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Gaurav Rai[1] & Suraj Raj Kesherwani[2] PDF Version of the Article Introduction 1. Domestic arbitrations in India are dominated by construction arbitrations and arbitrations in relation to the supply of goods and services. However, a niche has also been carved out under the construction and supply of goods or services contracts when the bids for such contracts are made by a consortium of bidders. Such a consortium also tends to incorporate a joint venture (“JV”) company to perform such contracts. Such JV agreements or shareholding agreements usually also provide for the exit of the JV partners after a minimum fixed term as a member. However, such exit clauses entail that the exiting partner must allow the remaining JV partners to match the offer received by the exiting partner to buy the shares of the exiting partner. These clauses are referred to as Right of First Refusal (“ROFR”) clauses. ROFR is a contract clause that provides a party the right to be the first to be entitled to accept an offer before others are so offered or entitled to accept.[3] The idea behind the ROFR clause is that the current JV partners would rather keep the shares of the JV within themselves rather than allow an outsider to become a member of the JV. This backdrop forms the setting for the discussion in Chapter 1 of this article relating to the sale by the exiting shareholder of its shares in Mumbai International Airport Limited. 2. It is pertinent to note that such ROFR clauses can also be found in agreements when one party buys shares in another party with an option to buy more shares in the future. The ROFR clauses in such cases are styled in such a manner that the selling party shall not sell shares in its company to a third party without giving an opportunity to the buying party to buy the further shares in the selling party. This forms the basis of the entire dispute between Future Group and Amazon when Future group decided to sell one of its companies to Reliance Group, wherein Amazon alleged that it had the right to buy the shares in this company before it was bought by Reliance. This discussion shall form Chapter 2 of this article. 3. Thereafter in Chapter 3 we shall move towards highlighting the relevance of emergency arbitration in such shareholder disputes and highlight the status of the law relating to emergency arbitration in India. This paper shall also show why such emergency arbitrations may also require legislative recognition which may be useful for the growth of arbitrations in India including resolution of disputes related to ROFR Clauses in shareholder agreements. Finally, we shall summarize our suggestions and takeaways in the Final Conclusion to this paper. Chapter 1 – Mumbai International Airport Limited Shareholder Dispute 4. The Mumbai International Airport was one of the first airport modernization concession contracts awarded to a consortium based on bids received by the Airports Authority of India (“AAI”).[4] The modernization was to be executed by a new JV company named Mumbai International Airport Limited (“MIAL”) having an authorised share capital of INR 250 Crores. After the incorporation of MIAL, a shareholder agreement (“Shareholder Agreement”) was executed between MIAL, AAI and the private participants who were members of the consortium, wherein concerned parties agreed to subscribe to the shareholding of MIAL as per the table below.[5] 5. In 2011, by mutual agreement, BSDM sold 50% of its stake (13.5% of MIAL’s shares) for an undisclosed price to GVK and GVK became the owner of 50.5 % shares of MIAL. BSDM was left with 13.5% stake in MIAL.[6] Offer by Adani and ROFR of GVK 6. In March 2019, Adani Group Company (“Adani”) made an offer to BSDM to purchase the shares at INR 77 per share for the entire shareholding of BSDM, totalling to INR 1248 Crores.[7] The Shareholder Agreement contained a ROFR clause wherein, if one of the consortium members wanted to sell its shares in MIAL, it had to offer the right to the other consortium members in the form of a notice indicating the number of shares, the price and other relevant information. GVK indicated its willingness to exercise its rights under the ROFR clause.[8] This clause was subject to Clause 2.5 of the Concession Agreement titled as Operation Management and Development Agreement (“OMDA”) between the AAI and the Consortium Members wherein under sub-clause (c) of Clause 2.5; the consortium members were free to sell their shares after 7 (seven) years from the effective date without the approval of AAI, subject to the overall shareholding of the relevant member not going below 10%.[9] Since BSDM intended to sell its entire stake of 13.5%, it can be safely assumed that any sale would have required eventual approval of the AAI. Seeking interim relief – Delhi High Court and the Arbitral Tribunal 7. A dispute arose between the GVK and BSDM when BSDM alleged that GVK had failed to make the payment as per the conditions under the ROFR clause of the Shareholder Agreement within 30 (thirty) days of the offer being sent to GVK and ACSA Global Ltd. in the form of the notice.