103 results found
- COURT’S POWER UNDER SECTION 34: THE EXTENT AND SCOPE OF THE APPLICATION THROUGH NHAI V. M. HAKEEM
Swetalana Rout In a significant ruling of the Supreme Court, it has been decided that the scope of power of a Court is limited to the grounds under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter “1996 Act”]. The Apex Court held that Courts cannot modify or vary an arbitral award and has no power to do so. It also highlights the remodelling of Section 34 in accordance with UNCITRAL Model Law on International Commercial Arbitration, 1985 [hereinafter “Model Law”]. Factual Matrix: A series of appeals arose before the Apex Court with respect to the notifications issued under the National Highways Act, 1956 [hereinafter “NH Act”] comprising of awards given by the Competent Authority based on the guideline value of the specific lands and not on sale deeds. As a result, , significantly lower amounts were granted by the relevant authorities. The arbitrator appointed by the government (District Collector) did not find irregularities in the compensation amounts and approved the same. However, after the award was challenged in the District and Sessions Court, the Judge enhanced the amount and in reality, modified the award. The High Court of Madras also affirmed the modification. Thus, the Apex Court had to decide whether the power of a court under Section 34 of the 1996 Act to “set aside” an award of an arbitrator would include the power to modify such an award. Opinion of the Court: The Apex Court took note of the fact that Section 34 is an appellate provision in nature and an award can be set aside only as per the grounds mentioned in subsections (2) and (3) of Section 34. It further held, “Quite obviously if one were to include the power to modify an award in Section 34, one would be crossing the Lakshman Rekha and doing what, according to the justice of a case, ought to be done. In interpreting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. It is only for Parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over.” Since it is the opinion of the Tribunal that counts to eliminate grounds of setting aside an award, it can be indicated by the Court hearing the Section 34 application. This particular provision is largely based on Model law, which gives no discretion to a Court to modify/vary an award. The Apex Court has also referred to some cases including McDermott International Inc. v. Burn Standard Co. Ltd. and Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd. The Mcdermott judgement specifies that where the Court sets aside the award passed by the majority members of the tribunal, the underlying disputes would require to be decided afresh in an appropriate proceeding. Under Section 34 of the 1996 Act, the Court may either “dismiss the objections filed, and uphold the award, or set aside the award if the grounds contained in sub-sections (2) and (2A) are made out”. There is no power to modify an arbitral award. There have been a plethora of cases indicating that the High Court is instructive. In Cybernetics Network Pvt. Ltd. v. Bisquare Technologies Pvt. Ltd., the Delhi High Court pointed out that courts cannot deal with claims in detail which are already decided on by the Arbitral Tribunal even if it appeared that the Tribunal/Arbitrator has erred in rejecting a few claims under the power given to the Courts under Section 34(4). Another judgement delivered by the Delhi High Courtheld that under the Arbitration Act, a successful challenge can lead to setting aside of an award, which was distinct from the power of the court under the Arbitration and Conciliation Act, 1940 [hereinafter “1940 Act”], as per which an award could be modified. Additionally, the decision in Puri Construction P. Ltd. v. Larsen and Toubro Ltd. was also taken into consideration, where the Delhi High Court, while reiterating the law laid down in McDermott, held that the power to modify, vary or remit the award does not exist under Section 34 of the Arbitration Act. The Delhi High Court held that a Court modifying or varying the award, would in essence be correcting the errors of the arbitrator. The Court also referred to Gayatri Balaswamy, relied on by the Respondent, which held that Mcdermottdid not settle the issue of modification by Court under Section 34. The Court observed that the judgements relied upon in Gayatri Balaswamy were the modified awards in the exercise of powers under Article 142 of the Constitution of India. Hence, this judgement was wrong in holding that the judicial trend shows that this provision has the power to modify, revise or vary an award. Another decision of the Madras High Court was highlighted to reiterate Mcdermott’s position that a modification is not possible under Section 34. Several other cases cited by the Respondent were also rendered irrelevant by the Apex Court since they were also passed in accordance with Article 142 of the Constitution and did not constitute the ratio decidendi. Analysis of NHAI vs. M. Hakeem: To interpret the current judicial trend and reading Section 34 as a power to modify, revise or vary an award would be akin to bringing back the previous law under the 1940 Act to the limelight. It would lead to ignoring the fact that the 1996 Act was based on the Model Law and was remodelled accordingly. Section 34 has also been compared with the provisions for challenging an award under the Arbitration Acts across the globe in this decision. It is explicit that there are provisions exclusively in their legislations, that permit varying the award, unlike Section 34. Further, the Apex Court also held that to assimilate the Section 34 jurisdiction with the revisional jurisdiction under Section 115 of the Code of Civil Procedure, 1908[hereinafter “CPC,1908”] is fallacious. Since Section 115 of the CPC, 1908 sets out three grounds for entertaining a revision and states that the High Court may make ‘such order as it thinks fit’ which are clearly missing in Section 34, it is not possible to interpret the award that way. The legislative intent was also cleared out in this judgement. In the decision, ‘purposive construction’ was referred to by Bennion in his classic on Statutory Interpretation, re-affirming that it must be applied on the facts of this case as in legislations dealing with land acquisition, a pragmatic view is required to be taken and the law must be interpreted purposefully and realistically so that the benefit reaches the masses. Purposive construction of statutes, relevant in the present context, was referred