Delhi High Court
Case BriefsHigh Courts

   

Delhi High Court: C Hari Shankar, J. opined that Section 5 of the Limitation Act, 1963 will apply in respect of appeals preferred under Section 18 Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act 2013 (‘POSH Act') because if a Court were to refuse to condone a delay of as little as 36 days in an alleged victim of sexual harassment preferring an appeal under Section 18 against the report of the inquiry committee the objective behind the legislation fails.

Respondent 1 accused Respondent 2 of having harassed her, sexually, at the workplace. The complaint was referred to an internal complaints committee which exonerated Respondent 2. Respondent 1 preferred appeal under Section 18 POSH Act before Central Government Industrial Tribunal wherein the impugned order was passed condoning the delay application by Shailja Naqvi for a delay of only 36 days. Aggrieved by the condonation grant, the petitioner invoked Article 227 of the Constitution of India.

Counsel for petitioner contended that no provision for condonation of delay is to be found in Section 18 of the POSH Act, and as Section 18(2) uses the word “shall”, CGIT could not have condoned the delay in filing of appeal by the respondent.

Reliance was placed on Commissioner of Customs and Central Excise v. Hongo India Pvt Ltd., (2009) 5 SCC 791 wherein it was observed that where the Central Excise Act envisaged condonation of delay in preferring appeals or application, it specifically so provided. As no such provision for condonation of delay, appropriate applications under Section 35-H of the Central Excise Act, 1944 found place therein, the Supreme Court held that it was not permissible to seek recourse to Section 5 of the Limitation Act for condonation of delay in filing such an application.

The Court relied on Hongo India case (supra) and New India Assurance Company Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. (2020) 5 SCC 757 to note that in light of the facts of the present case, the approach of CGIT is completely in accordance with the scheme of the POSH Act. The POSH Act is an ameliorative statute, intended to redress a serious social evil and victims of sexual harassment at the workplace suffer untold trauma, mental, physical and spiritual.

The Court further affirmed the view of CGIT that a victim of sexual harassment remains in a state of trauma and it cannot be expected that she would immediately rush to a Court seeking appellate remedies. It would be completely antithetical and inimical to the very scope and purpose of POSH Act, if a Court were to refuse to condone a delay of as little as 36 days in an alleged victim of sexual harassment preferring an appeal under Section 18 against the report of the inquiry committee.

Thus, the Court held that Section 5 of the Limitation Act would apply in respect of appeals which may be sought to be preferred under Section 18 of the POSH Act.

[DB Corp Ltd. v. Shailja Naqvi, CM (M) No. 705 of 2022, decided on 21-07-2022]


Advocates who appeared in this case :

Mr. Rajat Manchana, Ms. Tanya Singh and Ms. Radhika Jain, Advocates, for the Petitioner;

Mr. Manu Mishra, and Ms. Shreya Dutt, Adv. for R-2.


*Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Delhi High Court: Noting allegations against an employer with regard to the sexual harassment Sanjeev Sachdeva, J., expressed that,

“…instead of providing assistance to the aggrieved woman in prosecuting her complaint of sexual harassment, the Akademi has been opposing her tooth and nail and has even terminated her services pending the inquiry before the Local Committee.”

Note:

In view of Section 16 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the petitioners name has been kept confidential and would be referred to as the “aggrieved woman” and similarly, the name of the officer against whom the complaint has been made shall be kept confidential and he would be referred to as the “Secretary”.

Questions for Determination:

(i)  Whether the Secretary is an employer in terms of section 2(g) of the Act?; and

(ii)  Whether the complaint of sexual harassment against the Secretary could have been made only to the Local Committee and not to the Internal Complaints Committee in terms of Section 6(1) of the Act?; and

(iii)  Whether the Internal Complaints Committee was validly constituted in terms of Section 4 of the Act?; and

(iv)  Whether the aggrieved woman made any complaint to the Internal Complaints Committee in terms of Section 9 of the Act?’ and

(v)  If the answer to question (iv) is in the negative, then whether the report of the Internal Complaints Committee dismissing the complaint is sustainable?

(vi)  Whether the non confirmation/extension of probation of the aggrieved woman during pendency of the proceedings is sustainable?

