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- Rishabh Dheer[1] The short point of the present article is to examine the findings of the Supreme Court in Mankastu Impex Private Limited v. Airvisual Limited[2] (‘Mankastu Impex’) in relation to determining the juridical seat of arbitration proceedings. The title of this article makes clear that in my opinion, the judgment leaves more questions than answering the same. Before discussing Mankastu Impex, I find it apposite to mention two observations made by Justice Navin Chawla (Judge, High Court of Delhi) in a recent webinar on territorial jurisdiction in arbitration proceedings[3] that serve as a fitting prelude to the seat-venue conundrum – first, that this debate is akin to the Israeli-Palestinian conflict which never seems to get resolved, and that every time one feels that the conflict stands resolved comes another judgment creating more confusion in the minds of lawyers; and second, the seat-venue debate is “a litigating lawyer’s delight and a drafting lawyer’s nightmare.” Note: Neither does this article discuss the seat v. venue debate scrutinized in BGS-SGS Soma JV v. NHPC Limited[4] (‘BGS-SGS Soma’) nor does it detail the findings of the Supreme Court in Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc.[5] (‘BALCO’). A comprehensive discussion on these aspects can be found in my earlier article analyzing BGS-SGS Soma here. Also excluded from the purview of this article is the examination of Clauses 17.1 & 17.3 (infra) and the consequent finding of the Court in respect of Sections 2(2) & 11 of the Arbitration and Conciliation Act, 1996 (‘Act’). BACKGROUND A Memorandum of Understanding (‘MoU’) was executed between the Petitioner (a company incorporated under the laws of India) and the Respondent (a company incorporated under the laws of Hong Kong) pursuant to which the Respondent agreed to sell its complete line of air quality monitors to the Petitioner. Disputes arose between the parties and the Petitioner invoked the arbitration clause contained in the MoU and proposed an arbitrator’s name, subject to the consent of the Respondent. Separate proceedings under Section 9 were also initiated by the Petitioner against the Respondent before the High Court of Delhi. The arbitration clause i.e., Clause 17 of the MoU has been reproduced below: 17. Governing Law and Dispute Resolution 17.1 This MoU is governed by the laws of India, without regard to its conflicts of laws provisions and courts at New Delhi shall have the jurisdiction. 17.2 Any dispute, controversy, difference or claim arising out of or relating to this MoU, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered in Hong Kong. The place of arbitration shall be Hong Kong. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English language. 17.3 It is agreed that a party may seek provisional, injunctive, or equitable remedies, including but not limited to preliminary injunctive relief, from a court having jurisdiction, before, during or after the pendency of any arbitration proceeding. In response to the Petitioner’s invocation of the arbitration clause, the Respondent contended that Clause 17 provided for the arbitration to be administered and seated in Hong Kong. Therefore, the Petitioner ought to have referred the dispute for arbitration in Hong Kong. The Respondent further contended that in light of the usage of the phrase “arbitration administered in Hong Kong” under Clause 17.2 of the MoU, the Respondent had not intended to refer disputes to an ad hoc arbitral tribunal but to an arbitration institution in Hong Kong. It was in this backdrop that a petition under Section 11(6) of the Act came to be filed by the Petitioner before the Supreme Court for the appointment of a sole arbitrator in terms of Clause 17.2 of the MoU. The Petitioner had two broad contentions – Firstly, the proposed arbitration between the parties was an “international commercial arbitration” in terms of Section 2(1)(f) of the Act, being seated in Delhi. Accordingly, the appointment of a sole arbitrator was sought in terms of Section 11(6) read with Section 11(9) of the Act; and secondly, pursuant to Clause 17.1 of the MoU, the parties had clearly agreed that the MoU would be governed by the laws of India and that the Courts at New Delhi would exercise jurisdiction. The Respondent, on the other hand, made two submissions – Firstly, Part-I of the Act was inapplicable as the parties had, pursuant to Clause 17.2 of the MoU, categorically agreed that the “place of arbitration shall be Hong Kong” in addition to providing that the disputes “shall be referred to and finally resolved by arbitration administered in Hong Kong”. Hence, Indian Courts were proscribed from entertaining the petition for the appointment of an arbitrator and the Petitioner was required to approach the Hong Kong International Arbitration Centre; and secondly, placing reliance on BGS-SGS Soma, the Respondent submitted that the usage of the word ‘administered’ in Clause 17.2 of the MoU manifested that the arbitration would be seated in Hong Kong. The Supreme Court held that the juridical seat of arbitration was Hong Kong in the following terms: 20. It is well-settled that “seat of arbitration” and “venue of arbitration” cannot be used inter-changeably. It has also been established that mere expression “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration. The intention of the parties as to the “seat” should be determined from other clauses in the agreement and the conduct of the parties. 21. In the present case, the arbitration agreement entered into between the parties provides Hong Kong as the place of arbitration. The agreement between the parties choosing “Hong Kong” as the place of arbitration by itself will not lead to the conclusion that parties have chosen Hong Kong as the seat of arbitration. The words, “the place of arbitration” shall be “Hong Kong”, have to be read along with Clause 17.2. Clause 17.2 provides that “....any dispute, controversy, difference arising out of or relating to the MoU “shall be referred to and finally resolved by arbitration administered in Hong Kong.....”. On a plain reading of the arbitration agreement, it is clear that the reference to Hong Kong as “place of arbitration” is not a simple reference as the “venue” for the arbitral proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in Hong Kong. The agreement between the parties that the dispute “shall be referred to and finally resolved by arbitration administered in Hong Kong” clearly suggests that the parties have agreed that the arbitration be seated at Hong Kong and that laws of Hong Kong shall govern the arbitration proceedings as well as have power of judicial review over the arbitration award. [emphasis supplied in bold] ANALYSIS: A Fragmentary Judgment? The principle enunciated by the Supreme Court, which forms the major portion of discussion in the subsequent paragraphs, is once again reproduced below: “20. […] It has also been established that mere expression “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration. The intention of the parties as to the “seat” should be determined from other clauses in the agreement and the conduct of the parties.” Let us now examine the judgment in Mankastu Impex in three main prongs: 1. Are the findings in Mankastu Impex contrary to BALCO? At the outset, it is pertinent to highlight that the Constitution Bench in BALCO expressly recognized party autonomy and the territoriality principle. However, the three-judge Bench in Mankastu Impex concluded that the place of arbitration could not be the basis to determine the seat of arbitration – an antithetical finding to BALCO. Moreover, the Court did not elaborate on why it thought so. Instead, it straightaway proceeded in identifying altogether separate criteria for determining the seat (¶20). The following points manifest why the Court’s finding in Mankastu Impex in that ‘place’ cannot be the basis to determine the ‘seat’ is incorrect – (i) BALCO unequivocally states that Section 20 of the Act affords autonomy to parties to agree to any ‘place’ or ‘seat’, terms which as per the Constitution Bench “are often used interchangeably” (¶76). BALCO also quoted from Redfern and Hunter on International Arbitration[6] in support of the seat theory – “The concept that an arbitration is governed by the law of the place in which it is held, which is the ‘seat’ of the arbitration is well established in both the theory and practice of international arbitration”. (ii) Despite the usage of the word ‘place’ in all three sub-sections to Section 20, BALCO expressly distinguished between ‘seat’ (by referring to Sections 20(1) & 20(2)) and ‘venue’ (by referring to Section 20(3)). Furthermore, the Act adopts the UNCITRAL Model Law which, too, only refers to ‘place’ of arbitration under Article 20. Similarly, the New York Convention[7] does not expressly use the word ‘seat’. Article V(1)(d) contained thereunder refers to “the law of the country where the arbitration took place”, which indicates that the Convention gives recognition to party autonomy. Similarly, Clause 2 of the Geneva Protocol[8] recognizes territoriality and party autonomy inasmuch as “[t]he arbitral procedure, including the constitution of the arbitral tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place”. (iii) In an attempt to make the wording of the Act consistent with the international usage of the concept of a “seat” of arbitration, the 246th Report of the Law Commission of India inter alia proposed an amendment to Section 20(1) of the Act. It recommended the substitution of the word “place” with “seat and venue” in Section 20(1). However, this did not see the light of the day. In this context, the Court in Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited & Ors.[9] succinctly observed that this was “presumably because the BALCO judgment in no uncertain terms has referred to ‘place’ as ‘juridical seat’ for the purpose of Section 2(2) of the Act. It further made it clear that Section 20(1) and 20(2) where the word ‘place’ is used, refers to ‘juridical seat’, whereas in Section 20(3), the word ‘place’ is equivalent to ‘venue’. This being the settled law, it was found unnecessary to expressly incorporate what the Constitution Bench of the Supreme Court has already done by way of construction of the Act.” (iv) In BGS-SGS Soma, the Court places party autonomy at the fore in parties’ selection of a seat. The Court emphasized on the principle enunciated in Roger Shashoua & Ors. v. Mukesh Sharma[10] – which the Court in BALCO also quoted approvingly – to conclude that an arbitration clause providing for arbitration in a particular city or country (I have consciously avoided using ‘venue’ or ‘place’ here) would carry with it an implied choice of such city or country being the juridical seat unless a significant contrary indicia could demonstrate that the parties had agreed upon a different seat. (v) Even in Hardy Exploration and Production (India) Inc.[11] (‘Hardy Exploration’), the Court observed that when “a ‘place’ is agreed upon, it gets the status of seat which means the juridical seat. […] When only the term ‘place’ is stated or mentioned and no other condition is postulated, it is equivalent to ‘seat’ and that finalises the facet of jurisdiction. But if a condition precedent is attached to the term ‘place’, the said condition has to be satisfied so that the place can become equivalent to seat.” It must be clarified at this juncture that the oft-quoted test from Hardy Exploration for determination of ‘seat’ – of something else to be added to the ‘venue’ as a concomitant for it to become ‘seat’ – was used by the Court in light of the arbitration clause stipulating Kuala Lampur as the venue (and not ‘place’) for arbitration proceedings. Therefore, the Court in Mankastu Impex seems to have confused ‘venue’ with ‘place’ and, in that process, steered away from BALCO. The ramification of holding that ‘place’ may not amount to ‘seat’, especially in a scenario where the arbitration clause only specifies the place of arbitration, potentially allows for an argument that parties did not intend for such place to be the juridical seat of arbitration proceedings. In Mankastu Impex, given that (i) the arbitration clause categorically stipulated the place of arbitration as Hong Kong; & (ii) the Petitioner and the Respondent relied upon Hardy Exploration and BGS-SGS Soma, respectively, the Court could have utilized the opportunity in reading BALCO harmoniously with either or both Hardy Exploration and BGS-SGS Soma. By doing so, in any permutation and combination, the Court would have reached the same result i.e., Hong Kong being the juridical seat but with a cogent reasoning appended to the judgment. This is because in the facts of the case and in light of the dispute resolution clause, (i) the place specified in the arbitration clause (i.e., Hong Kong) having no condition precedent attached to it would have been equivalent to ‘seat’ as per the test in Hardy Exploration; and (ii) there being no contrary indication at all for postulating a different seat, let alone any significant contrary indicia, Hong Kong would have been the ‘seat’ even as per the test in BGS-SGS Soma. The following table simplifies the legal position that the three co-equal Benches prescribe for determination of the juridical seat in arbitration proceedings: Hardy Exploration ‘Place’ is equivalent to ‘seat’ when mentioned in the contract. However, if a condition precedent is attached, then the same has to be satisfied first for such ‘place’ to become the ‘seat’. A ‘venue’ can become the ‘seat’ if something else is added to it as a concomitant. BGS-SGS Soma A ‘place’ or ‘venue’ specified in the arbitration clause would tantamount to ‘seat’ unless there is significant indication to the contrary to demonstrate that the ‘venue’ stated in the arbitration clause was merely a convenient geographical location. Mankastu Impex A reference to ‘place’ alone is not sufficient. The intention of parties has to be determined from other clauses in the contract as well as the conduct of the parties. 2. A judgment with insufficient reasoning, a peculiar dispute resolution clause, and ineffectual principles At the cost of repetition, I find it necessary to highlight that the Court noted that providing for a “place of arbitration cannot be the basis to determine the intention of the parties” as to the seat. The Court then prescribed that the intention of the parties should, therefore, be determined “from other clauses in the agreement and the conduct of the parties.” (¶20) Two aspects need to be considered under this head – first, the judgment is bereft of sufficient reasoning; and second, there appears to be no correlation per se between the reasoning and the conclusion of the Court inasmuch as the Court merely relied on the text of a rather peculiar arbitration clause in arriving at its finding by rephrasing it. Bereft of Sufficient Reasoning: Unlike Hardy Exploration and BGS-SGS Soma (without going into their correctness), the judgment in Mankastu Impex does not engage with many of the aspects that the former two judgments examine in great depth. It is a short judgment which does not advert to three critical aspects: (i) While noting that the place cannot determine the parties’ intention as to seat, the Court preceded its observation by using the phrase “[i]t has also been established that” (¶ 20). However, neither does the Court elaborate upon this aspect nor does it cite any previous decisions to clarify what exactly has been established. If the reader were to hazard a guess and infer the Court’s reference to Hardy Exploration, then in light of the fact that Mankastu Impex was interpreting a clause stipulating the place of arbitration, the Court ought to have pinpointed the principle within Hardy Exploration. This is on account of the fact that even though Hardy Exploration is commonly referred to for the test of ‘venue’ qua ‘seat’, it distinctly culls out the principle in respect of both ‘place’ (¶32-34) and ‘venue’ (¶35) becoming a ‘seat’. (ii) There was no rationale for the Court to mention “conduct of the parties” (¶20) as a criterion for ascertaining the parties’ intention as the seat. In fact, a perusal of the judgment would in itself elucidate that the Court does not make use of its homemade criterion in arriving at any conclusion whatsoever – factually or principally. This can be corroborated from the fact that the Court would have reached the exact same conclusion with the exact same reasoning, or the lack thereof, in the absence of this criterion. What this, therefore, means is that a party applying the test in Mankastu Impex would have to go through an unwarranted checkpoint. (iii) While the judgment does refer to precedents in support of the significance of the juridical seat in arbitration proceedings (a matter which was uncontested and is even otherwise well-settled), the question that the Court had to answer was qua the maintainability of the petition under Section 11 of the Act, for which it had to determine the seat of arbitration. In that context alone, the Court made no reference to any precedents, including BALCO. Peculiarity of the Arbitration Clause: The Supreme Court was dealing with an arbitration clause inter alia providing for disputes being “finally resolved by arbitration administered in” a particular jurisdiction. The predominant – if not the only – basis for the Court in concluding that Hong Kong was the juridical seat was merely a reading of Clause 17.2 of the MoU which, even otherwise, was categorical in its purport. Pertinently, the Court does not use its own test ((¶20) in arriving at this conclusion. The following will elucidate my point: Clause 17.2 of the MoU Any dispute, controversy, difference or claim arising out of or relating to this MoU, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered in Hong Kong. The place of arbitration shall be Hong Kong. Findings by the Supreme Court 21. On a plain reading of the arbitration agreement, it is clear that the reference to Hong Kong as “place of arbitration” is not a simple reference as the “venue” for the arbitral proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in Hong Kong. The agreement between the parties that the dispute “shall be referred to and finally resolved by arbitration administered in Hong Kong” clearly suggests that the parties have agreed that the arbitration be seated at Hong Kong […] 22. […] The words in Clause 17.2 that “arbitration administered in Hong Kong” is an indicia that the seat of arbitration is at Hong Kong. (sic.) The Court’s finding reproduced above unambiguously evidences that the intention of the parties in choosing Hong Kong as the ‘seat’ is neither exhibited “from other clauses in the agreement” nor from “the conduct of the parties”. This raises certain questions the answers to which are anyone’s guess – How would the Court have decided the issue in the absence of the word ‘administered’ from the arbitration clause? Would the Court have prescribed a different test in the absence of Clause 17.2 altogether? Or, would the Court have concurred with the test laid down either in Hardy Exploration or BGS-SGS Soma for determining the seat had the arbitration clause simply provided for “place of arbitration” as Hong Kong? In future, how will High Courts across the country deal with cases where the juridical seat has to be determined, especially in light of the fact that the findings in Mankastu Impex are diametrically opposed to those in BGS-SGS Soma? And finally, is Mankastu Impex a classic example of the Court applying an incorrect formula, yet yielding a correct answer? 3. The Supreme Court missed the opportunity to refer the issue to a Constitution Bench In arriving at its eventual conclusion, the Supreme Court inter alia noted (¶13) that “considering Clause 17 of the MoU in the present case and the definite clauses therein and in the facts and circumstances of the case, we are not inclined to go into the question on the correctness of BGS Soma or otherwise”. What emerges from this is that the Supreme Court, yet again, missed the opportunity to refer this issue (of seat, venue, place) to a larger Bench in the interest of certainty of law. At this juncture, it is apposite to mention that whether or not reference to a larger Bench should have been made by the Supreme Court in BGS-SGS Soma in light of its express disagreement with Hardy Exploration – a judgment by a Bench of co-equal strength – is, at best, a moot point now. Consequently, as of March 2020, there are three judgments passed by co-equal Benches of the Supreme Court – Hardy Exploration (2018), BGS-SGS Soma (2019) and Mankastu Impex (2020) – that ostensibly lay down the ‘test’ for determining the juridical seat for arbitration proceedings. It is pertinent to note that the ‘test’ that each of the three judgments propounds is different. Therefore, there are not two but three conflicting judgments in operation now, creating further confusion on this issue in addition to increasing the prospect of chance litigation. In this context, it would be apt to recall that “increase in the frequency of conflicting judgments of the superior judiciary will do incalculable harm to the system inasmuch as the courts at the grass roots will not be able to decide as to which of the judgments lay down the correct law and which one should be followed.”[12] Much like the reference to a Constitution Bench[13] in 2019 on the issue of the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 owing to two contradictory judgment delivered by two Benches of co-equal strength (one in 2014 and another in 2018), a reference of the seat-venue conundrum by the Court in Mankastu Impex to a Constitution Bench would have put a lid on the issue. This is particularly because the Court very well recognized that this issue had, in fact, snowballed into a major controversy inasmuch the Court recorded the Petitioner’s submission (¶13) that “Hardy Exploration and BGS Soma, both being by the three-Judges Bench, […] it was not open to the Bench rendering the decision in BGS Soma to hold that the decision in Hardy Exploration was incorrect and the learned Bench in BGS Soma ought to have referred the matter to larger Bench” before expressing its disinclination in dealing with the correctness of BGS-SGS Soma. CONCLUSION Clearly, the judgment in Mankastu Impex muddies the waters. The three co-equal Bench judgments will beleaguer Courts across the country especially in matters calling for the interpretation of a contentious dispute resolution clause. While the most certain answer would lie in a Constitution Bench settling the controversy, a draftsman must clearly mention the ‘seat’ of arbitration in an agreement if the parties so intend in order to preclude the Lernean Hydra from reappearing. [1] The author is an Advocate practicing in New Delhi. He can be reached at rishabhdheer@gmail.com. [2] Mankastu Impex Private Limited v. Airvisual Limited, 2020 SCC OnLine SC 301. [3] The Delhi High Court Bar Association on 16 April 2020 organized a webinar on “Territorial jurisdiction in Arbitration – Seat v. Venue: Unravelling the mystery of ‘Place’ that matters” where Justice Navin Chawla was the keynote speaker. [4] BGS-SGS Soma JV v. NHPC Limited, 2019 (6) Arb LR 393 (SC). [5] Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552. [6] Blackaby, N., Partasides, C., & Redfern, A. (2009). Redfern and Hunter on International Arbitration. Oxford: Oxford University Press, 5th ed. (2009). [7] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958). [8] League of Nations (1928). Protocol on Arbitration Clauses, Geneva, September 24, 1923. [9] Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited & Ors., (2017) 7 SCC 678. [10] Roger Shashoua & Ors. v. Mukesh Sharma, [2009] EWHC 957 (Comm). [11] Union of India v. Hardy Exploration and Production (India) Inc., (2019) 13 SCC 472. [12] Official Liquidator v. Dayanand & Ors., (2008) 10 SCC 1, ¶ 70. [13] Indore Development Authority v. Manoharlal & Ors., 2020 SCC OnLine SC 316.

