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Hardik Sharma[1] INDIA & INTERNATIONAL COMMERCIAL ARBITRATION It is pertinent to comprehend the very need that stems as a result of rapid globalization and internationalization of traditionally proximal business models that have held themselves confined to territorial boundaries. This need is for systems and mechanisms that are able to swiftly and efficaciously deal with the disputes that arise out of legal contracts between the participating parties. While most of these contracts are bilateral, there are also instances where multilateral agreements may be drawn. The statutory provisions for Arbitration in India can be found under the Arbitration & Conciliation Act of 1996 (hereby referred to as “the Act”). The Act finds itself based on the UNCITRAL Model Law which provides universally accepted and recognized rules for international trade while specifically catering to international arbitral processes. Section 2(1)(f) of the Act defines ‘international commercial arbitration’ as an arbitration relating to disputes arising out of a legal relationship, whether contractual or not, which are considered as commercial under the law in force in India; where one or more of the parties are entities (personal or impersonal) which reside outside India.[2] UNDERSTANDING ‘SEAT OF ARBITRATION’ The appropriate legislation regulating arbitration, including the procedural features, is determined by the seat of arbitration. When the parties choose a relevant legislation for the arbitration agreement, that legislation rules the arbitration. Conversely, if the stakeholders have not directly or by reason of some event chosen the law regulating the conduct and process of the arbitration, the conduct of the Arbitration shall be governed by the law of the seat of arbitration. The courts of the nation in which the seat of arbitration is situated would oversee regulating the conduct of arbitration and challenging an award, as such courts would be the regulatory body with the ability to revoke the judgment. Often it has been observed in the Indian legal system that a literal interpretation of the word ‘seat’ was taken into consideration by lawyers. It has very well been cleared now that there exists a substantial difference between the ‘seat of arbitration’ and the ‘venue of arbitration’. The case of Bharat Aluminium Company Ltd. v. Kaiser Aluminum Technical Service Inc. [3](‘Balco’) has been of primordial importance in understanding this very concept. The Hon'ble Supreme Court ruled that the choice of another nation as the seat of arbitration would mean an acceptance of the fact that the regulations as a part of the law in that particular nation shall serve as abiding principles for the arbitration proceedings. The Supreme Court of India in the case of Enercon (India) Ltd. & Ors v. Enercon GmbH[4] reiterated the same verdict as in Balco and held that the “venue” of arbitration, which is the geographical location chosen based on the convenience of the parties is not similar to “seat” of arbitration, which works as the deciding factor on correct jurisdiction. The judgment in Balco[5] fact went further on to elucidate that even if the arbitration agreements were found to state that Indian Arbitration Act would govern their proceedings, the courts would hold no supervisory powers if the seat of arbitration was found to exist outside India. This judgment meant a momentous shift in the very foundation of the concept of jurisdiction and exercise of judicial power. However, the pronouncement was short-lived. The situation altered, when the Arbitration and Conciliation (Amendment) Act, 2015 (‘2015 Amendment’) came into effect. The 2015 Amendment modified the ratio decidendi established in Balco to a restricted extent, since it specifically states that a party can seek appropriate interim remedy from the Indian courts under Section 9 of the Act, even in international commercial arbitrations with a foreign seat. Section 9 of the Act allows for the protection, preservation, or temporary custody of commodities, assets, and properties, as well as the securing of sums in dispute and the appointment of interim receivers.[6] But the evolution of international commercial arbitration in India did not end there. While the amendment per se was an integral step in arriving at a more liberally held concept of resolving business disputes across borders, it certainly was not the cessation point. VARYING VIEWS IN THE INDIAN SCENARIO Parties registered in the same jurisdiction may seek to have their arbitration held outside of their home country for a variety of reasons. Before the Supreme Court's ruling in PASL Wind Solutions v. GE Power Conversion India Pvt. Ltd.[7], it was uncertain whether an overseas arbitration award between two or more Indian firms would be executable in India, or if the sides could even pursue interim relief in Indian courts. This question of arbitral awards for Indian parties having foreign seats is not new. The high courts of the nation had offered differing views on the issue. The Bombay High Court, for instance in the case of Addhar Mercantile Private v Shree Jagdamba Agrico Exports, held that two Indian parties could not choose a foreign seat because “the intention of the legislature is clear that Indian nationals should not be permitted to derogate from Indian law.”[8] The Bombay High Court relied heavily on the Supreme Court’s decision in TDM Infrastructure v. UE Development India Private Limited[9] to support its decision. On the other hand, we have the judgment of the Madhya Pradesh High Court which ruled in the case of Sasan Power versus North American Coal Corporation[10] that “two Indian Companies are permitted to arbitrate their dispute in a foreign country”[11] Here, a detailed analysis of the judgment made it evident enough that the court had considered the SC’s decision in Atlas Exports Industries v. Kotak & Company[12] of paramount significance where the bench had gone to say that merely because the arbitrators were situated in a foreign country cannot by itself be enough to nullify the arbitration agreement when the parties have with their eyes open willingly entered into the agreement.[13] The Delhi High Court had taken the very same route when it gave its judgment in the case of GMR Energy Limited v. Doosan Power Systems India Private Limited[14] where it relied on the case of Atlas[15] to state that the very instance of choosing a foreign arbitral seat by parties that were legally Indian was “in no way contrary to the public morality of India”, and henceforth in no way violated Sections 23 and 28 of the Indian Contract Act, 1872. While the Delhi High Court case could not lay down a clear precedent by virtue of it being second to the apex court, it surely did lay down a new lane to walk in while pondering the very question of legality and illegality of foreign arbitral seats by parties which were Indian. What is significant to note here is that even the Hon'ble Supreme Court had differed in its judgments. The question which arose was substantial- why were there such drastic differences on the very same issue by the very same court? The answer to the question lies within the formation of the Act itself. The Arbitration and Conciliation Act, 1996 is divided into 4 parts. Part I deals with the arbitrations possessing Indian seats. Essentially, this means that all arbitrations whether domestic or international commercial arbitrations having their arbitral seats in India will be governed under Part I of the Act. Lucidly explaining, Part I of the Act refers to ‘international commercial arbitration’ as overseas arbitrations having their arbitral seats in India or Indian seated arbitrations with a foreign nexus. Part II of the Act on the other hand talks about foreign-seated arbitrations or arbitrations possessing a foreign seat. The qualm which rests here is whether the same foreign arbitral award can be considered as one under the domain of ‘international commercial arbitration’ as defined under Section 2(1)(f) since there exists no mention of the same. Therefore, this interpretation was left to the courts of the country. While there have been some provisions contained in Part I of the Act which do apply to foreign seated arbitration, owing to certain legislative amendments, both Part I and Part II of the Act exist independently of each other. This essentially means that the provisions of Part I wouldn’t apply to foreign-seated arbitration while Part II wouldn’t extend its jurisdiction to foreign arbitration with Indian seats. PASL WIND SOLUTIONS V. G.E. POWER: LAYING FOUNDATIONS OF INDIAN LEGAL FLEXIBILITY The question in the case of PASL Wind Solutions v. GE Power Conversion India Pvt. Ltd. was a little complex. The case first came to the Gujarat High Court which determined Zürich (Switzerland) to be the seat of arbitration. It also ruled that the Indian law, in fact, did not disallow the Indian parties to choose a foreign arbitral seat. As the award maintained its seat in Zürich, Part II of the Act which lays its claim over foreign seated arbitration was invoked. The respondent in the case demanded interim relief under Section 9, the request of which was rejected by the Gujarat High Court. The reason was evident- A provision contained in Part I of the Act could not be invoked for a matter which fell specifically under Part II. PASL then approached the Supreme Court under Article 136 of the Constitution. The special leave petition appealed to the court to overturn the judgement of the high court. There was a tri-fundamental argumentative approach made by PASL here. 1. The seat of arbitration was argued to be Mumbai rather than Zürich; 2. Part II of the Act could only provide for those arbitrations whose awards fell under the criterion of ‘foreign awards, passed in the purview of ‘commercial international arbitration’ as defined under S. 2(1)(f) of the Act; 3. That the very act of two Indian parties choosing a foreign arbitral seat would be against Sections 23 and 28 of the Indian Contract Act, 1872 when read with Sections 28(1)(a) and 34(2A) of the Arbitration and Conciliation Act. THE VERDICT: CHANGING CURRENTS OF INTERPRETATION The Supreme Court gave a verdict which has now started to shape a definitive course for the way bilateral disagreements between international commercial agreements with foreign seats are to be handled. The Court, while giving its verdict, gave special emphasis on the questions raised by PASL and gave the ratio decidendi as follows: 1. The Supreme Court rejected the plea of PASL, which had stated that by the ‘closest connection test’ Mumbai was the arbitral seat. The Court elucidated that the closest connection test could only be applied to cases where the arbitral seat was not decided. Both the agreement and the Arbitration Tribunal designated the seat to be Zürich which was held rightful. 2. PASL laid emphasis on the words “unless the context otherwise requires” as mentioned in Section 44 to argue that the very presence of this phrase allows the definition of ‘international commercial arbitration’ as under Section- 2(1)(f) to be transferred to Section 44. However, the SC rejected this claim as well. The SC relied on its decision in the case of Balco[16] where it had explained the functional differences between Part I and Part II of the Act to make it clear that both of them were mutually exclusive to each other. Part I offered the term a “party-centric” meaning while when viewed under Part II of the Act, a “place-centered” focus was offered. To put it another way, whether the parties choose a foreign arbitral seat is the sole element that matters for the purposes of Part II of the Act, irrespective of whether the parties actually have any international link. 3. The Supreme Court also clarified that there are four elements that must be satisfied for an award to be designated a “foreign award” under Section 44: (i) the dispute must be a commercial dispute as understood under Indian law; (ii) the award must be made pursuant to a written arbitration agreement; (iii) it must be a dispute that arises between “persons” (without regard to their nationality, residence, or domicile), and (iv) arbitration must be conducted in a country that is a signatory to the New York Convention. The Court found that the arbitral award, in this case, satisfied all four elements and was, therefore, a “foreign award” under Part II of the Act. 4. Another argument that had been made by PASL was regarding the public policy of the country, which it alleged, was violated when two Indian parties were allowed to choose a foreign arbitral seat. PASL brought into debate Section 23 and Section 28 of the Indian Contract Act, 1872 (‘ICA’ herein) when read with Sections 28(1)(a) and 34(2A) of the Arbitration and Conciliation Act. The Court, therefore, had two questions to answer: a) Whether choosing a foreign arbitral seat by parties that were Indian was prohibited by Section 28 of the ICA? b) Whether a violation of Section 33 of the ICA would take place if the parties were allowed to do so? The court answered both in negation. The Supreme Court emphasized that Section 28 provides an unequivocal niche for arbitration agreements, based on the wording of the statute. As a result, the clause places no boundaries on the provisions of arbitration agreements, including the selection of arbitral seat. The Supreme Court concluded that there was nothing in India's public policy that prohibited party liberty in selecting a foreign arbitral seat by Indian parties under Section 23 of the Indian Contract Act. It emphasized that contract freedom must be weighed against obvious and unequivocal public damage and that enabling Indian parties to pick a foreign arbitral seat posed no such risk. Indian substantive law is only mandatorily relevant to domestic conflicts located in India, according to statutory interpretation of Section 28(1)(a) of the Act. This does not stop two Indian parties from choosing a foreign arbitral seat. However, the Court stated that if two Indian parties choose a foreign seat on the circumstances of a matter in order to avoid Indian public policy, the implementation of any foreign award issued in those proceedings may be challenged under the Act's public policy exemption, Section 48(2)(b). 5. Another important step included within the judgment was the grant of interim relief to GE India which according to the court was focal. The court responding to the cross-objection filed by GE India against the Gujarat High Court’s refusal to grant interim relief elucidated that relief under Section 9 of the Act was valid even if the seat of arbitration was foreign. Section 9 would apply to both Part I as well as foreign arbitrations that fall under the purview of ‘international commercial arbitration’ under the Act. Contextually, the Court determined that the lack of a foreign nexus, as required by Section 2(1)(f), was not relevant because the concept of "international commercial arbitration" under Section 2(1)(f) of the Act did not apply to foreign seated arbitrations. The court responded by making it clear that on the very basis of place of arbitration, a proceeding could be termed as ‘international commercial arbitration’ and that just because the arbitral seat was foreign, the arbitration fell under the same criterion. COMMERCIAL INTERNATIONAL ARBITRATION: A FUTURE SECURED The Supreme Court's judgment resolved a significant legal issue while preserving party autonomy. It also gave much-needed clarification on these concerns to firms operating in India, especially international enterprises with local subsidiaries. Even though the subject matters of their agreements and counterparties might fully lie within India, these organizations can now pick foreign arbitral seats in their arbitration agreements. The ruling gives much-needed clarification on Indian parties' use of foreign seats. The judgment highlights the significance of party sovereignty, describing it as the "brooding and guiding spirit of arbitration."[18] As a result, Indian parties and Indian subsidiaries of international corporations now have the option of selecting a foreign arbitral seat in agreements with other Indian entities if they so wish. The Indian courts will not have an oversight function over the proceedings in such matters, and any award will not be susceptible to forgo procedures in India. Due to the high number of cases in Indian court registries, arbitration-related judicial processes can be costly and time demanding, causing the issue to be delayed indefinitely. Picking a foreign arbitral seat allows Indian litigants to limit the possibility of concurrent court-actions that might otherwise occur in arbitrations held in India. And while it is true that the enforcement of such contracts might still require approaching the Indian judiciary (an aspect which arguably leads the litigants back to the crowd of registers they were hoping to avoid in the first place), even a single reduced trip to the court is a welcome change. Furthermore, when selecting a foreign seat, Indian parties (and their foreign parent entities) can be certain that the Indian courts would remain accessible and prepared to give interim relief in support of their arbitration. This is significant since the parties are likely to have interests that are mostly situated in India because they hold Indian domiciles. CONCLUSION The judgment is a landmark one. Not just because it provides an added right of having a foreign seat of arbitration, but because of the acceptance of involvement of domestic courts to grant interim relief as well. The decision of the court is nothing short of being monumental. The Supreme Court’s order granting interim relief comes with a formidable explanation. In lucid terms, the fact that two parties existing outside India choose a foreign arbitral seat would not matter as long as one of the parties holds assets in India. If such a case comes to light, courts would be empowered to grant interim relief to one of the parties according to the provisions of Section 9 of the Arbitration and Conciliation Act, 1996. It is a well-understood fact that international commercial transactions demand flexibility which the interpretation behind the court’s decision has duly provided to the arbitration mechanism prevailing in the country. And while the case per se wouldn’t be the end of the evolution of international arbitration in Indian law, it certainly has provided a paved way for the positive interpretation of globalized legal culture. [1] Hardik Sharma is a third-year law student pursuing B.A., LL.B (H) from Amity Law School Noida. Holding keen interest in Commercial International Arbitration and Private International Law along with Copyright Law Hardik has an array of articles and research papers published in various law journals in topics ranging from Refugee Law to IPR and the International Human Rights Law. [2] The definition qua ‘International Commercial Arbitration’ given in Article 1 (Chapter I: General Provisions) of the UNCITRAL Model Law is different from that which is adopted in the Arbitration and Conciliation Act of 1996. Article 1 (3) (a) - lays emphasis on the movement of goods across the national boundaries rather than on the character of parties. Article 1 (3) (b) & Article 1 (3) (c) refer to the occasion when the contract between two local parties can become international. Article 1 (3) (b) (i) and Article 1 (3) (c) contemplate situation wherein two local parties choose a foreign venue of arbitration in respect of a local contract. There is no implication that parties can resort to this, in order to circumvent the municipal law of the country to which they are the subjects. The courts can always refuse the enforcement. [3] Bharat Aluminium Company Ltd. v. Kaiser Aluminium Technical Service Inc. (2012) 9 SCC 552. [4] Enercon (India) Ltd. & Ors v. Enercon GmbH & Anr, (2014) 5 SCC 1. [5] Supra 4. [6] Section 9; Arbitration & Concilliation (Amendment) Act, 2015. [7] PASL Wind Solutions v GE Power Civil Appeal No. 1647 of 2021. [8] Addhar Mercantile Private v Shree Jagdamba Agrico Exports (2015) SCC OnLine Bom 7752 at para 8. [9] TDM Infrastructure v. UE Development India Private Limited (2008) 14 SCC 271. [10] Sasan Power v North American Coal Corporation (2016)(2) ArbLR 179 (MP). [11] Ibid. [12] Atlas Exports Industries v. Kotak & Company (1999) 7 SCC 61. [13] Ibid. [14] GMR Energy Limited v. Doosan Power Systems India Private Limited (2017) SCC OnLine Del 11625. [15] Supra 12. [16] Supra 4. [17] PASL Wind Solutions v. GE Power Conversion India para 60.

