Recommendations on Arbitration: Justice B N Srikrishna Report 2017

Justice B N Srikrishna Report and the road map of making India hub of International Arbitration.

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Lex Resonance

Justice BN Krishna Committee

Mr. Justice B N Srikrishna, Retired Judge, Supreme Court Chairman
Mr. Justice R. V. Raveendran, Retired Judge, Supreme Court Member
Justice S. Ravindra Bhat, Judge, Delhi High Court Member
Shri K.K. Venugopal, Senior Advocate, Supreme Court Member
Sh. P.S. Narasimha, Additional Solicitor General of India Member
Ms. Indu Malhotra, Senior Counsel, Supreme Court Member
Mr. Araghya Sengupta, Director, Vidhi Centre for Legal Policy Member
Representative of Federation of Indian Chambers of Commerce and Industry (FICCI) Member
Representative of Confederation of Indian Industry (CII) Member
Secretary, Department of Legal Affairs Secretary Member

The high powered committee set up in the directions of the Prime Minister of India, Shri Narendra Modi to prepare a road map to turn India into an international hub of arbitration. The Justice BN Srikrishna Committee, set up by the Law Ministry on January 13, 2017, to suggest reforms in India’s arbitration mechanism, has recommended the reforms mentioned below. The Committee has divided its Report into three parts.

Key Recommendations

The First Part is devoted to suggesting measures to improve the overall quality and performance of arbitral institutions in India and to promote the standing of the country as preferred seat of arbitration. The Committee is also of the opinion that the National Litigation Policy (NLP) must promote arbitration in Government Contracts.

The Committee in Part II of the Report reviewed the working of ICADR working under the aegis of the Ministry of Law and Justice, Department of Legal Affairs. The Institution was set up with the objective of promoting ADR methods and providing requisite facilities for the same. The Committee has preferred for declaring the ICADR as an Institution of national importance and takeover of the Institution by a statute. The Committee is of the view that a revamped ICADR has the potential be a globally competitive institution.

As regards the role of arbitrations in matters involving the Union of India, including bilateral investment treaties (BIT) arbitrations, the Committee in Part III of the Report has inter alia recommended for creation of the post of an ‘International Law Adviser’ (ILA) who shall advise the Government and coordinate dispute resolution strategy for the Government in disputes arising out of its international law obligations, particularly disputes arising out of BITs. The Committee has emphasized that ILA may be consulted by the Department of Economic Affairs (DEA), at the time of negotiating and entering into BITs.

The key recommendations include:
  • Key amendments in the existing arbitration laws and the establishment of Arbitration Promotion Council of India (APCI) among other suggestions.
  • The recommendations include setting up a dedicated bar for arbitration and creating special arbitration benches for commercial disputes in courts.
  • The APCI will recognize professional institutes providing accreditation of arbitrators and “interact with law firms and law schools to train advocates with interest in arbitration and with a goal to create a specialist arbitration bar comprising of advocates dedicated to the field”.
  • The committee has recommended the creation of the post of an International Law Advisor (ILA) to advise the government and coordinate dispute resolution strategy for the government in disputes arising out of its international law obligations.
  • The committee has also said the department of economic affairs (DEA) should consult the ILA at the time of negotiating and entering into bilateral investment treaties.
  • Changes have been suggested in various provisions of the 2015 Amendments to the Arbitration and Conciliation Act with a view to making arbitration speedier and more efficacious and incorporate international best practices.

The Government of India has laid emphasis on making Arbitration a preferred mode for settlement of commercial disputes.

Terms of Reference

The terms of reference for the High-Level Committee are as under:

  • To analyze & review the effectiveness of present arbitration mechanism.
  • To review the facilities, resources, funding, and manpower of existing ADR institutions.
  • To review the working of the institutions funded by the Government of India for arbitration purposes.
  • To assess skill gaps in ADR and allied institutions for both national and international arbitration.
  • To evaluate information outreach and efficacy of existing legal framework for arbitration.

Based on the foregoing, to: 

  • Suggest measures for the institutionalization of arbitration mechanism, national and international, in India so as to make the country a hub of international commercial arbitration.
  • Identify amendments in other laws that are needed to encourage International Commercial Arbitration (ICA).
  • Devise an action plan for implementation of the law to ensure speedier arbitrations.
  • Recommend revision in institutional rules & regulations and funding support
  • Advise empanelment of national and international arbitrators for time bound arbitral proceedings.
  • Suggest road map for further strengthening of research and development impacting the domain.
  • Enlist requisite steps for augmenting skill sets and professional manpower buildup for the sector.
  • Recommend measures to make arbitration more widely available in curricula and study materials.
  • Focus on the role of arbitrations in matters involving the Union of India, including bilateral investment treaties (BIT) arbitrations and make recommendations where necessary.
  • Evolving an efficient arbitration ecosystem for expeditious resolution of International and Domestic Commercial disputes.

The Committee was to submit its report within a period of 90 (ninety) days. Bottom of Form

Notice for the12th Qualifying Examination for Indian Nationals Holding Foreign Law Degrees

Legal System Update:

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Date of Notification: 25/05/2017

The 12th qualifying examination for Indian nationals/citizens holding foreign law degrees is scheduled to be held from 26th June 2017 to 1st July 2017 at the premises of the Bar Council of India at 21, Rouse Avenue Institutional Area, New Delhi

It shall comprise 6 papers of 100 marks, containing subjective questions spread over three parts viz. A, B, and C

Part A will have six questions in which there will be an option to answer any five questions out of the six questions. Each question shall carry 5 marks for the correct answer. Thus Part A shall be of (5X5 marks); 25 marks in all.

Part B shall carry four questions, with an option to answer any three questions. Each question shall carry 15 marks for the correct answer. Thus Part B shall be of (15X3 marks); 45 marks in all.

Part C shall have two questions out of which any one question is required to be answered. Each question shall carry 30 marks for the correct answer. Thus Part C shall be of (1X30 marks).

The examination shall be held from 11.00 AM to 2.00 PM daily between 26/6/2017 to 01/07/2017.

The syllabus and schedule of papers is as follows:

26/6/ 2017 Constitution of India
27/6/ 2017 Contract Law & Negotiable Instruments Act
28/6/ 2017 Company Law
29/6/ 2017 Civil Procedure Code and Limitation Act
30/6/2017 Criminal Procedure Code
01/7/2017 Indian Legal Profession and Code of Ethics

Please Note: The hall/admit cards for the candidates giving the qualifying exam will be issued in due course with further relevant information.

Information Curtsey: Bar Council of India

Please Note: For any further information and confirmation of this notification only with the Bar Council of India Website. The information in this regard on Bar Council of India website will be treated as final. 

Legal News Update from Ministries 2017

Legal updates from various Ministries of India.

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1A. Cabinet approves Protocol amending the  Convention between India and Portugal for the avoidance of double taxation (April 19, 2017) The Union Cabinet chaired by Prime Minister of India has approved the signing of the Protocol for amending the Convention between India and Portugal for the avoidance of double taxation. The Protocol will also ensure prevention of fiscal evasion with respect to taxes on income.  It further said that once the protocol enters into force, both India and Portugal would be able to exchange tax-related information, which will help tax authorities of both countries to curb tax evasion.  This Convention was in force since April 30, 2000. The Convention was applying to following categories mentioned below. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political or administrative sub-divisions or local authorities, irrespective of the manner in which they are levied.

modi cabinet 2014

This Convention was in force since April 30, 2000. The Convention was applying to following categories mentioned below. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political or administrative sub-divisions or local authorities, irrespective of the manner in which they are levied.

(a) This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.

(b) There shall be regarded as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the amounts of wages or salaries paid by enterprises.

(c) The existing taxes to which this Convention shall apply are in particular:

In the case of Portuguese Republic:

(i ) Personal income-tax
(ii ) Corporate Income-tax ;
(iii ) Local surtax on corporate income-tax;

In the case of Republic of India, income tax including any surcharge thereon.

The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes.

1B. An Agreement on Social Security (SSA) between India and Portugal was already signed on 4th March 2013 in New Delhi. On February 7,  2017, Portugal on completion of the relevant constitutional and legal formalities conveyed to the Indian side that it is ready to bring the SSA into force. Accordingly, the SSA between India and Portugal would come into force on 8th May 2017.

The SSA with Portugal will provide the following benefits to Indian nationals working in Portugal:

  • For short term contract, up to 5 years, no social security contribution would need to be paid under the Portuguese law by the detached workers provided they continue to make social security payments in India. The above benefits shall be available even when the Indian company sends its employees to the Republic of Portugal from a third country.
  • Indian workers shall be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Portugal. Self-employed Indians in Portugal would also be entitled to the export of social security benefit on their relocation to India.
  • The period of contribution in one contracting state will be added to the period of contribution in the second contracting state for determining the eligibility for social security benefits.

1C. India and Tunisi

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Screen Shot 2017-05-07 at 7.00.18 PMThe Ministry has provided for the incorporation of a company in one day with following features outlined.

REDUCTION IN PROCEDURES: Five Procedures for Starting a Business are now integrated and can be done simultaneously in One step. Using the newly launched integrated e-Form SPICe, stakeholders now apply for Company Name, Company Incorporation, DIN of the directors, PAN and TAN for the newly incorporated company, and avail all FIVE services simultaneously. The requirement of a company seal has also been removed vide Company (Amendment) Act, 2015.

REDUCTION IN COST/FEES: The fee for incorporation (of the integrated e-Form SPICe /INC-32) has been reduced from INR 2000 to INR 500. The cost incurred by a company for company seal is also eliminated, as the requirement for a company seal has been removed vide amendment to the Companies Act, 2013.

