC – 117
TC – 119

QUARTER-FINAL ROUND

02:00 PM: Judges Briefing

The Judges for the quarter-final round of the 1st National Negotiation Competition were briefed about the facts by the core members of the committee.

4:00 PM: Quarter-Final Round

The quarter-final round for the 1st National Negotiation Competition has ended. The highly competitive faces of the participants were really noticeable. Everyone gave their best for the competition. May victory serve the worthy and may the light of knowledge grace us all.

4:40 PM: Result of the Quarter-Final Round

The result of the quarter-final round of the 1st National Negotiation Competition is here.
The teams that have qualified for the semi-final round are :
TC – 107
TC – 111
TC – 106
TC – 118

SEMI-FINAL ROUND

06:00 PM Judges Briefing

The Judges for the Semi-Final round of the 1st National Negotiation Competition were briefed about the facts by the core members of the committee.

08:00 PM: Semi-Final Round

The nail-biting atmosphere of the semi-final round of the 1st National Negotiation Competition had everyone on the edge of their seats. The judges weren’t letting them off easily. They were placing hurdles, one after another although these hurdles weren’t enough to down their courage.

08:20 PM: Result of the Semi-Final Round

The result of the Semi-final round of the 1st National Negotiation Competition is here.
The teams that have qualified for the final round are :
TC – 111
TC – 118

DAY 3

11:50 AM: Final Round of 1st National Negotiation Competition

The teams with glitter in their eyes and butterflies in their stomach have started their journey for the final round of the 1st National Negotiation Competition. They utilized their every skill and ability to compete and make it to victory.

May victory serve the worthy, our best wishes are with them.

3rd National Mediation Competition 2021

02:00 PM Judges Briefing

The Judges for the preliminary round of the 3rd National Mediation Competition were briefed about the facts by the core members of the committee and research team.

All the very best to all the participants.

03:45 PM Preliminary Round

The first round of the competition ended successfully. These lazy afternoons weren’t lazy enough as everyone was fighting their own battles. Although it was a tough competition still everybody tried to give their best for the competition.

05:30 PM: Result of the Preliminary Round

The result of the preliminary round of the 3rd National Mediation Competition is here.
The teams that have qualified for the quarter-final round are:
Mediators
TC-302
TC-306
TC-311
TC-313
TC-315
TC-316
TC-328
TC-332

Client counsel Pairs
TC-305
TC-306
TC-308
TC-321
TC-322
TC-329
TC-331
TC-332

All the best to the qualifying teams!!

06:30 PM Judges Briefing

The Judges for the quarter-final round of the 3rd National Mediation Competition were briefed about the facts by the core members of the committee and research team.

08:30 PM  Quarter-Final Round

The quarter-final round ended. Beside being virtual round, the tension on the faces so much visible. It was hard for the judges also to evaluate the teams as every team performed so well.

11:30 PM: Result of the Quarter-Final Round

The result of the quarter-final round of the 3rd National Mediation Competition is here.
The teams that have qualified for the quarter-final round are:
Mediators
TC- 302
TC- 311
TC- 316
TC- 332

Client counsel Pairs
TC- 332
TC- 306
TC- 329
TC- 321

DAY- 4

11:45 AM: SEMI-FINAL ROUND

The semi-final rounds of the 3rd National Mediation Competition has commenced. After the commendable performance of the participants, judges look impressed and a bit stressed about the marking, awaiting results.
Teams are quite stressed but they are happy about how they managed to finally deliver their best. The judges were least concerned about the lapse of time and were more interested in watching their competitive nature.

1:15 PM: Results of the Semi-Final Round

The result of the semi-final round of the 3rd National Mediation Competition is here.
The teams that have qualified for the final round are:
Mediators
TC- 311
TC- 332

Client counsel Pairs
TC- 306
TC- 329

2:20 PM: Judges Briefing for the Final Round

The Judges for the Final Round of the 3rd National Mediation Competition were briefed about the facts by the core members of the committee and research team.