Written by Gaurav Rai[1] Edited by Justice A.K. Patnaik[2] A. Introduction Force Majeure is a French word which means Superior Force. It is broader than its latin counterpart Vis Major which means Act of God. Ideally clauses in the contracts dealing with the consequences on the happening of a contingency should be called contingent clauses and that is how they are treated under Section 32 of the Indian Contract Act. The Indian Contract Act, 1872 does not provide for the modalities and intricacies of such clauses but, Section 32, only recognizes the right of the parties to make such clauses in their contracts. B. Legal Position As a way of general commercial practice, the scope of Force Majeure Clauses is defined in the contract itself. For eg., Force Majeure Clause may state that “all such events beyond the reasonable control of the parties which hinder the performance of the contract will be Force Majeure”. Such clauses are not only broad to the extent that they include all events which traditionally would not fit within the definition of Force Majeure but may also have a lower threshold for invocation. In many cases, a mere “hindrance” may be enough to invoke a Force Majeure Clause as compared to the requirement of impossibility under the second limb of Section 56 of the Indian Contract Act, 1872 for the contract to become frustrated due to a supervening impossibility. Hence it is to be noted that if a Force Majeure Clause exists in the contract, the language of the Force Majeure Clause in the contract becomes extremely relevant to govern the invocation and the consequential relief from the same. Frustration of contracts is dealt with in the second limb of Section 56 of the Indian Contract Act, 1872. It states that all contracts become void if the performance of the contract becomes impossible after the contract has been entered into and such impossibility was not foreseen at the time of making the contract. This paragraph of Section 56 is generally referred to as the contract becoming frustrated due to ‘supervening impossibility’. There need not be any clause in the contract between the parties for a contract to become void under this Section 56 of the Indian Contract Act, 1872. If this section of the Act is attracted, in the absence of the Force Majeure Clause in the contract between the parties, the contract becomes void and the parties will not be required to perform their obligations under the contract any longer. However, the parties will be able to get payment for any work already done under the contract by invoking Section 65 of the Indian Contract Act, 1872. The second limb of Section 56 of the Indian Contract Act, 1872 however, will not be attracted if the contract has a Force Majeure Clause and particular event which is causing the delay in performance of the obligations of the parties under the contract is covered under this Force Majeure Clause of the contract. In a situation where the unforeseen event is not covered by the Force Majeure Clause of the contract, it may be a frustration of the contract under the second limb of Section 56 of the Contract Act. The seminal judgment on the interpretation of second limb/paragraph of Section 56 of the Indian Contract Act, 1872 is the case of Satyabrata Ghose v. Mugneeram Bangur AIR 1954 SC 44.[3] In this case, the Supreme Court has held that: “The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannot derogate from the general words used in the enactment. This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and unless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do.” ……… In cases, therefore, where the Court gathers as a matter of construction that the contract itself contained impliedly or expressly a term, according to which it would stand discharged on the happening of certain circumstances the dissolution of the contract would take place under the terms of the contract itself and such cases would be outside the purview of Section 56 altogether. Although in English law these cases are treated as cases of frustration in India they would be dealt with under, Section 32 of the Indian Contract Act which deals with contingent contracts or similar other provisions contained in the Act.[4] (Emphasis supplied) Most recently in the case of Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC 80 [5] the aforesaid position is affirmed, and it was held therein: 32. "Force Majeure" is governed by the Indian Contract Act, 1872. In so far as it is relatable to an express or implied Clause in a contract, such as the PPAs before us, it is governed by Chapter III dealing with the contingent contracts, and more particularly, Section 32 thereof. This case has summarized and analysed many previous cases and discussed the issues connected with Force Majeure Clauses of the contract and Section 56 of the Indian Contract Act, 1872 and is a good reference point. A fundamental difference between Force Majeure Clauses and the second limb of Section 56 of the Indian Contract Act, 1872 is that Force Majeure Clauses in contracts are generally drafted in such a manner as to keep the contract alive. These clauses mostly provide consequences which aim at the contract surviving the contingent event and the parties not being in violation of deadlines under the contract. They give the parties some relief such as extending the time period of performance, sharing of costs of extended time period, delay in payment etc. These clauses anticipate that the Force Majeure event will only last for a particular amount of time and hence the parties intend to continue the contract after the Force Majeure period subsides. However, such clauses generally also provide that if the Force Majeure period extends beyond a particular time period, say 90 days, then contract will become frustrated. Hence, it can be concluded from the aforesaid discussion that, if there is no Force Majeure Clause in the contract between the parties, the parties can only get relief under Section 56 of the Indian Contract Act, 1872 that too if they pass the threshold of impossibility as laid down in the Act and as interpreted by the Supreme Court in Satyabrata Ghose v. Mugneeram Bangur. However, if there is an express Force Majeure Clause in the contract between the parties which outlines certain events as contingencies and also provides the consequences on the occurrence of such events then the parties will be governed by the express terms of the Force Majeure Clause of the contract. Further, the threshold for invoking the same will have to be passed as per the terms of the contract and the parties will only get the benefits or remedies as outlined under the contract. Any relief under Section 56 of the Indian Contract Act,1872 cannot be invoked in such circumstances. C. Practical Analysis Commercial contracts in India generally have Force Majeure Clauses wherein they define contingencies under which certain protections or consequences follow on the happening of such contingencies. Any vague Force Majeure Clauses, however, cannot be enforced in the Court of Law. The rights of the parties in these contingencies have to be specifically provided under the contract. Some examples of contingencies, may be war, epidemic, riots, act of God such as tsunami, earthquake or hurricane. On the happening of these contingencies the parties may decide the consequences, eg. extension of time period for performance of contract, sharing of increased cost due to delay in performance of the contract, right to terminate the contract without being in breach of the same due to prolonged time of existence of Force Majeure conditions etc. In my experience in assisting the Presiding Arbitrator, I have come across 3 cases wherein the arbitral Tribunal accepted that the Force Majeure Clause of the contract was attracted in the facts of the case and as per the terms of the contract and held that the parties were to be governed by the consequences as stated in the clause. The issue of Force Majeure as discussed in these cases are broadly stated hereunder: a. In a road construction case, a particular stretch of land which was handed over to the construction company to develop could not be utilised as the District Collector had disallowed cutting of trees in the particular stretch. The order of the District Collector was passed pursuant to the Orders of the Supreme Court of India, wherein the Supreme Court had protected the trees and disallowed their cutting until further orders. The construction company waited for some time for the orders to be reversed, but when the orders were not reversed, the Employer delinked the particular stretch from the scope of the work. The construction company claimed that it was entitled to idling charges for its labour and machinery deployed at the site for the period it was not able to work on the stretch until the delinking of the stretch. The Employer however took the defence that this contingency fell under Non-Political Force Majeure Event, which could not have been reasonably avoided by the Employer and because of which the parties were to bear their own cost during the subsistence of the orders passed by the Supreme Court and the District Collector. The argument of the Employer was accepted based on the terms of the agreement and the facts of the case and consequently the parties were to be governed by the terms of the Non-Political Force Majeure Event wherein it was stated that the parties will bear their own cost during the subsistence of the contingent event. The construction company lost this particular claim in the arbitration. b. In a contract for supply and installation of transformers, the contractor was unable to procure the transformers from the list of vendors approved by the buyer. All the vendors in the list were either unable to provide the exact specification of transformers as sought by the buyer or were unable to manufacture the transformer in the required time period as they had heavy backlog of orders. Major delay was caused in supply and installation of the transformers for which liquidated damages had been deducted by the buyer from the price of the contract. In arbitration, it was found that the Force Majeure Clause in the contract between the parties was very wide. It characterised every instance which was beyond the control of the parties and which caused delay in performance of the obligations of the parties as a Force Majeure Event. Further, the Force Majeure Clause also gave certain examples of such events and stated that the same were not exhaustive. Looking at the circumstances that none of the buyer’s approved vendors were in a position to supply the transformers to the contractor within the time period as prescribed in the contract, which the contractor could then install, the arbitral Tribunal held that the same amounted to a Force Majeure Event and the contractor must be given extension of time for performance of the contract as per the terms of the Force Majeure Clause. Further, liquidated damages deducted by the buyer on an incorrect interpretation of the contract was asked to be paid to contractor. However, the parties were not held to be liable for any increased cost due to the Force Majeure event because the terms of the contract specifically denied such a right to the parties. c. A telecom service provider company had a contract with a tower installation company. The contract had a defined lock—in period which, if broken, would entitle the tower company an exit price from the telecom service provider for premature exit from the contract. The telecom license of the company was cancelled by the Hon’ble Supreme Court in the 2G case based on which the telecom service provider terminated its contract with the tower installation company. The tower installation company sued for a premature Exit Amount from the contract as per the terms of the contract. The Force Majeure Clause in the contract defined Force Majeure as an act or event affecting the performance by a party of its obligations from events beyond its reasonable control including several factors and specifically order or directive of any court or competent Government Authority in India. The clause however also stated that the party whose performance is affected has to take all steps (if any) which it could reasonably be expected to have taken in order to prevent such act or event occurring. Further, the contract also stated that the Exit Amount was payable only if the termination was voluntary. The telecom service provider argued that the termination was not a voluntary termination rather an involuntary termination as their licenses had been cancelled by the Hon’ble Supreme Court of India and no foul play could have been attributed to the service provider in the license being cancelled. The telecom service provider had taken all the steps to fight the case so that their licenses are not cancelled but the same was not within their hands as the telecom licenses were cancelled for reasons beyond their control. After a discussion of all the facts and circumstances of the case, the arbitral Tribunal agreed with the reasons given by the telecom service provider and held that the Exit Amount will not be payable as the termination was an involuntary one based on the Force Majeure Clause. D. Conclusion The author hopes that the aforesaid examples will give the readers an insight into treatment of Force Majeure Clauses in arbitration and can be kept in mind by drafters of commercial contracts and by arbitration practitioners. The language of the Force Majeure Clause becomes extremely relevant in its treatment. It is suggested that Force Majeure Clauses should be specific in the events which would entitle the parties to claim protection from being in breach of the contract but it should also be made clear in the clause that if the Force Majeure Event extends beyond a particular time then it would give the parties the right to terminate the contract without any negative consequences for any actions during the Force Majeure Period. Such a clause creates a balance and would be beneficial for all the parties to the contract. [1] Gaurav Rai has completed his BBA.LLB(Hons.) from National Law University Odisha in 2015 and his Master of Laws (LL.M) from University College London in 2016. He is an Advocate registered with the Bar Council of Delhi and has been working in the office of Justice A.K. Patnaik, Former Judge, Supreme Court of India as a Legal Assistant. His primary focus is on arbitration and he assists Justice Patnaik in his duties as an arbitrator. He can be contacted at raigaurav.legal@gmail.com [2] Justice A.K. Patnaik is a Former Judge of the Supreme Court of India. Since his retirement in 2014 he is actively working as an arbitrator dealing with Domestic, International Commercial and Foreign Seated Arbitrations. [3] Satyabrata Ghose v. Mugneeram Bangur and Company & Ors. AIR 1954 SC 44 [4] Satyabrata Ghose v. Mugneeram Bangur and Company & Ors. AIR 1954 SC 44 [5] Energy Watchdog v. Central Electricity Regulatory Commission (2017) 14 SCC 80