[10] The time period of 30 (thirty) days was mandated under the ROFR clause. GVK filed an application for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (“Act”) before the Hon’ble High Court of Delhi (“DHC”) to restrain BSDM from selling their stake. GVK argued that it had exercised its right and invoked the ROFR clause and it was upon BSDM to conclude the sale. The DHC, by its order dated 1 July 2019, did not provide any interim relief and left it to the arbitral tribunal to take a decision if an application under Section 17 of the Act is moved by GVK before the arbitral tribunal. 8. The matter proceeded for arbitration before a three-member arbitral tribunal. It appears that the arbitration was initiated under Clause 9.4.3 of the Shareholder Agreement which provided for a three-member arbitral tribunal seated in New Delhi.[11] After the constitution of the tribunal, it can be safely assumed that GVK moved an application for interim relief. The arbitral tribunal directed GVK to deposit the amount for the purchase of the shares in an escrow account before hearing GVK’s application to restrain BSDM from selling its stake.[12] Later, by a detailed order on 19.01.2020, the arbitral tribunal under Section 17 of the Act restrained BSDM from selling their stake to anyone till the resolution of the dispute.[13] Hence, it can be assumed that a prima facie case existed on facts that the conditions under the ROFR clause had been fulfilled by GVK for the purchase of the shares of BSDM because of which interim protection was granted to GVK. Vacation of interim protection provided to GVK 9. In a turn of events, about 300 Million USD of the money that was arranged and deposited in the escrow account by GVK had been withdrawn by its investors because of which GVK had to give up its claim for the purchase of the shares. Hence, the restraint on BSDM no longer existed. BSDM was eventually able to complete the sale of the shares to Adani in February 2021.[14] Eventually, GVK also got into a separate agreement altogether to sell its stake of about 50.5 % to Adani.[15] Adani closed the buyout of all three original private participants and became the owner of 74% of shares in MIAL. Chapter Conclusion 10. The lesson that is learnt from the MIAL dispute is that a ROFR Clause having a short time period of 30 (thirty) days to finalise the transaction was not enough to conclude the same. We understand that due diligence of the background of the shareholder and the shares being bought itself may not be necessary as the party who is purchasing the shares is itself a shareholder; however, to complete any transaction which involves payout of substantial magnitude would require time greater than 30 (thirty) days to close the transaction. Hence, the parties while drafting the shareholder agreement must have the foresight of such a situation arising and the possibility of buying or selling their stake in a JV company having a ROFR clause. 11. We can see that in this case, even though a time period of 30 (thirty) days was provided, BSDM was not able to exit as intended for almost three years from the first offer it received from Adani. Hence, it could have been in favour of both BSDM and GVK to see that a more extended period be provided for fulfilling the conditions under the ROFR clause and see that BSDM received the payout of the funds by GVK exercising the ROFR clause or from the original offeror who intended to buy its stake. Chapter 2 - Amazon-Future Group Dispute Background 12. In the year 2019, Amazon.Com NV Investment Holdings LLC (“Amazon”) after extensive exchanges with the Kishore Biyani driven Future Group, procured 49% stake in one of Future Group's unlisted firms Future Coupons Limited (“Future Coupons”). Future Coupons is the advertiser substance of Future Retail Ltd. (“Future Retail”) and holds a 7.3% stake in Future Retail. By implication, Amazon got 3.6% shareholding in Future Retail. As a component of the arrangement, Amazon also negotiated a 'call option' permitting it to purchase halfway or whole stake of the advertisers in Future Retail for a period going from 3 (three) to 10 (ten) years from the date of the Agreement[16](“2019 Agreement”). 