Case BriefsHigh Courts

Karnataka High Court: B.M. Shyam Prasad, J., held that there cannot be a complete adjudication of the petitioner’s rights unless the third parties are also heard.

In the present matter, the petitioner was a society registered under the Karnataka Societies Registration Act, 1960 and first respondent was a company registered under the Companies Act, 1956 engaged in the business of real estate development and construction of multi-storied apartments.

Further, the second respondent was a company registered under Section 25 of the Companies Act.

What is the Dispute?

The dispute was with regard to handing over vacant possession of certain apartments constructed in the property situated at Norris Road, Municipal ward No. 76, Richmond Town, Bengaluru. [Subject Property]

The said building was constructed by the first respondent in performance of the terms of the Joint Development Agreement and the Supplemental Agreement of even date. The said agreements were executed and registered amongst the petitioner and respondents.

 The J.D. Agreement was executed contemporaneously with a Power of Attorney. The said agreement provided for the resolution of disputes/difference amongst the parties.

As per the terms of the JD Agreement, the second respondent was the owner of the subject property with the petitioner being described as the Administrative Trustee managing the affairs of the subject property, and the revenue records for the subject property were made in the respondent’s name.

A dispute arose between the parties with respect to the allotment of the apartments. Hence the petitioner had filed a petition under Sections 11(4) and 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis, Law and Decision

Firstly, the High Court referred to the Supreme Court decision in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1.

The respondent’s objection to the reference of the dispute to arbitration was on multiple grounds such as that the dispute was essentially between two trusts, because of the fraud that was played by the first respondent in tandem with Sri Michael Sreenivasan, the dispute was time-barred, the parties did not agree upon mandatory arbitration and the dispute could not be just amongst the parties to the present petition.

Further, the respondent contended that certain third parties entered into the shoes of the petitioner with the assignment of their respective rights in the subject apartments in favour of third parties and therefore, the claim was non-arbitrable.

High Court stated that the proceeding under Section 11 of the Arbitration Act is not a stage for the Courts to enter into a mini-trial.

It emerged from the facts that the dispute was about the delivery of 3 apartments. The petitioner and the respondents entered into MOUs with third persons agreeing to assign their rights in the said apartments in favour of Kaveri Bai and Sudhir Jaganathan Kamath, who were not parties to the present petition.

It was added that the petitioner was categorical in his pleadings in the application under Section 9 of the Arbitration Act that such MOUs had been executed in favour of the above-said. The petitioner while admitting creation of third-party rights, proposed adjudication of its right to recover possession of the subject apartments in the absence of the third parties.

In this Court’s view, the dispute encompassed the question of facts which would have to be necessarily decided with due opportunity to the third parties who will not be parties to the arbitration proceedings.

Bench noted that, the petitioner did not even assert that the third parties would be bound by the arbitration clause as contained in the JD Agreement. The larger questions of facts involved the third-party rights, which were to be decided and such third parties would not even be parties to the arbitration proceedings.

Lastly, the High Court concluded that, respondents must be protected from being forced to arbitrate when the matter was demonstrably non-arbitrable.

Hence, since the dispute was non-arbitrable, parties must necessarily work out the remedies in properly instituted proceedings with the third parties. [South Indian Biblical Seminary v. Indraprastha Shelters (P) Ltd., Civil Miscellaneous Petition No. 129 of 2020, decided on 28-3-2022]


Advocates before the Court:

For the Petitioner: Joshua Hudson Samuel, Advocate

For the Respondents: Navakesh Batra, Advocate and B.R. Dhanalakshmi, Advocate for R1; V.B. Shivakumar, Advocate for R2

Op EdsOP. ED.

What is third-party litigation funding

Third-party funding is “an arrangement in which a party involved in a litigation” which could include an arbitration proceeding “seeks funding from an outside entity for its legal representation instead of financing its own legal representation”.[1] The outside entity is called a ‘‘third-party funder’’ and finances the party’s legal representation in return for a profit.[2] The third-party funder could be a bank, hedge fund, insurance company, or some other entity or individual.[3] Third-party funding (TPF) is also known as litigation financing. This type of financing “adjudges  the value of  legal  claims  even  before  they  can  be  adjudicated  upon  and  recovered  before  a  court  or tribunal”.[4] This helps parties understand the merits or demerits of their claim in order to enable them to take a judicious decision on whether or not to pursue the litigation. At a macro level, TPF helps to facilitate access to justice and also encourages out of court settlement of disputes based on the merits of a claim.[5]

The litigation-financing contract/TPF may be structured in a variety of different ways depending on the specific litigation.[6] It would include standard clauses that take care of the interests of both the financer and the party who is being financed and it would also include clauses covering confidentiality and non-disclosure.[7] TPF can  cover  legal  counsel’s  fee, the court or tribunal’s fee, cost of expert witnesses, pre-deposit, adverse costs order, and other dispute-related expenses including venue costs.[8] The disputes that this type of financing can cover includes a wide range of commercial disputes such as commercial suits, international or domestic commercial arbitrations, “class action suits, tortious claims like medical malpractice  and personal  injury  claims,  anti-trust proceedings, insolvency proceedings, and other like claims that  have  a calculated  chance  of resulting  in a substantial monetary award.”[9]

In recent years, TPF has gained impetus in countries such as Australia, Germany, United Kingdom, Singapore, and Hong Kong.[10] The rapid evolution of TPF in foreign jurisdictions is for two main reasons:

“(1) It provides a level playing field for both parties and ensures that legitimate rights are not compromised due to paucity of financial resources; and

(2) It provides for a good opportunity for funders to make investments”.[11]

Supporters of TPF have stated that TPF would introduce a level playing field between the parties to a dispute, while opponents favour banning or heavily regulating TPF.[12]

The law in common law jurisdictions

Historically, the common law doctrines of champerty and maintenance were an impediment to the growth of TPF. These doctrines which developed in the fifteenth century originated from Greek and Roman civilisations.[13] Broadly speaking, maintenance is an “overarching doctrine that encompasses providing financial assistance to a third-party/stranger while bearing no interest in the outcome of the case” while “champerty refers to providing similar assistance with the expectancy of receiving a share from the award and thus, bearing interest in the outcome of the case”.[14] In England, the attitude towards champerty and maintenance has undergone a change and since 1967 neither of them were considered criminal wrongs or tortious wrongs.[15] In 2011, the Civil Justice Council (Agency of the United Kingdom’s Ministry of Justice) published the Code of Conduct for Litigation Funders which was administered by the Association of Litigation Funders.[16] Most States in USA also allow TPF and US law generally allows attorneys to use a contingent fee (percentage basis) for certain cases like personal injuries.[17] Other common law countries such as Australia, Singapore and territories such as Hong Kong, have also diluted the applicability of these doctrines to pave the way for TPF. The High Court of Australia recognised the legitimacy of TPF in 2006.[18] Singapore enacted the Civil Law (Amendment Act) in 2017, permitting TPF for international arbitration and related proceedings.[19] Similarly, Hong Kong approved TPF for arbitration in the same year by adopting the Arbitration and Mediation Legislation (Third Party Funding)(Amendment) Bill, 2016.[20] Both Singapore and Hong Kong confined these amendments only to arbitration.

The law as it stands in India

India does not have any law regulating TPF. However, Indian law does not prohibit TPF. Perhaps one of the earliest decisions on this issue was of the Privy Council in Ram Coomar Coondoo v. Chunder Canto Mookerjee[21]in which the Judicial Committee held that“English common law and the statutes as to maintenance and champerty are not applicable and are considered as having no force in India”.[22] However, the Privy Council stated that such agreements, if found extortionate and unconscionable and not made with the bona fide object of assisting a claim would be opposed to public policy.[23]

The view of the Privy Council subsequently echoed by a five-Judge Bench of the Supreme Court of India in “G”, A Senior Advocate, In re[24], however, the observation did not constitute the ratio decidendi of the case. In a recent judgment delivered in 2017, the Supreme Court in Bar Council of India v. A.K. Balaji25observed that there “appears to be no restriction on third parties (non-lawyers) funding the litigation and getting repaid after the outcome of the litigation”. But the Court “strongly suggested” that “advocates in India cannot fund litigation on behalf of their clients”. This observation is also obiter dictum. However, both Supreme Court decisions have not referred to the aforementioned judgment of the Privy Council26. Nevertheless, a reading of the Supreme Court decisions would show that the Court has recognised TPF agreements provided the third party is not an advocate participating/appearing in the litigation on behalf of one of the parties. But these agreements have to pass the muster of the principles set out in the Contract Act, 187227 and “each agreement must be examined independently to ensure that it does not in fact intend to violate public policy and public morals”.28

Apart from the judgments of the Supreme Court, some States in India that include Gujarat, Madhya Pradesh and Uttar Pradesh had already given statutory recognition to TPF by amending Order 25 Rule 1 of the Code of Civil Procedure, 190829 (CPC).30 In Maharashtra, the Bombay High Court amended Order 25 Rule 1 in 1983 to specifically provide the courts with the power to secure costs for litigation by asking the financer to become a party to the suit and deposit the cost in the Court.31

Other than these minor amendments, there has not been any impetus to regulate TPF. This is probably because TPF as a concept is yet to gain recognition and popularity due to lack of awareness. Some strides have however been made in corporate India with companies such as Hindustan Construction Company entering into an agreement with a consortium of investors led by BlackRock to monetise an identified pool of arbitrational awards and claims for a consideration of Rs 1750 crores for which purpose a special purpose vehicle (SPV) had been created.32 Similar arrangements had also been made by companies such as Patel Engineering and Era Infra Engineering.33

There have been suggestions from various quarters to regularise and even legislate TPF in India.  In fact, a 2017 report on institutional arbitration in India even recognised existing TPF frameworks provided by arbitration-friendly jurisdictions.34 However, merely introducing a legislation in India to govern TPF would be missing the woods for the trees. This is because of the systemic problems that are prevalent in the justice-delivery system, the most important being delay and unpredictability of the judicial system while deciding a matter. Though efforts have been made to streamline commercial litigation by legislating the Commercial Courts Act, 201535 and by the amending the Arbitration and Conciliation Act, 199636 in 201537 and 201938, the problem of docket explosion that results in an inevitable delay in deciding all disputes including commercial disputes at various stages has not been effectively addressed. For instance, after the introduction of the Commercial Courts Act in 2015, the number of commercial disputes increased by 123% from 2015 to 2017.39 A perusal of the National Judicial Data Grid would also show that as on date there are 1,08,27,889 civil cases pending at the district and taluka level out of which 68.45% are civil suits.40 Therefore, an investor who would want to fund a dispute, for either the plaintiff/claimant or the defendant/respondent, would while conducting a due diligence on the merits and demerits of the matter would be unable to factor the time period by which a litigation would conclude. This, it is submitted would be the biggest impediment to accelerating the growth of TPF in India.

While TPF would be a novel and innovative way in streamlining commercial dispute resolution in India, delay and unpredictability of the justice-delivery system at various stages of litigation would be the biggest hindrance to its development.


*Advocate practising at the Bombay High Court and NCLT, Mumbai. Author can be contacted on Twitter@DormaanD.

[1]Sahani, Victoria, Third-Party Funding in Dispute Settlement in Africa, Proceedings of the Annual Meeting (American Society of International Law), Vol. 110 (2016), p. 90, <https://www.jstor.org/stable/26420162>.

[2]Sahani, Victoria, Third-Party Funding in Dispute Settlement in Africa, Proceedings of the Annual Meeting (American Society of International Law), Vol. 110 (2016), p. 90, <https://www.jstor.org/stable/26420162>.

[3]Sahani, Victoria, Third-Party Funding in Dispute Settlement in Africa, Proceedings of the Annual Meeting (American Society of International Law), Vol. 110 (2016), p. 90, <https://www.jstor.org/stable/26420162>.

[4] Das Gupta, Anshuman, Third-Party Litigation Financing: Asset or Liability, Vol. 4, Issue 1 (2021), p. 1764, <https://www.ijlmh.com/wp-content/uploads/Third-Party-Litigation-Financing-Asset-or-Liability.pdf>.

[5] Third-Party Funding in India, <https://www.cyrilshroff.com/wp-content/uploads/2019/06/Third-Party-Funding-in-India.pdf>, p. 4.

[6] Samra, Emily, The Business of Defence: Defence-Side Litigation Financing, The University of Chicago Law Review, Vol. 83, No. 4 (2016), 2302,<http://www.jstor.org/stable/44090016>.

[7]Third-Party Funding in India, <https://www.cyrilshroff.com/wp-content/uploads/2019/06/Third-Party-Funding-in-India.pdf>, p.5.

[8]Third Party Funding in India, <https://www.cyrilshroff.com/wp-content/uploads/2019/06/Third-Party-Funding-in-India.pdf>, p. 2.

[9]Third Party Funding in India, <https://www.cyrilshroff.com/wp-content/uploads/2019/06/Third-Party-Funding-in-India.pdf>, p. 2.

[10]Sumeet Lall, Sidhant Kapoor and Ananya Pratap Singh, Third party funding: India’s time is now, Bar and Bench, <https://www.barandbench.com/columns/third-party-funding-indias-time-is-now>.

[11]Mayank Mishra, Mohit Chadha, Vaishnavi Rao and Swati Mittal, India: Third-Party Funding – Is India Ready?, <https://www.mondaq.com/india/civil-law/1093690/third-party-funding-is-india-ready>.

[12]Kalajdzic, Jasminka, Peter Cashman, and Alana Longmoore, Justice for Profit: A Comparative Analysis of Australian, Canadian and US Third-Party Litigation Funding, The American Journal of Comparative Law, Vol. 61, No. 1 (2013), p. 94,<http://www.jstor.org/stable/41721716>.

[13]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021),

<http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[14]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021), <http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[15]Mulheron, Rachael, England’s Unique Approach to the Self-Regulation of Third-Party Funding: A Critical Analysis of Recent Developments, The Cambridge Law Journal, Vol. 73, No. 3 (2014), 580. <http://www.jstor.org/stable/24693910>.