to in a recent concurring judgment of Eera v. State (NCT of Delhi), as the theory of “creative interpretation”. However, even “creative interpretation” has its limits. The legislators did not intend to use the word “modify” anywhere in Section 34 of the Act but what was contemplated is only to “set aside” an award passed by the Arbitrator if it falls within the realm of Section 34 of the Act. There are a number of case laws where NHAI has not filed an appeal arising out of the Section 3A Notification, resulting in several land owners getting away with more compensation given by the District Court. We cannot be blindfolded by the fact that the award is based on the “guideline value” relevant only for stamp duty purposes and completely ignoring the sale deeds which are a correct measure of the land value. The Court also acknowledged the fact that differential compensation cannot be awarded solely to achieve a different public purpose. The public purpose can be extremely commendable, but the legislature cannot say that the award for the differential compensation is to be paid depending on the same. Conclusion: As per the High Courts, there is a difference of opinion on the issue of modification of awards. Hence, the Hakeemjudgement lays down a significant rule since it clarifies the position of Section 34 that Courts can neither modify, revise or vary an award. This decision places importance on the minimal judicial interference of Courts which is the basis of any arbitration. This decision is also consistent with the legislative intent and the recent amendments made to the Arbitration Act, specifically Section 34. National Highways No. 45E and 220 National Highways Authority of India v. M. Hakeem, 2021 SCC OnLine SC 473.  McDermott International Inc. v. Burn Standard Co. Ltd. , (2006) 11 SCC 181.  Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd., 2021 SCC OnLine SC 157.  Supra note 2.  Cybernetics Network Pvt. Ltd. v. Bisquare Technologies Pvt. Ltd, 2012 SCC OnLine Del 1155.  Nussli Switzerland Ltd. v. Organizing Committee Commonwealth Games, 2014 SCC OnLine Del 4834  Puri Construction P. Ltd. v. Larsen and Toubro Ltd., 2015 SCC OnLine Del 9126.  Supra note 2.  Gayatri Balaswamy v. ISG Novasoft Technologies Ltd., 2014 SCC OnLine Mad 6568.  Supra note 2.  The Constitution of India, 1950, Article 142.  Id.  The Code of Civil Procedure, 1908, Section 115.  Eera v. State (NCT of Delhi), (2017) 15 SCC 133.  Supra note 1.
- Finding The Tryst Between International Arbitration & Cross-Border Insolvency: An Indian Perspective
*Snehil Balani Understanding the Problem There is a constant wiggle between international arbitration proceedings and cross-border insolvency due to their opposite nature which often creates two extreme sides, in which none of them can be labelled as right or wrong. The intersection between the two can be seen more frequently in the times of covid as corporations and businesses were not able to comply with their international contractual obligations which led to international arbitration proceedings and on the other hand were not able to pay-back to the creditors which led to initiation of domestic insolvency proceedings against them. This led to parallel international arbitration and domestic insolvency proceedings against the same party. The conflict between the two was aptly explained by the Singapore Court of Appeal in the case of Larsen Oil and Gas Pte Ltd. v. Petroprod Ltd. (2011) as “Arbitration and insolvency processes embody, to an extent, contrasting legal policies. On the one hand, arbitration embodies the principles of party autonomy and the decentralisation of private dispute resolution. On the other hand, the insolvency process is a collective statutory proceeding that involves the public centralisation of disputes so as to achieve economic efficiency and optimal returns for creditors.” The intersection and conflict can be explained through an example: Party ‘A’ (residing in India) enters into a commercial contract for delivering certain goods to party ‘B’ (residing outside India). The contract contained an arbitration clause which provided that any or all disputes arising out of or in connection with the contract shall be finally resolved by arbitration in accordance with SIAC rules. The seat of the proceedings shall be Singapore and the contract shall be governed according to the laws of India. ‘A’ failed to comply with the contract and an arbitration proceeding is initiated by ‘B’ for breach of contract and damages. Subsequently, an insolvency proceeding by a different creditor in India against ‘A’ was admitted to CIRP and a moratorium is passed against ‘A’ under section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC” hereinafter). Now, a lot of questions arise in the present scenario, such as - Will the moratorium include a foreign seated arbitration within its ambit in order to stay the arbitration proceedings? No, in order to recognize foreign seated arbitration, there needs to be a pact between countries to recognise the same and India holds no such pact with other countries. But, it can be recognised on a case-to-case basis as illustrated in the further segments. - What are the possible repercussions that might arise if the arbitration proceeding is stayed recognising the insolvency proceedings in India? Possible repercussions include violation of party autonomy and pacta sunt servanda. - What are the repercussions if the arbitration proceeding is not stayed? It will go against the interest of the creditors and also against the principle of audi alteram partem which is one of the fundamental principles of natural justice. - Is there a mid-way? Ultimately, the probable solution regarding the conflict as addressed by different international organisations and networks was to recognise the insolvency proceedings moratorium in the interest of all the parties involved. Detailed analysis for the above points is covered in the following segments. Why Should Insolvency Proceedings be Recognised Under the International Arbitration? If the arbitral proceedings are continued and no stay is granted then it will be “contrary to the public policy of India”.Section 48(2)(b) of the Arbitration and Conciliation Act, 1996 (“the act” hereinafter) explains the term as: - Induced or affected by fraud or corruption; or - In contravention with the fundamental policy of Indian law; or - In conflict with most basic notions of morality or justice. The phrase ‘contrary to the public policy of India’ was further explained by the apex court within the context of section 48(2)(b) of the act in the case of Ssyangyong Engineering and Construction Co. Ltd. v. National Highway Authority of India (2019). It stated that “fundamental policy of law” includes principles of natural justice. This was in line with the judgment of Renusagar Power Co. Ltd. v. General Electric Co. (1994). Audi Alteram Partem (the rule of fair hearing) is one of the most basic principles of natural justice which states that rights/liberty/property of a person should not be affected without him being given a chance to represent himself and it was explained by the apex court in the case of Smt, Maneka Gandhi v. Union of India and Anr.