13. As part of the 2019 Agreement, the parties had a call option in the form of an exit clause which determined that Amazon would practice the privilege of the first refusal in a situation where Future Group wishes to sell all or part of Future Coupon’s promoter or Future Retail’s shareholding. Also, there was a provision that expressed that Future Group will not sell any resource within 10 (ten) years of the arrangement with Amazon. It is these provisos that became the premise of the disputes between Amazon and Future Group. Reliance Deal 14. In 2020, Future Group being staggered under huge debts followed by a nationwide lockdown due to COVID-19, sustained heavy losses in its retail business. Hence, around August 2020, Future Group entered into an agreement with Reliance Retail Ventures Limited (“Reliance Retail”) (a subsidiary of Reliance Industries Limited) for INR 24,713 Crore to sell its retail logistics and warehousing to Reliance Retail (“Reliance Deal”). As a part of the Reliance Deal, Future Group agreed to sell its supermarket chain Big Bazaar, premium food supply unit Food Hall and fashion stores and clothes supermarket Brand Factory’s retails to Reliance Retail[17]. This turned into the significant conflict between Amazon and Future Group and progressed into arbitration under the 2019 Agreement. Emergency Arbitration under SIAC Rules 15. Amazon and Future Retail, in their 2019 Agreement, concurred on New Delhi as the seat of arbitration and for the arbitration to be conducted under the aegis of Singapore International Arbitration Centre (“SIAC”). Accordingly, Amazon aggrieved by the Reliance Deal and in order to obstruct the Reliance Deal, initiated emergency arbitration against Future Group and sought interim protection by way of such emergency arbitration under the aegis of SIAC. SIAC thereafter appointed Mr. V.K. Rajah as the emergency arbitrator (“Emergency Arbitrator”). 16. Amazon alleged that the Reliance Deal was in breach of the terms of the 2019 Agreement, which barred the Future Group from selling any stakes to any third party without Amazon’s consent. Amazon further challenged the Reliance Deal to be in violation of the ROFR clause in the 2019 Agreement, which provided Amazon the first right to purchase the Future Group’s shares under the 2019 Agreement[18]. However, the Future Group contented that the ROFR clause of the 2019 Agreement would not apply to the Reliance Deal till the completion of 3 (three) years of the 2019 Agreement. 17. The Emergency Arbitrator ruled in favour of Amazon and as an interim measure, put the Reliance Deal on hold and restrained the Future Group from proceeding with the Reliance Deal until the resolution of the dispute (“Interim Order”). The Future Group did not have any response to challenge this request that was passed by the Emergency Arbitrator except for holding up till the constitution of the arbitral tribunal.[19] Enforcement of Interim Order before Single Judge of DHC 18. To enforce the Interim Order, Amazon filed an application before the DHC to restrain Future Group from concluding the Reliance Deal. The single judge of the DHC vide its decision dated 18 March 2021 in the matter titled Amazon.com NV Investment Holdings LLC vs. Future Coupons Private Limited, [20] upheld the validity of the Interim Order by holding that an emergency arbitrator is an arbitrator for all intents and purposes under Section 17(2) of the Act. In view of this, DHC (single judge) held Future Group to be liable under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908, which lead to the attachment of properties of Future Group companies and its promoters, including the properties of Kishore Biyani. Moreover, DHC further directed the Future Group to file an additional affidavit providing further details in relation to its assets and properties[21]. In addition to the same, the DHC also asked the Future Group not to take any further action in violation of the Interim Order. Appeal before the Division Bench of DHC 19. Future Group appealed against the judgment dated 18 March 2021 of the DHC (single judge) before the Division Bench and the judgment of the Single Judge was stayed by the Division Bench vide order dated 22 March 2021[22]. The DHC (Division Bench) took note of the Supreme Court of India’s (“SCI”) order, which records that the proceedings before National Company Law Tribunal Mumbai (“NCLT Mumbai”) will be allowed to go without a final order of sanction of the scheme between Future Group and Reliance. It also came over the petition filed by the Future Retail, which operates its business by the name Big Bazaar, FBB, Easy day, etc. In the said petition, the NCLT Mumbai has reserved its order over the scheme of arrangement of the Reliance Deal. The Reliance Deal, which is contested by Amazon, has already received clearance from the Competition Commission of India, and SEBI and the scheme of arrangement is now awaiting the nod from the NCLT and the shareholders.[23] Special Leave to Appeal before the Supreme Court 20. The DHC (Division Bench) thereby entailed Amazon to file a special leave petition (“SLP”) before the SCI. Amazon in its SLP, has sought a stay of the order dated 22 March 2021 of the DHC (Division Bench) till the issues are finally adjudicated by the SCI. Amazon has stated that the order dated 22 March 2021 of the DHC (Division Bench) is a grave error permitting Future Group to commit further breaches of the SIAC Award.