[16]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021),

 <http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[17]Daughety, Andrew F., and Jennifer F. Reinganum, The Effect of Third-Party Funding of Plaintiffs on Settlement, The American Economic Review, Vol. 104, No. 8 (2014), pp. 2553-2554, <http://www.jstor.org/stable/42920899>.

[18]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021),

 <http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[19]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021),

 <http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[20]Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021),

<http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

[21]1876 SCC OnLine PC 19.

[22]Ram Coomar Coondoo v. Chunder Cando Mookerjee, 1876 SCC OnLine PC 19.

[23]Ram Coomar Coondoo v. Chunder Cando Mookerjee, 1876 SCC OnLine PC 19.

[24]AIR 1954 SC 557, 559, para 11.

25(2018) 5 SCC 379, 411-412, para 38.

26Ram Coomar Coondoo v. Chunder Cando Mookerjee, 1876 SCC OnLine PC 19.

27Contract Act, 1872.

28Mayank Mishra, Mohit Chadha, Vaishnavi Rao and Swati Mittal, India: Third-Party Funding – Is India Ready?, <https://www.mondaq.com/india/civil-law/1093690/third-party-funding-is-india-ready>.

29Civil Procedure Code, 1908, Or. 25 R. 1.

30Pinheiro, Kaira and Chitalia, Dishay, Third-Party Funding in International Arbitration: Devising a Legal Framework for India, Vol. 14 NUJS L. Rev. 2 (2021), <http://nujslawreview.org/2021/10/12/third-party-funding-in-international-arbitration-devising-a-legal-framework-for-india/>.

31Bombay High Court Notification, No.  P. 0102/77 dated 5-9-1983, Amendment (1).

32 Rachita Prasad, HCC in Pact with BlackRock to Raise Rs 1750 crores via Monetisation of Claims, Economic Times,  <https://economictimes.indiatimes.com/markets/stocks/news/hcc-to-sell-litigation-claims-to-blackrock-led-investors/articleshow/68579183.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst>.

33 Amritha Pillay, Infrastructure Companies Eye Litigation Funding to Settle Claims, Business Standard, <https://www.business-standard.com/article/companies/infrastructure-companies-eye-litigation-funding-to-settle-claims-119021800035_1.html>.

34Justice B.N. Srikrishna, Report of the High-Level Committee to Review the Institutionalization of Arbitration Mechanism in India, p. 43,

35Commercial Courts Act, 2015.

36Arbitration and Conciliation Act, 1996.

37Arbitration and Conciliation (Amendment) Act, 2015.

38Arbitration and Conciliation (Amendment) Act, 2019.

39Pradeep Thakur, Commercial Cases Pendency in Courts up by 123%, The Times of India, <https://timesofindia.indiatimes.com/india/number-of-pending-commercial-disputes-has-arisen-by-123-in-2017/articleshow/65168645.cms>.

40National Judicial Data Grid, <https://njdg.ecourts.gov.in/njdgnew/?p=main/pend_dashboard>.

Case BriefsHigh Courts

Delhi High Court: Mukta Gupta, J., decided that mere use of word ‘Arbitration’ in the heading of an Agreement would not mean the existence of an arbitration agreement.

Petitioner sought appointment of an Arbitrator for solving the disputes in relation to the software development arising out of the agreement between the parties and costs.

As per the petitioner, petitioner and respondent had entered into a Master Service Agreement and after the start of the project, the petitioner raised concerns due to the delay on part of the respondent.

Respondent introduced a new person for communication with the petitioner and showed no intention of resolving the issues flagged by the petitioner. Hence, the petitioner sent a legal notice to the respondent invoking arbitration.

The response by the respondent to the legal notice was that, there was no arbitration agreement between the parties.

Clause 11 of the Master Service Agreement dated 29th July 2021 between the parties reads as under:-

“11. Jurisdiction, Arbitration & Dispute Resolution

This Agreement and any dispute or claim relating to it, its enforceability or its termination shall be governed and interpreted according to the laws of India Subject to this Clause 11, the Courts at Delhi, shall have exclusive jurisdiction over any disputes under this Agreement”.

 It was submitted that the above-said clause did not provide that the parties agreed to refer their disputes for resolution through arbitration, just on the basis of noting the word ‘Arbitration’ the petitioner claimed resolution of disputes arising between the parties through arbitration.

Issue for Consideration

Whether the use of the word ‘Arbitration’ in the heading of an Agreement would entail existence of an arbitration agreement?

The said issue was dealt with by this Court in Avant Garde Clean Room & Engg. Solutions (P) Ltd. v. Ind Swift Ltd., (2014) 210 DLT 714.

High Court, in view of the above decision, held that,

Mere use of the word ‘Arbitration’ in the heading in Clause 11 of the Agreement between the parties would not lead to inference that there exists an agreement between the parties seeking resolution of disputes through arbitration.”

Therefore, in view of the above, no ground to appoint an arbitrator was found. The petition was dismissed. [Foomill (P) Ltd. v. Affle (India) Ltd., 2022 SCC OnLine Del 843, decided on 25-3-2022]


Advocates before the Court:

For the Petitioner: Mr. Rajiv Kr.Choudhary, Advocate with Mr.Manash Barman, Advocate.

For the Respondent: Mr .Kapil Madan, Advocate with Ms. Ramya Verma, Advocate.

Case BriefsHigh Courts

Madhya Pradesh High Court: The Division Bench of Ravi Malimath, CJ. and Dinesh Kumar Paliwal, J. allowed an appeal which was filed aggrieved by the dismissal order of the petition by the Single Judge.

Respondents had filed an election dispute before the Registrar Co-operative Society, Bhopal challenging their election to the Board of Directors. During the pendency of the dispute, an application was filed by the respondents therein under Order VII Rule 11 read with section 151 of the Code of Civil Procedure seeking dismissal of the petition. While considering the said application, an interim direction was issued by the Registrar Co-operative Society, Bhopal to the effect that new members will not be admitted. That they will not allot plot to any new members and they will not take any policy decision. Thus, the instant petition was filed questioning the same. Single Judge had dismissed the petition.

The Court noted that the dispute pending with the Registrar was that of the election of the writ petitioner and others to the Board of Directors. The Court was of the opinion that whether it prejudices anybody or it is in the interest of the society or not, the power cannot be exercised by the concerned authority in an election petition but it does not mean that none of the members has any right to seek for any relief against the contesting respondents.

The Court set aside the order and allowed the appeal holding that Registrar who was trying the election dispute was exercising the power of the election tribunal. Therefore, he could not have passed orders even though it was in the interest of society. Respondent was however at liberty to file requisite application seeking appropriate relief before the appropriate authority.[Vikas Tiwari v. State of Madhya Pradesh, Writ Appeal No. 182 of 2022, decided on 28-02-2022]


For the appellant: Mr Anil Lala

For the respondents: Mr Suyash Thakur, Mr Sanjay K Agrawal


Suchita Shukla, Editorial Assistant has reported this brief.

Customs, Excise and Services Tax Appellate Tribunal
Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Sulekha Beevi, C.S. (Judicial Member) and P. Anjani Kumar (Technical Member) decided on an appeal which was filed in the matter of non-compliance with the pre-deposit.

It was alleged that M/s. Sri Vasavi Gold and Bullion Pvt. Ltd. (the main appellant) in the course of its business had imported articles of jewellery from Thailand as per Notification No. 85/2004-Cus dated 31.8.2004. During the investigation, the DRI unearthed incriminating documents relating to the import by which it appeared that the M/s. Sri Vasavi Gold and Bullion Pvt. Ltd. had been wrongly availing the benefit of exemption under the said Customs Notification No. 85/2004 dated 31.8.2004 r/w Notification No. 101/2004-Cus. (NT) dated 31.8.2004.

The notice proposed to deny the exemption benefit in respect of 48 bills of entry and also raised differential duty of Rs.19,03,19,798/- along with interest. The appellant herein was also issued a Show Cause Notice as to why penalty should not be imposed upon him under Sections 112(a) and 114AA of the Customs Act, 1962.

The Tribunal perused Section 129E of the Customs Act, 1962 and analyzed that unless the appellant has deposited 7.5% of the penalty when the penalty is in dispute, the appeal cannot be entertained by the Tribunal. The Tribunal has no power to waive the mandatory requirement of predeposit. On perusal of the impugned order, separate penalty has been imposed upon the business entity and the appellant herein.

Tribunal further clarified that there was no document produced by the business entity that the pre-deposit made by them can be stretched and applied for compliance of mandatory pre-deposit of the appeal filed by the appellant therein and in these circumstances, the request made by the counsel for appellant to waive the mandatory pre-deposit was not considered.[P. Seetharam v. Commr. Of Customs, 2022 SCC OnLine CESTAT 30, decided on 04-02-2022]


Suchita Shukla, Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Bombay High Court: The Division Bench of S.J. Kathawalla and Milind N. Jadhav, JJ., addressed a matter in which a dispute revolved with regard to the feeding of dogs in the society complex.

Petitioners sought the following reliefs:

  • Court may issue writ of mandamus to the Commissioner, Navi Mumbai Municipal Corporation and Managing Director, CIDCO jointly and severally being the respondents 8 and 9 to identify and confirm seven feeding stations for seven groups of dogs in their movement territory, situated under the boundary of total 50 acres area of respondent.
  • Issue directions/writs to the Registrar of Companies/respondent 2 to adjudicate and decide the letters of petitioners filed against a circular thereby deciding the legality and validity of the said circular viz calling upon the exorbitant and illegal amount of Rs 5,000 as a fine from the petitioners/feeders/caregivers of the stray dogs.
  • Issue the writ of mandamus and/or appropriate writs/directions to the Commissioner of Police, Navi Mumbai, being Respondent 18 to monitor and maintain the law and order situation for the better compliance of the orders passed by this Court and/or while and after demarcation of seven feeding stations for the dogs in the said area of Respondent 17 – SEL, thereby peaceful and continuous feedings of dogs may be acted upon by the dog feeders/interested residents of Respondent 17
  • This Court be pleased to issue the writ of mandamus and/or any appropriate writs/directions to the Principal Secretary, Ministry of Urban Development Department/Ministry of Animal Husbandary the Respondent.5 herein to comply with the directions dated 04/10/2016 issued by Supreme Court in the matter of Animal Welfare Board of India V/s. People for elimination of Stray Trouble and the Notification No.2016-/275/- (placed as Exhibit A-37) dated 11/11/2016 issued by Respondent No. thereby constituting the Dog Monitoring Committee to take care of health, wellbeing including vaccination, sterilization and counting of the stray dogs in the premises of the Respondent 17-SEL;
  • This Court may be pleased to issue the writ of mandamus and/or any appropriate writs/directions to Municipal Commissioner / the Respondent No.8 to take appropriate, urgent and effective steps for spreading awareness such as issuing notice and directions to housing societies, housing complex for implementation of ABC programs and animal laws;
  • Court may be pleased to issue the Writ of Mandamus and/or any appropriate Writs/Directions to the Respondent 11 / Director General of Police to issue appropriate Circular/Directions in its department, to adopt proactive approach towards the implementation of animal protection laws etc., for taking appropriate actions as per the complaints/advisory of AWBI, Dog Monitoring Committee and individuals etc.;
  • Be pleased to issue appropriate Writs/Directions to Respondent 3 – Animal Welfare Board of India to issue appropriate advisory / circular to all the Government departments as per the Office Memorandum dated 26th May, 2006 of Ministry of Personal, Public Grievances and Pensions, Department of Personal and Training of Govt. of India.

Court’s Decision

High Court noted the bitterness between the parties which appeared to be very intense in view of one group of members wanting to feed the dogs inside the complex and the other group making a grievance that the same would create a nuisance for the 5000 residents in the complex.

In Court’s opinion, the present matter needs to be resolved amicably between the members concerned/residents and only in case, the matter does not get resolved the Court will intervene.

Bench appointed Mr Nausher Kohli, Advocate as Amicus Curiae to assist the Court in resolving/deciding the above disputes between the parties.

Matter stood over to 3-1-2022. [Sharmila Sankar v. Union of India, WP No. 9513 of 2021, decide don 29-12-2021]


Advocates before the Court:

Mr. Anjani Kumar Singh with Ms. Sneha Jain i/by Siddh Vidya and Associates, for Petitioners.

Mr. D.P.Singh, for Respondent Nos.1 and 2.

Ms. R.P.Ojha, for Respondent No.3.

Mr. Rupesh Dubey i/by Mr. S.V.Marne, for Respondent No.8. Mr. Mukesh Gupta for Respondent Nos.15 and 16.

Mr. P.G.Sawant, AGP, for State.

Mr. Aditya Pratap, ,for Respondent No.17.

Legislation UpdatesStatutes/Bills/Ordinances

On December 20, 2021, a Mediation Bill (Bill No. XLIII of 2021) has been introduced in Rajya Sabha with an object to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process.

Applicability shall apply where mediation is conducted in India, and—
(i) all or both parties habitually reside in or are incorporated in or have their place of business in India; or
(ii) the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or
(iii) there is an international mediation.