Advik Rijul Jha[1] I. Introduction Arbitration as a preferred mode of Dispute Resolution has proliferated over the years in India, with an increase in not only the number of cases being referred to arbitration, but also a rampant rise in the kinds of disputes which are being referred to arbitration, both in terms of the nature of the dispute and the quantum of amounts in dispute. However, albeit the above growth of arbitration, it is pertinent to point out that Conciliation which has statutory recognition has also been promoted at a pre-arbitral stage for the resolution of disputes due to the possibility of hastening the resolution of the disputes in a time-bound manner coupled with reducing the burden on the courts. An instance of the same can be evinced from a perusal of various contracts entered into by the Public Sector Undertaking (PSU’s) such as GAIL, NTPC etc, wherein Conciliation has been explicitly stated to be attempted prior to Arbitration being invoked and proceeded with. Even in industrial disputes, the first step is to reach an amicable settlement by resorting to Conciliation vide the appointment of Conciliation officers, post which the matter is referred to be resolved vide arbitration. Against this backdrop, the question arises as to whether the process of Conciliation which is part and parcel of various Dispute Resolution clauses is directory or mandatory in nature prior to arbitration being commenced with. In order to answer the above question, it is imperative to refer to the relevant statutory provisions and judicial precedents in this regard. Further, with the Mediation Act, 2023 being passed recently, it would be interesting to see what changes the enactment of a dedicated statute brings to this dynamic of directory or mandatory nature of pre-arbitral modes of dispute resolution. II. Statutory Overview The provisions governing Conciliation are contained in Part III of the Arbitration and Conciliation Act, 1996 (“The Act”). A bare perusal of the various sections contained in the afore-mentioned chapter itself evince that Conciliation is a voluntary process which can only be proceeded with in the event of both parties agreeing to the method for resolution of their disputes. Commencement of conciliation proceedings therefore depends upon the acceptance of the invitation to conciliate. Further, it is imperative to refer to Section 77 of the Act, as a perusal of the said section would reiterate the voluntary and directory nature of conciliation, a view which has also been endorsed vide various judgments which would be discussed hereunder subsequently. A reading of the aforesaid section evinces that while the conciliation proceedings are in process, parties are prevented from taking recourse to any arbitral or judicial proceedings but where any of the parties are of the opinion that such movement on his part is needed so as to preserve his rights, resort to arbitral or judicial proceedings may be had. Thus, the statute itself waters down the mandate of resorting to conciliation prior to resorting to arbitration. III. Judicial Precedents The Hon’ble Supreme Court of India as well as the High Court of Delhi have had the occasion to deal with this interesting question of law. The Supreme Court dealt with this issue in the case of Demerara Distilleries Pvt. Ltd. v/s Demarara Distilleries Ltd.[2] In the aforesaid case, the Court observed “it was opined that the relegation of the parties to the avenue of amicable resolution, when the application under Section 11(6) of A&C Act, 1996 has been filed, would be unjustified as in the case, where such relegation would be merely in the nature of an empty formality.”[3] (Para 5) A perusal of the above demonstrates that conciliation/mutual discussion has a mere directory nature when the ultimate recourse lies in arbitration. Another corollary view has been taken by the High Court of Delhi in Ravindra Kumar Verma v/s BPTP Ltd.,[4] wherein it was observed that “nothing worthwhile would be achieved by relegating the parties to explore any avenue of amicable resolution. Besides, the appointment of an Arbitrator by this Court would not act as an impediment to the parties to resolve their disputes amicably should it be possible at any point of time.” (Para 11). The Courts have also harped upon the voluntary nature of conciliation proceedings from time to time. One such judgment is of Abhi Engg. Corporation Pvt. Ltd. v/s NTPC Ltd.,[5] wherein it has been held that “[I]t has been rightly argued on behalf of the learned counsel for the 'petitioner that the process of "conciliation" could be resorted to only if both the parties agreed. Since the petitioner was not agreeable to resolution through conciliation, the Invocation of Arbitration cannot be held to be in noncompliance of mechanism agreed between the parties.” (Para 11) Another notable ruling following the same line of reasoning is that of M/s Oasis Projects Ltd. v/s Managing Director, National Highway and Infrastructure Development Corporation Ltd.,[6] wherein a Coordinate Bench of the Delhi High Court, has held that “[i]t needs no emphasis that Conciliation as a Dispute Resolution Mechanism must be encouraged and should be one of the first endeavours of the parties when a dispute arises between them. However, having said that, Conciliation expresses a broad notion of a voluntary process, controlled by the parties and conducted with the assistance of a neutral third person or persons. It can be terminated by the parties at any time as per their free will.” (Para 12) The afore-said rationale has also been reiterated in the case of Subhash Infraengineers Pvt. Ltd. v. NTPC Ltd.,[7] wherein it has been stated “conciliation is a voluntary process and once a party has opted out of conciliation, it cannot be said that the said party cannot take recourse to dispute resolution through arbitration.” (Para 28) From the conspectus of cases discussed hereinabove, it is evident that the Hon’ble Supreme Court and the Delhi High Court are consensus ad idem with regard to the voluntary and directory nature of conciliation as opposed to it being mandatory. The same also seems to be steeped in logic since if an arbitration clause is read in a mandatory manner with respect to any prior requirement to be complied with albeit conciliation/mutual discussion before invoking arbitration, the same can result in serious and grave prejudice to a party who is seeking to invoke arbitration because the time consumed in conciliation proceedings before seeking the invocation of arbitration is not exempted from limitation under any of the provisions of the Limitation Act, 1963 including its Section 14. Once there is no provision to exclude the period spent in conciliation proceedings, it is perfectly possible that if conciliation proceedings continue when the limitation period expires the same will result in nullifying the arbitration clause on account of the same not capable of being invoked on account of the bar of limitation i.e when proceedings for reference to arbitration are filed in court, the right to seek arbitration may end up being beyond three years of arising of the disputes and hence the petition for reference may be barred by limitation. Such an interpretation would lead to valuable rights of parties of getting disputes decided by arbitration getting extinguished, which is definitely not the intent of the Legislature nor the Judiciary. Therefore, it is imperative to have a look at the recently passed Mediation Act, 2023 to see if any progress has been made in this regard. IV. The Mediation Act, 2023: The Mediation Act, 2023 has been passed recently which provides statutory recognition to amicable resolution of disputes in civil, commercial, family and matrimonial matters and fosters a collaborative approach, reduces the burden on the courts by facilitating settlement of disputes outside courts, and preserves relationships of amongst disputants. However, there are certain provisions in the Act which may act as a deterrent rather than as a catalyst for meeting these objectives. The first of such provisions which is imperative to be pointed out is that on a plain reading of the relevant provisions of Section 5 of the Act, it is discernible that even pre-litigation mediation although being given statutory recognition, has been given a voluntary nature i.e. the provision reads “may voluntarily and with mutual consent”, which may render it similar to conciliation as discussed above. Due to the above wording, there is a high possibility that the courts while interpreting these provisions follow the interpretation as currently employed with regard to conciliation, as discussed in various cases hereinabove. The voluntary nature of Mediation is also discernible from a reading of Section 16 of the Act. This in effect can lead to a situation wherein parties entirely skip the mediation process, prior to resorting to arbitration or litigation, thereby defeating the objective of the Act at the initial stages itself. Another potential drawback of the Act is with respect to Court referred Mediation in accordance with Section 7, wherein the Court has been empowered to pass interim orders which may eventually lead to litigation before the Courts in this regard. Therefore, the legislature may have missed an opportunity here by not making mediation compulsory in the first place prior to the parties approaching the courts, which would have helped in reducing cases before the courts, which is the objective of the Act. However, there is also light at the end of the tunnel with this new Act. The Act under Section 18 has proposed a time-limit for the completion of mediation proceedings which has been given a mandatory nature. This is corroborated by the fact that unlike Conciliation proceedings which have the tendency to eat into the period of limitation prescribed for arbitration as discussed earlier, the time spent in Mediation proceedings has been excluded from the calculation of the limitation period. This would ensure that the rights of the parties to approach the Court are not negatively impacted. Therefore, while the Mediation Act, 2023 is a mixed bag with its own hits and misses, there is scope for this Act to reduce some of the panacea that the current Arbitration Act had. [1] About the author: Advik Rijul Jha is an Advocate who has been practising at the Supreme Court of India, High Court of Delhi and various Tribunals for the past couple of years. The author graduated from Jindal Global Law School. He is currently a Law Researcher with the Delhi International Arbitration Centre (DIAC), High Court of Delhi. Views are personal. [2] MANU/SC/1121/2014. [3] MANU/SC/1121/2014. [4] MANU/DE/3028/2014. [5] MANU/DEOR/85493/2022. [6] MANU/DE/0638/2023. [7] MANU/DE/2476/2023.