[24] The SCI vide its order dated 19 April 2021 stayed the proceedings before the Delhi High Court and decided to start hearing the matter on 28 June 2021.[25] The matter has been partly heard by the SCI and is next listed on 27 July 2021 for the remaining arguments.[26] SIAC Proceedings 21. Both the parties to the dispute are gearing up for the last leg of the proceedings at SIAC regarding Future Group's INR 24,713 Crore sales of its retail assets to Reliance Industries Ltd. Recently, the SIAC has constituted its panel to pass the final judgment on the case between Amazon and Future Group. As per the sources[27], the arbitration panel is as follows: Albert Jan van den Berg (nominee arbitrator of Amazon), Jan Paulsson (nominee arbitrator of Future Group) and Michael Hwang (veteran barrister) (the presiding arbitrator). Chapter Conclusion 22. The lesson learnt from the Amazon Future Dispute is that urgency of the matter is prime in cases involving the sale of shares if one party has an ROFR clause in their favour. Primarily because one of the parties already has a buyer ready to receive the shares on the payment of the sum. The emergency arbitration provisions under the SIAC Rules have hence helped Amazon to protect its interest in the interim. Interestingly, in both the disputes discussed above, the disputes were fought during the interim stage itself since the appointment of the tribunal which hears the arguments on merits, in any case, would delay the completion of the sale of the shares and the original offeror would have to walk away while the arbitration proceedings are ongoing, which would hence make the main arbitration proceedings infructuous. This is what happened in the MIAL Dispute. 23. The Amazon Future dispute is currently past the interim measures / emergency stage complete. It would be interesting to see if the arbitration proceeds to merits and how it would affect the deal between Reliance and Future Group. Chapter 3 - Interim Measures and Emergency Arbitration 24. It is pertinent to note that interim measures of protection become extremely relevant to protect the subject matter of the dispute before arbitration. In the 2015 amendment, the (Indian) Arbitration and Conciliation Act, 1996 amended the applicability of certain sections of Part I of the Act including Section 9 and stated that Section 9 will be available for parties in foreign seated arbitrations as well. Prior to the amendment, parties in a foreign seated arbitration would not have the option of approaching Indian Courts under Section 9 of the Act to get interim relief. The alternate and quick approach in this regard would be to seek interim relief from the local courts or the emergency tribunal constituted by an arbitral institution in a foreign arbitration and then attempt to enforce the order in India. Evolution of Emergency Arbitration 25. In Asia, the SIAC was the first institution to incorporate emergency arbitration provisions in its 2010 Rules. The emergency arbitrator provisions were introduced in the SIAC Rules in order to address situations where a party is in need of emergency interim relief before a Tribunal is constituted.[28] Status of Emergency Arbitration under the Act 26. However, an issue may arise when the parties have received an interim relief from the emergency arbitrator in a foreign country attempt to enforce the same in India because under Part II of the Arbitration and Conciliation Act, 1996 only awards final or otherwise can be enforced and not interim orders. Under the SIAC Rules these interim orders are called ‘awards’[29] and the emergency arbitrator has been recognized as an arbitrator under the International Arbitration Act of Singapore.[30] Such an ‘award’ and may not pass the test of being an award under Part 2 of the Arbitration and Conciliation Act, 1996 to be enforced as one. Status of orders of Foreign Seated Emergency Arbitrators HSBC v. Avitel Post 27. In a case dealing with an order of interim protection ordered by the emergency arbitrator prior to the 2015 amendment of the Act, the Bombay High Court in its judgments of the Single Judge and the Division Bench in the dispute between HSBC and Avitel Post Studioz[31] held that the parties had expressly stated in the contract that the seat of arbitration will be Singapore and the arbitration will be governed by the SIAC Rules. The arbitration clause also stated that Part I of the Arbitration and Conciliation Act, 1996 will not be applicable save as except section 9 of the Act. To this extent while the courts in Single Bench and Division Bench were dealing with the applicability of Section 9 to this particular arbitration, it held that since the parties themselves allowed the applicability of Section 9 hence the same will be applicable even though Singapore is the seat of the arbitration and arbitration agreement is to be governed by the laws of Singapore. 