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Samyak Jain[1]* Recently, Madras High Court in the case of M/s J.K. Fenner (India) Limited v. M/s Neyveli Lignite Corporation[2] (hereinafter ‘Fenner’) had an opportunity to decide whether an arbitrator can grant interest pendente lite in an arbitration proceeding seated in India. The appeal was filed under section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘Arbitration Act”) challenging the validity of the order passed by the arbitral tribunal, wherein the Court modified the award in favour of the claimant and grant interest pendente lite together with principal amount, though the terms of the contract did not prohibit the same. This decision is in conformity with the decisions of the Supreme Courts and various other High Courts in the recent past. Introduction Interest pendente lite is defined as the interest between the date on which the cause of action arises until the date of the award. Recently, this issue is much debated in the legal arena as this issue repeatedly arises before the judiciary. Arbitration is now the principal method in resolving commercial disputes among the parties.[3] Judiciary repeatedly tried to maintain a balance between party autonomy and arbitrator’s power to award interest in order to do justice with the party petitioning for interest. It is also accepted that arbitrator cannot award interest if the terms of the contract expressly barred the tribunal from awarding it. Here, the author first tried to discuss position under the Arbitration Act of 1940 and 1996 with judicial pronouncements and then discusses the interpretation of a single-judge bench of Madras High Court in reaching conclusion in the present case. Position under 1940 Arbitration Act Claimant further supported this contention by placing reliance on the judgment of the Supreme Court of constitution bench in Secretary Irrigation Department, Government of Orissa and Others v. G.C. Roy,[4] (hereinafter ‘GC Roy’) considering the question of arbitrator’s jurisdiction in awarding interest pendente lite in the absence of the contract for the same. The court answered in affirmative that in a situation where the contract does not provide for the grant of such interest nor does it prohibit such grant, or the contract is silent as to the award of interest, the arbitrator has the power to award interest pendent lite. This reasoning is based on the presumption that interest was considered to an implied term of the contract between the parties, and therefore arbitrator has the power to award interest. Further, in Dhenkanal Minor Irrigation Division, Orissa & Ors. v. N.C. Budharaj,[5] (hereinafter ‘NC Budharaj’), a constitution bench judgment of the Supreme Court considered the question of award of interest for the pre reference period. NC Budharaj heavily relied on the judgment of GC Roy and held that arbitrator has the power to award pre reference award as long as there is nothing in the arbitration agreement to exclude the authority of an arbitrator to entertain a claim for pre reference interest. GC Roy and NC Budharaj are considered to be landmark cases under the 1940 Arbitration act. Under 1940 act, it is crystal clear that in absence of provision regarding the awarding of interest in a contract, then the arbitrator has the power to award interest along with principal amount as it is was considered an implied term of the contract. Position under 1996 Arbitration Act Section 31 (7) was added in the 1996 Arbitration Act. The law pertaining to the 1940 act has transformed after the introduction of the new act. Union of India v. Bright Power Projects,[6] states the position that as per section 31 (7) (a) of the Act, the arbitrator has the power to award interest pendente lite, “unless otherwise agreed by the parties.” It is clear from the language of section 31 (7) that it gives autonomy to the parties’ contract and the arbitrator is bound by the express terms of the contract. Therefore, where the parties agreed that no interest shall be payable, the tribunal cannot award interest.[7] Further, a three-judge bench of Supreme Court in the case of Union of India v. M/s Ambica Construction,[8] reiterated the same principle propounded by the Supreme Court in the above-mentioned case. Furthermore, the Supreme Court, recently, had an opportunity to decide whether an arbitrator can grant interest pendente lite in arbitration proceedings seated in India. This precedential judgment was delivered in February 2019 in the case of Jaiprakash Associates Limited v. Tehri Hydro Development Corporation India Limited.[9] A three-judge bench heard the appeal filed against the judgment of the Delhi High Court wherein the Court quashed an arbitration award to the extent it granted interest to the present appellant, though being barred by the contract between the parties to grant the same. In this case, the appellant was awarded a works contract by the respondents. The Contract contained a provision for arbitration of any dispute arising out of the concerned transaction by a panel of three arbitrators under the Arbitration Act. It is important to note that the interpretation of Clause 51 of the Contract clarifies that interest is not payable to the contractor on the money due to him. Then Court after taking into consideration precedents, statutory and common law principles answered in affirmative that arbitrator does not have the power to award interest in case if it is expressly barred by the terms of the contract. In light of the above discussion, it is necessary to discuss the facts of the Fenner case. Factual Background Claimant [hereinafter ‘JK Fenner’] is a company engaged in a business of designing, engineering, manufacturing, supply, testing and commissioning on turnkey basis to various infrastructure facilities like coal mines, chemical refineries, thermal power plants, airports etc. Claimant submitted their bid to a tender floated by the respondent [hereinafter ‘Neyveli Lignite Corporation’] for the design, supply and commissioning of a Lignite Handling and Storage System (LHS) on 11th April 1998. By letter of award dated 31st July 1998 and 12th August 1998, respondent accepted the claimant’s bid. As per the terms of the contract, the claimant is required to complete whole work including successful completion of the trial operation of the installed machinery within 30 months from the date of the letter of award i.e. by 31st January 2001 in consideration of a certain amount of money. By letter dated 1st March 2004, the respondent had provisionally taken over the operation of LHS with immediate effect inclusive of the 14 months period i.e. 1st January 2003 to 29th February 2004, where claimant operated under the instructions of the respondent. The dispute arose between the parties when a claimant sought payment for work done under various heads from the respondent. Despite sincere efforts made by the claimant, the respondent did not accept the claims of the claimant. Therefore, claimant invoked the arbitration clause of the contract by their letter dated 11th January 2007. Both parties appointed arbitrators and proceedings commenced. The arbitral tribunal passed the award on 5th October 2013 and modified the same on 5th January 2014. Tribunal awarded claims in favour of both claimant and respondent under different heads. In particular, the author only discusses Claim I which is about the refund of retention money held by respondent along with interest. Claim I is related to the payments withheld by respondents due to the claimants on the ground that claimant failed to complete work as per the performance guarantee test within the stipulated time. Respondent denied this claim by contending that the claimant was not ready for the test on the pre-decided date, and, therefore was not entitled to the payment. Tribunal observed that the equipment was working satisfactorily from January 2003 and mere failure to issue certificate cannot allow respondent to withheld claimant’s money. Hence, the tribunal awarded principal amount but did not allow interest from the date of the takeover of LHS till paid on the ground that the amount became payable only on the date of the award. Claimant challenged the arbitral award under section 34 of the Arbitration Act before Madras High Court under various heads. Issue Concerned Whether denial of interest by tribunal post 1st March 2004 to the claimant as per clause 6.5.2.1 (d) of the contract is an erroneous observation or not? Discussion The primary purpose of arbitration is no speed, or privacy, neutrality, or economy, but rather parties have the ability to make key choices to suit their particular needs.[10] Arbitration jurisprudence is largely guided by the norm of contractarianism. This is equally applicable in cases of interest pendente lite (period commencing from the date of cause of action to the date of award). In such cases, terms of the contracts agreed by the parties are of paramount importance with regards to the payment of interest applicable to the principal amount. These terms also serve as a determinant factor in establishing arbitrator’s authority in awarding such interest claims. It is important to produce clause 6.5.2.1 (d) of the contract at this stage, which does not prohibit grant of interest. Clause 6.5.2.1 (d): After successful completion of performance test for equipment and certification of results by the purchases/consultant – 10% to be paid. In the event of commissioning delayed beyond 6 months from the scheduled date and the delay is not attributable to the claimant, the final tranche of payment shall be released against the production and acceptance of a bank guarantee for an equal amount valid for one year or any revised scheduled date of commissioning whichever is earlier. It was the case of the claimants that the correct interpretation of clause 6.5.2.1 (d) of the contract would not restrict the arbitrator’s authority to grant interest pendente lite interest. In other words, Claimant contended that agreement does not expressly prohibit levy of interest. Case of Unliquidated Damages: Different from Liquidated Damages? - A New Dimension After discussing Fenner case, it is of utmost importance to discuss the interesting position reached out by Supreme Court in the case of M/s Raveechee & Co. v. Union of India,[11] (hereinafter ‘Raveechee’) wherein the court held that the bar to award interest on the amount payable under the contract would not be sufficient to deny the payment of interest pendente lite by the arbitrator. Court went on to proceed, as a general rule, that arbitrator has the power to award interest. Moreover, the court observed that in a case of unascertained damages, the question of interest would arise upon the ascertainment of the damages in course of the dispute. Such damages could attract pendente lite interest for the period from the commencement of the arbitration to the award. Thus, the liability for pendente lite interest does not arise from any term of the contract, or during the terms of the contract, but in the course of determination by the Arbitrators of the losses or damages that are due to the claimant. Such power was considered to be inherent in an Arbitrator who also exercises the power to do equity unless the contract expressly bars an Arbitrator from awarding interest pendente lite. An agreement which bars interest is essentially an agreement that the parties will not claim interest on specified amounts. It does not bar an Arbitrator, who is never a party to the agreement from awarding it. Nevertheless, the reasoning given in Raveechee is different from the reasoning in Chittaranjan Maity v. Union of India,[12] (hereinafter ‘Maity’) wherein the court held that the arbitrator does not have the power to award interest if it is expressly barred by the terms of the contract. Interestingly, both the judgments deal with the similar clauses under their respective contract which provides that no interest shall be payable upon the earnest money, security deposits or amounts payable to the contractor, but government securities deposited in the contract will be payable with interest. In Maity’s case, the court interpreted section 31 (7) of the Arbitration Act, in which interest award is made subject to the terms of the contract between the parties. Clause 16 (2) of the GCC expressly barring an award of interest would prevail over the arbitrator’s power to award interest. Hence, parties have agreed that interest shall not be payable under the contract barring arbitral tribunal to award interest pendente lite in the present case. On the contrary, the approach adopted by the court in Raveechee is completely different, where they held that GCC clause expressly barred interest payable upon earnest money, security deposits or amount payable to the contractor under the terms of the contract. A distinction was crafted by the court between liabilities to pay interest on the determination of unascertained damages in the course of dispute and liability to interest as per terms of the contract. Court further held that bar to award interest on the amount payable under the contract would not be sufficient to deny interest pendente lite as it would depend upon several factors such as phraseology used in the language of the contract, nature of claim and dispute referred to the tribunal. In sufficient similar worded clauses of both Raveechee and Maity, the court interpreted differently in order to arrive at a different conclusion. Raveechee follows the path that arbitrators have the power to do justice to the parties irrespective of the terms of the contract, whereas Maity follows that arbitrators are creatures of the contract and are bound to follow the express terms of the contract. Conclusion The extent of power vested in an arbitral tribunal is a subject of constant judicial interpretation. Indian Judiciary has constantly tried to clarify these questions when arise. Through the recent pronouncement of Supreme Court in Jaiprakash, the court has attempted to clarify the issue of arbitrator’s power to award interest pendente lite. However, in the light of Raveechee, the issue pertaining to award interest in unascertained damages is yet to be tested. It would be interesting to observe that larger bench of the Supreme Court address this ambiguity while dealing similar clauses in the light of section 31 (7) (a) of the Arbitration Act. In the light of the above discussion, the author is of the opinion that judgment pronounced in Fenner is correct in view of Supreme Court decisions in GC Roy, Maity and Jaiprakash. * This Article is an edited version of the 3rd Best Entry in the 1st Case Summary Writing Competition. Suggestions were made by the Editorial Team based on which changes were made by the author. [1] Samyak Jain, student of 7th semester studying at Institute of Law, Nirma University, Ahmedabad. The author can be reached at the E-mail address- 2808.vishi@gmail.com [2] M/s J.K. Fenner (India) Limited v. M/s Neyveli Lignite Corporation, O.P. No. 252 of 2014. [3] J Martin Hunter & Alan Redfern, International Arbitration 1 (6th ed. 2015). [4] Secretary Irrigation Department, Government of Orissa and Others v. G.C. Roy, (1992) 1 SCC 508. [5] Dhenkanal Minor Irrigation Division, Orissa & Ors. v. N.C. Budharaj, (2001) 2 SCC 721. [6] Union of India v. Bright Power Projects, (2015) 9 SCC 695. [7] Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat & Ors., (2010) 8 SCC 767. [8] Union of India v. M/s Ambica Construction, SLP [C] No. 11114/2009. [9] Jaiprakash Associates Limited v. Tehri Hydro Development Corporation India Limited, 2019 SCC OnLine SC 143. [10] Thomas J. Stipanowich, Arbitration: The “New Litigation,” 2010. ILL. L. REV. 1, 51 (2010). [11] M/s Raveechee & Co. v. Union of India, (2018) 7 SCC 664. [12] Chittaranjan Maity v. Union of India, (2017) 9 SCC 611.

