Supreme Court to reconsider Bhatia

The Hindu reports that the Supreme Court has constituted a five judge bench to reconsider the decision in Bhatia International v. Bulk Trading S.A. (Bhatia International). As we have discussed in several posts in the past, the Supreme Court's interpretation of Section 2(2) of the Arbitration and Conciliation Act, 1996 has been at the root of a chain of cases that have had severe adverse impact on the institution of arbitration in India.  This decision, by making Part I of the Act (and the powers under it, like the power to set aside an award under Section 34) applicable to arbitrations held outside India, rendered the Indian approach to arbitration extremely parochial. Some problems arising out of the decision, especially in the context of investment treaty arbitration was discussed here. Also, we had reported here how a Calcutta High Court decision following Bhatia had resulted in India being dragged into its first ever investment arbitration by an Australian investor.

The decision to reconsider Bhatia is a welcome one. Recently, the Government proposed overcoming the effects of Bhatia through legislative action. However, now the judiciary appears to be willing to clean up the mess that is its own creation.

The decision of the constitutional bench in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., which will finally decide the fate of Bhatia (and with it, the fate of arbitration in India) is eagerly awaited.

PCA Rules on Arbitration of Disputes relating to Outer Space

Earlier this month, the Permanent Court of Arbitration's ("PCA") Administrative Council adopted new rules of arbitration, called the PCA Optional Rules for Arbitration of Disputes Relating to Outer Space Activities ("Outer Space Arbitration Rules"). These Rules were formulated by the International Bureau of the PCA along with an Advisory Group of leading experts in air and space law, to address the need for specialised dispute resolution mechanisms in the field of outer space law, which is rapidly evolving. 

The Advisory Group, among other distinguished scholars, includes Indian Dr. V. S. Mani.  

Brief overview of the Rules:

 

The Outer Space Arbitration Rules are loosely based on the 2010 UNCITRAL Arbitration Rules, 

- with emphasis on the public international law element that pertains to disputes that may involve States and the use of outer space, and international practice appropriate to such disputes; 

- indicate the role of the Secretary-General and the International Bureau of the PCA; 

- provide for establishment of a specialized list of arbitrators and a list of scientific and technical experts; 

- aim to ensure confidentiality;

- emphasise flexibility and party autonomy.

The Rules are open to States, international organisations and private parties. 

The Rules provide for submission of a document agreed to by the parties, to the arbitral tribunal, summarizing and providing background to any scientific or technical issues that the parties may wish to raise in their memorials or at oral hearings. 

Standard clauses regarding statements of claim and defence and amendments thereto are present in these Rules, and the rule of Competence-Competence is spelt out in Article 23.

The tribunal is empowered to grant interim measures under Article 26. 

There are specific rules for appointing 1, 3 or 5 arbitrators to form a tribunal. Other standard provisions such as challenge to, or replacement of, an arbitrator are also present. A key time-saving provision in Article 15 is the non-repetition of hearings in case of replacement of an arbitrator. It is, however, questionable whether this is an entirely useful provision from the perspective of getting a holistic view of arguments put forth by parties. 

On the Interventionist Attitude of Indian Judiciary.

Here is an interesting post on the Kluwer Arbitration Blog on the interventionist attitude of the Judiciary in India in International Arbitrations.  The post is written by Mr.Ankit Goyal who is South Asia head of SIAC and Mr. Vivekananda N. who is the deputy South Asia head.

The post briefly traces the trend of the Indian Judiciary on its treatment to foreign awards arising from international arbitrations.  An interesting read for all our readers! 

National Seminar on Critical Issues in International Commercial Arbitration.

The following is an announcement from the “Centre for Business and Commercial Laws (CBCL)” at National Law Institute University, Bhopal  for a National Seminar on Arbitration .

The Centre for Business and Commercial Laws (CBCL) at National Law Institute University, Bhopal is pleased to announce a call for papers for the UGC sponsored National Seminar on Critical Issues in International Commercial Arbitration 2012 to be held on 3rdand 4th March, 2012.

In our endeavor to encourage scholarship in the area of Corporate Law among law students, CBCL is specifically looking forward to receiving scholarly articles on the subject of Critical Issues in International Commercial Arbitration authored by students, faculties and academicians from Indian law schools. Further, CBCL will also publish select entries in a Special Issue dedicated to International Commercial Arbitration which would contain views and opinions expressed by eminent personalities in the field of Arbitration law.

For further details, kindly visit our website here, where you can pursue our Submission Guidelines. For any other queries, feel free to contact us at: cbcl.nliu@gmail.com . Alternatively, you can also contact Albin George Thomas, Convener: (+91)989-335-4883 albin.georgethomas@gmail.com and Nikita Nehriya, Editor: (+91)999-377-6839 Nikita.nehriya@gmail.com

Supreme Court on existence of arbitration agreement

Reva Electric Car Co. P. Ltd. v. Green Mobil, decided by the Supreme Court on 25 November 2011, was an application under sections 11(4) and (6) of the Arbitration and Conciliation Act, 1996 (the "Act") for appointment of arbitrator by the Chief Justice of India ("CJI"). 

Facts

Petitioner had entered into a Memorandum of Understanding ("MoU") with Respondent for marketing of cars by Petitioner. The term of the MoU was from 25 September 2007 until December 2007, but it was extendable at the sole discretion of Petitioner in terms of clause 2 of the MoU and, according to Petitioner, was in fact extended by acts of Parties. These acts were various requests in 2008 and 2009 by Respondent for supply of cars in terms of the MoU. In September 2009, according to Petitioner, disputes arose between the Parties, with Petitioner claiming that Respondent did not have necessary resources to build Petitioner's brand, since enough cars were not sold in the Belgium region. Via email on 25 September 2009, Petitioner asked Respondent to cease marketing on behalf of Petitioner, thus constituting termination of the MoU, according to Petitioner. 

Petitioner received on 14 January 2010, a writ of summons of legal proceedings initiated by Respondent in the Commercial Court in Brussels, Belgium. Respondent claimed damages for termination of the MoU. An email from Respondent dated 15 March 2010 suggested a global settlement with Petitioner and the latter construed this as acknowledgement of the fact that the rights and obligation of both the parties were covered by the MoU, which stood duly terminated. 