-Utkarsh Srivastava[1] and Gaurav Choudhary[2] Part I- Introduction The trajectory of the process of the appointment of an arbitrator under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter ‘Arbitration Act’) operates from a mechanism which gives primacy to the approval of a voluntary, party autonomy-based appointment which is sanctioned by the courts and in the event of a failure of such process, an appointment is made by the judicial system.[i] There has been a long-standing jurisprudence of how an adjudication has to be made by the courts when treating a Section 11 application.[ii] This jurisprudence also includes questions pertaining to the extent to which a court must base its analysis in determining whether the Section 11 application should be dismissed or allowed. The conditions precedent to a Section 11 application is the existence of a valid arbitration clause and an arbitrable dispute between the parties. However, strictly limiting the court’s analysis to these conditions precedent while treating a Section 11 application has often resulted in a procedural imbroglio when this segment involves the applicability of a pre-arbitral mediation in the dispute resolution clause of the contract. Mediation is predominantly seen as a voluntary procedure in which the parties have significant control not only during the process itself but also beforehand, such as when they need to select a mediator. There are majorly three preferred routes for the appointment of a mediator, the first being the voluntary appointment by the parties, second by submission of the matter to any recognised mediation centre and third, wherein the court orders for commencement of mediation proceedings in a suit under Section 89 of the Code of Civil Procedure, 1908. In none of these routes do we find the applicability of any of the provisions of the Arbitration Act. However, there is a recent trend in courts where, while adjudicating on a dispute involving the applicability of a “Med-Arb Clause”, the bench has surprisingly not only appointed a mediator in an order Order under Section 11 of the Arbitration Act but has also simultaneously appointed the arbitrator before the commencement of mediation. The orders raise various procedural questions primarily in light of the timeline under Section 23(4) of the Arbitration Act. In this article, the authors, in Part II, try to decipher the judicial practice regarding the placement of mediation proceedings when the courts allow for mediation before the commencement of arbitration while considering Med-Arb clauses. Simultaneously, the recent deviation from such practice is also discussed. In Part III, the authors analyse the impracticality which arises due to this deviation in light of the mandate under Section 23(4). In Part IV, solutions which suggest a change in approach to the interpretation of the language of Section 23(4) are discussed. Finally in Part V, the authors give a brief yet effective conclusion to the whole article. Part II- Judicial practice in the treatment of Section 11 applications when there is the presence of a pre-arbitral mediation mechanism In India, courts have had differing views on the legality of multi-tiered clauses, with some considering them mandatory and others regarding them as voluntary pre-arbitration procedures. The same has been showcased through the treatment they have given to Section 11 applications when there has been a presence of pre-arbitral mediation in the arbitration clause. For example, in the celebrated judgment of Demerara Distilleries (P) Ltd vs Demerara Distillers Ltd, wherein the court, while analysing the problem, had rejected the stand of mediation being mandatory and had gone on to appoint an arbitrator. The Delhi High Court took it up a notch by holding that mere insisting by a party to first initiate the conciliation process before seeking initiation of arbitration would be a failure for appointment of arbitrator and, therefore, the same could be done by the court.[iii] The court, in such instances, rejected the claim for mediation and allowed the petition under Section 11 (6). However, on the other hand, the courts have also dealt with the same issue through a different set of eyes. For example, inSushil Kumar Bhardwaj vs Union of India,[iv] the Court had dismissed the Section 11 application on the ground that unless in the absence of an averment or a pleading to the effect that the agreed procedure or the procedure prescribed in law has been followed, there would be no option but to reject the application under Section 11(6) of the Arbitration Act as without cause of action and/or premature. In another instance,[v] the court had asked the parties to explore conciliation before turning to arbitration and had disposed of the application under Section 11. Therefore, from the above discussion, it is clear that the conditions under which a Section 11 application is allowed, and an arbitrator is appointed, cannot include allowing to conduct mediation simultaneously. However, there have been orders, such as in the case of Rao Constructions vs State of Karnataka,[vi] M/s. Hello Verify India Private Limited vs. M/s. Happiest Minds Technologies Private Limited,[vii] and Shreans Daga & Ors. vs. I.B.M. India Private Limited,[viii]wherein the court, while adjudicating on a Section 11 application, appointed an arbitrator to the dispute and not only permitted the mediation process to be followed before the arbitration but also appointed a mediator for such mediation under an application of Section 11. The Court, in both these cases, reasoned that there was an existence of a valid arbitration clause and an arbitrable dispute at hand, and therefore, it warranted the appointment of an arbitrator. These orders are irregular with respect to the legal process followed in India at multiple levels. Firstly, under no circumstances can a mediator be appointed under a Section 11 application. The scope of the provision is limited to the appointment of arbitrators, and mediation is not even covered by the statute itself. Even if the court were to appoint a mediator to the dispute, the correct procedure would have been a separate civil miscellaneous petition from the parties under which the court would have appointed a mediator.[ix] The appointment of a mediator under the Section 11 of the Arbitration Act is not tenable in law. Secondly, when the court upheld the mediation process, a pre-emptive appointment of an arbitrator was not the correct procedure to be followed. This is because when a court upholds the validity of such a mediation process before the arbitration, it presumes that the triggering of the arbitral process under the arbitration agreement would happen on a failure of the mediation mechanism.[x] Since the appointment of arbitrators is also a part of the arbitral process, therefore, such an appointment should also occur after the parties have exhausted the route of mediation given under the arbitration agreement to the contract.[xi] It is a settled position of law that, while adjudicating on a Section 11 application, the procedure agreed by the parties and party autonomy has to be given primacy.[xii] Therefore, if the parties have agreed to a mediation process before the arbitration, such a procedure should be followed while effectuating such adjudication. The appointment of an arbitrator not only frustrates the entire purpose of giving primacy to the procedure agreed upon by the parties but also provides for a practical impossibility to fulfilling the obligation under Section 23(4) of the Arbitration Act, which the authors have discussed in the next part. Part III- The timeline of Section 23(4) and how it affects this structure Not only the legal tenability of such orders is questionable, but their enforcement also provides for certain impractical circumstances for the parties. A possible impractical scenario can be considered in the case of the timeline mentioned under Section 23(4) of the Arbitration Act. According to the provision, the statement of claim and defence has to be completed within six months of the date wherein the arbitrators receive the notice of their appointment. When such a timeline mandate is seen in the context of an order where subsequent to an appointment of arbitrators, mediation has to be commenced, and post the failure of the mediation process, the arbitral proceedings will begin, it becomes nearly impossible for the parties to complete the statement of claims and defence within the duration of six months. Consider a situation where the mediation upheld under such an order itself takes six months. In such a case, since the computation of the duration for Section 23(4) will be calculated from the date when the arbitrators would have received the notice of their appointment, the mandate of six months would expire even before the initiation of the actual arbitral process. In addition to this, in the event that the parties try to adhere to this timeline, there is always a risk of an inefficient mediation process. In this respect, the applicability of the ratio in Geo Miller & Co. (P) Ltd. vs. Rajasthan Vidyut Utpadan Nigam Ltd. also needs to be checked. In this case, it has been categorically held by the Supreme Court that the duration of amicable settlement before the arbitral process would not be counted for the purpose of calculating the limitation period. However, this judgment is inapplicable for our assessment for two-pronged reasons. Firstly, in this judgment, there was no applicability of any pre-arbitral dispute resolution clause; rather, the parties were in the process of an amicable settlement between them. Secondly, this judgment relates to the time mandate under the Limitation Act, 1963 and the timeline under Section 23(4) is a separate time mandate and does not relate to the law of limitation. Part IV- Solution Certainly, under no circumstances a situation in the dispute resolution process can exist where a pre-arbitral dispute resolution process is initiated, and at the same time, the application under Section 11 is allowed as well. Such an Order is necessarily untenable in law. However, there is no explicit judgment which holds that a Section 11 application should be dismissed when a pre-arbitral mediation is upheld by the court of law. The judicial decisions in this respect only depict a practice wherein whenever such a dispute resolution mechanism is upheld, the Section 11 application has been dismissed. But, there isn’t any jurisprudence which entails reasoning as to why the courts dismiss a Section 11 application rather than moving forward with other alternatives such as granting a stay etc. Therefore, there is no explicit bar on the passing of such orders. Hence, our first solution would be to judicially forbid the passing of such decisions. The second solution in this regard would be to give a contextual broader interpretation to the words “receive the notice of their appointment” to mean initiation of proceedings and relax the time limit given under the provision. In the event of the continuation of the passing of such orders, the first hurdle which needs to be resolved is the pacification of the impossibility of complying with the mandate of Section 23(4). The non-compliance of the provision can provide an arbitrary leeway to the respondent party to file for termination of proceedings under Section 25. Therefore, to make the conditions surrounding the proceedings practicable for both parties, the time limit under Section 23(4) has to be relaxed either through a liberal interpretation or by an express relaxation by a judicial decision. Part V- Conclusion In conclusion, the treatment of Section 11 applications in cases involving pre-arbitral mediation mechanisms in India has presented a complex legal landscape. While there is no explicit bar on passing orders allowing simultaneous pre-arbitral mediation and Section 11 applications, such orders raise procedural and practical challenges. The judicial practice in this regard has been inconsistent, with some courts appointing an arbitrator and dismissing the Section 11 application when upholding the mediation process, while others have taken a different approach. To address this issue, it is imperative for the judiciary to establish a clear stance and judicially forbid the passing of orders allowing simultaneous processes of pre-arbitral mediation and Section 11 applications. This would provide clarity and avoid procedural confusion. Additionally, a contextual and broader interpretation of the timeline mentioned in Section 23(4) of the Arbitration Act could be adopted. By considering the initiation of proceedings as the trigger point for calculating the timeline, the practical challenges posed by the simultaneous mediation and arbitration process can be mitigated. Alternatively, a judicial decision explicitly relaxing the time limit under Section 23(4) could also provide a feasible solution. [1] Utkarsh Srivastava is a 5th Year Student at Dr Ram Manohar Lohiya National Law University, Lucknow. (utkarshsrivastava1610@gmail.com). [2] Gaurav Choudhary is a 4th Year Student at Dr Ram Manohar Lohiya National Law University, Lucknow. (gauravxchoudhary@gmail.com). [i] Gautam Bhatia, Section 11 of the Arbitration and Conciliation Act of 1996: The Jurisprudence of the Supreme Court and Implications for the Jurisdiction of an Arbitral Tribunal, National Law School of India Review Vol. 21, No. 2 (2009) pp. 67. [ii] Ibid. [iii] Oasis Projects Ltd. v. Managing Director, National Highway and Infrastructure Development Corporation Limited, 2023 SCC OnLine Del 645. [iv] Sushil Kumar Bhardwaj v. Union of India, 2009 SCC OnLine Del 4355. [v] Sanjay Iron and Steel Limited v. Steel Authority of India, 2021 SCC OnLine Del 4566. [vi] Rao Constructions v. State of Karnataka, 2020 SCC OnLine Kar 3498. [vii] M/s. Hello Verify India Private Limited v. M/s. Happiest Minds Technologies Private Limited, Civil Miscellaneous Petition No. 237 of 2020. [viii] Shreans Daga v. IBM India Private Limited, Civil Miscellaneous Petition No. 184 of 2019. [ix] Section 89, Code of Civil Procedure, 1908. [x] Nirman Sindia v. Indal Electromelts Ltd, Coimbatore, 1999 SCC OnLine Ker 149. [xi] Simpark Infrastructure Pvt Ltd v. Jaipur Municipal Corporation, 2012 SCC OnLine Raj 2738. [xii] Supra note 1.

Avesta Vashishtha[1] INTRODUCTION The integrity and effectiveness of arbitration as an alternative dispute resolution mechanism rely on the fair and informed decisions rendered by arbitral tribunals. However, there are instances where arbitral awards fail to address crucial and contentious issues, leading to a miscarriage of justice and violation of public policy. In such cases, the appellate court sets aside the arbitral award delivered by the tribunal without considering a crucial claim, while exercising its powers of setting aside an award under Section 34 (hereinafter ‘Sec. 34’). The continuous affirmation of the same by various High Courts, after the principle was established by the Supreme Court in the case of I-Pay Clearing Services, necessitates the recognition of violation of the basic intent of ‘The Arbitration and Conciliation Act, 1996’ if such awards are not set aside. This article entails a discussion on the infringement of rights in such situations and the aid of Sec. 34, analysing the perspective of various High Courts in dealing with set-aside applications. Further, it has been suggested how remitting such perverse awards back to the tribunal can be an efficient recourse. PERVERSITY DUE TO DISREGARD OF CONTENTIOUS ISSUE The general concept in view of various precedents in arbitration law has been that a flaw that can be corrected or removed from the award, shall be referred back to the tribunal for such correction under Sec 34(4), instead of simply setting it aside. But in numerous cases, the flaw is not curable, and the same is caused due to the sheer lackadaisical approach of the tribunal in recognising, acknowledging, and then discussing the major issues related to a dispute. The rights of the parties are so gravely affected that the award cannot be corrected by referring it to the same tribunal. The scope of Sec. 34 is set by the Supreme Court to allow the setting aside of such awards which are ‘perverse’ and patently illegal in nature due to disregard of a contentious issue. The term perverse has been interpreted widely to include a finding based on “no evidence at all or an award which ignores vital evidence” in arriving at its decision would be perverse and liable to be set aside on the grounds of patent illegality. CREATION OF CONUNDRUM W.R.T CONTENTIOUS ISSUES AND EVIDENCE The challenges posed by tribunals' ignorance of pertinent issues and evidence manifest in two ways: neglecting crucial evidence despite acknowledging the issue and completely overlooking a pertinent issue in the award. Either the tribunal acknowledges the issue, but fails to base its award on the evidence presented during the proceedings, or it altogether does not recognise a pertinent issue in the award. The former illegality is discussed frequently by courts when crucial evidence is ignored by the tribunal while passing an award. When the parties have put on record certain important aspects of the dispute, which are essential for concluding their rights, but the tribunal neglects such evidence, such award has been termed perverse in several judgements. In the latter situation, the tribunal is unable to conclusively determine the enforceable rights of the parties, let alone grant a legitimate award. For eg., an issue of limitation in a time-barred dispute would be a contentious aspect of the dispute, and passing an award without considering this issue would render the award patently illegal. If the award is given without any discussion on this issue, it would be unjust for the party against whom the award is passed, since the award holder would have taken advantage of the tribunal’s mistake by enforcing a right that has been statutorily prohibited. Another example is, if a party has surrendered a right and has been estopped from enforcing the same, or the Court has restricted it from raising certain claims during arbitral proceedings, but the unreasonable findings of the tribunal, wholly disregarding the existence of such facts, presents an award that goes against judicial orders of the court. JUDICIAL APPROACH TOWARDS SUCH AWARDS The Supreme Court, in the I-Pay Clearing Services case, conclusively decided the question of patent illegality when the tribunal failed to examine certain contentious issues, and held “in absence of any finding on contentious issues, no amount of reasons can cure the defect in the award”. Therefore, in such cases, the award cannot be remitted back to the tribunal for curing the same. This ruling has been followed in numerous High Court judgements. The Delhi High Court has recognised that such awards would be liable to be set aside under Sec. 34, and stated “While the Arbitral Tribunal had also duly taken notice of the contentious issue, unfortunately, the award is entirely silent on this issue. In the considered opinion of this Court, the Ld. Arbitral Tribunal has committed a manifest error in not coming to any finding on this issue.” It has been held in Inox Air Products (P) Ltd. v. Air Liquide North India (P) Ltd, “The learned arbitrator cannot reconsider his conclusion, or that Sec. 34(4) of the Act cannot be resorted to in a situation where the award itself may change as a result.” It has also been commented that such awards suffer from ‘incurable defects’ by not dealing with a party’s contentions[2]. Further, “a finding is based on no evidence, or an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.” The same perspective was also held in the landmark judgement of Ssangyong Engg. & Construction Co. Ltd. v. NHAI. UNNECESSARY MEDDLING BY COURTS The author opines that the argument where the arbitrator would not be able to appreciate the evidence a second time if it was ignored the first time, seems vividly exaggerated. If the award is remitted back to the tribunal, the arbitrators would be aware of the missing gaps in the award, and the same can be rectified specifically. Additionally, in numerous cases, arbitrators from non-legal backgrounds are appointed to deal with the technicalities of the subject matter that might be involved in the dispute. They are sometimes not aware of the procedural aspects of the legal system. An opportunity shall be given to them to rectify their errors and learn from the procedure so that they may render better awards in the future, without setting aside the whole award. Further, it has been abundantly established that the intent of Sec. 34 is to eliminate any curable defects from the award, which can only be done by the arbitral tribunal, and not by the court due to the principle of minimal judicial interference. Therefore, it is essential to remit the award back to the tribunal for deciding a pertinent issue. However, a problem exists where the court has to determine whether the lack of consideration given to certain evidence or contentious issue by the arbitrator renders the award totally incurable, or it can be remitted back to the tribunal for removing flaws. The test of perversity lies in the reasonableness of the decision of the arbitrator. The appellate courts have to determine perversity as follows -: “If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with”. The ambiguous and wide scope in Sec 34(4) exercised in such cases can create discrepancies in different cases, where the court is burdened with the discretion to decide the contentious issues of the dispute, and whether the same should be referred back to the tribunal owing to their curable/incurable nature. The court’s powers are restricted to determining the same, and not entering the merits of the case that has already been heard at length. Hence, the court is left with the sole alternative of setting aside the award. The approach of determining reasonableness in the award is followed while evaluating perversity, but the same does not have any set standard of rules that govern ‘reasonableness’ in an award. Therefore, the appellate courts have to conclude whether an award is reasonable, and there is sufficient scope correcting the award by remitting it back to the tribunal even where a contentious issue has been omitted. One of the standards for remitting back an award is whether the arbitrator failed to determine an issue because of ‘pure oversight’, and if the same can be corrected, it should be remitted back to the tribunal. This would be a subjective test based on factual circumstances of different cases. CONCLUSION The award should be sent back to the tribunal for the arbitrators to consider the relevant issue or evidence, and alter the award if needed. The same would be based on the legal intent of arbitration, wherein enforcement of awards is given a superior pedestal with due relevance than simply abrogating the award. There might be certain aspects of a dispute which, if ignored, would lead to grave injustice and biases in the award rendered by the arbitrator. The recent developments in the judicial sphere concerning awards omitting ‘contentious issues’ has been inclined towards setting aside such awards. But at the same, the courts must restrain itself from setting aside each award instantly. Striking the right balance between setting aside awards and allowing tribunals to rectify curable defects can uphold the integrity of arbitration and ensure justice prevails. [1] Avesta Vashishtha is a 3rd year student at Dr. Ram Manohar Lohiya National Law University, Lucknow. [2] Indian Oil Corpn Ltd v FEPL Engineering Ltd 2023 SCC OnLine Del 1617.