REDUCTION IN TIME: The time taken for processing company incorporation applications has been reduced drastically from between 5 to 15 working days in June 2014, to an average of 0.6 working days in March 2017. Similarly, the processing time for name availability applications has been brought down significantly from between 5 to 6 working days in June 2014, to an average of 0.4 days in March 2017. In addition, more than 90% applications are being approved within 1 working day.


jagologo (1)Service Charge levied by Resturants: Clarification issued by Ministry. Payment of service charge with the hotel bills is not uncommon. Many complaints were raised related to it and hence the Ministry has issued following press release on the issue

13. MOCA


1.  Draft of National Water Framework Bill, 2016

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2. Model Bill for the Conservation, Protection, Regulation and Management of Groundwater, 2016: Comments and suggestions are invited by the Ministry.

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1. Standard Operating Procedure for Missing Children: as provided on the Ministry of Women and Child Development Website is given below.

Screen Shot 2017-05-02 at 10.08.58 AMThe Hon’ble Supreme Court of India in Bachpan Bachao Andolan vs. Union of India (WP (Civil) 75 of 2012) on 10th May 2013 had directed formulation of a Standard Operating Procedure for cases of Missing Children. The Juvenile Justice (Care and Protection of Children) Act, 2015 under section 2 (14) (vii) includes a „Missing Child‟ as a „child in need of care of protection‟ and in Rule 92 of the “Juvenile Justice (Care and Protection of Children) Model Rules, 2016”, a procedure of inquiry regarding a missing child has been laid down.


The Department has issued notification dated March 10, 2017, for objections and suggestions on the Rights of Persons with Disabilities Rules, 2017



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Website of the Ministries

Lex Resonance: New Round Up 2017

Important news capsule from Facebook page of @indianlawwatch.

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1. Power to Punish Contempt: The power to punish for contempt vested in a Court of Record under Article 215 does not, however, extend to punishing for the contempt of a superior court. Such a power has never been recognised as an attribute of a court of record nor has the same been specifically conferred upon the High Courts under Article 215. If Supreme Court does not, despite the availability of the power vested in it, invoke the same to punish for its contempt, there is no question of a Court subordinate to the Supreme Court doing so.



1. No need to change the name in Passport for women on Marriage and Divorce:


The Prime Minister Narendra Modi has said that there was no need for a woman to change her name on the passport after marriage or divorce and that she could get the travel document by giving the names of either of her parents. There has been an important change in passport rules.  It will be up to her to have either the name of her father or mother on the passport.

2. Supreme Court declined urgent hearing in a request for a SIT Probe in Saharanpur Case (May 26, 2017): 


The Supreme Court on Friday refused an urgent hearing on a plea seeking a probe by a Special Investigation Team (SIT) into the recent incidents of caste violence in Uttar Pradesh’s Saharanpur district. A vacation bench comprising Justices L. Nageswara Rao and Navin Sinha said there was no urgency and the petition may be heard after the court’s summer break.


1. Nirbhyay Case: 


The Supreme Court upheld the death sentences of four convicts of the brutal gang-rape and murder of 23-year-old physiotherapy student. Terming the crime as brutal, barbaric and diabolic, the court said the incident shook the conscience of humanity and they deserved the extreme punishment. A bench headed by Justice Dipak Misra, while upholding the death sentence awarded to the four convicts—Pawan Kumar Gupta, Vinay Sharma, Mukesh and Akshay Kumar Singh—observed that the DNA profile developed from the blood stains obtained from the iron rods was consistent with the DNA of the victim.

2. article-2146026-13252D5E000005DC-541_224x423Three men to be sentenced for an attempt to murder charge against the Judges of Delhi Higher Judiciary: The three men were found guilty by a Delhi Court of attempting to murder three judges by hurling bricks at them in an alleged incident of road rage in 2012. The court observed that the judges while testifying, had remained unchallenged. Testimony of material witnesses of the prosecution shows that the accused became angry after seeing the sticker of ‘judge. On May 17, 2012, around 5 pm, three judges, Inderjeet Singh, Manoj Nagpal and Ajay Garg, were traveling in an official car. Two men on a bike hit it and fell, and when the driver of the car tried to talk, they got into a scuffle with him and abused him. The two men were identified as Anil Raj and Rohit, who were accused of passing threats and asking two more men to join them. The four men, it was further alleged, picked up bricks from a nearby pile and started hurling at the car, breaking its windshield. The three judges supported the testimony of the driver. While one of the judges, Garg, was hurt on his head and bled in the melee, Singh was “dragged” out of the car.  While one accused is on the run, Anil, Rohit, and Prashant were convicted on charges of attempt to murder. Anil and Rohit were also charged with offenses such as assault and causing hurt to a public servant. The court is yet to decide on the quantum of their punishment.


Paper cutout family with divorce related messages

1.  Commercial Surrogacy: Commercial surrogacy has been legal in India since 2002. In 2008, the Supreme Court of India in the Manji’s case (Japanese Baby) has held that commercial surrogacy is permitted in India with a direction to the Legislature to pass an appropriate Law governing Surrogacy in India. At present, the Surrogacy Contract between the parties and the Assisted Reproductive Technique (ART) Clinics guidelines are the guiding force. The Law Commission of India has specifically reviewed the Surrogacy Law keeping in mind that in India that India is an International Surrogacy destination.

International Surrogacy involves bilateral issues, where the laws of both the nations have to be at par/uniformity else the concerns and interests of parties involved will remain unresolved and thus, give due regard to the concerns and in order to prevent the commercialization of the Human Reproductive system, exploitation of women and the commodification of Children, the law commission has submitted its report with the relevant suggestion.

The Law Commission of India has submitted the 228th Report on “NEED FOR LEGISLATION TO REGULATE ASSISTED REPRODUCTIVE TECHNOLOGY CLINICS AS WELL AS RIGHTS AND OBLIGATIONS OF PARTIES TO A SURROGACY. The following observations had been made by the Law Commission: –

(a)  Surrogacy arrangement will continue to be governed by contract amongst parties, which will contain all the terms requiring consent of surrogate mother to bear child, agreement of her husband and other family members for the same, medical procedures of artificial insemination, reimbursement of all reasonable expenses for carrying child to full term, willingness to hand over the child born to the commissioning parent(s), etc. But such an arrangement should not be for commercial purposes.

(b) A surrogacy arrangement should provide for financial support for a surrogate child in the event of the death of the commissioning couple or individual before delivery of the child, or divorce between the intended parents and subsequent willingness of none to take delivery of the child.

(c)  A surrogacy contract should necessarily take care of life insurance cover for a surrogate mother.

(d) One of the intended parents should be a donor as well because the bond of love and affection with a child primarily emanates from the biological relationship. Also, the chances of various kinds of child abuse, which have been noticed in cases of adoptions, will be reduced. In case the intended parent is single, he or she should be a donor to be able to have a surrogate child. Otherwise, adoption is the way to have a child which is resorted to if biological (natural) parents and adoptive parents are different.

(e) The legislation itself should recognise a surrogate child to be the legitimate child of the commissioning parent(s) without there being any need for adoption or even declaration of guardian.

(f) The birth certificate of the surrogate child should contain the name(s) of the commissioning parent(s) only.

(g) The right to privacy of donor as well as a surrogate mother should be protected.

(h) Sex-selective surrogacy should be prohibited.

(i) Cases of abortions should be governed by the Medical Termination of Pregnancy Act 1971 only.

The Law Commission has strongly recommended against Commercial Surrogacy. However, this is a great step forward to the present situation.  Israel the first country in the world to implement a form of state-controlled surrogacy in which each and every contract must be approved directly by the state.

Present Law Related to Surrogacy surrogacy-law

There is a proposed legislation that aims at proper regulation and supervision of ART clinics and banks in the country. Some of the important developments include:

The government has proposed that surrogacy for foreigners in India shall not be allowed but surrogacy shall only be permissible to overseas citizens of India (OCIs), people of Indian origin (PIOs), non-resident Indians (NRIs) and any foreigner married to an Indian citizen. The eligible couple will have to produce a duly notarized agreement with the prospective Indian surrogate mother. Further, they have to produce an undertaking that they would take care of the child/children born through surrogacy.

For foreigners married to an Indian because there are other conditions to do so. The Bill makes it mandatory for the couple to be married with the marriage sustaining for at least two years. They will further need to submit a certificate, attested by the appropriate government authority of that country, conveying that the woman is unable to conceive.

The government has also said that the child born to a foreigner married to an Indian citizen by sperm or egg donation, or surrogacy in India, then the child will not be an Indian citizen, despite being born in India, and will be entitled to Overseas Citizenship of India under Section 7A of the Citizenship Act, 1955.

The ART Bill also has stern rules for surrogates. It says that any woman agreeing to act as a surrogate shall be duty-bound not to engage in any act, including unprotected sex that may harm the foetus during pregnancy and the child after birth, until the time the child is handed over to the designated commissioning couple.



1. Privacy Issue on Mobile Payments: There’s been a surge in transactions through the mobile payment channel. But are mobile payments secure? A study by the Centre for Software and IT Management (CSITM) at IIM Bangalore (IIM-B) raises significant questions on the risks associated with mobile phone-based payment systems.

The study evaluated the apps on the following six key security principles for electronic banking transactions: the potential for confidentiality breaches; the management of the transactions for subsequent repudiation; the strength of the authentication process; the data and transaction integrity procedures; the extent of access and availability of services; and the procedures for maintaining privacy of customer information.


The study found serious privacy concerns with all the services. For instance, while in many apps like Freecharge, the wallets are not directly linked to third-party vendors (such as Uber or BigBasket), apps such as Paytm allow for automatic linkage with the vendors and they can deduct amounts without the explicit consent of the user. Potential for confidentiality breaches was a problem observed in all the mobile payment methods, except USSD. A recurring security concern was that many of the apps do not automatically log the users out, and anyone having access to the phone can make financial transactions through these apps. This risk is highest if the user loses or misplaces her/his mobile phone, and higher still if the phone is unlocked or unprotected. However, apps such as iMobile, BHIM have auto-logout/session time-out features.