On appointment of a sole arbitrator by Petitioner, for confirmation by Respondent, under the terms of the MoU, Respondent denied existence of a contractual relation between Parties on 25 September 2009. A Section 9 application was thus filed by Petitioner in Bangalore, attempting to restrain legal proceedings in Brussels. On this being granted, the present section 11 application was filed, in terms of clause 11 of the MoU. 

Contentions

Respondent claimed that the MoU expired on 31 December 2007, and claims made by Petitioner related to commercial distribution of cars, commencing in 2008 and the distribution agreement, entered into after expiry of the MoU in 2007. Respondent also contended that Petitioner had invoked arbitration proceedings only to avoid legal proceedings in Brussels, as evident from the arbitration clause being invoked after Petitioner was intimated of proceedings in Brussels. 

Petitioner, on the other hand stated that it was Respondent’s intention to avoid arbitration by starting legal proceedings in Brussels. Moreover, Petitioner submitted that irrespective of the continued existence of the MoU, the arbitration clause would survive. Further, the Court, when acting under section 11 of the Act, is required to refer disputes without in-depth examination. It must only be satisfied that the disputes fall within the ambit of the arbitration clause. 

Respondent contended that the arbitration clause in the MoU related only to the test and trial period when the MoU was subsisting. Thus, disputes pertaining to a period after this were outside the ambit of the arbitration clause and could not be referred for arbitration by the Court. 

Decision

The Court, relying on Patel Engineering, National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd., A. P. Tourism Development Corporation Ltd. v. Pampa Hotels Ltd. [(2010) 5 SCC 425], and Alva Aluminium Ltd., Bangkok v. Gabriel India Ltd., stated that while entertaining a section 11 application, the CJI was bound to decide on: 

a) The existence of an arbitration agreement; and 

b) Whether the party applying under such an agreement was a party to that agreement. 

The issues which the CJI had the option of deciding are: 

a) Whether the claim is barred by time; and 

b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection. 

Issues which are to be left for decision by the tribunal are: 

a) Whether a particular claim falls outside the scope of the arbitration clause; and 

b) Merits of any claim involved in the arbitration. 

Therefore, existence of the arbitration agreement itself is a question which must be decided by the CJI in the first instance, since without the existence of an arbitration agreement, a reference under section 11 of the Act cannot be made. 

The Court, in light of the material on record already stated above, ruled in favour of Petitioner that the MoU had been extended by actions of the parties. Therefore, the arbitration clause was in existence, and did merit appointment of arbitrators under Section 11 of the Act. The Supreme Court further observed, relying on Everest Holding Ltd. v. Shyam Kumar Shrivastava and Ors., that irrespective of continued existence of the MoU, the arbitration clause would survive. This is in view of section 16(1)(a) of the Act, which reiterates the independent existence of an arbitration clause in a contract, separate from the main contract. Invalidation of the parent contract does not automatically entail invalidation of the arbitration clause, as evident from Section 16(1)(b) of the Act. Since disputes arising between the parties clearly related to subject matter of the contract, they must be adjudicated upon, through the arbitration agreement in that contract.

Conclusion

Thus, although section 16 of the Act, incorporating the principle of Competence-Competence, empowers the arbitral tribunal to adjudicate on matters pertaining to its own jurisdiction, under Indian law it is well-settled that when the Chief Justice is approached (whether for a domestic or international arbitration) to appoint arbitrators, he holds the power of making a preliminary determination of whether there exists an arbitration agreement at all.

NLSIR Public Law Symposium

The following is an announcement from the Editorial Board of National Law School of India Review. Though the symposium is not on arbitration or related issues, we thought some of our readers may be interested in the same:

The National Law School of India Review, the flagship journal of National Law School of India University, Bangalore is pleased to present the first NLSIR Public Law Symposium to be held on 10 December, 2011 at the National Law School campus. The theme of the symposium is "Adjudication of Socio-Economic Rights by the Indian Supreme Court", an issue which has seen significant legal developments in the recent past. The symposium will be attended by renowned legal luminaries including Justice Muralidhar, Mr. T. R. Andhyarujina, Mr. Shyam Diwan, Mr. Arun Kumar Thiruvengadam, Prof. U R Rai and Prof. B B Pandey amongst others.

The discussion will be divided into two sessions. In the first session (scheduled between 10.30 A.M.-12.30 P.M.) the panel will discuss the substantive adjudication of socio-economic rights undertaken by the Supreme Court concerning questions of the ever-widening ambit of Article 21 and the content of the new rights so evolved. The changing nature of the relationship between Part III and Part IV of the Constitution due to such expansion will form an important part of the session. The second session (scheduled between 1.30 P.M.-3.30 P.M.) will focus on the manner in which the Supreme Court has enforced these rights and consider the variety of procedural innovations employed for the same, including PILs and continuing mandamus.

The registration fee for the symposium is Rs. 500 for professionals. There is no registration fee for students. All those interested are requested to register their attendance here.

For any further details regarding the symposium, please contact Krishnaprasad K.V. (Chief Editor, NLSIR) at +91-9916589670 or Ashwita Ambast (Deputy Chief Editor, NLSIR) at +91-9986478265 or email us at mail.nlsir@gmail.com.

Supreme Court on definition of an arbitration agreement

A three-judge bench of the Supreme Court, on 14 November 2011, in Powertech World Wide Limited v. Delvin International General Trading LLC, reiterated the law on existence of an arbitration agreement and also carved out an exception, in light of particular facts and circumstances of the case. 

The petitioner was an Indian company, and the respondent, incorporated in Dubai. A purchase contract entered into between the parties had the following arbitration clause: 

“Any disputes arising out of this Purchase Contract shall be settled amicably  between both the parties or through an Arbitrator in India/UAE” 

On disputes regarding payments arising between the parties, a series of letters and legal notices were exchanged. On 30 May 2008, the petitioner invoked arbitration proceedings in Mumbai, India and appointed a retired judge of the Bombay High Court as sole arbitrator. The respondent was required to concur with the above appointment or nominate another arbitrator within 30 days from receipt of the petitioner’s notice. 

Respondent’s response on 27 June 2008 requested the petitioner not to approach or adopt legal proceedings for appointment of arbitrator as telephonically respondents were instructed to suggest some other name as an arbitrator subject to petitioner’s consent. 

Receiving no response from the respondent thereafter, the petitioner filed the present petition for appointment of arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 [the "Act"], (read with section 11(12)(a), for an international commercial arbitration) on 20 March 2010. 