Balaji Harish Iyer[1] INTRODUCTION The Novel Coronavirus Disease (“Covid-19”) that originated in China in late December 2019 has literally brought the world to a screeching halt. Entire countries have gone into lockdown, trade movements and international supply-chains have been restricted or disrupted[2], and stock markets have tumbled. Closely linked to business, trade and commerce, arbitration has also suffered a hit from this disease. Arbitral institutions such as the International Chamber of Commerce (“I.C.C.”), Singapore International Arbitration Center, Hongkong International Arbitration Center, and the London Court of International Arbitration, among others, have taken measures[3] to avoid personal meetings. Some institutions have asked arbitrators, counsels and parties to email their queries, submissions and awards, or file them online through specific portals;[4] others have mandated a 14-day self-quarantine for visitors to the centers.[5] The result of such restrictions and stop-gap solutions postponed, delayed indefinitely or cancelled cases.[6] Naturally, this means losses amounting to several millions of dollars. The solution to this standstill appears to be simple: implement methods to continue arbitrations online and conduct virtual proceedings, and thereby encourage Online Dispute Resolution.[7] The first in an article series, this article is aimed at providing an overview of the benefits of online arbitration; further articles will deal with specific issues that could relate online arbitrations. CAN PRESENT INSTITUTIONAL RULES MANAGE THE SITUATION? Not all of the existing institutional arbitration rules envisage a situation such as the one caused by Covid-19. Arbitrators and parties may have to use the applicable existing institutional arbitration rules to delay or extend arbitral proceedings beyond the stipulated date for conclusion; for example, the 2017 version of the I.C.C. Rules of Arbitration empower the Court of Arbitration and the arbitrator to extend the arbitral proceedings[8] beyond the typically prescribed six months[9]. An I.C.C. arbitral tribunal, by application of parties or sua sponte, also may resort to modifying the agreed procedural timetable and communicate such a modification to the Court of Arbitration.[10] The 2018 version of the rules of the German Arbitration Institute (“D.I.S.”) also empower arbitral tribunals to amend the agreed procedural timetable,[11] which can be used by D.I.S. arbitral tribunals to accommodate parties and proceedings that are impacted by Covid-19. These examples of how such a singular situation may be managed are not to suggest that there are no institutional rules that provide for online arbitrations.[12] Online arbitrations[13], requiring parties to share their respective cases and supporting documents digitally and receive a decision online,[14] has been propagated for a long time. Most examples are of the Business-to-Consumer and e-commerce space. For instance, disputes over domain names have been resolved by the Internet Corporation for Assigned Names and Numbers[15] almost since the idea of the internet; while this is not a true arbitration culminating in a binding award[16], it has nonetheless proven effective. eBay and PayPal follow similar dispute settlement mechanisms. In the realm of true arbitrations[17], which culminate in binding awards, the International Commercial Arbitration Courts of the Chambers of Commerce & Industries of Russia[18] and Ukraine[19] provide for hearings, examinations of witnesses and experts to happen via video conference, but this is subject to the discretion of the arbitral tribunals constituted under these respective rules; there are no reported cases of arbitral tribunals agreeing to conduct proceedings via video conference. The I.C.C. has long-established “Netcase”, a secure online arbitration portal which can be used by all parties to conduct proceedings following their assent by signing a statement of acceptance.[20] The I.C.C. also has prescribed a set of standard guidelines[21] for tribunals and parties that wish to adapt technology into the arbitral process in general. While examples of institutional rules being technology-friendly certainly exist, it appears that the international arbitration community has been relatively slow on its uptake,[22] with one commentator stating that he recalls only one instance, as president of a D.I.S. arbitral tribunal, in which virtual hearings were conducted[23]. This begs the question as to why the international arbitration community has been so slow to adapt I.T. to international arbitration? The answers could range from an inertia towards adapting technology to a lack of awareness; the current operation of online dispute resolution in specific business-to-consumer markets such as domain names, PayPal and eBay;[24] and, issues such as enforceability of awards rendered online[25] and the rules applicable to such disputes. In other words, there are both legal and non-legal drawbacks to the usage of information technology in international arbitration, none of which in my submission, are fatal to the process; on the contrary, there are sufficient answers and safeguards to the issues raised by bringing in technology to aid international arbitration. This article series will examine each of these issues in turn, in further articles. This particular article will confine itself to embellishing the benefits of bringing in technology to aid international arbitration. WHAT ARE THE BENEFITS OF TECHNOLOGY IN ARBITRATION? The most obvious benefits of adapting technology into arbitrations, conducting virtual hearings and online arbitrations are achieving savings on cost and time.[26] Online arbitration is potentially cost-effective because of the speed of the process and only a partial assumption of operating costs (such as travel and venue costs) by the parties. The instantaneous availability of information reduces the time taken for an arbitration. This advantage has been best espoused as follows: “The fabulous advantage of online disputes is that distances are abolished. A dispute is resolved in the same manner as the contract was entered into – and performed …. …. …. As far as online justice is concerned, if the competent court is located far away from the claimant’s home, [online arbitration] will guarantee access to justice that might otherwise be impracticable. This is all the more necessary as on the Internet people and businesses whose paths would never have crossed offline now enter into contracts with each other. The advantage of [online arbitration] in overcoming geographical limitations holds true until it comes to enforcing the outcome of the […] procedure.”[27] Disputes can be settled remotely, without requiring parties or counsels to be physically present; most people would have to connect through videoconference with the arbitral tribunal or in certain instances through their chosen organisations. Physical meetings could be replaced by electronic media, resulting in at least a partial elimination of physical presence. While there have been comments on the requirement of significant technological resources for organizing virtual hearings[28], in reality, it would not cost much or be overly complicated to organize hearings through software such as Skype, Zoom[29] or Google Meets. Other objections have been raised as to the equality of parties in organizing videoconferences arising out of differences in qualities of internet connections;[30] while this objection will be dealt with in a subsequent article in this series, suffice it to say that such problems were things of the past and with the advent of unlimited 4G, high speed and fiber technology, are unlikely to occur. Document transfers and correspondence takes place online. The cost involved is modest, in comparison to the need to photocopy or print out bulky documents. The tribunal, parties and counsels can do keyword searches within documents to minimize time and effort. Statements of claim, defence, and witness statements could be digitally signed and ratified. CONCLUSION Given the current standstill that international business and dispute resolution have achieved, there is a case to be made for resorting to online arbitration and adapting technology into the arbitral process. It is not denied that there are legal issues such as determination of the seat of arbitration, confidentiality, equal treatment of parties and enforceability of awards; these aspects will be dealt with individually in further articles in this series; despite these potential drawbacks, it is submitted that these drawbacks can be overcome and technology can serve to aid the arbitral process. In sum, perhaps the time is ripe for the world to adopt online dispute resolution and online arbitration in particular. [1] Balaji Harish Iyer is an advocate practising before the Bombay High Court. His focus is on arbitration and alternate dispute resolution. Balaji is an alumnus of the Humboldt University of Berlin, where he pursued an LL.M. in International Dispute Resolution, and National Law University, Delhi. Email: balaji@georgerebello.com, Mobile: +917349360143. [2] Gary L Benton, How Will the Coronavirus Impact International Arbitration?, Kluwer Arbitration Blog (2020), http://arbitrationblog.kluwerarbitration.com/2020/03/13/how-will-the-coronavirus-impact-international-arbitration/ (last visited Apr 1, 2020). [3] See Id.; See also Raid Abu-Manneh et al., Impact of Covid-19 in International Arbitration, Mayer Brown (2020), https://www.mayerbrown.com/en/perspectives-events/publications/2020/03/impact-of-covid19-in-administered-arbitrations (last visited Apr 2, 2020); See also Asmita Singh, Impact of Coronavirus on International Arbitration, The Arbitration Workshop (2020), https://www.thearbitrationworkshop.com/post/impact-of-coronavirus-on-international-arbitration-asmita-singh (last visited Apr 2, 2020). [4] See, COVID-19: Urgent Communication to DRS Community, (2020), https://iccwbo.org/media-wall/news-speeches/covid-19-urgent-communication-to-drs-users-arbitrators-and-other- neutrals/. (last visited Apr 1, 2020); See also, LCIA Services Update: COVID-19, (2020), https://www.lcia.org/lcia-services-update-covid-19.aspx (last visited Apr 1, 2020); See also, COVID-19 Information for SIAC User, , https://www.siac.org.sg/images/stories/press_release/2020/[ANNOUNCEMENT] COVID-19 Information for SIAC Users.pdf (last visited Apr 1, 2020). [5] See, Precautionary Measures at HKIAC in Response to COVID-19, , https://www.hkiac.org/our-services/Facilities (last visited Apr 1, 2020). [6] See specifically on the impact Gary L Benton, supra note 1; See a report on requests for adjournment by parties to arbitral tribunals, Aishwarya, Coronavirus: Indian Arbitration Forum urges Arbitral Tribunals to view requests to adjourn proceedings leniently to minimise health risks (2020), https://www.barandbench.com/news/coronavirus-indian-arbitration-forum- urges-that-requests-to-adjourn-arbitral-proceedings-be-considered-to- minimise-health-risks (last visited Apr 1, 2020). [7] Nils Schmidt-Ahrendts, Virtual Hearings in times of COVID-19 (2020), https://www.linkedin.com/posts/nils-schmidt-ahrendts-95ba8336_virtual-hearings-in-times-of-covid-19-activity-6650814927810383872-j7k7 (last visited Apr 1, 2020); See also Asmita Singh, supra note 2. [8] ICC Rules of Arbitration 2017, 31(2) (2017), https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/ (last visited Apr 1, 2020). [9] Id. at 31. [10] Id. at 24(2) & 24(3). [11] DIS Arbitration Rules 2018, 27.6 (2018), http://www.disarb.org/en/16/rules/-id38 (last visited Apr 1, 2020). [12] See Chen Zhi, The Path for Online Arbitration: A Perspective on Guangzhou Arbitration Commission’s Practice, Kluwer Arbitration Blog (2019), http://arbitrationblog.kluwerarbitration.com/2019/03/04/the-path-for-online-arbitration-a-perspective-on-guangzhou-arbitration-commissions-practice/ (last visited Apr 2, 2020); See also Jana Herbeczkova, Certain Aspects of Online Arbitration, 4, https://www.law.muni.cz/sborniky/dp08/files/pdf/mezinaro/herboczkova.pdf (last visited Apr 2, 2020). [13] See some permutations and combinations in Farzaneh Badiei, Online Arbitration: Definition and Its Distinctive Features, 684 CEUR Workshop Proceedings 87–93, 92 (2010). [14] See the example in Jana Herbeczkova, supra note 11 at 4–5. [15] Gabrielle Kaufmann-Kohler, Online Dispute Resolution and its Significance for International Commercial Arbitration, 693 Global Reflections on International Law, Commerce and Dispute Resolution 437–456, 441 (2005); See also Course on Dispute Settlement in International Trade, Investment and Intellectual Property, , in International Commercial Arbitration: Electronic Arbitration, 5. [16] See Gabrielle Kaufmann-Kohler, supra note 14 at 440; See also Course on Dispute Settlement in International Trade, Investment and Intellectual Property, supra note 14 at 5; See also Jana Herbeczkova, supra note 11 at 7. [17] See Gabrielle Kaufmann-Kohler, supra note 14 at 441. [18] The Rules of Arbitration of International Commercial Disputes, 30(6) (2017), https://mkas.tpprf.ru/en/documents/ (last visited Apr 1, 2020). [19] See The Rules of the International Commercial Arbitration Court, 47(2) (2018), https://icac.org.ua/wp-content/uploads/Rules-of-the-ICAC-at-the-UCCI.pdf (last visited Apr 1, 2020). [20] ICC Netcase: A Secure Online Environment for ICC Arbitration, (2005), https://iccwbo.org/content/uploads/sites/3/2016/11/NetCase-Pamphlet-English.pdf (last visited Apr 1, 2020). [21] See the entire Operating Standards for the Use of IT in International Arbitration, (2004), https://library.iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0029.htm?l1=Commission%20Reports&l2= (last visited Apr 1, 2020). [22] Nils Schmidt-Ahrendts, supra note 6 at Bullet (3); See also Gabrielle Kaufmann-Kohler, supra note 14 at 455 where the author states, “The amounts at stake will not act as an incentive to replace live hearings with e-mails and chat rooms”; See also Course on Dispute Settlement in International Trade, Investment and Intellectual Property, supra note 14 at 6–7; See also Section 9 in Jana Herbeczkova, supra note 11 at 11. [23] Nils Schmidt-Ahrendts, supra note 6 at Bullet (3). [24] Pablo Cortes, What is Online Dispute Resolution? 1 (2011), https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf (last visited Apr 2, 2020). [25] Gabrielle Kaufmann-Kohler, supra note 14 at 453–54; See also Jana Herbeczkova, supra note 11 at 10–11. [26] Farzaneh Badiei, supra note 12 at 90–91. [27] Gabrielle Kaufmann-Kohler, supra note 14 at 453. [28] Course on Dispute Settlement in International Trade, Investment and Intellectual Property, supra note 14 at 33. [29] Nils Schmidt-Ahrendts, supra note 6 at Bullet (7). [30] Course on Dispute Settlement in International Trade, Investment and Intellectual Property, supra note 14 at 36.