Nitesh Ranjan[1] & Aman Upadhyay[2] ESG stands for Environmental Social Governance. In this globalized world industrial sector is flourishing at a very high pace. As such, it is inevitable to maintain a balance between environmental well-being and economic affluence. In this regard, certain standards and sets of guidelines are needed to protect the environment and in turn, protect the biotic components of the world. Introduction Environmental, social, and governance (“ESG”) refers to a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments. Environmental criteria take into account a company's environmental protection efforts, such as corporate climate change policies. The management of relationships with customers, suppliers, employees, and the communities in which it operates is examined under the social criteria. Leadership, executive compensation, audits, internal controls, and shareholder rights are all topics covered by governance. The number of legal disputes involving ESG-related concerns tends to rise as ESG becomes more significant in business policies and investment choices. A wide range of ESG-related claims regarding its interpretation and compliance in specific circumstances have already been filed in numerous judicial and quasi-judicial forums, demonstrating the broad scope of those issues. However, there are two types of claims that are particularly well suited for arbitration: claims based on commercial contracts and claims based on treaties. Legal Foundations & Statutory Compliance The Environmental pillar of ESG becomes immensely important in relation to the growing global concerns over environmental degradation, carbon footprints, and related issues.There has also been a growing concern about human rights globally. As such, it is important for corporates to comply with the standards in terms of human rights and maintain harmonious relationships with the employees. Hence, the Social Pillar becomes the base here. Similarly, for the successful conduct of a company, there should be efficient and honest management, which is covered under the governance pillar. There are certain provisions in various statutes from which the idea of ESG seems to have culminated. Section 135 of the Companies Act (“Act”) provides for Corporate Social Responsibility, in accordance of which, it is explicitly mentioned in Schedule VII(iv) of the Act that ensuring environmental sustainability may be included by companies in their CSR policies. In addition to that, among others, the Environmental Protection Act, 1986 (“EPA”) contains various provisions which form the base of the Environmental pillar. From laying down standards for the emission of environmental pollutants, as per Section 3(2)(iv) of the EPA, to carrying out and sponsoring investigations and research relating to problems of environmental pollution [Section 3(2)(ix)], the EPA gives several powers to the central government to take measures to protect and improve the environment. As such, the companies are expected to comply with the rules. As far as the Social pillar is concerned, it has to be seen from the perspective of various labor laws based on the principles of social security, social justice, and social equity. Apart from this, Article 43 of the Constitution of India provides that the State shall endeavor to secure a living wage, decent standards of life, etc. for workers. Parliament has passed a number of laws pertaining to workers’ social security. In 1948, the parliament passed one such law called the Employees’ State Insurance Act. It was the first substantial social security law to give such benefits to organized sector workers in cases of sickness, maternity, and injuries at the workplace. There are certain other legislations like The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, with which a company is expected to comply. As for corporate governance, the Board of Directors is responsible for the smooth and efficient management of the company. Companies Act, 2013 and Companies Rules, 2014 provide a robust framework for the same. Section 177(9) of the Act, requires the corporation to develop a vigil mechanism through which directors and employees can report concerns about unethical behavior, real or suspected fraud, or violations of the company’s code of conduct or ethics policy. Role of Arbitration in ESG Dispute Resolution: Enhancing Effectiveness? Indeed, the International Chamber of Commerce (ICC) task force's 2019 report on “Resolving Climate Change Related Disputes Through Arbitration and ADR” noted the growing trend of ESG disputes being resolved through arbitration and made the case that arbitration is particularly well positioned to achieve this goal. Arbitration is well-suited for addressing ESG disputes due to its ability to select specialized arbitrators who understand the complexities of ESG issues, its capacity to handle international aspects effectively, and its provision for swift injunctive relief. The component of party autonomy in arbitration makes it easier for the parties to choose arbitrators who hold expertise in the field of arbitration. Judges may not be suitable for adjudicating upon the specifics of three pillars of ESG. The issues related to ESG are affecting people globally. In case a corporation is not maintaining the environmental standards, it would have effects globally. When the social pillar is not taken into consideration, the delicate social fabric is tinkered with, which affects society at large. And for that matter, the violation of governance pillar will have impact to a similar extent. As such, arbitration would enable parties to get quick injunctions to address these impacting issues. At the same time, the arbitral awards tend to gain recognition globally owing to the New York Convention, 1959. Commercial Contracts and Investment Treaties Arbitration: A Saga of Two Businesses can control ESG risks through the management of commercial contracts. Companies have the chance to assess their current supply networks and try to implement ESG into their contract portfolio as a result of exceptional supply chain disruption. These ESG guidelines may be derived from a company’s own ESG objectives and policies or from relevant legal requirements. Where there are varying standards, laws or regulations, and levels of openness between several nations throughout the supply chain, ESG contractual requirements will be especially important. Contractual clauses demanding compliance with specified ESG-related duties by all counterparties can be used to resolve jurisdiction-based conflicts. International trade and investment treaties are now increasing at a rapid rate. The relationship between ESG factors and investment arbitration has been largely overlooked, both in academic discourse and practical considerations. Article 15 of the BLEU Model BIT (2019) provides that, “Each Contracting Party shall ensure that its laws and policies provide for and encourage high levels of environmental and labour protection and shall strive to continue to improve those laws and policies and their underlying levels of protection.” This could lead to the emergence of new and innovative claims and defenses in the settlement of investor-state disputes, with more claims being brought by states. For instance, states might be allowed to bring claims (or counterclaims) against investors for ESG failures and/or the diluting of investor protection where that protection conflicts with the state's ESG objectives. ESG considerations have helped host states file winning counterclaims in cases like Perenco v. Ecuador . In the instant dispute, Ecuador claimed that Perenco's business operations caused a serious environmental catastrophe. The host state requested restitution to make up for the harm done to the environment. The tribunal made a decision in response to Ecuador's environmental counterclaim, ordering the investor, Perenco, to give Ecuador a substantial amount of USD 54 million as compensation for the essential remediation efforts required to address the environmental catastrophe. Typically, investment treaty arbitration conducted by ICSID serves as the forum for dispute resolution. The Conclusion ESG commitments are becoming more and more significant. Businesses who are able to adjust to these expectations stand to gain significantly. Arbitration could be a useful tool for resolving ESG conflicts. Arbitration is in a unique position to settle ESG issues because it offers the option of selecting a neutral court with subject-expert arbitrators. Therefore, it is expected that there will be an increase in the number of arbitrations on this subject given the growing significance of ESG in business operations and the benefits that arbitration provides for resolving ESG issues. ESG risk allocation clauses are now more prevalent in commercial contracts that businesses sign into as a result of the expanding scope of ESG duties. This tendency is clearly evident in merger and amalgamation deals, which frequently address ESG issues. Similar to this, it is typical for businesses to attempt to reduce and manage ESG risk in the agreements they make with their suppliers throughout their whole manufacturing chain. These clauses have caused commercial issues and most likely will continue to do so. We can anticipate that international arbitration will frequently be the preferred forum for the resolution of ESG-related disputes because many of the companies that are now putting ESG-related elements in their contracts operate on a worldwide scale. [1] Nitesh Ranjan is a 3rd Year Student at the National University of Study and Research in Law, Ranchi. (nitesh.ranjan@nusrlranchi.ac.in). [2] Aman Upadhyay is a 3rd Year Student at the National University of Study and Research in Law, Ranchi. (aman.upadhyay@nusrlranchi.ac.in).