(1978) as “even where there is no specific provision for showing cause, yet in a proposed action which affects the rights of an individual it is the duty of the authority to give reasonable opportunity to be heard”. If arbitral proceedings are conducted and an award is passed against party ‘A’ then it will affect his assets and property, in turn affecting the amount received by other creditors. Here, the rights and property of other creditors are being affected through the decision by the arbitral tribunal without giving them a chance for representing themselves, which will be contrary to the public policy of India and thus, unenforceable according to the laws of India under section 48(2)(b) of the act. The exception of public policy is also highlighted under Chapter VII of the UNCITRAL Model Law, Article V(2)(b) of the New York Convention. Why Should the Arbitration Proceedings be Given Effect and Insolvency Proceedings Not To be Recognised? There are multiple reasons as to why a stay should not be granted in the present example. If a stay is granted it will be “against the intent of the parties” which is one of the fundamental principles of international arbitration law. This principle has been highlighted by multiple courts and tribunal across the globe, for eg. by the Singapore court of appeal in the case of Insigma Technology Co. Ltd. v. Alstom Technology Ltd. (2009). The court held that “courts should construe an arbitration agreement so as to give effect to a clear intention evinced by the parties to settle their dispute by arbitration”. Stay in proceedings will also be against the principle of “pacta sunt servanda”. This is a common principle of international law which provides that “agreements must be kept”. In the present example, the agreement and intent of the parties to resolve any or all disputes arising out of the contract by arbitration would not be recognised if a stay is granted by recognising the insolvency proceedings. Also, the IBC extends to the whole of India according to Section 1(2) of it. So, the moratorium cannot have an effect on a Singapore seated international arbitration. Finding the Tryst This conflict between the two was explained by the U.S. courts in Re United States Lines Inc (1999) as “a conflict of near polar extremes: bankruptcy policy exerts an inexorable pull towards centralization while arbitration policy advocates a decentralised approach towards dispute resolution”. The issue between the two was attempted to be resolved by the UNCITRAL Model Law on Cross-Border Insolvency (“Model Law” hereinafter) which provides for a stay of arbitral proceedings under article 20 if, foreign insolvency proceedings have been recognised. Another attempt was made by the Judicial Insolvency Network (“JIN” hereinafter) provides to recognise cross-border insolvencies but only among signatory nations. Currently, 49 states have adopted the Model law and 16 jurisdictions have adopted the JIN guidelines. Thus, the conflict is tried to be resolved by putting a stay to arbitral proceedings and recognising cross-border insolvencies through the above-mentioned treaties. The problem in India is the non-adoption of such treaties in order to recognise foreign insolvency proceedings in India and vice-versa. Even though, Section 234 of the IBC provides for “agreements with foreign countries”, but it is not utilized for entering into bilateral treaties with foreign countries in order to recognise insolvency proceedings. Ultimately, recognition of insolvency can provide the best solution because it takes into consideration the interest of the larger group of creditors and is not limited to one creditor. Also, the person claiming the amount through arbitration proceedings (‘B’ in the present example) can get his remedy along with other creditors through the process of insolvency. This will ultimately help him to get his claim and not compromise with the interest of other parties. In the long term, the problem of recognition of cross-border insolvency for India can only be solved by adopting Model law and JIN guidelines. Until then, the short-term solution would be to recognise insolvencies on a case-to-case basis, keeping in mind the interest of all the parties. The same thing was done by NCLAT (National Company Law Appellate Tribunal) in the case of Jet Airways (India) Ltd. v. State Bank of India & anr. (2019). It recognised a Dutch foreign insolvency proceeding in India even without having a formal pact for recognition of insolvency proceedings between both countries. NCLAT did so by keeping in mind the interest at large which includes the interest of other creditors involved in the case. Even though, the case did not include an arbitration proceeding but this case provides the certainty that courts and tribunals can recognise foreign insolvency proceedings even without having a pact between the two countries. And this is what needs to be done until India adopts the Model law and JIN guidelines. Conclusion From the above analysis it can be concluded equality must be maintained among all the parties involved in a particular scenario (parties seeking arbitration and creditors seeking insolvency). Arbitration proceedings should not take away the rights of the creditors in the name of party autonomy and pacta sunt servanda. Arbitration proceedings should not be held at the cost of the interest of the creditors. By recognising moratorium, all the parties can seek their lending and damages under a same mechanism (insolvency proceedings) which is not detrimental to either of the parties. Thus, there is a need for optimum use of section 234 of the IBC in order to enter into agreements with foreign countries for recognition of cross-border insolvency proceedings and until then recognition can be done on a case-to-case basis.
- Exclusive Jurisdiction v. Forum Selection Clauses: What’s Brewing Amongst the High Courts?