28. The Single Judge held that this application under Section 9 has been made not for the enforceability of the emergency award but for grant of interim measures simpliciter under Section 9 which was available to the parties. Even the Division Bench agreed that even if an emergency award has been made by a foreign seated arbitrator, the order of Indian Courts exercising their jurisdiction under Section 9 has to be made independent of any such interim order of relief and that this application under Section 9 has not been made to circumvent the procedure of enforcement of a foreign seated award under Part II of the Act. Raffles Design v. Educomp 29. To this extent the Hon’ble DHC in Raffles Design International Pvt Ltd v Educomp Professional Education Ltd & Ors 2016 (6) Arb.L.R 426 (Delhi) while dealing with an application under Section 9 of the Act for enforcement of an order of a foreign seated emergency arbitrator, held that Section 9 cannot be used to enforce an award of a foreign seated emergency arbitrator. The DHC held that an emergency award can be enforced only by filing a suit. 30. However, it held that the parties may independently approach courts of India under Section 9 for securing interim relief, as the applicability of Section 9 of the Act has been extended to foreign seated arbitrations as well by the 2015 amendment. The Court also held that the choosing Singapore as the seat of arbitration and SIAC Rules to govern the arbitration would not preclude a party from approaching a Court for obtaining interim relief as the SIAC Rules itself provides that the parties may approach a court for interim relief. However, the DHC finally held that the question whether the interim orders should be granted under Section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Ashwini Minda v. U-Shin 31. The single judge of the DHC in Ashwani Minda v. U-Shin[32] while dealing with an application for interim relief under Section 9 in a foreign seated arbitration distinguished the Raffles decision discussed above on the point that the institutional arbitration rules applicable in the Raffles case was SIAC which allowed seeking interim relief from courts unlike the Japan Commercial Arbitration Association (“JCAA”) applicable to the case at hand. The DHC held that reading of the arbitration clauses clearly evinces the intention of the parties to exclude the applicability of Part I of the Act. Further, the DHC by applying the doctrine of election also held that having invoked the mechanism of the emergency arbitrator and inviting a detailed and reasoned order declining the relief, it is not open for the applicants to take a second bite at the cherry by way of an application under Section 9 and hence held the same to be not maintainable. 32. In appeal, the Division Bench in Ashwini Minda v. U-shin[33] upheld the judgment of the Single Bench however it gave different reasons for the same. The Division Bench agreed with the single judge on principle of doctrine of election stating that the Indian Courts do have jurisdiction to grant relief under Section 9 in foreign seated arbitration however in the present case, the applicant having agitated similar points before the emergency arbitrator of JCAA and having lost on jurisdiction and merits before the Emergency Arbitrator it will not be open to it to approach the Indian Courts under Section 9 being aggrieved by such an order. Additionally, the Division Bench also referred to Section 9(3) of the Act wherein the Courts are not supposed to grant interim relief once the arbitral tribunal has been constituted or if an efficacious remedy is not available to the parties. When the application was filed before the single bench the arbitral tribunal had not been constituted and that was also one of the reasons mentioned in the Section 9 application however by the time the application came to the be heard by the Division Bench, the arbitral tribunal had been constituted. Further, a remedy before the arbitral tribunal does exist and no arguments have been made that such a remedy is not efficacious. 33. Based on the aforesaid two points, the Division Bench fortified the reasons in declining to interfere with the judgment of the single judge. The Division Bench also gave further reasons to distinguish the Raffles Judgment by holding that in the Raffles case, the emergency award passed by the Emergency Arbitrator and upheld by the Singapore Court was being violated by the party and hence a relief was provided to the affected party by way of an order under Section 9. The same was not the issue in the case at hand. Based on these additional reasons, the Division Bench dismissed the appeal. 