2. Whistleblower’s Identity: Barclays has reprimanded Chief Executive Jes Staley and will cut his bonus for attempting to uncover a whistleblower’s identity, the British bank said on Monday, dealing a blow to a man who has been in the role little over 15 months.  Barclays grants whistleblowers anonymity to prevent any retribution for their actions — in keeping with normal UK practice.  The board, which said it accepted Staley’s explanation that he was trying to protect a colleague from what he believed to be an unfair attack, will back his reappointment at the annual shareholder meeting on May 10.  Barclays’ board first heard of Staley’s attempt to identify the author of the letter in early 2017, after the issue was raised by an employee, Barclays said.

3. Insurance cover for Mental Illness: The Mental Healthcare Bill 2016, which got Lok Sabha’s nod last week, will become law once it receives Presidential assent. The Bill makes it mandatory for insurers to provide insurance to the mentally ill. Health insurers are gearing up to bring mental illness, such as depression and anxiety, under insurance cover. The progressive provision, however, may result in more expensive insurance products. While estimate shows that 5-6 percent of the population suffers from some mental health concern, a recent survey conducted by the National Institute of Mental Health and Neuro Sciences (NIMHANS) puts the figure at a much higher 13.7 percent of the adult population, of which, at least 150 million need immediate medical intervention. This vast number is likely to put pressure on the health insurance providers.

3. FDI Policy in Multi Brand:  The government today said there is no proposal under its consideration to review the foreign direct investment (FDI) policy in the multi-brand retail sector. The current foreign direct investment policy permits overseas players to hold 51 percent stake in an Indian retail company. So far, only one foreign player, Tesco, has received approval for opening stores under the multi-brand retail policy.

4. Income Tax Declaration for loan and credit card bills: All cash payments of over Rs 2 lakh for paying loans and credit card bills during the 50-day period post demonetization will have to be disclosed in the new one-page Income Tax return form. The tax department a few days back notified new Income Tax Return (ITR) forms for filing of returns for the Assessment Year 2017-18 (the financial year 2016-17). Besides providing for declaring income, exemption claimed and tax paid, the forms have a new column providing for declaration for any deposit of over Rs 2 lakh in bank accounts made during 9 November and 30 December 2016 after the old 500 and 1,000 rupee notes were demonetized. This column is also to be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period. “The column is an attempt to match the cash deposits made post demonetisation with the annual income,” he said. While all credit cards are linked to permanent account number (PAN) of the holder, almost all loans by scheduled banks are also provided on furnishing of PAN.

5.  Lenders to Reliance Communications (RCom) has placed telecom company under a strategic debt restructuring exercise (SDR).


An SDR is a debt-recovery programme under which lenders convert debt to equity and sell the business to new owners. Reserve Bank of India (RBI) rules require that banks get control of at least 51% shares in the company through debt conversion and sell the business within 18 months of initiation of SDR. However, RCom’s lenders have agreed to wait until seven months before they convert debt to equity. RCom has debts of over Rs 45,700 crore on its books and it intends to reduce this by Rs 25,000 crore through a merger of its mobile services unit with Aircel and a sale of its interest in the telecom tower business to Canada’s Brookfield. The company’s current market capitalisation is Rs 5,139 crore. This will be the largest-ever debt reduction by a company in the history of India.



1. WTO Negotiations on E-commerce: India has joined forces with Cuba to resist pressure from other members of the World Trade Organization to start negotiations on e-commerce rules. Australia, the EU, Norway, and China have stepped up their campaign to include e-commerce in the agenda for the year-end Ministerial meeting in Buenos Aires, and New Delhi is reaching out to countries that share its opposition to the move. At a recent meeting of the WTO’s goods council, India and Cuba took the stand that it was premature to discuss multilateral rule-making in e-commerce, given the digital divide among members. Several other members such as Australia, Switzerland, Norway, Brazil and Argentina, however, said that an agreement on e-commerce was necessary for the WTO to demonstrate its continued relevance.

Enormous pressure

“There is a pressure from both developed and developing countries to bring e-commerce formally on the agenda of the WTO negotiations,” the official said. “India opposes it because once discussions begin, members could try to include a lot of aspects into it, including market access. It, therefore, has to work together with like-minded countries like Cuba.” Cuba particularly took issue with suggestions to negotiate liberalization and market access in e-commerce and emphasized that there was no basis for doing so, he added. Electronic commerce was made a part of the WTO in 1998 but in a limited way. Members had agreed to give a temporary moratorium on import duties on digital transmissions. This moratorium is extended every two years. It was also decided to hold discussions on various aspects of e-commerce, but there was no understanding on negotiating rules.

The stakes in India

The e-commerce sector is extremely sensitive in India as the move to allow foreign investment into the e-retail sector has, so far, been strongly resisted by the owners of small stores who argue that it will disrupt their livelihoods. Allowing multilateral rule-making in the area could lead to political destabilization. The African countries and the least developed countries (LDCs) have not opposed discussions on e-commerce, but they insist that the focus is on the development dimension. Uganda, on behalf of the LDC Group, said that most of the proposals on the table fall outside the scope of the work program on e-commerce and that development should be the focus of e-commerce talks. South Africa, speaking on behalf of the African Group, similarly said it would like the Goods Council to take up issues that place the needs of developing countries and LDCs at its core.

2. Israel has appointed the first-ever female judge to serve in the country’s sharia court system.


The unanimous appointment of Hana Khatib, hailed by some Arab lawmakers as “historic,” was carried out by the Committee to Elect sharia judges, known as qadis, which is headed by Justice Minister Ayelet Shaked. Sharia courts in Israel deal with personal status issues for the Muslim community, such as marriage, divorce, conversion, inheritance and prevention of domestic violence. They have existed in what is now Israel since early Ottoman times and through the British Mandate and were recognized by the State of Israel upon its founding in 1948.

3. Filipino lawyer Jude Sabio filed a complaint against Filipino President Rodrigo Duterte accusing him of extrajudicial killings during his nationwide anti-drugs crackdown.


The complaint was filed before the International Criminal Court (ICC) and asks the court to prosecute Duterte over his involvement in the Davao Death Squad. In an accompanying statement, Sabio accused the Duterte of “repeatedly, unchangingly and continuously” committing extrajudicial executions from his term as Mayor of Davao City through to his current presidency. Sabio is asking the ICC to charge Duterte and 11 senior government officials with crimes against humanity and to issue an arrest warrant for them. Over 8,000 people have been killed since Duterte took office last year over drug-related offenses.

4. Roman Seleznev, the son of a member of the Russian Parliament, was sentenced for hacking into more than 500 US businesses, stealing then selling millions of credit card numbers. Seleznev was sentenced to 27 years, the longest-ever sentence for such a crime, and ordered to pay nearly $170 million in restitution. US District Judge Richard Jones took no leniency on Seleznev, despite Seleznev’s pleas for mercy.


5.The Alabama Supreme Court upheld the September 2016 Court of the Judiciary decision to suspend Chief Justice Roy Moore for violation of the Cannons of Judicial Ethics by issuing orders contradicting the US Supreme Court’s recognition of same-sex marriage.

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6. A federal judge in Houston has overturned the county’s bail system for people charged with low-level crimes after finding that it disproportionately affected indigent residents and violated the Constitution.


The judge, Lee H. Rosenthal of Federal District Court, ordered Harris County to stop keeping people who have been arrested on misdemeanor charges in jail because they cannot pay bail

7.H1 B Visa:


U.S. President Donald Trump signed an executive order for tightening the rules of the H-1B visa program to stop “visa abuses.” The executive order also called upon the Departments of Labour, Justice, Homeland Security, and State to take action “against fraud and abuse of our visa programs. H1 B Visa is a non-immigrant visa in the USA under the Immigration and Nationality Act Section 101 (a) 17 (H). A bill has now been re-introduced in the House of Representatives that seeks an exemption for foreign-born persons with an American Ph.D. in science, technology, engineering or mathematics from the limits on the number of employment-based green cards and H-1B visas awarded annually.


1. Proposed Motor Vehicle Amendment Bill doubles penalty:


Lok Sabha has approved a bill for radical reforms in transport sector that will usher in multi-fold hike in fine for traffic violations, compensation of Rs. 5 lakh for grave injuries, and check bogus licences and vehicle theft. The bill, which seeks to amend nearly 30-year-old Motor Vehicle Act 1988, also calls for 100

a) The bill calls for 100 percent e-governance and will cap maximum liability for third party insurance at Rs. 10 lakh in case of death in a motor accident. The bill proposes a compensation of Rs. 5 lakh. This is not the upper limit. After getting this amount (the affected family) can withdraw the case or appeal. This (Rs 5 lakh) is being done to ensure that there are fewer court cases and immediate compensation is given. The minister also said that it would not be possible to increase the compensation in case of death to Rs.20 lakh as it would entail substantial hike in insurance premium. In the case of death in hit-and-run accidents, the bill provides for an eight-fold increase in compensation to Rs. 2 lakh.

b) The bill seeks to make services like issuance of licenses totally transparent and online and provides for punitive action against officials in case of delay in issuance of the document to eligible applicants. Under the new system, everyone will have to go to the licence issuing authority under a uniform procedure and if the licence is not issued in three days, the RTO will have to face action. A learner’s licence can be availed online sitting at home.

c) The government, he said, has already 786 black spots across the country, which are accident prone.

d) There is a provision in the bill under which if holes are found on roads, DPR designer and contractor would be held accountable.

e) The minister said that the proposal is on strengthening the network of trauma centres has also been received.

f) Euro VI emission norms, Gadkari added, would be made mandatory from April 1, 2020.

g)The bill provides for linking of driving licence and vehicle registration with Adhaar—based platform and heavy penalties for traffic violations.

h) The bill also provides for Aadhaar-based verification for grant of online services including learner’s licence. This would ensure integration of online services and also stop the creation of duplicate licences.

i) Stricter penalties have been proposed for high-risk offenses such as drunken driving, dangerous driving, overloading, non-adherence to safety norms by drivers (such as the use of seat belt, helmets).

j) The bill aims to provide for a national database of vehicles and driving licences that would help in safety and security and avoid malpractices.

k) It also provides specific timelines for processing of insurance claims. A ten-fold increase has been made in the amount of compensation awarded under a simplified process of claims disbursal wherein the family of an accident victim would get compensation of Rs. 5 lakh as a settlement within four months of the accident. Presently it takes at least four to five years for an award.

