ADR Scheme established in Kolkata

Last Saturday (April 23, 2011), the Bengal Chamber of Commerce and Industry organised a National Conference in Kolkata titled "Proposed Amendments to the Arbitration and Conciliation Act, 1996 and ADR".

In light of the fact that alternative dispute resolution mechanisms were not as popular as desired in India, this conference aimed at re-launching ADR by the Bengal Chamber and attempt to make arbitration, mediation and conciliation popular and effective instruments of dispute resolution to relieve the pressure on the courts of law, in the words of Mr. Sandipan Chakravortty, President of the Chamber.

Peter Norman Lodder, Chairman of the Bar Council of England and Wales, who was present at the conference, was of the opinion that international businesses would be prompted to invest in a place with a speedy and independent local justice system.

This ADR scheme, with an international character and English barristers on the Bengal Chamber panel of arbitrators would thereby assist in promoting Kolkata as an international business centre.

Non-enforcement of arbitral awards: ICSID takes a U-turn

Enforcement of arbitral awards under bilateral investment treaties has been a complex matter. Unlike the Iran - US claims tribunal awards against Iran which are satisfied from an initial deposit made by Iran at the time of the formation of the tribunal, BIT awards enjoy no such certainty of enforcement. While common sense dictates that a BIT that provides investors a right to arbitration of disputes should also, impliedly, provide a right to have an award enforced, enforcement mechanisms are mostly left to the procedural laws of the respondent State.

Recently, Mr. Prabhash Ranjan and I co-authored an article (pending publication in the Asian Journal of Comparative Law) arguing that the enforcement framework of the New York Convention is inept for the enforcement of BIT awards. We argued this from the Indian experience. The evolution of the the definition 'public policy' in India, from the narrower to the broader view, is well known and has been covered elsewhere in this blog. We argued that even under the narrower view, an award which is against the 'interests of India' will be considered to be against public policy and hence non-enforceable. A BIT award rejecting a position advocated by the Republic of India - say, in a matter of regulatory expropriation - will be considered to be against the 'interests of India' and hence non-enforceable on public policy considerations.

A safeguard against such non-enforcement of adverse awards by States was introduced into the framework of BIT arbitration by the ICSID award in Sapiem v. Bangladesh. In that case, the refusal by the High Court Division of the Supreme Court of Bangladesh to enforce an ICC award in favour of Sapiem and against a government company amounted to expropriation. This sent a warning to States against over-use of the power to refuse enforcement.

However, on March 31, 2011, the ICSID award in GEA v. Ukraine took a U-turn in this matter. The award held that an ICC award was not a protected 'investment' under the Germany-Ukraine BIT or the ICSID Convention and hence its non-enforcement did not amount to expropriation.

While both Sapiem and GEA concerned non-enforcement of awards arising out of commercial contracts, not BIT arbitrations, Sapiem gave out the signal that non-enforcement of an arbitral award could be dealt with by another arbitral proceeding which would characterise the first non-enforcement as a violation of the BIT. GEA undoes this hope.

The silver lining is that it is possible to argue that the non-enforcement of an adverse BIT award, as opposed to an award in a commercial arbitration, amounts to a situation where a breach is adjudicated and yet, no reparation is made, which is a continuing breach of the BIT obligations and a breach of the customary norms of reparation codified in the Articles on State Responsibility [See Art. 28-39].

Still, the point remains that it is too risky to leave enforcement of BIT awards either to the discretion of the respondent States, or the New York Convention framework. An alternative framework for enforcement of BIT awards needs to emerge multilaterally or bilaterally.

Errors in translation of institutional rules: an interesting post

The curse of Babel seems to be having its impact on arbitration too. This post by Isabelle Liger lists 100 errors in translation of institutional arbitration rules. Rules in Chinese, Korean, Japanese, English and French have been subjected to analysis. The work is commendable simply because it is not every day that one comes across an individual or a group of individuals capable of analysing texts in so many different languages. A summary of this post by Mr. Badrinath Srinivasan can be found here.

Special tribunal to compensate Coca Cola victims

The legislature of the South Indian state of Kerala, has passed the Plachimada Coca Cola Victims Relief and Compensation Claims Special Tribunal Bill, 2011 to establish a special tribunal to deal with claims arising out of ground water depletion and other environmental degradation caused by the Coca Cola bottling plant in Plachimada, Perumatty Panchayat, Palakkad District, Kerala. This is probably the first of its kind, special claims tribunal for environmental problems in India. 

