Friday, May 31, 2013

Recent Trends in Investment-State Dispute Settlement (ISDS): Why India Should be Worried

The latest UNCTAD report on trends in investment disputes says that last year saw a record 95 claims filed against States. This brings the total number of known treaty based cases to 518. Unsurprisingly, claimants from the United States account for 123 (or 24%) of all such cases. 42 decisions were given in 2013 of which 9 resulted in the award of $ 1.77 billion dollars.

The more worrying trend, which lends credence to the calls for reform is that 61 claims last year were against developing countries. Countries in financial crisis were also a target for investment claims with two Chinese investors bringing a claim against the Belgian government for its treatment of Fortis. A Cypriot bank brought claims against the Greek government arguing the bailing out Greek banks discriminated against its Greek subsidiary. Investors also challenged environmental measures taken by governments over the last year. Such claims should force us to revisit the question of the balance of power between Investors and States in BITs. This problem is magnified in case of practices like third party funding, where specialized firms finance Investor Claims in return for a share in future damages. The discontent with existing ISDS mechanisms is widespread and calls for reform are getting louder. It has been reported that mediation is proving to be an attractive option for resolution of such disputes (for a detailed analysis see the Kluwer blog article here).

It is in this context, that we look at what the UNCTAD report says about India. In January, it was reported that India was putting on hold all existing BIT negotiations in light of a spate of claims following the White Industries judgment. As many as 7 investors had filed investment claims against India in 2012, and India ranks as the country with the second highest claims after Venezuela (9). Despite this it seems that India is in negotiations to sign a BIT with the United States.

I had previously argued that investor claims notwithstanding India should in fact join the ICSID. I still stand by that position, because ICSID offers a way of resolving India's investment disputes as well as allowing Indian investors abroad to file claims against other States. But the problem with the current Indian position is that it is unclear if Investment awards can be enforced under the Arbitration and Conciliation Act, 1996. While the government has announced a rethink on BITs as far back April 2012, the process has been far from transparent, and little is known about what policy/legislation if any is being formulated to address this reconfigure India's BITs.

With India negotiating a BIT with the US- a country who's investors are responsible for a fourth of all investment claims- India should not only has the opportunity to reform its own BIT policy but also play a leadership role in evolving new mechanisms for developing countries in balancing the power between Investors and States.

Monday, May 27, 2013

Off-topic - TN's renewed claims over Katchatheevu

The Hindu (May 27) has published an op-Ed by me titled 'Chasing a boat we missed long ago'. This piece discusses the legal aspects of Tamil Nadu's renewed claims over Katchatheevu Island, which is currently in Sri Lankan possession. In this piece, I raise two key points: first, litigation before the Supreme Court on this matter is futile since any order issued by Supreme Court will not be binding on Sri Lanka; second, under international law (which governs territorial disputes between states), any claim that Tamil Nadu may persuade the Centre to make is likely to be a weak one.

The full text of the article may be accessed here.

Tuesday, May 21, 2013

Sahara Withdraws From IPL Over Arbitration Issue

Sahara, BCCI: No more getting back?

As per the latest reports here and here, Sahara has withdrawn from the Indian Premier League (IPL) which has already been in much controversy for sometime now. If that was not enough, Sahara even plans pull out of the sponsorship of the Indian cricket team from the next year. The reason for the withdrawal is supposedly Board of Control for Cricket in India (BCCI) not keeping its promise to arbitrate the disputes. 

The matter of the dispute goes something like this: Sahara had bought "Pune Warriors" franchise for an amount of rupees 1702 crore for 10 years. However, dispute arose regarding the reduction of the franchise fee as initially there were 94 matches which was later reduced to 64 matches. According to the report, Sahara paid around 20 percent of the year franchisee fee, an amount of Rs 170 crore in January and was about to pay the remaining amount by May 19 but failed. The IPL governing council then decided to encash the bank guarantee.

Sahara claims that the BCCI not only turn a deaf ear to its pleadings for arbitration and reducing the franchise fee but also rejected appointment of several arbitrators . It did not recommend any instead. Allegedly, the appointment of a former Chief Justice of India was also rejected by BCCI after sitting over the request for several months. 

The IPL has been hitting new lows with every passing day.

Sunday, May 19, 2013

FIAA / SIAC Advocacy Workshop on Questioning of Expert Witnesses in International Arbitration

Below is the announcement by FIAA - Foundation for International Arbitration Advocacy for its next Advocacy Workshop on "Questioning of Expert Witnesses in International Arbitration". The program is being conducted in collaboration with SIAC. 
On a personal note, it is one of the most relevant and effective programs as it equips the participants to argue on advanced and complex arbitration matters. The program would be big advantage for the people residing in Singapore and neighbouring Asian cities. The program has a limited intake so as to make it very productive. 

FIAA - Foundation for International Arbitration Advocacy has opened registration for its next Advocacy Workshop on "Questioning of Expert Witnesses in International Arbitration", which will be held 20 – 22 June 2013 at the Hilton Hotel in Singapore.  FIAA is pleased to be running this workshop in conjunction with SIAC – Singapore International Arbitration Centre and with the support several sponsors.