A question arose as to whether the arbitration clause quoted above was a binding arbitration agreement, enforceable under the Act. 

The prevailing legal position on definition of an arbitration agreement was then discussed. "Arbitration agreement" is defined in section 7 of the Act. It is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. The agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement and is mandatorily an agreement in writing. An arbitration agreement is in writing if it is contained in any of the clauses i.e. clauses (a) to (c) of Section 7(4) of the Act. 

In the case of Jagdish Chander v. Ramesh Chander and Ors., (2007) 5 SCC 719, a similar clause, which mandated that a dispute "shall be mutually decided by the partners or shall be referred for arbitration if the parties so determine", was held to be not a valid reference to arbitration. This was because there was an option given to the parties, to resort to arbitration. 

According to K. K. Modi v. K. N. Modi, (1998) 3 SCC 573, a valid arbitration agreement – 

- must contemplate that the decision of the tribunal will be binding on the parties to the agreement; 

- must contemplate that substantive rights of parties will be determined by the agreed tribunal; 

- must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal; 

- jurisdiction of the tribunal to decide the rights of parties must be derived either from the consent of the parties or from an order of the Court or from a statute, the terms of which make it clear that the process is to be an arbitration; 

- the tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towards both sides; and 

- agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law. 

Smitha Conductors v. Euro Alloys Ltd., (2001) 7 SCC 728 held that even where only certain correspondences indicated a reference to the contract containing arbitration clause for opening the letter of credit addressed to the bank, and no correspondence between the parties disagreed with terms of the contract or arbitration clause, it was a valid arbitration agreement. 

As evident from Rickmers Verwaltung GmbH v. Indian Oil Corp. Ltd., (1999) 1 SCC 1 and Shakti Bhog Foods Ltd. v. Kola Shipping Ltd., (2009) 2 SCC 134, the Court has always striven to understand the true intention of parties and whether there existed consensus ad idem. Also, in VISA International Ltd. v. Continental Resources (USA) Ltd., (2009) 2 SCC 55, where the clause in question stated: "any dispute arising out of this agreement and which cannot be settled amicably shall be finally settled in accordance with the Arbitration and Conciliation Act, 1996", the Court held that in spite of the respondent contending that the arbitration would not be cost effective and will be premature, the Court held that there was an arbitration agreement between the parties and the petitioner was entitled to a reference under Section 11 of the Act, since no party could be permitted to take advantage of inartistic drafting of an arbitration clause when clear evidence of intention to proceed for arbitration was evident from the material on record. 

In the present case, too, the Court held that there was consensus ad idem between parties to amicably settle their disputes or settle through arbitration in India or UAE. Notwithstanding the judgment in Jagdish Chander, the correspondence between parties dated 30 May 2008 and 27 June 2008 indicated that the petitioner had invoked arbitration and the respondent, not denying the existence of the arbitration clause invoked, had in fact referred to appointment of arbitrator. 

Thus, the Court in this case, enumerated an additional factor to determine existence of an arbitration agreement – apart from the terms of the clause itself, the related documents indicating the intention of parties.

Interesting News article on Arbitration in India.

Here is an interesting article in the Mint Newspaper on Arbitration in India.While the article recognises increasing use of arbitration and ADR methods, it also discusses the challenges faced by the Indian arbitration industry in a succinct manner. The article also contains data presented through pie-charts which can be viewed here. 

India-Nepal BIT.

All our readers would be familiar with Shashank who had earlier written a guest post on the Kishanganga dispute. Below is a guest post from him on the India-Nepal BIT which was recently concluded in October. This post was first published here.

During the Nepalese Prime Minister’s recent state visit to India, Nepal’s Minister for Industries and India’s Minister of Finance signed a bilateral agreement for the promotion and protection of investments between the two countries (“Nepal-India BIT”/”BIT”/”BIPPA”).

Possible Motivations

The underlying objective behind the BIT seems to be the belief that the treaty would serve as a catalyst in boosting investment flows between the two countries. India’s motivations, however, may well have been influenced by the problems faced by Indian investors in the recent past. For example, Colgate-Palmolive India was forced to shut shop and sell its Nepalese subsidiary following harassement and extortion demands by rebels and Maoists. The company claimed that the local government officials in Nepal provided little support in response to its requests for greater security. In fact, a leaked US Embassy cable from Kathmandu notes that:

“when he [the Colgate-Palmolive factory manager] told the local Chief District Officer (CDO) (the civil servant responsible for security in the district) that Colgate-Palmolive was considering closing the plant, the CDO responded, ‘Maybe you should.’"

Drawing from the Colgate-Palmolive incident, on the general climate for foreign investment in Nepal, the cable goes on to conclude:

“This is not the first time that a major high-profile foreign investor has been targeted by the Maoists. Extortion is commonplace, but many businesses choose to pay for 'security.' Those who refuse to pay, like Coca-Cola and Colgate-Palmolive, complain that they receive inadequate support from the GON [Govt. of Nepal] in protecting their security and investment. During a period of economic and political instability and declining business activity in Nepal, this does not bode well for the future of foreign investment here.”

In a region marred by security and stability concerns, considering India’s economic growth and physical proximity to Nepal, such fears may well have precipitated India’s desire for an investment agreement.

Is Nepal Warming up to the use of BITs?

Historically, Nepal has not been overly active in negotiating BITs with other states. It signed a BIT with France in 1983, followed by one with Germany in 1986, the United Kingdom in 1993, and Mauritius in 1999. This was followed by a lull, broken only by the signing of a BIT with Finland in 2009. The Nepal-India BIT makes it two treaties in less than three years. I am no expert on Nepal’s economic and trade policy and, as such, wonder if these recent BITs suggest that Nepal has come to see BITs as a means of attracting foreign investment, or, at the very least, improving its global image as a host state. Comments welcome.

Early Trouble for the BIT?

Meanwhile, the baby seems to have developed complications even before its birth (the BIT has only been signed, and not yet ratified, by the two countries). News reports indicate that a senior Nepalese lawyer, Balkrishna Neupane, has filed a writ at the Supreme Court of Nepal, challenging the the India-Nepal BIT. The gist of the challenge seems to be that the agreement is unequal and give undue benefits to India. Specifically, the report indicates that the challenge raises three issues:

“While the agreement mentions the “air space” of India, it does not mention that of Nepal, which, Neupane argues, is incorrect as Nepal seems not to have taken into account its own air space while signing the agreement. The deal, the writ contends, has given India the right of uninterrupted use of Nepali air space while Nepal clearly does not have such rights.