The background:

Plachimada is a village in Perumatty Panchayat, Palakkad District of Kerala. It was an agrarian village that seldom attracted the attention of the media or the outside world. M/s Hindustan Coca-Cola beverages Private Ltd. applied for consent of the Board in June 1999 to establish a factory on a 31 acre plot at Plachimada in Palakkad district for manufacturing 5,61,000 litres of soft drinks (Coca Cola, Limca, Fanta, Thums Up, Sprite, Kinley soda and Maaza) per day. The raw materials include 15,00,000 litres of water, soft drink concentrate, carbon dioxide, sugar, mango pulp, preservatives, water treatment chemicals, etc. The factory was discharging more than 8,00,000 litres of water per day and provided the sludge to the villagers to use as fertilizers.

Some more Vis tips, from a Vienna runner-up

The only time an Indian team won Vis was in 2003. In 2009, the team of ILS Law School, Pune (Sneha Jain, Shraddha Deshmukh and Preeti Sukhthanker) missed it between the cup and the lip when they emerged runners up in a close contest with Victoria, Wellington. In addition to being the only Indian team to have entered the finals other than the 2003 NUJS team, the team also secured two Honourable Mentions for its oralists. In the following paragraphs, Sneha Jain shares her experience with Vis. She also reveals the factors that contributed to the success of her team.

The Hongkong Vis Moot just concluded and the Vienna Vis Moot is now knocking on the door! Deepak has beautifully encapsulated the essential points to be kept in mind while tackling the Vis Moot. He has requested that I share a bit about our team's Vis experience during the 16th Vis Moot, 2009 and what we learnt during our journey to the finals. So here goes:

1. 1. Knowing your arbitrator's domestic legal system (civil or common law) helps in structuring your arguments. In any case, I'd suggest that regardless of the constitution of the panel, oralists must cite both - statutes and case laws, equally. In one of our rounds, one of our arbitrators hailed from a country with a civil law system but practised international arbitration under both civil and common law systems. Consequently, his questions were mixed. Citing both supporting statutes and case laws helped us show that our research was balanced and that we were not inclined towards any single system in particular. 

Speaking at Vis, some FAQs, some common errors and some tips

The battle in Hong Kong is over and the bigger fight is about to start in Vienna. A lot of participants have been mailing me from several universities asking for last minute tips. Here are a few questions that I have been asked by the participants and my answers to them.

Tip 1: Take tips with a pinch of salt.

Recently, in one of my oral rounds at Jessup international, one of the judges narrated an experience he had as a young Jessup mooter. He had a small book in which he used to keep track of all the feedback he got after each court. Towards the end, he realised that almost everything tip in that book was countered by another tip in the same book. 

Call for papers for an edited book on arbitration

The West Bengal National University of Juridical Sciences has issued a call for papers for an edited book on arbitration. The editors of the proposed book include Prof. Dr. M.P. Singh, (Vice Chancellor, NUJS), Hon. J. (Retd.) Mrs. Ruma Pal (former Judge, Supreme Court of India), Hon. J. Mr. Pinaki Ghosh (Judge, Calcutta High Court) and Mr. Nitai Roy Chowdhury, (former Law Minister, Bangladesh). Mr. Anirban Chakraborty (Assistant Professor, NUJS) will serve as the Managing Editor.

The papers are to be 5000 - 7500 words long and may be on any issue pertaining to arbitration in India or any other jurisdiction. The deadline for submission of papers is May 30, 2011.

The call for papers and other details can be found here.

Vindobona Junction - Speaking at Vis: Two cents from a quarter finalist

The oral rounds have started in Hong Kong. Vienna rounds are also around the corner. Against this background, Iram Huq, a quarter finalist and Honourable Mention winner at Vienna last year and a quarter finalist at Jessup Internationals this year, shares her thoughts on the oral rounds.

Since the Vis moot in Hong Kong is beginning  today, my friend and colleague, Deepak Raju asked me to write about my experience of speaking at Vis Vienna last year. I have to say that it was the experience of a lifetime, and set off a chain of events that made my life much more beautiful and complete than it was before I went to Vienna.

Most people who participate in the Vis moot would agree that it’s a journey of self-discovery. It’s the perfect simulation of dispute where you get to test your innate argumentative skills. More importantly, you get to meet people from all over the world. I’ve always felt that the best way to find out more about yourself is to talk to people who are completely unlike you. There’s no better place to find random strangers than the bar at OST club during the competition!

  

Arbitration Matters: A Conference by NPAC and SIAC.

The Nani Palkhivala Arbitration Centre (NPAC) and the Singapore International Arbitration Centre (SIAC) recently organized a conference: “Arbitration Matters” in Bangalore on 19 March 2011.