This learning-by-doing workshop will provide international arbitration practitioners with skills and techniques for examination, cross-examination and witness conferencing involving expert witnesses. Participants will have a unique opportunity to improve their advocacy skills by:
  • working with accounting experts from leading firms;
  • engaging in exercises and simulations based on a mock arbitration case, including a full day witness hearing; and
  • obtaining direct feedback and practical advice from leading international arbitration practitioners and advocacy instructors. 

Early registration is recommended as this workshop is limited to 24 participants. For full workshop and registration details, please see the attached Program or visit

Saturday, May 18, 2013

SIAC Opens up in India. It's First Outside Singapore.

The Singapore International Arbitration Centre (SIAC), for the first time stepping outside the island nation, has opened up its new office in the financial capital of India, Mumbai. India’s image as a country significantly contributing to international arbitration case load is being increasingly recognized. World’s major arbitration institutes want their share of this big pie. Few years back LCIA too had chosen India to open its first off shore office: LCIA India. However, unlike LCIA India, SIAC shall not be having separate arbitration Rules for India. India, as a seat for international arbitration does not seem to be a preferred choice among the international corporations.

Mr. Vivekananda N., Head (South Asia) of SIAC would be heading this office. Here are his answers to few questions with regard to SIAC India.

This is SIAC's first offshore office, why was India chosen?

SIAC has continued to focus on engaging with the Indian market since 2005.

The years 2009 and 2010 saw the number of India-related cases at the SIAC grow by about 100% in 2009 (24 cases in 2009 as compared to 11 in 2008) and another 50% in 2010 (36 cases in 2010). The number of cases involving Indian parties was the single largest contingent of cases from a single non-Singaporean nationality at the SIAC for these years.

As a consequence of these developments and the positive response we received from the community in India, it was felt that it would be useful to maintain a presence in India through an office to reach out to lawyers and users in India. With this in mind, in mid-2011, the SIAC Board of Directors headed by Dr Michael Pryles decided to commence efforts to explore the opening of an office in India.

Would SIAC have separate rules to govern arbitrations in India?

The India office of the SIAC is not involved in the administration of cases in India. The office is a subsidiary of the SIAC. It is charged with functions of interacting with our current and potential users and sharing information on international arbitration jurisprudence and practice with a view to marketing SIAC’s and Singapore’s capabilities in this regard.

What would be the role of SIAC India office?

Our primary focus will remain the provision of practical information necessary to lawyers and corporate users for the effective use of international arbitration as a dispute resolution mechanism. Making arbitration cost-effective, timely and efficient for Indian and other parties and letting them know that this is imminently possible outside of courts is of paramount importance for the SIAC.

What are your plans for the coming 3 years?

The Indian market is fairly widespread across industry sectors and cities. The office provides us with the perfect opportunity to reach out to lesser known sectors and the smaller cities in India though Mumbai, Delhi and Bangalore will continue to remain primary areas of focus.

The office will continue our efforts to obtain continuous feedback on our services as an arbitral institution, such feedback being crucial to maintaining and constantly improving the quality of our case management and administration capabilities.

The office will also provide us with the opportunity to work more closely with the judiciary and the government in India on policy initiatives, regular exchange of ideas on live issues, legislative change, amongst others.

Last but not the least, we also look forward to working with the Indian lawyers of tomorrow at universities to train them in international arbitration practice and actively work towards developing a dynamic arbitration bar in India.

Better awareness, understanding and practice of international arbitration in India is in the best interest of everyone involved, the users, lawyers, the judiciary and arbitral institutions.

How many cases at SIAC involved Indian parties in recent past?

In 2012, about 21% of cases at SIAC involved at least one Indian party. I attach a Statistical Report on our India-related cases. Some interesting facts:
(i) The number of new cases at SIAC has gone up by 25% from 2011 to 2012
(ii) The number of new cases involving at least one Indian party has grown tenfold in the period from 2001 to 2012 and by almost 50% from 2011 to 2012
(iii) The monetary quantum of disputes involving at least one Indian party has similarly gone up by 200% from 2011 to 2012
(iv) The largest case for 2012 was a case involving an Indian party and involved a sum in dispute of SGD 1.5 billion
(v) The average dispute amount at the SIAC for 2012 in cases involving Indian parties was SGD 41.88 million. Even without the largest case being accounted for, the average sum in dispute for cases involving Indian parties went up by 66% from 2011 to 2012. This implies that not only are more Indian parties opting to arbitrate at the SIAC but that higher value contracts involving Indian parties increasingly provide for arbitration at the SIAC.
The link to the full report is below: 

Statistical Report of Singapore International Arbitration Centre (SIAC) on India 2012

Call for Papers: Indian Journal of Arbitration Law

Below is the call for papers for the Indian Journal of Arbitration Law. 

The Indian Journal of Arbitration Law is pleased to announce its upcoming issue (Volume 2: Issue 2), which is to be published in September this year. The Board of Editors cordially invites original, unpublished submissions for publication in the following categories:
- Articles
- Notes
- Comments
- Book Reviews
Manuscripts may be submitted via email to latest by 31st July 2013.

Editorial policy and submission guidelines are available here.

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