Aman Upadhyay[1] and Nitesh Ranjan[2] Introduction The structure of modern society is completely different from the ancient society, now disputes arise more frequently. Intellectual property is not immune to disputes, such as those resulting from registration, licencing, and infringement. The establishment of a peaceful and progressive society requires a quick resolution of these conflicts. It becomes a very cumbersome task to resolve disputes quickly and without much expense for a highly populated country like India. The courts are overburdened with already pending cases. Arbitration works as a good alternative to the courts. Also, now arbitration has become the default commercial dispute mechanism because it is less expensive, quicker, secure and offers more privacy. In India, arbitration is recognised as a medium of dispute resolution vides Section 89 of the CPC. Although arbitration is not a new concept to resolve disputes still its expansion to include disputes involving intellectual property is a developing jurisprudence. The court and statutory provision don’t have a clear instance in IP infringement-related disputes. Intellectual property rights while originating in municipal law now is deeply rooted in International law, and play a vital role in the protection of creativity. The clarity in the scope of arbitration in IP rights is the need of the hour for achieving its objective. Legislative Ambiguity: A Much-Needed Reform Statuary provisions are important to mention since the arbitrability of some matters is ascertained by them. Although nothing in the Arbitration Act precludes the enforcement of awards with respect to Intellectual Property Rights, including the validity or infringement but Section 135 of the Trade Mark Act, 1999 provides that trademark holders can seek judicial remedies through civil court. Further, the Copyright Act also provides that any suit or civil proceedings in matters of copyright infringement shall be instituted by the civil court having jurisdiction. In some instances such as Indian Performing Right Society (IPRS) Ltd. v. Entertainment Network (India) Ltd,[3] narrow interpretations of these sections are being taken and held as the matters can only be resolved by the court not arbitration. The concept of ‘commercial disputes’ in the Commercial Courts Act, 2015 includes intellectual property conflicts, as per section 2(1)(xvii) of the Act. This means IP disputes are inherently considered as being within the ambit of commercial disputes as defined by the act. Furthermore, the Commercial Courts Act provides that commercial disputes can be arbitrated without excluding IP disputes Following this it could be inferred that the matters on IP disputes comes under the ambit commercial dispute that can be resolved through arbitration under the Commercial Courts Act. Section 103(5) of the Indian Patent Act, 1970 allows for arbitration only in instances involving the government. The statuary provisions are ambiguous, perhaps by some reform or amendment in the legislation such as by specifically providing about the arbitrability of IP disputes in the Arbitration and Conciliation Act the issue could be resolved. Determination of Arbitrability in India: Uncertainty Prevails The phrase “Quo Vadis Arbitration” (where do you go arbitration)has famously been asked by Peter Pender and is particularly relevant for the Indian context because of the inconsistency in the laws related to the question of arbitrability. In 2011 with the case of Booz Allen Hamilton vs SBI Home Finance the Supreme court made its first attempt to determine the arbitrability of any matter. In this case, the court laid down that disputes related to right in rem must be out of the scope of arbitration and only disputes related to right to personam can be arbitrable. The Court further stated that personal rights or obligations arise as a subset of public rights. But the issue with this test is that sometimes the matters of right rem and right in personam become difficult to differentiate. The same follows in the cases of Intellectual property rights disputes. In Ayyasamy vs Paramasivam while adding to the list of non-arbitrable matters, the Supreme Court has held that arbitration is available only in the cases where the law accepts arbitration as an alternative remedy. In the judgement court has neglected, the ambiguity of statutory provisions that are silent in the question of the possibility of arbitration in matters of IP disputes. The law doesn’t give a clear view either on the arbitrability or the non-arbitrability of IP matters. Another segment of non-arbitrable matters is related to the State’s inalienable sovereign and public interest functions. In the recent case of Vidya Dorlia vs Durga Trading Corporation Supreme Court has given a “fourfold test” to determine when the subject matter of a dispute in an arbitration agreement is non-arbitrable. According to the test, matters related to right in rem, matters which affects the third party ‘erga omnus effect’, the matters of State’s inalienable sovereign function, disputes which are non-arbitrable on the account of expressly or impliedly stated under the statute are excluded from the scope of arbitration. The ‘fourfold test’ given in the Vidya Dorila case is much needed as with the advancement of technologies new forms of disputes are arising but there is inconsistency and non-clarity in the usage of these rules. The right in rem and personal are still in question on some subjects. The fourth point of the test is questioned since the possibility of conflicting opinions regarding the restriction of arbitration remains open because of the vagueness of statutes on this subject. The pendulum of conflicting decisions: conundrum persists in arbitrability of IP Mundipharma AG vs Wockhardt Ltd. was one of the earliest cases which determined the arbitrability of IPR matters. In this case, the court took a narrow view regarding the arbitrability of intellectual property rights. Following statuary wording under part II of the Copyright Act, 1957, the court concluded that copyright infringement is non-arbitrable since it is up to the civil court to decide all remedies related to copyright infringement. The purposive interpretation of the act was beyond the view of the court since the purpose of the lawmakers while forming any legislation is to provide speedy and fair justice to the stakeholders. Currently, arbitration is one of the best mediums to accomplish this objective. Interpreting the statutory wording of the act provides jurisdiction to civil courts to decide remedies as the prohibition to arbitration is not correctly construed. In the SAIL case, the Bombay High Court has rejected the arbitrability by saying, “The rights to a trademark and remedies in connection therewith are matters in rem and by their very nature not amenable to the jurisdiction of a private forum chosen by the parties”. The judgement didn’t consider the possibility of right in personal within the IP infringement disputes as numerous matters related to IP disputes don’t affect society at large. A different approach in this matter was brought through the Ministry of sound international vs Indus Ranassiance Partners Entertainment Pvt. Ltd. In this case, the court has defended arbitrability owing to the fact that licencing agreements should be interpreted following the common sense approach. Since there is no absolute statutory prohibition on the arbitrability of IPR the Court held that agreements facilitating the licensing of trademarks would merely affect the rights of parties and not infringe on any legal provision. After all, it is a business document that grants the licensee permission to use the trademarks and intellectual property. The arrangement, according to the Court, was governed by English law, allowing the tribunal to issue injunctive relief. As a result, the court determined that the case should be resolved through arbitration. The Delhi High Court gave an important judgement in Golden Tobie Private Limited v. Golden Tobacco Limited. Referring the case to an arbitrator, the Court laid down that as the dispute was between a family group regarding the usage of trademark, thereby “The right that is asserted by the plaintiff is not a right that emanates from the Trademark Act but a right that emanates from the Agreement... assignment of the trademark is by a contract and not by a statutory act. It does not involve any exercise of sovereign functions of the State. It cannot be said that the disputes are not arbitrable.” Thus, the court has affirmed that IP disputes which arise out of a contract and not directly from the statute would be arbitrable. The court is right in this approach however, the scope of arbitration in the matters of IP disputes needs to be broadened. Limiting the arbitration in IP disputes to this extent is restricting the advantages which could be achieved by increasing the ambit. The ambiguity in the scope of arbitration in IP disputes persists since the decisions don’t follow a certain way and the same could be accounted to the lack of statutory provisions. Current Scenario and The Way Forward In arbitration, parties get an opportunity to carefully draft the arbitration clause. This meticulous drafting avoids potential difficulties and ensures that the interests of parties are ascertained. The right in rem approach deprives parties from taking such crucial benefits. There is no doubt that even now the conflicting decisions have made the question related to the arbitrability of IP disputes unclear perhaps due to the lack of statutory provisions. While the formulas given by Vidya Drolia and the approach of the Delhi High Court in the Golden Tobie case have provided some clarity to this issue but the ambiguity still remains. The complexity of IP disputes such as the possibility of right in personam in the disguise of right in rem and also in some contractual IP disputes, litigation would be in favour of the public interest instead of Arbitration. It is a need of the hour to come up with some clear provisions for the matter related to the arbitrability of IP disputes. As it’s already discussed by the authors that there is no clear legislative intendment in either existing IP statutes or Arbitration Act for exclusion of IP disputes from the ambit of arbitration. Even a certain extent the holistic understanding of the statutes shows the implied intention of making IP disputes amenable to arbitration. The expressed provision related to the arbitrability of the IP disputes in arbitration act or IP statues will bring clarity regarding this. IP disputes often transcend the boundary of the nation. Since arbitration has long been one of the most popular ways for businesses to resolve disputes, a nation with pro-arbitration legislation attracts investors and encourages them to invest in its companies. By making IP disputes arbitrable in India, the government can take a step ahead in the path of promoting India as an arbitration-friendly nation and attract more foreign investment, which will boost the country's economy. [1] Aman Upadhyay is a 3rd Year Student at National University of Study and Research in Law, Ranchi. (aman.upadhyay@nusrlranchi.ac.in). [2] Nitesh Ranjan is a 3rd Year Student at National University of Study and Research in Law, Ranchi. (nitesh.ranjan@nusrlranchi.ac.in). [3] Indian Performing Right Society (IPRS) Ltd. v. Entertainment Network (India) Ltd, 2016 SCC Online Bom 5893.

Gautam Mohanty & Arnav Doshi[1] INTRODUCTION In a relief from a catatonic arbitration regime in the context of litigation funding, the recent Delhi High Court decision in Tomorrow Sales v SBS Holdings probed the possibility of recovering adverse costs from arbitral proceedings from third party funders. At the outset, the Delhi High Court in the aforesaid decision has solidified the position for third party funding (“TPF”). A brief version of the facts in the present matter pivoted around a Bespoke Funding Agreement between SBS Transpole (“Transpole”) and Tomorrow Sales Agency (“TSA”) which provided that TSA would, inter alia, provide financial assistance of INR 250 crores to Transpole’s claim against SBS Holdings Inc. (“SBS”) and Global Enterprise Logistics Pte. Ltd., Singapore. Transpole referred its claim by virtue of an alleged breach of contract against SBS to arbitration before the Singapore International Arbitration Centre (“SIAC” or “Tribunal”). However, the SIAC Tribunal rendered an award in favour of SBS, dismissing the claim and awarded costs of the proceedings in favour of SBS. Accordingly, SBS filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (“Act”) before the Delhi Court, praying, inter alia, for interim measures aiming to secure the arbitral award rendered by the SIAC tribunal. Notably, SBS prayed for the disclosure of the assets and related bank accounts of TSA and other respondents and further furnish security to secure the proceeds granted to it under the arbitral award. Pertinently, TSA was not a party to the arbitral proceedings nor an impugned party in the arbitral award rendered by the tribunal but had merely funded the claimant to pursue the arbitral proceedings under a funding agreement. In the first instance, the Single Judge of the Delhi High Court imposed liability on TSA on account of substantial interest and control in relation to the arbitral proceedings. The Single Judge after referring to the decisions rendered in Arkin v. Borchard Line Ltd. & Ors. and Excalibur Ventures LLC v. Texas Keystone Inc and Ors reasoned that TSA had “an exclusive, unfettered right on the damages recovered”, and thus, labelled TSA the real beneficiary of the arbitral proceedings despite being neither a party to the arbitral agreement nor the consequent proceedings. Therefore, TSA was directed to disclose their fixed assets and bank accounts in view of the payment of adverse costs. The single judge of the Delhi High Court further held that a party that undertakes the funding of legal proceedings with a speculative intent for profit cannot evade accountability and that a delicate equilibrium must be struck between ensuring access to justice through funding arrangements and the encumbrance that a respondent might endure in instances where the litigation falters on account of its intrinsic lack of merit. The learned Singular Justice articulated that allocating the financial burden of litigation expenses onto the respondent for the sake of mounting a defense against litigation that is found devoid of merits – and perhaps would not have been instigated but for the financial backing of an external party(funder) – was incongruous. However, on appeal, the Division Bench of the Delhi High Court overturned the decision of the single judge. The Division Bench distinguished that the instant matter was regarding “whether a person who is not a party to the arbitral proceedings or the award, rendered in respect of disputes inter-se parties to the arbitration, can be forced to pay amount awarded against a party to the arbitration” in lieu of whether a non-signatory can be bound by the arbitration agreement (group of companies/ alter ego doctrine). The Bench concluded that- firstly, TPF was disclosed at the start of the dispute, and SBS’s application to the SIAC tribunal for security and for costs was rejected on grounds of want of evidence. The division bench of the Delhi High Court observed that a third-party may be bound by the arbitral award only if was a party to the arbitration proceedings. Thus, the Court by a necessary corollary inferred that a party against whom the arbitration agreement was not invoked and who was not a party to the arbitration proceedings would not be bound by the arbitral award and consequently no question of enforcing an arbitral award against it would arise. Hence, as per the Court, SBS having failed to join TSA as a party to the arbitration cannot seek to add TSA to the enforcement proceedings by seeking interim measures against it. In the words of the Court, “[T]SA is not a party to the Arbitral Award. It cannot be treated as a judgment-debtor under the Arbitral Award if it is enforced as a decree, as required under Section 36(1) of the A&C Act…None of the clauses of the BFA provide any obligation for TSA to fund an adverse award.” Secondly, there existed no rule under SIAC, High Court Rules, the Arbitration and Conciliation Act, 1996, or the Code of Civil Procedure, 1908 that provided for imposing costs on a non-party to an arbitration. Thirdly, and lastly, the Bench laid a keen emphasis on observing a balance between ensuring access to justice through such funding arrangements and the cost borne by the defendant in the event of a meritless case. The Bench expressed that “third party funding is essential to ensure access to justice. In absence of third party funding, a person having a valid claim would be unable to pursue the same for recovery of amounts that may be legitimately due.” In light of the same, this post discusses TPF as a mechanism to ensure and safeguard access to justice for parties in international arbitration (I) and discusses the need to regulate nascent TPF arrangements in India (II). I. Deciphering the access to justice rationale of TPF The pivotal role of TPF in ensuring access to justice warrants careful consideration. It is imperative to delineate between access to justice and access to arbitration. Access to justice, in its broader purview, encompasses not only access to courts but also the availability of diverse judicial mechanisms for dispute resolution. Consequently, the equivalence of access to arbitration with access to justice holds merit only when arbitration represents the singular recourse for the funded party. It is noteworthy that parties may engage TPF not solely due to impecuniosity but as a deliberate strategic choice aimed at preserving their financial equilibrium or circumventing the onerous fiscal encumbrances associated with arbitration proceedings. The empirical research carried out on the behavioural patterns of funders highlights that the claim that TPF promotes access to justice is a little wide off the mark. One research that analyzed the behavioural patterns of funders highlighted that funders are “rational” in their decision-making process and tend to primarily fund high value claims. The abovementioned proposition is further strengthened by the practice of funders wherein some funders disclose that the minimum value of claims they are willing to fund ranges between £15 million to £2 million or from €100,000 to €300,000. Similarly, another research indicates that TPF does not always result in an increase in access to justice and tends to increase the number of frivolous claims. The most extensive research carried out on the litigation funding industry in Australia concluded that TPF in litigation increases frivolous litigation and its impact on access to justice was “ambiguous”. The summation of all empirical research carried out on TPF leads to the unmistakable conclusion that TPF is only available to a limited number of claimants who have a high number of claims and particularly those claims that have a high chance of success. Hence, as a necessary implication, low value claims and claims that are weak on merits are likely to lose out on accessing funding. II. Normative Frameworks Governing TPF in India In addition to the issue of TPF furthering the tenets of access to justice, there exists a regulatory vacuum for such financing transactions in India. It is pertinent to note that the Supreme Court in Bar Council of India v AK Balaji clarified that there appears to be “no restrictions on third parties (non-lawyer) funding the litigation and getting repaid after the outcome of the litigation”. Despite the Apex Court paving the way for TPF, the legal landscape in India is bereft of a legislative instrument, such as the ones introduced in Singapore and Hong Kong, that regulates litigation funding. In a similar vein, the rules of prominent institutional arbitration centres in India like the Delhi International Arbitration Centre Rules, 2023, Mumbai Centre for International Arbitration Rules, 2016, International Arbitration and Mediation Centre Arbitration Rules, and International Centre for Alternative Dispute Resolution Arbitration Rules, 1996, do not contain any provisions for TPF or litigation funding. Barring the residuary powers under institutional rules that allow a Tribunal to take appropriate decisions on all matters which are not specifically provided for. Moreover, both- the Act and institutional rules- are silent regarding the regulation of TPF. Notably, recognizing the significance of litigation funding in Tomorrow Sales v SBS Holdings passes the smoke-test but also poses a a potential minefield, particularly in the absence of a legislation governing third party funders. At the outset, it was the High Level Committee to review the institutionalization of Arbitration Mechanism in India that recognized the need for such legislation to make India an “arbitration-friendly jurisdiction”. A parchment safeguard for TPF exists in the form of amendments made by Maharashtra, Karnataka, Gujarat and Madhya Pradesh to the Code of Civil Procedure, 1908 that acknowledged the possibility of litigation funding and set out the situations when such financier may be made a party to the proceedings. Pursuant to this objective, it is recommended that the legislature borrows guidance from the regulatory framework in other jurisdictions. For instance, the Code of Conduct by the Association of Litigation Funders in the United Kingdom, and the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance, 2017 that implemented the Code of Practice for Third Party Funding of Arbitration demonstrate the regulatory framework enacted to provide measures and safeguards in relation to TPF. Moreover, in view of institutional arbitration, for example, the International Chamber of Commerce Rules of Arbitration 2021 via Article 11(7) provides for TPF and requires parties to disclose TPF arrangements to avoid potential conflicts of interest. In conclusion, a two-fold implication presents itself. The decision by the Delhi High Court highlights the significance and application of TPF arrangements in India, and analogously, opens the scope and extent of such arrangements to obscurity. At the first blush, the recognition of TPF, and the nexus between litigation funding and access to justice is a welcome measure. However, the continuation of a regulatory vacuum in India would result in the measure’s transition into an unruly horse, and thus, a consideration for legislative interference. [1] Gautam Mohanty is an Assistant Professor at Jindal Global Law School (JGLS), India and a Ph.D. student researching on Third-Party Funding at Kozminski University, Warsaw, Poland. He is also a Fellow at JGLS Centre for Alternative Dispute Resolution (CADR) and an advocate enrolled at the bar in India. He can be reached at gautam.mohanty1414@gmail.com. Arnav Doshi is a fifth-year student currently pursuing the B.B.A LL.B (Hons.) programme at Jindal Global Law School, Sonipat. He is also a Senior Staff Editor for The Arbitration Workshop.