4:30 PM: Final Round 

The final round of the 3rd National Mediation Competition ended. The teams had made it to the final after so much hardship that none was ready to give in for a moment and everyone just did an extraordinary job.

6:00 PM: Valedictory Ceremony

We are all set for the valedictory ceremony of MADHYASTHAM UPES FEST’21.

This COVID-19 situation has changed our way of living a lot and still, we are adopting this new normal. There was a time when we used to gather for fests and go through the ups and downs together. But now we held meetings on online platforms and sort all problems virtually. It proves that no matter what when there is a team working together no obstacles matter in front of their courage and dedication.

We would like to thank each of you who has contributed to this MADHYASTHAM UPES FEST’21 and raised it to a grand success. We would like to express our sincere gratitude to all our faculty coordinators and Prof.(Dr.) Vijay Kumar Singh, Dean, UPES School of Law for giving us their valuable time and having faith in us in organising such a big event via virtual mode.

Op EdsOP. ED.

The principle of Gram Swaraj is based on the idea of “self-governance” or “self-rule” which teaches human beings to be self sufficient by living in peace and harmony and by understanding and respecting the needs and demands of their fellow brethrens.

In dispute resolution, this principle inspires the conflicting parties to resolve their disputes amicably by understanding and respecting the needs and demands of each other. The true aim of the dispute resolution system based on the principle of Gram Swaraj is to unite the parties towards the path of humanity and love for mankind.

Mohandas Gandhi, in his autobiography, had shared an instance wherein he successfully convinced the parties to arbitrate their dispute and, thereafter, successfully convinced the award holder to allow the award debtor to pay the awarded sum in “moderate instalments”, even though the instalments were to run “over a very long period”. Had his client (the award holder) not gotten convinced for such a settlement, the award debtor would be declared bankrupt “and there was an unwritten law among the Porbandar Memans living in South Africa that death should be preferred to bankruptcy.”[1] Gandhi wrote thereafter that “It was more difficult for me to secure this concession of payment by installments than to get the parties to agree to arbitration. But both were happy over the result, and both rose in the public estimation. My joy was boundless. I had learnt the true practice of law. I had learnt to find out the better side of human nature and to enter men’s hearts. I realized that the true function of a lawyer was to unite parties riven asunder. The lesson was so indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromises of hundreds of cases. I lost nothing thereby – not even money, certainly not my soul.[2]

This enshrines the spirit of Alternative Dispute Resolution mechanism in India.

Alternative Dispute Resolution (hereinafter ‘ADR’),which stands as an acronym for a variety of dispute resolution methods such as arbitration, mediation, conciliation, Permanent Lok Adalats, etc., complements the formal justice system. The ADR mechanism gives the autonomy to the parties to select the procedure and the dispute resolution method which are best suited to their needs and preferences. This enables them to resolve their disputes more efficiently by avoiding the complexities involved in court adjudication. This means that they will have more freedom, relaxed rules, tailored remedies, speedy resolution, cost-efficient mechanisms, and an improved access to justice.

However, the parties while deciding to resolve their dispute through any mode of ADR face certain difficulties such as uncertainty in the selection of procedures, uncertainty in the selection of an efficient panel of neutrals (arbitrator, conciliator, mediator, etc.), uncertainty in fixing the fee of the panel of neutral(s), difficulty in searching for a proper place of proceeding etc. To overcome these shortcomings, the institutional ADR offers many advantages. The institutional ADR facilitates the process of ADR by equipping the parties with the prerequisites for effective conduction of the proceedings. For example, it provides to the parties a well built-in infrastructure, a panel of specialised and efficient neutral(s), uniform fees, updated rules, and predetermined procedures, among others.