We are grateful to Mr. Michael Black QC, who agreed to give us this interview. We are delighted that he will be sharing his views on his practice as a counsel and an arbitrator. To give our readers a brief introduction of Mr. Black, he has practiced as an international arbitration lawyer throughout his career and for more than 25 years has regularly received nominations as sole arbitrator, party-appointed arbitrator and chairman under the City Disputes Panel, ICC, LCIA, DIFC-LCIA, ADCCAC, UNCITRAL, LMAA, SCMA and DIAC Rules as well as under ad hoc procedures. He is recommended in both Legal 500 and Chambers & Partners in this area and said to be “top of many people’s list for international arbitration work.” He has appeared as counsel in several leading English and Privy Council cases concerning arbitration including B v A – whether failure to apply chosen law a “mere error” or procedural irregularity – the status of dissenting opinions; Michael Wilson & Partners v Emmott – challenging tribunal’s award as to its substantive jurisdiction – decision on procedural matters; Cetelem SA v Roust Holdings Ltd – whether judge has jurisdiction to make interim mandatory order pending ICC arbitral proceedings – whether court usurping arbitral process; Henry Boot Construction (UK) Limited v Malmaison Hotel (Manchester) Limited – powers of Court of Appeal to review decision of judge on appeal from arbitrator; Al-Naimi v Islamic Press – duties of judge when considering a stay of court proceedings; IPCO v NNPC – enforcement of a New York Convention award subject to challenge at the seat; Anzen v Hermes One – optional arbitration clauses and stay of proceedings. ZCCM v Kansanchi – procedural order or award – section 68 Arbitration Act 1996. He has an international reputation as an expert in dispute resolution procedures. He spent nearly five years as a member of the English Civil Procedure Rule Committee. In that time, he was particularly involved in the draftsmanship of the English Court Rules relating to Arbitration Claims. As a result of this experience, he was retained to draft the procedure rules for the Courts of the Dubai International Financial Centre. He was involved in the draftsmanship of the DIFC Arbitration Law 2008. He is a member of the Court of the Casablanca International Mediation & Arbitration Centre and the ICC Global Commission on Arbitration and ADR. As Visiting Professor at Manchester University, he lectures and supervises at Masters’ and Doctoral level in international dispute resolution. He has written widely on arbitration both in the UK and the USA. Mr. Black, we welcome you to the Arbitration Workshop Blog and thank you again for agreeing to this interview. Q.1. How did your interest in commercial dispute resolution in general and arbitration in particular begin? For how many years did you practice before you started accepting nominations as a Sole Arbitrator or a member of an Arbitral Tribunal. Do you believe your practice helped you in developing the skillset to serve as an arbitrator as well? A1. In fact, as soon as I began my pupillage in 1977 I was exposed to both shipping and construction cases. Thereafter my junior practice developed in the areas of construction and insurance where there was a tradition of arbitration. The huge increase in construction disputes in the UK in the 1980s consequent on the economic crises led to an upsurge in domestic construction arbitration. I began receiving a few appointments in the domestic construction area before I was appointed Queen’s Counsel in 1995 but it was thereafter that they became more numerous and international in nature. Yes of course, I firmly believe that one cannot sit in any judicial capacity unless one has acted an advocate. Without that experience the tribunal has no understanding of the pressures on the advocates and why matters are presented in the way they are. Q2. You are considered an expert on Middle Eastern dispute settlement and were influential in the early days of working of the Dubai International Arbitration Centre and the Dubai International Financial City. When and how did you decide to work in the Middle East and what factors led to choosing Dubai as one of the major seat of practice both as counsel and as an arbitrator? A2. I think it is true of most lawyers’ careers that things often happen by accident. The trick is to recognise that fate has provided you with an interesting opportunity. I had always had an interest in the Middle East and indeed both my first major case as a very junior and my first trial in the High Court without a Leader were Middle East cases. Those who were setting up the DIFC approached me in 2003 to assist with the establishment of the DIFC Courts because of my experience on the English Civil Procedure Rule Committee. Q3. To the uninitiated, how do DIFC Court and the DIAC fare as venues for neutral arbitration? In your experience, which kind of parties have switched to DIAC from other neutral hubs like Singapore, Hong Kong, London, Paris and New York. A3. I think DIAC remains more focussed on Dubai disputes and in particular in the construction arena. DIFC-LCIA is more commercial and more international in outlook. Arbitrations administered by that institution are often subject to the curial jurisdiction of the DIFC Courts. The DIFC Courts are one of the most arbitration friendly jurisdictions in the world. The bench has always comprised distinguished international lawyers - the first Chief Justice was Sir Anthony Evans, former English Court of Appeal judge and President of the Chartered Institute of Arbitrators. He was followed by the famous Singaporean arbitrator Michael Hwang SC. The current Chief Justice is the former Chief Justice of Malaysia and bench has recently been joined by the former Chief Justice of Australia. It is hardly surprising that such a jurisdiction attracts business from all over the world. Q.4. India is making progressive steps to develop a few of its cities into International Arbitration hubs. The attempts can be seen in the form of legislative reforms (2015 and 2019 amendment to the Arbitration and Conciliation Act, 1996), executive actions (creation of the New Delhi International Arbitration Centre) and also by the judiciary by practicing minimal interference in International and Domestic Arbitration matters. In your experience, what factors go into making a good neutral hub for arbitration. Could you let us know from your experience of working in London, Singapore and Dubai as to what could steps could cities like New Delhi and Mumbai in India take to become an arbitration hub? A.4. The most important factors in the success of an arbitral seat are conveniently set out in the Chartered Institute’s 10 “London Principles”: ·an arbitration law providing a good framework for the process, limiting court intervention, and striking the right balance between confidentiality and transparency ·an independent, competent and efficient judiciary ·an independent, competent legal profession with expertise in international arbitration ·a sound legal education system; the right to choose one’s legal representative, local or foreign ·ready access to the country for witnesses and counsel and a safe environment for participants and their documents ·good logistical support, including transcription, hearing rooms, document handling, and translation ·professional norms embracing a diversity of legal and cultural traditions, and ethical principles governing arbitrators and counsel ·well-functioning venues for hearings and other meetings ·adherence to treaties for the recognition and enforcement of foreign awards and arbitration agreements ·immunity for arbitrators from civil liability for anything done or omitted to be done in good faith as an arbitrator. Q.5 You have extensively worked both as a counsel and an arbitrator. Based on your experience, could you tell us your opinion about the issue of double hatting? What practices help you in switching between your roles as a Counsel and an Arbitrator? Do you believe institutions guidelines could help in addressing this issue and allaying the concerns of litigants? A.5. I go back to what I said before not only do I think it is not a cause for concern but I think it is highly desirable if not essential. Q.6. As Tribunal Secretaries in domestic arbitrations in India, we have had extensive exposure to construction disputes. In a few International Commercial Arbitrations, we have shareholder disputes take center stage. Given your experience in the resolution of Shareholders dispute, both as a counsel and an arbitrator, could you paint us a picture of the fundamental conflicts that come up in such arbitration matters. Are there any books or reference material that you would recommend for the practice of arbitration in shareholder disputes? A.6. The typical shareholder dispute in which I become involved usually relates to a joint venture between a state entity and a foreign investor in infrastructure projects or the extractive industries. I am not sure that I can recommend books specifically directed to the arbitration of shareholder disputes as of course issues will often depend on the governing law. I would certainly recommend the magisterial general works on arbitration such as Born and the upcoming new editions of Craig, Park & Paulson and Mustill & Boyd. Q.7. Are there any specifics of arbitral practices that you particularly enjoy? What practices do you employ to engage and keep up with the recent trends in arbitration? Is there any routine you would recommend young lawyers regularly engage in to become better in the field? A.7. I enjoy the people. It is a shame that that has been impacted by the present pandemic. Hopefully normality will resume soon. Conference and seminars are the best way to keep up-to-date and young lawyers should attend and participate. Q.8. What would be your word of advice to the readers trying to make it big in the transnational practice of international arbitration and what books and reference material would you want them to read and refer to? A.8. I am not sure what “make it big” means. I think the answer is not found in books. The advice I give to all young lawyers is to say “yes” to every opportunity to gain experience. There is no such thing as useless experience and you never know where it might lead you. The Editorial Team at the Arbitration Workshop would like to thank Mr. Black for taking out time from his busy schedule and for sharing his perspectives with us!

- Rituparna Padhy This is Part I of a three-part series on the new proviso regarding unconditional stay of an award upon discovery of fraud/corruption vis-à-vis Arbitration and Co­­­nciliation (Amendment) Bill 2021. The Rajya Sabha, the Upper House (Council of States) of the bicameral Parliament of India, recently passed through voice vote the Arbitration and Conciliation (Amendment) Bill 2021 [“Amendment Bill”]. The Bill would replace the ordinance that was issued on 4 November 2020. The Bill addresses two issues: a. An unconditional stay shall be granted if the arbitration agreement, underlying contract, or the impugned award is prima facie induced/affected by corruption, and b. Omission of the Eighth Schedule of the Arbitration and Conciliation Act 1996 (“Act”) that had enumerated qualifications for an arbitrator. The Amendment Bill essentially provides that when the court is satisfied that a prima facie case has been made out for the arbitration agreement, the underlying contract, or the making of the award has been induced/affected by fraud/corruption, the court is bound to stay the award’s enforcement unconditionally until the Section 34 application has been disposed of.[1] This new proviso to Section 36(3) of the Act would apply to all court cases related to arbitration proceedings that are pending or were initiated after the 2015 Amendment Act[2] came into force (23 October 2015). Consequentially, it is immaterial whether the arbitration/court case(s) began before or after the 2015 Amendment Act.[3] In this Part, the author will be addressing the impact of the new proviso on the scope of judicial interference, the doctrine of severability, and the computation of the relevant limitation period. Scope of Judicial Interference The Act's objective to minimise judicial intervention in arbitral proceedings is evident in Section 5 of the Act, whose non-obstante clause clarifies that the only judicial intervention permitted is what is expressly provided in the Act.[4] The scope of judicial intervention has been particularly contentious in relation to issues dealing with Section 36 of the Act, with the stance in early 2020 being that a separate stay application has to be made regardless of when the court case/arbitration proceeding was initiated. The Supreme Court in the seminal case of Hindustan Construction Company Ltd. v Union of India[5] (“HCC”) ruling that an automatic stay on the operation of an award was no longer permitted.[6] Now, the new proviso may reintroduce the same “mischief”[7] of an automatic and unconditional stay, albeit in more limited circumstances. This is because once the court is satisfied that a prima facie case of fraud/corruption exists, it is mandated to grant an unconditional stay on the operation of the award, making it partially automatic. Worryingly, there persist more concerns regarding the new proviso to be added to Section 36(3) of the Act. Pursuant to the Amendment Bill, while the award cannot be set aside on the ground of the underlying contract being affected by fraud/corruption, the operation of the award can be stayed for the same ground. It is evident that the grounds on which an unconditional stay on enforcement can be sought would be wider than the grounds permitted for challenging the award itself, which further broadens the scope of judicial intervention without balancing the rights of the parties as well. Moreover, what if a prima facie determination of the arbitration agreement/underlying contract being induced by fraud/corruption is made out under Section 36(3), but the Section 34 challenge is dismissed because the award was not induced/affected by fraud/corruption? Would the award-holder now be able to get the award enforced despite the determination under the stay application? Considering the fact that Section 37 of the Act (exhaustively enumerating the appealable orders) does not apply to court orders relating to Section 36 (as held by the Bombay High Court in Essar Oil and Gas Exploration v Toshiba Water Solutions Pvt. Ltd.[8]),[9] the situation remains uncertain. Presently, even when a Section 34 challenge has been filed, the award in question would not become unenforceable ipso facto. For the operation of the award to be stayed, a separate application has to be filed for the court to determine whether to grant such an order or not.[10] The court has the discretion to grant a stay "subject to such conditions as it may deem fit",[11] which suggests that practically, the court could ‘deem it fit’ to not impose any conditions. If the new proviso expressly mandates an unconditional stay upon a prima facie discovery of fraud/corruption, does it mean that an unconditional stay can be granted for no other grounds/claims? It is uncertain what the impact of the new proviso will be on the limits of judicial intervention be in this context. At the same time, the discretionary authority to impose conditions on a stay order that is granted to courts by Section 36 is more considerate of the parties’ situation. Being compelled to grant an unconditional stay in the face of allegations as that of fraud/corruption could result in the misuse of the provision, since the interests of the award-holder and the conduct of the award-debtor may get more difficult to accommodate equitably. In this context, one could say that the scope of judicial intervention is being curtailed without a sufficient cause, though the Bill’s Statement of Objects and Reasons considers the unconditional nature of the stay a benefit – that an unconditional stay would protect the interests of the aggrieved party better. However, it provides no further explanation as to why the courts need to be divested of their discretionary power. Additionally, the wording in the Amendment Bill - "Where the Court is satisfied that a prima facie case is made out"[12] implies that a claim of fraud/corruption has to be expressly made by a party for the court to adjudicate on it. This interpretation would be more in line with the objective of minimum judicial interference of the Act. However, one could also argue that even when the separate stay application does not expressly argue on the ground of fraud/corruption for a stay on the award, the Court can take up the issue sua sponte. This interpretation would help dispense with the filing of more documents and ward off even more prolonged proceedings. On the other hand, should that be the intended interpretation, more deliberation would ensue - would the increased judicial discretion be antithetical to the objective of reducing judicial interference in arbitration or be in consonance with the Act by expediting proceedings? Furthermore, the Act clearly lays down that an award cannot be set aside merely upon reappreciation of evidence.[13] However, if the tribunal has already undertaken the fact-finding process regarding the alleged fraud/corruption, the court would have to review and second-guess the arbitrator’s decision for granting a stay on that ground. Detecting fraud/corruption in the making of the award may be more procedural in nature and can be undertaken without reappreciating the evidence. In contrast, when the underlying contract has been tainted by fraud/corruption, it would necessitate ‘reappreciating’ the evidence and revisiting the facts and circumstances of the case. Another peculiar situation may arise. As we know, one can file a Section 34 application on the ground of the award being in conflict with the public policy of India due to it being induced/affected by fraud/corruption.[14] While a stay application has to be separately filed, the new proviso permits the applicant to request a stay on the award’s operation on the same ground of fraud/corruption. The dilemma becomes this: would the court have to determine whether a prima facie case of fraud/corruption exists before the court determines the same thing (albeit more conclusively) in the Section 34 challenge? If the prima facie determination is in the affirmative, then the award has to be stayed unconditionally – the award-debtor gets to pause the enforcement of the award well before its Section 34 challenge on the same ground is resolved. Whether the net outcome is beneficial to the objectives of the Act or not would vary from case to case, but this can also tantamount to a pre-emptive decision that places the award-holder in a prejudiced position before the actual proceedings are completed. Essentially, the award-debtor would have an additional loophole through which it can invite greater judicial intervention in the dispute. Doctrine of Severability We see that for a Section 34 application, the decision-making process behind the award should have been induced/affected by fraud/corruption.[15] However, according to the proposed proviso, a stay can be sought under Section 36(2) even when the contract in question appears to be induced/affected by fraud/corruption. Apart from increasing the scope of judicial interference, this has one major implication: it conflicts with the doctrine of severability that is fundamental to arbitration. The principle of severability in arbitration postulates that an arbitration agreement is distinct and separate from the contract between parties, even if the arbitration agreement is one term of the contract.[16] This means that even if the underlying contract is nullified, the arbitration agreement/clause is not invalidated ipso jure.[17] Contextually, a stay on the operation of the award should not be affected by the validity of the underlying contract. This would be in line with the jurisprudence of Section 34 challenges,[18] which is relevant since a stay application is derived from a Section 34 challenge. However, the Amendment Bill blurs the line of severability because if the contract appears to have been tainted by fraud/corruption, then the award [that is based on the arbitration agreement] would be stayed unconditionally. Impact on the Limitation Period When the Amendment Bill enters into force, there can be two general situations regarding a Section 36(2) application: either the stay application was filed first and the fraud/corruption was detected later, or the stay application is filed after the fraud/corruption was detected. In either case, the courts would be able to accommodate the aggrieved parties' concern regarding potential fraud/corruption impacting the arbitration due to two reasons - courts could have the suo motu authority to look into such concerns, and there are no time limits prescribed for filing or adjudging a Section 36(2) application. However, accommodating such concerns carries its own set of complications. It is probable that at the time of filing the Section 34 or Section 36(2) application(s), the aggrieved party was unaware of such acts. The impact of the Amendment Bill would differ between the two applications with regard to the limitation period: Section 34 application Section 34(3) expressly sets a time period of 3 months (from the date of receiving the award) with an additional thirty days (if sufficient cause present) for filing an application to set the award aside.[19] Additionally, Section 34(6) emphasises the need to dispose of such applications expeditiously.[20] Accordingly, it is understandable that courts have consistently refused to grant extensions even when sufficient cause for an extension is found.[21] It is also why courts have excluded the application of Section 17 of Limitation Act 1961, which provides that in cases where fraud is detected, the period of limitation would begin only after the party has discovered the fraud.[22] In light of such a well-established practice, it is unlikely that courts will permit an extension of time when fraud/corruption is discovered after the prescribed period. This is the likely outcome despite the Supreme Court recently opining in the case of Government of Maharashtra v Borse Brothers Engineers and Contractors Ltd.[23] that a short delay may be condoned in limited situations.[24] However, by omitting to add an exception clause in Section 34(3) for the fraud/corruption proviso, the legislature has seemingly not accounted for the legitimate delays that may occur before the discovery of fraud/corruption. Section 36(2) application Section 36(2) appears to be more accommodative of the time it may take before the fraud/corruption is discovered. Since there is no time limit associated with the filing of a Section 36 application, one will theoretically be able to claim a prima facie discovery of fraud/corruption well after the filing as well. Even the court would not be bound to determine a prima facie case within a prescribed time limit, which would ultimately be beneficial for the aggrieved party. Moreover, courts will likely permit invoking Section 17 of the Limitation Act for a Section 36(2) application too, since the Act has no time limits that would override the provisions of the Limitation Act. Even though the abovementioned Section 17 covers fraud, one can be hopeful that courts would extend the principle to cases of corruption as well. Effect of the explanation to the new proviso The explanation of the new proviso clarifies that the proviso would apply retrospectively regardless of whether the court case or the arbitration proceedings commenced before or after the 2015 Amendment. As mentioned previously, this explanation expressly acknowledges the maintainability of the eligible applications in the context of the time period. However, two new procedural concerns arise: a. If a Section 36(2) application is already pending, either a fresh application has to be filed for invoking the new proviso or the party should be permitted to amend the already filed application. This can tantamount to further delays unless the court can take suo motu notice of the new proviso and dispense with any further action on part of the applicant. However, this would again call into question the interpretation of the phrase “prima facie case is made out” – whether this requires the applicant to expressly argue for this proviso to apply, or whether the court can take the matter up without the parties having to invoke the same. b. Due to the retrospective application, a flurry of new Section 36(2) applications could be apprehended due to the allure of an unconditional stay, especially when a previous stay application was already refused in the same matter. The courts must exercise caution when parties attempt to take ‘a second bite at the cherry’ and argue for a stay on the operation of the award. Concluding Remarks Even in 2020, the Supreme Court had to point out that Section 34 proceedings take an average of six years to be disposed of.[25] This in itself exemplifies the significance of a stay on the enforcement of an arbitral award, especially an unconditional one. In this first Part, we analysed how the boundaries of judicial intervention are being modified, the overall inference being that the chances of curial intervention are heightened without some of the necessary safeguards being present. With respect to the doctrine of severability, we studied the potential ripples in litigation the new proviso may cause by subjecting an award’s stay to the validity of the underlying contract. Finally, we observed how time limits in Section 34 appear to be more rigid towards and Section 36 appears to be more accommodative of the new proviso. While relaxing Section 34 time constraints would be detrimental to the speedy disposal of cases in general, an exception clause could have been added to it for complementing the new proviso. Thus, while the Amendment Bill would be welcomed in some procedural aspects, it regrettably leaves much to speculation and interpretation. In the next two Parts, we would delve deeper into the substantive scope of fraud and corruption in the context of arbitration. [1] §2, Arbitration and Conciliation (Amendment) Bill 2021. [2] Arbitration and Conciliation (Amendment) Act 2015. [3] Id. [4] §5, Arbitration and Conciliation Act 1996. [5] WP (Civil) No. 1074 of 2019 [HCC]. [6] Id. at ¶31. [7] HCC supra note 5 at ¶50. [8] Commercial Appeal (L) No. 4288 of 2021. [9] Id. at ¶4. [10] §36(2), Arbitration and Conciliation Act 1996. [11] §36(3), Arbitration and Conciliation Act 1996. [12] Proviso to §36(3), Arbitration and Conciliation Act 1996. [13] Proviso to §34(2A), Arbitration and Conciliation Act 1996. [14] Explanation 1(i) to §34(2)(b)(ii), Arbitration and Conciliation Act 1996. [15] Explanation 1(i) to §34(2)(b)(ii), Arbitration and Conciliation Act 1996. [16] §16(1), Arbitration and Conciliation Act 1996. [17] Id. [18] Vidya Drolia and Others v Durga Trading Corporation, 2020 SCC OnLine SC 1018, ¶67; A. Ayyasamy v A. Paramasivam and Others, (2016) 10 SCC 386, ¶53. [19] §34(3), Arbitration and Conciliation Act 1996. [20] §34(6), Arbitration and Conciliation Act 1996. [21] Simplex Infrastructure v Union of India, SLP (C) No. 17521 of 2017; Basawaraj v Land Acquisition Officer, (2013) 14 SCC 81, ¶12; Government of Maharashtra (Water Resources Department) v M/S Borse Brothers Engineers & Contractors Pvt. Ltd., CA 995 of 2021, ¶56, 60. [22] §17, Limitation Act 1961. [23] CA No. 995 of 2021. [24] Id. at ¶61. [25] HCC supra note 5 at ¶3.