The conference was aimed to emphasize that Arbitration as a means to settle disputes does matter and not only should every business organization include a dispute resolution clause in their contracts, but make sure that it is properly phrased without any ambiguity.

The first session on “Why Every Indian Company Should Arbitrate” was chaired by Mr.Anirudh Wadhwa, advocate Supreme Court of India with eminent experts as panelists. It was interesting to hear about the “fee shifting clause” from Mr.Wadhwa. These kinds of clause usually come into play when there is a dispute between two parties (for example, a contract between an MNC and a SME) who are not equal to each other in economic terms. The speakers in this session included Mr. N L Rajah, Director, NPAC; Mr.Prakash Pillai, Partner, Rajah & Tann LLP; Mr. Rajinder Pillai, President-Legal, Jindal Southwest Holdings; and Mr.Tan Chuan Thye, Director, Stamford Law. Mr. Pillai emphasized the benefits of institutional arbitration when compared to adhoc arbitrations and courts. On a question raised about the scrutiny of the award, Mr.Pillai was of the opinion that it can’t really affect the award but is a method of pointing towards the errors in the award. Mr. Thye talked about IBA guidelines on taking evidence and also about the experts, their importance and their role when they are either party appointed or tribunal appointed. In his presentation he also referred to the new UNCITRAL Mediation Rules and the growing recognition of mediation as a mode of dispute resolution.

Specific question doctrine in Indian law: Guest Post by Vivek Menon

The following is a guest post by Vivek Menon, third year student, National University of Juridical Sciences, Kolkata on the specific question doctrine in Indian law.

Section 34 of the Arbitration and Conciliation Act, 1996 provides for the setting aside of an arbitral award. In this regard, it is well established that a court may only go into questions of law and not of fact. However, there are certain constraints placed on the court's jurisdiction on matters of law as well. The specific question doctrine is one such example.

According to the specific question doctrine, the court's jurisdiction to review an arbitrator's decision is ousted if a question law was specifically referred to the arbitrator and the parties agreed to submit the dispute to arbitration and be bound by the consequent award. This was laid down by the Supreme Court in Seth Thawardas Pherumal v. Union of India [AIR 1955 SC 468], where it was observed:

Dallah v. Pakistan: The Buzz continues.

According to the latest reports that have been coming, the Court of Appeal in Paris has upheld the award passed by ICC in a dispute between Dallah, a construction company and Pakistan when a challenge was brought by the Pakistan government. Interestingly, the same award was rejected by the UK Supreme Court. The earlier post on this case can be found here.

More to come as the saga further unfolds.

The first Indian pre-moot for Vis (Kolkata, March 5th and 6th)

Pre-moots for the Willem C. Vis International Commercial Arbitration Moots, Vienna and Hong Kong, are popular events in the mooting calenders all over the world. They allow participants from a particular country or region to come together and learn from each other so as to enhance their performance in the moot. However in India, no such event has ever been held. This year, the West Bengal National University of Juridical Sciences, Kolkata (NUJS) is all set to host the first ever pre-moot in India for the Vis moots in collaboration with NALSAR University of Law, Hyderabad. The event is scheduled for the first weekend of March (March 5, 6) and will be judged by former Vis Mooters including former winners.

The modalities of the event are still being worked out and official communications will be sent to all concerned as soon as the details are worked out. 

Teams from all over the world are welcome to participate. For the first edition of the event, there may be a team cap depending on the availability of resources and there may be a registration fee. Considering the possibility of a team cap, interested teams are requested to contact indianpremoot@gmail.com at the earliest. Those interested in acting as arbitrators or in sponsoring the event may also contact the same email address.

With sufficient funding, the event may also become a national funding round for the Vis Moots.

Arbitration in Lex Sportiva: Guest post by Bedavyasa Mohanty and Jay Sayta

The following is a guest post by Bedavyasa Mohanty and Jay Sayta, both undergraduate students at National University of Juridical Sciences, Kolkata. Jay Sayta maintains a website on gambling laws in India.

This post discusses the history, development and future of the Court of Arbitration of Sport as a mechanism of arbitrating on any issue relating to sports. The CAS arbitrates disputes of various sports ranging from physical sports like football and hockey to mind games like chess; and card games like poker. (Though it has been argued that poker is a game of considerable skill, akin to chess).

The Tribunal Arbitral du Sport or the Court of Arbitration of Sport (CAS), with its headquarters at Lausanne, Switzerland, was established in the year 1984 by the International Olympic Committee with the intent of serving as the ultimate authority to adjudicate on disputes relating to rights of athletes, governing bodies and various sports federations.