Shreesh Chadha[1] INTRODUCTION The Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment) introduced a large number of changes and it’s aspects have been discussed time and again by the Supreme Court of India and various High Courts. However, the same kind of lucidity has not been given to the amendment in Section 8 of the Act, 1996, particularly the limitation for filing an application before the “judicial authority” for appointment of an arbitrator. The unamended Section 8 of Arbitration and Conciliation Act, 1996 (Act) specified the time limit for filing an application in implicit terms as “not later than when submitting his first statement on the substance of the dispute”. Subsequently, Section 8 of the Act, 1996 was amended and currently reads as-“not later than the date of submitting his first statement on the substance of dispute”. Pertinently, issues pertaining to this amendment were raised before the Delhi High Court in SSIPL Lifestyle Pvt. Ltd. vs. Vama Apparels (India) Pvt. Ltd.[2], which recently adjudicated on the purport of the 2015 Amendment in this regard. This article will elucidate the reasoning of the Delhi High Court and the analysis of the position of law on the time limit to refer the dispute to arbitration as per Section 8 of the Act, 1996. MEANING OF “FIRST STATEMENT” IN SECTION 8 OF THE ACT,1996 The Supreme Court had previously clarified the meaning of “first statement” as used in both the amended and unamended Section 8 of the Act, 1996. In Rashtriya Ispat Nigam Ltd. vs. Verma Transport Company[3] the SC has observed that the term “first statement” in Section 8 of the Act, 1996 means – “36. The expression “first statement on the substance of the dispute” contained in Section 8(1) of the 1996 Act must be contradistinguished with the expression “written statement”. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, needed is a finding on the part of the judicial authority that the party has waived its right to invoke the arbitration clause.” Further, the Delhi High Court in Sharad P. Jagtiani vs. Edelweiss Securities Limited[4] has opined that the “first statement” in a civil suit, must necessarily mean the “written statement” submitted by the defendant. The Delhi High Court opined as follows: “15. Section 8 does not specify the manner in which the party has to submit its first statement on the substance of the dispute, and normally with respect to a suit, the first statement on the substance of the dispute by the defendant would be the written statement.” Therefore, it is an established position that irrespective of the 2015 Amendment, the event that governed the time limit of referring a dispute to arbitration, was the filing of the written statement. LIMITATION PERIOD UNDER SECTION 8 OF THE ACT, 1996 The issue of time limit under the unamended Section 8 of the Act,1996 was dealt by the Supreme Court in Booz Allen and Hamilton Inc. vs. SBI Home Finance Ltd. & Ors.[5] It was stated that even though there was no time limit mentioned in Section 8 of the Act, 1996 (before the 2015 Amendment), the provision read with the scheme of the Act indicated that an application before the judicial authority should be filed “at the earliest”. Thus, it follows as a necessary inference that any time before the filing of a written statement, irrespective of whether interim applications were filed by the defendants, or settlement talks were going on between parties, an application under Section 8 of the Act, 1996 for referral of disputes to arbitration can be raised. Notably, the Amendment 2015, had introduced the words- “not later than the date” in Section 8 of the Act, 1996, and it was the impact of such an amendment which was the issue before the Delhi High Court in SSIPL Lifestyle (supra). In SSIPL Lifestyle case (supra), the issue came up for hearing before a Single Judge when in two connected suits, the Defendants-Vama Apparels filed an application under Section 8 of the Act, 1996 in both suits along with applications for condonation of delay under the Limitation Act,1963. These applications were being heard together in the two suits filed for recovery of sums arising out of a sale-purchase agreement between the parties. The issues that were raised before the Single Judge bench were- (i) Whether the amended Section 8 of the Act, 1996 prescribes a time limit for filing an application? And (ii) Whether the time limit under the Code of Civil Procedure, 1908 (CPC) and Commercial Courts Act, 2015 is applicable to an application under Section 8 of the Act, 1996? In response to the questions framed, the Bench analysed other decisions of the Delhi High Court which previously dealt with these issues. One of them being, Hughes Communications India Ltd. and Ors. vs. Union of India[6] wherein it was opined that the only time limitation under Section 8 of the Act,1996 is that it should not be filed later than the first statement by the defendant. It was further held, that merely because the time for filing the written statement had expired, the defendant is not estopped from filing an application under Section 8 of the Act, 1996 and seek referral of the dispute to arbitration. This case was cited with disapproval in the SSIPL Lifestyle case (supra), as it relied on a decision of the Madras High Court in M/s Sri Ragavendra Advertising & Anr vs. Prasar Bharti (Broadcasting Corporation of India)[7] which dealt with the unamended Section 8 of the Act, 1996. A significant ruling by the Delhi High Court in Krishan Radhu vs. Emmar MGF Construction Pvt. Ltd.[8] on the effect of the 2015 Amendment to Section 8 of the Act,1996 was cited with approval in SSIPL Lifestyle (supra). It was held in this case that by inclusion of the words “not later than the date of submitting his first statement on the substance of dispute” a specific time limit for filing a Section 8 application under the Act, 1996 was introduced. Affirming that the words, “first statement” necessarily refer to the written statement, it was propounded that the amended Section 8 of the Act, 1996 required the party to file an application under Section 8 of the Act, 1996 for the referral of the dispute to arbitration, and the words “not later than the date” prescribe the time limit that would concomitantly apply to the filing of the written statement. The relevant excerpt of the Krishan Radhu (supra) judgement is extracted hereinbelow: “17. Thus, the third amendment to Section 8 (1) whereby the existing words “not later than when submitting” have been substituted by “not later than the date of submitting” are of some import. Under the amended law the defendant is now required to invoke the arbitration clause and apply to the court for a reference thereunder by moving an application but not required to file his written statement or any answer to set out his statement on the substance of the dispute. Rather, the submission of the written statement or reply indicating his (first) statement on the substance of the dispute may be construed as waiver of the right to seek reference to arbitration, or even as submission to or acquiescence of the jurisdiction of the court where the action has been brought by the claimant (the plaintiff). The amended provision of Section 8 (1), however, sets out a limit to the period within which such application invoking the arbitration agreement must be presented. It is this limitation period which is indicated by the words “not later than the date of submitting. ... 19. It is clear from the above provision of law that a defendant when called upon to respond to the claim brought by a civil suit and upon being served with the summons is required, by the law, to submit his reply or response in the form of “written statement” within the period of thirty (30) days. So read for purposes of the arbitration law, it is this period which is the period within which “first statement on the substance of the dispute” under the amended law is expected to be submitted.” Therefore, the extendable period of 30 days as mentioned in Order 8 Rule 1, CPC is the stipulated limitation even for an application under Section 8 of the Act, 1996. The correct position in law as cited by the Bench, was advanced by the Delhi High Court in Anil Mahindra vs. Surender Kumar Makkar[9] wherein it was held that the defendants in this case, had participated in the proceedings before the civil court, by availing the extended 90 day period under Order 8 Rule 1, CPC to file the written statement, and belatedly filing the Section 8 application under the Act, 1996 after expiry of the stipulated period amounts to unnecessarily delaying the adjudication of the dispute. The Section 8 of the Act, 1996 application was hence, denied in this case. Relying on the abovementioned decisions, in Krishan Radhu (supra) and Anil Mahindra (supra), the Bench observed that the period for filing the written statement in this case was closed, and the Section 8 application could not be filed after the expiry of such period. It was held that the 2015 Amendment was introduced to provide for a time limit under Section 8 of the Act, 1996 and the word “date” in the amended provision implied precision and was incapable of ambiguity. It was also observed that the scheme of the 2015 amendments in other provisions such as Section 9, Section 11, Section 29A, Section 29B has been to “tighten the time limit to commence and conclude arbitration proceedings” and that such an effort to expeditiously resolve arbitration or related proceedings must be given full effect to by the Courts. Therefore, it was conclusively answered in no uncertain terms that the time limit for filing an application under Section 8 of the Act,1996 is the same as the time limit for filing the written statement under Order 8 Rule 1, CPC, which is 90 days for non-commercial suits, and 120 days (by virtue of Commercial Courts Ac, 2015) for commercial suits. CONCLUSION The ruling of the Delhi High Court in SSIPL Lifestyle (supra) is in line with subsequent amendments to the Act,1996 such as the time limit being prescribed for completion of pleadings before the tribunal [in S. 23 by the Arbitration and Conciliation (Amendment) Act, 2019]. It is also pertinent to mention that by implication the time limit for filing a Section 8 application is mandatorily 120 days, and cannot be filed beyond that period, as held by the Supreme Court in M/s SCG Contracts India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors[10]. The impact of the ruling is vast. It compels the parties to stick to a time limit for referring the dispute to arbitration, and holds the delay in such a request as a waiver of the right to invoke arbitration. Granted, the procedure of arbitration is inherently more flexible, less time consuming and more informal than court proceedings, but the Delhi High Court has proved that such a callous approach to arbitral proceedings is unwarranted and cannot be permitted. [1] Shreesh Chadha is a final year student at Jindal Global Law School(JGLS), Sonepat and can be reached at shreeshchadha@gmail.com. [2] SSIPL Lifestyle Pvt. Ltd. vs. Vama Apparels (India) Pvt. Ltd. C.S. COMM. 735/2018. [3] Rashtriya Ispat Nigam Ltd. vs. Verma Transport Company 2006 7 SCC 275. [4] Sharad P. Jagtiani vs. Edelweiss Securities Limited, FAO (OS) 188/ 2014. [5] Booz Allen and Hamilton Inc. vs. SBI Home Finance Ltd. & Ors. (2011) 5 SCC 532. [6] Hughes Communications India Ltd. and Ors. vs. Union of India CS(COMM) 439/2017. [7] M/s Sri Ragavendra Advertising & Anr vs. Prasar Bharti (Broadcasting Corporation of India)2009 -5-L.W.439. [8] Krishan Radhu vs. Emmar MGF Construction Pvt. Ltd. CS(OS) 3281/2014. [9] Anil Mahindra vs. Surender Kumar Makkar C.M.(M) 243/2016. [10] M/s SCG Contracts India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors. (Civil Appeal No. 1638 of 2019 arising out of S.L.P (C) No. 103/2019).

Link to the originally published article in The Interpreter by the Lowy Institute ANAÏS TOBALAGBA [1] & JUSTIN JOS [2] Newly released rules can help close a gender gap in international tribunals – both on the bench and in processes. Of those who serve on the world’s various international tribunals for resolving business or human rights disputes, the under-representation of women as arbiters has been well documented. According to the International Chamber of Commerce, out of the total of sole arbitrators appointed or confirmed by the International Court of Arbitration in 2018, only 29% were women, whereas 21% of presidents and 13% of co-arbitrators were women. Similarly, the 2019 Annual Report of the International Centre for Settlement of Investment Disputes shows that 24% of the arbitrators and conciliators appointed were women. Trends are slowly evolving towards filling this gender gap as international arbitral institutions recognise the need for change. Initiatives such as the Equal Representation in Arbitration Pledge, for example, seek to increase the number of women appointed as arbitrators. In this context, how can promoting gender diversity in international arbitration influence the resolution of business and human rights disputes? This question has of late become particularly relevant. On 12 December 2019, the Business and Human Rights Arbitration Working Group released The Hague Rules on Business and Human Rights Arbitration (known simply as the Hague Rules). These rules “provide a set of procedures for the arbitration of disputes related to the impact of business activities on human rights”. They allow individuals, states, and corporate entities to settle their disputes with companies and business partners in front of an international arbitral tribunal. There has been a lot of debate about the suitability of international arbitration for human rights disputes, including in relation to claims against corporations. Concerns were raised about the potential unlikeliness of corporations to settle their human rights disputes through arbitration, and about international arbitration possibly conflicting with other remedies for human rights abuses. However, the 2011 UN Guiding Principles on Business and Human Rights place responsibility on states and businesses to provide remedies for those harmed by corporate activities. The Hague Rules thus seem to facilitate the establishment of a new dispute settlement avenue for rights-holders. The adverse impacts of business operations affect men and women differently. The Danish Institute for Human Rights reports, for instance, that in supply chains across several industries, women face gender-specific forms of segregation, discrimination, and violence. Women also face barriers in accessing effective remedies when their rights have been violated. These barriers include lack of information about their rights, high financial costs of participating in grievance processes, stigma and stereotypes associated with certain abuses of women’s rights, and dispute resolution processes that lack gender responsiveness. According to the UN Working Group on the issue of human rights and transnational corporations and other business enterprises: even if affected women are able to access certain judicial, non-judicial or operational-level mechanisms, they are unable to enforce suitable remedies, because these remedial mechanisms typically adopt gender-neutral processes or, worse, operate within existing patriarchal norms. In other words, some avenues for remedy fail to consider women’s specific but varied experiences and needs. In the context of business and human rights, this may result in reinforced power imbalances between companies and female rights-holders. This is where international arbitration may have a role to play. It is accepted that arbitration is not an appropriate way to address all human rights violations that women face. Yet, it may offer female rights-holders alternative options for remedy when other non-state mechanisms have the potential of perpetuating discrimination against women. While international arbitration should not be presumed to replace state judicial and non-judicial mechanisms to address business-related violations of women’s rights, it is an avenue that, as one analyst puts it, “we cannot afford to close off”. However, for international arbitration to contribute to filling gender gaps in the resolution of business and human rights disputes, it is crucial that the nominated arbitral tribunal adopt a gendered approach to decide on cases of gender discrimination, inequality and abuses of women’s human rights. One of the ways the arbitral tribunal can develop more gender-responsive processes and awards is by consistently appointing and encouraging parties to appoint female arbitrators. This fits with the Hague Rules, which call for the formation of “a diverse tribunal”. As it is also the case for state-based judicial institutions, many agree that more gender diversity in arbitration produces better-quality decisions that are more satisfactory for all the parties involved, including women. It is important to note that beyond gender, the goal for more diversity in arbitral tribunals extends to the full spectrum of diversity. To achieve this objective the arbitral tribunal could establish a formal process through which it would appoint and encourage parties to appoint women arbitrators. It would be simplistic to ignore the fact that the pool of women available to be arbitrators is relatively small, and parties can have limited access to information about suitable women candidates. This is why this process could involve systematically providing parties with lists of potential female arbitrators or referring them to arbitrator databases such as ArbitralWomen. Although international arbitration of business and human rights claims is a recent and still uncertain process, making it work for female rights-holders is important in order to achieve effective remediation outcomes. To meet this goal, it is imperative that the nominated international arbitral tribunal adopt an intersectional understanding of women’s human rights while resolving disputes between rights-holders and corporations. [1] Anaïs Tobalagba is a PhD Researcher and a Teaching Fellow at the Faculty of Law of the University of Technology Sydney (UTS). Her research focuses on corporation’s human rights responsibilities and their potential to prevent violence against women in business operations. Before commencing her graduate studies at UTS, Anaïs worked in Europe, North and Central America, Africa and Australia for various government and non-government institutions including the International Committee of the Red Cross and Partnership Africa Canada (now Impact). She managed projects on national implementation of international humanitarian law, certification of conflict minerals, and access to justice for women survivors of conflict-related sexual violence. [2] Justin Jos is a PhD candidate at the Faculty of Law, University of New South Wales, Sydney. He completed his undergraduate law and business administration (BBA LLB) degree from National Law University Odisha, India and Master of Laws (Distinction) from University of Exeter, United Kingdom as a Commonwealth Shared Scholar. Justin’s main research interests lie at the intersections of corporate accountability and international human rights law.