Similarly, the petitioner mentions that the term “republic” has been obliterated from the accord unlike in the case of India. This, Neupane affirms, might have happened either because India has not been able to take note of the changes–republican set up in Nepal–or the Nepali side could not clarify it to India.

Neupane has taken serious exception to the provision in the BIPPA that would allow Indian companies to bring in their own workers and staff. This will not create additional job opportunities, as envisaged, for the Nepalis but will have an opposite effect.

The deal is against Labour Act, which doesn’t permit non-Nepalis to work, the writ argues. The petitioner has also challenged the compensatory provision in the agreement in case the Indian companies incur non-commercial losses.”

At least one Nepalese author (Sapkota), however, suggests that the opposition to the BIT is based on “misinformation and faulty comprehension of the scope and depth of the agreement”, and is politically motivated. In his opinion:

“While the private sector has openly welcomed BIPPA, selfish political leaders are politicizing it just to make themselves heard. For instance, former Prime Minister Jhalanath Khanal rebuked the government for signing BIPPA, which he thinks is not in our national interest. He seems to be so lost in the dirty political game that he forgot what was mentioned in Economic Survey 2009/10 published by the Ministry of Finance during his tenure as PM.

It stated that “a Bilateral Investment Promotion and Protection Agreement is signed with India to promote Indian Investment in Nepal, while preparation is being made to continue such agreements with other countries as well” (page 187). This shows how poor our leaders like Khanal are in understanding economic issues and also remembering what they officially endorsed while at the helm of power. Similarly, some influential leaders have been arguing that BIPPA is against the interest of our country and the workers. Their argument is that BIPPA will increase Indian dominance and erode rights of domestic workers.

These arguments are senseless, baseless and outright illogical. If BIPPA is against our national interest, why did we not hear loud outcry of this intensity when Nepal signed BIPPA with other countries? Importantly, the self-centered leaders opposing BIPPA should explain how exactly Nepal was dominated and workers’ rights eroded by signing such agreement with five countries before it was done with India. In our investment strapped economy, more investment is definitely a good thing and is in our national interest because it will lead to more jobs, revenue and potentially stimulate growth.”

I will try to post an analysis of the BIT itself soon, but in the meanwhile would love to hear more on this from our Nepalese readers.

The text of the India-Nepal BIPPA is available here.  

Foreign awards that patently violate Indian substantive law are not enforceable: Supreme Court

Phulchand Exports Ltd. v. OOO Patriot is yet another case of a foreign award being challenged before Indian courts for non-conformity with substantive provisions of Indian law, but this time with more disastrous consequences.

The case surrounded the enforceability of an award dated October 18, 1999 (yes, it has been 12 years!) given by the International Court of Commercial Arbitration at the Chamber of Commerce and Industry of Russian Federation, Moscow in a dispute between an Indian seller and a Russian buyer. The arbitral tribunal had found that the seller was in breach and passed an award directing the seller to make partial reimbursement under a contractual clause providing for reimbursement in case of breach. The seller challenged the enforcement of the award claiming that the reimbursement clause was in nature of a penalty and hence violated Section 74 of the Indian Contract Act.

The Supreme Court on October 12th passed its judgment in the matter. It relied on ONGC v Saw Pipes to hold that an award that patently contravenes substantive laws of India will be against the public policy of India. However, the Court refused to engage in detail with the submission that the Saw Pipes judgment dealt with the definition of public policy under Section 34 of the Arbitration and Conciliation Act and there was no reason to extend the same definition to Section 48. The only observation of the Court in this regard is, "There is merit in the submission of learned senior counsel that in view of the decision of this Court in Saw Pipes Ltd., the expression `public policy of India' used in Section 48 (2)(b) has to be given wider meaning and the award could be set aside, `if it is patently illegal'."

This is extremely unfortunate as the Court has pronounced a position that can have far reaching implications without giving reasons for the same or considering submissions on this point with the due consideration they deserve. This hurry on the part of the Court to dispose off the matter has is explained by the following sentences in the judgment: "At the first blush we thought of remanding the matter to the High Court, but on a deeper thought, we decided to hear the objections relating to patent illegality in the award ourselves as the award by the Arbitral Tribunal was given as far back as on October 18, 1999 and about 12 years have elapsed since then. We thought that the issue relating to enforceability of the subject award must be brought to an end finally one way or the other." The Court went on to examine whehter the impugned award in this case was patently illegal and held it was not, allowing the enforcement of the award. Thus, the hurried decision of the Court appears to be motivated by the good intention of allowing enforcement of the award without any further delay. But just like the well intentioned judgment in Bhatia (which was motivated by the consideration that if the Court took a different stance, interim measures in support of arbitration could not be granted), this judgment will have devastating effects on the enforceability of foreign awards and the institution of arbitration as a whole.

It is well accepted in statutory interpretation that the same word, when used in different parts of the same statute carries the same meaning. But this is not so, if the context requires the word to be accorded different meanings in different parts of the same statute.

Section 34 is located in Part I and is concerned with the setting aside of awards. Section 48 is located in Part II and deals with the enforcement of awards. Great harm has already been done by Indian decisions holding that 'public policy' under Section 34 includes patent illegality and even foreign awards can be set aside for non-conformity with Indian law. While extending this definition to Section 48 too, the Court appears to have forgotten its own earlier judgment in Renusagar, which drew a clear distinction between public policy considerations in setting aside an award before a domestic court and public policy considerations while enforcing a foreign award:

"The Foreign Awards Act is, therefore, intended to reduce the time taken in recognition and enforcement of foreign arbitral awards. The New York Convention seeks to achieve this objective by dispensing with the requirement of the leave to enforce the award by the courts where the award is made and thereby avoid the problem of "double exequatue'. It also restricts the scope of enquiry before the court enforcing the award by eliminating the requirement that the award should not be contrary to the principles of the law of the country in which it is sought to be relied upon. Enlarging the field of enquiry to include public policy of the courts whose law governs the contract or of the country of place of arbitration, would run counter to the expressed intent of the legislation."