Milind Yadav[1] The 2019 amendments to the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) has helped propel India forward as an arbitration-friendly destination for the global community. The emerging jurisprudence on arbitration discourages judicial intervention in arbitral proceedings until ‘public policy’ enters the frame. Despite acknowledging the need to reduce judicial intervention, courts may occasionally be unable to enforce a challenged award because the challenge that may appear to be a mere procedural error snowballs into a substantive issue related to crucial grounds of challenge like ‘public policy’. The situation gets precarious even further when the arbitral tribunal seems to have overpowered the substantive rules they are bound to follow. The combined situation of substantive irregularity in the award and misuse of jurisdiction by the tribunal calls for judicial intervention as the last resort. The author analyses the above premise through an analysis of the recent case adjudged by the Madras High Court where the challenged award had contravened the provisions of the Arbitration Act. The case appears to revolve around a mere procedural requirement that was not adhered to, and the judicial intervention seems to have been uncalled for. However, the author argues that deeper analysis indicates a potential infringement on the ground of the ‘public policy’ that the Division Bench of the Madras High Court took into consideration but not expressly acknowledged while analysing the award reaffirmed by the Single Judge Bench of the High Court. Facts of the Case Recently, the Madras High Court in Hindustan Petroleum Corporation Ltd v Banu Construction[2] heavily criticized the Single Bench for failing to examine the award when an application to set it aside was submitted/filed. In fact, when addressing the Single Bench’s order that passed the challenged award, the Division Bench remarked, “this is a classic example of what cannot be done by an Arbitration Court.”[3] In this matter, the award was initially challenged before the Single Bench. However, the bench rejected the challenge and reaffirmed the quantum being awarded. This order by the Single Bench was challenged before the Division Bench of the Madras High Court under Section 37 of the Act with the appellant alleging that the order was unreasoned and therefore, unenforceable. The Judgement The court primarily examined the content of the award to deduce the shortcomings in the tribunal order in question. Basing their decision on the principle codified in the Act, which provides that “the award shall state the reasons upon which it is based”[4], the court opined that the arbitrator had not given any considerable reason that indicates his ‘application of mind’ in the quantum awarded.[5] However, the author argues that the judgment not only addresses the consequences of not adhering to procedural formalities but also portrays the jurisprudential understanding to keep arbitral proceedings in check with the help of the principles of public policy, the interest of justice and conscience of the court. Analysis Scope to Set Aside an Arbitral Award The statutory authority of the Court to set aside an arbitral award, albeit limited, is enshrined in Section 34(2)(b)(ii) of the Act. The award can be set aside if it violates the public policy of India, i.e., it contravenes the fundamental policy of law or conflicts with the basic notions of morality or justice. Over the years, the courts have attempted to define public policy in order to inspect/review and set aside arbitral awards. Though courts have not established the definition of ‘public policy’ but it is firmly certain that whatever falls within ‘public policy’ can be rightfully lead to judicial intervention. In Oil and Natural Gas Co. Ltd. v. Saw Pipes[6], the court gave a wider meaning to public policy by applying to it a meaning similar to that of public good and public interest and held that an award that contravenes statutory provisions is against public policy as well. In Mcdermott International Inc v. Burn Standard Co. Ltd[7], the Supreme Court held that courts have a supervisory role to ensure fairness in arbitral awards. In ONGC Ltd. v. Western Geco International Ltd.[8], the court laid down certain principles for a suitable judicial approach as well as natural justice to define the boundaries of the phrase ‘fundamental policy of Indian law’. Essentially, the principles lay down that any court or tribunal must refrain from acting arbitrarily, which may otherwise have civil consequences and that they should act judicially and in the interests of justice.[9] In 2015[10], the Supreme Court emphasised that an arbitrator is the sole judge who examines the facts of the case. Therefore, the arbitrator cannot be irrational/unreasonable when deciding the award, and the reasons for the award should be able to withstand the ‘reasonable man’ test.[11] The court further held that an award cannot be enforced if it goes against justice and morality such that it shocks the conscience of the court.[12] In two recent cases, the Supreme Court has adopted views that is opposite to the observations made by the Hon’ble High Court in the present case. In Venture Global Engineering LLC v. Tech Mahindra Ltd.[13], the Supreme Court held that a court cannot examine the legality of an arbitral award. The point was further elaborated in Ssangyong Engineering & Construction Co. Ltd. v. NHAI[14], where the Supreme Court clarified that courts cannot interfere with an arbitral award on the ground that “justice has not been done in the opinion of the Court”.[15] At the same time, the Supreme Court reasserted its earlier stand on the interpretation of ‘public policy’ as was opined in the judgment of Government of India v Vedanta Limited[16], where the court had held that ‘public policy’ comprised of fundamental policy, the interest of justice, and morality. The Public Policy Role of the Arbitrator The court found that the award by the tribunal is set on a total of 120 pages which covers everything from facts to claims but the reasoning for the quantum awarded by the tribunal was hardly a paragraph on page number 118 of the award.[17] However, it was not with respect to the lack of proportional reasoning with respect to the total number of pages in the award that led to the contravention of public policy. Rather, it was the fact that the arbitrator did not address the reasoning behind his decision at all. The Act mandates the arbitrator to record reasons for the award[18] because the courts, who would have reviewed the dispute otherwise, have limited authority to examine the award when the same is challenged. The courts can then rely on the arbitral tribunal’s reasons for its findings on merits or jurisdiction to adjudicate the challenge. The Statutory Responsibility of Tribunal and the Limitation In the present case, what shook the conscience of the Division Bench Court was that the Single Judge Bench of the High Court chose not to set aside the award despite prima facie inconsistency with the provision of the Act. Rather, the court itself gave reasons for the award in the judgment by examining the merits of the case. It seems unreasonable for the court to take such a course because the Act clearly states that the reasoning for the award must be given in the award itself. There is no provision for the court to provide reasons as a ‘substitute’ to the arbitrator’s findings in a challenged award. The court, instead of analysing the award in its entirety and without examining the merits of the case, stepped into the shoes of the arbitrator to satisfy the ‘reasonableness’ for the quantum awarded. The same is pointed out by the Division Bench to ‘rewrite the arbitration award’ in order to support the quantum awarded is not the ‘business’ of the court.[19] Thus, the court went well over the statutory responsibility by dismissing the challenge and substituting the arbitrator’s lack of reasoning with its own. The Sense of Subtle Biasness Though the Madras High Court did not directly assert partiality and a prejudicial bias on part of the arbitrator, if any, the vehement criticism of the arbitral award may suggest a red alert that the Court realized while analysing the award. The Act requires the appointed arbitrator to disclose his personal interest before the arbitral proceedings commence.[20] However, there remains a probable chance that the arbitrator omitted to make a substantial disclosure, either intentionally or mistakenly. The Act recognises the implications of a biased arbitrator and allows the parties to challenge the appointment of arbitrators if circumstances exist to raise “justifiable doubts as to his independence or impartiality.”[21] However, this provision can be successfully invoked only when the party challenging the appointment has sufficient grounds to prove the arbitrator’s partiality and biases. Thus, when an arbitral award is challenged, courts tend to keep the sceptics of partiality within the purview of “interest of justice and morality”[22] while examining the arbitral award. Conclusion The Madras High Court’s analysis might seem superficial due to the consideration of factors like the number of pages for each part, and the Division Bench observing the lack of proportionality for the reasons assigned to the decision of the arbitrator. However, the court did follow implicitly the spirit of the Indian arbitration jurisprudence within which an award cannot be against the public policy of India and cannot be so egregious as to shock the conscience of the court. The arbitrator in the present case had irrationally chosen to not record proper reasons for the decision. Therefore, the court did take the right approach by opining that the award was “not worth the paper it is printed on”[23] and was hence set aside. [1] Milind Yadav is a Third Year Student at Jindal Global Law School. He is also the Associate Editor of the International Journal of Legal Studies and Arbitration. He can be contacted at milind9yadav@gmail.com. [2] Hindustan Petroleum Corporation Ltd v. Banu Constructions, OSA.No.270 of 2020. [3] Ibid at [2]. [4] Section 31(3), Arbitration and Conciliation Act. [5] Hindustan, Supra note 2 at [9]. [6] Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., 2003 (4) SC 171. [7] Mcdermott International INC. v. Burn Standard Co. Ltd., (1991) 2 SCC 669. [8] Oil And Natural Gas Corporation Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263. [9] Ibid at [26]. [10] Associated Builder v. Delhi Development Authority, (2004) 73 DRJ 551. [11] Ibid at 23-24. [12] Ibid at 26. [13] Venture Global Engg. LLC v. Tech Mahindra Ltd., (2018) 1 SCC 656. [14] Ssangyong Engineering and Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131. [15] Ibid at [48]. [16] Government of India v. Vedanta Ltd., (2020) 10 SCC 1. [17] Supra note 2 at [5]. [18] Section 31(3), Arbitration and Conciliation Act, 1996. [19] Supra note 2 at [15]. [20] Section 12, Arbitration and Conciliation Act, 1996. [21] Section 12(3), Arbitration and Conciliation Act, 1996. [22] Government of India v. Vedanta Ltd., (2020) 10 SCC 1 43. [23] Supra note 2 at [6].