While these institutional advantages can be avail for the ADR methods such as arbitration, mediation, negotiation, etc, in India, the institutional system of Permanent Lok Adalat (hereinafter ‘PLA’) provides for some additional benefits. Moreover, whenever we think about institutional ADR, we mostly think of Arbitration and Mediation. However, we fail to acknowledge that these mechanisms are predominantly of the rich and the corporate. The common man hardly avails justice through these modes of ADR. Thus, the PLA is an ADR institution for justice to the common man. It is cost-efficient, speedy, government-supported, and promises justice to all, irrespective of their economic, social, or other disability.

PERMANENT LOK ADALATS

Permanent Lok Adalats (hereinafter ‘PLAs’) are one of the most effective tools of ADR in India. PLAs are special tribunals established by the National Legal Service Authority (hereinafter ‘NALSA’) or the State Legal Service Authority (hereinafter ‘SLSA’) with a pre-litigation attempt to resolve the disputes related to public utility in a speedy manner by means of compromise. The latest statistics on PLAs available on the NALSA website reveal that currently there are 298 PLAs in the country which had collectively settled 102,625 out of 143,061 cases from April 2018-March 2019, the total settlement value of those touches Rs. 3,870,578,815[3]. Moreover, the pecuniary jurisdiction of the PLA has been increased from Rupees Ten lakhs to Rupees One crore.[4]

Unlike Lok Adalats which can only be called occasionally, PLAs are established institutions. With the aim of fulfilling the constitutional promise of justice to all, in an affordable, efficient and speedy manner, Parliament in 2002 made certain amendments in the Legal Services Authorities Act, 1987 (hereinafter ‘the Act’), and added Chapter VI-A for pre-litigation conciliation and settlement of the disputes.

This amendment, which gave birth to the system of PLA, was an attempt to further strengthen the system of Lok Adalat in India by institutionalising a forum for compulsory pre-litigation re-conciliation and settlement of disputes related to public utility services such as those related to transport, postal, sanitation, education, dispensary, banking, insurance, housing and real estate, power, light, water, etc.[5]

Further, the unique feature of PLA is that, unlike Lok Adalat, it is a hybrid mechanism of reconciliation and adjudication. In Interglobe Aviation Ltd v. N. Satchidanand,[6] the Supreme Court of India said that the procedural trait of PLA is CON-ARB (that is “conciliation-cum- arbitration”). Further, in Bar Council of India v. Union of India[7], it was said that PLAs are empowered to decide the dispute on merits upon failure between the parties to arrive at a settlement by the way of conciliation.[8]

This means that PLA has twofold power. First: it has the power to conduct the conciliation proceedings between the parties, taking into consideration the circumstances surrounding the dispute, to help them reach an amicable solution in an impartial, speedy, and independent manner.Second: if during the conciliatory proceedings in action, the panel of neutrals realises that one of the parties is unnecessarily becoming adamant to not settle the dispute, even when there exist possible “elements of settlement” for the parties to sign an ‘agreement of settlement on dispute’, then the PLA also has the power to give a decision in the dispute, provided that the dispute does not relate to any non-compoundable offence.[10]

Therefore, the major advantage of PLA is that even though it is a forum for ADR which primarily aims at resolving disputes consensually, yet it is empowered to give a final and binding decision when one of the parties purposefully gets unwilling to settle a fit case.

Are the awards of PLA appealable?

Every award of PLA is final and binding[11] and “shall not be called into question in any original suit, application or execution proceeding”[12]. Here, one may argue that the appeal of the award of PLA should be possible primarily because (i) the Act expressly doesn’t bar the appeal for the award of PLA whereas it does expressly bar the appeal for the award of Lok Adalat under Section 21(2) of the Act which says that “no appeal shall lie to any court against the award [of Lok Adalat]”[13] and (ii) because PLA can adjudicate a dispute on the merits of the case which opens room for the aggrieved party to move the award in appeal, in contrast to Lok Adalat which only conciliates a dispute and passes award on the consent of the parties, thus, leaving no room for an appeal.[14]