Hurdle for International Arbitration Centre, Goa.

The New Year is definitely not a good start for the proposed International Arbitration Centre at Goa, India. Aires Rodrigues, a social activist has asked Law Minister Veerappa Moily not to inaugurate the centre as it is being set up by a private trust and also because there are already international arbitrations happening at Indian Council of Arbitration and Indian Council of Dispute Resolution (ICADR), both being registered under the Societies Registration Act 1860. According to Aires Rodrigues the new private center at Goa will be run by a private trust which will not be accountable to the public. More on this can be found here.

I doubt whether an international arbitration centre for commercial matters necessarily requires a registration under Societies Registration Act. On the other hand, there remains a skepticism (as was discussed in few conferences organized this year): Will so many arbitration institutions mushrooming without any international expertise and without any support of the government or any other international arbitration institute help the business community or only add to confusion and chaos?

Happy New Year!!!

Lex Arbitri wishes all its readers a very warm, happy and prosperous New Year. We thank all of you for your support and trust. Hail 2011!

Interview with Prof.Martin Hunter on VIS. NOT TO MISS!

At Lex Arbitri, particularly at Vindobona Junction we have tried partnering all the Vis participants in the wonderful and exciting journey of the Moot. Not to forget, the moot is considered to be the "Olympics" of international trade law and is one of the few moots reported at the UN.

Trying to give the most authentic insights of the moot, we present to you an interview of Prof.Martin Hunter.

Prof. Hunter needs no introduction in the field of arbitration. His book which which he has co-authored with Sir Alan Redfern, often cited as the "Red Bible" on arbitration has certainly turned Blue with its new edition. (By Red and Blue, I only refer to the colours of the cover of the book)

The participants at VIS Vienna would surely find him as a judge in one of the final rounds of the moot. Last year he had coached the team from Kings College, London which had won the moot. We hope his insights would help everybody related to Vis or even remotely related to arbitration mooting.

SO, HERE IT GOES:

Q- 1. The first submission is already over, what do you think is the most important thing for an award winning memorandum?

A-1. I don’t think I can identify one single point. In the mooting context, a good memorandum must have a sound structure, and it must have clarity. Obviously, it should demonstrate an ability to analyse complex legal issues, and to assemble persuasive arguments. The review panel will also, generally, look at how convincingly the memoranda have dealt with the weak arguments as well as how well they have argued the strong points. I also think that the final draft text should be edited again and again, and again and again. You would probably be surprised at the number of times professional authors review their own drafts texts. It may be as many as five or six times. Each read-through will be for a specific purpose. The first might be for structure. The second may be for validity of the content. The third may be a technical proof-read for grammar and spelling, etc (no sentence should be more than 25 words, no sentence should contain more than one set of parentheses; no paragraph should attempt to deal with more than one proposition). The fourth might be for clarity. The last will be for the ‘need-to-know’ test for each proposition – does the reader really need to be informed of it? If not, strike it out.

Q-2. How important is formatting according to you?

A-2 It is very important to stick precisely to the formatting instructions given in the rules of the competition.

Q-3. Can you identify any particular region who are exceptionally good with their memorandums and any reason for the same?

A-3. I am not aware of any regional trend, but I do recall the German teams being particularly strong in the early years of the Vis. I think that German universities focused on the CISG more than universities in other countries, particularly than those from the common law world. Recently, the Australian universities have done well. I have the impression that they are particularly well-coached for the memoranda.

Q-4 What is more important for a memorandum: to be based on law or on facts?

A-4 It depends partly on the problem in any particular year. In some years the factual issues are dominant, in others the legal (CISG) issues are in the front line. Don’t forget that the procedural aspect of the problem is also equally important, and that this usually involves mixed issues of fact and (procedural) law, which is not at all related to the CISG. The procedural aspects are nearly always governed by the UNCITRAL Model Law and a particular set of international arbitration rules. I feel that some of the more academic-type coaches focus too much on the substantive (CISG) aspect of the problem, and not enough on the procedural aspect. Both are equally important in the context of evaluating the teams’ memoranda.

Q-5 Coming to orals, what are the crucial things to make a mark at VIS?

A-5. By the orals stage, good presentation skills are as important as knowledge of the law. Many teams, and their coaches, spend proportionately too much time and effort on the academic aspects of the problem and do not give adequate time and importance to presentation. Moot competitions are an important part of training to become a practising lawyer, and are intended to test presentational skills as well as the ability to analyse a factual and law-related scenario. Elements such as posture, body language, pacing and tonality are important. By the time of the oral phase most teams are on the top of the problem, particularly in the final elimination rounds. The arbitrators (who are also the competition judges) will be looking for the extent to which the teams appearing before them have abandoned ‘bad’ arguments and have found attractive ways of presenting the good arguments. By the time of the quarter/semi final rounds the differential between the teams is more likely to be seen in their presentational skills, rather than their in their technical prowess in analysing the legal and factual issues.