- Er. Alpesh Yadav[1]* Introduction Construction industry has seen some of the largest and complicated arbitrations often involving rigorously interplay of technical and legal interpretations. Construction arbitration does not merely revolve around contracts but also demands technical aptitudes and practical understanding of the industry. Construction businesses embroiled in disputes prefer using arbitration mechanics rather than going for litigation to resolve their disputes. This article seeks to identify how arbitration is so uniquely suited for the resolution of engineering disputes and what are the role of Engineers and Lawyers in construction arbitration. Anatomy of Construction Dispute The Construction Sector is classified mainly into three important segments a) Infrastructure, b) Commercials and c) Residentials. Each sector has its own issues only slightly overlapping. Construction disputes are primarily technical in nature and can potentially have far reaching impact on the projects but to understand the same let us first briefly understand the types of disputes involved in construction. Disputes in the construction industry continue to be proliferate mainly due to:[2] (a) Difference in opinion over designs & drawings, compliance with specifications & standards, ambiguous terms, guillotine provisions, fit for purpose, etc. (b) Differing site conditions, force majeure, etc. (c) Constriction disagreements over owners directed changes and change of scope. (d) Change in legislation / law. (e) Unrealistic contract duration or completion date and consequent differences of opinion on extensions of time and compensation. (f) Errors and / or omissions to understand and comply with contractual obligation. (g) Poorly drafted or incomplete and unsubstantiated claims. As it may be clear from the above list, technical aspect is inextricable from construction disputes. How construction arbitrations are different from generic arbitrations Construction disputes are unique due to the nature of science and arithmetic involved in its adjudication. The other important aspects which differentiate them from others is discussed in the following paragraphs. Quantum of losses For most sectors other than construction, cause of differences are certain and their contracts provide mechanism for computing damages or may have amounts predetermined for defaults. The same is not the case with construction contracts. Construction claims are largely technical in nature such as disagreements over rates, quantities, scope, durations, and may also have consequential losses such as loss of profit, loss of opportunity and overheads. The nature of dispute and computation of damages depends on the facts and circumstances of each case. It becomes difficult to establish the quantum of such claims only based on documentary evidence and reliance is placed on established engineering concepts and formulae. The adjudicators often exercise caution when dealing with quantum of claims and use their own expertise or engage experts / specialist to decide the quantum of damages or compensation. High Stakes and Volatility The monetary stake involved in construction business can be very high. The infrastructure and commercial contracts have longer gestation period and therefore investment remains blocked for longer period, whereas residential projects are confronted with highly volatile market. Further construction industry is the one, which is most effected by economic crisis as it directly impacts the demand. Under such circumstances, any discrepancies, ambiguities, differences, delays can turn the project financially unviable. Construction projects are more susceptible to financial challenges and are prone to disputes. Multiple Stakeholders Multiple parties are involved in each construction project, such as the owners, architect, designers, contractors, vendors, suppliers, etc. Most are directly involved in the project and local authorities, public utilities, technical institutions, labour unions, personal interest groups are indirect stakeholders. Each party may have unique role and contractual arrangements with one or several others involved in the project. Any delays, inefficiencies, defects by any of these stakeholders is detrimental to the project and consequently on interest of other parties involved. Understanding the role of stakeholders in disputes in construction arbitration could be challenging. Interestingly when other aggrieved parties join the interested parties in a single arbitration proceeding, apportioning of liability and award thus becomes a task for the arbitrators and the parties. Complex point of law and procedure Construction disputes are often connected with delay in acquisition of land, environmental concerns, increase in the cost of labour and materials, shortage of labour, issues related to migrant labours, finance, disinvestment, etc. and their resolution often requires compliance to their related statutes such as contract law, land acquisition law, labour law, environmental law, income tax law, company law and such others. These disputes often involve exceedingly complex technologies, intellectual property rights issues, regulatory schemes, ownership rights, which cut across many domestic and international jurisdictions. Further the arbitration law in India allows the parties to choose their own law, Indian or foreign, based on which arbitration will be conducted, place and forum of arbitration, within or outside India, adopt their own procedures or the procedure of any internationally recognized arbitral forums. Arbitration award may further require compliance to several law requirements, some unstated, for its enforcement. Construction arbitration therefore encompassing multiple parties in multiple jurisdictions, with complex interrelated statutes, could involve painstaking arguments on complex legal positions. Voluminous Documents Construction contracts are highly illustrative and consist of several documents with distinct purposes but interlinked with each other. Documents differs based on the nature of construction activities such as public private partnership, turnkey, EPC, item rate, etc and form of contract chosen such as FIDIC, NEC, JCT, ACE, Government Contracts[3], etc. Complexity of documents, inconsistencies coupled with long lifecycle of construction projects can be breeding ground for disputes. Construction arbitration involves deciphering of these complex contracts and contemporaneous records. Documents filed by parties could be in the form of multiple agreements, designs & drawings, charts, schedules, cost accounts, communications, emails, minutes of meetings, etc., which may require time consuming and cumbersome analysis to recreate the timeline of events and ascertain the facts. Experts Given the technical nature of disputes, the role of experts in construction arbitration sometimes become inevitable. The expert, either party appointed, or tribunal appointed, can be renowned independent professional such as quantity surveyors, geologists, chartered engineers, chartered accountant, etc., called upon to decipher and analyse the technical documents, to overcome evidentiary hurdle and give its opinion. The parties may also have expert witness having adequate experience and knowledge to lend credence to their case. Thorough and convincing expert testimony can help a party prevail on any of the hosts of issues that typically arise in construction disputes. Arbitrators The inherent techno-legal complexity involved in construction disputes necessitate the adjudicating body be well versed with the construction industry and have adequate technical and legal knowledge. The arbitration law regime in India gives the parties the liberty to appoint arbitrators of their choice which they feel could be adequate to adjudicate their disputes. If a balance of technical and legal expertise is maintained while appointing the arbitrators, the tribunal could be better equipped to handle expert evidence and submissions on technical and legal aspects. How arbitration is uniquely suited for the resolution of construction disputes Amongst the two primary mode of adjudication for resolving disputes (a) litigation in the courts and (b) arbitration, the most preferred mode in the construction industry is arbitration for three fundamental reasons (i) efficiency of time; (ii) confidentiality; and (iii) control over the process of dispute resolution. Construction industry is ideally placed to reap the benefits of arbitration to resolve its disputes. This is true for several reasons and some of them are enumerated below. a) Peculiar nature of constructions disputes is such that if not resolved quickly can have cascading effect causing time and cost overrun. Such disputes cannot be allowed to linger and languish in usual channel of litigative process of the country. b) Parties in arbitration have the liberty to choose their arbitrators who may understand the engineering and underlying scientific principles, thereby limiting the amount of time counsel needs to spend on educating the tribunal. c) Engineering disputes are distinct as they revolve around analysis of complex technical documents and science involved. With engineering savvy arbitrator on the panel, viable conclusion can be drawn from data subjected to assessment and testament. d) Arbitration encourages creative ways of receiving expert testimony that are not available in a court trial. e) The arbitration regime in India has been revamped by several amendments in recent years to make arbitration proceedings in India more effective, especially for the construction sector. f) The changes have far reaching impact for the construction industry as it balances the control that one party (generally the owner) used to exercise previously. The regime now gives more power to the arbitral tribunal for award of interim measures and provide for cost effective and timely redressal of disputes. Role of Engineers and Lawyers We discussed above, construction disputes are distinctive, often involving mixed issues of facts and law. The identification of the intricacies of cross obligations and assessing their impact on project for apportionment of liability is highly technical in nature and has evolved into a specialised jurisprudence in itself. Knowledge of the technical details involved in the contract and grounding in law are both essential to effectively resolve construction disputes. Construction arbitrations therefore necessitates the arbitrators and advocates to have certain knowledge of engineering principles and some comfort with related mathematics apart from applying the law for deciding the disputes. A techno-legal counsel or team of Lawyers and Engineers can proficiently present contentious technical case and render scientific principles involved in an understandable manner before the arbitrators. Often to conclude the matter the arguing counsels and / or arbitrators may have to understand the Engineers approach towards the issues and its practical resolution. Concluding Thoughts Construction industry is one of the most dynamic sectors not only on a global scale, but also in India and is expected to grow approximately 85% worldwide by 2030 with India, China, and United State accounting for 57% of the total growth[4]. It is one of the major contributors to India's economic development but is also regarded as one of the most conflict and dispute ridden industries. In a sector which is subjected to such extreme technicalities and complexities, it is imperative to resolve issues efficiently and economically and it is therefore important to have distinct expertise and in depth understanding of subject. With the added stress of the COVID-19 emergency on the markets, there is a potential for an influx of disputes which if not resolved effectively could cause immense and long term damage to the industry. As could be perceivable from the above discussions, rational approach for success in construction arbitration could be concrete collaboration of technical and legal profession for effective resolution of disputes rather than playful game of grammar by the parties. To conclude “Talent wins games, but teamwork and intelligence win championships.” - Michael Jordan [1] Alpesh holds Engineers Degree from Mumbai University and PGs in Construction Management from NICMAR and Institute of Engineers. He is pursuing Master of Business Law and PGD in Environmental Law from NLSIU. He has more than 16 years of experience in contracts management and arbitration. He can be contacted at alpesh.yadav@hotmail.com. *This article is an opinion piece by the Author on the current arbitration and technolegal regime. The views are personal to him and does not necessarily reflect the views of the blog. [2] Global Construction Disputes Report 2020, Published by Arcadis Construction Claims Consulting. [3]Government utilities such as Neeti Ayog, Railways, NHAI, NHPC, etc. have devised their own standard contract formats for infrastructure projects. [4] Forecasted by PriceWaterCoopers in Global Construction 2030 Report.

- Rituparna Padhy I. Introduction Arbitral tribunals exercise significant power, be it to pass an award/order on the subject-matter of the dispute and other ancillary issues, set its procedure for proceedings, or even determine its competence. However, judicial intervention is still restrictively accommodated within the legislation as a check to the arbitral tribunal’s competence and discretion. The restrictive ambit of judicial intervention is manifest from Section 5 of the Arbitration and Conciliation Act, 1996 (“Act”), whose non-obstante clause clarifies that the only judicial intervention permitted is what is expressly provided in the Act.[1] While the general boundaries of the court’s writ jurisdiction in arbitration appear to be well-established,[2] the dichotomy between preserving the extraordinary jurisdiction of writ courts and upholding the parties’ contractual obligation to arbitrate persists even today. This year itself has seen two Supreme Court judgments on this issue (to be elaborated in the following sections). The more recent of them reiterated as obiter that if the case is of a public law nature, then writ jurisdiction of courts cannot be fettered by an alternative remedy. The other introduced a distinct ground of ‘exceptional circumstances or bad faith’ which can be invoked by writ courts to exercise their plenary powers. In light of the recent developments that push the boundaries of courts’ extraordinary jurisdiction further ahead, this article attempts to overview the current scope of writ jurisdiction in arbitral proceedings. Part II enumerates certain judicial pronouncements that have set the limits of the courts’ writ jurisdiction in different matters relating to arbitration proceedings, and Part III concludes by examining whether the judicial pronouncements in this regard have remained consistent. (For better understanding, the author has categorized the different cases based on the matters the courts have adjudicated and not by chronology.) II. Limitations on Writ Jurisdiction for different matters While Article 227 has a wider scope than Article 226 and both are distinct from each other, it is interesting to note that many writ petitions to the High Court are often filed under both Articles 226 and 227, presumably because “the distinction between the two jurisdictions stands almost obliterated in practice”.[3] We will also observe that most of the relevant cases revolve around the abovementioned Articles of the Constitution, often reaching the Supreme Court through Special Leave Petitions. A. Violations of Natural Justice In the 2005 case of Ashish Gupta v IBP Co. Ltd.,[4] (“Ashish Gupta”), a Section 8 (of the Act) application was filed for the breach of the audi alteram partum principle. While writ jurisdiction for arbitral matters is excluded from application by an alternative remedy, the Delhi High Court clarified that the rule is discretionary and not obligatory.[5] In suitable matters, despite an alternate remedy being available, the High Court may still exercise writ jurisdiction where (including but not limited to these cases) the writ petition seeks enforcement of any of the fundamental rights; there is a failure of principles of natural justice, or the orders or proceedings are wholly without jurisdiction.[6] In this case, with the application being allowed, the court further emphasised that a writ court can exercise its extraordinary jurisdiction only when “illegality is writ large on the face of the record”.[7] Issuing a prerogative writ “to the exclusion of other available remedies”[8] would generally be permitted only if the actions of the State or its instrumentality violates Article 14 of the Constitution or for other valid and legitimate reasons that make it necessary to exercise such plenary power of the High Court. We thus observe that for judicial intervention through writ jurisdiction, the circumstances should prima facie indicate a sufficiently serious contingency. B. Scope of Writ Jurisdiction when State or State Instrumentalities are Involved Be it at the stage of beginning or during the course of arbitral proceedings; courts have been more inclined to exercise their extraordinary writ jurisdiction when the State or a State instrumentality is a party. In the most recent Supreme Court judgment Unitech Ltd. and Ors v Telangana State Industrial Infrastructure Corporation (TSIIC) and Ors,[9] the Court opined as obiter that while an arbitration clause ousts the courts’ writ jurisdiction, the courts may still determine on a case-to-case basis if “recourse to a public law remedy can justifiably be invoked”.