Key features of the Bill:

  • subsuming conciliation under Part III of the Arbitration and Conciliation Act, 1996, in mediation as per international practice of using the terms “conciliation” and “mediation” interchangeably;
  • compulsory pre-litigation mediation in matters of civil or commercial dispute, before parties approach a court or a tribunal as provided;
  • conduct of online mediation;
  • an indicative list of matters which are not fit for mediation under the First Schedule;
  • mediation that will take place within the territorial jurisdiction of the court or tribunal of competent jurisdiction, unless parties agree otherwise or undertake mediation in online mode;
  • a period of one hundred and eighty days, for completing the mediation process which is further extendable to a maximum period of one hundred and eighty days with the mutual consent of the parties;
  • the mediated settlement agreement resulting from mediation which will be final and binding and will be enforceable in accordance with the provisions of Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree of a Court;
  • establishment of Mediation Council of India, objects of which would be, inter alia, to promote mediation and to develop India as a robust centre for domestic and international mediation, make regulations for registration of mediators, grade mediation service providers, specify criteria for recognition of mediation institutes and mediation service providers, to hold training workshops and courses in the area of mediation, etc.; and
  • conduct of community mediation with consent of parties for disputes which are likely to affect peace, harmony and tranquility amongst the residents or families of any area or locality.
National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Noting unfair trade practice by the builder while insisting the buyers to sign a paper wherein it was stated “that they were receiving possession in full ready condition” which was false, Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) allowed the complaint of the buyer and directed refund of their amount along with compensation of Rs 1 lakh.

Complainants filed a complaint about directing the OP (Builder) to refund the amount deposited by the complainants along with interest from the date of each deposit till its payment. Compensation was also sought for mental agony and harassment.

Factual Background

Present complaint emerged from the documents attached with it. Builders launched a project wherein the complainant booked a villa and were allotted a Unit. Payment plan was “Construction Linked Payment Plan”. Agreement for Sale and Agreement for Construction were executed between the parties.

Complainants diligently followed the payment plan and deposited money as and when demanded by the builder, but the builder delayed the construction.

In 2017, the complainants were invited to take possession of the villa and on reaching the villa, they found that the villa was not complete in all respect and was not in a liveable condition. On the other hand, the builder was insisting to sign the paper, in which, it was written that they were receiving possession of the villa in fully ready condition.

Complainants did not agree to sign that paper and were disappointed with the attitude of the builder, who was insisting to sign above said paper in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

Complainants sought for refund vide a legal notice, but no reply was given by the builder.

Analysis, Law and Decision

Commission noted that the builder did not raise any dispute that the complainants had committed any default in payment, on issue of demand notice.

According to the builder, the construction was completed in August, 2017, as such, there was delay in construction for more than two years, according to their own version.

Clause-E(2) of Agreement For Construction provides as follows:-

“2. Possession/Handing over Possession in this agreement is limited to the developer obtaining Completion Certificate from the concerned local authority/Project Architect and intimating the purchaser to take possession of the Villa.”

Builder nowhere stated that he had obtained a Completion Certificate. Instead, he argued while relying upon Rule 20 of Tamil Nadu Combined Development and Building Rules, 2019 and argued that “Completion Certificate” was not required for the villa. The said Rules were not in existence in 2017.

The paper, which the builder insisted the buyers sign upon stated that they were receiving the possession of the villa in fully ready condition, in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

In Commission’s opinion, the above was an unfair trade practice.

Offering possession of incomplete construction and without obtaining “Completion Certificate” does not justify the act of the builder.

 Therefore, complaint was allowed with cost of Rs 1 lakh and builder was directed to refund the entire amount along with interest @9% per annum within a period of 2 months.[Suman Kumar Jha v. Mantri Technology Constellations Pvt. Ltd., Consumer Case No. 54 of 2018, decided on 29-10-2021]


Advocates before the Commission:

For the Complainant: Mr Aditya Parolia, Advocate

For the Opp. Party: Mr Sunder Patjoshi, Senior Advocate and Mr. Manish Tiwari, Advocate

Op EdsOP. ED.

Introduction

“There can be no life without change, and to be afraid of what is different or unfamiliar is to be afraid of life.”

— Theodore Roosevelt

Arbitration is often hailed for its exemplary flexibility and time effective process, as an ingenious dispute resolution mechanism. With physical hearings of courts, tribunals, etc. coming to a halt[1], Covid-19[2] pandemic made virtual hearings, the new normal. Virtual arbitration or even virtual adjudication is an unconventional eventuality that has been spurned upon the legal fraternity across oceans. Wherein, the legal fraternity was used to appearing in person before the courts or various tribunals, everyone has been thrust to a world of remote hearing, as a matter of urgency and desperation so that the judiciary is not overburdened due to a major time lapse.

It is often said: “justice delayed is justice denied”. In order to tackle the preceding issue, the Indian judiciary came up with effective solutions to move forward with their work and manage the rise of cases as they come, as justice never sleeps. Howbeit, there was a certain lack of illumination in regards to our alternate dispute resolution mechanism i.e. arbitration. Wherein our country and judiciary hails themselves to be a pro-arbitration regime, they sure have failed to take charge to emphasise that stance. With hearings in arbitration hardly moving past the initial stage, we have become what one might call “stagnant”. As a developing arbitration regime, being stagnant in this time and day is unpropitious news. In order to avoid becoming a dinosaur in the arbitration community, our country would have to take major significant steps to curb the conundrum which our country does not fully realise.

Vis-à-vis the aforementioned inception, the authors have penned down their thoughts on virtual arbitration in India. The article highlights the benefits and downfalls in virtual hearings in arbitration through an analysis undertaken by White & Case, elucidates the existing procedural framework and deals with the legal and ancillary issues subsisting and posed by the Covid-19 pandemic, concluding with the way forward for India to effectively adapt and tackle the predicament in order to become a hub for arbitration in the future.

A statistical analysis by White & Case

Internationally renowned firm, White & Case, in association with Queen Mary University of London and School of International Arbitration conducted a survey.[3] It stated that the use of virtual hearings has been brought upon as a result of Covid-19 pandemic. It has allowed for people to evaluate the alternatives available to in-person hearings.[4]

Inter alia, the survey pinpointed the wish of the people and exhibited their opinion on virtual arbitration hearings. When posed with the question of procedural delay and scheduled hearing dates which would be hampered as a result of this pandemic, 79% surveyors opted for advancing with virtual hearing on the pre-decided date rather than uprooting the process and causing a procedural delay, 16% opted for postponing the hearing and 4% opted for an award to be delivered based on the documents submitted in front of the Tribunal.[5] So much so, that 40% of arbitrators said they would do without an oral hearing for any procedural matter[6] and 87% would prefer to hold a virtual hearing if an in-person hearing is not an alternative.[7]

It even highlighted the advantages of virtual hearings with 65% going for more benefits of more available dates for hearing, 58% highlighting greater efficiency through use of technology, 55% opting for greater procedural and logistical flexibility, 34% choosing less environmental impact compared to in-person hearings inter alia.[8] Speaking of disadvantages, 40% each chose multiple time zones issues and harder in-between hearing conversations between client and counsel, respectively. 38% stated concern over controlling their witnesses and their credibility, 35% each over technical malfunctions and screen fatigue respectively. Confidentiality and cybersecurity also found 30% of people voting for it as a concern for virtual arbitration. 27% and 15% of the people voted for difficulty in reading arbitrators and other participants and expressed concern on arbitrator’s ability to confer during sessions respectively. Last but not the least ethical or procedural issues and enforcement of awards stood at 11% and 8% respectively.[9]

It is clearly visible from the above survey that virtual arbitrations are not the pariah as they are made out to be. Innovation is termed as need of this hour and in hindsight, by hiding behind the curtain of a pretend pro-arbitration stance, India has basically shot themselves in the foot.

Procedural framework for arbitrations: The rudiment of all dispute resolution

A concrete foundation for a prospective arbitration is actualised via the legal framework that is made applicable to it. It is of paramount significance that the governing/procedural law, substantive law of the contract and the seat is selected as per the peculiar requirements of each party at the time of drafting of the arbitration clause or agreement. India has been taking leaps to strengthen its own procedural framework so as to advance India’s ease of doing business rankings and establish the nation as a growing hub of alternate dispute resolution (hereinafter “ADR”). The Arbitration and Conciliation (Amendment) Act, 2015[10] (providing time limitations, fast-track procedures, narrowing scope of public policy, etc.), the Arbitration and Conciliation (Amendment) Act, 2019[11] (providing for the courts to make reference to certain arbitral institutes, formation of the Indian Arbitration Council, mandating confidentiality, etc.) and the Arbitration and Conciliation (Amendment) Act, 2021[12] (removing qualifications for empanelling as arbitrator) have been notified by the Government. The State is cognizant of institutes like International Chamber of Commerce (ICC), Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA), Australian Centre for International Commercial Arbitration (ACICA), International Centre for Settlement of Investment Disputes (ICSID), etc. that have tried to minimise disruptions from the pandemic by issuing relevant virtual protocols. There is much to learn from these soft law instruments and these can be used as guiding principles while creating the Indian arbitral framework.

Covid-19 and arbitral best practices

With the onset of the Covid pandemic, arbitral friendly nations and institutions perceived the inevitability of the evolution of virtual hearings and accepted this challenge with utmost compassion. Choosing the right arbitral institution with facilities such as e-filing of documents, live help-desk features, panel of emergency arbitrators, panel of experts on various subjects, protocols for online dispute resolution, cybersecurity policies, etc. would solve half the dispute at hand. Many of these institutes like Singapore International Arbitration Centre, World Intellectual Property Organisation (WIPO), etc.  have also been using, third-party management services such as those of Maxwell Chambers to meet their logistical needs through curated meeting rooms, breakout rooms, screen-sharing facilities, etc.

Timely case management conferences to determine procedure and choosing the right meeting platform are the cornerstone of a successful arbitral session.[13] Necessity is the mother of invention and India needs to provide impetus for the creation of platforms like Cisco Webex, Zoom, etc. with end-to-end encryption under its Make in India and Digital India initiatives. Online meeting etiquette dictates that meeting time be decided keeping in mind the difference in time zones (if any)[14] of the parties, giving proper notice, providing a list of participants who will be present in the meeting and sticking to the agenda of the meeting.[15]

Speedy and complete justice can be guaranteed by tweaking procedure to include more partial awards for different issues, accepting only documentary submissions for adjudicating upon issues and no evidence[16], allowing very limited arguments on certain contentions,[17] identifying issues that can be resolved without witness statement or expert evidence, etc.[18] A documents-only procedure as adopted by SIAC[19] or use of Redfern Schedule for limiting documentary production[20] are suitable examples of a hybrid procedure. The only way to conceive virtual arbitrations in India is through digitisation, both in terms of procedure adopted in the arbitration and in working of appellate court. Arbitral awards in India have to be rendered in writing[21], have to bear the arbitrators’ signatures[22], have to be delivered to the parties[23] and have to be submitted to Court in order to be recognised and enforced. However, Section 5 of the Information Technology Act, 2002[24] (hereinafter “the IT Act”) provides that a digital signature has the same effect as that of a paper signature and thus, digitally signed copies/scanned copies sent via e-mail[25] and original copies sent via post (as is being done by the leading arbitral institutes[26]) both can be filed in Court for enforcement of the award.

Legal and ancillary issues that converge in virtual arbitrations: Can they be dealt with?

Various challenges may be posed in virtual arbitrations but the authors herein have discussed some core issues to exhibit how they can be dealt with effectively by the parties, Tribunal and the appellate courts. The fundamental principle of each solution is that every virtual arbitration will endorse mutual consent juxtaposed with party autonomy, to ensure equity.

I. Accessibility to internet services and technology

Virtual arbitrations in the time of a pandemic will go on to secure justice for all as enshrined under Article 39-A of the Constitution.[27] However, as of now, only 55% of the Indian population has access to internet[28] which is now a protected right under Article 19 of the Constitution.[29] Only 23% of the urban and 4% of the rural population possesses computers,[30] which creates obstacles in accessibility to technology for virtual hearings. In the same way, certain hardware and infrastructural requirements are also supposed to be met.[31] Although infrastructure comprising hardware, LAN, DG set, UPS, internet connectivity and CIS software is available in the premises of almost all the lower courts, their usage has to be completely overhauled. E-governance initiatives in India, recognising the lacuna of accessibility of internet services and technologies, creation of more common service centres (CSS) and legal aid cells around the country and promotion of institutionalisation of arbitration can plug these administrative loopholes and allow virtual arbitrations to flourish in India.

II. Arbitrability of complex disputes

While simple contractual matters may easily be dealt with in virtual arbitrations, multi-party matters with multiple claims and voluminous evidence may render the process inaccessible.[32] While considering resolution of complex disputes the Supreme Court held that, “There appears to be need to consider categories of cases which can be partly or entirely concluded ‘online’ without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated.”[33] Modified procedures such as considering the nature of the dispute before passing an order/direction for e-disclosure, retention or preservation of e-documents[34] will have to be made the norm. Therefore, wherever possible, virtual recourse must be sought.

III. Technological complexities

Videoconferencing facilities have been set up across various Benches of the Income Tax Appellate Tribunal (ITAT) such as Ahmedabad, Delhi, etc., turning them into e-courts,[35] and an e-filing portal has been instituted for the ITAT.[36] Digital Negotiable Instruments Courts have been set up by the Delhi High Court’s State Court Management Systems Committee (SCMSC) for disposal of cheque dishonour cases.[37] These examples are testament to the fact that if proper protocols and logistics are adopted, virtual arbitrations can be made a reality too.

The key is to conduct training/orientation sessions for the parties, arbitrators, etc. to gauge the features of the meeting platform such as chat and breakout features and to families themselves with trouble-shooting features of the meeting platform.[38] Adequate training of judicial officers in computerisation is necessary and is underway,[39] although it needs to be ramped up exponentially. Similarly, the SIAC has been training a number of their counsel in the Secretariat to provide technological support.[40] Thus, even though differing technical capabilities may complicate the inception of virtual hearings,[41] user-friendly platforms, proper training and spreading awareness about e-initiatives can help in navigating through them.

A “data disruption” and “meeting disruption” policy will cater to technological issues, so that parties are not excluded from any part of the hearing without their consent.[42] These include internet connectivity issues, dropped calls, audio-video disruption, etc.

IV. Cybersecurity, privacy and data protection

Various cybersecurity protocols such as ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration (2020 Edition) can be referred to secure safety of the parties. A prior agreement on the participants allowed into the meeting, proper identification and verification of participants done before the commencement of the virtual hearing, etc. will ensure that there is no breach of trust amongst the parties involved.