34. Considering the reasons given by the Division Bench above, it declined to rule on the observations of the single judge on the aspect of whether the applicability of Section 9 of the Act has been excluded by the parties by way of the dispute resolution clause. The Division Bench held that this issue would remain open and the judgment of the single bench has not closed the issue and the same will be available for discussion at the appropriate stage. Analysis 35. Hence a combined reading of the aforesaid judgments demonstrates that although the power under Section 9 continues to exist under the Act for grant of interim measures, even in foreign seated arbitrations, the emergency award by a foreign seated arbitrator cannot be enforced under Section 9 of the Act. A similar relief however can be claimed under Section 9 and the Court while exercising jurisdiction has to remain independent of the order passed by the emergency arbitrator. However, if the emergency arbitrator has denied the relief to such an applicant seeking interim relief, then the applicant cannot invoke Section 9 of the Act as it would be presumed that the party has consciously elected to pursue an efficacious remedy before the emergency arbitrator and the Emergency Arbitrator refusing the remedy by way of a detailed reasoning, the parties have closed their right to approach Indian Courts under Section 9. Further, if the regular arbitral tribunal has already been constituted it would be a further impediment to the application to Indian Courts under section 9 as the party will have to necessarily prove that it does not have an efficacious remedy available before the arbitral tribunal because of which the Section 9 application has been sought. Status of orders of India Seated Emergency Arbitrators 36. The three cases above dealt with emergency arbitrations orders made in a foreign seat. However, in the Amazon Future Dispute, the Emergency Arbitrator was appointed in an arbitration seated in New Delhi, India but under the aegis of SIAC and governed by SIAC Rules which provided for such emergency arbitration. Hence, when Amazon received a favourable order for interim relief from the Emergency Arbitrator, it approached the DHC for enforcing the same under Section 17(2) of the Arbitration and Conciliation Act, 1996 to recognize the interim order of the Emergency Arbitrator as an interim measure granted by the arbitral tribunal. 37. The DHC (single bench) in Amazon.Com NV Investment Holdings LLC v Future Coupons Private Limited & Ors.[34] relied on the arguments made by the parties and the conclusions drawn by the Emergency Arbitrator as well and agreed with the Emergency Arbitrator that the (Indian) Arbitration and Conciliation Act, 1996 does not disallow an emergency arbitration and that the order of the emergency arbitrator can be enforced under Section 17(2) of the Act. It held that the Emergency Arbitrator is included in the definition of arbitral tribunal under the Act. 38. The judgment of the single bench of the DHC is a welcome step for Indian parties to approach Indian institutions for emergency arbitrations and including institutional arbitration in the dispute resolution clauses under the contract. Although a stay order was granted against this judgment by the Division Bench of the DHC, the same was done for reasons other than the reasoning provided by the single judge for enforcing the order of the emergency arbitrator and in any case the stay order was interim in nature and not the final judgment of the Division Bench. 39. It is pertinent to note that as of 2021, the Mumbai Centre for International Arbitration, Indian Council of Arbitration, Delhi International Arbitration Centre, Madras High Court Arbitration Centre, Nani Palkhivala Arbitration Centre and Hyderabad Arbitration Centre among others provide for emergency interim relief by way of appointment of an emergency arbitrator by the arbitration centre. This is a welcome step by the arbitration centres in India realising the utility of emergency arbitration in several arbitrations including the arbitrations related to shareholder dispute and disputes related to the invocation of the ROFR Clause. 40. Interestingly, the 246th Law Commission Report, which forms the basis of the 2015 amendment to the Arbitration and Conciliation Act, 1996, had proposed recognizing an emergency arbitrator as an arbitral tribunal under the Act to recognize arbitrators as provided for under the SIAC Arbitration Rules[35] however the change as recommended was not carried out in the amendment to the Act. In India’s attempt to move towards an institutional arbitration, which is evident from the 2019 amendment made to the Act, it would not be out of place for the parliament out of abundant caution, to include the Emergency Arbitrator as an arbitral tribunal recognized under the Act in lines with the International Arbitration Act of Singapore and the judgment of the single bench of the DHC in Amazon.Com NV Investment Holdings LLC v Future Coupons Private Limited & Ors. Conclusion 41. Hence the authors in conclusion submit that parties to shareholder agreements should deliberate on a reasonable time for concluding a sale of shares under a ROFR Clause and further the dispute resolution clause should state that the arbitration would be conducted under the aegis of an institution which has the provision for appointing an emergency arbitrator to protect the rights of all involved. 