(vii)  Whether the Petition by the aggrieved woman is not maintainable as she has not exhausted the alternative remedy of an appeal against the finding of the Internal Complaints Committee?

Background

In the present matter, it was stated that the aggrieved woman faced severe sexual harassment from March 2014 onwards at the hands of the Secretary.

Further, it was alleged that he regularly made racist and sexist comments on women hailing from the North-East, particularly from the home state of the aggrieved woman.

As a counterblast to aggrieved woman’s objections, with regard to inappropriate sexual advances by the Secretary, he in the presence of other officers screamed at her and kept accusing her of poor performance or not working properly.

Adding to the above allegations, the aggrieved woman also stated that he tried to hold her hand, saying that she should have understood his ‘hints’ and should have provided him ‘bodily satisfaction’ if she did not want her probation to get extended.

Further, she was also served with frivolous office memoranda which were sent to tarnish her employment record.

In 2019, she submitted a complaint to the police station detailing out the acts of sexual harassment and assault perpetrated by the Secretary, later an FIR was registered.

Aggrieved woman protested and informed the ICC that it did not have the jurisdiction to look into her complaint against the Secretary and only the Local Committee was vested with the jurisdiction to initiate proceedings based on her complaint, as the Secretary was the employer in terms of Section 2(g) of the Act.

Further, the ICC stated that if the aggrieved woman will not appear, the Committee shall have no option but to terminate the proceedings.

Local Committee granted aggrieved woman relief of 3 months paid leave in terms of Section 12(1) of the Act.

In February 2020, the aggrieved woman was discharged from her duties due to unsatisfactory performance.

Analysis, Law and Decision

High Court expressed that since the Secretary was the employer for the purposes of the Act, the complaint of the said employer would not lie to the Internal Committee but shall lied only to the Local Committee.

Therefore, ICC does not have any jurisdiction to entertain a complaint against the Secretary.

In the present matter, the aggrieved woman had emailed to the Executive Board requesting them to set up an independent committee to enquire into her complaint of sexual harassment and assault in the same email she had alleged that the ICC lacked jurisdiction to enquire into her complaint as her complaint was against the Secretary who was the ‘employer’ within the meaning of Section 2(g) of the Act.

Since no complaint was made by the aggrieved woman to the Internal Committee in terms of Section 9 of the Act, the Internal Committee could not have conducted any inquiry or submitted a report.

Court while reasoning out further stated that,

  • No rule or provision pointed out on behalf of the Akademi to justify the procedure of constituting a Review Committee to review the performance
  • Office memoranda and calling explanations relied upon were issued either by the Secretary or by the officers junior to the Secretary, who also report to him
  • If there was any merit in the allegations of the aggrieved woman then the office memoranda and calling explanations were all issued because she rebuffed his advances
  • Timing of the termination order was such that it prima facie smacks of malafides. Especially, when a complaint of sexual harassment was pending against the Chief Executive Officer of the Akademi, the Executive Board should have waited for the decision on the complaint of the aggrieved woman.

Note:

Section 19 of the Act stipulates the duties of the employer to inter alia provide a safe working environment at the workplace with shall include safety from the persons coming into contact at the workplace; display at any conspicuous place in the workplace, the penal consequences of sexual harassments; and the order constituting, the Internal Committee under Section 4(1); provide assistance to the woman if she so chooses to file a complaint in relation to the offence under the Indian Penal Code or any other law for the time being in force; cause to initiate action, under the Indian Penal Code or any other law for the time being in force, against the perpetrator, or if the aggrieved woman so desires, where the perpetrator is not an employee, in the workplace at which the incident of sexual harassment took place; and treat sexual harassment as a misconduct under the service rules and initiate action for such misconduct.

 Conclusion

Petition was disposed of in the following terms:

(i)  The Secretary is held to be an employer in terms of Section 2(g) of the Act.

(ii)  The complaint of sexual harassment against the Secretary would lie only to the Local Committee and the Internal Complaints Committee would not have any jurisdiction to entertain any complaint against the Secretary.