UNCITRAL: Celebrating 50 years of Rule Based Commerce

50 years is a glorious period of a journey for any organisation and of great significance if it’s for a body with uniform acceptance like UNCITRAL. The article covers some of the important highlights of the deliberation on this day.

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Commerce is driving force of the globalisation today and to make it more rules based, legal body with universal membership was need of an hour. Accordingly, recognising the need for a global platform, United Nation General Assembly in the year 1966 passed a resolution 2205 on December 17, which constituted United Nations Commission on International Trade Laws popularly known as UNCITRAL. The body is working in its area with a mandate of progressive harmonisation and modernization of commercial laws by the adoption of both legislative and non-legislative means. These includes the following areas within its ambit at present-

  • Dispute Resolution
  • International Contract Practices
  • Transport
  • Insolvency
  • Electronic Commerce
  • International Payment
  • Secure Transactions
  • Procurement
  • Sale of Goods

In order to increase these opportunities worldwide, UNCITRAL is formulating modern, fair, and harmonised rules on commercial transactions. These include:

  • Conventions, model laws and rules which are acceptable worldwide
  • Legal and legislative guides and recommendations of great practical value
  • Updated information on case law and enactments of uniform commercial law
  • Technical assistance in law reform projects
  • Regional and national seminars on uniform commercial law

In the course of the journey, UNCITRAL has emerged as the core legal body of the United Nations systems in the field of international trade law. Of recently in November 2016, the body is celebrating its 50 years. The article captures the deliberation at its 50 years.


The UNCITRAL has been given the mandate to execute the wider acceptance of existing conventions and model laws with uniformity of laws for implementation of rule-based commerce. UNCITRAL works for greater participation of the member nations and for the wider acceptance of the existing system, which includes uniform interpretation of application the model laws.

The Model Law on Arbitration which was adopted on June 21, 1985, is designed to assist States in reforming and modernising their laws on the arbitral procedure so as to take into account the particular features and needs of international commercial arbitration. It covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.

UNCITRAL working model to execute the existing model includes- Commission, Intergovernmental Cooperation, Secretariat. The UNCITRAL holds annual plenary sessions for its working of the Commission either at New York or at Vienna. The model law is a legislative text recommended for enactment into national laws. UNCITRAL model laws on International Commercial Arbitration was launched in the year 1985 while the UNCITRAL Model Law on Electronic Commerce was launched in the year 1996. Model Law on Goods Construction and Services (1994) was launched in 2011 as model law on Public Procurement.

The debates on laws take place on the floor of UNCITRAL with a consensus of all member countries or near consensus give these laws greater legitimacy to these laws.



In 2016, the journey of UNCITRAL completed its 50 years and the glorious history was marked by celebrations in Delhi, only place outside Vienna, the seat of UNCITRAL, to witness it. The momentous celebrations were spread as a two days event held at Vigyan Bhawan and the entrancing Hotel Leela Palace, New Delhi on November 28-29, 2016. The then Chief Justice of India, Justice T.S. Thakur expressed his happiness of India’s participation in UNCITRAL, right from the formative ages, since 1968.

The day witnessed the august gathering of distinguished participants from all across the globe including important legal luminaries from India. Mr Salim Moollan QC, Chair of the 44th Session of the UNCITRAL, delivered the welcome address at the inaugural session touching upon the issue of microfinance at the stage of UNCITRAL. Mr Moollan highlighted in his speech how important is the tool of microfinance which is facing challenges and how it can be a regulated without destroying the flexibility that lies at its call. To resolve the issue he highlighted, UNCITRAL came as a common answer. UNCITRAL undoubtedly has emerged as the forum to address the concerns of the commercial disputes in a coordinated manner.

The President of India, Shri Pranab Mukherjee who was the Chief Guest gave the keynote address highlighting India’s role and pro-activeness in such multilateral institutions right from its inception. The key highlights of his speech included:

  • “It is a glowing testament to India’s commitment to the rule of law that India is only one of eight countries that have been a member of UNCITRAL from its inception, and has recently been re-elected for a term of six years. India recognises that the impact of UNCITRAL has been far beyond mere facilitation of international trade. Its exemplary work over the years has provided significant thought leadership that has inspired the transformation of several domestic legal regimes to facilitate both domestic and transnational commerce and trade.”
  • “During my tenure as Commerce Minister, I led several rounds of negotiations that led to the establishment of the World Trade Organisation in 1995. The diversity of economic interests, languages, legal systems and cultures in organisations such as WTO and UNCITRAL is indeed staggering- it is, therefore, a great achievement by UNCITRAL to have created conventions and model laws which are acceptable worldwide. In addition, UNCITRAL has created practical legal and legislative guides and provided technical assistance for law reform, apart from maintaining an updated database of uniform commercial law and judicial decisions.”
  • UNCITRAL’s conventions and its model legal texts have formed the basis of new enactments in India and amendments to a wide array of our commercial legislation ranging from the Arbitration and Conciliation Act 1996, the Information Technology Act, 2000 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to name but a few.”

The then Chief Justice of India, Justice T.S. Thakur continued the momentum of celebration in his own style of eloquence by sharing the joy of golden jubilee celebration as a commemorative moment for any institution and highlighted how it was more so special when the same is a subsidiary body of United Nation General Assembly.

Senior Advocate, Fali S. Nariman, Chairman UNCC India needs special mention for the vote of thanks conveyed who in his own way touched the heart of every audience with the joy of celebration of the delegates with humour and thoughts vital to be addressed for the day. Judge Kurian Joesph, Supreme Court of India was amongst other important dignitaries of the august gathering. A stellar list of speakers descended down to not only highlight the importance of the day but also to the deliberate way ahead in fostering the trade between the countries via rule based commerce.

The reflection of the day revolved around sharing of views towards attainment for rule-based commerce including full multilateral forethoughts as sin qua non-for achieving global standards. India’s role was emphasised as pivotal in the world centre stage as India’s economic growth in the last two decades has attracted immense investor interest. India’s FDI inflows stood at US$ 44 billion in 2015 making it the 10th largest receipt of such inflows according to the World Investment Report 2016 issued by UNCTAD. The President of India rightly underlined that it is a blooming demonstration to India’s commitment to the rule of law for being only one of the eight countries that have been a member of UNCITRAL from its inception and has recently been re-elected for a term of six years.

Another important focus of the confab was stress on harmonisation of International trade laws taken up especially by H.E. Sheikha Haya Rasheed, Former President, 61st Session of UN General Assembly. She deliberated on New York Convention on Recognition and Enforcement of the arbitral award was adopted in 1958 as the first significance of International legislation. Further, highlighted that Model Law constituted one-quarter of the global adoption is another successful effort of the UN. She also mentioned about the adoption of Model laws by the Bahrain and the  Bahrain Chamber of Dispute Resolution. She rightly stressed that globalisation has a symbolic relationship with the adoption of uniform laws. The legal culture of countries should stress upon uniformity and the mere usage of the uniformity will not achieve the goal if the local laws are adopted by the lawyers pertains to the local procedures. It is heartening to note that UNCITRAL is taking the lead in furthering debate and harmonisation in the sphere of investor-state dispute settlement.

UNCITRAL proceeds with a vision to take the world along with it. The UNCITRAL’s objectives stand integrated with the realms of different legal regimes in the world, i.e. civil law and common law amongst others. The harmonious nature of deliberation and consolidation into principle represents one of the surest protections of international peace and security. In the field of international trade and commercial law, it continues to deliver the same with wide recognition and acceptance.

UNCITRAL is the core legal body of United Nations and there is a need to find legitimate legal standards acceptable to all member countries. The conference debated both on the arbitrability of disputes in a well-crafted session chaired by Senior Advocate, Gaurab Banerji, Supreme Court of India. The then Chief Justice of India rightly applauded UNCITRAL Secretariat’s effort for establishing a system for collecting and disseminating information on court decisions and arbitral awards relating to the Conventions and Model Laws-CLOUT (Case Laws on UNCITRAL Laws).

There were discussions that took off on finding solutions of evolving multilateral Investment Courts and on harmonisation issue yet it needs further deliberation for finding a permanent place in model laws. Overall, the celebration was towards adopting a greater rule based commerce by ironing out the differences in laws for better harmonisation.

In day 2 of the Conference: Emerging legal standards in the electronic commerce across the border along with cross-border insolvency along with reform and legitimacy in investment arbitration was discussed. One of the speakers highlighted that the establishment of the Model Law in electronic commerce acceptable to different legal, social and economic system can help in the harmonisation of economic laws. These laws are applicable to any kind of data message for electronic commercial activity. UNESCAP initiative is going on for paperless discussion. The rule and implementation process are being discussed in the UN Expert Group partnered by UNCITRAL. The recognition of electronically signed document can give a great push to the electronic commerce.  By illustration it was highlighted how demurrage charges are paid by the importer at a port as the documents say from a country like Nepal may take a time to reach the port town through courier. In such a scenario, the electronic commerce can be a great rescue.