-Rohan Gulati* INTRODUCTION The hotly debated and persisting conundrum of seat and venue of arbitration has been a canvas that has been painted with several strokes of paint [judgments]. Be that as it may, the fact that these paint strokes have been made by different brushes [different approaches and reasoning] is perhaps the perplexing aspect altogether. Somewhere between the fine margins, the enigma of exclusive jurisdiction clauses and forum selection clauses has garnered immense interest. Before deep-diving into the intricacies of the debate and a flood of judgments, it is indispensable to pause, take a step back, and highlight the most recognized principle of the seat of arbitration in the context of exclusive jurisdiction clauses. Simply put, in cases where a seat of arbitration is designated by the parties, the courts at the seat of arbitration will have jurisdiction in respect of all cases arising out of or in relation to such arbitration. Such jurisdiction has been referred to as the supervisory jurisdiction of the seat court since the seat has been considered to hold the center of gravity. Unfortunately, in the Indian jurisdiction, at times, contracts carry two different jurisdictional clauses, i.e., a clause that stipulates the seat of arbitration (commonly referred as the ‘exclusive jurisdiction clause’) and another clause that stipulates the courts that hold the jurisdiction in case of any dispute (commonly referred as the ‘forum selection clause’). These two jurisdiction clauses carry their distinct legal implications respectively but become dichotomous when included in the same contract. In an attempt to decode the afore-stated dichotomy, three different High Courts in India hand-picked three different brushes [different approaches] and each of them painted a different stroke on a brand-new canvas. The purpose of this article is to go stroke-wise [judgment-wise], identify the best stroke [the ideal and correct judgment], and highlight the stroke that hand-picked the wrong brush [the judgment that did not follow the correct law]. [Note: The words ‘exclusive jurisdiction’ and ‘seat of arbitration’ will be used interchangeably in the article.] THE FIRST STROKE The Hon’ble Delhi High Court (“Delhi High Court”) in the case of My Preferred Transformation and Hospitality Pvt. Ltd. v. Sumithra Inn was confronted with a situation where a Management Services Agreement (“MSA”) stipulated that the courts of New Delhi would have exclusive jurisdiction insofar as the arbitration proceedings were concerned but the courts at Bangalore would have jurisdiction for all matters arising out of the MSA. The petitioner in the instant case had approached the Delhi High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“1996 Act”) and the respondent vehemently opposed the same on the ground that in accordance with the MSA, the courts at Bangalore had the appropriate jurisdiction to appoint an arbitrator under Section 11(6) of the 1996 Act. Thus, the Delhi High Court had to resolve the tussle between an exclusive jurisdiction clause and a forum selection clause, both stipulated under the MSA, and whether the Delhi High Court was forum conveniens. The Delhi High Court laid down 4 permutations and combinations that could arise in such situations (not limited to the MSA): · Cases in which the contract only contained a ‘forum selection’ clause, but no ‘seat of arbitration’ clause; · Cases in which the contract contained a ‘seat of arbitration’ clause but not a ‘forum selection’ clause; · Cases in which the contract contained a ‘seat of arbitration’ and a ‘forum selection’ clause and both clauses vested jurisdiction in the same court, or courts at the same territorial location; or · Cases in which the contract contained a ‘seat of arbitration’ and a ‘forum selection’ clause, vesting jurisdiction in courts at different territorial locations. [Note: In the afore-stated four scenarios, the Delhi High Court had used the words ‘exclusive jurisdiction’ which have been replaced with the words ‘forum selection clause’ to maintain consistency in the language throughout the article.] It was prima facie apparent that the instant case fell into the last category. The Delhi High Court then relied upon the judgment of the Hon’ble Supreme Court of India (“Supreme Court”), delivered in the case of Mankastu Impex Pvt. Ltd. v. Airvisual Ltd. (“Mankastu Impex”), wherein the Supreme Court was confronted with an identical set of facts, albeit regarding an international commercial arbitration. The Supreme Court there had opined that since Hong Kong was designated as the seat of arbitration, the same would have precedence over the forum selection clause. Thus, following on the lines of Mankastu Impex, the Delhi High Court observed that merely conferring jurisdiction upon the courts at Bangalore would not mean that the Section 11 petition would lie before the High Court of Karnataka at Bangalore. Additionally, by combining two pertinent aspects - first, there was no provision that specifically conferred jurisdiction, and second, the seat of arbitration was agreed to be New Delhi in the MSA - the Delhi High Court concluded that it would be vested with the jurisdiction under Section 11 of the 1996 Act. Whilst the stroke painted by the Delhi High Court appears to be with the correct brush, there is certainly more than what meets the eye. While answering the issue of jurisdiction, the Delhi High Court observed the following (emphasis added): “42. In the case of a domestic arbitration…the Court, having jurisdiction over the seat of arbitration, would be exclusively competent to entertain petitions under the 1996 Act, in exercise of its supervisory jurisdiction over the arbitral process, unless there is a separate clause conferring exclusive jurisdiction on a court in another territorial location, qua the particular provision which is in issue. If, in other words, in the present case, the MSA were to contain an exclusive jurisdiction clause, conferring exclusive section 11 jurisdiction on a court located elsewhere than at New Delhi, the situation may have been different. There is, however, no such specific exclusive jurisdiction clause; ergo, territorial jurisdiction, to entertain the present petition under Section 11 of the 1996 Act, thus, has to abide by the seat of arbitration which is, undisputedly, New Delhi.” From a bare perusal, the Delhi High