Though Renusagar decision was passed under the Foreign Awards Act, not the 1996 Act, neither the staturtory language nor the legislative intention appears to have undergone a transformation after that decision in such a manner as to permit the stance taken by the Court in the present case.

The present decision will have the effect of subjecting every single arbitral award, irrespective of its country of origin, to Indian law. While this was already achieved by the Venture-Satyam decision which permitted challenge of a foreign award under Section 34, the position has been worsened by the present judgment as a challenge based on Indian substantive law will operate even in cases where the award debtor does not take the active step of challenging the award under Section 34.

Vindobona Junction - Industry Research: Myth or necessary evil ?

by Smaran Shetty

Most people who are in a position to give out advice for merits speakers at the Vis moot, readily concede that some level of research must be undertaken to understand the realities of the industry of the good in question, be it squid, pipes, cars or wine. They advocate that such research, grounds legal arguments in commercial realities of the industry and therefore is far more reasoned and mature. In this post I examine this long standing (and almost universally accepted proposition) to discuss what is the true place of commercial knowledge in the moot.

Industry based research is an arduous and almost always a frustrating experience, as materials are not readily available. Additionally, materially that is actually available online is either not authoritative (credible enough to be used for arbitral proceedings and cite in a memorandum) or is far too technical to be comprehended by an average law student. But the effort in some senses is worthwhile, when material is eventually found that shapes the nature of the argument being made either for the memorandum, or while speaking.

If participants do decide to undertake industry specific research for the purpose of the moot, then I would advise caution and insist that the research is limited to certain predetermined questions. Teams must be careful not to spend weeks on trying to find obscure information, that may eventually have no bearing on the memorandum. Having said that, points of research that teams may focus on are: What is the nature of flow of capital in the trade ? What are the specific laws that impact the conduct of your client, by virtue of being part of the industry ? What are the acceptable norms or standard practices in the industry ? What is the nature the production line in the industry, i.e how many actors are involved ? What are the technical implications (if any) of the product ? All these questions help to limit the scope of research, yet focussing on the most relevant aspects of the commercial knowledge that may have a bearing on a legal argument.

Having said that, I must warn against excessive dependence on commercial knowledge in terms of facts and technical jargon. For instance last year when I was a participant, while arguing in the round of 32, the opposing team referred extensively to FAO Official Reports and Internationally recognized health regulations concerning the freezing and handling of squid. The information presented before the bench did not scare me, as I had come across all the information during my research and had used the same material, in a watered down manner in previous rounds. However the judges gave the verdict to our team. Later on, I approached the opposing merits speaker and asked him the reason for the judges decision (as I believed that the opposing team should have won). In response he told me that the judges did not appreciate the excessive dependence on external material, that undermined the confines of the moot problem. The judges although impressed with the thoroughness of research, were still convinced by innovative logic that was developed within the confines of the facts.

The lesson to take away from this, is that industry research has an important place in the moot, but often that importance is overstated and may not always have the desired results. Teams who decide to venture outside of the problem, should do so with caution and more importantly for a clearly defined purpose.

India to file counter-memorial in the Kishanganga arbitration.

We have earlier discussed about the Kishanganga Arbitration Dispute between India and Pakistan here, here, here, here, and here.

According to the latest news coming in it is supposed that India is soon to file its counter memorial before the Permanent Court of Arbitration (PCA) by end of this month in response to Pakistan's memorial seeking a complete moratorium on the 330-MW Kishanganga Hydro Electricity Project, J&K.

The reports speculate that India will base its argument on the provisions of the 1960 Indus Water Treaty, which it claims, allows use of western rivers - Chenab, Jhelum and Indus - for hydro power projects, with certain restrictions. India thus, would base its arguments on not violating the treaty.

It is also being thought that the Indian side would try convincing the court that because Neelum-Jhelum Hydroelectric Project in PoK which Pakistan claims will be affected is "India territory" occupied by Pakistan, Pakistan cannot raise the Kishenganga project before the PCA.

The matter was taken by Pakistan to the PCA claiming India had violated the 1960 Indus Water Treaty and the dam would gravely put at risk Pakistan's interest and the Neelum-Jhelum Hydroelectric Project near Muzaffarabad, capital of PoK. Following this, an arbitration proceeding with seven-judge bench was started in January. Later, in June Pakistan sought interim measures from the PCA asking India to stop all work on the dam.

We shall try and keep the readers updated of the events as they unfold.

CIArb's Alexander Lecture on the Dallah Case.

We have earlier posted on the Dallah v Pakistan case here and here and there was some discussion here too.

In this year's Alexander Lecture, President of the UK Supreme Court and CIArb Patron The Right Hon the Lord Phillips of Worth Matravers will analyse the judgments made by the Supreme Court and the Paris Court of Appeal in the landmark case of Dallah v Pakistan.  Lord Phillips will consider why the two courts came to different conclusions, exploring the possible implications for the arbitration community as a whole.

Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan is arguably a case which has been waiting to happen for years. An award rendered in Paris to be enforced in London saw the English courts seeking to determine whether a government could be liable to honour an arbitration award rendered against it in relation to a contract and arbitration clause which did not name it as a party.

As a former eminent arbitration practitioner and President of the Supreme Court, Lord Phillips had a unique front-row seat in the proceedings and is ideally placed to offer his observations on a case which has gripped the arbitration community in recent months.

The lecture takes place on November 16 in London. More information on the event can be accessed here.

Journal of Dispute Prevention and Resolution - Board of Editors

The Journal of Dispute Prevention and Resolution, the new venture of the Lex Arbitri team, is happy to announce the composition of its Board of Editors as follows:

Editor in Chief: 

Prof. Eric Bergsten 

Advisory Panel:

Prof. George A. Bermann

Justice Clyde Croft 
Emmanuel Gaillard

Lord David Hacking 

Prof. Martin Hunter

Managing Editors:

Deepak Raju, Associate, Amarchand Mangaldas & Suresh A. Shroff & Co., Mumbai

Rukmini Das, Associate, PXV Law Partners, Kolkata

Ashutosh Ray, Gujarat National Law University

Dhruv Sharma, Associate, Amarchand Mangaldas & Suresh A. Shroff & Co., Mumbai

Puneeth Nagraj, NALSAR University of Law

Content Editors:

Diane Desierto, Yale Law School

Mario Micciché, Oxford University
Mark L. Rockefeller, Columbia University

Sumit Rai, Geneva Master in International Dispute Settlement

Rahul Donde, Geneva Master in International Dispute Settlement

Mihir Naniwadekar, Advocate, Bombay High Court

Citation Editors:

Souvik Kumar Guha, National University of Juridical Sciences, Kolkata

Shabdita Gupta, National University of Juridical Sciences, Kolkata

Anagh Sengupta, National University of Juridical Sciences, Kolkata

Pankhuri Agarwal, National University of Juridical Sciences, Kolkata

Editorial Assistants:

Prianka Mohan, National Law University, Jodhpur

Srishti Aishwarya Srivastava, National University of Juridical Sciences, Kolkata

Telma Raju, National University of Advanced Legal Studies, Cochin

Prateek Andheria, NALSAR University of Law, Hyderabad

Vidyullatha Kishore Reddy, National University of Juridical Sciences, Kolkata

Coordinator, Administrative Affairs: 

Pankhuri Agarwal, National University of Juridical Sciences, Kolkata

Canadian investor devices novel strategy to fund its investment arbitration with Venezuela

Canadian mining company Crystallex, which is engaging in a legal battle with Venezuela over the treatment of its investments in Las Cristinas gold project has announced a novel strategy to fund the investment arbitration. Unable to finance its outstanding debts and the costs of arbitration consequent to measures adopted by Venezuela, Crystallex is issuing securities worth US$120 million linked to the proceeds of a future ICSID win against Venezuela.

Further details of the securities, which are currently being sold through private placements, can be found here.

Vindobona Junction - Team formation: Some insights

by Smaran Shetty

The Vis problem has been out for some time now and I am sure that teams have progressed well into the substantive issues concerning this years problem. In this post, I would like to offer some insights into how work must be divided amongst team members, and what skills would be required out of such roles. 

Every Vis problem concerns two broad issues, namely questions relating to the legal propriety of the arbitral proceedings, i.e. essentially questions of jurisdiction and substantive questions relating to the breach of contract in question and resulting loss. Accordingly, any team, however big or however small will have to divide their work load along these lines. In this post I intended to outline the qualities need for each of these tasks, so as to enable teams to make the right choice, or review already decided team formations in light of my suggestions. 

Jurisdictional questions every year relate to highly arguable legal issues concerning the Arbitral rules of a certain arbitral institution that is either newly formed, or whose rules have recently been revised. Keeping that in mind, those persons involved in jurisdictional research, drafting of the memo and eventual speaking at Vienna and Hong Kong, will be required to be competent with thorough and in-depth legal research. Considering little material is available on jurisdictional issues, team members who are doing jurisdiction related research, must learn how to read the fine print, cross reference sources and most importantly be patient in finding relevant material, as chances are it will take a substantial amount of time to be able to arrive at the final argument. Jurisdiction team members will also be required to properly understand both the basics as well as the nuances of International Commercial Arbitration and must also be prepared to do cross jurisdictional research concerning the practices of Arbitral Institutions around the world. Most importantly, jurisdiction team members must at all costs operate within the confines of the law they are dealing with and must base all arguments on recognized legal principles of some kind, arguments based on personal belief or intuition, have no relevancy to a jurisdiction team member. If you are currently a jurisdictional team member and doubt whether you have the requisite skills, I strongly urge you, to convene a team meeting to re-consider whether the appropriate roles have been assigned to team members. 

On the other hand team members dealing with the substantial issues of the contract or the “merits”, will be required to posses a different set of skills to effectively execute their responsibilities. The merits of the dispute relate to certain provisions of the CISG every year, and in that sense involves the application of a static body of law, to dynamic and arguable facts of the present dispute. In terms of research, the effort involved relates to making sure all the authoritative and relevant authors/judicial decisions have been read, as opposed to finding the relevant material. Merits team members will hardly find any difficulty in research, but the task involved relates to the application of well settled legal propositions to fact situation that may or may not support the law in question. In that sense, a merits team member, unlike a jurisdictional member is not confined to merely the law. In fact merits team members are encouraged to look beyond the CISG into actual business practice and relevant data from the real world to buttress arguments based in principles of the CISG. The most convincing and compelling arguments from a merits team member, will often involve a healthy mix of law and logical assertions that fits well into the scheme of the problem (the nature of the business, character of dispute, position of parties, commodity in question). If any team member feels unsure of the ability to look beyond the law, then I suggest a reconsideration of team roles. 

Another means of dividing up work amongst a team (mostly large teams) is to divide the work based on the sides of the dispute, implying that some members do jurisdictional research only from the perspective of the claimant and some do research for the merits only from the respondent’s side. I strongly advise against such an arrangement, and may lead to disastrous results in terms of team coordination. My principal objection to such an arrangement is that fact that this results in excessive compartmentalization, inhibiting a more balance perspective of the issues involved in the problem. The best way of making an argument is acknowledging its limitations and dealing with it effectively. However when you research only from one side, you fail to recognize the argument from the other side and accordingly start to believe in the false strength of a one sided argument. 

I hope these observations help teams, and am happy to be told that I am completely wrong. I look forward to a healthy discussion in the comments section. 

You may also want to read this earlier post on the same subject.

2012 ICC RULES OF ARBITRATION: ASIA LAUNCH

Singapore witnessed the Asia Launch Conference of the New ICC Rules of Arbitration on 12 October, exactly one month after they were first released on 12 September this year. The ICC Rules of Arbitration, which are used worldwide to resolve hundreds of business disputes each year, have been newly revised to take account of current requirements and developments in arbitration practice and procedure since the last revision in 1998. The new vintage is the fruit of two years of active work within the ICC Commission on Arbitration, a think tank of 620 dispute resolution specialists from 90 countries. A core group comprising Commission members and representatives of the Secretariat of the ICC International Court of Arbitration have drawn on their own professional experience and feedback from a 200-member task force to draft the new Rules. This conference unveiled and explained the changes made to the Rules in its third revision and was a first hand opportunity for practitioners to acquire a comprehensive overview of the changes in readiness for the subsequent entry into force of the new Rules, and to have a direct exchange with several of the experts from the drafting group.

The Conference was organised at Maxwell Chambers which is the world's first integrated dispute resolution complex housing both best-of-class hearing facilities and top international ADR institutions.