- Prakhar Singh [1] & Manas Rohilla [2] The conundrum of determination amongst seat, venue, and jurisdiction in arbitration disputes has been the subject of discussion for a long time. Indian courts have attempted to answer it by applying the Shashoua principle, as per which the “venue” of the arbitration is in actuality its “seat”, unless there is a contrary indication or counter-indica. While much has been deliberated upon this issue, what amounts to “contrary indication” remains debated. This piece portrays how the Courts have interpreted “counter-indica” while applying the Shashoua principle. Additionally, it also highlights the significance of the intent and conduct of the parties while establishing the seat of arbitration and the jurisdiction of the court in a given circumstance. Distinguishing Seat from Venue: Jurisdictional Complexity The seat of arbitration specifies the curial law or procedural law that governs the arbitration and decides which court(s) will have supervisory authority over it. In contrast, the “venue” of arbitration only describes the geographical location where such arbitration is to be held and is unrelated to either curial law or court jurisdiction. The term “place of arbitration” is used in Section 20 of the Arbitration and Conciliation Act, 1996 (the “Act”) and is used interchangeably for both seat and venue. This would not render the seat of arbitration unlawful, and the relevant court having territorial jurisdiction over the “seat” would have exclusive supervisory jurisdiction over the arbitration proceedings in question. The first instance to differentiate between the concepts of seat and venue of the arbitration arose in the case of Bharat Aluminium Company (BALCO) v. Kaiser Aluminium Technical Service Inc. ("BALCO"), where the Supreme Court examined the notions of seat and venue and determined that they are distinct. While emphasising party autonomy, the Apex Court provided concurrent supervisory authority to two separate courts, namely the court having jurisdiction over the place of arbitration and the court in whose jurisdiction the cause of action originated. This caused confusion and resulted in inconsistent judgements by different High Courts. Resolving the Debate: Determining contrary indica the parties’ intent The Supreme Court eventually put an end to this discrepancy in BGS SGS SOMA JV v. NHPC Ltd. (“BGS SGS SOMA”). The Court noted that once the parties have designated the seat of arbitration, only the courts governing the seat could have exclusive jurisdiction to govern such arbitration proceedings, and the jurisdiction of all other courts stood ousted. The Court in the same case also examined the concept established in Roger Shashoua v. Mukesh Sharma (Shashoua), upholding the reasoning of the England and Wales High Court on this matter, now known as the Shashoua principle. In Shahoua, the parties chose London as the place of arbitration but not as the seat. Cooke, J. propounded that when parties opt for a venue for arbitration without designating a seat of arbitration, it is safe to assume that the venue is the seat of arbitration if the parties chose a supranational body of rules to govern the arbitration and there is no other indication to the contrary. It is apposite to note that the Constitutional Bench in BALCO had also impliedly adopted the Shashoua principle. Consequently, it looked like this viewpoint was firmly established throughout India. According to the Shashoua principle, when an agreement specifically identifies the venue without any express reference to the seat, in conjunction with a supranational body of laws and no major opposing indica, the inevitable inference is that the venue is actually the seat of arbitration. In the case of BGS SGS SOMA, the Apex Court found that when a clause specifies an arbitration venue and says that the arbitration would take place there, it suggests that the place is indeed the seat. This, together with the absence of any robust contradictory indications that the "venue" is only a place of arbitration and not a seat, further proves that such a place is in fact the seat. As a result, unless otherwise specified, the "venue" of arbitration is the actual seat. The idea has not been accepted by all courts in its absolute sense. In Hardy Exploration, a three-judge bench of the Hon'ble Supreme Court decided that a place may become a seat of arbitration only if something else is added to it as a concomitant. As a result, the Apex Court explicitly said that in order for a venue in an arbitration agreement to become a seat, an additional indicator must be included. It is worth noting that the court's decision contradicts the Shashoua Principle, which was recognised by the same court in BALCO. The question of what amounts to a counter-indication has been deliberated by the Apex Court in Mankastu. The court, deviating from what was held in the BGS SOMA SGS and agreeing to the reasoning as laid in Hardy, observed that it is the intent of the parties that determines whether the venue of arbitration is in actuality its seat. It was further held that the intention of the parties as to the seat should be determined from other clauses in the agreement and the conduct of the parties. Therefore, if the other clauses of the agreement or the conduct of the parties showcase that it is not the intention of the parties to consider the venue in the agreement to be the seat of the party, the same would be considered a counter indicator. In one of the instances before the Apex Court, the respondent contended that Kolkata, being the venue of the arbitration, should also be the seat of the arbitration. The Apex Court held that the parties did not intend for Kolkata to serve as the arbitration's location. The Hon’ble Court observed that the respondent himself sought temporary relief under Section 9 of the A&C Act at the District Court in Muzaffarpur, not a court in Kolkata. Thus, the conduct of the respondent itself showcases that there was no intention to make the venue of the arbitration, i.e., Kolkata, the "seat" of the arbitration. In another case where the arbitration agreement conferred exclusive jurisdiction on the courts in Gurugram, Haryana, and also incorporated New Delhi as the venue of the arbitration, the Court held that the parties' decision to provide the Courts in Gurugram, Haryana, exclusive jurisdiction is a sign that they did not intend for New Delhi to serve as the place of arbitration. Therefore, it was concluded that the conferment of exclusive jurisdiction may act as a counter indica in order to distinguish between the venue and the seat of the arbitration. Similarly, in another instance, where the arbitration agreement conferred exclusive jurisdiction upon the civil courts of Guwahati and considered New Delhi to be the venue of the arbitration, it was observed that the inclusion of the exclusive jurisdiction clause made it clear that the intent of the parties was clear that the seat would be in Guwahati and the civil court(s) at Guwahati would have jurisdiction. Precision in Arbitration Agreements: Navigating the Complexities of Jurisdictional Determination The wording of an arbitration agreement is imperative to conclusively determine the seat of the arbitration proceedings, which would further establish the jurisdiction. There exist various possibilities, subject to the wording of the arbitration agreement, that contemplate the determination of specific jurisdiction, and the same have been reflected below. In the case where both jurisdiction and seat are given in the agreement, the rule as established in the BGS SGS would apply. Therefore, the jurisdiction of the Court with respect to the agreement concerning the seat of the arbitration would prevail over other courts. In cases where both jurisdiction and venue are given in the agreement, the jurisdiction would be contingent on the fact that whether the agreement related to the venue is in actuality an agreement related to the "seat" of the arbitration, the same can be evaluated as per an external indicator that may imply the intent and conduct of the parties. Lastly, in cases where both seat and venue are included in the agreement, the principle stated in the BALCO case that the "seat" of arbitration is the centre of gravity of the arbitration would apply and therefore, the jurisdiction of the Court with respect to the agreement concerning the seat of the arbitration would prevail. Conclusion In the context of arbitration, a counter-indica is any indication towards parties’ intention for not keeping "venue" of the arbitration to be its "seat." While this indication doesn't automatically negate the venue's designation as the seat, it does trigger questions and may ultimately affect whether or not this is upheld. It should be noted that how much weight a counter-indica carries in determining whether a venue operates double-duty as a seat remains unsettled in case law. Essentially, this means courts may have different outcomes despite similar circumstances. Nonetheless, recognizing what constitutes a counter-indica is important for any party utilizing an arbitration agreement. By understanding the factors that are being considered by the courts, parties can make informed decisions about how to draft their arbitration agreements and conduct the same in a harmonious manner. [1] 3rd Year Student at Gujarat National Law University, BSW LL.B Hons. [2] 3rd Year Student at Gujarat National Law University B.A LL.B Hons.

Dalima Pushkarna[1] Introduction The Singapore International Commercial Court (hereinafter “SICC”) in CZT v CZU, dated 28 June 2023, clarified that an Arbitral Tribunal’s discussions/deliberations were confidential in nature, and the principle of confidentiality allows for the disclosure of these documents solely under highly exceptional circumstances. The exception to this rule of confidentiality is that only in extremely exceptional circumstances can these documents be produced. This landmark decision highlights Singapore’s pro-arbitration approach by marking the inaugural instance in which a Singaporean Court has addressed ordering the disclosure of deliberation records. The judgement strongly upholds the principle of confidentiality concerning tribunal deliberations and establishes that any departure from this confidentiality should only occur if the “interests of justice” substantially outweigh the policy considerations supporting confidentiality. Such an exception would necessitate (a) the presence of very serious allegations that attack the integrity of arbitration at its core and (b) a reasonable prospect of these allegations achieving success. This decision of SICC also aligns with the view adopted by the National Courts of other jurisdictions like the USA, UK, and Australia, where an exception to confidentiality is allowed depending on the circumstances of the case and the nature of the allegations made. With the help of this article, the author tries to analyse the confidentiality regime present in India and how India can follow the approach taken by the arbitration hubs of the world and derive certain exceptions to the confidentiality clauses in India. International Legal Framework on the Issue While it can be said that statutes on arbitration are silent on the issue of limitations to the rule of confidentiality, the courts across various jurisdictions have highlighted and developed exceptions to the confidentiality rule through case law jurisprudence. These exceptions are of limited nature, depend on a case-to-case basis and are made when there are serious or grave allegations and not upholding the principle of confidentiality is in the interest of justice. In the case of Vantage Deepwater Co. v Petrobras Am., Inc., the client, represented by Tai-Heng Cheng, was awarded US$622 million along with 15.2% compound interest. However, a dissenting arbitrator raised allegations of unfairness during the proceedings. Subsequently, the party that lost the arbitration attempted to challenge the majority award and requested access to discovery from the dissenting arbitrator and the American Arbitration Association (the entity that conducted the arbitration). The Fifth Circuit, after reviewing the case, upheld the Lower Court’s decision to dismiss the motions for discovery. The Court emphasised that before granting such discovery, it is crucial to assess the asserted need for previously undisclosed information and its potential impact on the arbitral process. Hence, USA Court focused that depending upon the need and the interest of justice, an exception to the confidentiality regime can be made. Similarly, in the English case of P v Q & Ors., a party made an application to remove two arbitrators on the grounds of misconduct. In support of this application, the party sought access to communications exchanged between the arbitrators and the tribunal secretary. Similar to the approach taken by the SICC, the English Commercial Court determined that disclosure would only be ordered if the allegation of misconduct had a reasonable likelihood of success. Moreover, the court considered whether the requested documents were strictly necessary for the fair adjudication of the application and whether it was appropriate, considering all circumstances, to exercise its discretion and grant the disclosure order. Further, in the case of Ali Shipping Corp v Shipyard Trogir, the UK Court laid down exceptions to confidentiality and cases where disclosure can be made: 1. Where the party who originally produced the material expressly or impliedly consents; 2. Disclosure pursuant to an order of the court or with leave of court; 3. Disclosure to the extent reasonably necessary for the protection of a party’s legitimate interests, in particular in establishing or defending a claim against or from a third party; and 4. Disclosure where the interests of justice require it. Furthermore, Part III of the International Arbitration Act (IAA) also outlines the limitations and exceptions to the confidentiality regime in Australia. Section 23C of the IAA provides that parties to arbitral proceedings commenced in reliance on an arbitration agreement must not disclose confidential information unless: the disclosure falls within one of the circumstances outlined in Sec. 23D of the IAA, including that all parties to the proceedings consent to the disclosure; the disclosure is to a professional or other adviser to any of the parties; or if the disclosure is necessary for the purpose of enforcing an arbitral award, and the disclosure is no more than reasonable for that purpose (Sec. 23D); the arbitral tribunal makes an order allowing the disclosure in certain circumstances (Sec. 23E), and no court has made an order prohibiting a party from disclosing confidential information (Sec. 23F); or a court makes an order allowing disclosure in certain circumstances (sect. 23G). Hence, National Courts all over the world have provided some exceptions to the general rule of confidentiality. When the case involves serious allegations, “is in the interest of justice”, and when the case has real prospects of succeeding, then limitations on confidentiality may be imposed. Indian Legal Framework In 2017, a distinguished High-Level Committee chaired by Justice B. N. Srikrishna was established with the purpose of conducting a comprehensive review of the institutionalisation of arbitration mechanisms in India. The Committee’s significant mandate involved proposing various reforms and amendments to enhance the Arbitration and Conciliation Act, 1996. One crucial recommendation by the Committee pertained to the incorporation of the principle of ‘confidentiality’ in arbitration proceedings. Subsequently, in alignment with these recommendations, the Arbitration and Conciliation (Amendment) Act of 2019 was enacted. This amendment introduced Section 42A, which effectively extended the application of the principle of ‘confidentiality’ to encompass arbitration proceedings. Section 42A of the Act herein follows: “Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution, and the parties to the arbitration agreement shall maintain the confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award.” It is important to note that this provision does not incorporate all the suggestions made by the B.N Srikrishna Committee. The Committee had suggested three exceptions to the issue of confidentiality, namely: Disclosure required by a legal duty; Disclosure to protect or enforce a legal right; To enforce or challenge an award before a court or judicial authority. The legislature, while making the amendments and incorporating the recommendations of the Committee, only included one exception to Section 42A that pertains to the disclosure of arbitral awards to facilitate their implementation. Therefore, it can be inferred without trouble that India’s stance on the exceptions and limitations to confidentiality does not align well with the practice of National Courts of other jurisdictions, according to which if the allegations are serious and there is a reasonable prospect of achieving success, then in those cases the exceptions to the confidentiality of the arbitration proceedings are applicable. Apart from deviating from the approach of other jurisdictions, the Indian provision also fails to consider certain instances where the disclosure of arbitration proceedings may be in the interest of the general public, especially in cases where the state is a party to the arbitration. Hence, in these cases, an exception must be made from the generally followed practice, and imposing restrictions on this via Section 42A might amount to violating the Right to Information of the general public. The High Court of Australia, in the case of Esso Australia Resource Ltd. v Plowman, dealt with an issue of violation of the Right to Information in an arbitration dispute where a state-owned entity was one of the parties. The Court recognized that the resolution of such a dispute has broader implications that affect the interests of the general public. Consequently, the Hon’ble High Court concluded that the public’s right to be informed about the affairs of public authorities was paramount in this context, and therefore, the public had a legitimate interest in knowing the intricacies and details of the arbitration proceedings. Conclusion Taking inspiration from its foreign counterparts, India should involve a comprehensive review and amendment of the current legal provisions to align with international practices and strike a balance between confidentiality and transparency. By incorporating exceptions to confidentiality like those recognized in other jurisdictions, India can ensure that in cases of serious allegations or when the public interest is involved, disclosure of arbitration proceedings can be permitted. This will enhance the transparency and accountability of the arbitral process, which is crucial for maintaining public trust in the legal system. However, providing exceptions to confidentiality in arbitration also comes with potential drawbacks. Care must be taken to define these exceptions precisely to prevent misuse or unwarranted disclosure of sensitive information. The interests of justice should be the guiding principle, and disclosure orders should be granted sparingly and only when necessary to protect legal rights or public interests. Additionally, ensuring that any disclosure is limited to the specific information needed and does not compromise the overall confidentiality of the arbitral process is essential. [1] B.A. LL.B. (Hons.) | Candidate of 2026 Dr. RML National Law University, Lucknow.