Court essentially highlighted that if a clause conferred a ‘provision-specific’ jurisdiction upon a ‘particular’ court, it would prevail over and above the exclusive jurisdiction (that designates the seat of arbitration). This observation may be in conflict with the existing landscape and lead to an anomaly even in the instant case or where contracting parties may wish for the Delhi High Court to adjudicate a Section 11 petition and for the Madras High Court to adjudicate a Section 34 petition, even when the seat of arbitration is Bangalore. This would effectively turn the exclusive jurisdiction clause entirely redundant. Therefore, the reasoning of the Delhi High Court that primarily conveys that a forum selection clause, if conferred with ‘provision-specific’ jurisdiction will supersede the courts at the seat of arbitration, seems to be largely flawed and inconsistent in light of the ratios in the case of BGS SGS Soma JV v. NHPC Ltd. (“BGS Soma”) and Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. (“Indus Mobile”). Both BGS Soma and Indus Mobile had similar issues and held that if there exists a clause that designates the seat of arbitration, it implies that the courts at the seat of arbitration would have the jurisdiction and the clause would thereby be akin to an exclusive jurisdiction clause. THE SECOND STROKE The second stroke on the canvas came from the Hon’ble Calcutta High Court (“Calcutta High Court”) in the case of Bowlopedia Restaurants India Ltd. v. Devyani International Ltd. (“Bowlopedia Restaurants”). The case concerned a Section 9 petition that involved the question of jurisdiction - the courts at Kolkata were vested with the jurisdiction but the seat of arbitration was agreed to be at New Delhi. The Calcutta High Court framed the issue as: when there is a forum selection clause that stipulates a different court over the seat of arbitration, whether it would override the latter? Whilst answering the afore-stated issue in affirmative, the Calcutta High Court premised its ruling on two pillars viz., (i) the principle of party autonomy and (ii) a part of the cause of action arising within the territorial limits of the Calcutta High Court. That being said, the Court disregarded the essence and weight of the seat of arbitration in domestic cases and held that the significance of seat and venue is material to international commercial arbitration and not domestic arbitration. According to the Court, the seat of arbitration clause will be significant in a case where the forum selection clause is absent. In all other cases, party autonomy would dictate that the seat of arbitration clause be overridden by the forum selection clause as the courts at the forum will also hold jurisdiction over the subject matter. The above decision is a classic example of throwing the baby out with the bathwater. The judgment, is without an iota of doubt, a bad precedent in the current regime. The Court considered the principles of jurisdiction as established under Section 20 of the Code of Civil Procedure, 1908 (“CPC”) to hold that since a part of the cause of action arose within its territorial limits, the Calcutta High Court would have the appropriate jurisdiction. On the contrary, as per the authoritative judgments in BGS Soma and Indus Mobile as discussed above, the seat of arbitration clause would firstly prevail over the forum selection clause and secondly, the courts at the seat of arbitration would have supervisory jurisdiction over the arbitral process. Pertinently, the principle of the cause of action is wholly irrelevant whilst determining a tussle between an exclusive jurisdiction and forum selection clause in an arbitration case. The ethos of the decision in BGS Soma was primarily aimed at giving supremacy to the seat of arbitration over the traditional CPC approach of deeming the cause of action to be the center of gravity. Therefore, the decision in the case of Bowlopedia Restaurants completely derails from the existing line of decisions and sets a bad precedent in law. The Calcutta High Court seems to have not only painted a bad stroke on the canvass but also picked the wrong brush in doing so. It is hoped that the decision is revisited by a Division Bench of the Calcutta High Court and the judgment of the learned single judge is set aside to keep at bay the ghosts of the past. THE THIRD STROKE A Division Bench of the Hon’ble Bombay High Court (“Bombay High Court”) in the case of Aniket SA Investments LLC v. Janapriya Engineers Syndicate Private Limited (“Aniket Investments”) delivered a landmark judgment and held that a choice of seat is in itself an expression of party autonomy and carries the effect of conferring exclusive jurisdiction to the courts at the seat of arbitration. The judgment arose as a result of an appeal from the decision rendered by the learned single judge and under a Section 9 petition filed before the Bombay High Court. The arbitration agreement stipulated that the seat of arbitration would be Mumbai. However, the forum selection clause stipulated that ‘subject to’ the arbitration clause, the courts at Hyderabad shall have exclusive jurisdiction. The learned single judge, the forum selection clause took precedence over the seat of arbitration, and whilst dismissing the petition, held that the courts at Hyderabad will be forum conveniens. Aggrieved, the petitioner appealed to a Division Bench that set aside the order of the learned single judge. Relying on the Supreme Court’s decision in Bharat Aluminum Company v. Kaiser Aluminum Technical Services Inc.