19th July 2019 The Supreme Court of India on 1st July,2019 delivered the judgment in the case of Reckitt Benckiser (India) Private Limited v. Reynders Label Printing India Private Limited and Anr[1]. The question poised before the Court was whether a Foreign group company (Respondent No. 2 in the Clause Title) which was part of the same group as its Indian Affiliate, could be made a party to the arbitration under an agreement to which it was not a signatory. The applicant and the Respondent No. 1 (Indian Affiliate) were parties to the Agreement and a petition had been made to implead the Foreign Group Company to the proposed arbitration although it was not a signatory to the agreement. Link to the Judgment is here: https://sci.gov.in/supremecourt/2016/24972/24972_2016_9_1503_14652_Judgement_01-Jul-2019.pdf Hon’ble Justice Khanwilkar in his judgment made it clear that this issue was “no longer res integra” and relied upon the principles laid down in the case of Chloro Controls India Private Limited Vs. Severn Trent Water Purification Inc. and Ors.[2], wherein a three-Judge Bench of the Apex Court opined that ordinarily, an arbitration takes place between persons who have been parties to both the arbitration agreement as well as the substantive contract underlying it. Invoking the doctrine of “group of companies”, the Court in the Chloro Controls case(Supra) went on to further observe that an arbitration agreement entered into by a company, being one within a group of corporate entities, can, in certain circumstances, bind its non-signatory affiliates. Accordingly, the Supreme Court of India while placing reliance on Chloro Controls(Supra) went on to examine whether it was manifest from the indisputable correspondence exchanged between the parties, culminating in the agreement dated 1st May, 2014, that the transactions between the applicant and Respondent No.1 were essentially with the group of companies and whether there was a clear intention of the parties to bind both the signatory as well as non-signatory parties (Respondent No.1 and Respondent No.2, respectively). Notably, the Applicant during the course of proceedings made two assertions, namely that the Respondent No. 2 was the parent company of the Respondent No 1 and that the negotiations in finalising the Agreement were made by a Mr. Frederick Reynders who was a promoter of Respondent No. 2. Thereafter the court examined the Counter affidavit and the communication exchanged between the parties and came to the conclusion that the Respondent No. 2 was not the parent company of Respondent No. 1 but both the companies were rather part of the same group of companies. Secondly, Mr. Frederick Reynders was not a promoter of Respondent No. 2 but rather an employee of Respondent No. 1 on behalf of whom he made the negotiations. The Applicant had also made an assertion during its rejoinder that Mr. Frederick Reynders was taking instructions from Respondent No. 2. As per the facts of the present case the only causal connection that the Respondent No. 2 had to this agreement was that the group companies of Respondent No. 1 had agreed to indemnify the Applicant for losses caused to them. Once it has been held that the Respondent no. 2 had no intention to be part of the Agreement the onus falls on the applicant to show that the Respondent no. 2 had an intention to arbitrate albeit for a limited purpose of enforcing the indemnity clause. This burden had not been discharged by the applicant and hence the Supreme Court was not inclined to allow the application to implead Respondent No. 2. Having established that Mr. Reynders was not connected to the Respondent No. 2 and only acted in his capacity as a representative of the Respondent No. 1, the Supreme Court stated that in such a situation it was irrelevant that the Respondent No. 2 was part of the same group company as Respondent No. 1 as the burden was on the Claimant to establish that Respondent No.2 had an intention to consent to the arbitration agreement and be party thereto, maybe for the limited purpose of enforcing the indemnity clause in the agreement, which refers to Respondent No.1 and the supplier group against any claim of loss, damages and expenses, howsoever incurred or suffered by the applicant and arising out of or in connection with matters specified therein. Based on the affidavit and the communications between the parties, the Court dismissed the arguments of the Applicant that there existed a clear and mutual intention of the parties to extend the arbitration clause to the non-signatory foreign group company. Hence the Hon’ble Supreme Court of India did not allow the Foreign Group Company, which was not a signatory to the agreement containing the arbitration clause, to be impleaded in the arbitration between the two signatory parties to the agreement. Hence this case should be a guide to parties and arbitral Tribunals as to what factors are relevant for a non-signatory Foreign Group Company to be impleaded in an arbitration in which its Indian affiliate is a signatory. The thumb rule for impleading foreign group companies which are non- signatories to the arbitration agreement is to check whether there was a clear and mutual intention of the parties to bind not only the signatory but the non-signatory parties as well. [1] Reckitt Benckiser (India) Private Limited v. Reynders Label Printing India Private Limited and Anr. Petition for Arbitration (Civil) NO. 65 OF 2016, Supreme Court of India [2] (2013) 1 SCC 641 - https://sci.gov.in/jonew/judis/39605.pdf

*Asmita Singh Coronaviruses are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome and Severe Acute Respiratory Syndrome.[1]In December 2019, a new strain was discovered in humans, and it impulsively spread over the globe since then, to the extent that it has been declared as a pandemic by the Word Health Organization.[2] Coronavirus’s impact on Arbitration Centers and Institutes Though Coronaviruses started with China, but it spread to London, Singapore, Zurich, Paris, Geneva, Washington D.C., and also in Germany, Spain, Iran and India. While a vaccine is still being worked on, to prevent the virus from spreading any further, cities are going in a lockdown, trade movements are being restricted, daily life altered, most of private sector is encouraging its employees to work from home (the effectiveness of which is still in question). The pandemic certainly has dealt a solid blow on the global trade and commerce, with stock markets tumbling all over the globe. With trade and commerce being affected severely, the same is also not good news for the arbitration community. As the situation continues to unfold, here are some of the precautionary measures that have been taken by various Arbitration Institutions and prominent arbitration centers of the world. - The Indian Arbitration Forum (IAF) has requested the Arbitral Tribunals nationwide to consider restricting the conduct of proceedings for the next eight weeks to guard against the spread of the novel Coronavirus (COVID-19).[3] - The London Court of International Arbitration (LCIA) has advised the parties and the arbitrators to avoid meetings as much as possible, and to send and answer queries / or even render awards through emails.[4] - Hong Kong (China) where lies the headquarters of The Hong Kong International Arbitration Centre (HKIAC) has mandated all travelers from mainland China entering Hong Kong are required to go into quarantine for 14 days.[5] - Singapore which has The Singapore International Arbitration Centre (SIAC) has denied entry (or even transit through Singapore) to visitors who recently travelled to mainland China.[6]Additionally, Singaporean citizens and permanent residents who recently travelled to mainland China are advised to not go to work, observe a 14 day.[7] - Australian Centre for International Commercial Arbitration (ACICA), and The American Arbitration Association (AAA) have also taken similar approach as Singapore. - Arbitration institutions in mainland China (such as the China International Economic and Trade Arbitration Commission (CIETAC), the Beijing International Arbitration Center (BAC), the Shanghai International Arbitration Center (SHIAC) etc) have all postponed arbitration hearings and recommended parties (and legal representatives) to abstain from attendance in person.[8]The institutions have also advised the parties to apply for extension of deadline as per the applicable arbitral rules. Compliance to the advisory issues by health agencies, and arbitral institutions, would affect both the ongoing and upcoming international arbitrations. Conducting arbitration proceedings in such times is unfeasible as neither the attendance of parties nor the arbitrators, or even witnesses or experts can be mandated or even possible in some cases. This not only affects the pre scheduled timeline of the matter but also the quality and the total cost of the proceedings. Although the parties are encouraged to make submissions online, conduct meetings via video links, and present evidences during such meetings, but such arrangement at the eleventh hour may not be pragmatically feasible. Ongoing proceedings seem to have been delayed until an effective antidote to the virus can be found. While this health crisis might come in handy for parties aiming to delay the completion of arbitration proceedings, it will cost the other party heavily. For parties entering into contracts, the coronavirus cases will undoubtedly be a consideration when negotiation clauses regarding arbitral seats, choice of law, institutions and procedures. Coronavirus giving rise to new arbitration claims In addition to that, a plethora of new international arbitration claims are expected to emerge as a result of the coronavirus, involving pharmaceutical, biotech, other healthcare industries, and also in almost all other sectors: construction, fashion, transport, and technology to name a few. For example, India, alone counts for around 20 percent of the world’s generic drug supply[9]has restricted the export of certain pharmaceuticals because of the scarcity concerns (possible in the near future) due to the corona outbreak [10]India obtains most of its core ingredients for these pharmaceuticals from China. Currently, the import from China is in turn effected by the diverted attention of Chinese government and health care industry tackling coronavirus cases in the country, rather than the export industry.[11] The pandemic, has not only disordered daily lives but has also damaged the global supply chain balance. Most cross-border contracts, especially in the pharmaceutical industry refer the disputes to be resolved through international arbitration. This disruption in the global supply chain of drugs, will now result in a number of arbitrations claims particularly because of contractual breaches. This is only one example of the possible international arbitration claims that might emerge in various industries due to the coronavirus outbreak. Contractual claims of similar nature will surely arise in every sector where cross border transaction, transport or delivery has been impacted. Time to shift to ODR (Online Dispute Resolution) Mechanisms? As of now, none of the arbitral institutes have specific rules or guidelines pertaining to online dispute resolution. With the coronavirus outbreak, and disturbance in almost every sector, including that of dispute resolution, it drives us to develop (and adapt) the online dispute resolution mechanism better. Its time that arbitral institutions aim to cultivate and formalize online dispute resolution mechanism with specific rules and reference to it in the arbitral rules. The technology to conduct hearings online, present arguments, submit and seek documents, already exists, but the same needs to be formally acknowledged by the arbitral institutes, or the community at large. They must craft an institutional framework that allows for multiple separation screens; the appearances of counsel, arbitrators, witnesses and parties simultaneously around the world; and the easy exchange of information [12]During the creation of the framework, the business community and the very essence of arbitration must be the bedrock of the dialog. Allowing technological advances in online dispute resolution will not only save the party’s logistics cost, time, effort of rescheduling, but also ensure continuity of the proceedings even when physical presence cannot be ensured. As for the pandemic is concerned, it is not just for arbitration community to contemplate over its course from here forward, but also for us society as a whole to formulate better strategies for circumstances similar to these. * Asmita Singh is working as a Research Associate in Jindal Global Law School, O.P Jindal Global University. She has a BA.LLB (Hons.) from Jindal Global Law School and a Master’s in International Dispute Resolution from the Humboldt University of Berlin, Germany. She wrote her master thesis on Harmonizing Investor & State Interests in Bilateral Investment Treaties and its impact on the ‘ease of doing business’ index of a country. She was also an Arbitrator at the Berlin Pre-Moot for the 26th Willem C. Vis Moot Court. While working in Germany, she has dealt with matters relating to maritime arbitration, investment arbitration, and commercial arbitration. She has also worked on matters to be filed at the European Court of Human Rights. She believes in a multi-dimensional approach in terms of research and hence works on issues related to law and society; and feminist jurisprudence in addition to international commercial arbitration and international investment arbitration. On the sides, she is also exploring the possibilities of ‘soft skill’ training especially in the legal market. She can be reached at asmitasingh@jgu.edu.in. [1] World Health Organization: WHO (2020). Coronavirus. [online] Who.int. Available at: https://www.who.int/health-topics/coronavirus [Accessed 20 Mar. 2020]. ‌ [2] Who.int. (2020). WHO Director-General’s opening remarks at the media briefing on COVID-19 - 11 March 2020. [online] Available at: https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020 [Accessed 20 Mar. 2020]. ‌ [3] Aishwarya (2020). Coronavirus: Indian Arbitration Forum urges Arbitral Tribunals to view requests to adjourn proceedings leniently to minimise health risks. [online] Bar and Bench - Indian Legal news. Available at: https://www.barandbench.com/news/coronavirus-indian-arbitration-forum-urges-that-requests-to-adjourn-arbitral-proceedings-be-considered-to-minimise-health-risks [Accessed 20 Mar. 2020]. ‌ [4] Lcia.org. (2014). LCIA Services Update: COVID-19. [online] Available at: https://www.lcia.org/lcia-services-update-covid-19.aspx [Accessed 20 Mar. 2020]. ‌ [5] Coronavirus: Hong Kong to quarantine all arrivals from abroad. (2020). BBC News. [online] 17 Mar. Available at: https://www.bbc.com/news/world-asia-china-51921515 [Accessed 20 Mar. 2020]. ‌ [6] Stb.gov.sg. (2019). Advisory on COVID-19 (Coronavirus Disease 2019) | STB. [online] Available at: https://www.stb.gov.sg/content/stb/en/home-pages/advisory-on-covid-19.html [Accessed 20 Mar. 2020]. ‌ [7] Ibid. [8] Yang Ernest, Chen Xiaoshan, Zhao Terry (2020). Novel coronavirus (2019-nCoV) – potential effects on international arbitration, sale of goods, shipping and shipbuilding (AsiaPac) | Insights | DLA Piper Global Law Firm. [online] Available at: https://www.dlapiper.com/en/uk/insights/publications/2020/02/novel-coronavirus-potential-effects/ [Accessed 20 Mar. 2020]. ‌ [9] Diwanji Sanika (2019). Topic: Pharmaceuticals in India. [online] Available at: https://www.statista.com/topics/5456/pharmaceuticals-in-india/ [Accessed 20 Mar. 2020]. ‌ [10] Reuters (2020). Global supplier India curbs drug exports as coronavirus fears grow. [online] CNBC. Available at: https://www.cnbc.com/2020/03/04/global-supplier-india-curbs-drug-exports-as-coronavirus-fears-grow.html [Accessed 20 Mar. 2020]. ‌ [11] Reedsmith.com. (2019). India restricts drug exports over Coronavirus fears and international arbitration claims are likely to follow | Perspectives | Reed Smith LLP. [online] Available at: https://www.reedsmith.com/en/perspectives/2020/03/india-restricts-drug-exports-over-coronavirus-fears [Accessed 20 Mar. 2020]. ‌ [12] Benz Jeff (2020). What The Coronavirus Means For Arbitration And Mediation - Law360. [online] Available at:https://www.law360.com/articles/1249725/what-the-coronavirus-means-for-arbitration-and-mediation [Accessed 20 Mar. 2020].