However, the Supreme Court of India refuted these arguments in Bar Council of India[15](supra), and held that the award of PLA is non-appealable. It further clarified that (i) the right to appeal is not an inherent right but a creation of statute; if a statute doesn’t expressly prohibits the appeal of an award, that by ipso facto doesn’t make an award appealable especially when the text of the statute strongly suggests otherwise; (ii) that PLAs are special tribunals aiming at resolving public utility disputes at the earliest, and hence, to avoid unnecessary prolongation, the right to appeal is absent; (iii) that if at all, a party is aggrieved by the adjudication of PLA, he always has an option to invoke the special and extraordinary jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India.[16]

Procedure followed by PLA

The procedure followed by the PLA is in complete resonance with what is required to be followed in any ADR mechanism. The legislation requires that the proceedings in the PLA, both at the time of conciliation between the parties and at the time of deciding a dispute on merit if needed, should be guided by “the principles of natural justice, objectivity, fair play, equity, and other principles of justice.”[17] Moreover, it is required that the PLA should remain impartial and independent while conciliating the parties to reach an amicable solution.[18] Further, as far as procedural applicability is concerned, the PLA is not bound by the Code of Civil Procedure, 1908 and the Evidence Act, 1872[19]. However, “for the purpose of holding any determination”, the PLA shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit.[20]

Suggestions

While PLA is one of the fastest growing ADR institutions in the country, its jurisdiction to entertain only the matters related to the public utility services needs to be expanded. I suggest that the civil dispute claims such as breach of contract claims, tort claims, equitable claims, traffic rules claims, negotiable instrument claims, etc., must also be put under the purview of PLA. Here, it is noteworthy that according to the 245th Report of the Law Commission of India, the disputes related to negotiable instruments, police and traffic challan, electricity bills, and sanitation are the source of excessive litigation in the country.[21]

The huge backlog of cases only makes justice less accessible. Therefore, to reduce the backlog of cases, and in the interest of speedy justice, it is suggested that such disputes should compulsorily be resolved through PLA.

Further, after regarding the composition of PLA, it is my suggestion that there should be some definite definition of the term persons “having adequate experience in public utility service”.[22] In SN Pandey v. Union of India[23], the Supreme Court of India said that “We do emphasis that the persons who are appointed on the Permanent Lok Adalats should be person of integrity and adequate experience. Appropriate rules, inter alia in this regard, no doubt will have to be framed, if not already in place”.[24] Hence, it is proposed that the Government should notify certain specifications for the appointment of the neutrals in the panel of a PLA.

Lastly, a time-frame needs to be introduced for resolution of disputes in PLAs. Currently, there is no time limit for the resolution of disputes that are filed before PLAs.Therefore, if disputes are left unresolved for a longer period, there will be ambiguity and instances of unchecked discretionary actions by the PLA panels. Hence, to keep alive the spirit of PLA, a time-frame must be defined by the Government.

PLA vis-à-vis International Arbitration Institutions

Whether it can be said that PLA is an Indian model bearing close similarity to international arbitration tribunals?

While there are a few procedural similarities between the PLA and international arbitration institutions, the system of PLA is a unique one. The unique model devised to grant justice to the common man makes PLA stand out in the world from the rest of the ADR institutions.

The PLA charges zero fee for the resolution of disputes[25]. Also, the parties have the option of arguing their case by themselves, thus allowing them to save on the lawyer’s cost. In contrast, resolving a dispute before an international tribunal through any mode of ADR viz. arbitration, mediation, or conciliation is very costly. It involves hefty administration fee, counsel fee, neutrals’ fee (i.e. the fee charged by the panel of arbitrators, mediators, or conciliators as the case may be) among others.