(“BALCO”) and BGS Soma and approving the reasoning adopted in Indus Mobile, the Division Bench ruled that once the parties have selected a seat of arbitration, it would carry with it a conferment of exclusive jurisdiction over the entire arbitral process. The Bombay High Court categorically noted that one of the most pertinent aspects of BGS Soma was its clarification of the judgment in BALCO. Interestingly, the Bombay High Court also noted that BALCO was often misconstrued in the sense that two courts at different locations could exercise jurisdiction i.e., concurrent jurisdiction however, BGS Soma authoritatively clarified this point that neither did BALCO promote concurrent jurisdiction of the courts nor did it divide two different courts as the cause of action court and seat court. In accordance with BGS Soma, the Bombay High Court ultimately opined that since Mumbai was fixed as the seat of arbitration and the forum selection clause only being ‘subject to’ the arbitration agreement, courts at Mumbai would hold precedence in jurisdiction over the Hyderabad courts. Thus, the judgment of the Bombay High Court is perhaps the most lucid and authoritative insofar as the debate at hand is concerned. Not only does the judgment reflect a stance friendly to party-autonomy, it also follows the correct law and disregards any misinterpretations. As discussed, due to the conflicting nature of the judgments rendered by the Delhi High Court and the Calcutta High Court, it is imperative that the judgment of the Bombay High Court is followed as the proper precedent. In sum, the Bombay High Court seems to have hand-picked the best brush and painted the best stroke on the canvas. CONCLUSION Despite the landmark Supreme Court judgments and given the three conflicting precedents of different High Courts in India, the conundrum remains far from being settled at the moment. On one hand, the courts must take note of the interpretations that must be consistently followed after BALCO and then BGS Soma. On the other hand, arguing the conundrum between exclusive jurisdiction and forum selection clauses may be a litigating lawyer’s delight, albeit the outcome of such decisions may yield a bad precedent, as observed in the case of Bowlopedia Restaurants. Post the BGS Soma judgment, it had become amply clear that there remained no room for concurrent jurisdiction being exercised by two different courts with different territorial limits. The regime had always been structured to provide the courts at the seat of the arbitration the exclusive jurisdiction over the arbitral process. However, what has gone around has certainly come around. In the meantime, it is vital that the judgment in Aniket Investments is treated as the most valuable precedent concerning the dichotomy between exclusive jurisdiction and forum selection clauses. It would be appropriate to end with an observation made by the Bombay High Court in the case of Aniket Investments: “It is too late in the day, to contend that the seat of arbitration is not analogous to an exclusive jurisdiction clause.” * Rohan Gulati is a Junior Staff Editor for the Arbitration Workshop Blog. He is currently a fourth-year law student pursuing B.B.A. LL.B. at Symbiosis Law School, Hyderabad. His primary area of interest is Alternative Dispute Resolution (ADR) with a specific focus on arbitration law. He can be contacted at firstname.lastname@example.org  BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234.  Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552.  2021 SCC OnLine Del 1536.  (2020) 5 SCC 399.  Supra note 3 at ¶ 40.  Id, ¶ 42.  (2020) 4 SCC 234.  (2017) 7 SCC 678.  2021 SCC OnLine Cal 103.  Supra note 9 at ¶ 36.  Supra note 1 at ¶ 49.  2021 SCC OnLine Bom 919.  (2012) 9 SCC 552.  Supra note 12 at ¶ 24.  Supra note 1 at ¶ 57.  Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603 at ¶ 45.
- Blog on Arbitration | Arbitration Workshop
About Us This blog is an attempt by its promoters to create an environment for discussion on the functioning and working of Arbitral Tribunals and the interaction of the Arbitration and Conciliation Act, 1996 with the Tribunals. This blog will attempt to de-mystify the laws as argued in connection with the Arbitration Acts across the globe which are based on the UNCITRAL Model Law of 1996 and address the working of contractual provisions as argued in trial. This attempt is also to get members of the bar working in arbitration, across global jurisdictions, to express their views in connection to the working of Arbitral Tribunals, drawing from their own experiences and to involve them in making this blog a practical approach to arbitration rather than a theoretical one. Besides dealing with modalities of functioning of Arbitral Tribunals, this blog from time to time will also keep its readers updated about the major shifts and trends of International Commercial Arbitration. As the name of this blog would suggest, we are attempting to look specifically at the workings of Arbitral Tribunals and not the aspects of the Arbitration Act beyond the Arbitral Tribunals. In all, we would like to raise the level of arbitration advocacy in India and around the world and promote greater discussions on various aspects of arbitration. The same will be done while maintaining confidentiality of all the stakeholders of the arbitration from which the participants will draw their experiences. 2 days ago Towards a Permanent Court of Investment Arbitration This paper discusses the creation of a Permanent Court of Investment Arbitration (“PCIA”). 30 Aug 6 Institutional Innovations – a threat to the Lex Arbitri? Umang Bhat Nair Arbitration today, as a means of consensual dispute resolution, can be likened to a game of football where the... 106 Aug 1 Arbitrating Shareholder Disputes: A Case for Emergency Arbitration in India Gaurav Rai and Suraj Raj Kesherwani dive deep into the world shareholder disputes and the need for emergency arbitration in India. 129 Jul 23 Application of Limitation Act,1963 to Arbitration And Conciliation Act, 1996 In this article, Arpit Sarangi discusses the law of limitation as it is applicable to the Arbitration and Conciliation Act, 1996 60 Jul 16 Interview with Mr. Peter Ashford, Partner at Fox Williams LLP Mr. Ashford, welcome to the Arbitration Workshop! Firstly, we are highly honoured to have you agree to give us your interview. Secondly,... 192 Jul 11 Supreme Court of India resolves the ‘venue’/‘seat’ of arbitration conundrum Harshvardhan Tripathi of NALSAR , Hyderabad takes us through the development of jurisprudence of the venue/seat debate. 201 Featured Posts Interviews Jul 16 Interview with Mr. Peter Ashford, Partner at Fox Williams LLP Mr. Ashford, welcome to the Arbitration Workshop! Firstly, we are highly honoured to have you agree to give us your interview. Secondly,... Jan 24 Interview with Mr. Nicholas Peacock, Partner at Herbert Smith Freehills Focus on doing each role you are given as best you can and learning from those around you. Jan 7 Interview with Ms. Lucy Greenwood, Arbitrator and Counsel in Arbitration We are grateful to Ms. Lucy Greenwood, who agreed to give us this interview. We are delighted that she will be sharing her experiences...