The right to privacy being a fundamental right in India, private information disseminated during such proceedings must be handled with caution. The protocols provided under the Personal Data Protection Bill, 2019[43] and the Personal Data Protection Bill, 2018 and the EU General Data Protection Regulation (“GDPR”) can be followed for limited processing, storage, transmission and erasure of information for all principals. Express consent for processing information and record of said processing will rein in data protection and privacy concerns. Password protected and secured personal networks can be accessed for internet connectivity, rather than public networks. Filing of documents, correspondence and posting of orders in e-format can be done through secure online channels/dockets[44], on a cloud service,[45] through a licence fee-based documents sharing platform, so that it is accessible to all parties, as is their right.[46]

V. Confidentiality

Section 42-A, added by the 2019 Amendment Act imposes data confidentiality obligations on the parties and the arbitrator. Confidentiality, an implied aspect of arbitration,[47] may be achieved by the arbitrator by binding all parties and participants involved to a confidentiality undertaking. Adopting a confidentiality clause or rules of a designated arbitration service provider that require specified confidentiality levels, can also have the same effect. Professional meeting software can be used to ensure meetings are end-to-end encrypted and are not infiltrated by Trojan horses or bugs and have provisions of breakout rooms for privileged communication.

VI. Admissibility and veracity of virtual evidence

The definition of “evidence”[48] under the Indian law includes all statements made by a witness in  court and documents, including e-documents (they are legally recognised as records[49]) produced in court. The Supreme Court has held that evidence recorded in videoconferencing “would be as per procedure established by law”[50] and therefore, would be well within the periphery of due process of law. In fact, very recently, the Delhi High Court asked appearing counsel to submit video recordings along with concise documents containing their arguments to adjudicate upon a matter virtually.[51]

So long as the accused and/or his pleader are present while the evidence is recorded by videoconferencing, the evidence is said to be taken in the “presence” of the accused[52] and will be admissible. If the videoconference is set up in the presence of the Judge himself, the requirements of recording evidence under Sections 274[53] and 275[54] of the Code of Criminal Procedure, 1973 will be fulfilled too.[55] The natural corollary, ergo, is to apply these ratio decidendi to virtual arbitrations as well, as they are ejusdem generis to court proceedings. Commissions issued by the courts under CrPC have been permitted to record evidence of unavailable witnesses, through video conferencing.[56] Similarly, the court may issue commissions under the Arbitration Act[57] to provide electronic evidence to the Tribunal and penalties/disadvantages may be imposed on the persons failing to attend them.[58]

VII. Witness examinations

India is not completely amiss of the merits of virtual examinations and has allowed them in the past.[59] It has been stated that videoconferencing would allow seeing the witness better, observing their demeanour, replaying or rehearing their deposition and testimony.[60] Witness statements and their examination must be sought on live meeting, under oath[61] and in the presence of the learned arbitrator and relevant court officers, after seeking proof of identity of the witness. All relevant exhibits and documents being used in the process of examination must also be provided to the opposing party prior to the commencement or shared at the time of the hearing with the opposing party[62] and to the witness for their perusal.[63] If questions put to the witness and the answers given by them are typed by a stenographer and made visible on the screen, it will ensure transparency in the process.[64] Reasonable opportunity must be given to the counsel to object to questions and statements put to their witnesses.

The Tribunal must not conduct the witnesses examination or allow adduction of evidence in the absence of parties, unless the parties have otherwise chosen to remain absent, despite proper notice.[65] Despite the concerns surrounding virtual arbitrations, they work to eliminate visual, behavioural and verbal bias that is created in the mind of the Tribunal and put the spotlight solely on the testimony presented.

VIII. Witness coaching

To ensure that the witness is not coached/prompted, a party may require its duly empowered legal representative to be present at the location of the witness, upon having sought the permission of the Tribunal. For a witness outside India, an officer of the Indian Consulate/Embassy may be placed in the room with the witness.[66] Moreover, the witness may be asked to show his surroundings via camera to prove that there is no one else present with him.[67] He should not be allowed to confer with his counsel,[68] use virtual backgrounds or use electronic devices other than the computer during the hearing.[69]

IX. Challenge to proceedings

If awards pronounced in virtual arbitrations are challenged under the garb of unfair treatment of parties or the public policy umbrella, the credibility of such arbitrations is thrown out the window. A work-around can be for parties to agree to not challenge the award or seek its annulment on the ground that the proceedings were not held in-person.[70] Moreover, parties are estopped from challenging a mutually decided procedure[71] and strict interpretation of public policy[72] will render such challenges infructuous in the court of appeal. Furthermore, even the Supreme e-Committee draft rules suggest that proceedings conducted by way of videoconferencing are judicial proceedings.[73]

X. Costs

As per Section 31-A of the Act, all expenses incurred in connection with the arbitral proceedings are included in the definition of “costs” and as a general rule, the losing party bears such costs, unless there is an agreement between the parties stating differently. Some protocols require the requesting party to bear costs for videoconferencing facilities,[74] whereas some mandate equal cost sharing.[75] The Tribunal may also refuse the request to use novel technology upon an analysis of the unreasonable financial burden it lays down on parties.[76]

XI. Due process

Due process holds the Government subservient to the law of the land and protects individuals from the excesses of State.[77] Conscious use of technology like teleconferencing and videoconferencing should be encouraged as they can replace the formal physical settings and manifest into a more efficient and smoother arbitral process.[78]

The Arbitration and Conciliation Act, 1996[79] (hereinafter “the Act”) or the 1985 UNCITRAL Model Law on International Commercial Arbitration[80] on which it is based, have no overt references to virtual arbitrations. Section 18 of the Act only talks about the treatment of parties with equality and the provision of adequate opportunity to present their case, in line with the principles of natural justice. The juristic principle of audi alteram partem is enshrined under Section 18 and the principle constitutes a fundamental policy of Indian law.[81] Thus, it only needs to be ensured that:

(i) There is availability of proper internet and infrastructure for all the parties involved that provides them a sufficient opportunity to argue their case.

(ii) No party is heard in the absence of the other as it would constitute a violation of fundamental principles of natural justice.[82]

(iii) Real-time transcripts or video records of the proceedings[83], will also be available to the differently abled.

(iv) Interpreters will be used, whether in a staggered manner or simultaneously.[84]

Section 19(2) gives the parties autonomy to choose the procedure to be followed in the proceedings, which could be virtual or physical hearings. If a procedure is not agreed to, Section 19(3) mandates the Tribunal to conduct proceedings in the manner it considers “appropriate”, ex aequo et bono, after giving due reasoning[85] and ensuring that requirements under Section 18 are met.[86] Thus, virtual hearings may be conducted by the Tribunal either via oral hearings or on the basis of documents and other materials submitted by the parties.[87] Brief, coherently structured written submissions also reduce the likelihood of error and help in saving time.[88] Since Section 24(3) ensures full disclosure of applications filed, reports and documents referred to etc. between the parties and the arbitrator, the mandate of due process will definitely be upheld.

Objections to virtual hearings

Before taking such a decision, Tribunals are to remain flexible[89], consider all the circumstances and consequences of the Covid-19 pandemic, the pertinent reasons for proceeding with the virtual hearing, the nature and complexity of the case, adequate time for the parties to prepare, enforceability of such an award and adopt procedures that are not contrary to the agreement between the parties.[90] An opportunity will be given to the objecting party to raise their concerns and the Tribunal will address said concerns and record reasons for its decisions.[91]

Section 20(3) of the Act allows the Tribunal to “meet at any place it considers appropriate for consultation.”[92] Similarly, a switch from the “physical venue” to the “online virtual venue” can also be done if it is deemed necessary. In Adani Ennore Container Terminal (P) Ltd. v. Kamarajar Port Ltd.,[93] the Madras High Court ordered the parties to the dispute to have a Zoom meeting to see if there is any scope for mediation between them.

Section 24 allows documentary or oral hearings, but does not mandate in-person hearings and cannot be equated to the latter necessarily.[94] “In person” may simply mean a live, adversarial exchange which may be done virtually.[95] Evidence taken over videoconferencing also suffices the requirements under Section 273[96] of the Code of Criminal Procedure, 1973 as the witness is perfectly visible. Electronic discovery of documents is permissible under Section 24 and the scope of the discovery can be limited to what is strictly necessary.[97] This is useful when conducting virtual arbitrations and is a widely accepted practice.[98]

Therefore, it can be deciphered from the above that not only is it possible to conduct virtual arbitrations, but they also have inherent benefits that will reflect in any such proceeding.

Overview and analysis

Virtual arbitration in essence cater to the needs of a section of the society that are completely forgotten in conventional arbitrations in India — the differently-abled individuals. Chairperson of the e-Committee of the Supreme Court recently wrote a letter to the Chief Justices of the High Courts to make provisions for the disabled and physically challenged in terms of filing cases, attending proceedings in an accessible manner, etc.[99]  Accessibility is a natural corollary to Articles 14, 19(1)(g) and 21 of the Constitution and virtual arbitrations help solve the issue of accessibility for all. Meetings can be accessed from the comfort of a home and interpreters/translator/sign language experts can provide specialised aid to the parties/counsel to make their submissions,[100] which may not be possible in an open, in-person hearing.

Effective access to justice is a part of the basic structure doctrine, conceptualised by the Supreme Court.[101] Under the 1996 Act, disposal of both domestic and international commercial arbitrations disputes is time-bound[102] which propels speedy justice in India. However, due to the pandemic, conventional arbitrations have been adjourned sine die which is against the mandate of the Act. Complications may come as part and parcel with virtual hearings, but the solutions are equally ubiquitous. Early case management conferences, a widely accepted practice in all leading arbitral institutions and can help determine the applicable procedure, rules, logistics and clarify the concerns of the parties towards this revolutionary virtual experiment. Prospective arbitrators, technical specialists, etc. can be trained at par with international standards[103] and empanelled in alternate dispute resolution (hereinafter “ADR”) Committees set up by the High Courts in their jurisdiction. The 2020 Ordinance promulgated by the President has also omitted the Eighth Schedule to the Act which provided for minimum qualifications to become an arbitrator, thereby, opening the door for everyone to set foot in the realm of arbitrations.[104] Gaps in technological knowhow continue to challenge the proposed scheme of virtual ad hoc arbitrations. The learning curve is steep but proper coaching, awareness about third-party management services and institutional arbitrations, grant-in-aid for infrastructural costs and good faith between the parties can plug the administrative loopholes that exist in this realm. There also have been various discussions about use of artificial intelligence to aid the user with management and automated service processes.[105] Various protocols have been effectuated to cater to cybersecurity issues,[106] such as the ICC issued ICC-NYC Bar Protocol[107] or the IBA issued Cybersecurity Guidelines.[108]

It is rightly said that justice delayed is justice denied. Therefore, rather than running away from the problem, we must face the challenge head on and with utmost vigour. Arbitration matters that have been stuck in oblivion due to the pandemic can finally be put to rest by the mutual cooperation of the parties[109] and thus, it is necessary that all stakeholders come together and support each other to make virtual arbitrations a new reality.


Associate at Jurisconsultus, Advocates, Business & Commercial Solicitors. Author can be reached at aafreenchoudhary1@gmail.com.

†† LLB 2021, Lloyd Law College, Greater Noida can be reached at dhruv.srivastava4@gmail.com 

[1]Mohamed S. Abdel Wahab, Chapter 1: Dispute Prevention, Management and Resolution in Times of Crisis between Tradition and Innovation: The COVID-19 Catalytic Crisis in Maxi Scherer, Niuscha Bassiri, et al. (eds.), International Arbitration and the COVID-19 Revolution.

[2] See Covid-19, Kluwer Arbitration Blog (26-6-2021, 12.05 p.m.), COVID-19 Archives — Kluwer Arbitration Blog.

[3]White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf>.

[4] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 21.

[5] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 20.

[6] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 14.

[7] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 22.

[8] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 23.

[9] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, at 24.

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

[11]  Arbitration and Conciliation (Amendment) Act, 2019.

[12] Arbitration and Conciliation (Amendment) Act, 2021.

[13]In a recent letter written to Justice Dr D.Y. Chandrachud, the Madhya Pradesh State Bar Council has highlighted the glitches, disruptions, heavy data load and complicated user interface of the “Jitsi” platform which is being used by courts all across India to conduct virtual hearings. See Khadija Khan, Jitsi not User-Friendly, Shift Madhya Pradesh High Court Hearings to Zoom/Webex: M.P. Bar Council Chairman writes to Justice D.Y. Chandrachud (29-6-2021, 7.30 p.m.), Jitsi not User-Friendly, Shift Madhya Pradesh High Court Hearings to Zoom/ Webex: M.P. Bar Council Chairman Writes to Justice D.Y. Chandrachud (barandbench.com).

[14]Indian Arbitration Forum, Protocol on Virtual Hearings for Arbitrations, Para 2(a)(ii), p. 2, September 2020 accessed at <https://indianarbitrationforum.com/wp-content/themes/iaf/assets/IAF-Protocol-on-Virtual-Hearings-for-Arbitrations-Oct-2020.pdf> (indianarbitrationforum.com).

[15]International Chamber of Commerce, ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the Covid-19 Pandemic, Para 8, p. 2, 9-4-2020 accessed at <https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf> (iccwbo.org).

[16] Satpal P. Malhotra v. Puneet Malhotra, 2013 SCC OnLine Bom 689.

[17] Sukhbir Singh v. Hindustan Petroleum Corpn. Ltd., 2020 SCC OnLine Del 228; Also see Sohan Lal Gupta v. Asha Devi Gupta, (2003) 7 SCC 492.

[18] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdfPara 8, p. 2.

[19] Singapore International Arbitration Centre, SIAC Covid-19 Frequently Asked Questions (FAQs) (30 June, 4.39 p.m.), SIAC Covid-19 Frequently Asked Questions (FAQs) <www.siac.org.sg/faqs/siac-covid-19-faqs>.