Just for information of our readers as the reference to it was made in speech, the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT) is a community of knowledge and practice for experts from developing countries and transition economies from Asia and the Pacific involved in the implementation of electronic trade systems and trade facilitation. It was established by the UN ESCAP and UNECE in 2009. This body is working on the establishment of the paperless trade.

The concluding session was graced by presence of Sujata Mehta (Secretary, Ministry of External Affairs); Timothy Leay (Principal Legal Officer, Secretariat UNCITRAL) and Adwaita Sharma (Secretary, UNCC India).

© Indian Law Watch


Undoubtedly, UNCITRAL Model laws are great facilitator of rule based commerce which are not only integrating economies but also connecting them socially with trade as vehicle. There are important issues to address at present like multilateral investment court, cross border insolvency, electronic commerce with passage of time. Commerce is not only prominent driving force but is also an important engine of globalisation, and more it is rule based, the more it brings closer world economies.


  • UNCITRAL Website
  • UNNExt Website

Arbitration Judgments: Reliance Industries

Applicability of Part-I of the Arbitration and Conciliation Act, 1996 is still leading to litigations despite the rulings in BALCO judgment. Reliance Industries judgment again sieves the fine line between applicability of the Part 1 and a frivolous litigation.

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A.  Background

The present article arises out of a Special Leave Petition, Union of India vs. Reliance Industries[1] (“Judgment-II”) whereby the Delhi High Court had dismissed an application filed under Section 14[2] of the Arbitration and the Conciliation Act, 1996 (“Act”), on the ground that the apex Court’s judgment dated 28.5.2014/Judgment-I referred below having held that Part-I of the Arbitration Act, 1996 is not applicable, such petition filed under Section 14 of the Act would not be maintainable. A review petition against the said judgment dated 28.5.2014 and a curative petition filed thereafter was also dismissed. This case is arising out of sequel from judgment Reliance Industries Ltd. another vs. Union of India[3] (“Judgment-I”) dated 28.05.2015 in which the court has discussed at length the maintainability of petition under the section 34 of the Act in proceeding outside India wherein substantive law was Indian but the juridicial seat and the law governing the arbitration agreement is English. The article outlines the judgment with focus on underlying arbitration agreement to give legal counsel a thought while drafting such agreements.

 B. Facts of the Judgment-I

Two Production Sharing Contracts (“PSC”) were executed in this matter. The relevant clauses of the contracts insofar as they are applicable to the present controversy are as follows:

  • Applicable law Governing Contract/ Substantive Law: The agreement stated that the contract would be governed and interpreted in accordance with the laws of India.
  • Law relating to Arbitration Proceedings: The proceedings shall be conducted in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) of 1985 except that in the event of any conflict between these rules and the provisions of this Article 33 (Sole Expert, Conciliation and Arbitration) shall govern.
  • Venue of the Conciliation or Arbitration/ Law of Seat: Unless the Parties otherwise agree, the venue shall be London, England and shall be conducted in English Language.
  • Arbitration agreement: It is contained in Article 33 of the agreement shall be governed by the laws of England.

Since, certain disputes and differences arose between the Union of India and Reliance Industries Limited sometime in 2010, the Union of India invoked the arbitration clause and appointed Mr. Peter Leaver, QC as Arbitrator. Reliance Industries Limited appointed Justice B.P. Jeevan Reddy as Arbitrator and Mr. Christopher Lau SC was appointed as Chairman of the Tribunal. On 14.9.2011, the Union of India, Reliance Industries Limited and BG Exploration and Production India Limited, agreed to change the seat of arbitration to London, England and a final partial consent award was made and duly signed by the parties to this effect. On 12.9.2012, the Arbitral Tribunal passed a final partial award, which became the subject matter of a Section 34 of the Act petition filed in the Delhi High Court by the Union of India.

The essential dispute between the parties is as to whether Part I of the Arbitration Act, 1996 would be applicable to the arbitration agreement irrespective of the fact that the seat of arbitration is outside India. To find a conclusive answer to the issue as to whether applicability of Part I of the Arbitration Act, 1996 has been excluded, it would be necessary to discover the intention of the parties. The Delhi High Court by a judgment and order dated 22.3.2013 decided that the said petition filed under Section 34 was maintainable. The apex Court in a detailed judgment dated 28.5.2014/Judgment- I reversed the judgment of the Delhi High Court.

B. Analysis of the Judgment-I

1. For Applicability of Part-I: Since the ratio of law laid down in Balco vs. Kaiser Aluminium Technical Services Inc[4]. has been made prospective in operation by the Constitution Bench itself, this Court is bound by the decision rendered in Bhatia International [5]. According to which:

“32. To conclude, we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply.”

INTERPRETATION 1: As per Bhatia International judgment (Supra) in International Commercial Arbitration Part I of the Act would apply in appropriate cases:

(i) Arbitration held in India: The Part I of the Agreement would be compulsorily applicable and parties to the agreement are free to deviate only to the extent permitted by derogable provisions of the Act.

(ii) International Commercial Arbitration: Unless parties by agreement both expressed and implied exclude all or any of the provisions.   In that case, the chosen rules would apply. But contrary provisions would not apply.

It is also important to highlight what all is covered under Part I of the Act- General Provisions, Arbitration Agreement, Composition of Arbitral Tribunal, Jurisdiction of Arbitral Tribunal, Conduct of Arbitral Proceedings, Making of arbitral award and termination of arbitration proceedings, Recourse against arbitral proceedings, Finality of arbitration award, Appeal, Limitation and jurisdiction.

2. Analysis of PSC to determine the intention of the Parties: It must, immediately, be noticed that Articles 32.1 and 32.2 deal with the applicable law and the language of the contract as is evident from the heading of the article which is “Applicable law and language of the contract”.

  • General Analysis: The two articles do not overlap-one (Article 32) deals with the proper law of the contract, the other (Article 33) deals with ADR i.e. consultations between the parties; conciliation; reference to a sole expert and ultimately arbitration. Under Article 33, at first efforts should be made by the parties to settle the disputes among themselves (Article 33.1). If these efforts fail, the parties by agreement shall refer the dispute to a sole expert (Article 33.2).
  • Article 33.4 of the Agreement: The provision with regard to constitution of the Arbitral Tribunal provides that the Arbitral Tribunal shall consist of three arbitrators. This article also provides that each party shall appoint one arbitrator. The arbitrators appointed by the parties shall appoint the third arbitrator.
  • Article 33.5 of the Agreement: In case, the procedure under Article 33.4 fails, the aggrieved party can approach the Permanent Court of Arbitration at The Hague for appointment of an arbitrator.
  • Further, in case the two arbitrators fail to make the appointment of the third arbitrator within 30 days of the appointment of the second arbitrator, again the Secretary General of the Permanent Court of Arbitration at The Hague may, at the request of either party appoint the third arbitrator.

INTERPRETATION 2: In the face of the above discussion, the court held that it is difficult to appreciate the submission of the respondent Union of India that the Part I of the Act would be applicable to the arbitration proceedings. In the event, the Union of India intended to ensure that the Act shall apply to the arbitration proceedings, Article 33.5 of the agreement should have provided that in default of a party appointing its arbitrator, such arbitrator may, at the request of the first party be appointed by the Chief Justice of India or any person or institution designated by him. Thus, the Permanent Court of Arbitration at the Hague can be approached for the appointment of the arbitrator, in case of default by any of the parties. This, in Court’s opinion, it is a strong indication that the parties excluded applicability of the Act by consensus. Further, the arbitration proceedings are to be conducted in accordance with the UNCITRAL Rules, 1976 as in Article 33.9. It is specifically provided that the right to arbitrate disputes and claims under this contract shall survive the termination of this contract Article 33.10. The article which provides the basis of the controversy herein is Article 33.12 which provides that venue of the arbitration shall be London and that the arbitration agreement shall be governed by the laws of England. It appears, as observed earlier, that by a final partial consent award, the parties have agreed that the juridical seat (or legal place of arbitration) for the purposes of arbitration initiated under the claimants’ notice of arbitration dated 16-12-2010 shall be London, England.

In opinion of the court, the meaningful reading of the aforesaid articles of the PSC, that the proper law of the contract is Indian law; proper law of the arbitration agreement is the law of England.

3.  Seat of Arbitration and Exclusive Jurisdiction Clause: The Court went on to state in paragraph 45 that it is too late in the day to contend that the seat of arbitration is not analogous/similar to an exclusive jurisdiction clause and then went on to hold as follows:

In our opinion, these observations in Sulamerica case[6] are fully applicable to the facts and circumstances of this case. The conclusion reached by the High Court would lead to the chaotic situation where the parties would be left rushing between India and England for redressal of their grievances. The provisions of Part I of the Act (Indian) are necessarily excluded; being wholly inconsistent with the arbitration agreement, which provides “that arbitration agreement shall be governed by English law”. Thus the remedy for the respondent to challenge any award rendered in the arbitration proceedings would lie under the relevant provisions contained in the Act of England and Wales. Whether or not such an application would now be entertained by the courts in England is not for us to examine, it would have to be examined by the court of competent jurisdiction in England.”

INTERPRETATION 3: There are three important law of arbitration clause-Curial Law, Substantive law and law relating conducting arbitration proceedings.