- Meet the Team | Arbitration Workshop
Team Arbitration Workshop Gaurav Rai Editor, The Arbitration Workshop Gaurav Rai is an Associate at AKS Partners, New Delhi. He completed his BBA.LLB(Hons.) from National Law University Odisha in 2015 and his Master of Laws (LL.M) from University College London in 2016. His primary focus is on commercial and investment treaty arbitration. He has previously worked as a Legal Assistant in the office of Justice A.K. Patnaik, Former Judge, Supreme Court of India and assisted him in his work as an Arbitrator. He can be contacted at email@example.com Gautam Mohanty Editor, The Arbitration Workshop Gautam Mohanty is currently a Doctoral Candidate at Kozminski University, Warsaw Poland. He has completed his BBA.LLB(Hons.) from National Law University Odisha in 2015 and has a Master of Laws (LLM) from Central European University, Hungary in 2017. He is working as an Arbitration Consultant in the offices of Justice Deepak Verma, Former Judge Supreme Court of India. He is also an Assistant Professor on leave at Jindal Global Law School (JGLS) with a keen interest in International Commercial Arbitration, International Investment Law and Private International Law. He is a graduate of the coveted Arbitration Academy, Paris. He has recently published his first book titled ‘Enforcement of Foreign Arbitral Awards and Public Policy Exception- Including an analysis of South Asian State Practice’ published by Springer Publications. He can be contacted at firstname.lastname@example.org ' Aastha Sharma Staff Editor, The Arbitration Workshop Aastha, graduated with an LL.M. in International Legal studies with a focus on Arbitration and Dispute Resolution from Georgetown University, USA in 2020. While pursuing her LL.M. she interned with an international boutique Arbitration firm in D.C. which fostered her inclination to delve deeper into the subject area. Currently, she’s an associate at a firm in Delhi focusing on IBC, Arbitration and Corporate laws. As a new practitioner, she plans to enhance her understanding of various commercial laws and share the developments taking place in Arbitration through writing. Alexandros Bakos Staff Editor, The Arbitration Workshop Alexandros is an International Affairs Research Analyst at Comply Advantage, where he focuses on the international legal and (geo)political framework concerning international sanctions. Before joining the Arbitration Workshop, he had worked for almost three years as an editor for a Romanian online outlet focused on bringing the latest news that is relevant for the Romanian legal sphere. He is also the managing editor of DAVA | Strategic Analysis, an online platform dedicated to geopolitical analysis surrounding the Eurasian region. Alexandros has ample research experience in international investment arbitration and public international law. He also has a strong interest in arbitration in general, human rights issues, international sanctions law, and EU external relations law. In terms of his educational background, Alexandros holds an LL.M. in Law and Economics from Utrecht University and an LL.M. in International and Comparative Business Law from Babeș-Bolyai University. Khushbu Turki Junior Staff Editor, The Arbitration Worksho p Khushbu Turki is currently a third year law student pursuing B.A L.L.B (Hons.) at National Law Institute University, Bhopal. She is an avid mooter and debater. She has a keen interest in arbitration law and corporate law. She also serves as an Editor for the NLIU Law Review and the Indian Arbitration Law Review. She can be contacted at email@example.com Rituparna Padhy Junior Staff Editor, The Arbitration Worksho p Rituparna Padhy is currently a fourth-year law student pursuing B.A. LL.B. at National Law University Odisha. She is an avid mooter and is keenly interested in Alternative Dispute Resolution, primarily arbitration. She has also been a content developer for Memo Pundits and CLAT Decodified and participated with distinction in conferences, paper presentations and even drafting competitions in the field of ADR. She can be contacted at firstname.lastname@example.org Rohan Gulati Junior Staff Editor, The Arbitration Worksho p Rohan Gulati is currently a fourth-year law student pursuing BB.A LL.B at Symbiosis Law School, Hyderabad. His primary area of interest is Alternative Dispute Resolution (ADR) with a specific focus on arbitration law. His accolades vary from securing meritorious positions in arbitral award writing competitions to case commentary competitions. He has also served as the President of the Alternative Dispute Resolution Society at Symbiosis Law School, Hyderabad. He can be contacted at email@example.com Vidhi Parikh Junior Staff Editor, The Arbitration Worksho p Vidhi Parikh is a member of the Institute of Company Secretaries of India with an All India Rank 20 and a second-year law student at Jitendra Chauhan College of Law, Mumbai. She is an active member of the Moot Court Committee of her College and has completed her master's in Bharat Natyam, a classical form of dance. She wishes to become an accomplished Corporate Law expert and excel in the field of Arbitration. She can be reached at- firstname.lastname@example.org Abhay Raj, Junior Staff Editor, The Arbitration Worksho p Abhay Raj is currently a third-year law student pursuing B.B.A. LL.B.(Hons.) from Jindal Global Law School, Sonepat. Being an avid mooter, he has done Frankfurt Investment Arbitration Moot, providing him with an insight into the field of Investment Arbitration. Abhay takes immense interest in researching and legal writing and aims to serve back to society. He has previously interned with the Chambers of Aditya Shankar, Advocate, Supreme Court of India, and assisted them on matters pertaining to arbitration and contract law. He can be reached at email@example.com Aditya Rathore, Junior Staff Editor, The Arbitration Worksho p I am a penultimate-year law student from National Law University Odisha. I developed a penchant for arbitration very recently and have been really enjoying it ever since. After my graduation, I intend to pursue litigation in the field of arbitration. I keep myself active by writing and researching on recent developments in the field. Apart from arbitration, I also enjoy taxation law and wish to pursue it alongside as well. In my free time, I like to read books. He can be reached at firstname.lastname@example.org . Jayati Goyal Staff Editor, The Arbitration Workshop Jayati Goyal is currently pursuing