The gathering was welcomed by Ms. Kim Kit Ow, Director, ICC Arbitration and ADR, Asia. Mr. Philip Jeyaretnam, Chairman of the Maxwell Chambers and Managing Partner of Rodyk & Davidson LLP and Mr. Alvin Yeo, member of ICC Commission on Arbitration, Senior Partner- WongPartnership LLP gave brief introduction to ICC Arbitration with their opening remarks.

The first session was on the General Provisions and Arbitral Tribunal. Mr. John Beechey, Chairman, ICC International Court of Arbitration, Paris and Mr W. Laurence Craig, Co-Chair of the Taskforce on the Revision of the ICC Rules of Arbitration gave the audience an overview of the same.

The focus of the first part of the session was on the opening provision of the Rules and the changes made to it seeking to provide clarification on the respective roles of the Court, its Secretariat and arbitral tribunals. It also clarified that ICC arbitration is available for a full range of disputes, including both commercial arbitration and treaty investment arbitrations. Other changes to the rules, which were presented in the session recognized the specifics of treaty investment arbitrations and arbitrations involving states or state entities. Articles 4 and 5 concerning the Request for Arbitration and the Answer are key provisions in the Rules, as these documents set the initial stage for the arbitration. The session addressed the revisions made to these provisions and explained the requirements which parties will have to meet when submitting the Request and the Answer. In addition, revisions to the rules explicitly allowing for tailor-made confidentiality orders as well as other modifications concerning confidentiality were presented.
An often used maxim says that "an arbitration is only as good as the arbitrator" and the provisions concerning the constitution of the arbitral tribunal are at the core of any set of arbitration rules. The session focused on the revisions made to those provisions, including the appointment of the arbitrators by the Court (Article 13), the arbitrators’ duty of impartiality and independence (Articles 11 and 14), and the notification of reasons for Court’s decisions concerning challenges, non-confirmation and replacement of arbitrators.

The question and answer session was moderated by Mr. Alan Thamiayah, independent Arbitrator at the Arbitration Chambers. An interesting question was posed by Mr.Nish Shetty, Partner, Clifford Chance on the fate of contracts which were entered into by virtue of decisions of the highest court of Singapore which allowed SIAC to administer arbitration under ICC Rules but are now in conflict with the new ICC Rules which specifically mention that only ICC can administer case under its rules. The answer to this given by the panel was that only time will tell how such cases are dealt but it would be advisable that such clauses were amended to avoid any problem.

The second session had Mr.Jason Fry, Secretary General, ICC International Court of Arbitration and Mr.Peter Wolrich, Chaiman, ICC Commission on Arbitration on the panel. The discussion was on Improving the Time and Cost efficiency.

One of the primary goals of the rules revision was to find ways to encourage the controlling of time and cost in arbitration. This effort was specifically requested and encouraged by the corporate users of ICC arbitration. The session presented the revisions in order to permit the Secretariat to constitute the arbitral tribunal more rapidly (Article 6(3)) and improve the turnaround time for draft awards (Articles 27, 31). The new provisions addressed to parties and arbitral tribunals concerning the conduct the arbitration proceedings in an expeditious and cost-effective manner and the corresponding cost provisions were also presented (Articles 22- 24, Appendix V, Article 36). Finally, a user’s perspective was presented by the panel.

The question and answer session was moderated by Mr. Chelva Rajah, ICC Court Member for Singapore. Interesting questions were put by the users of ICC Rules of Arbitration which were satisfactorily answered by the panel.

The third session was on a completely new area that has been introduced by ICC through its new Rules. It was on Emergency Arbitrator Provisions. The session was presented by Mr.Christopher Lau, Member of ICC Commission on Arbitration and Mr Vinayak Pradhan, President of the ICC Commission on Arbitration.

The 2012 ICC Rules for Arbitration includes provisions permitting parties to seek the appointment of an Emergency Arbitrator to decide upon urgent conservatory or interim measures that cannot await the constitution of the arbitral tribunal. The session presented the revisions made to the rules in this respect, as well as the wholly new Appendix which sets out the rules for emergency arbitrator proceedings (Article 29, and the Appendix).

The question and answer of this session was moderated by Ms.Kim Kit Ow, Director, ICC Arbitration and ADR, Asia. The presenters were asked all sorts of questions. There was an interesting discussion which ensued on the weight of "order” given by an emergency arbitrator as it is difficult to enforce under the New York Convention for not being an "award" but instead being an "order".

The fourth session which was presented by Ms. Francesa Mazza, Counsel, ICC International Court of Arbitration and Mr Andrew Foyle, ICC Court member, barrister, One Essex Court was on the new area of Multi-Party, Multi-Contract arbitration and consolidation.

The Court has seen a considerable increase in cases involving multiple parties or multiple contracts in the past decade, which reflects an increasing complexity of the transactions underlying the disputes giving rise to ICC arbitrations. The 2012 Rules of Arbitration contain for the first time a chapter devoted to arbitrations involving multiple parties or contracts and consolidation. This session presented those new provisions and related provisions concerning the fixing of the advances on costs in such situations (Articles 7, 8, 9, 10 and 36) and focused on how they will operate in practice.

The question and answer session was moderated by Mr.Yu-Jin Tay, Counsel, Sherman & Sterling. The questions asked by the audience touched various angles of such complex situations but were well answered by the presenters.

The concluding remarks were given by Mr. John Beechey and Mr.Peter Wolrich which was followed by cocktails.

I soon plan to come out with an analysis of the New ICC Arbitration Rules.

More on White Industries Arbitration: When did it start and who are the real players?

In a previous post, I shared a piece written by Mr. Prabhash Ranjan and me on the White Industries investment arbitration. However, there is much that is not really known in India about this arbitration. For instance, I was surprised when Bar & Bench reported that Additional Solicitor General Mr. Vivek Tankha represented India at the proceedings, as investment arbitration is a complex area of law which cannot be handled by a lawyer specializing in domestic laws, however eminent he may be (Palkhivala's arguing before the ICJ on substantive points is an exception, like Palkhivala himself is). Further, no one really seemed to know when the request for arbitration was filed and who the arbitrators were.

Last night, I had the opportunity to have a chat with Mr. Luke Eric Peterson, a legal journalist reporting on investment arbitration proceedings at IA Reporter. Surprisingly, he had many more details on this case than that have been reported in India. It was he who first reported the existence of the dispute on July 7, 2011. He was kind enough to agree that he would remove the "pay wall" on that article and make it freely accessible here. The article discusses the complete details of the panel, the legal teams, etc. Please note that the article mentions Singapore as the venue which was subsequently shifted to London.