By Gautam Mohanty Edited by Gaurav Rai The Arbitration & Conciliation (Amendment) Act, 2019 (“Amendment Act, 2019”) received the assent of the President on 09.08.2019[1] is yet another major initiative introduced by the Legislature towards making India a hub of domestic and international arbitration and for efficacious conduct and management of arbitration proceedings. This post will briefly aim at bringing forth various changes introduced via the Amendment Act, 2019. The impact of these changes along with a critical analysis of new and amended provisions, however, will be discussed in subsequent posts. Recently, the Ministry of Law and Justice vide its Notification dated 30.08.2019[2] intimated that Section 1, Section 4 to Section 9, Section 11 to Section 13 and Section 15 of the Amendment Act, 2019 shall come into effect from 30.08.2019. It remains to be seen as to when the other Sections of the Amendment Act, 2019 come into force. The key provisions of the Amendment Act, 2019 that will be focused are as below: A. The Arbitration Council of India: The major highlight of the Amendment Act, 2019 is the introduction of the Arbitration Council of India(“Council”) in Section 43A to 43M as Part IA which under the Amendment Act, 2019 will be an independent institution responsible for the promotion and encouragement of arbitration, mediation, conciliation or other alternative dispute resolution mechanism in India (Section 43D). The Council, inter alia, is entrusted with the duty of grading existing arbitral institutions, quality and caliber of arbitrators, performance and compliance of time limits for disposal of domestic or international commercial arbitrations. In pursuance to the above, the Eight Schedule which is to be read as part of Section 43J entails the qualifications, experience and general norms applicable to the Arbitrators. Further, as per Section 43C of the Amendment Act, 2019 the Council, as according to the Amendment Act, 2019, will consist of a Chairperson who will be either a former judge of the Hon’ble Supreme Court of India or Chief Justice of a High Court or a Judge of a High Court or an eminent person possessing special knowledge and experience in arbitration. The members of the Council as provided for under the Amendment Act, 2019 can be (i) an “eminent arbitration practitioner” having substantial knowledge and experience in institutional arbitration, both domestic and international; (ii) an “eminent academician” having experience in research and teaching in the field of arbitration; (iii) Secretary to the Central Government in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary as an ex officio member; (iv) Secretary to the Central Government in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary as an ex officio member (v) one representative of a recognised body of commerce and industry, chosen on rotational basis by the Central Government, as a part-time member, and (vi) Chief Executive Officer-Member-Secretary, ex officio (Section 43C(1)(a)–(f)). (NOTE – It is highly pertinent to note that these changes i.e. insertion of Part IA which deals with the Arbitration Council of India and the Eighth schedule outlining the qualifications for being appointed as an arbitrator, have not been notified by the Gazette notification of 30th August 2019.) B. Time Limits for Arbitration Proceedings: The Amendment Act, 2019 introduces 2 significant changes in the context of submission of pleadings and conclusion of arbitration proceedings. The newly introduced Section 23(4) mandates that the Statement of Claim and Statement of Defense shall be completed within a period of 6 months from the date of appointment of the arbitrator(s). Section 29A of the principal Act, has been amended to provide that an arbitral award in domestic arbitrations shall be made by the Tribunal within 12 months from the date of completion of pleadings as stipulated under Section 23(4). Out of experience we have seen that pleadings generally take 3-4 months after the first date of meeting of the arbitral Tribunal. Hence the amendments give the arbitral Tribunal a maximum of 6 months for pleadings + 12 months of regular time + 6 months of time extension by mutual consent of the parties i.e. a total of maximum of 24 months to complete the arbitration proceedings before the need arising for the parties to approach the concerned Court for an extension of time. This however has already started to cause practical difficulties regarding its application, in terms of calculation of time period for the arbitrations which started post 2016 and are already running. However, the authors feel the same will phase out in a year when the new arbitrations which start will follow the new timelines. From a practical standpoint the introduced proviso which provides that during the pendency of an Application for extension of mandate of the Tribunal, the mandate of the arbitrator shall continue till the disposal of the said application atleast ensures that during the pending Application the Tribunal is not functus officio. C. Confidentiality: The Amendment Act, 2019 introduces Section 42A in relation to confidentiality of information in arbitration proceedings. The newly inserted Sections provide for complete confidentiality of all arbitral proceedings except for the award which is used for the purposes of implementation and enforcement of award. D. Protection to Arbitrators: The new Section 42B, is a provision aimed at providing complete immunity to the actions taken by an Arbitrator from suits and other legal proceedings provided such actions are done in good faith. E. Speedy appointment of Arbitrators: The Amendment Act, 2019 attempts to reduce the time period for court appointed arbitrators by way of amending Section 11 of the Principal Act. The amendments introduced empower the Supreme Court and the High Court to designate arbitral institutions or maintain a panel of arbitrators (in jurisdictions where there are no arbitral institutions) for speedy appointment of arbitrators. This will give an impetus to Arbitration institutions to maintain a robust standard to be recognized as an arbitral institution under the Act and to be given the opportunity to appoint arbitrators under Section 11 of the Arbitration and Conciliation Act, 1996. F. A smaller window for setting aside the Award: Previously, as under Section 34(2)(a) of the Act, 1996 a party making an Application for setting aside of an Arbitral Award had to furnish proof in order to satisfy the requirements postulated for setting aside the Arbitral Award. However, under the Amendment Act, 2019 a party now making an Application does not have to furnish proof for setting aside the award. The amendment limits the scope of interference by Courts by stating that Courts can rely only on materials furnished by Parties before the relevant Tribunal. As already stated above, the practical impact of the changes along with an assessment of its proposed impacts on arbitration in India will be conducted in the upcoming posts. [1] http://egazette.nic.in/WriteReadData/2019/210414.pdf [2] http://egazette.nic.in/WriteReadData/2019/211902.pdf

Written by Gautam Mohanty Edited by: Gaurav Rai The Hon’ble Delhi High Court on 23.09.2019, while deciding an Application under Section 45 of the Arbitration and Conciliation Act, 1996(“Act, 1996”) in the case of JES & BEN Groupo Pvt. Ltd & Ors. v. Hell Energy Magyarorzag KFT.(“Hell Energy”) was presented an opportunity to revisit the concept of forum non conveniens in the context of international arbitrations. In international arbitral jurisprudence, the concept of forum non conveniens doctrine allows Courts to decline to hear a case that would be more convenient to try in another forum, notwithstanding that the Court has jurisdiction over the Parties and the subject matter of the dispute. It is founded on the Court’s inherent authority to manage its own affairs in order to promote the orderly and efficient disposition of cases.[1] Notably, the Court while allowing the Application filed by Hell Energy (Defendant No.1 in this case) referred the matter to Arbitration to be held in Hungary rather than in Delhi in accordance with the terms agreed between the Parties in the Exclusive Distribution Agreement. Further, the Court while adjudicating the matter before it, also discussed other issues such as (i) scope and power of the Court under Section 45 of the Act, 1996 (ii)scope and power of the Court to bind a non-signatory to the arbitration agreement[2] (iii)difference in the conceptual understanding of “seat” and “venue”. However, for the purposes of this write up the tests to determine whether there was unequal bargaining power of parties in the context of commercial transactions, will be discussed briefly in the following paragraphs. FACTUAL BACKGROUND: The Plaintiff in the present case was a company incorporated in New Delhi and engaged in the business of import, distribution, marketing and advertising of food and beverage products. Alternatively, the Defendant was a company incorporated under the laws of Hungary and was engaged in the business of production and sale of “Hell Energy” Drinks and development of the brand. Pursuant to an Exclusive Distribution Agreement(“Agreement”) dated 04.10.2017 entered into between Parties granting exclusive distribution rights of the product “Hell Energy” were given to Plaintiff company. Subsequently, Defendant company terminated the Agreement on 25.03.2019 due to the alleged failure of Plaintiff company to fulfill 75% of Annual Order Volume as per Clause 9.2.5 of the Agreement. The bone of contention between the Parties arose when the Plaintiff filed a suit for injunction, cancellation, declaration, reconciliation/rendition of accounts and damages and Defendant relying upon Clause 10.13 of the Agreement contended that the present case was a foreign seated International Commercial Agreement. Clause 10.13 of the Agreement reads as below: “10.13. The Contracting Party undertake to resolve the disputes arising in an amicable way, and if this is ineffective, the parties specify the exclusive competence of the Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, which proceeds according to its rules of procedure, to resolve the dispute. The Arbitration Court is composed of three Arbitrators, and the court is sitting in Budapest and the language of the procedure shall be Hungarian. The contracting parties accept the decision of the Arbitration Court as binding on them, and the costs of the procedure shall be borne by the losing party.” CONTENTIONS OF THE COUNSELS: The Counsel for Defendant, inter alia, submitted that as both India and Hungary were contracting parties to the UNCITRAL Convention on the Recognition and Enforcement of Foreign Arbitral Award (“New York Convention”) and as the present case was a clear case involving International Commercial Arbitration, Part II of the Act, 1996 was applicable thereby barring the Application of Part-I of the Act, 1996. In order to buttress its contentions, the Counsel for Defendant relied upon the observations enumerated in Bharat Aluminum Company v. Kaiser Aluminum Technical Services Inc., (2012) 9 SCC 552, Shin-Etsu Chemical Co. Ltd. vs. Aksh Optifibre Ltd. and Anr., (2005) 7 SCC 234 and Chloro Controls India Private Limited vs. Severn Trent Water Purification Inc., (2013) 1 SCC 641. The Counsel for Defendant when relying upon Shin-Etsu Chemical Co. Ltd. vs. Aksh Optifibre Ltd. and Anr., (2005) 7 SCC 234, particularly focused upon the observation of the Supreme Court wherein it has been held that the correct approach to be adopted by the trial court under Section 45 of the Act at the pre-reference stage, is to draw a prima facie finding as to the validity or otherwise of the arbitration agreement and refer the parties to arbitration. Per Contra, Counsel for Plaintiff argued that the Application filed by Defendant was misconceived and that the present suit filed by Plaintiff was the only appropriate remedy especially when Plaintiff was challenging the validity of the arbitration agreement in present proceedings on the ground of it being in contravention with the Public Policy of India. The essence of the Public Policy argument advanced by the Plaintiff essentially was premised on the fact that in view of Section 28 of the Indian Contract Act, 1872, the agreement entered into between the Parties was void and the arbitration agreement which clearly favored the Defendant in terms of geography, language and laws could not be enforced to the financial and legal determent of the Plaintiff. Pertinently, Section 28 of the Indian Contract Act, 1872 states as below: “28 Agreements in restraint of legal proceedings, void. — 17 [Every agreement,— (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or (b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.] Exception 1.— Saving of contract to refer to arbitration dispute that may arise. —This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred. …” ANALYSIS AND FINDINGS OF THE COURT I. Scope and Power of the Court under Section 45 of the Act Section 45 of the Act, 1996 stipulates as below: “Section 45 - Power of judicial authority to refer parties to arbitration[3] Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, 1[unless it prima facie finds] that the said agreement is null and void, inoperative or incapable of being performed.” The Court while elaborating and explaining the legal principles enshrined in Section 45 of the Act, 1996 held that the provision, in accordance with the New York Convention, incorporates the salutary principle that the Court should not refer the parties to arbitration, when it finds that the agreement between the Parties is null and void, inoperative and incapable of being performed. In its further analysis, Court extensively relied upon Shin-Etsu Chemical Co. Ltd. (2005) 7 SCC 234[4] and Sasan Power Ltd. v. North American Coal Corpn. (India) (P) Ltd., (2016) 10 SCC 813 to opine that Section 45 of the Act, 1996, mandates the Court to take an objective prima facie view of the matter on the basis of the material and evidence produced by the parties on the record of the case. In its concluding paragraph, the Court by placing reliance on Sasan Power (2016) 10 SCC 813 summed up the scope of inquiry under Section 45 of the Act, 1996 as under: “49. In our opinion, the scope of enquiry (even) under Section 45 is confined only to the question whether the arbitration agreement is “null and void, inoperative or incapable of being performed” but not the legality and validity of the substantive contract.” II. Whether the Contract in the present case was inoperative and null and void? After having defined the contours of powers of the Court under Section 45, the Court proceeded to examine the material placed on record before it to ascertain as to whether a prima facie view could be taken in the Application filed by Plaintiff. Referring to the arguments raised by Plaintiff under Section 28 of the Indian Contract Act, 1872 (arguments pertaining to the right to resort to Courts in cases of fraud and serious malpractices being taken away) the Court held that the contentions advanced by the Plaintiff were contrary to the settled principles of law laid down by the Hon’ble Supreme Court of India. The Court with a view to concretize its observation, relied upon the judgement of the Apex Court in World Sport Group(Mauritius) Ltd. v. MSM Satellite (Singapore) Pte.Ltd. (2014) 11 SCC 639[5] to observe that when the parties have expressly entered into an agreement referring any dispute to arbitration, the same cannot be held to be contrary to public policy. Moving ahead to the next bone of contention between the Parties i.e. issues regarding fraud and serious malpractice on part of Defendants, the Court after having perused the arguments forwarded by Plaintiff held that no case in relation to fraud and malpractice was established by the Plaintiff and that the allegations of fraud were only raised to circumvent the Arbitration Clause, without any real substance. Notably, the Court also remarked that the present suit was entirely premised on Plaintiff’s allegations relating to violations of the contractual terms and the resultant damages. The Court while relying upon the ratio laid down in the case of A.Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386 reiterated the test for determining non-arbitrability of disputes in cases of fraud. The relevant portion reads as below: “25. In view of our aforesaid discussions, we are of the opinion that mere allegation of fraud simpliciter may not be a ground to nullify the effect of arbitration agreement between the parties. It is only in those cases where the court, while dealing with Section 8 of the Act, finds that there are very serious allegations of fraud which make a virtual case of criminal offence or where allegations of fraud are so complicated that it becomes absolutely essential that such complex issues can be decided only by the civil court on the appreciation of the voluminous evidence that needs to be produced, the court can sidetrack the agreement by dismissing the application under Section 8 and proceed with the suit on merits…” Therefore, the Court ultimately held that the allegations of the Plaintiff regarding the terms and conditions of the contract being onerous and unreasonable are also questions which would have to be examined by the Arbitrator and cannot be a ground to avoid the Arbitration Clause. III. Court of Natural Jurisdiction Plaintiff in the case also contended that there was no other Court which could be construed as court of “natural jurisdiction” since no part of cause of action in connection with the present suit has arisen outside India. The Plaintiff further contended that Hungarian Chambers of Commerce is not the appropriate or convenient forum to resolve the disputes between the Plaintiffs and Defendants. The Court while rejecting the submission of Plaintiff in that regard, observed that as the agreement between the Parties was valid and binding and Hungarian Chambers of Commerce at Budapest was agreed by the parties as the only appropriate forum to resolve the present disputes the principle of forum non conveniens cannot be applied to the present factual scenario. In that regard, Court referred to the decision of the Supreme Court in Harmony Innovation Shipping Ltd. Gupta Coal Indian Ltd and Ors., AIR 2015 SC 1504, relevant para of which is reproduced hereinbelow: “50. Thus, interpreting the clause in question on the bedrock of the aforesaid principles it is vivid that the intended effect is to have the seat of arbitration at London. The commercial background, the context of the contract and the circumstances of the parties and in the background in which the contract was entered into, irresistibly lead in that direction. We are not impressed by the submission that by such interpretation it will put the respondent in an advantageous position. Therefore, we think it would be appropriate to interpret the clause that it is a proper clause or substantial clause and not a curial or a procedural one by which the arbitration proceedings are to be conducted and hence, we are disposed to think that the seat of arbitration will be at London.” IV. Determining unequal bargaining power Addressing the issue regarding unequal bargaining power as raised by Plaintiff, the Court observed that the plea of unequal bargaining power cannot be a ground to disallow the application under Section 45 of the Act, 1996. According to the Court, since the parties had entered into an agreement of their own volition, the sanctity of the contract has to be preserved and thus, the plea of Forum Non Conveniens being claimed on account of financial burden and legal non viability is not a question that can be entertained while deciding the application under Section 45 of the Act, 1996. For the purposes of the same, Court extensively relied upon the ratio propounded in the case of Central Inland Water Transport Corporation Limited v. Brojanath Ganguly, (1986) 3 SCC 156. PRACTICAL TAKEAWAYS From a practical perspective, it emanates from the above paragraphs that Practioners should in all likelihood expect the Court to rule in favour of the Party invoking arbitration provided arbitration is the agreed procedure for resolution of disputes arising between the Parties. Hence, Parties and respective Counsels must pay utmost heed to drafting of the Arbitration Clause taking into consideration the forum for settlement of disputes as recent trends illustrate the argument of Forum Non Conveniens raised by the Party against arbitration rarely withholds the scrutiny of the Court. [1] Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947); Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). [2] The Court after having relied upon the judgements of the Supreme Court in the case of Chloro Controls India Private Limited v. Severn Trent Water Purification Inc., (2013) 1 SCC 641 and Cheran Properties Limited v. Kasturi and Sons Limited and Ors., (2018) 16 SCC 413, held that the disputes raised by the Plaintiff No.1 can be referred to Arbitration and the Tribunal can further adjudicate whether Defendant No. 2 can be arrayed as a party to the same proceedings. [3] Substituted by Arbitration And Conciliation (Amendment) Act, 2019, w.e.f. 30.08.2019 for the following:- "unless it finds". [4] Paras no 47, 51 and 100. [5]Para 38 of World Sport Group(Mauritius) Ltd. v. MSM Satellite (Singapore) Pte.Ltd (2014) 11 SCC 639.