  • The court held that it is unable to agree with the submission that since the issues involved herein relate to the public policy of India, Part I of the Act would be applicable.
  • Applicability of Part I of the Act is not dependent on the nature of challenge to the award. Whether or not the award is challenged on the ground of public policy, it would have to satisfy the pre-condition that 1996 Act is applicable to the arbitration agreement.
  • In the opinion of the apex court, the High Court has committed a jurisdictional error in holding that the provisions contained in Article 33.12 are relevant only for the determination of the curial law[7] applicable to the proceedings. The parties by agreement have provided that the juridical seat of the arbitration shall be in London. Necessary amendment has also been made in the PSCs, as recorded by the final partial consent award dated 14-9-2011. It is noteworthy that the Act does not define or mention juridical seat. The term “juridical seat” on the other hand is specifically defined in Section 3 of the English Arbitration Act. Therefore, the parties understood that the arbitration law of England would be applicable to the arbitration agreement. In view of the aforesaid, we are unable to uphold the conclusion arrived at by the Delhi High Court that the applicability of the 1996 Act to the arbitration agreement in the present case has not been excluded.

In view of the above, the Apex Court held that the petition filed by the Union of India under section 34 of the Act in the Delhi High Court is not maintainable. The Hon’ble Court overruled and set aside the conclusion of the High Court that, even though the arbitration agreement would be governed by the laws of England and that the juridical seat[8] of arbitration would be in London, Part I of the Arbitration Act would still be applicable as the laws governing the substantive contract are Indian laws. In the event a final award is made against the respondent, the enforceability of the same in India can be resisted on the ground of public policy. The conclusion of the High Court that in the event, the award is sought to be enforced outside India, it would leave the Indian party remediless is without any basis as the parties have consensually provided that the arbitration agreement will be governed by the English law.

Therefore, the remedy against the award will have to be sought in England, where the juridical seat is located. However, the court accepted the submission of the appellant that since the substantive law governing the contract is Indian law, even the courts in England, in case the arbitrability is challenged, will have to decide the issue by applying Indian law viz. the principle of public policy, etc. as it prevails in Indian law.

C.  Analysis of Judgment-II

1.  Background:  The Judgment-II is sequel to the Judgment-I and is arising out of section 14 petition filed under the Act, therefore facts need not be repeated. However, the discussion involves mention that prior to the 1996 Act, three Acts governed the law of Arbitration in India:

  • The Arbitration (Protocol and Convention) Act, 1937, which gave effect to the Geneva Convention,
  • The Arbitration Act, 1940, which dealt with domestic awards, and;
  • The Foreign Awards (Recognition and Enforcement) Act, 1961 that gave effect to the New York Convention of 1958 and which dealt with challenges to awards made which were foreign awards. 

The Judgment-II throw light on history of doctrine of concurrent jurisdiction discussed below.

2.Recognition of Concurrent Jurisdiction but Applicability of Part I on the basis of Substantive Law of Arbitration: In National Power Company vs. Singer Company[9], this Court while construing Section 9(b) of the Foreign Awards Act held that where an arbitration agreement was governed by the law of India, the Arbitration Act, 1940 alone would apply and not the Foreign Awards Act. The arbitration clause in Singer’s case read as follows:

“Clause 27 of the General Terms deals with arbitration sub-clause 7 of the said clause deals with arbitration in respect of a foreign contractor. The provision says:

27.7 In the event of foreign contractor, the arbitration shall be conducted by three arbitrators, one each to be nominated by the owner and the contractor and the third to be named by the President of the International Chamber of Commerce, Paris. Save, as above all rules of conciliation and arbitration of the International Chamber of Commerce shall apply to such arbitrations. The arbitration shall be conducted at such places as the arbitrators may determine.”

In respect of an Indian contractor, sub-clause 6.2 of Clause 27 says that the arbitration shall be conducted at New Delhi in accordance with the provisions of the Arbitration Act, 1940. It reads: “27.6.2 The arbitration shall be conducted in accordance with the provisions of the Indian Arbitration Act, 1940 or any statutory modification thereof. The venue of arbitration shall be New Delhi, India.”

The General Terms further provide: “The contract shall in all respects be construed and governed according to Indian laws.” (32.3).

The formal agreements, which the parties executed on August 17, 1982, contain a specific provision for settlement of disputes.

Article 4.1 provides:“4.1. Settlement of Disputes: It is specifically agreed by and between the parties that all the differences or disputes arising out of the contract or touching the subject-matter of the contract, shall be decided by process of settlement and arbitration as specified in Clauses 26.0 and 27.0 excluding 27.6.1 and 27.6.2., of the General Conditions of the Contract.” [para 4]

Notwithstanding that the award in that case was a foreign award, this Court held that since the substantive law of the contract was Indian law and since the arbitration clause was part of the contract, the arbitration clause would be governed by Indian law and not by the Rules of the International Chamber of Commerce. This being the case, it was held that the mere fact that the venue chosen by the ICC Court for the conduct of the arbitration proceeding was London does not exclude the operation of the Act, which dealt with domestic awards i.e. the Act of 1940.

In a significant sentence, the Court went on to hold:

“…Nevertheless, the jurisdiction exercisable by the English courts and the applicability of the laws of that country in procedural matters must be viewed as concurrent and consistent with the jurisdiction of the competent Indian courts and the operation of Indian laws in all matters concerning arbitration insofar as the main contract as well as that which is contained in the arbitration clause are governed by the laws of India.” [at para 53]

3. Doctrine of Concurrent Jurisdiction: It can be seen that this Court in Singer’s case (Supra) did not give effect to the difference between the substantive law of the contract and the law that governed the arbitration. Therefore, since a construction of Section 9(b) of the Foreign Awards Act led to the aforesaid situation and led to the doctrine of concurrent jurisdiction, the 1996 Act, while enacting Section 9 (a) of the repealed Foreign, 1961, in Section 51 thereof, was careful enough to omit Section 9 (b) of the 1961 Act which, as stated herein above, excluded the Foreign Awards Act from applying to any award made on arbitration agreements governed by the law of India. This being the case, the theory of concurrent jurisdiction was expressly given a go-by with the dropping of Section 9 (b) of the Foreign Awards Act, while enacting Part-II of the Arbitration Act, 1996, which repealed all the three earlier laws and put the law of arbitration into one statute, albeit in four different parts. However, the apex Court Bhatia International (Supra) revived this doctrine of concurrent jurisdiction by holding, in paragraph 32, that even where arbitrations are held outside India, unless the parties agree to exclude the application of Part-I of the Act either expressly or by necessary implication, the courts in India will exercise concurrent jurisdiction with the court in the country in which the foreign award was made.

Bhatia International was in the context of a Section 9 application made under Part I of the 1996 Act by the respondent in that case for interim orders to safeguard the assets of the Indian company in case a foreign award was to be executed in India against it. The reductio ad absurdum (a common argument to show that a statement is true and that its denial produces absurd results) of this doctrine of concurrent jurisdiction came to be felt in a most poignant form in the judgment of Venture Global Engineering vs. Satyam Computer Services Ltd. & Anr.[10]., by which this Court held that a foreign award would also be considered as a domestic award and the challenge procedure provided in Section 34 of the Part-I of the Act of 1996 would therefore apply. This led to a situation where the foreign award could be challenged in the country in which it is made; it could also be challenged under Part-I of the 1996 Act in India; and could be refused to be recognised and enforced under Section 48 contained in Part II of the 1996 Act.

Given this state of the law, a 5-Judge Bench of this Court in Balco Judgment (Supra), overruled both Bhatia International and Venture Global Engineering (Supra). But in so overruling these judgments, this Court went on to hold:

The judgment in Bhatia International [(2002) 4 SCC 105] was rendered by this Court on 13-3-2002. Since then, the aforesaid judgment has been followed by all the High Courts as well as by this Court on numerous occasions. In fact, the judgment in Venture Global Engineering [(2008) 4 SCC 190] has been rendered on 10-1-2008 in terms of the ratio of the decision in Bhatia International [(2002) 4 SCC 105]. Thus, in order to do complete justice, we hereby order, that the law now declared by this Court shall apply prospectively, to all the arbitration agreements executed hereafter.” [at para 197]

It will thus be seen that facts like the present case attract the Bhatia International principle of concurrent jurisdiction inasmuch as all arbitration agreements entered into before Bhatia International will govern 12.9.2012 that is the date of pronouncement of Bharat Aluminium Company’s judgment.

It is important to note that in paragraph 32 of Bhatia International itself this Court has held that Part-I of the Arbitration Act, 1996 will not apply if it has been excluded either expressly or by necessary implication. Several judgments of this Court have held that Part-I is excluded by necessary implication if it is found that on the facts of a case either the juridical seat of the arbitration is outside India or the law governing the arbitration agreement is a law other than Indian law. This is now well settled by a series of decisions of this Court Videocon Industries Ltd. vs. Union of India & Anr[11], Dozco India Pvt. Ltd. vs. Doosan Infracore Company Limited[12]; Yograj Infrastructure Limited vs. Ssang Yang Engineering and Construction Company Limited[13]the very judgment in this case reported Judgment-II and a recent judgment in Harmony Innovations Shipping Ltd. vs. Gupta Coal India Ltd. & Anr[14].