[10] Even though courts generally agree that their writ jurisdiction may be subject to a more efficacious alternative remedy, they are reluctant to uphold the same strictly when the State or State entities are involved. In the case of Union of India v Tantia Construction Pvt. Ltd.,[11] the East Coast Railway [a State instrumentality] had awarded a project to the respondent. Despite the contract containing an arbitration agreement, the respondent filed a writ petition under Article 226 of the Constitution before the High Court. The petitioner appealed against the High Court’s decision to allow the respondent’s writ petition. The Supreme Court, rejecting the appeal, reasoned that “injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution”.[12] We thus observe that despite an alternative remedy of arbitration being available, the courts can still exercise their writ jurisdiction if injustice was evident on the record. Similarly, in Ram Barai Singh & Co. v State of Bihar and Ors,[13] it is noteworthy to take into account the significance of raising timely objections to a writ petition’s maintainability as well. The petitioner had challenged the order of the Patna High Court (Division Bench), which had allowed the respondents’ Letters Patent Appeal by setting aside the Single Judge’s order for the writ petition on the sole ground that an arbitration agreement existed between the parties but was not availed by the appellant. The appellant argued that the contract no longer existed since the work was completed long back. Moreover, the respondents had not raised the point of arbitration clause before the Single Judge. The Supreme Court accepted the appellant’s argument, observing that even though the availability of an alternative remedy is a permissible ground to exclude writ jurisdiction, an arbitration clause cannot ipso facto oust the courts’ writ jurisdiction. Moreover, since the respondents had not objected to the writ petition’s maintainability before the Single Judge, a judgment on merits cannot be set aside merely because arbitration could have been resorted to. The writ court may exercise its discretionary power for either accepting its jurisdiction or relegating to availing alternate remedy. To note: In most of the abovementioned cases, ABL International Ltd. and Anr v Export Credit Guarantee Corporation of India Ltd and Ors (“ABL”) has been relied upon by the Courts.[14]Courts have often relied on this case to uphold the exercise of their writ jurisdiction if public law is involved, even if an arbitral agreement exists. However, even though the Supreme Court had opined in the ABL case that a petition can be filed under Article 226 of the Constitution if a State “acts in an arbitrary manner even in a matter of contract”,[15] there was no arbitration clause in the contract in question. In fact, the Supreme Court further held that “[I]f the parties to a dispute had agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration unless of course both the parties to the dispute agree on another mode of dispute resolution.”[16] Therefore, the relevance of the ABL case in the current discourse may be limited to writ jurisdiction over contractual matters only when a State or State instrumentality is involved. Reliance on it would be misplaced when an arbitration agreement is involved. C. Jurisdiction of Arbitral tribunals One of the major Supreme Court cases dealing with applications under Section 16 of the Act is Deep Industries v Oil and Natural Gas Corporation (“Deep Industries”).[17] The High Court was found to have contradicted the arbitrator’s order dismissing the Section 16 application (which the Supreme Court deemed sufficient grounds to set aside the High Court judgment) and exceeded its writ jurisdiction by going into the merits of the dispute.[18] While declaring that the High Court through its jurisdiction under Article 227 of the Constitution can correct only jurisdictional errors, the Supreme Court also held that since the Act does not provide any option for appealing against an Order emanating from a Section 16 application, parties can only await the passing of the final award before appealing under Section 34 of the Act.[19] However, in September 2020, the Supreme Court in Punjab State Power Corporation v EMTA Coal Ltd.[20](“PSPC”) opined that if a Section 16 application is dismissed by the arbitrator, then a writ court can exercise its extraordinary jurisdiction only when the order so passed is “so perverse”[21] on the face of the record that “the only possible conclusion is that there is a patent lack in inherent jurisdiction”.[22] It remains unclear whether such an exception can be carved for writ jurisdiction when an alternate efficacious remedy exists under Section 34 of the Act, especially when the legislative provision provides no such allowance.[23] While the Ashish Gupta pronouncement may lend credence to the PSPC ratio, it is notable that the former was in the context of a Section 8 application, where the competent court expressly has its authority recognised, and the latter concerns a Section 16 application which gives authority exclusively to the arbitral tribunal to first determine the application. D. Applications regarding Section 11 In the landmark judgment of SBP & Co. v Patel Engineering­­­,[24] (“SBP”), an order by the Chief Justice refusing to appoint an arbitrator was challenged before the High Court under Article 226 of the Constitution. The Supreme Court emphasised that except for a right to appeal under Section 37 of the Act,[25] interference of the writ courts regarding the orders passed by the arbitral tribunal during the arbitration proceedings is impermissible.[26] Essentially, the Supreme Court in the SBP case opined that should an order regarding a Section 11 application be passed by the Chief Justice of India or the designated Supreme Court judge; there can be no appeal against such an order.[27] Meanwhile, an order by the Chief Justice of the High Court or the designated High Court judge can be only appealed against through Article 136 of the Constitution and not Articles 226 or 227 of the Constitution.[28] Interestingly, in 2008, the court in Punjab Agro Industries Corp. v Kewal Singh Dhillon[29]ruled that an order by the Civil Judge can be challenged under Article 227 of the Constitution. The Supreme Court distinguished this case from the SBP pronouncement on the ground that the relevant ratio of SBP was applicable only for orders made by the Chief Justice of a High Court or the designated judge of that High Court and did not apply to a “subordinate court functioning as Designate of the Chief Justice”.[30] The court’s decision here was also influenced by the fact that no provision for appeal existed against an order under Section 11(4) of the Act.[31] E. Orders for Interim Measures/Orders during the pendency of arbitral proceedings The general stance of courts in matters which involve an appeal against the interim measure(s) or order(s) amidst ongoing arbitration proceedings is that interlocutory orders of an arbitrator/arbitral tribunal can be challenged only after the final award is passed and the aggrieved party invokes Section 34 of the Act. In 2020, the Karnataka High Court adjudicated the case of Tejavathamma v M. Nataraj and Ors, where an interlocutory order of the arbitral tribunal (rejecting the petitioner’s plea to impound certain agreements) was challenged under Article 227 of the Indian Constitution.[32] Here, the petitioner heavily relied on Section 17(1)(ii)(c) of the Act, which allows an interim measure to be granted/refused for “the detention, preservation or inspection of any property or thing which is the subject- matter of the dispute in arbitration, or as to which any question may arise therein”.[33] However, the court clarified that the abovementioned provision does not pertain to “questioning the admissibility of the documents”,[34] as was the case here. Unless an order of the arbitrator(s) is challenged under Section 37, no challenge could lie before the extraordinary writ jurisdiction of the High Court against an interlocutory order in the course of arbitral proceedings. At best, the court further observed, the aggrieved party may reserve its rights to challenge such an interlocutory order if and when it suffers an adverse award.[35] Thus, pertinently it can be seen that there is a reiteration of the judicial view that unless a challenge can be successfully invoked under Section 37 of the Act, no orders of the arbitral tribunal during the course of arbitral proceedings can be challenged under Articles 226 and 227 of the Constitution. The suggestion of the court for the aggrieved party to reserve its rights to a challenge appears to be a sound option that may offer some solace to the aggrieved party. Notably, the Karnataka HC is this case did not refer to the Deep Industries case, even though the latter judgment was pronounced nearly seven months before the former and is a considerably relevant Supreme Court case. In the case of Deep Industries, the Appellant had, in its notice of arbitration, challenged the termination of the contract and its blacklisting. Under a Section 17 application, the arbitrator stayed (with qualification) the Respondent’s order that blacklisted the Appellant for two years. However, the Respondent filed a Section 16 application, arguing that the issue of blacklisting is outside the arbitrator’s jurisdiction, which was rejected by the arbitrator. After the first appeal [under Section 37(2)(b) of the Act] was rejected by the Ahmedabad City Civil Court against this Section 16 application, a special civil application was filed under Article 227 challenging the dismissal of the first appeal. Notably, Section 37(3) of the Act expressly provides that “No second appeal shall lie from an order passed in appeal under this section”.[36] The Supreme Court took into consideration two main provisions of the Act – Section 5 and Section 37. The Court observed that only “one bite at the cherry”[37] is permitted, and a second appeal being filed is interdicted. It finally held that even though the High Court can exercise its writ jurisdiction without being curtailed by the non-obstante clause of Section 5 of the Act, the High Court should be “extremely circumspect in interfering with the same…so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction”.[38] Moreover, the High Court cannot entertain a writ petition under Article 227 merely because the first appeal was dismissed by a subordinate court.[39] This year, the Gujarat High Court in GTPL Hathway v Strategic Marketing Pvt. Ltd.[40]reiterated that an order passed by the arbitrator during the pendency of arbitration proceedings cannot be challenged under Articles 226 and 227. In this case, during the proceedings, the arbitral tribunal held that the disputes were arbitrable despite the criminal allegations of fraud and cheating as raised by the petitioner. The High Court, while dismissing the petition filed, reiterated two points: firstly, that Section 5 of the Act itself provided for limited judicial intervention by courts except what is expressly permissible, and secondly, that the petitioner still had an alternate efficacious remedy under Section 34 of the Act.[41] On these grounds, the court dismissed the petition. F. Bad Faith and Exceptional Circumstances In January 2021, the Supreme Court adjudicated the case of Bhavan Construction v Executive Engineer, Sardar Sarovar Narmada Nigam Ltd. and Anr.[42] wherein Respondent no. 2 was the sole arbitrator, and the appellant and respondent no. 1 had entered into a public works contract, which included an arbitration agreement. The sole arbitrator had rejected a Section 16 application filed by respondent No. 1, which had challenged the arbitrator’s jurisdiction. While the Gujarat High Court rejected respondent no. 1’s writ petition under Article 227 of the Constitution against the arbitrator’s order, its Letters Patent Appeal was allowed. Parallel to the appellant’s appeal to the Supreme Court, respondent no. 1 had challenged the final award under Section 34 of the Act. The Supreme Court reiterated that “when statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation”.[43] Taking into account that the appellant had acted without mala fides, the Court pointed out that respondent no. 1 had to have shown exceptional circumstances or ‘bad faith’ on part of the appellant to successfully invoke remedies under Article 227 of the Constitution.[44] On this ground, coupled with the pending Section 34 challenge, the Supreme Court allowed the appeal and set aside the High Court’s order under the Letters Patent Appeal. We observe that proof of exceptional circumstances or bad faith was introduced as a ground to invoke writ jurisdiction where an arbitration agreement existed. This appears to be in addition to the three grounds permitted by the court in Ashish Gupta. While bad-faith may still be accommodated within the principles of natural justice, the ground of ‘exceptional circumstances’ widens the scope of potentially exercising writ jurisdiction, even if it may be on a case-by-case basis. Even though the grounds listed by the court in Ashish Gupta were enumerated as an inclusive list, care must be taken that courts continue to respect the Legislature’s objective of minimum judicial intervention in arbitration. III. Concluding Remarks Even from this limited number of cases, it can be seen that while judicial intervention under writ jurisdiction is acknowledged to be used sparingly, the qualifying criteria for its application, though generally inclusive, continues to fluctuate from case to case. Since writ courts often enumerate grounds for invoking their jurisdiction in an inclusive list, this has allowed them to introduce new grounds. However, the purpose of the Act to minimize judicial intervention should remain at the forefront when determining the ‘extraordinary’ writ jurisdiction of courts. It is, however, encouraging to note that even though ambiguous grounds like “valid and legitimate reasons” (in Ashish Gupta) and “exceptional circumstances” (in Bhaven Construction) widen the scope of judicial intervention in arbitration, they remain a high threshold and need to be applied with the context in mind. Given the sheer variety of matters wherein writ jurisdiction of courts has been invoked in, it may soon become imperative for them to clarify whether their determination is restricted to the facts of that case or can be adopted for multiple circumstances. It is widely accepted that the Act is self-contained and exhaustive, thereby indicating that only those acts are permissible which are expressly mentioned in the Act. Despite courts agreeing that the availability of arbitration ousts the writ courts’ extraordinary jurisdiction, we continue to witness judicial views that assert that an arbitration agreement cannot ipso factor fetter their jurisdiction. We have even noted instances where even when the relevant provisions of the Act provide no scope for judicial intervention (such as Sections 16(6) and 11(4) of the Act), petitions under Articles 226 and 227 of the Constitution have been allowed. In sum, these are a few conclusions that can be consistently inferred from the overall landscape of such judicial opinions: 1. While a writ court's jurisdiction cannot be curtailed by any legislative authority, extreme caution is needed when applying the same. It is imperative to take into account all the material facts of the case, the intention of parties and the provisions of the Act in question. 2. Orders patently lacking in inherent jurisdiction are permitted to be challenged under Articles 226 and 227. 3. Orders passed during the course of arbitral proceedings (especially interlocutory orders) can be challenged before the writ courts if and only if Section 37 of the Act can be invoked – the only other option is to wait until the final award is passed and then challenge it under Section 34 of the Act. It is imperative to remain conscious of the overall objective of the Act to minimise judicial intervention, including the exercise of plenary powers by writ courts, and prevent inordinate delays in passing awards. Another useful criterion for the maintainability of such writ petitions may be to observe whether the alternative remedy under Sections 34 and/or 37 are efficacious enough and if any significant contingencies are apparent. In any case, it is evident that the facts of the case will have a considerable impact on the outcome of the question of maintainability of writ petitions when an arbitration agreement is concluded by the parties. [1] §5, Arbitration and Conciliation Act, 1996. [2] Arts. 226-7, Constitution of India, 1950. [3] Raj International v Tripura Jute Mills Ltd., CRP No. 91 of 2007. [4] AIR 2006 Delhi 57. [5] Id. ¶7. [6] Id. [7] Id. ¶11. [8] Id. ¶28. [9] CA No. 317 of 2021. [10] Id. ¶33. [11] SLP(C) No. 18914 of 2010. [12] Id. ¶27. [13] CA No. 11465 of 2014. [14] CA No. 5409 of 1998 [hereinafter ABL]. [15] Id. ¶10. [16] Id. ¶14. [17] CA No. 9106 of 2019 [hereinafter Deep Industries]. [18] Id. ¶16. [19] §34, Arbitration and Conciliation Act, 1996. [20] SLP (C) No. 8482/2020. [21] Id. ¶3. [22] Id. ¶4. [23] §16, Arbitration and Conciliation Act, 1996. [24] CA No. 4168 of 2003 [hereinafter SBP]. [25] §37, Arbitration and Conciliation Act, 1996. [26] SBP, supra note 24 ¶¶ 44, 46(vi). [27] Id. ¶46(viii). [28] Id. ¶46(vii). [29] CA No. 5226 of 2008. [30] Id. ¶8. [31] §11(4), Arbitration and Conciliation Act, 1996. [32] WP No. 2121/2020 [hereinafter Tejavathamma]. [33] §17(1)(ii)(c), Arbitration and Conciliation Act, 1996. [34] Tejavathamma, supra note 21 ¶18. [35] Id. ¶19. [36] §37(3), Arbitration and Conciliation Act, 1996. [37] Deep Industries, supra note 17 ¶12. [38] Id. ¶13. [39] Id. ¶17. [40] SCA No. 4524 of 2019. [41] Id. ¶19. [42] CA No. 14665 of 2015. [43] Id. ¶17. [44] Id. ¶¶19, 21.