- Raghav Bhargava [1] Introduction Under the aegis of United National Commission on International Trade Law (“UNCITRAL”), various Working Groups or Committees are constituted to look into reforms. Each Working Group is tasked with working on different focus areas such as Small and Medium Enterprises, Dispute Settlement amongst others. My point of interest is Working Group III (“Working Group”), responsible for recommending reforms on Investor-State Dispute Settlement. In October last year, the Working Group met in Vienna from 14th to the 18th of October during its thirty-eight session and came out with a report highlighting three major reforms. The purpose of this article is to analyze these reforms. I. Multilateral Advisory Centre The discussion surrounding a Multilateral Advisory Centre (“MAC”) stems from the call to establish a Multilateral Investment Court. In the absence of any governing body or an international multilateral treaty, the purpose of the investment court is to remedy unpredictability of investment dispute decisions, reduce time taken to arrive at decisions and also make the investment dispute resolution process cost-effective. The motive is to create a independent body/ organizations that functions taking into consideration interests of big as well as small nations so that they may be able to effectively and efficiently either pursue or defend investment claims. In the background of Multilateral Investment Court, the Working Group proposes to establish MAC to compliment the court. Apart from having an advisory centre which will complement other reforms recommended by the Working Group, the primary purpose is to assist, least-developed and developing states with costs related to defending claims, sound legal advice to states with limited experience in addressing ISDS. The Working Group also recommended the MAC to help investors to bring successful claims, specially Small and Medium Scale Enterprises. While the discussion in the thirty-eighth session was limited to establishment of the centre and not on the extensive services which the MAC should offer, a reference was made to a previous report of the Working Group which discusses the services which may be offered in detail. It is interesting to note that the Working Group went ahead to discuss the modalities of the MAC and the possible structure and financing of the same. It was recommended that the advisory centre be established as an intergovernmental body, with each member state making financial contribution to keep it afloat. The Working Group made an interesting reference to the Advisory Centre on WTO Law (“ACWL”). It was noted that the ACWL could provide a useful model. In order to understand the motive behind the MAC, it is imperative to highlight that international investment law, is not governed by any multilateral treaty or rules and regulations of any independence body. While trade law has World Trade Organizations and related agreements, international criminal law has the International Criminal Court and its statute, investment law does not have any third party governing document or rules. When investment disputes are taking to arbitration, the only governing rules are those of arbitration institutions such as ICSID should the dispute be taken to them. Bi-lateral treaties or International Investment Agreements often play a vital role in the resolution of such disputes; however, the contents of these agreements are based upon the deliberations between the states concerned. Consequently, there are widely criticized for either be biased, not in the true intereste of the investors amongst other. A very prominent example of the same is India’s Model Bilateral Investment Treaty which does not contain any National Treatment or Most Favoured Nation clause amongst others. The lack of any multilateral treaty or regulation, thereby makes this recommendation come at an apt time. The ACWLprovides free legal training and advice to Least Developed Countries (“LDC”) and reduced fee for support in dispute settlement proceedings. On the other hand, they provide some financial concession to developing countries. At the present, the services of ACWL are only limited to developing countries and LDCs. Hence, should the MAC decide to follow such approach, it would be in the interest of investors and developing and LDCs wherein increased investments are being made. However, this move may gather opposition from developed countries which also have significant investments within their territories. The membership of ACWL is automatic for those developing countries and LDCs which are members of the WTO or in the process for becoming members. For countries, otherwise, a fee payment is required to become part of ACWL. This may create a hurdle in ISDC cases as there is no independent body whose membership states have or can take for dispute resolution. A possible solution to the same could be relying on membership of one of the dispute resolution centres such as ICSID, but that may defeat the purpose of the MAC as it would be restrictive and constrained to a limited number of countries only. Most of the member countries of ICSID are developed countries and this move may impose an undue obligation on developing countries or LDCs to become a part of ICSID. II. Code Of Conduct For ISDS Tribunal Members Impartiality and independence of arbitrators, freedom to appoint arbitrators by parties are just some of the characteristics that have formed the basis of arbitration, even in investment disputes. However, recently, there has been a growing resentment towards the method of functioning of arbitrators. Biased approach, unreasoned awards, undisclosed relationships which affect appointments and just a few among the many problems that are plaguing the dispute resolution process and have given rise to criticism about the legitimacy of the ISDS system. In light of this pressing issue, the Working Group discussed creation of a Code of Conduct (“CoC”) for arbitrators The Working Group relied on its own special report which was limited to the contents of CoC to decide that this report was serve as the basis for contents. While discussing the structure of the CoC, the Working Group recognized the need to have two sets of contents in the report. The first, general set of rules which shall be applicable in all situation. Second, specific set of rules which should be adhered to keeping in light with various socio-cultural background of the arbitrator and countries and national laws which they need to adhere to. The report while relying on other rules for arbitrators such as the UNCITRAL Arbitration Rules , International Bar Association guidelines on conduct for arbitrators discussed certain criteria which must be addressed while making these rules. Factors such as impartiality and independence of arbitrators, restrain from adjudication in situations which give rise to justifiable doubts, integrity, not dealing with parties unilaterally and acting diligently to deliver decisions without any undue delay, are some which require to be mentioned in the CoC. However, these recommendations have not yet considered specific situations which may constitute of interest or what is the threshold of disclosure. While the factors discussed are imperative to be included in the CoC, it is equally important that explanations to each of these rules must be provided. International arbitration rules on conflicts of interest such as UNCITRAL, IBA, SIAC and other arbitral institutions have incorporate elaborate events which may fall within conflict of interest and require either disclosure by the arbitrator to the parties or constitute grounds for the arbitrator to step down from the proceedings. These arbitral institutions have been able to develop comprehensive rules for arbitrators in commercial arbitration. These elaborate rules also impacted the Indian arbitration scenario wherein the Indian Arbitration Act was amended to include Schedule V and VII containing rules regarding conflicts of arbitrators. As a result, these could serve a potential basis for the Working Group to include the requirements mentioned therein as the basic threshold required to be met and subsequently tailor make requirements to suit investment arbitration. The Working Group has also recognized the dilemma between optional disclosures and mandatory adherence to these rules, resulting in challenge to the arbitrator’s appointment. While optional disclosure may not solve all issues of impartiality and transparency, compulsory disclosure leading to challenge in appointment may create situations wherein the arbitrators are not willing to take the responsibility upon themselves as a result of onerous burdens. This recommendation is apt coming at a time when investment dispute resolution is heavily criticized for its functioning. The challenge would be with regards to the functioning and enforcement mechanism of CoC as it would determine its effectiveness. III. Third Party Funding Third-Party Funding (“TPF”) is a recent growing trend that has found acceptance in commercial as well as investment arbitration. TPF is a process wherein an individual or corporate entity who is not a party to the arbitration proceedings provides financial support to a party to the proceeding. More and more countries and arbitral institutions are accepting this method of either bringing claims or defending claims. Investment tribunals have in the arbitrations of Quasar De Valores v. Russian Federation and Philip Morris Brands v. Oriental Republic of Uruguary have accepted third party funding. The Working Group discussed having concrete rules for regulating TPF amidst concerns including conflicts of interest arising out of TPF, impact of TPF on costs and on security for costs, disclosure of information to third-party funders not subject to confidentiality obligations, control or influence of third-party funders over the arbitration process, negative impact on amicable resolution of disputes amongst others. The Working Group acknowledged the need for regulating the largely unregulated TPF in ISDS. Varied suggestions were put forth with regards to the TPF. One set of suggestions were to completely prohibit TPF, while another set of suggestions were to only permit TPF in situations wherein the claim was not frivolous or not politically motivated. It was also recommended that a clear definition of what constitutes as TPF must be decided. Some members recommended having a broad definition while some members recommended having a narrow definition so as to exclude pro bono assistance, funding for non-profit purposes, contingency arrangements and inter-corporate financing. The Working Group settled on the following preliminary recommendation regarding TPF before deciding on any concrete steps. It was settled that TPF and the identify of the third-party funder should be disclosed at an early stage along with the identity of the ultimate beneficial owner. It was also suggested that the terms of the funding agreement should also be disclosed to reveal the nature of third-party funder’s involvement. The Working Group also suggested that costs related to third-party funding should not be considered as recoverable costs. Keeping these recommendations in mind, it was decided that the Secretariat would working closely with ICISD and other institutions and prepare draft provisions on TPF. TPF as a mode of financing claims has gathered large support from corporations and countries incapable of either bringing forth high stake claims or defending such claims. It has served as a basis for many countries to defend claims against bring corporation. The best example of this is the TPF provided to Uruguay by the Bloomberg Foundation’s anti-tobacco wing to help it defend claims from Phillip Morris. However, TPF at the same time may encourage frivolous claims and claims to intimidate LDCs and developing countries. Additionally, confidentiality plays an essential role in inter-state disputes. TPF for inter-state disputes may also serve as a method for furthering political agendas of states against each other. Hence, it is safe to say that the stakes inside and outside the arbitral hearing are higher in ISDS than commercial arbitration. Commercial arbitration rules may provide as a reference point but may not be best suited for the ISDS regime. As a result, the modalities, functioning, enforcement mechanism and the rules would require to be robust and stringent to take into consideration the socio-political and economic factors surround such disputes. CONCLUSION The Working Groups’ reports and their recommendations are welcomed at a time where arbitration across the global is developing rapidly. Newer concepts are developing which are being adopted by parties and arbitrators alike. In the context of such rapid development, it is imperative that ISDS also adapts to such changes in order to remain relevant. These recommendations come at a crucial time wherein the ISDS has been under constant scrutiny for various operative and procedural shortcomings. However, it is equally important that factors unique and intrinsic to ISDS are taken into consideration while tailoring these recommendation and not merely adopting rules from other investment and commercial arbitration institutions. [1] Raghav Bhargava is a 4th year student of Gujarat National Law University pursuing law. He has a keen interest in commercial arbitration and international humanitarian law. He is also the Editor-in-Chief, GNLU Student Law Review. He has previously worked under Justice Deepak Verma, Former Judge of Supreme Court of India and has written for the Cambridge International Law Journal. He can be reached at raghavbhargava@hotmail.co.uk

A Legislative Guide Gautam Mohanty[1] & Raghav Bhargava[2] [Originally published in the Journal of International Arbitration. The details of the original publication are as hereunder: Mohanty, Gautam & Bhargava, Raghav. ‘Separability of Arbitration Agreement in Mutual Termination of Contracts in India: A Legislative Guideline’. Journal of International Arbitration 36, no. 6 (2019): 727–738. This article is being republished here under the rights of the Author (Gautam Mohanty) to republish on personal website with permission of Kluwer Law International for a non-commercial purpose and with permission of the Co-author Raghav Bhargava. Gautam Mohanty is an Editor of The Arbitration Workshop. The separability for an arbitration agreement from the underlying contract is a well-established theory in commercial arbitration by courts and arbitral tribunals across the globe. However, the position becomes complex in circumstances where the underlying contract is mutually terminated between the parties. Jurisdictions across the globe have adopted a different approach to this kind of separability either through legislative provisions or judicial decisions. Unfortunately, the position remains rather unclear in India due to conflicting judicial decisions of the Bombay High Court and lack of any authoritative ruling by the Supreme Court of India. This article aims to conduct a comparative analysis of various national systems as well as international rules and arbitral institutions regarding this theory and to suggest the way forward for India. 1. INTRODUCTION An arbitration agreement is treated independent of the contract that contains the agreement. Section 16(1)(b) of the Indian Arbitration and Conciliation Act, 1996 expressly states that the invalidity of a contract shall not affect the validity of an arbitration agreement, even in cases of the contract being void ab initio. This provision is modelled on the UNCITRAL Model Law. This settled position of law has also been reflected through the Honoura’ble Supreme Court of India’s judgment in the case of A. Ayyasamy v. A. Paramasivam,[3] wherein the Apex Court has given due recognition to the principle of severability in contracts stipulating a separate arbitration clause. However, such rulings are restricted to cases whether either the contract is void ab initio or has been terminated, inter alia, due to reasons such as fraud, impossibility to perform, non-performance of the contract etc. Pertinently, the question of whether, as a consequence of mutual bilateral termination of a contract, an arbitration clause is terminated or not, still remains and is res integra. The purpose behind the doctrine of severability in a contract containing an arbitration agreement is to ensure the effective resolution of disputes arising between the parties to a contract via arbitration. It is intended for an effective adjudicatory mechanism to exist even in situations where the contract becomes non-executable due to reasons beyond the control of the contracting parties. While the arbitral process is contingent on mutual consent of the parties to refer the matter to arbitration, a peculiar scenario arises in situations where the contract containing the arbitral agreement is mutually terminated. This results in a dichotomy: the parties’ clear intention to terminate the arbitration agreement for resolution of disputes between the parties, on the one hand, contradicts a pre-decided mechanism of dispute resolution on the other hand. In light of the above, it is pertinent to consider the judicial dicta relating to this issue. The Honourable High Court of Bombay has sought to clarify such bilateral terminations in the cases of Ashok Thapar v. Tarang Exports[4] and Mulheim Pipecoatings GmbH v. Welspun Fintrade Ltd. & anor.[5]But in the absence of any legislative action or a categorical decision by the Honourable Supreme Court of India clarifying the legal position regarding the same and conflicting jurisprudence of the Honourable Bombay High Court, this issue remains unclear. This article aims to analyze views taken by the Honourable Bombay High Court against the current position of law, analyze the position in foreign jurisdictions, and suggest legislative reforms with regard to the issue of existence of an arbitration agreement in cases of bilateral termination of contracts. 2. EXISTING JURISPRUDENCE 2.1 Ashok Thapar v. Tarang Exports 2.1.1 Background Facts The plaintiff and the respondent entered into a Leave and License Agreement, pursuant to which the respondent (Tarang Exports) was permitted to occupy the property. Subsequently, both parties mutually ended the Agreement. Disputes arose with respect to recovery of security deposit and other monies. The plaintiff filed a suit with the City Civil Judge for recovery of the security deposit and other claims based on the Leave and License Agreement. Thereafter, the defendant argued that the Civil Court did not possess requisite jurisdiction to entertain the suit in light of the arbitration clause contained in the Leave and License Agreement. The Civil Court dismissed the defendant’s application and held that it had jurisdiction in the matter. The defendant appealed before the Bombay High Court. 2.1.2 Judgment The Bombay High Court opined that the issue in dispute was “whether an Arbitration Clause survives even after bilateral termination of the Agreement” and that the above issue was res integra in nature. Further, the Bombay High Court, while relying on the judgments of the Supreme Court in the cases of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Co. Pvt. Ltd.,[6] Branch Manager, Magma Leasing & Finance Ltd. v. Potluri Madhavilata,[7] and Ford Credit Kota Mahindra Ltd. v. M. Swaminathan,[8] held that the doctrine of separability applies even in cases of mutual termination of a contract containing the arbitration agreement and thus, the matter should be referred to arbitration. In its judgment, the Bombay High Court did not address the application of the doctrine of severability in the context of unilateral termination of agreements or in the context of an impossible agreement. 2.2 Mulheim Pipecoatings Gmbh v. Welspun Fintrade Ltd. & Anor. 2.2.1 Facts The appellant and respondent had entered into a Share Purchase Agreement (SPA) which contained an arbitration clause covering all disputes related to it. The agreement included a transfer of shares by the respondent to the appellant. The appellant company was not allowed to transfer the shares to a third party within two years. If after the expiry of two years, they wished to transfer the same, the first preference should be given to the respondent at the same price. A subsequent Memorandum of Understanding (MOU) entered between the two did not contain any mention of arbitration as a method of dispute resolution, but had provisions contradictory to the SPA. Disputes arose regarding the validity of the notice and the transfer of the shares. The matter was brought before the Bombay High Court. 2.2.2 Judgment The Court, while opining that arbitral proceedings must continue in this matter, made interesting observations. Justice Chandrachud distinguished between two situations: first, when the performance of the contract containing the arbitration agreement is brought to an end; second, when the existence of the contract is brought to an end. In the former, the arbitral agreement will survive, while it will not survive in the latter. As a result of Ashok Thapar and Mulheim, a confusion has arisen, as the same court in two different judgments has interpreted severability during mutual termination of an agreement in two opposite ways: in one of which the arbitration agreement will be valid, while in the other it will not be. This contradictory interpretation by the same court requires much needed clarity. 3. INTERPRETING THE JUDGMENT IN ASHOK THAPAR The controversial ruling of the Honourable Bombay High Court in Ashok Thapar has unsettled the position with respect to severability. Frustratingly, while it interprets the law in an unconventional manner, this ruling does not adequately explain its reasons for reaching this conclusion. However, various arguments can be made in support of the Ashok Thapar decision. First, arbitration agreements have autonomy. Legislations in India are often modelled according to legislations in England. The Arbitration and Conciliation Act of 1996 (“Indian Act”) is a proof of the same with respect to the Arbitration Act of 1996 (“English Act”). Pertinently, a similar question as to the status of an arbitration agreement pursuant to mutual bilateral termination of a contract has been dealt with in the landmark English case of England Harbour Assurance Case.