(iii)  The Inquiry report dated 14.01.2020 of the Internal Complaints Committee and its opinion and recommendations are held to be without jurisdiction and non est.

(iv) Office Memorandum dated 14.02.2020 terminating the services of the aggrieved woman quashed.

(v) The aggrieved woman would be deemed to continue in service but as a probationer in terms of her appointment letter till the conclusion of the inquiry by the Local Committee. She is reinstated to her former position, with continuity of service, full back wages, and other consequential service benefits.

(vi) The Akademi shall forthwith pay her salary for the current month and clear the arrears of her salary within four weeks.

(vii) The aggrieved woman shall be deemed to be on paid leave till the Local Committee passes appropriate interim orders with regard to provision of a safe working environment to her.

(viii) The competent authority of the Akademi would be at liberty to review her performance and take a decision on her employment status after submission and implementation of the report by the Local Committee.

(ix) Since it has been held that the Secretary is the employer in terms of Section 2(g) of the Act and that a complaint against him would not lie to the Internal Committee, the question as to whether the Internal Committee was validly constituted and details thereof displayed in terms of Section 19 of the Act, is left open.

(x) The claim of the aggrieved woman for compensation for alleged mental trauma, pain, suffering and emotional distress caused to her is left open for determination by the Local Committee in terms of Section 15 of the Act.

Therefore, petition was allowed in the above terms.[X v. Y, WP(C) 1103 of 2020, decided on 25-10-201]


Advocates before the Court:

For the Petitioners:

Mr. Ritin Rai, Senior Advocate with Ms. Shreya Munoth, Ms. Kritika Bhardwaj, Mr. Ashwin Pantula, Ms. Aditi Rao and Ms. Suhavi Arya, Advocates.

For the Respondents:

Ms. Geeta Luthra, Senior Advocate with Mr. Abhishek Aggarwal, Ms. Damini Thaker and Ms. Kamkashi Gupta, Advocates for Respondent No. 1

Mr. Anupam Srivastava, ASC, GNCTD with Mr. Dhairya Gupta, Advocate for R-2 and 3/GNCTD.

Case BriefsHigh Courts

Sikkim High Court: The Division Bench of Jitendra Kumar Maheshwari, CJ. and Meenakshi Madan Rai, J., partly allowed an appeal which was filed challenging the Judgment dated 08-12-2020 passed in Silajit Guha vs. Sikkim University, WP(C) No.30 of 2019 by Single Bench, partly dismissing the petition deciding the issue of jurisdiction.

 The appellant was a Professor in the department of respondent 1, Sikkim University, respondent 5, a student of the department made a complaint of sexual harassment against the appellant to the Internal Complaint Committee (ICC). After inquiry it was submitted to the Executive Council of the University i.e. respondent 3. The Registrar of the University issued the office order bearing no.201/2019 dated 28-06-2019, terminating the services as per the 33rd Meeting of the Executive Council. Relying upon the inquiry report and while considering the representation of the petitioner under clause 8(6) of the University Grant Commission (Prevention, Prohibition and Redressal of Sexual Harassment of Women Employees and Students in Higher Educational Institutions) Regulation, 2015 (hereinafter in short referred as UGC regulations) Council was of the opinion that the appellant is not fit to be retained in the service of the University, however, terminated his service with immediate effect. The petitioner preferred a statutory appeal on 01-07-2019 which was pending. In the meantime, the Writ petition seeking quashment of show cause notice dated 10-06-2019, the inquiry report dated 08-06-2019 and the order of termination dated 28-06-2019 and various other consequential reliefs was filed.

Counsel for the appellant contended that at one place learned Single Judge proceeded to decide the scope of the definition of the ‘workplace’ observing that it is inclusive definition but simultaneously the same question was left open to decide by the Executive Authority in terms of Section 9 of the Act, which cannot be decided exceeding to the observations of the Court.

The Court found that there was substance in the argument of the Counsel for the appellant. The Court further observed that in the facts of the case the ambit and scope of the workplace as specified in Section 2(o) of the Act can be decided after appreciation of the evidence brought before ICC, as considered by Single Bench. The Court opined that observation of Single Judge referring to Section 2(o) of the Act i.e. ‘workplace’ its ambit and scope is not proper in particularly when the same question is permitted to be decided by the Executive Authority.