-Khushbu Turki* It is settled law that courts should not interfere with the view taken by an arbitral tribunal unless an award portrays perversity unpardonable under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the Act’). In other words, courts generally refuse to interfere with awards wherein the arbitral tribunal has arrived at a possible or plausible conclusion. However, what might be a plausible view in a particular matter has been subject to constant debate, largely because of the element of subjectivity involved in interpreting agreements and other correspondence between the parties. In the recent case of Anglo American Metallurgical Coal Ltd. v. MMTC Ltd.,[1] the Supreme Court overruled the decision of the Delhi High Court and attempted to discern the characteristics of a decision based on no evidence or imaginary evidence. The analysis of the same has been divided into four parts – Part I explains the factual matrix in brief; Part II discusses the decisions of the arbitral tribunal, the Delhi High Court and the Supreme Court respectively; Part III comprises an analysis of the rationale behind the judgment; and lastly, in Part IV, the author concludes by affirming that courts must be careful while distinguishing between a scenario wherein the tribunal has relied on no evidence, and one wherein the tribunal has merely put forth a plausible view based on the existing evidence. FACTS OF THE CASE MMTC and Anglo American were parties to a long-term contract, pursuant to which MMTC was to purchase coking coal from Anglo American, at a price of USD 300 per metric tonne, over five delivery periods. Following a slump in the industry, the parties agreed to a one-time ad-hoc arrangement under which coal would be supplied at a discounted price of USD 128.25 per metric tonne. The obligation under the original contract continued separately. Sometime after the execution of the ad-hoc arrangement, MMTC requested Anglo American to supply the coal due in the fifth delivery period while referring to certain backlogs in the supply. Anglo American responded by stating that there was no coal available for supply for the rest of the year. After completing the fifth delivery period, Anglo American proposed a new agreement under which the previously unfulfilled obligations could be carried out. However, the parties could not arrive at an understanding concerning the prices and the duration in which the coal would be lifted. Subsequently, Anglo American initiated arbitration proceedings against MMTC for breaching the contract by failing to lift the coal as per the existing agreement. The entire matter revolves around the interpretation of certain correspondence between the parties to determine which party is to be held liable for breaching the contract. THE TRIBUNAL’S AWARD Based on the analysis of the testimonies and the e-mails exchanged between the parties, the Tribunal concluded that Anglo American’s statement regarding the non-availability of coal had been made in the context of the ad-hoc arrangement. The non-availability had been communicated for supplying coal at the ad-hoc price, and Anglo American had always been willing to supply coal at the price mentioned in the long-term agreement.[2] Although the e-mails made no specific mention of the ad hoc price, the tribunal stated that the same could not be interpreted literally, and had to be read in the context of the parties’ previous dealings. It, therefore, held MMTC responsible for breaching the contract and awarded Anglo American damages of USD 78,720,414.92 pendente lite and future interest and cost.[3] DECISION OF THE COURTS When the award was challenged by MMTC in the Delhi High Court, the single judge upheld the validity of the award and refused to set it aside. MMTC then preferred an appeal under Section 37 of the Act before the Division Bench.[4] The Bench observed that while requesting for coal, MMTC had clearly referred to backlogs and requested for the supply due in the fifth delivery period. The court relied primarily on “three crucial emails” wherein Anglo American had responded to MMTC’s request for coal by stating that they did not have any coal to supply for the remainder of the year.[5] Since the court found the language of these three e-mails to be clear and unambiguous, it refused to consider the testimony of Anglo American’s witness who asserted that the non-availability of coal had been conveyed in the context of MMTC’s constant requests for supplying coal at reduced prices. Further, as there was no mention of any reduced price in the e-mail, the bench observed that there was no reason for Anglo American to assume that the coal was being demanded at a reduced price, and not at the price specified in the original agreement. The Bench concluded that the arbitral tribunal had acted in an arbitrary and capricious manner by reading words into written communications between the parties and omitting to read what had been written in plain and unambiguous terms.[6] Relying heavily on the reasoning given in Associate Builders v. Delhi Development Authority,[7] the bench held that the tribunal had made a perverse award based on no evidence or imaginary evidence, and set it aside. When the matter reached the Supreme Court, the court overturned the division bench’s verdict and concurred with the rationale proposed by the tribunal as well as the single judge. The court found that upon a holistic reading of the correspondence exchanged between the parties, the view taken by the tribunal was a plausible view which could not be set aside merely because the division bench came forth with an alternate interpretation. ANALYSIS OF THE JUDGMENT A. PLAIN-EYED READING OF EVIDENCE: THE CORRECT APPROACH? The Division Bench of the Delhi High Court had relied upon the judgment of Smt. Kamala Devi v. Takhatmal and Anr.,[8] (which discussed the scope of Section 94 of the Indian Evidence Act, 1872) to conclude that there was no reason to look for the undisclosed intention of the parties when the express words contained in the three crucial emails were perfectly in accord with the existing facts. The court opined that by overlooking the clear meaning of these mails, the tribunal had constructed an imaginary scenario and essentially relied on “no evidence” when finding MMTC at fault. It further stated that in cases where the conclusion of the arbitral tribunal is not supported by a “plain, objective and clear-eyed reading” of the unambiguous documentary evidence, such awards may fall within the ambit of perversity. However, the application of the principle in the present case is flawed because of two reasons: First, when such principles are applied to a string of correspondence between parties, each document must be taken to be part of a coherent whole, and certain portions cannot be read in isolation. In the present case, as there was no mention of the price at which coal was to be supplied in the three crucial emails, it cannot be claimed that the language of the mails was clear enough to derive a conclusion solely based on their plain-eyed reading. Second, when the three mails are read in context, there does arise an ambiguity which has to be resolved by taking the witness testimonies into consideration and discerning the intent behind the communication. B. Resolving the ambiguity: The Tribunal’s plausible view As mentioned previously, the division bench’s decision was rooted in its reliance upon the principle that the court need not look at the intention behind the correspondence which does not reflect any ambiguity. The bench, however, failed to note the following points, which when read together with the three mails, certainly raise doubts as to the context in which the mails were written: First, after the completion of the fifth delivery period, Anglo American sent a mail to MMTC proposing a new agreement under which MMTC could fulfil its obligation of lifting the stipulated quantity of coal mentioned in the Long-term agreement. Instead of disputing Anglo American’s assertions with respect to the unfulfilled obligations, MMTC acknowledged the same.[9] Second, post receiving Anglo American’s communication with respect to the completion of the fifth delivery period, and the proposed new agreement, MMTC never questioned Anglo American for not fulfilling its obligations. It did not even claim that there had been a breach of contract for refusal to supply the coal. It merely asked for more time to lift the coal and attempted to negotiate the prices. Even while negotiating for a new agreement, MMTC expressed its inability to lift the quantity of coal initially proposed by Anglo American.[10] Third, soon after the commencement of the fifth delivery period, MMTC requested a reduction in the price of the coal being supplied because of the market recession. Moreover, MMTC gave no response to Anglo American’s request for providing a delivery schedule for fulfilling obligations under the Long-term Agreement, even after being reminded about the same.[11] It simply enquired about the availability of items for the future months. The aforementioned points, when read alongside the three mails clearly raise doubts as to the context in which Anglo American had mentioned the non-availability of coal. Therefore, the tribunal in an attempt to make sense of the correspondence, closely scrutinised the mails and the testimonies advanced from both sides and deduced that Anglo American, being a major producer of coal, was both capable and willing to supply the contracted quantity of coal for the fifth delivery period at the contractual price and that it was MMTC who had been unwilling to lift the coal owing to a slump in the market conditions. This was a plausible view that could be reasonably taken after reviewing the entire fact situation and hence did not appear to be perverse in any manner. CONCLUDING REMARKS While the principle of the arbitrator being the ultimate master of the facts reigns supreme, there have been a number of instances in recent times wherein courts have set aside awards by finding fault with the arbitrators’ appreciation of the evidence, documentary or otherwise. This is because there can be no straightjacket formula for decoding whether a particular interpretation of the evidence is a possible and reasonable view of the matter, or if it is an impossible view emerging from an erroneous application of the law to the facts of the case. In cases like the present one, where the evidence is considerably ambiguous in nature, there is a greater chance that an alternative view may seem as an impossible one to the court hearing the matter. In the author’s opinion, the Division Bench’s end conclusion based on its appreciation of the evidence cannot be deemed as incorrect. However, the bench made the error of believing that its view was the only reasonable one, and thereby failed to consider the possibility of the arbitral tribunal’s view being a plausible one as well. There are two key takeaways from the judgment: First, the division bench put forth an interesting test for perversity, that is, if the inference drawn by the arbitral tribunal is not supported by a plain, objective and clear-eyed reading of documents, the award may be set aside. This observation stemmed from the court’s understanding that the tribunal in the current case had read words into the written communications between the parties, and omitted to read what was written in simple, uncomplicated language. While the test is logically sound, courts must take care to note that the aforementioned clear-eyed reading of the documents must be done in a holistic manner, and cherry-picking sentences from documentary evidence and giving them a literal interpretation must be avoided at all costs. Further, while interpreting contractual agreements, it is necessary to consider all relevant evidence which may give an insight into the parties’ true intent and objectives. Second, while it is an established principle that a plausible view taken by the tribunal should not be interfered with, the distinction is drawn between an alternative view and an impossible view in a particular case is largely dependent on the judges’ psyche and their comprehension of the arbitrator’s rationale. Therefore, while evaluating an award for perversity, courts must exercise judicial restraint and set aside the award only in exceptional circumstances. *Khushbu is a Staff Writer for the Arbitration Workshop Blog. She is currently a third-year law student pursuing B.A L.L.B (Hons.) at National Law Institute University, Bhopal. She also serves as an Editor for the NLIU Law Review and the Indian Arbitration Law Review. She can be contacted at khushbuturki14@gmail.com [1] 2020 SCC OnLine SC 1030. [2] MMTC v. Anglo American Metallurgical Pvt. Ltd., FAO(OS) 532/2015 & CM. APPL 20560/2015, MANU/DE/0664/2020. [3] Id. at 1. [4] Id. [5] Supra note 2 at 12. [6] Supra note 2 at 43. [7] (2015) 3 SCC 49. [8] (1964) 2 SCR 152. [9] Supra note 5. [10] Id. [11] Supra note 2 at 6.

- Gautam Mohanty[1] PDF version of the article 1. In this article, the author discusses the judgment of the Balasore Alloys Limited v. Medima LLC (2020) 9 SCC 136. This judgment was delivered by a 3-judge bench of the Supreme Court in September 2020. In this case, Balasore Alloys Ltd. (Applicant) approached the Supreme Court of India (SCI) in a petition under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996 (Act, 1996) praying for the appointment of an arbitrator on behalf of Respondent to adjudicate all disputes arising out of and in connection with 37 purchase orders executed between the Applicant and Respondent. FACTS OF THE CASE: 2. The Applicant in the present case was a manufacturer of high carbon ferro chrome and entered into a business transaction with the Respondent whereby the Applicant agreed to supply the high carbon ferro chrome manufactured by them to the Respondent for sale of the same in the territories of USA and Canada. An Agreement dated 19.06.2017 limited to the sale of 2000MT was signed between the Parties and consequently, 37 purchase orders were placed by the Respondent, specifying the details of the supply to be made under each of the purchase orders. Additionally, the parties also entered into another Agreement dated 31.03.2018 relating to the above transaction enumerating new terms of the transaction. Thus, the premise of the entire issue in discussion surfaced when certain disputes arose between the Parties which were required to be resolved through arbitration. THE CASE OF APPLICANT: 3. The Applicant placed reliance on Clause 7 in the said 37 purchase orders in the Agreement dated 19.06.2017, seeking for the appointment of an arbitrator to resolve the disputes. Notably, Clause 7 of the said 37 purchase orders envisaged a dispute resolution process through arbitration by an Arbitral Tribunal. Since, as per the Applicant, Respondent had failed to appoint their Arbitrator, the Court should appoint an arbitrator on their behest. THE CASE OF RESPONDENT: 4. Per Contra, the case of the Respondent was that the entire transaction was governed by the “Umbrella” Agreement dated 31.03.2018. Therefore, as per Respondent, Clause 23 of the aforesaid Agreement would be the relevant dispute resolution clause governing the disputes emanating from the purchase orders. Further, Respondent also contended that under Clause 23 of the Agreement dated 31.03.2018, the International Chamber of Commerce (ICC) was the relevant authority to adjudicate the disputes in hand and accordingly the Arbitral Tribunal had already been constituted under the aegis of ICC. Hence, in the present case, Respondent prayed for the dismissal of the Section 11 Application filed by the Applicant. RELEVANT CLAUSES: 5. Clause 7 of Agreement dated 19.06.2017 is as below: “7. ARBITRATION: Disputes and differences arising out of or in connection with or relating to the interpretation or implementation of this contract/order shall be referred to the Arbitral Tribunal consisting of 3 Arbitrators of which each party shall appoint one Arbitrator, and the two appointed Arbitrators shall appoint the third Arbitrator who shall act as the Presiding Arbitrator as per the provisions of the Arbitration and Conciliation Act, 1996 and any modification or re-enactment thereto. The venue of the arbitration proceedings shall be at Kolkata and language of the arbitration shall be English. The arbitration award shall be final and binding upon the parties and the parties agree to be bound thereby and to act accordingly. When any dispute has been referred to arbitration, except for the matters in dispute, the parties shall continue to exercise their remaining respective rights and fulfil their remaining respective obligations.” 6. Clause 23 of the Agreement dated 31.03.2018 is as below: “23. GOVERNING LAW; DISPUTES This Agreement shall be governed by and construed in accordance with the laws of the United Kingdom. Any claim, controversy or dispute arising out of or in connection with this Agreement or the performance hereof, after a thirty calendar day period to enable the parties to resolve such dispute in good faith, shall be submitted to arbitration conducted in the English language in the United Kingdom in accordance with the Rules of Arbitration of the International Chamber of Commerce by 3 (Three) arbitrators appointed in accordance with the said Rules, to be conducted in the English language in London in accordance with British Law. Judgment on the award may be entered and enforced in any court having jurisdiction over the party against whom enforcement is sought.” ISSUES FOR CONSIDERATION: 7. Whether Clause 7 of the Agreement dated 19.06.2017 or Clause 23 of the Agreement dated 31.03.2018 is the correct dispute resolution clause in the current factual matrix? More particularly, whether the Arbitral Tribunal has already been constituted in terms of Clause 23 of the Agreement dated 31.03.2018? DISCUSSION & ANALYSIS: 8. At the outset, the SCI in view of the facts of the case referred to Olympus Superstructures' (P) Ltd. v. Meena Vijay Khetan wherein the SCI had previously dealt with a similar issue. In the above-mentioned case, the SCI had harmonized the two clauses and had on reconciliation held that the parties should resolve their disputes under the main agreement. Keeping the above case in the backdrop, the SCI in the present factual matrix was of the view that to conclusively ascertain the applicable dispute resolution clause it was imperative to refer to the manner in which the arbitration Clause was invoked and the nature of the dispute that was sought to be resolved by the Parties through Arbitration. 9. Further, the SCI upon close perusal of the reply to the notice of Respondent invoking the arbitration clause dated 13.04.2020 observed that the Applicant had made references to price and the terms of the payment in the context of the Agreement dated 31.03.2018, i.e. the Umbrella Agreement. Additionally, the SCI also observed that Clause 5,8,9 and 10 of the Pricing Agreement provides for the mechanism relating purchases and sales; final price, payment of provisional price and adjustment of advance, determination of the final sale price and monthly accounting and payment. Alternatively, the SCI took note that the purchase orders did not provide for any of the above but merely provided for the purchase order referring to the price of the quantity ordered for and the special terms relating to provisional price etc. In light of the above, the SCI stated that even if disputes are raised relating to the contract terms, the pricing, deductions etc. will be related to the main agreement and the Tribunal constituted thereunder is empowered to address any issue arising under the contract terms of the individual purchase order as well. 10. Taking note of the fact that Parties had entered into an agreement dated 31.03.2018 which was encompassing all terms of the transaction and such agreement contained an arbitration Clause which was different from the arbitration Clause provided in the purchase orders which was for the limited purpose of governing disputes arising out of the supply of the product; the SCI ultimately observed that the arbitration Clause contained in Clause 23 in the Agreement dated 31.03.2018 would govern the parties in the present case as the disputes raised by the Parties was in relation to price, terms of payment including recovery etc. 11. Lastly, the SCI also opined that as the arbitration Clause contained in the Agreement dated 31.03.2018 had been invoked and the Tribunal had been constituted on 22.06.2020 it would be inappropriate for the Applicant to invoke Clause 7 in the said 37 purchase orders in the Agreement dated 19.06.2017 at this juncture. PRACTICAL TAKEAWAYS: 12. At the outset, the basis of the priority of reference to international arbitration, does not seem to be decisive in nature owing to a lack of general discussion in that regard in the judgement. The ground that the Tribunal had already been constituted under Clause 23 under the rules of ICC and that it would be inappropriate to invoke Clause 7 is at best a moral assertion without any legal backing. In view of the author, such factors should not play an influential role in decision making, whereby it compromises due process in arbitration. 13. Notwithstanding the above, the author approves the harmonization of two parallel arbitration clauses and deems it as a necessary postulation by the SCI to clarify the debated topic of applicability of parallel arbitration clauses in arbitration. [1] Editor, The Arbitration Workshop | Doctoral Candidate, Kozminski University, Warsaw, Poland. He can be reached at gautam.mohanty1414@gmail.com