[20] See Union of India v. Reliance Industries Ltd., 2018 SCC OnLine Del 13018; also see, Thiess Iviinecs India v. NTPC Ltd., 2016 SCC OnLine Del 1819.

[21] The Arbitration and Conciliation Act, 1996, S.  31(1).

[22] The Arbitration and Conciliation Act, 1996, S. 31(1).

[23] The Arbitration and Conciliation Act, 1996, S. 31(5).

[24] Section 5, Information Technology Act, 2002.

[25] Delhi High Court, Guidance Note for Conducting Arbitration Proceedings by Video Conference 2020, Para 2.3, p. 2, (30 June, 4.50 p.m.), Public Notice_QS9BF6S2KSA.PDF (delhihighcourt.nic.in).

[26] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at < http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf>.

[27]Constitution of India, Art. 39-A.

[28] Niti Aayog and United Nations, SDG India Index & Dashboard 2020-21 Partnerships in the Decade of Action, p. 136 (1-7-2021, 4:00 p.m.), accessed at <https://www.niti.gov.in/writereaddata/files/SDG_3.0_Final_04.03.2021_Web_Spreads.pdf>.

[29] Anuradha Bhasin v. Union of India, (2020) 3 SCC 637.

[30] National Statistical Office, Key Indicators of Household Social Consumption on Education in India, NSS 75th Round (July 2017–June 2018) (1-7-2021, 4.21 p.m.),  <http://mospi.nic.in/sites/default/files/publication_reports/KI_Education_75th_Final.pdf> (mospi.nic.in)

[31]72% of the judicial officers emphasised the development of better infrastructure and 8% wanted the internet facilities to be improved. See National Council of Applied Economic Research, Evaluation Study of eCourts Integrated Mission Mode Project (1-7-2021, 5.41 p.m.), Evaluation Study of eCourts Integrated Mission Mode Project <www.doj.gov.in/sites/default/files/Report-of-Evaluation-eCourts.pdf>

[32]TadasVarapnickas, Will COVID-19 Revolutionize Arbitration? What’s Next for Business and Arbitration?, TGS Baltic Webinar.

[33] Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560.

[34] Chartered Institute for Arbitrators, Protocol for E-Disclosure in International Arbitration, International Arbitration Protocol, Art. 3.1, p. 3  accessed at <www.ciarb.org/media/1272/e-iscolusureinarbitration.pdf>.

[35] Special Correspondent at The Hindu, e-Court Launched at Income-Tax Appellate Tribunal in Chennai, (1 July 7.21 p.m.),  The Hindu.

[36] Press Information Bureau, Law Minister Shri Ravi Shankar Prasad Launches “itat e-dwar”, an E-Filing Portal of Income Tax Appellate Tribunal. Portal will Enable Online Filing of Appeals, Applications, Documents, etc. by Various Parties. Cases of Income Tax Appellate Tribunal should be Integrated in National Judicial Data Grid: Shri Ravi Shankar Prasad (1-7-2021, 3.34 p.m.), Press Information Bureau <www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1730394>

[37] Delhi High Court, Digital NI Act Courts, (1-7-2021, 2.20 p.m.), Digital NI Act Courts <www.delhidistrictcourts.nic.in/digitalnicourts.html>

[38] International Institute for Conflict Prevention and Resolution, CPR Model Procedural Order for Remote Video Arbitration Hearing, Para B(2) accessed at NEW: CPR’s Annotated Model Procedural Order for Remote Video Arbitration Proceedings | CPR International Institute for Conflict Prevention & Resolution Inc. (cpradr.org); also see White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf >  Para B(ii) and (v), pp. 2, 9.

[39] Ministry of Law and Justice, Initiatives Towards Computerisation of Courts, Initiatives Taken by the Ministry of Law & Justice During the Two Years of the Present Government (1-7-2021, 5.35 p.m.), accessed at <https://lawmin.gov.in/sites/default/files/2year-achi.pdf> (lawmin.gov.in).

[40]Singapore International Arbitration Centre, Open Letter from SIAC President (1-7-2021, 3.15 p.m.), (Open Letter from SIAC Court President) Arbitration at SIAC during COVID-19.pdf

[41]Gabrielle Kaufmann-Kohler and Thomas Schultz, The Use of Information Technology in Arbitration, Jusletter, December 2005, at 62, available at <http://lk-k.com/wp-content/uploads/The-Use-of-Information-Technology-in-Arbitration.pdf> (hereinafter “Kaufmann-Kohler & Schultz”); Christoph Liebscher, The Healthy Award: Challenge in International Commercial Arbitration 243-273, 344 (2003).

[42] Rudramuni Devaru v. Shrimad Maharaj Niranjan Jagadguru, 2005 SCC OnLine Kar 173.

[43] Personal Data Protection Bill, 2019.

[44] World Intellectual Property Organisation, WIPO eADR Practices (1 July, 4.41 p.m.), WIPO eADR Practices <www.wipo.int/amc/en/eadr/wipoeadr>

[45] Seoul International Dispute Resolution Center and KCAB International, Seoul Protocol on Videoconference in International Arbitration, Art. 4.3, 18-3-2020 accessed at <www.kcabinternational.or.kr/user/Board/comm_notice_view.do?BBS_NO=548&BD_NO=169&CURRENT_MENU_CODE=MENU0025&TOP_MENU_CODE=MENU0024>; also see Hogan Lovells Protocol for the Use of Technology in Virtual International Arbitration Hearings, Art. 3.2(a), p. 7, April 2020 accessed at  <https://www.hoganlovells.com/~/media/hogan-lovells/pdf/2020-pdfs/2020_04_09_hogan_lovells_international_arbitration_digital_hearing_protocols.pdf> (hoganlovells.com)

[46] Ssangyong Engg. and Construction Co. Ltd. v. National Highways Authority of India, (2019) 15 SCC 131.

[47] Malaysian Newsprint Industries Sdn Bhd v. Bechtel International Inc., (2008) 5 MLJ 254.

[48] The Evidence Act, 1872, S. 3.

[49] The Information Technology Act, 2000, S. 4.

[50] State of Maharashtra v. Praful B. Desai, (2003) 4 SCC 601.

[51] Sat Prakash Soni v. Union of India, 2020 SCC OnLine Del 2027.

[52] The Code of Criminal Procedure, 1973, S. 273.

[53] Section 274 CrPC.

[54] Section 275 CrPC.

[55] State of Maharashtra v. Praful B. Desai, (2003) 4 SCC 601, para 19.

[56] State of Maharashtra v. Praful B. Desai, (2003) 4 SCC 601, para 20.

[57] Arbitration and Conciliation Act, 1996, Ss. 27(4) and (6).

[58] Arbitration and Conciliation Act, 1996, S. 27(5).

[59]International Planned Parenthood Federation v. Madhu Bala Nath, 2016 SCC OnLine Del 85; also see Twentieth Century Fox Film Corpn. v. NRI Film Production Associates (P) Ltd., 2003 SCC OnLine Kar 22.

[60]World Intellectual Property Organization, WIPO eADR Practices (1 July, 4.41 p.m.), WIPO eADR Practices <www.wipo.int/amc/en/eadr/wipoeadr> at paras 19 and 20.

[61] Same protocol followed by the Bombay High Court in the videoconferencing in Taher Fakhruddin Saheb v. Mufaddal Burhanuddin Saifuddin, 2020 SCC OnLine Bom 7551.

[62] Special Correspondent at The Hindu, E-Court Launched at Income-Tax Appellate Tribunal in Chennai, (1 July, 7.21 p.m.), E-Court Launched at Income-Tax Appellate Tribunal in Chennai — The Hindu; Hogan Lovells , Art. 3.2(b), p. 7.

[63]See Covid-19, Kluwer Arbitration Blog (26-6-2021, 12.05 p.m.), COVID-19 Archives — Kluwer Arbitration Blog; Hogan Lovells  at Para 5(g), p. 9.

[64] Same protocol followed by the Bombay High Court in videoconferencing in Taher Fakhruddin Saheb v. Mufaddal Burhanuddin Saifuddin, 2020 SCC OnLine Bom 7551; also see White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf>  Para E(iv).

[65] Rudramuni Devaru v. Shrimad Maharaj Niranjan Jagadguru, 2005 SCC OnLine Kar 173.

[66] See Covid-19, Kluwer Arbitration Blog (26-6-2021, 12.05 p.m.), COVID-19 Archives — Kluwer Arbitration Blog at Paras 5(i) and (iii), p. 10.

[67] See Covid-19, Kluwer Arbitration Blog (26-6-2021, 12.05 p.m.), COVID-19 Archives — Kluwer Arbitration Blog at Para 5(d)(iii), p. 9.

[68] Africa Arbitration Academy, Africa Arbitration Academy Protocol on Virtual Hearings in Africa, Para 2.1.4, p. 7, April 2020 accessed at <https://www.africaarbitrationacademy.org/wp-content/uploads/2020/04/Africa-Arbitration-Academy-Protocol-on-Virtual-Hearings-in-Africa-2020.pdf>  (africaarbitrationacademy.org).

[69] Recently, the Delhi District Court allowed a mutual application moved on behalf of the parties for the recording of evidence through videoconferencing. Guidelines were put forth by the court to ensure that the witness is not being tutored while evidence is being recorded and in case there appears to be any prompting on the side of the witness, or if he deliberately keeps disrupting his internet connection, the proceedings will be adjourned. This can be applied to virtual arbitrations.  See Kanwal Nain Singh Mokha v. Rekha Khurana, CC No. 1924 of 2016, decided on 26-6-2021 (Delhi District Court).

[70] The Information Technology Act, 2000, S. 4; also see World Intellectual Property Organisation, WIPO eADR Practices (1 July, 4.41 p.m.), WIPO eADR Practices <www.wipo.int/amc/en/eadr/wipoeadr> at Art. 2.10, p. 5.

[71]Jagjeet Singh Lyallpuri v. Unitop Apartments and Builders Ltd., (2020) 2 SCC 279.

[72]Govt. of India v. Vedanta Ltd., (2020) 10 SCC 1; also see Ssangyong Engg. and Construction Co. Ltd. v. National Highways Authority of India, (2019) 15 SCC 131; also see Associate Builders v. DDA, (2015) 3 SCC 49.

[73] E-Committee of the Supreme Court of India, Draft Video Conferencing Rules, Para 3(ii) (1-7-2021, 6.20 p.m.) accessed at <https://cdnbbsr.s3waas.gov.in/s388ef51f0bf911e452e8dbb1d807a81ab/uploads/2020/08/2020082629.pdf> (s3waas.gov.in).

[74] National Statistical Office, Key Indicators of Household Social Consumption on Education in India, NSS 75th Round (July 2017–June 2018) (1-7-2021, 4.21 p.m.),  <http://mospi.nic.in/sites/default/files/publication_reports/KI_Education_75th_Final.pdf> (mospi.nic.in) at Art. 9.1.

[75]World Intellectual Property Organisation, WIPO eADR Practices (1 July, 4.41 p.m.), WIPO eADR Practices <www.wipo.int/amc/en/eadr/wipoeadr> at Art. 2.9(f), p. 5.

[76]International Chamber of Commerce, ICC Commission Report Information Technology in International Arbitration, Para 1.2, 2017 accessed at <icc-information-technology-in-international-arbitration-icc-arbitration-adr-commission.pdf> (iccwbo.org).

[77] Maneka Gandhi v. Union of India, (1978) 1 SCC 248 and Rustom Cavasjee Cooper v. Union of India, (1970) 1 SCC 248 have read the due process doctrine into Art. 21, making them in severable parts of each other.

[78]Law Commission of India Report No. 246, Amendments to the Arbitration and Conciliation Act, 1996, Point 16, p. 13 (2-7-2021, 8.40 p.m.)

[79] Arbitration and Conciliation Act, 1996.

[80] UNCITRAL Model Law on International Commercial Arbitration, 1985.

[81] Associate Builders v. DDA, (2015) 3 SCC 49.

[82] Sulaikha Clay Mines v. Alpha Clays, 2004 SCC OnLine Ker 79.

[83] E-Committee of the Supreme Court of India, Draft Model Rules for Live-Streaming and Recording of Court Proceedings, Para 10, p. 13 (30-6-2021, 1.15 p.m.), Rules on Live Streaming (mygov.in); also see Hague Conference on Private International Law, Guide to Good Practice on the Use of Video-Link under the 1970 Evidence Convention, p. 98 (30-6-2021, 12.24 p.m.) <https://assets.hcch.net/docs/569cfb46-9bb2-45e0-b240-ec02645ac20d.pdf> (hcch.net); also see Kanwal Nain Singh Mokha v. Rekha Khurana, CC No. 1924 of 2016, decided on 26-6-2021 (Delhi District Court).

[84] World Intellectual Property Organisation, WIPO eADR Practices (1 July, 4.41 p.m.), WIPO eADR Practices <www.wipo.int/amc/en/eadr/wipoeadr> at Art. 3.5, p. 7.

[85] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf> at Para D(iii).

[86] Sukhbir Singh v. Hindustan Petroleum Corpn. Ltd., 2020 SCC OnLine Del 228.

[87] The Arbitration and Conciliation Act, 1996, S. 24(1).

[88] Kiran Chhabra v. Pawan Kumar Jain, 2011 SCC OnLine Del 803.

[89] Narendra Kumar Anchalia v. Krishna Kumar Mundhra, 2002 SCC OnLine Cal 485.

[90] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf> at Paras 18 and  22.

[91] See Covid-19, Kluwer Arbitration Blog (26-6-2021, 12.05 p.m.), COVID-19 Archives — Kluwer Arbitration Blog at Para 2, p. 2.

[92]In line with this, the venue of arbitration was changed from Kuala Lumpur, Malaysia to London, due to the breakout of the Severe Acute Respiratory Syndrome (SARS) virus, which was designated as a mere physical change in Videocon Industries Ltd. v. Union of India, (2011) 6 SCC 161.