Further, the PLA model is inherently a ‘multi-tier dispute resolution’ model i.e. it first provides conciliation of the dispute, and, if the conciliation fails because of the adamant nature charged with mala fide of one of the parties, then the PLA can even adjudicate the dispute. Whereas, to avail a multi-tier dispute resolution process before an international tribunal, it requires (i) consent of the parties at dispute, (ii) a multi-tier dispute resolution clause, (iii) time, resources, and efforts to defend any challenge related to the existence, validity, invocation, or qualification of the multi-tier dispute resolution clause, and (iv) multiple costs at every tier of the multi-tier dispute resolution.

Furthermore, under the PLA model, the parties do not have to decide anything ‘mutually’ concerning the dispute resolution before entering into any contractual relationship relating to the use of public utility services. PLAs are government institutions which provide CON-ARB form of ADR with pre-defined procedure, rules, composition and qualifications of the panelists, and which are currently located at 298 different ‘places’ in India. A party can unilaterally invoke the jurisdiction of the PLA without the need for any pre-existing dispute resolution agreement. In contrast, the resolution of a dispute before an international tribunal is purely based on ‘party autonomy’ and existence of a valid ‘dispute resolution agreement’. Thus, the parties have to mutually agree upon the form of ADR, its procedure, forum, place, venue, number of arbitrators (or mediators or conciliators as the case may be), subject-matter, etc., before entering into any contractual relationship. This involves a lot of time, effort, and resources both during the drafting of the dispute resolution agreement and thereafter, during defending its ingredients before the tribunal. The system of PLA, therefore, provides an escape route from these complexities and challenges, thus, saving a lot of time, resources and energy of the parties, and ensuring a time-bound resolution of the dispute.

Finally, the subject-matter of disputes before PLAs and international tribunals is largely different. PLAs aim at resolving public utility disputes at the domestic level while the international tribunals function to resolve international/domestic commercial disputes, investor-State treaty disputes, and State-to-State disputes. Both the tribunals, however, share similarity so far as both are (i) institutionalised forum of ADR and (ii) not bound by the domestic rules of evidence and civil procedure.

The advantages of the PLA cannot be compared readily with those of international tribunals. PLA is a forum that provides justice to the common man whereas international tribunals are predominantly of the rich and the corporate.

CONCLUSION

PLA – the unique hybrid of reconciliation and adjudication in India- is the Indian contribution to the world ADR jurisprudence. The PLA performs the function of promoting and strengthening the principle of “equal access to justice” in the country.  It is very popular among the litigants and legal functionaries not only because of its innovative nature and inexpensiveness but also because it serves the common man. The country which is infected with illiteracy, poverty, downtrodden and pendency of cases, PLA is the institutional ADR mechanism progressing towards the attainment of the principle of “Gram Swaraj” and the constitutional promise of justice to everyone at the doorstep.


*IV Year BA LLB (Hons.) student at Maharashtra National Law University, Nagpur. Email id: prakhar.spc@gmail.com

[1] Mahatma Gandhi, The Story of My Experiments with Truth 158 (1959).

[2] Ibid, 158-59 (1959).

[3] National Legal Service Authority, Permanent Lok Adalat, April 2018 to March 2019, National Legal Service Authority of India (May 02, 2020, 02:05 Am)

[4] Section 22-C(1) of the Legal Services Authorities Act, 1987

[5] See Section 22-A(b) of the Legal Services Authorities Act, 1987

See also, National Legal Service Authority, Lok Adalat: Permanent Lok Adalat, National Legal Service Authority of India (May 02, 2020, 02:25 Am), https://nalsa.gov.in/lok-adalat.