Therefore, the Court held that the finding on the point of jurisdiction explaining the definition of ‘workplace’ was an inclusive one, stands set aside to such extent and the liberty is granted to the appellant to raise the said question before the Executive Authority who shall decide the same in accordance with the law.

It was directed that the Executive Authority shall decide the appeal as observed by the learned Single Judge without influencing with the observation recorded in the Judgment on the point of jurisdiction or on the point of ambit and scope on the definition of ‘workplace’.[Silajit Guha v. Sikkim University, 2021 SCC OnLine Sikk 80, decided on 03-07-2021]


Suchita Shukla, Editorial Assistant has reported this brief.

Alternate Dispute ResolutionOp EdsOP. ED.

Introduction

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

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

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

Correlation of Paris Agreement and International Commercial Arbitration

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

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

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

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

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

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

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

The potential steps by ICC in climate change-related disputes

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

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

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

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

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

CGA: A pathway to greener arbitration

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

  1. The green protocol for arbitral proceedings

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

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

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

  1. The green protocol for arbitrators

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

  1. The green protocol for arbitration institutions.

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

  1. The arbitration hearing venues

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

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

 Conclusion

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


*Advocate, High Court of Chhattisgarh.

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

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

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

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

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

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

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

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

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

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

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

Experts CornerTariq Khan

Government has no business being in businessPrime Minister Narendra Modi 

One of the fastest growing nations in the world is facing problems in becoming a hub of international arbitration. India has often been considered as a jurisdiction that sends mixed signals to the global investor community insofar as investments are concerned. Investors are often confused whether to invest in India or not. The efforts of the Government and the Judiciary in making India a hub of arbitration are praiseworthy however, somewhere we have lost the plot. Interestingly, India started early and was one of the first few countries to adopt the New York Convention in 1960 as compared to Singapore which adopted the same in 1986. Despite that, Singapore stands out as one of the leading centres for International Commercial Arbitration as parties prefer choosing it as a neutral venue for Arbitration. In a short span, Singapore has emerged as a hub of international arbitration alongside popular Arbitration hubs such as Paris, London and Geneva. The credit goes to the Supreme Court of Singapore that has upheld arbitration agreements, enforced foreign awards and construed public policy narrowly and the Government of Singapore that has ensured world class infrastructure and is known for its competence and integrity.

Every country aspires to become the centre of arbitration owing to various benefits that it entails. Also, every country wants to get more and more investment, but the investors take a note of various factors before investing in a country i.e. whether the country has a robust arbitration mechanism, whether the Courts and Government of that country are arbitration friendly or whether there is ease of doing business and stable environment, etc.

In India, most of the arbitrations are ad hoc and we are slowly moving towards Institutional Arbitrations. The Government has taken certain steps to make India a hub of arbitration. The Arbitration and Conciliation (Amendment) Act, 2019 , which was based on the recommendations of B.N. Srikrishna Committee Report, aimed to institutionalise Arbitration in India. It also provides for establishment of an Arbitration Council of India under Sections 43-A to 43-M. However, these steps are not sufficient. India can achieve its dream of becoming a hub of arbitration if the following issues are addressed.

Full-time Arbitration Lawyers

One of the major problems is that we do not have full-time arbitration lawyers. Lawyers often give second preference to arbitration matters and choose the time slot after the court hours for conducting arbitrations. After spending the entire day in court, they are already exhausted and thus, the proceedings do not go on for long. Also, sometimes they seek adjournments if they are in a court hearing and fix dates in arbitrations when they do not have hearings before the court. Similarly, some of the arbitrators, who are also practising in the courts, are unable to give sufficient time to the arbitration proceedings. Therefore, there is a need for full-time Arbitration Lawyers and Arbitrators who can devote sufficient time to arbitration so that there are no delays in the arbitration process.