[93] 2020 SCC OnLine Mad 2708.

[94] Yvonne Mak, Do Virtual Hearings Without Parties’ Agreement Contravene Due Process? The View from Singapore (8-7-2020, 7.15 p.m.), Do Virtual Hearings Without Parties’ Agreement Contravene Due Process? The View from Singapore — Kluwer Arbitration Blog; <http://www.scconline.com/DocumentLink/Dgqf5o4W>.

[95] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf> at Para 23.

[96] Section 273 CrPC.

[97] Union of India v. Reliance Industries Ltd., 2018 SCC OnLine Del 13018.

[98]Pyrrho Investments Ltd. v. MWB Property Ltd., 2016 EWHC 256; Da Silva Moore v. Publicis Groupe SA, 11 Civ 1279 (ALC) (AJP) (SDNY 2012) Judge Peck; Irish Bank Resolution Corpn. v. Quinn, 2015 IECH 175.

[99] ANI, Need to Create Accessible Infrastructure for Lawyers, Litigants, with Disabilities: Justice D.Y. Chandrachud to High Courts (29-6-2021, 12.40 p.m.), Need to Create Accessible Infrastructure for Lawyers, Litigants with Disabilities: Justice D.Y. Chandrachud — The New Indian Express.

[100]Same protocol followed by the Bombay High Court in the videoconferencing in Taher Fakhruddin Saheb v. Mufaddal Burhanuddin Saifuddin, 2020 SCC OnLine Bom 7551 at Para 5.9.3.

[101]Kesavananda Bharati Sripadagalvaru v. State of Kerala, (1973) 4 SCC 225 .

[102] Arbitration and Conciliation Act, 1996, S. 29-A.

[103] See New Delhi International Arbitration Centre Act, 2019, S. 29(1), No. 17.

[104] The Arbitration and Conciliation (Amendment) Act, 2021, S. 4.

[105] Aditya Singh Chauhan, Future of AI in Arbitration: The Fine Line between Fiction and Reality (29-6-2021, 8.51 p.m.), Future of AI in Arbitration: The Fine Line between Fiction and Reality — Kluwer Arbitration Blog.

[106] White & Case, 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, accessed at <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf>  at 14; also see Claire Morel de Westgaver, Cybersecurity in International Arbitration — A Necessity and An Opportunity for Arbitral Institutions (29-6-2021, 8.47 p.m.), Cybersecurity in International Arbitration – A Necessity and An Opportunity for Arbitral Institutions — Kluwer Arbitration Blog.

[107]ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration (2020 Edition) ICCA Reports n6-v4-A5-v4 (arbitration-icca.org).

[108]International Council for Commercial Arbitration, The ICCA-IBA Roadmap to Data Protection in International Arbitration accessed at ICCA-IBA Roadmap to Data Protection in International Arbitration: 2020 Edition (arbitration-icca.org).

[109]Kanwal Nain Singh Mokha v. Rekha Khurana, CC No. 1924 of 2016, decided on 26-6-2021 (Delhi District Court).

Case BriefsSupreme Court

Supreme Court: Expressing on the aspect of independence and impartiality of the arbitrators, Division Bench of M.R. Shah and Aniruddha Bose, JJ., held that,

Though the word ‘Chairman’ is not mentioned explicitly in Seventh Schedule, at the same time, it would fall under clause 1, clause 2, clause 5, and clause 12 of the Seventh Schedule, hence will be ineligible for the purpose of the arbitration.

The above schedule is to be read with Section 12(5) of the Arbitration and Conciliation Act.

Aggrieved and dissatisfied with the impugned order of Rajasthan High Court allowing applications under Section 11 of the Arbitration and Conciliation Act, 1996 and appointing an Arbitrator, Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., preferred the present Special Leave Petitions.

Facts leading to the present matter

Respondent and the Sahkari Sangh entered into a Distributorship Agreement for the distribution of milk and butter milk in certain zones in Jaipur for a period of two years.

Disputes arose between the two and as per Clause 13 of the said agreement, all disputes and differences arising out of or in any way touching or concerning the agreement, whatsoever shall be referred to the sole Arbitrator, the Chairman, Jaipur Zila Dugh Utpadak Sahkari Sangh Ltd. and his decision shall be final and binding for the parties.

Respondent approached the Sole Arbitrator for settlement of a commercial dispute between the parties.

But during the pendency of the arbitration proceedings, the respondent approached the High Court for appointment of an arbitrator in exercise of powers under Section 11 of the Act and invoking the arbitration contained in clause 13 of the Agreement.

Opposing the above, petitioner submitted that once the respondent has approached the Sole Arbitrator invoking clause 13 and participated in the arbitration proceedings, it is not open for it to approach the High Court to appoint an arbitrator under Section 11 of the Act.

High Court considering Section 12(5) read with 7th Schedule to the Act, allowed the said application and had appointed the former District and Sessions Judge to act as an arbitrator.

Analysis, Law and Decision

Supreme Court noted that the High Court while allowing the application under Section 11 of the Act had appointed the arbitrator other than the Chairman.

Petitioners Contention:

Agreement was prior to the insertion of Sub­section (5) of Section 12 read with Seventh Schedule to the Act and therefore the disqualification under Sub­section (5) of Section 12 read with Seventh Schedule to the Act shall not be applicable and that once an arbitrator – Chairman started the arbitration proceedings thereafter the High Court is not justified in appointing an arbitrator.

Court’s view:

Petitioner’s contention stated above had no substance.

Supreme Court’s decisions in Trf Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665, considered in detail the object and purpose of insertion of Section 12(5) read with Seventh Schedule to the Act.

In the decision of Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665, it was observed and held by the Court that the main purpose of amending the provision was to provide for ‘neutrality of arbitrators.’

Further, it was observed in the case that,

Sub­section (5) of Section 12 lays down that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject­matter of the dispute falls under any of the categories specified in the Seventh Schedule, he shall be ineligible to be appointed as an arbitrator. It is further observed that in such an eventuality i.e. when the arbitration clause finds foul with the amended provisions (Sub­section (5) of Section 12 read with Seventh Schedule) the appointment of an arbitrator would be beyond pale of the arbitration agreement, empowering the court to appoint such arbitrator as may be permissible. It is further observed that, that would be the effect of non obstante clause contained in sub­section (5) of Section 12 and the other party cannot insist on appointment of the arbitrator in terms of the arbitration agreement.

Adding to the above list of decisions, Court added another one, Bharat Broadband Network Ltd.v. Telecoms Limited, (2019) 5 SCC 755, wherein it was observed that Section 12(5) read with Seventh Schedule made it clear that if the arbitrator falls in any one of the categories specified in the Seventh Schedule, he becomes ‘ineligible’ to act as an arbitrator. Once he becomes ineligible he then becomes dejure unable to perform his functions.

Petitioners Contention:

In view of Section 58 of the Rajasthan Cooperative Societies Act, 2001, the dispute between the parties is to be resolved by the Registrar only and as per Bye Laws 30 of Rajasthan Cooperative Societies Act, 2001 shall be applicable and therefore no court shall have jurisdiction and therefore the dispute referred to the former District Judge is unsustainable has no substance.

Court’s view:

Bench opined that, despite Section 58 of the Rajasthan Cooperative Societies Act, 2001, there is an agreement between the parties to resolve the dispute through arbitrator – Chairman. Parties are bound by the agreement and the arbitration clause contained in the Agreement.

Hence, neither Section 58 of the Rajasthan Cooperative Societies Act, 2001 shall not be applicable at all nor the same shall come in the way of appointing the arbitrator under the Arbitration Act.

Significant Question:

Whether the Chairman who is an elected member of the petitioner Sahkari Sangh can be said to be ineligible under Section 12(5) read with Seventh Schedule to the Act or not?

As per the petitioner, Seventh Schedule to the Act ‘Chairman’ is not mentioned and only Manager, Director or part of the Management can be said to be ineligible.

Court’s view:

Bench expressed that Section 12 (5) read with Seventh Schedule was inserted bearing in mind the ‘impartiality and independence’ of the arbitrators. It had been inserted with the purpose of ‘neutrality of arbitrators.’

Independence and impartiality of the arbitrators are the hallmarks of any arbitration proceedings, as observed in Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665.

Rule against bias is one of the fundamental principles of natural justice which apply to all judicial proceedings and quasi­judicial proceedings and it is for this reason that despite the contractually agreed upon, the persons mentioned in Sub­section (5) of Section 12 read with Seventh Schedule to the Act would render himself ineligible to conduct the arbitration.

In view of the above-cited decision, Supreme Court held that Chairman of the petitioner Sangh can certainly be held to be ‘ineligible’ to continue as an arbitrator. Court added that though the word ‘Chairman’ is not specifically mentioned, but it would fall in the category of Clause 1; Clause 2; Clause 5; Clause 12 which read as under:

“1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.

  1. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties
  2. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.
  1. The arbitrator is a manager, director or part of the management, or has a similar controlling influence in one of the parties.”

Therefore, Chairman who was elected member/Director of the Sangh could certainly be said to be ‘ineligible’ to become an arbitrator as per Section 12(5) read with Seventh Schedule to the Act.

Petitioner’s Contention:

Respondents participated in the arbitration proceedings before the sole arbitrator – Chairman and therefore he ought not to have approached the High Court for appointment of arbitrator under Section 11

Court’s view:

While citing the decision of this Court in Bharat Broadband Network Ltd. v. Telecoms Limited, (2019) 5 SCC 755, wherein it was stated that there must be an ‘express agreement’ in writing to satisfy the requirements of Section 12(5) proviso, Bench found the above substance also unsustainable.

Conclusion

On considering the above discussion, Supreme Court held that once the sole arbitrator – Chairman is ‘ineligible’ to act as an arbitrator to resolve the dispute between the parties in view of Section 12(5) read with Seventh Schedule to the Act he loses mandate to continue as a sole arbitrator.

Hence, High Court did not commit any error in appointing the arbitrator other than the sole arbitrator – Chairman.

Taking into consideration the above reasons, Supreme Court dismissed the applications. [Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd. v. Ajay Sales & Suppliers, 2021 SCC OnLine SC 730, decided on 9-09-2021]


Advocates before the Court

Gunjan Pathak, Counsel for the Petitioners

Alternate Dispute ResolutionCase BriefsHigh Courts

Delhi High Court: J.R. Midha, J., in view of serious doubts on the independence of sole arbitrator as named in the arbitration agreement, appointed another independent arbitrator.

Petitioner sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act.

Parties had agreed for reference of disputes to the sole arbitrator, Sachin Dev Sharma, Chartered Accountant as per the arbitration agreement between them.

Petitioners Counsel submitted that the sole arbitrator was not competent to act as an arbitrator in terms of Section 12(5) read with 7th Schedule of the Arbitration and Conciliation Act as the named arbitrator was a consultant/advisor to the respondent and a director and shareholder in PEB Steel Lloyd (India) Ltd.

This Court vide an Order in March had directed the arbitrator to file an affidavit with respect to his relationship between the parties in terms of the Seventh Schedule under Section 12(5) of the Arbitration and Conciliation Act, wherein he admitted that he was an independent director in PEB Steel Lloyd (India) Ltd. in which respondent 1 was also a director.

Further, respondent 1 submitted that the petitioner had agreed to the named arbitrator cannot wriggle out of the arbitration agreement.

High Court in view of the above submissions, held that it had serious doubt to the independence of named arbitrator and hence in the interest of justice it would be appropriate to appoint an independent arbitrator to adjudicate disputes between the parties.

Saurabh Kirpal, Senior Advocate was appointed as the sole arbitrator and was directed to ensure compliance with Section 12 of the Arbitration and Conciliation Act before commencing the arbitration. [Monica Khanna v. Mohit Khanna, 2021 SCC OnLine Del 3421, decided on 18-06-2021]


Advocates before the Court:

For the Petitioners: Abhay Mahajan, Advocate

For the Respondents: Amit Mishra, Advocate

Op EdsOP. ED.

Arbitration is considered as one of the most preferred modes of dispute resolution as it is expedient, it values party autonomy and ensures party equality and these features are also the pillars on which arbitration as a method of dispute resolution enjoys its standing.

Mr Fali S. Nariman in one of his lectures said “the development of arbitration in India is not attributable to the success in arbitration, rather to the failures of the Court”.

The above-quoted statement quite vehemently and rightly express the development of the law concerning arbitration in India. The Indian jurisprudence has seen a constant development in its understanding and applicability of the concepts and principles of arbitration and the major changes in its jurisprudence has to be attributed to the developing judicial understanding over the same.

However, this method of dispute resolution suffers from various limitation and this article will be dealing with the issue of arbitrability, which is one of the most important issues and limitations of arbitration and it discusses whether the scope of the Arbitration Tribunal extends to disputes of all nature or there exists disputes which the Tribunal is not capable of resolving and have to be mandatorily tried in the courts.

Arbitrability

Arbitrability refers to determining which type of disputes may be resolved by arbitration and what kind of disputes shall be exclusively dealt with by the courts.[1] As per Article V(2)(a) of the New York Convention, the arbitration award may be refused recognition or enforcement if the subject-matter of the difference is not capable of settlement by arbitration under the law of that country.[2] Further, Article 36(1)(b) of the UNCITRAL Model Law, a court can refuse enforcement if it finds that the subject-matter of the dispute is not capable of settlement under the law of the State.[3]

In Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., the Supreme Court while propounding the three-prolonged test of determining arbitrability bifurcated the disputes into dealing with rights in rem and right in personam and held that the latter were arbitrable whereas the former was not arbitrable as they have the potential to affect the society at large.[4] The  Court also listed out certain types of disputes which were not arbitrable and there has been an evolving jurisprudence which has further added type of disputes to this list.