- Vaibhav Pratap Singh and Vihaan M.N.[1] Introduction Mediation is a popular and effective method of alternative dispute resolution that can help parties find a mutually satisfactory settlement without resorting to litigation. However, one of the challenges of mediation is how to ensure the enforceability of the settlement agreement in case of non-compliance by one of the parties. One possible solution is to convert the mediation settlement agreement into an arbitral award on agreed terms, enforceable under the Arbitration and Conciliation Act, 1996 [hereinafter “the Act”]. However, this option raises several legal and practical issues that need to be addressed. In this article, we examine whether mediated settlements should be considered as awards on agreed terms under Sections 30 and 74 of the Act. We will analyze the arguments for and against this proposition and compare the Indian position with the international and comparative perspective. We will also discuss the implications of this option for the parties, the mediators, and the courts. The Case for Including a Mediation Settlement as an Award on Agreed Terms The Act provides for the enforcement of settlement agreements arising from conciliation proceedings in Section 74. It states that such agreements have the same status and effect as arbitral awards on agreed terms under Section 30. The Act also equates mediation with conciliation [2], as it follows Article 1 of the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation, which uses the terms ‘Mediation’ and ‘Conciliation’ interchangeably. This is consistent with the American judicial system [3] and the Supreme Court of India’s ruling in Afcons Infrastructure Ltd. v. Cherian Varkey Construction. Therefore, Part III of the Act may apply both to mediation and conciliation, and the settlement agreements reached through mediation may be brought under the ambit of Sections 73 and 74. These sections require that the settlement agreements are drawn up, written, and signed by the parties and that they are final and binding. Some jurisdictions allow parties to convert their settlement agreements into arbitral awards for the purpose of court enforcement. For example, in Italy, under Section 217 of the Mediation Legislation, parties can jointly request the approval of their agreement by a court, which gives it the same effect as a legally binding judgment. In the US, parties can use Article 1 of the New York Convention to enforce their settlement agreements as arbitral awards. The language used by the parties to express their agreement should be given due respect unless it leads to absurdity as observed in cases like M.O.H. Uduman and Abhijith Paul. ADR is a process that empowers the parties to resolve their disputes outside the court, by choice. The court should not interfere with the legislative intent of promoting ADR on technical grounds and should uphold the enforceability of the agreements that the parties have freely consented to. Both arbitration and mediation in real life are very similar. In private arbitration, the parties themselves appoint an arbitrator, and every procedural step is guided by party autonomy. Arbitral proceedings can even happen in a park, outside the rigors of regular procedural codes and laws. Both arbitration and mediation also share the feature of confidentiality, which protects the parties’ privacy and reputation. By recognizing mediated settlements as consent awards, the court would enable the parties to enjoy the benefits of enforceability and finality as arbitration, which would enhance access to justice, encourage the use of ADR methods, and reduce the burden on the judiciary. The Case Against Including a Mediation Settlement as an Award on Agreed Terms While making such a stretched argument, it is pertinent to remember the challenges of such a recognition. Firstly, an issue with such recognition would be the circumvention of the procedure stipulated under the Act for Conciliation. Section 62 focuses on the commencement of conciliation proceedings. It explicitly stipulates that a written invitation to conciliate must be sent by the conciliating party to another and the conciliation proceedings shall commence when the other party accepts the invitation in writing. The Delhi HC dealing with this problem in Shri Ravi Aggarwal v. Shri Anil Jagota held that to cover a settlement agreement under Part III of the Act, settlement agreements had to be drawn with mutual consent by duly constituted conciliation proceedings. The Code of the Act covers consent awards only through the slightly more formal procedures of conciliation. Secondly, as per Section 30, the arbitral tribunal may use mediation, conciliation, or other procedures at any time during the arbitral proceedings to encourage settlement. This settlement shall be recorded in the form of an arbitral award in agreed terms that shall have the same status and effect as any other arbitral award on the issues of dispute. But here it appears that the constitution of an arbitral tribunal first is sine qua non. Third is the issue of formality. Private mediation is not governed by any statute or legal standards whereas conciliation is regulated by the Act. Settlement agreements cannot be interpreted as arbitral awards if the parties have chosen private mediation, whether through a mediation clause or otherwise. They are enforced only as agreements between parties. The US Court of Appeals in Castro v. Tri Marine Fish Co. LLC declined to regard a mediated settlement as an arbitral award due to the absence of formality essential for a procedure to become arbitration. The main issue here would be the probability of misuse of such recognition by parties in whose favor the balance of power tilts. Finally, anything contained in the Act applies to parties only if there is a valid arbitration clause or agreement. Mediation clauses cannot be construed to be Arbitration clauses. In the Act, conciliation as a process is present in the same act as that for arbitration as a secondary option, which can be utilized by parties going for arbitration itself, as enunciated in Section 30. Therefore, any attempt to circumvent this and bring in mediation within the same ambit might be against the intent of the legislature. The Need for Enforcement Rather Than Mere Contractual Obligation. Keeping the technical aspects aside, there is a need to enforce mediated settlements in the current era of fast-moving business. Mediation and Conciliation are both similar in nature insofar as the nature of dispute resolution is concerned. Essentially, the outcome or result of mediation is recorded in an agreement that is enforceable as a contract in the absence of a law regulating mediation. It can be vitiated by any of the elements vitiating a normal contract such as undue influence or fraud. In a consent award, however, there is an adjudication of issues rather than mere settlement of disputes, done by the parties themselves with the help of a conciliator. When agreements reached out of mediation are already legally enforceable contracts, what is the need to clothe them with enforceability? Let us take an instance where 2 parties are engaged in a dispute over the division of property and they engage in mediation to solve the same. During the course of mediation, the parties agree to give up/ take each other’s property as per their wishes and sign a settlement agreement. In the future, one party fails to give up his property as agreed. Now if the settlement is clothed with enforceability, the aggrieved party can directly go to court and get the award executed just like a normal award passed by an arbitral tribunal. In the absence of the same, the aggrieved party should have to sue the other party for breach of contract or specific performance which is a more tedious and less fruitful path to take. Therefore, recognizing a mediated settlement agreement as an arbitral award on agreed terms can provide much-needed enforceability to day-to-day settlements. Conclusion There are both a possibility and various technical challenges for converting mediated settlements into consent awards. On one hand, this option can enhance the enforceability and finality of mediated settlements, encourage the use of alternative dispute resolution methods, and reduce the burden on the judicial system. On the other hand, this option can also raise several legal and practical issues, such as the validity and scope of consent, the role and status of mediators, the compatibility and consistency with the arbitration law and practice, and the impact on the confidentiality and flexibility of mediation. We have also found that there is no clear and uniform position on this issue in India or internationally. There is a need for the legislature to deal with this issue in the current draft Bill on Mediation. While there is no one-size-fits-all solution to this issue, in India, there is a need to provide recognition to mediated settlements under the Arbitration and Conciliation Act, until the Mediation Act is passed. However, there should be some safeguards, such as a standard process or institution for mediation, a need for a written agreement between the parties consenting to convert the settlement into an award and so on to ensure fairness and protect the parties’ interests. We hope that this article has provided some useful insights and perspectives on this complex and evolving issue. We believe that this issue is important and relevant for developing and promoting mediation as an effective alternative dispute resolution method in India. [1] The authors are currently pursuing B.A LLB (Hons). at National Law University, Jodhpur, and are in their Second Year. [2] Sriram Panchu, Mediation Practice and Law, The path to successful dispute resolution, Appendix 3, 483, LexisNexis Butterworths Wadhwa, (2011) [3] Aditi Bhargava, Conciliation: An Effective Mode of Alternative Dispute Resolution System

- Gaurav Rai [1] and Rakshita Singh [2] Introduction Dispute resolution clauses in Commercial Contracts provide for the dispute to be resolved by arbitration or in a multi-tier dispute resolution format. However, instead of resolving the disputes through arbitration, the parties may choose to amicably settle the dispute by way of a negotiated settlement between themselves. In some cases, the settlement arrived at may only resolve the ongoing dispute between the parties, while the parties continue to be governed by the contract's original terms, including the arbitration clause for any future dispute. However, certain settlements might change the obligations and nature of the contract to such an extent that the parties may agree to execute an agreement or Memorandum of Understanding (“MoU”) in supersession of the Contract already existing between the parties (“Original Contract”). In this article, the authors discuss the issues that can arise in the aforementioned situation. The article shall also consider the steps that can be taken by the parties to protect themselves from the pitfalls of novating or superseding the Original Contract. The discussion in this article will be founded upon the judgment of the Hon’ble High Court of Delhi (“DHC”) in the case of B.L. Kashyap and Sons Limited v. MIST Avenue Private Limited ([2023] SCC OnLine Del 3518), which dealt with a similar fact situation as stated above. Facts prior to the arising of disputes. The Original Contract signed between the parties pertained to a civil structural project in the model of Bill of Quantities (“BOQ”) approximately worth Rs. 229 crores. The Original Contract contained a dispute resolution clause allowing the parties to settle any disputes by way of arbitration. While certain disputes arose between the parties, they were mutually resolved through an MoU by which the Original Contract was changed to a cost-plus contract from the originally agreed BOQ contract. Consequently, certain agreed payments were made to settle the dispute. It is pertinent to note that the MoU did not contain an arbitration clause. Dispute between the Parties and the Findings of the Arbitral Tribunal A dispute arose between the parties and the same was referred to an arbitral tribunal (“Arbitral Tribunal”) for resolution. In the arbitration proceedings, B.L Kashyap and Sons (“Claimant”) sought to raise the claims under the Original Contract between the parties due to the breach of the terms of the MoU entered into between the parties. MIST Avenue Private Limited (“Respondent”), however, raised a preliminary objection regarding the existence of the arbitration clause. Respondent argued that the MoU had superseded the Original Contract and that the Original Contract along with the arbitration clause no longer exist. Accordingly, the disputes between the parties, if any, cannot be raised before an arbitral tribunal as per the provisions of the Original Contract. The issue before the Arbitral Tribunal was whether the arbitration clause in the Original Contract could be revived even after the execution of the MoU. The Arbitral Tribunal, while interpreting the terms of the Original Contract, came to the conclusion that the Original Contract was indeed superseded by the MoU. The Arbitral Tribunal held that the MoU had in fact novated the Original Contract, and thereby the tribunal does not have jurisdiction to try the present case as per the arbitration clause contained in the Original Contract. While giving the aforesaid finding, the Arbitral Tribunal relied on the judgments of Young Achievers v. IMS learning Resources Pvt. Ltd.[2013] 10 SCC 535. & Ansal Housing and Construction Ltd. v. Samyak Projects Pvt. Ltd.[2018] SCC OnLine Del 1286. It was stated by the Arbitral Tribunal that the language of the MoU made it clear that the Original Contract was forthwith superseded on the execution of the MoU. Further, the supersession was not contingent on successfully fulfilling the terms of the MoU, as sought to be relied on by the Claimant. The Case before the DHC under Section 34 of The Arbitration and Conciliation Act, 1996 Aggrieved by the Award of the Arbitral Tribunal, the Claimant challenged the same under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act, 1996”) before the DHC. B.L Kashyap and Sons (“Petitioner / Claimant”) submitted that the Award passed by the Arbitral Tribunal was arbitrary and perverse and therefore manifestly illegal. It contended that execution of the MoU on a cost-plus basis was a conditional settlement, and the Respondent had breached the same. Therefore, the Petitioner was entitled to settle all dues as per the Original Contract. The Petitioner / Claimant contended before the DHC that the MoU would stand satisfied only if conditions under the MoU were complied with in its entirety. Since the same was not done, the arbitration proceedings were therefore correctly invoked under the Original Contract and the presence of a subsequent MoU could not bar such proceedings. The Petitioner / Claimant further submitted that the Original Contract allowed the Petitioner to file any legal measures for this purpose, and accordingly, the claims of the Petitioner before the Arbitral Tribunal were under the Original Contract and not under the MoU. Basis the aforesaid, the Arbitral Tribunal should not have rejected the Petitioner’s claims for want of jurisdiction. The Claimant relied on the judgments in Union of India v. Kishorilal Gupta & Bros AIR 1959 SC 1362 & Lata Construction v. Rameshchandra Ramniklal Shah (2000) 1 SCC 586 for its arguments. The Respondent, on the other hand, argued that the view taken by the Arbitral Tribunal was a correct and plausible one. The Respondent submitted that upon a proper reading of the MoU, it can be inferred that parties arrived at a mutual settlement by way of the MoU. Therefore, the Original Contract stood ‘cancelled or closed’, and accordingly, the Original Contract only allowed the Claimant to raise claims contained in it and not revive the arbitration clause. Therefore, the Claimant cannot invoke the arbitration proceedings as per the clause contained in the Original Contract for a breach of the MoU. The Respondent relied on