Mr. Peacock, welcome to the Arbitration Workshop! Firstly, we are extremely honoured to have you agree to give us your interview and to share your perspective with our readers. Q. Before we delve in, may we request you to kindly introduce yourself and tell us about the origins of your interest in the field of Arbitration? A. Firstly, thank you for the invitation and congratulations on The Arbitration Workshop project. I am a Dispute Resolution lawyer, and international arbitration specialist, based in London. I am a partner in the law firm Herbert Smith Freehills (HSF) and Head of the India Disputes practice. I have been involved in arbitration cases since I qualified as a solicitor some 20+ years ago having been fortunate to work as a junior with Julian Lew QC, Larry Shore and Robert Volterra during their time with HSF. I have been involved on India-related arbitrations since the outset – one of my first cases as an associate involved the interplay between the Delhi High Court and a prospective Singapore arbitration. Since that time, I have been fortunate to act for a number of India’s largest corporations on their disputes in various forums, and also to act for investors into India on their commercial and treaty arbitrations. I have also sat as an arbitrator and had the pleasure of being addressed by Indian advocates. I spent 3 years heading up the HSF arbitration practice in Singapore, which involved a large number of India-related matters. I am (when circumstances permit) a frequent visitor to India and a long-time supporter of arbitration in India. I have the great privilege to sit on the Council of the excellent Mumbai Centre for International Arbitration (MCIA), amongst my other appointments. Q. What discernible trends in commercial and investment arbitration do you see emerging as a result of the COVID-19 pandemic? What considerations do you think future Claimants should take into due notice before initiating arbitrations? A. I think the trend will be for a long tail of disputes arising from the devastating commercial impacts of the pandemic, many of which will of course end up being resolved through arbitration. While some of these disputes have already started to arise, many businesses and industry sectors, are understandably more focussed on ensuring their survival in the near term than in seeking to litigate out now breaches of agreements with counterparties who may not themselves be capable of satisfying any remedies that are awarded. Limitation periods may force some claims to be brought sooner, but otherwise I would expect businesses to want to get to the other side (or what they hope is the other side) of this situation before then deciding what breaches remain significant and what claims to pursue whether in commercial or investment arbitration. The considerations for claimants will be the same as always - to ensure at the outset that they are clear on the strategy, commitment, and the ultimate enforceability of the arbitration outcome before starting proceedings. There may of course be short-term reasons to threaten or bring proceedings, such as negotiation leverage or the availability of interim relief, but arbitration and litigation are both exercises where claimants need to be clear on their goals and what investment of time and effort may ultimately be needed to achieve success before they press the button to commence. Q. Do you agree with the general impression that the Model BIT of India is protectionist in scope especially with concerns caused by the omission of Fair & Equitable Treatment standard and the presence of a clause mandating exhaustion of domestic remedy before initiating arbitration proceedings? What changes, if any, would you recommend in the Model BIT of India which could satisfy the interests of India while at the same time providing adequate protection to the foreign investor? A. The prior question is whether to enter into a bilateral investment treaty (BIT) at all. That is, whether you promise foreign investors standards of treatment and the availability of treaty remedies, rather than no such promises. Of course, the debate in relation to India includes the backdrop that a large number of BITs which included substantially different provisions to the current Model BIT were unilaterally cancelled. Those cancellations and the scope of the protections in the model BIT certainly appeared, at least in part, to be a reaction to the BIT claims that India was then facing and before it had succeeded in defending any such claims, which it has since done, albeit it has lost on others. I know that, since the publication of the Model BIT, the Indian government has been consulting and trying to get views from investors on what levels of protection they would like to see, and would be influenced by, in terms of investments into India, but also importantly for Indian investors overseas. The latter perspective is obviously important for BITs with countries where Indian outbound investment may be substantial, so the question of what satisfies the interests of India must include what level of protection its Indian businesses want when they invest overseas. Q. ICSID and UNCITRAL have now released the long-awaited Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement, what is your take on the draft code? How successful do you think will the code of conduct be in addressing issues such as biasness and double hatting in investment arbitrations? A. There is a lot in the draft Code, and I suspect we have some distance to go before we reach a final text. I certainly applaud the efforts to bring greater clarity on how Investor-State Dispute Settlement is intended to operate and to address criticisms of the process. That is not to say that all the criticisms are valid, or that sweeping changes are needed. Double-hatting, for example, in my view is more of a problem in theory than in practice. Likewise, I simply do not think that the current system is fundamentally undermined by bias. No doubt there will always be some instances or allegations that need to be properly addressed, as there are in national courts. Disclosure is also an area where greater focus is always helpful provided the demands are realistic and do not themselves create unnecessary grounds for future challenges that might undermine the process intended to be supported. Q. How important do you think Data Protection is in International Arbitration? Also, in simple terms can you describe what exactly does the term “data” include within its ambit in the context of data protection in arbitrations and what possible repercussions emerge in case of a leak of such “data”? A. Unfortunately, there are few simple answers when it comes to managing data in arbitrations. It is a topic that was seldom discussed 10 years ago, but now is – rightly – absorbing a lot of considered thought from institutions, arbitrators, parties and their counsel. Fundamentally, the arbitration process (like many others) needs to ensure that it has adequate measures in place to prevent the improper dissemination or use of personal data belonging to those who may be involved in the dispute, or may be peripheral to it. The harm that may arise of course depends on what data is leaked and to whom. Individuals may suffer personal, reputation or financial consequences depending on the nature of the data. Companies, governments and other organisations may suffered their own harm if their data is improperly access or used, including by criminals who may view the arbitration process as a repository of often sensitive data about valuable or otherwise important projects. A good entry to the topic is the ICCA-IBA Joint Task Force’s Roadmap to Data Protection in International Arbitration which was published as a consultation draft last year (https://cdn.arbitration-icca.org/s3fs-public/document/media_document/roadmap_28.02.20.pdf). Q. Given your varied experiences as a member of HSF’s India Executive, working in the Moscow office on English law Russian disputes, co-chairing the Nordic Group and also having previously led the Singapore arbitration practice of the firm, do you think cultural considerations and different legal traditions are an important aspect that every law firm needs to address while interacting with clients? If yes, then how should a law firm go about doing that? A. Another big topic! Yes, any firm or practitioner who deals with cross-border transactions or disputes must try to understand the differing perspectives of the various stakeholders to the process. This is not just the clients, although of course they are the entry point for the law firm. In an arbitration context, think also about the counterparties, the arbitrators, co-counsel, opposing counsel, witnesses, experts, arbitral institutions. If you are addressing an arbitral tribunal of 3 diverse practitioners in the same way you would address a judge in your domestic courts, then you are probably doing it wrong. If you are making submissions in English, are you using the right English for your audience? The use of cricket analogies, for example, may be common enough in the Indian or English court, but confusing at best for an arbitral tribunal whose members do not know or care about “straight bats” and the “front foot”. Q. How is your firm adapting to the Work from Home culture? Do you think virtual hearings will become the norm beyond the quarantine period as well? A. The success of moving into a fully or mostly ‘work from home’ environment has surprised me, and I think many others. Obviously, the circumstances under which we have been forced to adapt are not welcome, but the rapid evolution in the use of technology has been beneficial in terms of providing options for the future. Virtual hearings are one such option. Even before last year many procedural hearings in international arbitration would take place by telephone in order to avoid the cost and disruption of travelling to meet in person. 2020 has seen those hearing move onto virtual platforms, and I would expect that to endure. For final hearings involving witnesses and lengthy oral submissions, I suspect we will see more flexibility around the use of virtual or hybrid hearings. That said, many tribunals and counsel (not to mention parties and witnesses) may retain a preference for in person hearings where possible. For example, where there is conflicting witness testimony, a tribunal may well prefer to see the witnesses in person to give their evidence and be questioned on it, rather than have them appear virtually. There will always be a trade-off in terms of time, disruption, costs, and the carbon cost of flying to meet in person. I think what 2020 has done is re-set expectations in terms of what can effectively be done virtually. That lesson will remain with us. Q. Are there any specifics of arbitral practices that you particularly enjoy? Is there any particular practice you would recommend young lawyers should regularly engage in to become better in the field? A. For me, the best parts of the job are the strategic planning and the advocacy. In both cases, it is vital to try to see the dispute as others may see it. What is it that the counterparty sees in this case? Why is it acting the way it is, and what does that tell me about how I should address them and the dispute? Likewise, for an advocate, it is vital to think how the case appears to a neutral decision-maker who has less familiarity with the details and less time to reach a firm view on the merits. It is too tempting to fall for your own arguments, and just to focus on your own perspective. You will do yourself and your client no favours if you do. Q. What would be your word of advice to the readers trying to make it big in the transnational practice of international arbitration? A. Focus on doing each role you are given as best you can and learning from those around you. Repeat at the next steps and then learn also how to delegate and work with those junior to you. After a few years, you will be astonished how much you have learned and how far you have developed.

- Er. Alpesh Subhash Yadav[1] 1. Introduction The Pandemic of COVID 19 literally tripped the circuit breakers on physical interactions around mid March 2020 and pushed the commercial world to adapt to a new reality of conducting businesses virtually considering the travel restrictions and compulsory social distancing measures. The legal profession and the administration of justice have been no exception. Technology has been quick to address the need for remote conduct of arbitration, from the very early stages of the current pandemic. Virtualisation of arbitration proceedings has been largely found efficient, affordable, and substantially eliminated (or at least reduced) the risk of getting infected by virus during such proceedings. A considerable number of efficient and reliable tools for conducting arbitration through audio visual mode were discovered / evolved and parties to arbitration got themselves acquainted (more or less) with this digital mode of doing business. Sharing of data, documents, charts, photographs, and the like, virtually, digitised, easy to navigate, searchable documents, organise and position at the disposal of counsels, witness, and tribunal made things smarter. The time-consuming fumbling of paper pages look like a thing of the past. The accomplishment for which virtual arbitration must also be applauded is the coverage of geographical distances that otherwise had been expensive and time consuming. Given the advantage of virtual proceedings over physical proceedings and with advancement in tools and technology being available with the commercial and legal fraternity, it would be difficult to argue that virtual hearings are not efficient. However, are they effective and will they continue to be mode of arbitration once the pandemic ends and normalcy prevails is what is discussed in this article. 2. Criticisms and Positives of Virtual hearings While lockdown and restrictions, imposed to control the spread of virus, are been substantially relaxed in many parts of world, spread of COVID 19 by and large seems to be coming in control and vaccination for eradicating the virus being commenced in many parts of the World including India, voice for resuming physical proceedings or rather urge to accept and work with corona environment by taking all necessary precautions is increasing. The Chairman of Bar Council of India, in his letters[2] addressed to the Chief Justice of India[3], has expressed concern over the gap between availability of resources with lawyers of humble background from rural cities as compared to those from urban cities for such virtual proceedings. The letter highlights the fact that "90% of the advocates and judges are unaware of the technology and its nuances”. The Bar Counsel also expressed that virtual court cannot displace and replace traditional courts even partly due to lack of knowledge and training in technology, lack of technological infrastructure and due to law and procedures of dispensation of justice in trail matters. A recent letter[4] by Supreme Court lawyers to CJI, seeking resumption of physical functioning at the top court, express similar concerns. The representation made by senior lawyers highlights virtual court has more lacune than benefits and that it has failed to adequately serve the cause of justice. More or less similar concerns also apply to arbitration. The sudden necessity to adopt technology stimulated due to pandemic has raised several concerns, including arbitrator / counsel / client not familiar with technology or are not tech savvy, difficulty in briefing clients / counsels virtually, frequent interruptions due to internet connectivity, hyperactive antivirus, improper permissions, incompatible operating systems, etc. particularly in India, where ad hoc arbitrations are still prominent. In institutional arbitration such challenges can be overcome to some extent as proceedings are administrated centrally, and technical assistance can be made available on demand. The other major concern is the difficulty in communicating during virtual proceedings particularly when participants involved from a particular side are not at the same venue. Similar concern also exists with arbitrators if they want to discuss amongst themselves during the hearing. Solutions presently available through various virtual platforms and messaging tools for such private communications have their own shortcomings. It is believed that gravity of proceedings can be viscerally felt when it is physically experienced in practice which is unlikely in case of virtual hearings where participants are in their familiar home environment. The counsels (both lawyers and nonlawyers) practising arbitration commonly feels that the art of advocacy to some extent is getting ineffective in virtual proceedings. Especially during arguments and cross examinations due to lack of direct eye contact which plays a very vital role. It has a very significant impact on a witness that knows and feels is being looked at directly and a very significant feedback on the tribunal and counsels when direct eye contact is received during arguments. This important impact/feedback cannot be experienced in virtual proceedings as direct, mutual, and simultaneous eye contact is technically impossible. This sometime lead to detached and subconsciously uninvolved experience, when compared to the more intense environment of a physical setting. Compounded to this ineffectiveness, it is possible for witness coaching to take place through mobile or email communications. There also always exist the risk of technological failures and disturbances during proceedings. The other concerns are confidentiality, including the need to ensure the hearing itself and data, documents, transcripts, and videos shared during the proceedings are not compromised. Procedural fairness and the associated implications. Enforcement of an arbitral award passed with remote proceedings by using virtual technology would be challenging. In an event[5] organised by Confederation of Indian Industries and Society of India Law Firms, Justice Rajiv Sahai Endlaw, Judge, Delhi High Court opined, “It is the new normal till the pandemic lasts. I don't see it as a normal for normal times…….” Agreeing with Justice Endlaw, Senior Advocate Sibal remarked, “Technology is not a fulltime solution to everything. For technology to work, you need to have infrastructure. Technology is for the rich and the powerful. Unless the infrastructure reaches the poor. what are you talking about!.....” Therefore, argument in favour for resuming physical hearings is increasing, particularly when no lockdowns are in force and where international traveling is not required for some or all of the persons that must attend. 3. Conclusion Virtual procedures or online arbitration practices adopted even partially, if not for the entire arbitration, could significantly reduce time and costs of travel, and of organising physical hearings. A combination of virtual and physical hearings depending on the requirements and mode of business to be conducted in the proceedings, could prove to be both efficient and effective without compromising, either the health of the attendees or the immediacy of arguments and scrutiny of witness. Parliamentary Standing Committee[6] on Personnel, Public Grievances, Law and Justice, in its interim report submitted to Rajya Sabha suggested virtual proceedings are likely to become permanent particularly for statutory arbitrations such as Telecom Dispute Settlement Appellate Tribunal, Intellectual Property Appellate Tribunal, National Company Law Appellate Tribunal, etc. The committee acknowledged the difficulties in virtual proceedings and admitted need for massive investments to put in place the infrastructure necessary to support the digitised hearings. The report highlighted ‘Justice delayed is Justice denied’ but ‘Justice hurried is also Justice buried’. Currently, due to pandemic, the virtual hearings have been used as an interim tool for avoiding disruptions, but sooner or later the virtual hearings are bound to become normal especially for internationals and cross-border disputes owing to their expeditious and cost-effective means for resolution of disputes. The government and arbitration institutions should enact the necessary changes for adopting virtual hearings under the Arbitration and Conciliation Act, 1996 and issue model guidelines on virtual hearing for all the arbitrations in India. [1] Alpesh holds a bachelor’s degree in Civil Engineering from Mumbai University and is postgraduate in Infrastructure Development and Management from National Institute of Construction Management and Research. He also has Diploma in Construction Management from Institute of Engineers. He is currently pursuing Master of Business Laws (MBL II) from National Law School of India University and have also enrolled for Post Graduate Diploma in Environmental Law from NLSIU. He has over 16 years of experience in the field of contracts management and arbitration and holds senior management position in one of India’s top construction organisation. He can be contacted at alpesh.yadav@hotmail.com [2] Chairman of Bar Council of India letters dated 28.04.2020 and 26.05.2020 addressed to CJI. [3] Justice Sharad Arvind Bobde, CJI. [4]Representation, written by advocates Shri Kuldeep Rai, Shri Ankur Jain and Shri Anubhav and signed by 505 other lawyers including Senior Advocates, seeking resumption of physical functioning of top court. [5]Confederation of Indian Industries and Society of India Law Firms to hold an online panel discussion on 'Virtual Courts' on 21st November 2020. [6]Hon’ble Rajya Sabha Member and Chairman of Standing Committee on Personnel, Public Grievances, Law and Justice, Shri Bhupender Yadav on 11th September 2020 submitted an Interim Report on the “Functioning of the Virtual Courts/Court proceedings through video conferencing” to Hon’ble Rajya Sabha Chairman Shri M Venkaiah Naidu.