Sloppy drafting of the law

Before the amendment of 2015, Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter “the 1996 Act”) was an invitation to file objections as it would automatically stay the operation of the arbitral award as soon as the petition under Section 34 was filed. This was a major hurdle in the execution of the arbitral awards. In 2015, this issue was addressed through the amendments made to the 1996 Act. However, the language of the Amendment Act was such that it took three years to understand whether the Amendment Act applied to pending Section 34 petitions or not. Even when the judgment of BCCI[1] was passed, another Section 87 was introduced by the legislature which was later struck down in Hindustan Construction Co. Ltd. v. Union of India [2] . A lot of judicial time got wasted to give clarity to these amendments.

Lack of proper law

The Arbitration and Conciliation (Amendment) Bill of 2021 seeks to amend Section 36 of the 1996 Act and raises several concerns as it provides for an unconditional stay on the operation of the award in case fraud or corruption is involved. This will take us back to the era of the automatic stay of arbitral awards as it would make it convenient for the judgment-debtors to avoid their obligations under the award. There is an ambiguity as to what constitutes fraud or corruption as it has not been defined under the 1996 Act. Thus, in every case a judgment-debtor may allege fraud and corruption for getting an unconditional stay on the operation of the award. As a result, the enforcement of awards will get more difficult and the ease of doing business will be adversely affected.

The Government has recently brought in amendments after amendments which shows that issues were not properly addressed, and the amendments were not properly drafted. In spite of a number of amendments, the seat versus venue conundrum has not been addressed in any of the Amendment Acts. Another example is Section 29-A which is contrary to the idea of minimum judicial interference as enshrined in Section 5 of the Act and an application under Section 29-A may itself take more than a year to decide whether an extension of six months should be granted.

Lack of institutional arbitration

In spite of a few good centres like Delhi International Arbitration Centre (DIAC), Nani Palkhivala Arbitration Centre (NPAC), Mumbai Centre for International Arbitration (MCIA), etc. India still does not have any institution that can be considered in the same league as Singapore International Arbitration Centre (SIAC), International Criminal Court  (ICC), London Court of International Arbitration (LCIA), etc. Most of the Arbitrations in India are ad hoc which is a major reason why arbitration mechanism in India is not robust. A world class arbitral institution would also need a renowned arbitration expert, e.g.  SIAC was led by Gary Born. Owing to the busy schedule of litigation lawyers in India, it is unlikely that any leading lawyer would thoroughly engage with an arbitration centre.

Judicial intervention

Another issue is inadequate support from the Courts. We have seen that there are judicial delays because the courts are overburdened. Once an arbitration matter gets entangled in the Court, then it gets delayed and it cannot be ascertained as to how much time the matter will take. For instance, if we take the example of a Section 34 petition, which deals with challenge to an arbitral award, the same may take forever to decide. The petition is also heard as an appeal by various courts in spite of clear directions from the Supreme Court that the Court under Section 34 does not sit over as an appeal and cannot go into the merits. In many cases, the courts have re-appreciated the evidence and have permitted the counsels to argue the merits of the case at length.

The other problem is that some of the judgments delivered by the High Courts have turned out to be bad jurisprudence. This is because it is not possible for all the courts in India to be on the same page. In fact, we have seen some regressive judgments even by the Supreme Court e.g. ONGC v. Saw Pipes Ltd.[3] We must remember that it takes years to undo the harm which such judgments cause. This forms a perception of India as a jurisdiction which is not arbitration friendly and where investments are not safe.

Practice of Appointment of Retired Judges as Arbitrators

It is surprising to see that the best arbitrators are overburdened with arbitrations because there are not many options to choose from. The reason is that we do not let young arbitration lawyers be appointed as arbitrators and as a result, mostly the retired Judges are appointed. This practice must be done away with and young lawyers must be appointed as arbitrators in disputes. This will make the arbitration mechanism more robust as a whole and the quality of awards will also not suffer. Usually, it gets impossible to maintain the quality of awards while having a huge quantity of arbitration matters. No other country is thus fond of appointing only retired Judges as arbitrators like ours.

Moreover, the appointment of young lawyers as arbitrators is also in line with the disclosure prescribed by Schedule 6. According to the Schedule, the arbitrator is bound to disclose how many ongoing arbitrations he is handling and whether he will be able to finish the arbitration within one year or not.  Also, in highly technical matters, we need skilled arbitrators from a particular field such as maritime arbitration.