                  There are various categories of dispute like intellectual property rights, antitrust, insolvency, criminal matters, fraud, etc. which are considered to be non-arbitrable.[5] Fraud has been defined as concealing or making false representation by way of a statement or conduct which results into loss of the person relying on such representation.

Section 17 of the Contract Act, 1872[6] defines “fraud” to mean and include suggesting “a fact knowing it to be untrue, knowingly active concealment of a fact, making a promise without intending to fulfil it or any other act which is capable of deceiving and is committed by a party to a contract, or with his participation, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract”.

The Evolving Jurisprudence

The following judicial decisions highlight the evolving jurisprudence over the concept of arbitrability of fraud:

  1. Russel v. Russel.—The issue of arbitrability of fraud for the first time arose in this case, wherein it was held that if there exists prima facie evidence to support the existence of fraud the court can refuse to refer the matter to arbitration.[7]
  2. Thereafter, the Supreme Court in Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak  held that cases involving serious allegations of fraud were to be decided by the court and it was a valid ground for not referring the matter to arbitration.[8]
  • The  Supreme Court  again in N. Radhakrishnan v. Maestro Engineers  held that an issue of fraud is not arbitrable as the case involved serious allegations of fraud and such dispute were to be settled by the courts through detailed evidence led by both parties. In addition to this, the  Court also emphasised that the dispute would be non-arbitrable on public policy consideration if it was related to serious allegations of fraud.[9]
  1. A. Ayyasamy v. A. Paramasivam[10].—It was held that, cases where there exists serious allegation of fraud are to be treated as non-arbitrable and such matters have to be dealt with only by the civil courts. However in case, the allegations are in the nature of fraud simpliciter, such disputes can be dealt by the Arbitral Tribunal.[11] The Supreme Court further deliberated that issues in which there exists serious allegation of forgery/fabrication of documents or where fraud is capable of invalidating the entire contract or affects the validity of the arbitration clause will be dealt only by the courts and the Arbitration Tribunal will not have jurisdiction to decide the same.
  2. The concept of “complex fraud” may be found in the opinion of Lord Hoffman, in Fiona Trust & Holding Corpn. v. Privalov, where the Court dealt with the concept of “complex fraud” and held that it refers to a scenario where the very foundation of an arbitration agreement is challenged due to a fraudulent act.[12]
  3. Further in Rashid Raza v. Sadaf Akhtar, the  Supreme Court formulated a two-step test to determine what constitutes a complex fraud It held that firstly, it has to be seen that whether the plea perrmeates the entire contract and specifically the arbitration agreement, thus rendering it void and secondly, the courts have to see whether the allegations of fraud are related to the internal affairs of the parties and have no implication in the public domain and such case it would be arbitrable.[13]
  • The Supreme Court in Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd. observed that a dispute becomes non-arbitrable only when the court comes to the conclusion that the “serious allegations of fraud” which make arbitration agreement itself is inexistent and has been vitiated by fraud; or in cases where the allegations are levelled against the State or its instrumentalities, relating to arbitrary, fraudulent, or mala fide conduct, raising  the question of public law as opposed to questions limited to the contractual relationship between the parties and rest all the allegations of fraud are arbitrable.[14]

The Problematic Jurisprudence

The existing jurisprudence highlights the complexity with which the issue of arbitrability of fraud has been dealt with and more importantly it has been overfilled with various test making it more prone for judicial intervention. There exists no sound logic for differentiating between fraud simpliciter and fraud complex as the arbitrators also has the power to seek assistance for the recording of evidence under Section 27 of the Arbitration and Conciliation Act, 1996[15] (hereinafter referred to as “the Act”) and hence decide accordingly based on such evidence the issue of fraud like the courts would ordinarily do.

The fact that this distinction is superfluous and impractical is evident by the fact that the Supreme Court itself after suggesting this distinction in Ayyaswamy[16] has suggested new and complex factor to the same and thus making it unpredictable and wavering.

Even the Law Commission in its 246th Report proposed addition of sub-section (6) to Section 16 of the Act and empowering the Tribunal to pass an award even if there were allegations of fraud  which would still leave the parties with the option of raising the issue of arbitrability before the arbitrator at the pre-award stage and thus adhering to the principle of Kompetenz-Kompetenz and if rejected by the Tribunal, it would be available at the post-award stage as the award can be challenged on the ground of conflicting with the public policy of India under Section 34(2)(b)(ii) of the 1996 Act.[17]

Further, the  Supreme Court in  World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd. while dealing with a foreign seated arbitration held that every kind of fraud is arbitrable, there exists no reasonable differentia for this different approach for foreign and domestic arbitration.[18]

Solving the Problem

Recently, the  Supreme Court in Vidya Drolia v. Durga Trading Corpn. held that allegations of fraud are arbitrable when it relates to a civil dispute and exclude only those claims which vitiates and render the arbitration clause invalid.[19] The Court analysed the fact that arbitration is a private dispute resolution mechanism which aims at securing just, fair and effective resolution of disputes in an expedient manner. The Court focused on the distinction between matters which deal with right in rem and right in personam.

Previously, in N Radhakrishnan case[20], the Supreme Court had held that a dispute would be non-arbitrable on public policy constraints if it is related to serious allegations of fraud. However, the Supreme Court in Vijay Drolia[21] held that if the reasoning propounded in N. Radhakrishnan[22] has to be accepted, it would be similar to agreeing that the arbitration mechanism of the country is flawed and compromised one which can be set aside on grounds that public policy or public interest demands that such dispute should be decided in the court and it would be abrupt to second this opinion. In addition to this, the  Court also highlighted the fact that an  arbitrator is also an expert and decides a case on basis of facts, evidence and law. Further simplicity, informality and expedition are hallmarks of arbitration. Also the principle of party autonomy which finds its place in Sections 8[23] and 11[24] of the Act and also Section 89 of the Civil Procedure Code, 1908[25] of respecting the autonomy of parties and their decision to arbitrate the matter by simply referring the matter to arbitration and not try it themselves.

The  Court further highlighted that the general rule and principle, given the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019[26], and the principle of severability and Kompetence Kompetence, is that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. The Court has been conferred the power of “second look” on aspects of the non-arbitrability post the award in terms of sub-clauses (i), (ii) or sub-clause (iv) of Section 34(2)(a) or sub-clause (i) of Section 34(2)(b) of the Arbitration Act[27].

The Court propounded the fourfold test for determining the arbitrability of the subject-matter:

  1. When the cause of action and subject-matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem;
  2. When the cause of action and subject matter of the dispute affects third-party rights; have erga omnes effect; require centralised adjudication, and mutual adjudication would not be appropriate and enforceable;
  3. When the cause of action and subject-matter of the dispute relates to the inalienable sovereign and public interest functions of the State and hence mutual adjudication would be unenforceable; and
  4. When the subject-matter of the dispute is expressly or by necessary implication non-arbitrable as per mandatory statute(s).

It held that only when the answer is affirmative, the subject-matter would be considered as non-arbitrable and accordingly it overruled the ratio in N. Radhakrishnan judgment[28]  and held that allegations of fraud can be arbitrable when it relates to a civil dispute. However, the only caveat being that fraud which vitiates or rends the arbitration clause invalid would be non-arbitrable. It further held that matters which are to be adjudicated by the Debts Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 will not be arbitrable.

Conclusion

This recent judgment of the Supreme Court has cleared its stance over the issue of arbitrability of disputes concerning serious allegation of fraud and its relation to the public policy of India and is definitely a step towards the agenda of a pro-arbitration regime, however in the author’s view the Supreme Court has left the matter half done by holding that “those frauds which vitiate or renders the arbitration clause invalid would still be non-arbitrable”, as this still leaves the scope for judicial intervention in arbitration matters where the courts can delve into the question of validity of the arbitration clause and thus can still intervene in arbitration matters which is against the basic principle of arbitration i.e. Kompetenz-Kompetenz.

In Henry Schein Inc. v. Archer and White Sales Co.,  the US Supreme Court held that the issue of arbitrability must be decided by the arbitrator in all cases and not by the civil courts.[29] It further emphasised that even where any party pleads that the reference to arbitration is baseless or has no grounds, even that plea should be decided by the arbitrator because of the principle of Kompetenz-Kompetenz.

This approach adopted by the US Supreme Court is in consonance with the basic principles of arbitration and hence acts as a benchmark towards establishing and functioning a pro-arbitration regime and is a favourable approach than the one propounded by the Indian Supreme Court. Thus it can be concluded that though the Indian jurisprudence on arbitraibility is moving towards a pro-arbitration regime, it cannot be said to be settled notion and in full consonance with the established principles of arbitration like Kompetenz-Kompetenz.


* Principal Associate, Hammurabi and Solomon Partners.

** IVth year student, BA LLB (Hons.), National Law University, Nagpur.

[1]Nigel Blackaby, Constantine Partasides et al., Redfern and Hunter on International Arbitration, 110, (5th Edn. 2014).

[2]Article V(2) NYC, United Nations Commission on International Trade Law, UNCITRAL Model Law on

 International Commercial Arbitration 1985: With amendments as adopted in 2006 (Vienna: United Nations,

2008), available from www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf.

[3] Article 36, United Nations Commission on International Trade Law, UNCITRAL Model Law on International

 Commercial Arbitration 1985: With Amendments as adopted in 2006 (Vienna: United Nations, 2008)

[4] (2011) 5 SCC 532 

[5]See O.P. Malhotra on The Law and Practice of Arbitration and Conciliation, Third Edn. authored by Indu Malhotra.

[6]http://www.scconline.com/DocumentLink/4JVnT6aM

[7](1880) 14 Ch D 471

[8](1962) 3 SCR 702

[9] (2010) 1 SCC 72

[10] (2016) 10 SCC 386

[11]Shubham Jain and Prakshal Jain, Arbitrability of Fraud in India – Is Ayyasamy only about “Seriousness”?, IndiaCorpLaw (31-10-2019), available at https://indiacorplaw.in/2017/12/arbitrability-fraud-india-ayyasamy-seriousness.html.

[12]Fiona Trust & Holding Corpn. v. Privalov, 2007 UKHL 40.

[13] (2019) 8 SCC 710 

[14]2020 SCC OnLine SC 656

[15] Arbitration and Concialiation Act, 1996 

[16] Supra Note 10.

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

[18](2014) 11 SCC 639

[19]2020 SCC OnLine SC 1018

[20] Supra Note 9.

[21] Supra Note 18.

[22] Supra Note 9.

[23] http://www.scconline.com/DocumentLink/0P4pSy8x.

[24] http://www.scconline.com/DocumentLink/02bfnuC4.

[25] http://www.scconline.com/DocumentLink/3iU0MzIU.

[26] http://www.scconline.com/DocumentLink/L7728DGv.

[27] http://www.scconline.com/DocumentLink/teuo89l3.

[28] Supra Note 9.

[29] 2019 SCC OnLine US SC 1 : 202 L Ed 2d 480 :  139 S Ct 524 : 549 US           (2019)

Himachal Pradesh High Court
Case BriefsHigh Courts

Himachal Pradesh High Court: Jyotsna Rewal Dua J., dismissed the petition being non-maintainable.

The petitioner by way of this instant petition has challenged the election of Respondent 5 as Member, Block Development Committee, Misserwala, District Sirmour in the elections to Panchayati Raj Institutions of the State concluded in January 2021. The writ petition has been filed seeking that the respondent election commission may be directed to start the fresh election and declare the election under challenge as null and void.

The issue before the High Court is the maintainability of writ petitions under Article 226 of the Constitution of India vis-à-vis Article 243-O of the Constitution of India in respect of limitation in exercise of judicial review by the Court in election matters.

Section 162 of the H.P. Panchayati Raj Act provides that no election under the Act shall be called in question except by an election petition presented in accordance with the provisions of the chapter and Section 175 of the Act enumerates the grounds for declaring election to be void.

The Court stated

 “We are also conscious of the limitations set forth on such exercise of judicial review in view of bar of jurisdiction imposed by Article 243-O of the Constitution of India, which is quoted hereinbelow:-

“243-O. Bar to interference by Courts in electoral matters- Notwithstanding anything in this Constitution-

(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies made or purporting to be made under article 243K, shall not be called in question in any court;

(b) no election to any Panchayat shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any Law made by the Legislature of a State.”

 The Court further relied on judgment Laxmibai v. Collector, Nanded, (2020) 12 SCC 186 wherein it was observed the maintainability of writ petitions under Article 226 of the Constitution of India vis-a-vis Article 243-O of the Constitution of India in respect of limitation in exercise of judicial review by the Court in election matters, it was held that all election disputes must be determined only by way of an election petition. This by itself may not per-se bar judicial review, which is the basic structure of the Constitution but ordinarily, such jurisdiction would not be exercised. The relevant paragraphs of the judgment are extracted hereinafter:

 “15. It is true that the High Court exercises a plenary jurisdiction under Article 226 of the Constitution of India. Such jurisdiction being discretionary in nature may not be exercised inter alia keeping in view of the fact that an efficacious alternative remedy is available therefor. (See Mrs.

  1. Article 243-O of the Constitution of India mandates that all election disputes must be determined only by way of an election petition. This by itself may not per se bar judicial review which is the basic structure of the Constitution, but ordinarily such jurisdiction would not be exercised. There may be some cases where a writ petition would be entertained but in this case we are not concerned with the said question.
  2. ….a writ petition should not be entertained when the main question which fell for decision before the High Court was non-compliance of the provisions of the Act which was one of the grounds for an election petition in terms Rule 12 framed under the Act.”
  3. Section 10A of the 1959 Act and Section 9A of the 1961 Act read with Articles 243-K and 243-O, are pari material with Article 324 of the Constitution of India. In view of the judgments referred, we find that the remedy of an aggrieved person accepting or rejecting nomination of a candidate is by way of an election petition in view of the bar created under Section 15A of the 1959 Act. The said Act is a complete code providing machinery for redressal to the grievances pertaining to election as contained in Section 15 of the 1959 Act. The High Court though exercises extraordinary jurisdiction under Article 226 of the Constitution of India but such jurisdiction is discretionary in nature and may not be exercised in view of the fact that an efficacious alternative remedy is available and more so exercise restraint in terms of Article 243-O of the Constitution of India. Once alternate machinery is provided by the statute, the recourse to writ jurisdiction is not an appropriate remedy. It is a prudent discretion to be exercised by the High Court not to interfere in the election matters, especially after declaration of the results of the elections but relegate the parties to the remedy contemplated by the statute. In view of the above, the writ petition should not have been entertained by the High Court. However, the order of the High Court that the appellant has not furnished the election expenses incurred on the date of election does not warrant any interference.”