Q-6. Again, would you like to identify any geographical region very good in the oral skills?

A-6. One of the strengths of the Vis Moot is that success is marked by a remarkable level of diversity. I have not counted, but certainly the winners of the main team prize have come from both civil law and common law countries. Winning teams have also come from developed and developing countries. There is also a remarkable, and manifestly unmanipulated, diversity both as to gender and race.

Q-7. Do you believe LUCK plays a role at VIS?

A-7. Oh, yes! Absolutely. I think that quality plays the greater part in the four preliminary rounds. Some, but not many, really strong teams are eliminated; and some, but not many, weak teams go through to the final rounds. But in the elimination rounds the dynamic changes significantly. Assessing the competing teams on a ‘knock-out’ basis is a very subjective exercise, and the tribunal deliberations after the arguments are concluded can, in my experience, be coloured by the way that relationships between the three arbitrators have developed before and during the hearing. I am always struck by the relatively large number of results in the elimination rounds that are reached by a majority vote, which shows that the decision could have gone either way.

GOOD LUCK!

International Arbitration Centre to open in Goa

An International Arbitration Centre is soon to become operational in Goa. It is to be inaugurated on January 4, 2011. It will initially function from the premises of the Goa Chamber of Commerce and Industries.

This new Centre was announced a few months ago by Union Law Minister Veerappa Moily after the regional meeting on implementation of the 13th Finance Commission recommendations.

It is hoped that Goa's status as a popular tourist destination would help to make it an attractive destination for arbitration.

More on this here.

More on IPL Arbitration.

As we had posted earlier on the IPL arbitration earlier which can be accessed here and here, following the “appeal” by BCCI in the Bombay High Court against the stay to the termination of its contract by the Board of Control for Cricket in India (BCCI), the court today upheld the order passed by Retired Justice B N Srikrishna, the single arbitrator. The single judge Bench of Justice S F Vazaifdar on 14th December dismissed the appeal filed by BCCI challenging the stay granted by the arbitrator and permitted Rajasthan Royals to participate in the IPL-4 auction that is to be held on January 8 and 9.

However, the court has imposed a condition on Rajasthan Royals directing them to file an affidavit before it by January 3 specifying full details of its ownership pattern and mode of control and that the three owners are in full control of their investment companies. As per the directions of the court, Rajasthan Royals will also have to submit US$2.83 million as guarantee to the BCCI for the contract and US$ 18 million as bank guarantee for the players.
Similarly, in case of Kings XI, BCCI suffered yet another setback the very next day when its appeal to a higher bench of the Bombay High Court against the orders passed by single judge bench of Justice Shiavax Vazifdar got dismissed. A two judge bench comprising of Justice D Y Chandrachud and Justice Anoop Mohata ruled that the entire basis of the letter of termination issued by the BCCI to the Mohali franchise was "erroneous and flawed". Earlier, due to Justice Srikrishna rescuing himself from the arbitration proceedings, Justice Vazifdar had granted interim relief till a new arbitrator was appointed and finally disposed of the dispute, which itself could take a long time.

AIJA Arbitration Conference:India

AIJA (Association Internationale des Jenues Avocats/International Association of Young Lawyers) was in India after a long gap of almost 2 decades for a conference. Last time it was there in 1988 & 1992. The conference which spanned for 2 days in Mumbai was on “International Business and Arbitration: Is India Still Different?” was attended by representatives of many national and international law firms and provided an apt platform for people to discuss the two most critical issues for the Indian judiciary and economy. The conference organized by the International Arbitration Commission of AIJA was divided into sessions with excellent speakers and experts as panelists. As the conference theme suggests, there was extensive discussion on Arbitration and Business scenario in India but this report would majorly cover sessions related to Arbitration.

Vindobona Junction - Claimant memo final Check list

Today is the first landmark for the Vis teams. The Claimant memorial, the result of a lot if effort over the last few months, will be submitted today. For those situated in many time zones, including mine, there is less than 12 hours left for the deadline. We had shared some tips on Vis memos in Vindobona Junction. If you already do not have the best of arguments and have not done a good job with the memorial, there is not much you can do now. 

However, the following is a checklist that may help you avoid some of the most common errors that one may commit while racing against time. These deal with presentation, not content.