Inadequate Representation of the Arbitration Issues: Need for an Arbitration Bar

The leaders of the Bar Associations do not speak about the arbitration issues as they are too busy dealing with the problems of the Court. This is one of the major reasons why the issues relating to arbitration mechanism are not highlighted or addressed. Thus, there is a pressing need to have a Bar to address the prevailing issues and the concerns of the arbitration practitioners.

Rigid Approach of the Arbitrators

Another reason why the arbitration mechanism has failed is because of the rigid approach adopted by the arbitrators. If in a tribunal there is an arbitrator who is strictly going by Civil Procedure Code, 1908 (CPC) and evidence, as opposed to Section 19 which categorically states that strict rules of evidence and CPC will not apply to arbitration, then the whole purpose is defeated. This is because the arbitration proceedings in such cases become just like a civil suit.

In addition to this, Arbitrators generally do not control the cross-examination. We have seen lawyers asking unnecessary and repeated questions, which eventually delays the arbitration proceeding immensely. Thus, the arbitrators must not sit as spectators when the cross-examination is taking place instead, they must control the cross-examination and should not permit questions that are based on contents and interpretation of documents.

Other issues faced during Arbitration Proceedings

The arbitration proceedings in India suffer from other difficulties such as absence of professionalism and mannerism. Arbitrators do not have dates for proceedings for months. This, in turn, leads to unnecessary delays. There is also a dire need to emphasise on the ethics and duties of Arbitrators as well as counsels.

Problems posed by the Public Sector Undertakings (PSUs)

We must focus on PSUs as most of the cases are filed by them. PSUs have a tradition of not settling and contesting till the end. The Government must direct the ministries concerned to analyse which cases should be contested and which should not be contested. For instance, if the award is a reasoned one then the same should not be challenged.

Government Interference

None of the institutions of the world including ICC, SIAC, LCIA, are Government controlled. On the other hand, the New Delhi International Arbitration Centre and Arbitration Council of India have members from the Government. Therefore, a lot will depend on the functioning of Arbitration Council of India and Government’s interference should be least in arbitration matters.

Suggestions and concluding remarks

Arbitration in India is like an unruly horse that moves forward, backward and sometimes even sideways. Undoubtedly, in the past few years, there has been a significant growth of arbitration in India. The situation has improved and now various arbitration centres have come up. These institutions are playing a significant role in strengthening arbitration in the country through their operations and are also imparting knowledge to the general public by organising number of conferences. However, we must remember that hubs are not made by getting a five-star property or by creating the infrastructure only. Making a building is not the only thing required as Delhi already has a lot of buildings. A lot will depend on the honest implementation as bringing amendments is not enough. Also, arbitration culture is required in other cities such as Kanpur, Ludhiana, Kolkata, Lucknow, etc. which are also hub of businesses. Focus should not only be on Delhi and Mumbai.

Ease of doing business, enforcement of contracts, and execution of arbitral awards are some key factors that will help in making any jurisdiction attractive for investment. Former Chief Justice of India Ranjan Gogoi, while speaking at an event organised by India Today, has highlighted the need of having a robust system to deal with commercial disputes. It is pertinent for India to adopt a pro-enforcement approach in order to increase the confidence of the foreign investors.

In cases where well-reasoned awards are passed by the Tribunal, the same should not be challenged by the parties. As officers of the court, lawyers should not resist arbitration or file frivolous challenges to the award to resist enforcement. Effective enforcement of awards would help in making arbitration more robust in India. This, in turn, will help in attracting more investment, which will prove to be beneficial for the economy as a whole. Indian economy is largely dependent on agriculture. It is important to get more investments in other sectors as well such as exports, infrastructure, etc.

There is lack of awareness in the general public about choosing arbitration over litigation. The reason is that institutions in India do not proactively hold conferences like SIAC and ICC. Thus, more awareness campaigns should be introduced to educate the society at large. Additionally, the students, practitioners and other members of the legal fraternity should be trained and encouraged to step in as full-time arbitration lawyers. Apart from this, less judicial interference is required. We should also look at the possibility of welcoming foreign lawyers to come and do arbitrations in India.