In fact, in Harmony’s case (Supra), this Court, after setting out all the aforesaid judgments, set out the arbitration clause in that case in paragraph 32 as follows:

“In view of the aforesaid propositions laid down by this Court, we are required to scan the tenor of the clauses in the agreement specifically, the arbitration clause in appropriate perspective. The said clause read as follows:

“5. If any dispute or difference should arise under this charter, general average/arbitration in London to apply, one to be appointed by each of the parties hereto, the third by the two so chosen, and their decision or that of any two of them, shall be final and binding, and this agreement may, for enforcing the same, be made a rule of Court. Said three parties to be commercial men who are the members of the London Arbitrators Association. This contract is to be governed and construed according to English Law. For disputes where total amount claim by either party does not exceed USD 50,000 the arbitration should be conducted in accordance with small claims procedure of the Page 33 33 London Maritime Arbitration Association.” [at para 32] It then held:

“Coming to the stipulations in the present arbitration clause, it is clear as day that if any dispute or difference would arise under the charter, arbitration in London to apply; that the arbitrators are to be commercial men who are members of London Arbitration Association; the contract is to be construed and governed by English Law; and that the arbitration should be conducted, if the claim is for a lesser sum, in accordance with small claims procedure of the London Maritime Arbitration Association. There is no other provision in the agreement that any other law would govern the arbitration clause.” [at para 41] “Thus, interpreting the clause in question on the bedrock of the aforesaid principles it is vivid that the intended effect is to have the seat of arbitration at London. The commercial background, the context of the contract and the circumstances of the parties and in the background in which the contract was entered into, irresistibly lead in that direction. We are not impressed by the submission that by such interpretation it will put the respondent in an advantageous position. Therefore, we think it would be appropriate to interpret the clause that it is a proper clause or substantial clause and not a curial or a procedural one by which the arbitration proceedings are to be conducted and hence, we are disposed to think that the seat of arbitration will be at London.

Having said that the implied exclusion principle stated in Bhatia International (supra) would be applicable, regard being had to the clause in the agreement, there is no need to dwell upon the contention raised pertaining to the addendum, for any interpretation placed on the said document would not make any difference to the ultimate conclusion that we have already arrived at.” [At paras 46 and 47]

It is interesting to note that even though the law governing the arbitration agreement was not specified, yet this Court held, having regard to various circumstances, that the seat of arbitration would be London and therefore, by necessary implication, the ratio of Bhatia International would not apply. The last paragraph of Bharat Aluminium’s judgment has now to be read with two caveats, both emanating from paragraph 32 of Bhatia International itself – that where the Court comes to a determination that the juridical seat is outside India or where law other than Indian law governs the arbitration agreement, Part-I of the 1996 Act would be excluded by necessary implication. Therefore, even in the cases governed by the Bhatia principle, it is only those cases in which agreements stipulate that the seat of the arbitration is in India or on whose facts a judgment cannot be reached on the seat of the arbitration as being outside India that would continue to be governed by the Bhatia principle. Also, it is only those agreements, which stipulate or can be read to stipulate that the law governing the arbitration agreement is Indian law which would continue to be governed by the Bhatia rule.

Conclusions  of Judgment II

  • The Court has already determined both that the ‘juridical seat’ of the arbitration is at London and that English law governs the arbitration agreement. This being the case, it is not open to the Union of India to argue that Part-I of the Arbitration Act, 1996 would be applicable.
  • A Section 14 application made under Part-I would consequently not be maintainable. It needs to be mentioned that its valiant attempt to reopen a question settled twice over, that is by dismissal of both a review petition and a curative petition on the very ground urged before us, must meet with the same fate. His argument citing the case of  Mathura Prasad Bajoo vs. Dossibai N.B. Jeejeebhoy (1970) 1 SCC 613, that res judicata (a matter adjudicated may not be pursed further by same parties) would not attach to questions relating to jurisdiction, would not apply in the present case as the effect of clause 34.2 of the PSC raises at best a mixed question of fact and law and not a pure question of jurisdiction unrelated to facts. Therefore, both on grounds of res judicata as well as the law laid down in the judgment dated 28.5.2014/Judgment- I, this application under Section 14 deserves to be dismissed.
  •  The court held that it is also an abuse of the process of the Court. It is only after moving under the UNCITRAL Arbitration Rules and getting an adverse judgment from the Permanent Court of Arbitration dated 10.06.2013 that the present application was filed under Section 14 of the Arbitration Act two days later i.e. on 12.6.2013. Viewed from any angle therefore, the Delhi High Court judgment is correct and consequently this Special Leave Petition is dismissed.

Conclusions of Judgment-I

  • Applicability of Part I of the Act is not dependent on the nature of challenge to the award. Whether or not the award is challenged on the ground of public policy, it would have to satisfy the pre-condition that 1996 Act is applicable to the arbitration agreement.
  • The remedy against the award will have to be sought in England, where the juridical seat is located. However, the Hon’ble Court accepted the submission of the appellant that since the substantive law governing the contract is Indian law, even the courts in England, in case the arbitrability is challenged, will have to decide the issue by applying Indian law viz. the principle of public policy, etc. as it prevails in Indian law.  Therefore, there is a co-relation between juridical seat and exclusive jurisdiction clause.


In matters where the damages is the civil remedy, matter can be referred to arbitration by choice by way of agreements between the parties. However, the seat of arbitration especially in International Commercial Arbitration has always been a reason for approaching Indian courts for remedy and giving rise to recent important precedents. The outcome of the article is that the BALCO Judgment (Supra)  will apply to all arbitration agreements entered on or after September 6, 2012. Post this date, all arbitration agreement drafted, the seat will determine the choice of curial law. For arbitration agreements prior to that date means that Part I of the 1996 Act will continue to apply to foreign-seated arbitrations with respect to arbitration agreements concluded prior to that date, unless the parties have either expressly or impliedly agreed otherwise (Bhatia International (Supra)).

[1] SLP 11396 of 2015

[2] Failure or impossibility to act-

(1) The mandate of an arbitrator shall terminate if—

(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and

(b) he withdraws from his office or the parties agree to the termination of his mandate.

(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.

[3] (2014) 7 SCC 603

[4] (2012) 9 SCC 552

[5] (2002) 4 SCC 105

[6] (2013) 1 WLR 102 : 2012 EWCA Civ 638 : 2012 WL 14764

[7] It is the law governing the arbitration proceedings.

[8] A set of mandatory rules applicable to seat

[9] (1992) 3 SCC 551

[10] (2008) 4 SCC 190

[11] (2011) 6 SCC 161

[12] (2011) 6 SCC 179

[13] (2011) 9 SCC 735)

[14] Civil Appeal No. 610 of 2015

Understanding Arbitration Amendment Bill 2015

The new arbitration amendment brings paradigm shift in conducting arbitration proceeding in India. A positive change which would help India emerge as seat of arbitration for foreign investor. Read here for all the changes introduced.

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Arbitration is the most preferred dispute resolution mechanism in today’s commercial world, however, India is fast to catch with it but is loosing its role in emerging as the seat of arbitration. The International investor is keen on choosing destinations like Singapore, London for the adjudication of disputes. Time has come for India to send a strong message to international community about the viability of India to emerge as the seat of arbitration and the recent amendment does help in sending the message. The amendment seeks to replace the ordinance and intends to make India more investor friendly with sound legal framework. The Parliament has passed the Arbitration and Conciliation (Amendment) Bill, 2015. The date of amendment coming into force is from October 23, 2015. The important changes introduced are discussed below.

A. Discussion on Amendment

2 Court

Domestic Arbitration: The Bill modifies by adding clarification that in case of a domestic arbitration the meaning of court would be principal civil court or High Court exercising original jurisdiction.

International Commercial Arbitration: In the case of international arbitration, the relevant court would only be the relevant high court.

7 Arbitration Agreement

Communication by Electronic Means: Arbitration Agreement has to be in writing which if contained by means of telecommunication including communication by electronic means.


Power to refer parties to arbitration where there is an arbitration agreement Referral for Arbitration even if Contrary Judgment exist if Arbitration Agreement is Valid: Under the Act, if any matter that is brought before a court is the subject of an arbitration agreement, parties will be referred to arbitration.  The Bill states that this power of referral is to be exercised by a court even if there is a previous court judgment to the contrary.  The Court must refer the parties to arbitration unless it thinks that a valid arbitration agreement does not exist.
9 Interim measures, etc. by Court

Grounds for Maintainability of Application under the Section: The Bill amends this provision to specify that if the Court passes such an interim order before the commencement of arbitral proceedings, the proceedings must commence within 90 days from the making of the order, or within a time specified by the Court.  Further, the Court must not accept such an application, unless it thinks that the arbitral tribunal will not be able to provide a similar remedy.

11 Appointment of Arbitrators

Substitution of the Word: The word ‘Chief Justice and the person or institution designated by him’ is substituted by the Supreme Court as the case may be, High Court or an institution designated by it in Section 11 (4) (5) and (6).

Confine the Argument to Valid Arbitration Agreement: The Bill states that, at this stage, the Court must confine itself to the examination of the existence of a valid arbitration agreement. An application for an appointment of arbitrator has to be disposed within period of sixty days of service of notice to the opposite party.

11A Power of Central Government to amend IV Schedule Amendment to IV Schedule of fees: vested with the Central Government.
12 Grounds for Challenge

The person who is appointed as an arbitrator has to make certain disclosures in writing about his impartiality and neutrality with special mention about his ability to complete the arbitration within a period of 12 months.

The Fifth Schedule would act as a guide to judge the impartiality or neutrality of the arbitrator.

The Sixth schedule provides the form for disclosure.

The arbitrator who is connected to the parties or counsel or subject matter of dispute or any of the categories in VII Schedule would be ineligible to be an arbitrator.

The parties can waive of the application of this section by express agreement after dispute.

This will not apply to proceeding before the commencement of the amendment.

14 Failure or impossibility to act

The mandate of the arbitrator would terminate and be substituted by another arbitrator if the grounds mentioned therein are satisfied.

17 Interim Measures Similar to grounds of section 9
23 Statement of Claim and Defense <>Set-off and Counter claim can be submitted if the same is within the scope of arbitration agreement.

24 Hearing and written proceedings

Oral hearing and Oral argument to be presented on day-to-day basis and no adjournments without sufficient cause.

25 Default of a Party

Including the sentence ‘Shall have discretion of right of respondent to file the reply/statement of defence as forfeited’.

28 Rules applicable to Substance of Dispute

While writing the award the terms of the contract and trade usage related to transactions to be taken into account.