[6] (2011) 7 SCC 463

[7] (2012) 8 SCC 243

[8] See also, Section 22-C(8) of the Legal Services Authorities Act, 1987

[9] S.N. Pandey v. Union of India, (2012) 8 SCC 261

[10] Section 22-C(7) read with Section 22-C(8) of the Legal Services Authorities Act, 1987

[11] Section 22-E(1) of the Legal Services Authorities Act, 1987

[12] Section 22-E(4) of the Legal Services Authorities Act, 1987

[13] Section 21(2) of the Legal Services Authorities Act, 1987

[14] P.T. Thomas v. Thomas Job, (2005) 6 SCC 478

[15] (2012) 8 SCC 243

[16] Bar Council of India v. Union of India, (2012) 8 SCC 243

[17] Section 22-D of the Legal Services Authorities Act, 1987

[18] Section 22-C(5) of the Legal Services Authorities Act, 1987

[19] Section 22-D of the Legal Services Authorities Act, 1987

[20] Section 22(1) of the Legal Services Authorities Act, 1987

See also, Bar Council of India v. Union of India (2012) 8 SCC 243.

[21] Law Commission of India, Report No. 245 on Arrears and Backlog: Creating Additional Judicial (wo)manpower, Government of India, (July 2014) 

[22] Section 22-B(2)(b) of the Legal Services Authorities Act, 1987

[23] (2012) 8 SCC 261

[24] SN Pandey v. Union of India, (2012) 8 SCC 261

[25] National Legal Service Authority, Lok Adalat, National Legal Service Authority of India (May 04, 2020), https://nalsa.gov.in/lok-adalat.

Case BriefsSupreme Court

Supreme Court: In the case where a Notice Inviting Tender had a clause asking the parties invoking arbitration to furnish a “deposit-at-call” for 10% of the amount claimed, the bench of RF Nariman and Vineet Saran, JJ struck down the said clause on the premise that:

“Deterring a party to an arbitration from invoking this alternative dispute resolution process by a pre-deposit of 10% would discourage arbitration, contrary to the object of de-clogging the Court system, and would render the arbitral process ineffective and expensive.”

The Court was hearing the matter where the Punjab State Water Supply & Sewerage Board Bhatinda had issued notice inviting tender for extension and augmentation of water supply, sewerage scheme, pumping station and sewerage treatment plant for various towns mentioned therein on a turnkey basis. Clause 25(viii) of the Notice inviting Tender was challenged before the Court which read

“It shall be an essential term of this contract that in order to avoid frivolous claims the party invoking arbitration shall specify the dispute based on facts and calculations stating the amount claimed under each claim and shall furnish a “deposit-at-call” for ten percent of the amount claimed, on a schedule bank in the name of the Arbitrator by his official designation who shall keep the amount in deposit till the announcement of the award.”

Noticing that a 10% deposit has to be made before any determination that a claim made by the party invoking arbitration is frivolous, the Court said that such a clause would be unfair and unjust and which no reasonable man would agree to.

The Court said that since arbitration is an important alternative dispute resolution process which is to be encouraged because of high pendency of cases in courts and cost of litigation, any requirement as to deposit would certainly amount to a clog on this process. It also said:

“it is easy to visualize that often a deposit of 10% of a huge claim would be even greater than court fees that may be charged for filing a suit in a civil court.”

Striking down the said clause, the Court said that unless it is first found that the litigation that has been embarked upon is frivolous, exemplary costs or punitive damages do not follow.

“Clearly, therefore, a “deposit-at-call” of 10% of the amount claimed, which can amount to large sums of money, is obviously without any direct nexus to the filing of frivolous claims, as it applies to all claims (frivolous or otherwise) made at the very threshold.”

[ICOMM Tele Ltd. v. Punjab State Water Supply & Sewerage Board, 2019 SCC OnLine SC 361, decided on 11.03.2019]

Law School NewsMoot Court Achievements & Reports

Priyanka Sunjay, 5th Year, National Law University Jodhpur was adjudged as the best negotiator at the 5th RMLNLU National Mediation Competition 2019.
The team comprising, Shreya Poonia and Priyanka Sunjay won the award for the best team.
Law School NewsMoot Court Achievements & Reports

The 4th SLCU National Alternative Dispute Resolution Competition 2018 was conducted by the Alternate Dispute Resolution Board of School of Law, CHRIST (Deemed to be University) from 13 – 15 December 2018. The event comprised of three competitions, Mediation, Negotiation and Client Counselling conducted over a period of three days having preliminary rounds, quarter final round, semifinal round and final round. The competition witnessed 48 teams from 16 law colleges across the nation take part in it.