We are grateful to Ms. Lucy Greenwood, who agreed to give us this interview. We are delighted that she will be sharing her experiences with us. Having read her Articles and Books during the preparation of our LLM Thesis and on other occasions, this is in every sense a fanboy moment for the Editorial Team at the Arbitration Workshop. To give our readers a brief introduction of Ms. Lucy Greenwood, she is an independent international arbitrator specializing in commercial and investment disputes. She has over 20 years of experience in commercial and investment treaty arbitrations in a wealth of different industries and has acted as counsel or arbitrator in more than 60 arbitrations. She is highly regarded for her efficient resolution of disputes and active case management of arbitrations and is recognized by Who's Who Arbitration, Legal 500 and Global Arbitration Review. She is a Chartered Arbitrator, a Member of the State Bar of Texas and a Solicitor of the Supreme Court of England and Wales. Her extensive experience includes arbitrations involving fracking and water rights, land disputes, major construction and design issues, transportation of heavy oil, consideration of complex contractual provisions regarding pricing and liquidated damages, emergency proceedings in relation to joint operating agreement disputes, energy exploration and developments and FPSO facilities offshore. She is listed on the following panel rosters - AAA Panel of Commercial Arbitrators, ICDR Panel, AAA Panel of Arbitrators for Large, Complex Cases, as a renowned energy arbitrator she is listed on the CPR Institute Oil and Gas Panel, she is listed on the AiADR (Asian Alternative Dispute Resolution) arbitrator list, as well as WIPO, ACICA (Australian Centre for International Dispute Resolution) HKIAC (Hong Kong International Arbitration Centre), Asian International Arbitration Centre, Singapore International Arbitration Centre, Arbitrators’ Roster for the American Chamber of Commerce, Jamaica, Arbitrators’ Roster for the Houston Maritime Arbitration Association, Dispute Adjudication Service Presidential Panel, Russian Arbitration Centre, Ukrainian International Commercial Arbitration Court, National Arbitration and Mediation Panel, Neutrals Panel for Federation of Integrated Conflict Management and on the lists of numerous arbitral institutions, as well as on Global Arbitration Review's Arbitrator Research Tool. She is a Trustee of the Chartered Institute of Arbitrators, Chair, International Committee, Dispute Resolution Section, American Bar Association, Past Chair, North America Branch of the Chartered Institute of Arbitrators and a Fellow of the College of Commercial Arbitrators. Ms. Lucy Greenwood, we welcome you to the Arbitration Workshop Blog and thank you again for agreeing to this interview. Q.1 How did your interest in arbitration and career as an arbitrator begin? Were there any significant obstacles that you had to overcome when you started your career as an arbitrator? A.1 I became involved in arbitration early in my career. I studied law (including private and public international law) at the University of Cambridge, then I joined a magic circle firm in London. During my first week as a qualified lawyer in 1998 I was involved in a $1 billion arbitration case, a worldwide freezing injunction in support of an arbitration seated in Switzerland. After six months in the disputes department in London I was seconded to the Paris office of the firm. I spent three years there working on ICC arbitration matters. After I returned to London, I had three children in quick succession whilst continuing to work full time in international arbitration. After four years back in London I joined a major international law firm in Houston, Texas and continued to specialise in international arbitration matters, focusing on energy related work in the investment and commercial arbitration sphere. In terms of obstacles that I faced, like any international arbitration associate I found there were challenges in juggling work issues but these are particularly exacerbated when both parents are working in demanding full time jobs, which was the case for me and my husband. Throughout all the ups and downs of juggling careers and children I always knew I was in the right profession for me, and, when I became a full time independent arbitrator, I knew I was in the right role in that profession. Sitting as arbitrator plays to all my strengths in terms of case and people management, analysing and determining problems and writing, I feel very privileged indeed to have this job! Q.2 Based on your experience, could you tell us your opinion about the issue of double hatting? Do you believe institutions guidelines could help in addressing this issue and allaying the concerns of litigants? A.2. I am not in favour of double hatting, as you might expect given the fact that for the past few years I have practised exclusively as an international arbitrator and I do not practise any longer as counsel. My reasons for not being in favour of double hatting are slightly purist in the sense that I feel strongly that my role as an international arbitrator is wholly distinct from my previous role as an arbitration counsel. I think they require different skills and different approaches. I therefore struggle with the notion that it is beneficial to either profession to move between the two, however I appreciate that this is a slightly purist approach. I do not feel that more guidelines could really help addressing this issue it very much comes down to the individual and their reasons for acting as both arbitrator and counsel. Q3 How did the idea/genesis of the green pledge come about? How do you think arbitrators and counsels today can do more in terms of being environmentally friendly and take the green pledge to another level? A.3 The “green pledge”, which is my promise to parties and counsel arbitrating before me that I will manage the arbitration in an environmentally friendly manner, came about when I spoke at London International Disputes Week on technology in arbitration in 2019. I concluded that we were not using technology to run arbitrations more efficiently and/or to run them in a more environmentally friendly way. I soon realised that there was a lack of understanding and awareness of the environmental impact of international arbitrations generally. So the green pledge was expanded and became the Campaign for Greener Arbitrations. This is a global initiative to reduce the carbon footprint of international arbitrations. We have conducted detailed empirical research into the environmental impact of a major arbitration and the results are staggering. The Campaign is currently working on ‘green protocols’ - best practice guides to assist participants in the international arbitration process to reduce their carbon footprint. Please visit www.greenerarbitrations.com and sign up to show your support for the green pledge and the campaign. Q.4 Would you please enlighten our readers about arbitrations in Climate disputes? What are your views on the existing regime for arbitration of climate disputes? Do you feel a new regime, as has been debated by many, is required to effectively arbitrate climate disputes? A.4 There is no doubt that, as the ICC Commission report on arbitration and change concluded, climate change disputes are likely to grow exponentially. In my practice I have seen a significant increase in arbitrations arising out of climate change issues, particularly those involving renewables technology. Commercial arbitration is well suited to the resolution of certain types of dispute which will arise as a result of climate change, for example those relating to renewables and other new technologies. In relation to broader environmental issues some disputes are more likely to be decided in investor state arbitrations, particularly where regulatory change has resulted from a country's attempts to reduce emissions in accordance with commitments it may have made in relation to the Paris Agreement. Currently I am not of the view that we need a new regime to arbitrate climate change disputes, although I do think we need greater understanding of the complex issues involved. Q.5. There has been a growing debate about diversity in arbitration. While some argue, that statistically the situation has improved, do you feel the situation has drastically improved? How do you think the arbitration community can contribute more towards enhancing diversity or what essential steps need to be taken? A.5 I first wrote about the underrepresentation of women on international arbitration tribunals back in 2010 . At that time there was little to no statistical data to monitor the lack of women at the very top of our profession. Since then of course there have been great strides made in relation to the under representation of women, I am thinking particularly of the Equal Representation in Arbitration pledge which was launched in 2015. This has had a dramatic impact, both in raising awareness of the issue and encouraging greater transparency in relation to the data. Yet in order for international arbitration as an industry to get the benefit of true diversity we need to be focusing on diversity of background, viewpoint, and opinion and not just gender. To achieve this, we need to be building a more inclusive community in international arbitration which attracts entrants from all different sectors of society, ethnicity, geography, sexual orientation and of course gender. . I am optimistic that we can continue to change and improve in this regard. Increased engagement on social media can help make the profession more accessible, additionally the switch to webinars throughout the COVID-19 pandemic has meant that practitioners can access content that they would not otherwise have been able to do so and there is a better understanding generally at the senior level of the profession of the value of mentoring. Q.6. We understand that you have presided as an arbitrator in several energy arbitrations and have also written about energy arbitration and specialized arbitrators. Why do you think energy arbitrations specifically require extra scrutiny while selecting arbitrators? What can parties do to ensure that they have chosen the most suitable arbitrator for the dispute? A.6 Arbitrators are selected for two main reasons: experience and expertise . Of course, these two things are related. My ten years spent working in Houston Texas meant that I was able to gain a good grounding in energy related issues and this has proved invaluable in determining the wide range of energy related matters that I have been involved in. Energy related work in particular has certain nuances that really do require a deep understanding of the issues. Q.7 What would be your word of advice to the readers trying to make a name for themselves in the transnational practice of international arbitration? A.7 There is no substitute for hands on experience arguing international arbitration cases, however, practising international arbitration is also surprisingly (and rewardingly) academic. I recommend that practitioners read numerous scholarly articles on major issues in international arbitration and, where possible, contribute to the discussions on the subject by publishing their own articles. Attending and speaking at conferences is important in terms of profile raising and to build a network. I have been encouraged by the switch from in person conferences to webinars as this has meant that practitioners who would not otherwise have had access to senior members of the profession have been able to interact with them. The Editorial Team at the Arbitration Workshop would like to thank Ms. Lucy Greenwood for taking out time from her busy schedule and for sharing her perspectives with us!

- Gaurav Rai[1] PDF version of the article Introduction An essential aspect of commercial dispute resolution is the contract between the parties. Having a well-drafted contract that covers all aspects, especially regarding the most basic of issues, is essential. The thumb rule, while drafting contracts, should be that nothing is understood or assumed, or a given. It is only when there is a lack of foresight and a situation arises not covered by one of the provisions of the contract that arbitration and dispute resolution processes begin. The author bases this on his experience of looking at contracts while analysing them during arbitration to determine the nature of rights and obligations of the parties to the contract. However, it must also be noted that arbitrations also come up when a clear meaning of an express term of the contract is onerous and secondary to the primary purpose of the contract or goes against the tenets of the statutes governing the contract. Hence, this article is an endeavour to discuss the two situations mentioned above and the principles of contractual interpretation that deal with the aforesaid scenarios. Business Efficacy Principle To close the gaps in the contract, the arbitral Tribunal would be guided by the principle of Business Efficacy. Under this principle, the Court or Tribunal implies a term in the contract that the parties would have always intended to have in the contract as prudent businessmen and by such implication, business efficacy is supplied to the contract. It is to be remembered that while applying the principle, only the bare minimum has to be implied which, helps to make the contract workable. The classic case for this principle is the opinion of Bowen L.J. in The Moorcock (1889) 14 PD 64, which was cited with approval in the case of Satya Jain v. Anis Ahmed Rushdie (2013) 8 SCC 131 wherein the Supreme Court said that “this test requires that a term can only be implied if it is necessary to give business efficacy to the contract to avoid such a failure of consideration that the parties cannot as reasonable businessmen have intended.” In Nabha Power v. Punjab State Power Corporation (2018) 11 SCC 508, the Supreme Court outlined the jurisprudence regarding implying terms of the contract and affirmed the 5 prong (penta) test to be applied in such a scenario. The same is extracted hereunder: This test has been set out in B.P. Refinery (Westernport) Proprietary Limited vs. The President Councillors and Ratepayers of the Shire of Hastings (supra) requiring the requisite conditions to be satisfied: (1) reasonable and equitable; (2) necessary to give business efficacy to the contract; (3) it goes without saying, i.e., The Officious Bystander Test; (4) capable of clear expression; and (5) must not contradict any express term of the contract. The same penta-principles find reference also in Investors Compensation Scheme Ltd. vs. West Bromwich Building Society (supra) and Attorney General of Belize and Ors. vs. Belize Telecom Ltd. and Anr. (supra). Needless to say that the application of these principles would not be to substitute this Court’s own view of the presumed understanding of commercial terms by the parties if the terms are explicit in their expression. The explicit terms of a contract are always the final word with regards to the intention of the parties. The multi-clause contract inter se the parties has, thus, to be understood and interpreted in a manner that any view, on a particular clause of the contract, should not do violence to another part of the contract. Non-strict interpretation of express terms and Business Common Sense On the opposite end of the spectrum of the aforesaid principle of contractual interpretation are the cases in which strict interpretation of the express terms of the contract are not followed. Many parties have an incorrect understanding that each express term of the contract, however onerous or skewed, will be followed to the letter. They forget that a well-drafted commercial contract, without any gaps, may have terms that may be inconsistent with the Indian Contract Act, 1872 or the Sale of Goods Act, 1930. Such terms of the contract cannot be enforced and the provisions of the Contract Act or the Sale of Goods Act will prevail over such terms. For example, a term in the contract expressly stating that parties will not be liable for damages for breach of the contract will fly directly in the face of Section 73 and 74 of the Indian Contract Act, 1872 and such a term cannot be enforced. This position is also supported by Section 28(1) and the amended Section 28(3) of the Arbitration and Conciliation Act, 1996. I have discussed some of these issues in an article on exclusion clauses in a contract, which can be accessed here. There is another principle of contractual interpretation that does not allow a strict and pedantic interpretation of the Contract. This principle of interpretation of contracts is called Business Common Sense. Although not in a specific context of the interpretation of commercial terms of a contract, the Supreme Court of India in Enercon India Limited and Ors. V. Enercon GMBH (2014) 5 SCC 1, cited with approval the observations of Lord Diplock in Antaios Cia Navieara SA v. Salen Rederierna AB, the Antaios [1985] AC 191 wherein it was stated that if a detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense. This means that the strict interpretation of the contract is not preferred when enforcing such a term in the contract makes it impracticable to perform the contract. The test for business common sense being that of a reasonable commercial person. Use of the principle of business common sense is generally required in a standard contract with skewed clauses wherein there is no scope for negotiations between the parties. However, this principle, will not apply to all standard contracts but only to those terms that do not make commercial sense and/or are beyond the primary purpose of the contract. For e.g., a contract for the supply of goods may have a clause giving the buyer an option for the supply of an additional quantity of items at a later date at the same price. However, if the market conditions change drastically and the price quoted at the start of the contract may not be practical anymore for additional quantities, then in such a case fulfilling the term of the contract for additional quantities of goods would not make business common sense and the supplier may not be required to supply the additional quantities at the earlier quoted price as per the terms of the Contract. Concluding remarks and suggestions Interpretation of contracts is of utmost importance in arbitration matters, and any guidance regarding the principles to be used in the aforesaid scenarios was limited to foreign principles. The apprehension of an arbitral Tribunal based in India to use such principles would be understandable and hence it is immensely satisfying when an issue of interpretation of the contract in a power purchase agreement in a Thermal Power Plant was appealed all the way up to the Supreme Court and the Supreme Court recognized and relied on the principles of contractual interpretation in common law jurisdiction to provide domestic arbitrations with some affirmation in using the said principles in their awards. The Supreme Court in Nabha Power v. Punjab State Power Corporation (2018) 11 SCC 508 has outlined the literature on several principles of contractual interpretation including the ones discussed above. Although they haven’t strictly implied a term in the contract using the Business Efficacy test but have stated the use of this principle and the others in the manner utilised in other jurisdictions as principles that can apply to India as well. Finally, they have also provided a word of caution and a guideline before ending with the case which is relevant for our discussion and is extracted hereunder: We may, however, in the end, extend a word of caution. It should certainly not be an endeavour of commercial courts to look to implied terms of contract. In the current day and age, making of contracts is a matter of high technical expertise with legal brains from all sides involved in the process of drafting a contract. It is even preceded by opportunities of seeking clarifications and doubts so that the parties know what they are getting into. Thus, normally a contract should be read as it reads, as per its express terms. The implied terms is a concept, which is necessitated only when the Penta-test referred to aforesaid comes into play. There has to be a strict necessity for it. In the present case, we have really only read the contract in the manner it reads. We have not really read into it any ‘implied term’ but from the collection of clauses, come to a conclusion as to what the contract says. The formula for energy charges, to our mind, was quite clear. We have only expounded it in accordance to its natural grammatical contour, keeping in mind the nature of the contract. Hence, we see a summing up of the principles relating to both express and implied terms which, can act as a definitive guide to arbitral Tribunal when dealing with the interpretation of contracts in such a scenario. [1] Gaurav is Advocate based in Delhi working primarily in areas of arbitration and contract law. 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. He can be contacted at raigaurav.legal@gmail.com