[9] In this case, an action was brought by re-insurers on the grounds of illegality of reinsurance policies, as a result of which the plaintiff should not be held liable. The illegality was denied by the defendants who sought a stay and reference to arbitration. The court held that while the purposes of the contract may fail, resulting in termination of a contract, the arbitration clause may not be automatically extinguished for the purpose of the agreement. More recently, in 2007, the English Court of Appeal and House of Lords in Fiona Trusts & Holding Corp. v. Privalov,[10]which involved claims of fraudulent inducement of a party’s agent, observed that such a claim levelled at the sanctity of the underlying contract does not adversely affect the arbitration clause within the contract. The court, while relying upon several authoritative academic works,[11]declared that: It is not enough to say that the bribery impeaches the whole contract unless there is some special reason for saying that the bribery impeaches the arbitration clause in particular … It is only if the arbitration agreement is itself directly impeached for some specific reason that the tribunal will be prevented from deciding the disputes that relate to the main contract. Therefore, the arbitration agreement is treated as a self-contained contract ancillary to the principal contract.[12] This is popularly referred to as the principle of autonomy, wherein the arbitration agreement remains unaffected by the fate of the main contract, that is, the latter’s nullity, resolution, termination, or even its non-existence.[13] Accordingly, the arbitrator/judiciary possesses the ability to determine the existence of an arbitration agreement. This interpretation does find support in section 11(6A)[14] of the Indian Act pursuant to which the courts have the power to determine the existence of an arbitration agreement. The principle of autonomy also finds acceptance in rules of various international arbitration centres and institutions, such as the London Court of International Arbitration (LCIA) Rules,[15] wherein an arbitration agreement is treated as a distinct agreement. Similarly, the International Chamber of Commerce (ICC) Rules,[16] as well as the UNCITRAL[17] Rules, also reflect the independent nature of the arbitration agreement vis-à-vis the principal agreement. Thus, the autonomy of the arbitration agreement has now become a general principle of arbitration on which arbitrators across the globe rely to solve disputes.[18] Secondly, arbitration agreements are not compulsorily governed by the laws governing the contract containing the arbitration agreement. A contract is to be governed by national laws under which it is made, whereas, an arbitration agreement is governed by the laws chosen by the parties. As a result, situations might exist wherein the principal contract is governed by laws separate from that of the arbitration agreement. Thus, laws which govern the principal contract cannot be enforced upon the arbitration agreement. In such situations, an arbitration agreement would stand independent of the principal contract. The arbitration agreement would not be scrutinized based on national law rules regarding the validity of other contracts. The reverse also holds true. National law rules which render an agreement invalid would not be made applicable to the arbitration agreement. Thus, the validity or invalidity of the arbitration agreement would be separate and independent to that of the main contract. Though not explicitly stated, the aforesaid view could also form the basis to come to similar conclusions as that of the court in Ashok Thapar. Redfern and Hunter provide further support to the aforesaid argumentation. In their view, there are two separate contracts.[19] The first contract is the primary contract which contains commercial obligations and transactions with respect to the parties to the contract. This is the contract that governs all transactions between the parties. The second contract is the arbitration clause. This contract deals with all disputes relating to the primary contract which may arise between the parties. The second contract remains dormant and only becomes active when there is a dispute between the parties regarding the first contract. As a result, the autonomy of the arbitration agreement results in two independent contracts, which even though contingent on each other to a certain extent remain independent as well. 4. BOGHARA POLYFAB AND KISHORILAL GUPTA: SEPARABILITY PRINCIPLE ENGULFED IN OBITER For the purposes of this article, the authors believe that the case of Union of India (UOI) v. Kishorilal Gupta & Bros.[20] and National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd.[21] assume pivotal importance, as the Honourable Supreme Court has in the aforesaid cases made observations with regard to the applicability of the separability principle to bilateral termination of contracts. However, as the observations are obiter dicta in nature and not ratio decidendi, they are barred from legal recognition under judicial dictum as laid elaborately laid down by the Apex Court of India.[22] In Union of India v. Kishorilal Gupta & Bros.,[23] the Honourable Supreme Court, while deciding a Special Leave Petition (SLP), was principally adjudicating upon the legal question of survival of an arbitration clause in a contract when the contract was superseded by a new contract. In that case, certain disputes arose under three contracts in relation to the supply of raw materials and for compensation for breach of contract. The Supreme Court of India, after application of its judicial mind uninfluenced by authorities or case-law, observed that: the logical outcome of the earlier discussion would be that the arbitration clause perished with the original contract. Whether the said clause was a substantive term or a collateral one, it was none the less an integral part of the contract, which had no existence de hors the contract … Though the phraseology was of the widest amplitude, it is inconceivable that the parties intended its survival even after the contract was mutually rescinded and substituted by a new agreement.[24] However, after incisively analysing the relevant judicial opinion and principles regarding the doctrine of separability, the Honourable Supreme Court enunciated the necessary principles for judicial determination of separability as below:[25] (1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but none the less it is an integral part of it; (2) however comprehensive the terms of an arbitration clause may be, the existence of the contract is a necessary condition for its operation; it perishes with the contract; [emphasis added] (3) the contract may be non est in the sense that it never came legally into existence or it was void ab initio; (4) though the contract was validly executed, the parties may put an end to it as if it had never existed and substitute a new contract for it solely governing their rights and liabilities thereunder; (5) in the former case, if the original contract has no legal existence, the arbitration clause also cannot operate, for along with the original contract, it is also void; in the latter case, as the original contract is extinguished by the substituted one, the arbitration clause of the original contract perishes with it; and (6) between the two falls many categories of disputes in connection with a contract, such as the question of repudiation, frustration, breach, etc. In those cases, it is the performance of the contract that has come to an end, but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. As the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes. The Supreme Court ultimately held that the new contract entered into between the parties had superseded the earlier contracts entered into between the parties and as a result the arbitration clause postulated in the earlier contracts perished automatically. Even though, the ratio decidendi of the Court in the aforesaid case was limited to the validity of an arbitration agreement in a contract which was superseded by a new contract, the Court has clearly opined as obiter dicta that the existence of an arbitration clause is entirely dependent upon the existence of the contract, which can be argued as necessarily implying that an arbitration clause does not survive pursuant to bilateral termination of the contract. In National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd.,[26]the Supreme Court, while deciding an insurance matter, framed the moot legal question as whether a dispute raised by an insured, after giving a full and final discharge voucher to the insurer, could be referred to arbitration. The disputes in the case arose around the discharge voucher issued by the National Insurance Co. Ltd. (appellant in this case) in favour of Boghara Polyfab whereby the appellant argued that Boghara Polyfab had accepted the payment offered in full and final settlement and therefore arbitration for any disputes arising thereafter was not arbitrable on account of discharge of the contract. In response, Boghara Polyfab argued that the discharge voucher was obtained by fraud and coercion. A perusal of the judgment delivered by the Apex Court categorically highlights that the ratio decidendi of the case is in relation to the ambit of powers vested with the Chief Justice/his designate under section 11 of the Indian Arbitration and Conciliation Act, 1996. Nonetheless, the Supreme Court of India has in its obiter dicta opined about the consequences emanating from bilateral termination of contract as stated below: We may next examine some related and incidental issues. Firstly, we may refer to the consequences of discharge of a contract. When a contract has been fully performed, there is a discharge of the contract by performance, and the contract comes to an end. In regard to such a discharged contract, nothing remains – neither any right to seek performance nor any obligation to perform. In short, there cannot be any dispute. Consequently, there cannot obviously be reference to arbitration of any dispute arising from a discharged contract. … It is thus clear that the arbitration agreement contained in a contract cannot be invoked to seek reference of any dispute to arbitration, in the following circumstances, when the contract is discharged on account of performance, or accord and satisfaction, or mutual agreement, and the same is reduced to writing (and signed by both parties or by the party seeking arbitration): (a) Where the obligations under a contract are fully performed and discharge of the contract by performance is acknowledged by a full and final discharge voucher/receipt. Nothing survives in regard to such discharged contract. (b) Where the parties to the contract, by mutual agreement, accept performance of altered, modified and substituted obligations and confirm in writing the discharge of contract by performance of the altered, modified or substituted obligations. (c) Where the parties to a contract, by mutual agreement, absolve each other from performance of their respective obligations (either on account of frustration or otherwise) and consequently cancel the agreement and confirm that there is no outstanding claims or disputes. 5. THE NOTION OF SEVERABILITY ACROSS INTERNATIONAL JURISDICTIONS 5.1 Austria The Austrian Arbitration Law Reform Act, 2006 is based on the UNCITRAL Model Law and follows the principles enshrined therein. However, during the course of adoption, Article 16 of the UNCITRAL Model Law, which lays down the theory of separability, was excluded from inclusion in the national legislation.[27]A perusal of the legislative history behind the enactment of the Austrian Arbitration Law indicates that the drafters of the statute took an extreme yet interesting view regarding the doctrine of separability and believed this doctrine to be “misleading, overly simplifying and alien to the general principles of Austrian law,”[28]thus, making Austria one of the only countries which does not have a provision in their national legislation with respect to separability of an arbitration agreement from the main contract. In the absence of an express provision and lack of reasoning provided by the Commission that drafted the Austrian Arbitration Act, the Austrian judiciary has played an important role in clarifying the law regarding separability.The Supreme Court of Austria, in its decision of 2015, gave a landmark judgment wherein it rejected the doctrine of separability by holding that the arbitration agreement is only ancillary to the main agreement.[29] As a consequence, an arbitration agreement is considered akin to any other clause in the underlying contract and therefore does not hold any special place in the contract. It is not the case that the existence of the arbitration agreement is contingent on the existence or fate of the main contract. The rationale behind the judgment of the Austrian Supreme Court as understood is centered around the intention of the parties with respect to the arbitration agreement. The Supreme Court of Austria, in its decision of 5 February 2008,[30] held that while an arbitration agreement may be treated as any other clause in the contract, its survival is contingent on the intention of the parties with respect to the arbitration agreement. Thus, the arbitration agreement will survive if the intention of the parties was to ensure it survives, and alternatively, the arbitration agreement will not survive if the parties did not intend for it to survive.The position of law in Austria, thus, reflects a unique position in international arbitration, wherein the fate of the underlying contract does not drive the fate of the arbitration agreement, but rather it is driven by the intention of the parties. Accordingly, where the parties intended for the arbitration agreement to survive the termination of the contract, it will survive the termination. 5.2 Switzerland The law in Switzerland with regard to treatment of arbitration agreements after termination of the contract containing the agreement therein follows in the footsteps of Austria. Austria and Switzerland both believe that the termination of the contract containing the arbitration agreement shall not affect the arbitration agreement except in cases where an express intention to the effect can be shown. The Swiss Code on Private International Law, 1987[31] lays the foundation for independence of the arbitration agreement from the underlying contract. Article 178[32] states that “the validity of an arbitration agreement may not be contested on the ground that the principal contract is invalid or that the arbitration agreement concerns a dispute not yet existing.” The provision indicates that the courts shall not entertain any challenge to the arbitration agreement stemming from the validity or invalidity. While the provision does not make any express mention of the status of an arbitration agreement during mutual termination of contract, however, it sets the basis for further expansion of the theory of separability to mutual termination of contracts. This is evinced by Judgment 4A_438/2013 of February 27, 2014, First Civil Law Court, wherein the court held that “the severability of the arbitration clause is a cornerstone of arbitration and if a contract provides that the rights and obligations of the parties cease at termination, this will not extend to the arbitration clause unless very specifically stated in the contract.” Similar observations were made by the Association Suisse de l’Arbitrage, who stated that the arbitration clause is independent of the underlying contract and in particular will survive the termination of the contract. [33] Thus, it is clear that Switzerland also believes in the independence of the arbitration clause from the contract containing the clause. 5.3 China The law governing arbitral proceedings in China is the Arbitration Law of China, 1994. The legislation is by far the most explicit amongst domestic legislations across the globe with respect to separability of arbitration agreements. Article 19 of the Act[34] states that “an arbitration agreement shall exist independently. The amendment, rescission, termination or invalidity of a contract shall not affect the validity of the arbitration agreement. The arbitration tribunal shall have the power to affirm the validity of a contract.” Even in China, an arbitration agreement can exist independently of the underlying contract and shall continue to be valid even in cases wherein the underlying contract containing the arbitration agreement is mutually terminated. 5.4 Institutional and International Rules The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), the key document with respect to arbitral awards, does not provide any direct reference to the principle of autonomy of the arbitration agreement or its separability from the main contract. However, Article V of the New York Convention lays down grounds on which enforcement of awards may be refused. These grounds include invalidity of the arbitration agreement as per laws under which it was made, incapacity of the parties to arbitrate the matter, amongst others. This reflects the belief that it is indeed within the powers of the national legal system to determine whether the arbitration agreement is valid for enforcement or not. Support with regard to autonomy of arbitration agreements can also be found in the UNCITRAL Arbitration Rules,[35] London Court of International Arbitration Rules,[36] as well as the International Chamber of Commerce Rules of Arbitration.[37] 6. CONCLUSION In the authors’ view, it would be preferable in light of the detailed discussions above, that the Indian Legislature amends the law and expressly incorporates a provision similar to article 19 of the Arbitration Law of China, 1994, explicitly giving legal recognition to the obiter dicta of the Supreme Court as enunciated in the preceding paragraphs. However, one must remain sceptical as to whether the Indian Legislature will take the abovementioned suggested steps, as it rarely amends the Indian Arbitration and Conciliation Act, 1996 in view of purely legal conceptual concerns. Thus, for the time being, it would be apt for parties and practitioners to explicitly incorporate the theory of separability into their arbitration agreement. Any express intention of the parties with regard to the survivability of the arbitration agreement as a separate agreement irrespective of the existence of the main contract will in all likelihood be given due recognition by the courts of India. [1] Gautam Mohanty is a registered Advocate in India and is currently working as an Arbitration Associate with Justice Deepak Verma, Former Judge of Supreme Court of India. [2] Raghav Bhargava has a keen interest in commercial arbitration and international humanitarian law. He has previously worked under Justice Deepak Verma, Former Judge of Supreme Court of India and has written for the Cambridge International Law Journal. [3] A. Ayyasamy v. A. Paramasivam, AIR 2016 SC 4675 (India). [4] Ashok Thapar v. Tarang Exports Pvt. Ltd., 2018 SCC OnLine Bom 1489 (India). [5]Mulheim Pipercoatings GmbH v. Welspun Fintrade Ltd. & Anr., (2014) 2 AIR Bom R 196 (India). [6] SMS Tea Estate (P) Ltd. v. Chandmari Tea Co. (P) Ltd. (2011) 14 SCC 66 (India). [7] Branch Manager, Magma Leasing & Finance Ltd. v. Potluri Madhavillata, (2009) 10 SCC 103 (India). [8] Ford Credit Kota Mahindra Ltd. v. M. Swaminathan, AIR 2005 Mad. 18 (India). [9] Harbour Assurance Co. (UK) Ltd. v. Kansa General Int’l Insurance Co. Ltd. [1993] 1 Lloyds Rep. 81 (QB). [10] Fiona Trust & Holding Corp. v. Privalov, [2007] 1 All E.R. (Comm.) 891 (English Ct. App.), aff’d [2007] UKHL 40 (HL). [11] The Court of Appeal relied in particular on L. Collins (ed.), Dicey, Morris and Collins on The Conflict of Laws ¶12-099 (14th ed. 2006), which approved the analysis in Prima Paint and subsequent U.S. decisions. [12] Hayman v. Darwins Ltd. [1942] A.C. 356 (HL). [13] Aiste Skylent, International Arbitration: The Doctrine of Separability and the Competence-competence Principle (Aarhus School of Business, May 2003) accessed 12 February 2019. [14] Arbitration and Conciliation Act 1996, s. 11(6A) (India). [15] LCIA Arbitration Rules, art. 23(1). [16] ICC Arbitration Rules, art. 6(4). [17] LCIA Arbitration Rules, art. 21(2). [18] Supra n. 11. [19] Alan Redfern and Martin Hunter, Redfern and Hunter on International Arbitration, 5th edn, OUP 2009) 117. [20] Union of India v. Kishorilal Gupta & Bros., AIR 1959 SC 1362 (India). [21] National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd., (2009) 1 SCC 267 (India). [22] State of Haryana v. Ranbir, AIR 2006 SC 1796 (India), para. 10. [23] Supra n. 18. [24] Ibid. para. 8. [25] Ibid. para. 10. [26] Supra n. 19. [27] M Nueber and G Zeiler, ‘Austria’ in S Balthasar (ed), International Commercial Arbitration 194 (C.H. Beck 2016). [28] Dietmar Czernich, Theory of Separability in Austrian Arbitration law: Is it on safe pillars?, 32 Arbitration International 463 (2018). [29] Supreme Court, 23 June 2015, 18 Cg1/15v, RdW 2016 (Austria). [30] Supreme Court, 5 February 2008, 10 Ob 120/07f (Austria). [31] Swiss Federal Code on Private International Law, 1987. [32] Ibid. art. 178. [33] Association Suisse de l’Arbitrage, Arbitration Clauses in Switzlerand (2016) accessed 14 March 2019. [34] Arbitration Law of China, 1994, art. 19. [35] 2010 UNCITRAL Arbitration Rules, arts. 16(1) and 21(2). [36] LCIA Arbitration Rules, art. 23(2). [37] Ibid. art. 6(9).

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