Inauguration:
The inauguration of the 4th SLCU National ADR Competition conducted on 13 December 2018 was graced by Mr Satish Srinivasan, Partner, ALMT Legal, Bengaluru, Ms Rukmini Menon, Mediator, Bangalore Mediation Centre & Ms Rhea Mathew, Counsel at Arista Chambers. A conceptual understanding was provided to the audience by explaining the merits of client counselling, negotiation and mediation by the guests who illustrated the manner in which the proceedings occur and iterated the difference between the various facets of dispute resolution.
The guests also spoke of how dispute resolution is now growing, why it is preferred over litigation and the scope that we, as law students can seek if we pursue the same in future.

Final Rounds:
The Final Round of Client Counselling was judged by Hon’ble Mr Justice Veerna Angadi & Mr Prabhakaran PM, Partner, Lakshikumaran & Shridharan, Bengaluru. The Final Round of Mediation & Negotiation was judged by Hon’ble Mr Justice V Gopala Gowda, Former Judge, Supreme Court of India, Hon’ble Justice Chandrashekariah, Former Judge, High Court of Karnataka & Mr Prashanth Poppat, Senior Partner, ALMT Legal.

Valedictory Ceremony:
The valedictory ceremony of the competition was graced by Hon’ble Mr Justice V Gopala Gowda, Former Judge, Supreme Court of India, Hon’ble Justice Chandrashekariah, Former Judge, High Court of Karnataka, Mr Prashanth Poppat, Senior Partner, ALMT Legal Bengaluru & Ms Tara Ollappaly, Co-ordinator, Centre for Advanced Mediation Practice, Bengaluru.

Prize Winners:
Client Counselling

  • Winners – National Law University, Jodhpur
  • Runners Up – Symbiosis Law School, Pune
  • 2nd Runners Up – West Bengal National University of Juridical Sciences, Kolkata
    Mediation

Mediator

  • Winner – NMIMS
  • Runner Up – NALSAR, Hyderabad

Client Advocate Team

  • Winners – Tamil Nadu National Law University
  • Runners Up – Jindal Global Law School, Panipat

Mediator (Preliminary Rounds)

  • Best Mediator – Joseph Moses, Jindal Global Law School, Panipat
  • 2nd Best Mediator – Shantanu Awasti, WBNUJS, Kolkata

Negotiation

  • Winners – National Law University, Jodhpur
  • Runners Up – Dr Ram Manohar Lohia National Law University, Lucknow
  • National Law University, Jodhpur was declared as the overall champions of the 4th SLCU National ADR Competition, 2018.

Law School NewsOthers

ILS Centre for Arbitration (ILSCA) in association with Peacekeeping and Conflict Resolution Team (PACT) is organizing a two day workshop on “ADR Methods with  Focus on Commercial Arbitration and Mediation”.

This Workshop will provide participants with core arbitration, mediation and negotiation skills and hands-on experience through a variety of simulations and practical role play sessions.

Highlights of the Workshop:

  1. Use of Arbitration-Mediation(Med-Arb) as an appropriate ADR tool in Indian and foreign jurisdictions.
  2. Setting and executing Arbitration and Mediation clauses in commercial contracts.
  3. Recent updates on mandatory Commercial Mediation in India and its impact on the courts of Law.
  4. Pre-Litigation Mediation and court-referred Mediation in India and abroad.
  5. Scope and practice of Investor-State Arbitration in India and Abroad.