her Master of Laws (LLM) in Corporate and Financial Law and Policy from Jindal Global Law School, Sonipat (JGLS). She completed her BA.LLB (Hons.) from School of Law, Christ University, Bangalore in 2017. During her graduation, she interned at various law firms and acquitted herself in the field of litigation. Upon completion, she got opportunities to represent important clients before the High Court of Karnataka as well as Arbitral Tribunals. After successfully litigating for more than 2 years in various fields of law (Civil, Criminal, ADR and Corporate Litigation), she found her niche in Arbitration. She is a writing enthusiast and has presented write-ups on various legal and social issues. She can be contacted at email@example.com Swetalana Rout Junior Staff Editor, The Arbitration Worksho p Swetalana Rout is currently a fourth-year law student pursuing BA. LLB (Hons) at Damodaram Sanjivayya National Law University, Visakhapatnam. Her primary areas of interest lie in the field of Dispute Resolution with a penchant for arbitration law. Her accolades vary from getting published in several esteemed journals to being given an Hon'ble mention in Willem C. Vis East Moot 2021. She has successfully worked at several top tier law firms and has proven instrumental to the disputes and arbitration teams of the respective firms. She can be contacted at firstname.lastname@example.org Harshvardhan Tripathi Junior Staff Editor, The Arbitration Worksho p Harshvardhan Tripathi is a 4th year student of BA. LLB (Hons.) at NALSAR University of Law, Hyderabad. He has keen interest in the field of Arbitration, Mediation and Negotiation. He has participated and won in numerous international and national ADR competitions like ICC Paris and ICC Asia Pacific. In his free time, he enjoys running, writing poetry, reading philosophy and psychology, and sketching. He can be contacted at email@example.com
- CONTRIBUTORS | Arbitration Workshop
Gaurav Rai Editor - The Arbitration Workshop Gaurav Rai is an advocate registered with the Bar Council of Delhi and has been working in the office of Justice A.K. Patnaik, Former Judge, Supreme Court of India as a Legal Assistant. He primary focus is on arbitration and he assists Justice Patnaik in his duties as an arbitrator. He has completed his BBA.LLB(Hons.) from National Law University Odisha in 2015 and his Master of Laws (LL.M) from University College London in 2016. Gautam Mohanty Editor, The Arbitration Workshop Gautam Mohanty has completed his BBA.LLB(Hons.) from National Law University Odisha in 2015 and has a Master of Laws (LLM) from Central European University, Hungary in 2017. He has previously worked as an Arbitration Associate in the office of Justice Deepak Verma, Former Judge Supreme Court of India for a period of more than two years. Currently, he is working as a Senior Research Associate(SRA) at Jindal Global Law School(JGLS). Edita Maric Edita Marić is a Legal Research Associate at Alchemy Capital and is based in Sarajevo, Bosnia and Herzegovina. She holds an LL.M degree from University College London, University of London and an LLB degree in International and Comparative Law from American University in Bosnia and Herzegovina. Due to her extraordinary academic performance and strong analytical rigor, she was provided with an opportunity to conduct series of internships and positions. Before joining Alchemy Capital team as Legal & Research Associate, Edita’s previous work was at the Commission on Security and Cooperation in Europe, US Congress in Washington D.C., as well as in academia. Since May 2018, she is also a member of European Legal Research & Training Network BiH, an organization contributing to lawyer’s gradual integration to the EU job market. She can be contacted at firstname.lastname@example.org Ujjawal Satsangi Ujjawal Satsangi is a practicing advocate at the Allahabad High Court. He practices in Arbitration Law, apart from Civil Laws, Services laws, Commercial Laws and Criminal Laws. He has regularly assisted the Hon'ble High Court of Allahabad, NCLT, DRT, and other forums. Further, he has been representing the interest of his clients in Arbitrations, Investment Negotiations and other commercial transactions. He graduated from National Law University Odisha in 2016. He has been an avid writer and often writes on several niche topics of law with an aim of enriching the world of legal writing and bringing a meaningful impact by doing the same. He can be contacted at email@example.com Tia Majumdar Tia Majumdar is a graduate from National Law University, Delhi with a specific interest in commercial dispute resolution. She has assisted various Arbitral Tribunals in several high stake disputes under the guidance of Justice Deepak Verma (Retd.), Former Judge, Supreme Court of India. Rishabh Dheer Rishabh is an Advocate practicing in the Delhi High Court. He can be reached at firstname.lastname@example.org Raghav Bhargava Raghav Bhargava is a 4th year student of Gujarat National Law University pursuing law. He has a keen interest in commercial arbitration and international humanitarian law. He is also the Editor-in-Chief, GNLU Student Law Review. He has previously worked under Justice Deepak Verma, Former Judge of Supreme Court of India and has written for the Cambridge International Law Journal. He can be reached at email@example.com Asmita Singh Asmita Singh is working as a Research Associate in Jindal Global Law School, O.P Jindal Global University. She has a BA.LLB (Hons.) from Jindal Global Law School and a Master’s in International Dispute Resolution from the Humboldt University of Berlin, Germany. She wrote her master thesis on Harmonizing Investor & State Interests in Bilateral Investment Treaties and its impact on the ‘ease of doing business’ index of a country. She was also an Arbitrator at the Berlin Pre-Moot for the 26th Willem C. Vis Moot Court. While working in Germany, she has dealt with matters relating to maritime arbitration, investment arbitration, and commercial arbitration. She has also worked on matters to be filed at the European Court of Human Rights. She believes in a multi-dimensional approach in terms of research and hence works on issues related to law and society; and feminist jurisprudence in addition to international commercial arbitration and international investment arbitration. On the sides, she is also exploring the possibilities of ‘soft skill’ training especially in the legal market. She can be reached at firstname.lastname@example.org.