 The Court thus held that “the instant writ petition is not maintainable at all and the same is accordingly dismissed with liberty reserved to the petitioner to avail appropriate alternate remedy in accordance with law.” [Kauser v. State Election Commission,  2021 SCC OnLine HP 227, decided on 08-02-2021]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Pankaj Mithal and Saurabh Lavania, JJ., dismissed a Public Interest Litigation.

The petitioner in Public Interest had sought quashing of letter of the Chief Engineer (Purchase) of U.P. Jal Nigam requesting  Crown Agents (India) Pvt. Ltd. to inspect Rashmi Metaliks Ltd., Kolkata and issuance of mandamus directing respondent 2 and 3 not to permit re-inspection of Rashmi Metaliks Limited, Kolkata.

The Court while explaining the purpose of PIL said that normal rule was that a person, who suffered a legal injury or whose legal right was infringed, alone had locus standi to invoke the writ jurisdiction to avoid miscarriage of justice but the said common rule of locus standi stood relaxed where the grievance was raised before the Court on behalf of poor, deprived, illiterate or the disabled persons, who cannot approach the Court independently for redressal of the legal wrong or the injury caused to them on account of violation of any constitutional or legal right. However, the relaxation was misused by unscrupulous persons seeking cheap publicity quoting the judgment of Supreme Court in State of Uttaranchal v. Balwant Singh Chaufal, (2010) 3 SCC 402.

The Court further observed that in the present petition the petitioner had not mentioned anything substantial other than he was a Lawyer and was involved in social work, thus not fulfilling the conditions of the rule laid down in the above case. The Court further stated that the petitioner in filing this petition in Public Interest had not even disclosed that he was filing this petition on behalf of such disadvantageous persons or that injustice was meted out to a large number of people and therefore it has become necessary for him to come forward on their behalf.

The Court while dismissing the PIL held that the petitioner was not a person, who had any credentials to move in Public Interest. Simply on the allegation that he was a Lawyer and a person involved in social work without disclosing his credentials and in the absence of the fact that the petition had been preferred in the interest of justice for large number of downtrodden persons who are unable to approach the Courts of Law, the petitioner was not entitled to maintain this petition in the public interest that too in a matter which does not involve basic human rights.

The Court, however, mentioned that U.P. Jal Nigam was not directly involved in the purchase of any material from any firm, rather it awarded contracts on a turn-key basis and it was the contractor who made purchases of the material from amongst firms prescribed by the U. P. Jal Nigam, provided there was otherwise no legal impediment thus letter of the Chief Engineer (Purchase) on record, since the purchases from the aforesaid firm would be taken subsequent to its certification by the inspecting agency, thus interference by the Court was not required.[Narendra Kumar Yadav v. State of U.P., 2020 SCC OnLine All 1395, decided on 05-11-2020]


Suchita Shukla, Editorial Assistant has put this story together

Jharkhand High Court
Case BriefsHigh Courts

Jharkhand High Court: Sujit Narayan Prasad, J. dismissed the petition by asking the appropriate authority to look into the dispute among the office bearers of the organisation concerned.

A petition was filed under Article 226 of the Constitution of India, whereby the petitioner sought for directions upon the Respondent 2 to take final decision upon the representation dated 08.03.2016 and grant licence to run Public Distribution System shop in the name of Sarda Mahila Mandal for village Patratu, Gola or in alternative to taking action against the wrongdoer, i.e. erstwhile Secretary Sabitri Devi.

A license was granted in the name of Sarda Mahila Mandal, a group of women of self-help in which the respondents Sabitri Devi was the President while Koshil Devi was the Secretary and the respondent Basni Devi was the treasurer but due to internal dispute and allegations and counter-allegations, the licence has been cancelled by the competent authority.

The Government, in order to provide food grain articles and other materials to be supplied under the control rate, came out with a decision sometime in the year 2006 to grant licence to group known as self-help group and in pursuance thereto, the petitioner Sarda Mahila Mandal, through its President, has made an application for grant of licence under PDS and taking into consideration the fulfillment of requirement as per the policy decision, the licence had been granted.

The Court held that when there was internal dispute amongst the office bearers of the Sarda Mahila Mandal and considering the said circumstances, if the licence had been cancelled by the licensing authority, it cannot be said that any illegality had been committed, it is for the reason that the concept of extending the licence of Sarda Mahila Mandal for smooth distribution of food grain articles and more particularly to deal with situation of black marketing since the individuals in whose favour the licence was earlier been granted who indulged in case of black marketing having no control of anyone, save and except the raid and inspection if conducted by the inspecting authority, and if the licence would be granted in favour of a group, there would be check and balance amongst the members itself.

Keeping that fact into consideration, the Court, directed the Deputy Commissioner, Ramgarh to look into the matter, so that people at large of the area who are getting food grain articles from the shop in question may not suffer and disposed of the petition. [Sarda Mahila Mandal v. State of Jharkhand, 2019 SCC OnLine Jhar 1535, decided on 13-11-2019]

Jammu and Kashmir and Ladakh High Court
Case BriefsHigh Courts

Jammu & Kashmir High Court: Ali Mohammad Magrey, J. disposed of the writ petition on the grounds that questions of fact could not be the subject matter of a writ petition.

The petitioner filed the instant petition praying that the respondents be commanded to implement the recommendations of the Human Rights Commission. The petitioner claimed to be the widow of one Abdul Ahad Malik) who as argued by her, left his home towards Srinagar on 16-02-2003 and on the very next day, his dead body was received by his family members. It is stated that since the deceased was the only breadwinner of the family, the petitioner filed a complaint before the State Human Rights Commission, Srinagar on 11-05-2004, in terms of the J&K Human Rights Act, praying therein for compensation.

The State Human Rights Commission recommended the Government payment of ex-gratia relief of Rs 10 lacs in favour of the petitioner and benefit of employment in terms of SRO 43 to the elder son of the petitioner. Since the Government did not act upon the recommendations of the State Human Rights Commission, the petitioner filed the instant petition for the above-stated reliefs.

B. A. Misri, learned counsel for the petitioner, provided on record a letter issued by Senior Superintendent of Police, addressed to the Principal Secretary to Government, Home Department, J&K, Jammu, making reference to some report that the deceased Abdul Ahad Malik was killed by some un-known militant at Srinagar, with further clarification that no case/report has been registered in the concerned police station nor any Medico legal formalities conducted.  In his reply, the Deputy Commissioner stated that the petitioner had a natural death, and also has placed on record photocopy of certificate issued by Deputy Medical Superintendent, SMHS Hospital, Srinagar certifying that the deceased was admitted in the hospital on 16-02-2003 as a case of Cardio Vascular Arrest and expired on 16-02-2003. The Petitioner in response, to such a report placed on record a certificate issued by Resident Medical Office Records, Government SMHS Hospital which said that there was an un-known patient admitted in the hospital without giving any details regarding the address and parentage.

After perusing the pleadings the court held that it was not forthcoming that the deceased died in a militancy-related incident, therefore, disputed questions of fact were involved in the present case, which could not be determined by this Court and no relief could be passed on such disputed question of facts. The petitioner has to approach a civil Court for the establishment of her right before filing a writ petition. The recommendations of the Human Rights Commission were not binding on the State. The petitioner was free to approach the Civil Court for the establishment of her right with reference to the death of her husband as well as the implementation of the recommendations of the Human Rights Commission. [Nazira Begum v. State of J&K, 2019 SCC OnLine J&K 832, decided on 09-10-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court:  Lisa Gill, J. allowed the application for the refund of the fees on the ground that the matter was resolved between the parties.

An appeal was filed by the appellant-plaintiff against the order passed by the Additional Civil Judge (Senior Division), Faridabad where the suit for specific performance filed by the appellant was dismissed.

Rakesh Kumar Sharma, counsel for the applicant/appellant submitted that the appellant does not wish to pursue the appeal which was filed for the specific performance as the dispute between the parties had been resolved amicably.The applicant/appellant further prayed for the refund of the court fee.  Reliance was placed upon the decision of Division Bench of the Karnataka High Court in the case of A. Sreeramaiah v. South Indian Bank Ltd., 2006 SCC Online Kar 563 in which it was held that the matter being resolved by the parties amicably, amongst themselves without the intervention of the court, the court fees should be refunded.

In the above-mentioned case, the court held that the object behind Section 89 of the Civil Procedure Code, 1908 is to encourage the parties to arrive at the settlement. It is not important that the parties are referred to the four methods but if parties themselves at the earliest stage before the court come to the settlement, it will be considered that the object of Section 89 is achieved. The court further held that “No party should be discriminated in the matter of refund of Court Fees mainly on the ground that they have settled the dispute at the earliest stage before the court without recourse to any of the methods mentioned under Section 89 of the Civil Procedure Code, 1908.” Thus, the court directed the refund of the court fees appended with the appeal to the appellant. [Raj Kumar v. Gainda Devi, 2019 SCC OnLine P&H 658decided on 29-5-2019]

Case BriefsHigh Courts

Orissa High Court: The Bench of A.K. Rath, J. allowed the petition filed that challenged the order which allowed the appointment of an Amin Commissioner for local investigation under Order 26 Rule 9 CPC for the suit land.

The facts of the case were that the plaintiff-opposite party instituted the suit for declaration of right, title and interest, confirmation of possession and recovery of possession. Case of the plaintiff was that he was the owner of the suit land. Defendants filed a written statement denying the assertions made in the plaint. Case of the defendants was that the plaintiff had no title over the suit land and the defendants purchased the same by means of a registered sale deed. While matter stood thus, the plaintiff filed an application under Order 26 Rule 9 CPC for the appointment of a commissioner for demarcation of the property. Defendants filed an objection to the same. The Trial Court appointed a commissioner for local investigation. Mr. P.K. Satapathy, the counsel for the petitioners submitted that there was no justifiable reason to appoint a survey knowing commissioner in the factual scenario. The dispute did not pertain to demarcation or identification of the land.

The Court held that since both parties were claiming title over the suit land, it was not per se a ground to appoint a commissioner. The plaintiff could adduce evidence to substantiate the case. The dispute did not pertain to the area or identification or measurement or location of the land. Thus the Court had traveled beyond its jurisdiction in appointing a commissioner. The impugned order was quashed and the petition was allowed. [Regional Coop. Marketing Society v. Amarnath Saraph, 2019 SCC OnLine Ori 172, Order dated 19-04-2019]

Hot Off The PressNews

Port of Spain, Trinidad: Judgment was delivered today by the Caribbean Court of Justice (CCJ) in the consolidated matters of Trinidad Cement Limited and Arawak Cement Limited vs. The State of Barbados, and Rock Hard Cement Ltd. v. State of Barbados and  Caribbean Community (CARICOM). The CCJ ruled that the regional tax payable on ‘other hydraulic cement’, imported by Rock Hard Cement from Portugal and Turkey, should be 5%. The case was in the CCJ’s Original Jurisdiction where the Court interprets the Revised Treaty of Chaguaramas.

In 2001, CARICOM’s Council for Trade and Economic Development (COTED) granted Barbados an exemption, in respect of the regional Common External Tariff (CET) of 0-5%, so that the State could apply taxes of 60% to categories of cement described as ‘other hydraulic cement’. The regional tariff is intended to offer goods produced and distributed in the region an advantage over imported ones. In 2015, Barbados decided to return to the CET and apply a 5% tax on the ‘other hydraulic cement’ imported by Rock Hard Cement Limited.

In its ruling, the Court decided that where COTED allowed a Member State to charge taxes higher than the regional tariff on the importation of good from outside the region, there was no need for the Member State to obtain approval from COTED to revert to the CET. However, in these circumstances, the Member State should give reasonable notice of its intention of returning to the regional tariff. The Court stated that this notice would ensure that regional businesses enjoy transparency, certainty, and predictability of tax structures. This was, according to the Court, “reflective of good administrative practices, preserved the sovereign autonomy of the Member State and ultimately enhanced the overall functioning of the CSME”.

The Court also found that the regional manufacturers of cement, who had brought the action against Barbados, had noticed for several years of the intention of Barbados to revert to the regional tariff and therefore could not succeed in their action.


Press Release dt. 17-04-2019

Caribbean Court of Justice

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: The Bench of Manoj K. Tiwari, J. disposed of a compounding application in favour of the parties as they had amicably settled the dispute by entering into a compromise.

In the pertinent case, an FIR was lodged by the respondents under Sections 420 and 468 IPC on 05-01-2019. Later a compounding application duly supported by affidavits was filed stating that they have buried their differences and settled the dispute amicably outside the Court by entering into a compromise, therefore, no useful purpose would be served if the same is continued. They further relied on Gian Singh v. State of Punjab, (2010) 15 SCC 118 which has considered the question with regard to the inherent power of the High Court under Section 482 CrPC in quashing the criminal proceedings. Moreover, it was contended that the offence involved in the case is of a personal nature and is not an offence against the society and is not heinous offence showing extreme depravity.

The Court opined that “the possibility of conviction is remote and bleak and continuation of the criminal case would put the accused to great oppression and prejudice, which would tantamount to abuse of process of law.”And thereby, allowed the application. [Shiv Shankar v. State of Uttarakhand, 2019 SCC OnLine Utt 91, Order dated 15-02-2019]