Eligibility:

  • All the Law students studying in either 3 or 5 year Law course in India are eligible to attend this workshop.
  • Recent Law Graduates, Professionals, and Law Enthusiasts can also be a part of the coveted Workshop.

Location: ILS Law College, Pune.

 Registration procedure

The prospective participants can register by visiting the link given below:

Certificates shall be awarded to all the participants provided they are present for all the sessions conducted on both the days.

 Fees:

  • For ILS Students: ?2500 plus GST(18%)
  • For Non ILS Studens: ?3500 plus GST(18%)
  • For Professionals and Recent Graduates: ?5000 plus GST(18%)

Important Dates

  • Registration Starts from: 13th December, 2018    
  • Last Date to Register:  31st December , 2018

 For Correspondence:

Student Coordinators:

Faculty Coordinators:

  • Sathya Narayan, Ms. AnwitaDinkar; Ph: 020 25676866

Official Email ID (for communications, queries and requests): ilscapact@gmail.com

For the schedule of the workshop, click HERE

Case BriefsHigh Courts

Delhi High Court: While deciding the instant review petition wherein the issue was raised that whether the either parties during the trial can use the Counselor’s report furnished in the course of mediation proceedings or the Mediator’s report in case the process fails. The petitioner further raised a grievance against the decision of this Court dated 07.02.2017 holding that the reports furnished by the Counselor and Mediator were not confidential and will not fall within the bar of confidentiality. Allowing the petition it was observed by the Division Bench of S. Ravindra Bhat and Yogesh Khanna, JJ., that ‘confidentiality’ is the essence of mediation proceedings, thus constituting “a permanent ‘dark area’ and off limits, till such time appropriate and nuanced clear rules are enacted by legislation or binding norms by way of limited exception”.

As per the facts, the parties to the instant petition are disputants before the Family Court claiming guardianship of the son born to them. In order to resolve the dispute amicably, the parties opted for Mediation which unfortunately failed. The Counselor appointed by the Mediator submitted its report to this Court thereby causing the decision of 07.02.2017. The counsel for the petitioner Prosenjeet Banerjee referring to the Delhi High Court Mediation and Conciliation Rules, 2004, Conciliation Rules of United Nations Commission on International Trade Law (UNCITRAL) and Mediation Training Manual issued by the Supreme Court, argued that mediation is purely a confidential process and anything said or any view expressed by the parties; or documents obtained etc in the course of the process, need not be a part of the mediation report especially when the mediation has failed. It was also argued that the Mediator was not authorised by the Court to refer the dispute to the Counselor. The respondents via Inderjeet Saroop put forth before the Court that the Counselor’s report is only to be referred for the purposes of appreciation of the parties’ stand vis-à-vis their child and urged the Court to exercise it’s parens patriae jurisdiction for the benefit of the child.

Perusing the contentions and facts and referring to the various Rules and Conventions namely UNCITRAL Rules, Arbitration and Conciliation Act, 1996 etc. all highlighting the confidentiality aspect of mediation, the Court observed that a Mediator is not an amicus curiae and therefore the process itself involves a neutral third party who in a non- judgmental fashion acts as a facilitator for the disputants to reach an agreement. Therefore mediation process depends upon maintaining confidentiality at all times till the end of the proceedings, thus a mediator cannot file reports to the Court especially when the process has failed. Mediators cannot involve experts or counselors in the process and if any need arises, the parties must approach the Court to explain requirement and the Court in such cases may use its discretion under Section 12 of the Family Courts Act, 1984. In case a counselor is appointed, a mediator shall not present when the parties are interacting with the counselor and interactions of the counselor and Court should be confidential as well. Based on the observations, the Court directed the Family Court to

disregard the reports of the Mediator and Counselor when it will determine the case upon its merits. It was also held that the said report will not be a subject of debate or argument. [Smriti Madan Kansagra v. Perry Kansagra, 2017 SCC OnLine Del 12156, decided on 11.12.2017]