Thanks Luke!

This raises a larger question. In India is there any obligation on the government to inform the public or their representatives in the Parliament when the country is involved in an international dispute? Will cover that in a later post.

Supreme Court of India on Joinder in Arbitration.

The Supreme Court (SC) of India has given an excellent example of its maturity to deal with complex arbitration matters. In the case of P.R Shah, Shares & Stock Broker (P) Ltd. (“Appellant”) V M/s. B.H.H Securities (P) Ltd. & Ors (“Respondent”) the SC has dealt with the issue of joinder in very straight forward terms. The SC held that a joinder is possible when facts and circumstances require so, more so when the claimant has arbitration agreements with both the other parties, the claims against them cannot be separated and when the party being joined is so inextricably linked to the other party in its function and management. The Judgement of the case is available here. It was decided by SC on 14 Octoer, 2011.

Relevant Facts:
The Appellant and the Respondent, both were members of the Bombay Stock Exchange (“Exchange”). The Respondent raised and referred a dispute against the Appellant and one another party (the Other Party) under the Rules, Bye-Laws and Regulations of the Exchange seeking an award. In the arbitration reference, the Respondent alleged that Appellant and the Other Party were sister concerns with a Common Director and that the Director of the Appellant approached the Respondent for a transaction on behalf of the Other Party. In respect of the transaction the Respondent issued and delivered the contract and bill in favour of the Other Party. When the amount was due towards the Other Party the Appellant issued a Credit Slip in favour of the Respondent. The said Credit Slip was rejected by the Exchange and so the Respondent approached the Appellant and the Other Party for a cheque for the said amount. The Appellant issued a cheque accordingly on behalf of the Other Party for a lesser amount though. Further, to settle the amount, the Director asked the Respondent to issue all the bills in the name of the Other Party. The Director accepted the Bills assuring payment and that both the Appellant and the Other Company were jointly and severally liable to pay the amounts due.

After several attempts by the Respondent when the money still remained due, the Executive Director of the Exchange permitted the Respondent to file arbitration claim against both the Appellant and the Other Party. Both the Appellant and the Other Party filed objections which had several common grounds with identical wordings. The Appellant denied that the transaction was done for the Other Party and contended that arbitration reference was bad in law on account of misjoinder of parties and misjoinder of causes of action. It was submitted by the Appellant that while it was a member of Exchange, the Other Party was not and hence different set of Arbitration Rules would govern each arbitration. The Dispute was heard by three member Arbitral Tribunal consisting of Justice D.B Deshpande, Mr.Hemant V. Shah and Mr. Sharad Dalal.

While the majority view of the tribunal was that both the Appellant and the Other Party (both were respondents in the arbitration proceedings) were liable for the amounts claimed, the minority view which was of Justice Deshpande who in spite of agreeing with the other two was of the opinion that the Tribunal as appointed by the Exchange had no jurisdiction to hear Respondent’s claim against the Appellant. The award was made as per the majority view that the Other Party shall pay the Respondent and in case of failure the Appellant shall do that. The Other Party neither contested the award nor paid the amount. The Appellant on the other hand filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) challenging the award.

Single Judge Bombay High Court (HC) Bench:
The application was dismissed by the HC. The HC upon a contention placed by the Appellant held that if in a dispute between a member and non-member an identical or connected claim against another claim cannot be referred for a common arbitration and the Claimant is compelled to resort to two proceedings before different fora, then there is a possibility of multiplicity of findings at variance with each other.

Intra Court Appeal by Division Bench:

The Division Bench too dismissed the appeal filed by the Appellant.

Appeal by Special Leave to SC:
Three contentions were raised:
I. A single arbitration is not possible against both the parties because while one is a member of the Exchange, the other is not and both have different bylaws governing the arbitration.
II. The Arbitral Tribunal should have held that there was no contract between the Respondent and the Appelant.
III. The tribunal has passed the award by using their personal knowledge and not on the basis of record placed before them.
On the first contention, the SC held that it should be noticed that the arbitration was an institutional arbitration under the Exchange and not an adhoc arbitration. “As the Exchange has permitted a single arbitration against both, there could be no impediment for single arbitration.” Giving an example court held:
“If A had a claim against B and C, and there was an arbitration agreement between A and B but there was no arbitration agreement between A and C, it might not be possible to have a joint arbitration against B and C. A cannot make a claim against C in an arbitration against B, on the ground that the claim was being made jointly against B and C, as C was not a party to the arbitration agreement. But if A had a claim against B and C and if A had an arbitration agreement with B and A also had a separate arbitration agreement with C, there is no reason why A cannot have a joint arbitration against B & C. Obviously, having an arbitration between A and B and another arbitration between A and C in regard to the same claim would lead to conflicting decisions. In such a case, to deny the benefit of a single arbitration against B and C on the ground that the arbitration agreements against B and C are different, would lead to multiplicity of proceedings, conflicting decisions and cause injustice. It would be proper and just to say that when A has a claim jointly against B and C, and when there are provisions for arbitration in respect of both B and C, there can be a single arbitration.”
On second contention, the SC stated that it cannot sit in appeal over the award of an arbitral tribunal by re-assessing or re-appreciating the evidence.
On the last contention, the court held that:
“An arbitral tribunal cannot of course make use of their personal knowledge of the facts of the dispute, which is not a part of the record, to decide the dispute. But an arbitral tribunal can certainly use their expert or technical knowledge or the general knowledge about the particular trade, in deciding a matter. In fact, that is why in many arbitrations, persons with technical knowledge, are appointed as they will be well-versed with the practices and customs in the respective fields. All that the arbitrators have referred is the market practice. That cannot be considered as using some personal knowledge of facts of a transaction, to decide a dispute.”
Thus, the SC dismissed the appeal.

Comments:

This judgment is a welcome decision by the SC given with a very simple and crisp rational. This case also shows the benefit of an institutional arbitration which can be useful to overcome issues which might be problematic in adhoc arbitrations.
With regard to complex issues regarding multi-party arbitration and multi-contract arbitration involving issues of joinder, the New ICC Rules of Arbitration which come into effect from January 2012 are worth having a look at. I shall soon be posting about the New ICC Arbitration Rules, the Asia launch of which I had a chance to attend in Singapore.