29A Time Limit for Arbitral Award

Period of Making Award: Within twelve months within date on which tribunal enters into reference. The date of reference would be the date on which all the members of tribunal receive the notice.

The extension of Period of Making Award: By six months only by the parties.

Additional Fees: If the tribunal passes the award within six months from terms of reference. The additional fees as would be agreed between the parties.

Failure to Pass an Award under Extended Period: The mandate of the arbitrator would terminate and further extension would be granted only with the permission of the Court before or after the expiry of the tribunal only on grounds of sufficient cause and on terms and conditions prescribed by the court. Further, if the delay is attributable to the tribunal then the same involve reduction of fees to the extent of 5% cap per month for each month delay. The court would have power to substitute all or one of the arbitrator but the proceedings would continue from the point left with evidence or material already on record. The second tribunal if newly constituted, it would be deemed in continuation of the existing one.

Period of Disposal of Application under the Section: Sixty days from the service of notice to the Opposite Party.

29B Fast Track Procedure

Resolution of Dispute by Fast Track: Parties to an arbitration agreement agree for the same at any stage, which involves hearing without oral argument on the basis of submissions, documents and pleadings. The fast track procedure can be concluded within a period of six months from term of reference. The period for extension would be as provided in Section 29A of the amended Act.

31 Form and Content of the arbitral award The rate of interest would be higher by 2% than the current prevalent rate of interest at the time of award.
31A Cost of an Arbitration The tribunal would determine cost payable. Cost means:(i)    Fees and expenses of the arbitrator(ii)   Fees and expenses of court and witnesses(iii)   Legal Fees and Expenses

(iv) Administration Fees of Institution doing arbitration

(v)   Miscellaneous

The following factors would be taken into account for fixing any fees under the Act: Order as to payment of Cost with general rule that unsuccessful party pays to the successful party in case of any reverse order the same would come with reasons.

34 Application for setting aside arbitral award Clarification as to what amounts to conflict with public policy of India.Insertion of Subsection 2 (A) for patent illegality at the face of the award.
36 Enforcement

Substitution by new Section: The enforcement of the award would be as per the provision of Code of Civil Procedure, 1908. An application under section 34 would not render the award unenforceable unless the court grants a stay to the award.

37 Appealable Order For section 8, 9 and 34
47 Evidence

In this section and all the following sections of this Chapter, “Court” means the High Court of original jurisdiction having jurisdiction over the subject matter of the award if the same had been the subject matter of a suit.

48 Condition for Enforcement of Foreign Award

Explanation has been added for award in conflict with public policy

57 Conditions for enforcement of foreign awards

The award would be considered against the public policy if the award was made by fraud or corruption (which shall not entail review of dispute) or was in violation of section 75 or section 81 or in contravention with fundamental policy of India or is in conflict with most basic notion of the morality and justice.

 B. Schedules Introduced

Schedule IV Model Fees
Schedule V Arbitrator’s relationship with the parties and counsel, dispute etc. as per section 12 (1) (b)
Schedule VI Format for Section 12 (1) (b)
Schedule VII Arbitrator’s relationship with the parties and counsel, dispute etc. as per section 12(5) of the amending act


  • Time has been biggest factor to enable India emerge as the seat of arbitration and the amendment at least is a step in the directions.
  • The idea is to make the amendment user friendly
  • Neutrality of arbitrators is another important focus of the amendment
  • Interim measure often also adds to period of adjudication now comes with a caveat that the application would not be maintainable, if the same relief can be obtained from tribunal.
  • Rewarding the arbitrator who does his job before time.
  • Extensions to tribunal only with consent of party for six months and beyond only with permission of court and only if sufficient cause exists.
  • Important clarifications have been added
  • The amendment Act come into force on 23.10.2015 which would have impact on amendment proceedings on or after the aforesaid date.
  • Model Fees has been added which would help reduce the cost of conducting the proceedings

Interim Measures under the Indian Arbitration Act

Arbitration is most important mode of dispute resolution in commercial world. However, before or after the parties go to invoke arbitration clause, they resort to interim relief, most of the time.

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Arbitration is most important mode of dispute resolution in commercial world. However, before or after the parties go to invoke arbitration clause, they resort to interim relief, most of the time. The arbitration law in India and other UNCITRAL model law provide for interim relief measures. Indian law on arbitration also provides that in cases where the dispute is arbitrable, a party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36,can apply to a court for interim measures.This is what makes section 9,a most popular section under the Arbitration Act, 1996 “Act”. The scope of this article is deliberation on section 9 of the Act.

Grounds for seeking Interim Measures

The Act expressly provides the grounds for seeking interim relief, which are as follows:

(i) The appointment of a guardian: for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) An interim measure of protection in respect of any of the following matters,namely:

(a) The preservation, interim custody or sale of any goods, which are subject matter of the arbitration agreement;

(b) Securing the amount in dispute in the arbitration

(c) The detention, preservation or inspection of any property or thing, which is:

  • Subject-matter of the dispute in arbitration, or
  • As to which,any question may arise therein and
  • Authorizing for any of the aforesaid purposes to any person to enter upon any land or building in the possession of any party, or
  • Authorizing any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) Interim injunction or

(e) The appointment of a receiver;

(f) Such other interim measure of protection as may appear to the court to be just and convenient.

The Court shall have the same power for making orders,as it has for the purpose of, and in relation to, any proceedings before it. It is important to understand that the power provided under section-9 of the Act is not meant to frustrate the proceedings before arbitral tribunal.

Jurisdiction in Court to File an Interim measures Applications

The seat of arbitration decides the jurisdiction.If the parties to arbitration have conferred the jurisdiction to a particular court, only that court would have jurisdiction to entertain the application under section 9 of the Act.The party thereafter is not permitted to enforce the theory of cause of action by invoking Code of Civil Procedure, 1908.While deciding the jurisdiction for an application under section-9 of the Act, the court may not go into the merits of the matter.

Appeal under Section 9 Petition

The Bombay High Court in its recent judgment in Mrs. Perin Hoshang Davierwalla & Anr. v. Mr. Kobad Dorabji Davierwalla & Ors[1].has resolved the question pertaining to the appealability of an ad-interim order [an order which is operative either till the final disposal of the interim application or till the next hearing] passed under Section 9 of the Act. It has held that the appeal provisions under Section 37 of the Act include within their ambit not only an appeal, which maybe filed against an interim order passed under Section 9 of the Act but also an ad-interim order, which maybe passed by a trial court under the same provision.

Recent Judgment

Harmony Innovations Shipping Ltd. Vs. Gupta Coal India Ltd. Anr. [2]

Interim relief play very important role to contain the damage or provide relief before main relief can come.Under the Act, the application under interim relief can be provided under section 9 of the Act from the court depending upon seat of arbitration. This judgment is crucial for pre-BALCO agreements.In this matter of International Commercial Arbitration, Hon’ble Supreme Court concurred with the conclusion of the High Court on the issue but differs on the reasoning. In this case, the arbitration clause of the agreement states that the laws in England would govern the arbitration proceedings and in case the dispute exceeds the amount of USD 50,000, the arbitration would be conducted as per the small claim London Maritime Arbitration Procedure.The arbitration agreement was executed in 2010 for voyages of coal shipment belonging to the Appellant.The agreement was executed pre-BALCO and addendum to this agreement was done post BALCO. However, this addendum has not modified the agreement clause. The seat of arbitration was in London. The two issues under the consideration of the Hon’ble Court were:

(a)  Whether on the basis of construction placed on the said clause in the agreement, it can be stated that the ratio laid down by Bhatia International could not be attracted but what was laid down in Reliance Industries would be applicable?

The issue was to be tested on the parameter of the law laid down in Videocon Industries Pvt. Limited; Dozco matter; Reliance Industries Supra.The Hon’ble Court found that the arbitration would happen in London and there were ample indication to that effect. The terms of the agreement stipulated in the contract clearly states about the procedure to be followed to the extent of claim amount. In such a scenario, the doctrine of presumed intention is crystal clear that the juridical seat in this matter was London.

(b) Whether the execution of addendum would attract the principles laid down in BALCO case?

1. The Hon’ble court held that since the implied exclusion principal of Bhatia International is applicable to the said case there is no requirement of any interpretation of addendum.

Applicability of BALCO or Bhatia International in present case: The BALCO case judgment pronounced in 2012 clarified that the Bhatia International rendered in 2002 and the Venture Global Engineering passed in 2008, which repeated its ratio, has been repeatedly followed by all the High Courts as well as that the law declared by the Court under the BALCO judgment has come into force prospectively vis-à-vis agreements executed hereinafter. The cut of date to apply the ratio of the judgment is September 6, 2012.For an application under section 9 for seeking interim measures under the agreement either BALCO or Bhatia International would be applied to a matter depending upon, the date of the arbitration agreement, which is relevant to adjudicate any matter. In this matter, the arbitration agreement was of prior date and it governs both by the addendum and the principal agreement, which was executed prior to BALCO judgment. Hence, Bhatia International which states part 1 of the Act does not apply to International Commercial Arbitration would govern the agreement.

2. The very fact that the Bhatia International judgment holds that it would be open to the parties to exclude the application of the provisions of Part I by express or implied agreement,would mean that otherwise the whole of Part I would.The Supreme Court held that the implied exclusion principle as stated in Bhatia International would be applicable to the present case as the party’s intention was to have London as the juridical seat of arbitration, evidenced the parties intention to exclude the applicability of Part 1 of the Act. Thus, the ultimate finding of the Supreme Court was that though the High Court erred in applying BALCO to the facts of the instant case, it’s conclusion that ADJ had no jurisdiction, was correct.

BALCO judgment has prospectively overruled the Bhatia International judgment.

[1] Arbitration Appeal 42 of 2013
[2] SLP (C) No. 36643 of 2014