* Principal Associate at Advani & Co.

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

[2] 2019 SCC OnLine SC 1520.

[3] (2003) 5 SCC 705.

Case BriefsHigh Courts

Delhi High Court: Pratibha M. Singh, J., observed that:

Complaints of sexual harassment are initially filed with enormous reluctance. The power of the ICC to hold the enquiry and give a report ought to be within the scheme and the four corners of the statute itself.

In the instant petition, recommendations of the Internal Complaints Committee have been challenged as given in the report as well as further action taken by the Punjab National Bank on the basis of ICC’s report.

A complaint was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 against respondent 3 who was working as the General Manager of respondent 1 Bank, in Mumbai.

The above-stated complaint was referred to the ICC, which was constituted by the Bank, consisting of four members.

What was the analysis of ICC?

ICC came to the conclusion that the relationship between the petitioner and respondent 3 was based on personal grounds with mutual consent, and that the allegations of sexual, emotional and mental harassment were not substantiated by the petitioner.

Hence, the complaint against respondent 3 was rejected.

ICC made additional observations that the behaviour of the parties had been inappropriate and unbecoming of officers/employees of the Bank and accordingly recommended the Competent Authority to take suitable action against the petitioner and the respondent 3.

Based on the above report, a charge sheet was issued against the petitioner under Regulation 6 of the Punjab National bank Officer Employees’ (Discipline & Appeal) Regulations, 1977, hence in view of the same, petitioner has filed the instant petition.

Single Judge in his order had stayed the ICC’s recommendation and the consequent charge-sheet.

Later during the pendency of the petition, the petitioner became eligible to be considered for promotion. Petitioner stated that her promotion was being held up in view of the pendency of the present petition.

Thereafter, the Bank was directed to independently consider the petitioner’s candidature for promotion, however, it was directed that the same shall not be given effect to and kept in a sealed cover. Due to the lockdown, the matter could not be heard.

Analysis and Decision

Bench on perusal of the facts and circumstances of the matter raised the question as to whether the ICC could have, in the first place, made a recommendation directing the competent authority to take action?

ICC in its report had concluded that the allegations were not substantiated and the complaint was not made out. and further added remarks in regard to the conduct of the petitioner and respondent.

High Court made an observation in light of Section 13 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, that is the allegations of sexual harassment or any other form of harassment, as contemplated under the Act, are not proved before the ICC, the ICC can only recommend the employer to not take any action in the particular matter.

In the instant case, ICC has gone beyond its statutory mandate and has made observations that both the parties indulged in inappropriate/unbecoming conduct and indiscipline action against them.

Bench held that the above-stated recommendation by the ICC was beyond jurisdiction.

Moral Policing

‘Moral Policing’ is not the job of the Management or of the ICC.

With regard to Moral Policing, Court expressed that, any consensual relationship among adults would not be the concern of the Management or of the ICC, so long as the said relationship does not affect the working and the discipline of the organisation and is not contrary to the Rules or code of conduct binding on the said employees. It is only if a complaint is made of sexual harassment under the Act that the Management can constitute the ICC to enquire into the same.

Bench in view of the above discussion found the last paragraph of ICC’s report in the instant case to be commenting on the conduct of the parties which is against the statute and hence the same was not tenable and liable to be set aside.

In view of the above position, the fact that the Petitioner has become eligible for promotion means that the Bank would accordingly offer her promotion in accordance with her seniority, performance and merit, as per the applicable service rules. [Bibha Pandey  v. Punjab National Bank,  2020 SCC OnLine Del 1639, decided on 16-12-2020]

NLU Delhi
Law School NewsMoot Court Achievements & Reports

National Law University, Delhi will be organizing the India Qualifying Rounds for the International Criminal Court Moot Court Competition from March 17-20, 2016. The problem deals with jurisdictional issues of the ICC relating to crimes against humanity and war crimes. The University and the Moot Court Committee is looking for judges for the oral rounds of the competition. If you have worked on the area and are interested in judging, please email the University at: iccmoot@nludelhi.ac.in