the judgments of Nathani Steel Ltd. v. Associated Constructions [1995] Supp (3) SCC 324. & Damodar Valley Corporation v. K.K. Kar [1974] 1 SCC 141. in support of its submissions. Decision of the DHC Before rendering its decision, DHC outlined the several undisputed principles of law formulated on the basis of various authorities cited by the parties. They were as follows: a. An arbitration clause in a contract which is void ab initio cannot be enforced since the contract that contains such a clause itself was never enforceable, or legally came into existence; b. A contract which is validly executed can still be extinguished by a subsequent agreement between the parties; c. If the original contract remains in existence, then to deal with issues such as repudiation, breach, etc. arising in relation to that contract, the arbitration clause would continue to operate for those purposes; and d. In case of a new agreement and wholesale novation of the previous contract, the arbitration clause in such previous agreement will stand extinguished due to the new contract coming into existence. Relying on the aforesaid principles derived from the authorities cited by the parties, the DHC concluded that the arbitration clause would not extend to the subsequent MoU and the non-exercise of jurisdiction by the arbitral tribunal was a plausible interpretation of the contract between the parties. The DHC refused to interfere in the matter. The DHC also underlined the fact that courts’ interference with the tribunal’s award can only be in cases where there seems to be a patent illegality. If the award granted by the arbitrator is not even one of the plausible interpretations and outcomes of the contract, then the award can be challenged on grounds of being arbitrary or patently illegal. In support of the aforesaid finding, the DHC relied on Sangyong Engg. & Construction Co. Ltd. v. NHAI [2019] 15 SCC 13. The arbitral award only has to pass the plausibility test, and consequently, it is upon the arbitrator to proceed on that view and grant the award. In support of the aforesaid finding the DHC relied on UHL Power Co. Ltd. v. State of H.P. [2022] 4 SCC 116. Therefore, the DHC held that the impugned Award was not patently illegal and needed no interference. The petition was accordingly dismissed. The DHC clarified that no observations were being made on the merits of the dispute, as the arbitral tribunal has only stated that it does not have jurisdiction to adjudicate the disputes, and the judgment of the DHC was also limited to this aspect of the award. Analysis and Suggestions - Incorporation of Arbitration Clauses in Subsequent Contracts The Act 1996 provides for what might be called a solution to such situations. However, the same does not come without its fallacies and loopholes. Section 7(5) of the Act,1996 provides for an arbitration clause to be incorporated or extended to subsequent contracts by referring to a contract which initially contains such clause. However, there is a fundamental difference between reference to a contract and incorporation. The former includes a specific part of the contract which the parties must have intended to include in subsequent agreements whereas in the latter case, the subsequent contract is incorporated in its entirety. In such cases, the arbitration clause will also be incorporated and applicable to the new agreement. Then again, the incorporation of the arbitration clause itself is based on the consent of the parties, and in the absence of consent, nothing can be held to be a part of the agreement by virtue of implication. However, in contracts where both parties are the same (single contracts), an arbitration clause can be extended to a new contract given that the parties consented to it on the basis of the reasonability test. Notwithstanding the aforesaid, in cases where even one party is different (double contracts), such incorporation cannot be made, except in cases where a contract is a standard contract and the practice of a party is standard and well known. In the above mentioned solutions, the idea remains the same: if the arbitration clause, is to be extended to the subsequent agreement between the parties, it shall be based on consent of the parties or on the test that a reasonable man would have expected such a term to be part of the contract impliedly. i.e. without having to be written down specifically.[3] However, to avoid the complications of referring to previous arbitration clauses, it is advisable for the parties, who are making an agreement in supersession of the previous agreement, to include a new arbitration clause in the new contract and not rely on the principle of incorporation of contracts. With the growing acceptance of alternate dispute resolution mechanisms such as arbitration, mediation, or negotiated settlement, it is only prudent that any settlement arrived at between the parties be tactfully outlined in a settlement agreement. With some foresight, parties can avoid any complications at a later stage.[4] In the experience of the authors, there have been many cases where the absence of a well-drafted arbitration clause has led to conflicts and complications during dispute settlement, as was in the case of B.L. Kashyap and Sons v. MIST Avenue Private Ltd.. Thus, it is evident that a clear and well-drafted arbitration clause would significantly help in avoiding the situations that occurred in the case as discussed above. [1] Gaurav Rai is an Advocate based in Delhi and a Senior Associate at Legafin Law Associates LLP. He is also the Editor of The Arbitration Workshop Blog. [2] Rakshita Singh is a Second-Year law student, currently pursuing her BA.LLB(Hons.) degree from Institute of Law, Nirma University. [3] See generally Kartikey Sanjeev Bhalotia, ‘“Incorporation by Reference”: A Need to Reconsider Standards?’ (Arbitration Workshop, 7 July 2020) accessed 28 June 2023. [4] See generally Anish Jaipuriar and others, ‘Agreements for Settlement and Release in India: Legal Position and Essential Elements’ AKS Partners - Monthly Newsletter October 2021 .

Shaswat Kashyap & Snigdha Dash[1] The noteworthy decision by a three-judge bench of the Supreme Court in N.N. Global 2021, diverted from previous judgments in SMS Tea Estates, Garware Wall Ropes, and Vidya Drolia. It was stated in the earlier judgments that arbitration agreements without the appropriate stamping could not be legally enforced. However, in the 2021 ruling, the Supreme Court adopted a pro-arbitration position and declared that even arbitration agreements that were not stamped nor had insufficient stamping could still be directed to arbitration. In the N.N. Global 2021 case, the Supreme Court paid reliance on the UNCITRAL Model Law and the doctrine of severability, which was introduced in the Heyman v. Darwins case. It dismissed the conclusions reached in the SMS Tea and Garware, and stated that the absence of stamp duty payment does not render the arbitration agreement null and void. The Garware judgment attempted to harmonize the Indian Stamp Act, 1899 with the Arbitration and Conciliation Act, 1996 by prescribing a timeline for resolving issues related to stamping, making a distinction between the “validity” and “existence” of an arbitration agreement, and emphasizing that the Stamp Act applies to the agreement or conveyance as a whole. The court in N.N. Global 2021 dismissed Garware’s perspective as flawed. The court stressed the importance of disassociating the fate of the arbitration agreement that lies underneath the contract. Additionally, it ruled that the non-payment or insufficient payment of stamp duty could be rectified as a ‘correctable error’. However, the court recognized that Vidya Drolia had upheld the decisions made in Garware, and both cases were decided by benches of equal strength. In light of this conflicting situation, the Court decided to refer the matter to a Constitutional Bench comprising five judges in the N.N. Global 2021 case. The purpose of this referral was to resolve the disagreement and reconcile the differing opinions between Vidya Drolia and N.N. Global 2021, which had created a conflict in the interpretation of the law. In the wake of the uncertainty surrounding unstamped arbitration agreements, the Constitution Bench of the Honorable Supreme Court of India delivered a significant judgment in the N.N. Global 2023 case, aiming to bring clarity to the situation. This ruling clarified the enforceability of arbitration agreements that lacked proper stamping or had insufficient stamping. With a majority decision of 3:2, the court established that an arbitration agreement must adhere to the stamping requirements outlined in the Indian Stamp Act, 1899. Failure to meet these requirements renders the agreement legally nonexistent and unenforceable. Foreign Legal Framework Article 23 of the UNCITRAL Arbitration Rules, 2021, states that the invalidity of the main agreement does not automatically render the arbitration clause invalid. This principle is commonly referred to as the "severability or separability of the arbitration clause. Judge Stephen Schwebel from the International Court of Justice explains that the concept of an “arbitration agreement” itself implies the existence of a separate or detachable agreement, which can be separated from the main agreement if necessary. The principle of separability is of great significance and has been acknowledged by the International Chamber of Commerce (ICC) in its arbitration rules. The ICC initially recognized the concept of separability in its 1955 Arbitration Rules and has further reinforced it through the amended ICC Rules of 2012. Notably, Article 6(8) of the ICC Rules explicitly promotes the principle of separability, highlighting its importance in the arbitration process. United Kingdom: The Court of Appeal’s decision in Harbour Assurance v. Kansa General International Insurance supports the notion that the validity of an arbitration agreement can be maintained even if the underlying contract is deemed invalid, as long as the arbitration clause itself is not directly challenged. An arbitration agreement must be in writing to be enforceable and valid, but there is no requirement for the agreement to be signed or stamped. Pakistan: The issue of enforceability of unstamped arbitration agreements has been settled in Pakistan, as established in the Supreme Court judgment of Union Insurance Company of Pakistan v Hafiz Muhammad Siddique. In this case, the Supreme Court through Dorab Patel emphasized the language of Section 35 of the Stamp Act, 1899, and reiterated that expanding the interpretation of the section would go against established principles. Patel further explained that the objective of the Stamp Act is to preserve public revenue, and the absence of a stamp on the document does not affect the validity of any contract it contains. However, it renders the document inadmissible as evidence. This ruling overturned the Lahore High Court’s decision and clarified that while the non-stamping of an arbitration agreement makes it defective per se, it does not render it invalid in the eyes of the law. China: China has a ruling similar to that of Pakistan concerning the validity of unstamped arbitration agreements. This ruling was established in the case of Luck Treat Ltd. v. Shenzhen Zhong Yuan Cheng Commercial Investment Co., Ltd. In this particular case, even though one party failed to sign or stamp the main contract, the court affirmed the legitimacy and enforceability of the arbitration clause. The court emphasized the principle of separability, which ensures that the arbitration agreement is valid and independent of the main contract. Reference was made to Article 10 of the Interpretation of the Supreme People’s Court Concerning Some Issues on the Application of the Arbitration Law, which explicitly states that the absence of a main contract does not impact the validity of the arbitration agreement, relying on the separability clause. Furthermore, Article 19 of the Arbitration Law of the People’s Republic of China underscores that the existence of an arbitration agreement remains unaffected and separate from any modifications, cancellations, terminations, or invalidations of the underlying contract. Other Jurisdictions: Additionally, Section 178(3) of the Swiss Federal Statute on Private International Law (Swiss PIL) affirms that the validity of an arbitration agreement cannot be disputed solely based on the potential invalidity of the underlying contract. Legal Implications & Concluding Remarks Indian courts, through several rulings, have consistently supported the notion that non-payment of stamp duty is considered a “curable defect.” This means that an unstamped document can still be valid and enforceable once the stamp duty is paid. By allowing the defect to be rectified through the payment of a penalty, it is argued that an unstamped instrument cannot be deemed non-existent in the eyes of the law. Moreover, the addition of Section 11(6A) to the 1996 Act in 2015 aimed to simplify the pre-arbitration stage by limiting the court’s role in verifying the continuance of an arbitration agreement. This provision sought to expedite the arbitration process and reduce unnecessary court interference. However, the recent judgment may lead to an increase in disputes over the validity of arbitration agreements. This could result in delays in resolving disputes as parties now have the opportunity to challenge the enforceability of such agreements, leading to additional legal proceedings. The interpretation of this provision is closely tied to crucial arbitration principles such as the doctrine of severability, minimal judicial intervention, and kompetenz-kompetenz. For instance, the interpretation of the seemingly innocuous phrase ‘existence’ in Section 11(6A) of the Arbitration & Conciliation Act, 1996 has sparked intense debates among legal scholars and experts. The debate stems from differing opinions among the Supreme Court benches. Some argue that the court’s examination should be limited to the mere factum of the existence of an arbitration agreement, leaving issues of scope, validity, and enforceability to the arbitral tribunal to decide under Section 16(1) of the Act. This interpretation aims to minimize the court's intervention and aligns with the legislative policy of the 2015 amendment. However, others argue that the term “existence” should be understood in a contextualized manner, taking into account the statutory norms that determine the nature of an arbitration agreement. It emphasized on the existence of an arbitration clause being contingent on enforceability and adherence to statutory requirements. The amendment to Section 11(6A) focuses the court’s inquiry solely on determining whether an arbitration agreement exists, without disregarding the need for appropriate stamping or the enforceability of the entire agreement. The interpretation of the term "existence" in Section 11(6A) plays a crucial role in deciding the enforceability and relevance of an arbitration clause within a broader agreement. Internationally, the principle of separability, recognized by the UNCITRAL Model Law and various arbitration institutions such as the ICC, holds significant importance. It emphasizes that the arbitration agreement is a separate and distinct entity from the parent contract and can be enforced independently, even if the main contract is invalidated. This principle has been acknowledged in different jurisdictions, including China, the United Kingdom, the United States, France, and Switzerland. The Supreme Court ruling has introduced an extra level of scrutiny during the arbitrator appointment process, deviating from the original legislative intent, in order to assess the legality and existence of the arbitration agreement. The decision has the potential to significantly prolong the arbitration process from the very beginning, causing increased delays. [1] Shaswat Kashyap, a 3rd-year B.A., LL.B. (Hons.) student at Gujarat National Law University, and Snigdha Dash, a 3rd-year B.A., LL.B. (Hons.) student at National Law University, Odisha.