42. In furtherance of the same, in case India wants to develop as a major hub for arbitration the parliament should consider amending the Act to recognize emergency arbitration just like the legislature of Singapore. It would provide much needed legitimacy to the emergency arbitrations provisions under the various Indian arbitration centres mentioned above and to protect the rights of the parties specifically in such disputes where grant of interim relief in a short time is of utmost importance. Further it may also explore whether the award of the emergency arbitrator should be considered for enforcement as an award under Part 2 of the Act or if provisions are to be made within Section 9 of Part 1 itself for enforcement of interim measures awarded under a foreign seated emergency arbitrator. [1] Gaurav is an Associate at AKS Partners and the Editor of The Arbitration Workshop Blog. His area of interest lies in investment arbitration, international & domestic commercial arbitration and contract law. He can be contacted at raigaurav.legal@gmail.com. [2] Suraj is an Associate at AKS Partners. He holds a BA. LLB degree from UPES Dehradun and his work profile primarily includes commercial arbitration and litigation. He can be contacted at srajk.law@gmail.com. [3] ‘Definition of Right of First Refusal’ (The Law Dictionary) accessed 14 July 2021. [4] Rekha Jain, G. Raghuram, and Rachna Gangwar, ‘Airport Privatization in India: Lessons from the Bidding Process in Delhi and Mumbai ’ (Working Paper, IIM Ahmedabad 2007) 3 accessed 21 June 2021. [5] Clause 3.2, Shareholder Agreement, Mumbai International Airports Limited, 4 April 2006 available at https://www.civilaviation.gov.in/sites/default/files/moca_000981.pdf [6] ‘India’s GVK Power Raises Stake in Mumbai Airport Firm to 50.5 Pct’ Reuters (2 March 2011) accessed 7 June 2021. [7] ‘Battle for Stake in Mumbai Airport: High Court Refuses Interim Relief to Adani’ (The Economic Times, 6 November 2019) accessed 12 June 2021. [8] Shahkar Abidi, ‘GVK to Buy Bidvest Stake, Keep Adani out of MIAL’ (DNA India, 25 February 2019) accessed 7 June 2021. [9] ‘Operation, Management and Development Agreement between Airports Authority of India and Mumbai International Airport Private Limited for the Mumbai Airport’ accessed 8 June 2021. [10] ‘Battle for Stake in Mumbai Airport: High Court Refuses Interim Relief to Adani’ (n 7) (“…GVK had offered to buy Bidvest’s stake, but failed to arrange for the funds within the 30-day period.”). [11] Clause 9.4.3, Arbitration, Shareholder Agreement, Mumbai International Airports Limited, 4 April 2006 available at https://www.civilaviation.gov.in/sites/default/files/moca_000981.pdf. [12] ‘Battle for Stake in Mumbai Airport: High Court Refuses Interim Relief to Adani’ (n 7) (“On September 15, an arbitral tribunal, which heard the case between GVK and Bidvest, gave GVK time till October 31 to deposit the money. According to the arbitral order, if GVK failed to deposit the money, Bidvest was free to sell its stake to anyone else.”). [13] ‘Breather for GVK Group! Arbitration Tribunal Restrains Bidvest from Selling Stake in Mumbai Airport’ (Business Today) accessed 9 June 2021. [14] Aneesh Phadnis, ‘Adani Completes Purchase of 23.5% Stake in Mumbai International Airport’ Business Standard India (8 February 2021) accessed 9 June 2021. [15] Forum Gandhi, ‘Adani Takes over MIAL, Navi Mumbai Airports after a 2-Year Tussle with GVK’ (@businessline) accessed 17 June 2021. [16] ‘The Long Game: Amazon, Reliance & The Future Group Dispute’ (Algo Legal, 18 December 2020) accessed 25 June 2021. [17] Pranav Mukul, ‘Explained: Why Future Group Took Amazon to Court, and What the Delhi HC Said | Explained News, The Indian Express’ (The Indian Express, 4 January 2021) accessed 25 June 2021. [18] ‘What Is Amazon-Future-Reliance Battle? Explained’ (India TV, 27 March 2021) accessed 25 June 2021. [19] ‘Singapore International Arbitration Centre | SIAC Rules 2016’ accessed 25 June 2021. [20] AmazonCom NV Investment Holdings LLC v Future Coupons Private Limited & Ors [2021] Delhi High Court O.M.P(ENF)(COMM) 17/2021 Order dated 18 March 2021, available at https://www.livelaw.in/pdf_upload/jrm18032021ompenfcomm172021200230-390779.pdf. [21] ibid. [22] Future Coupons Private Limited & Ors v Amazon.Com NV Investment Holdings LLC [2021] Delhi High Court FAO(OS) (COMM) 50/2021 Order dated 22 March 2021 available at http://delhihighcourt.nic.in/dhcqrydisp_o.asp?pn=52155&yr=2021. [23] ‘Future Group Says NCLT Can Continue Hearing on RIL Deal as per Supreme Court Direction’ (ETRetail.com, 22 March 2021) accessed 22 June 2021. [24] ‘Amazon Moves SC for Stay on Delhi HC Order till Verdict on Future-Reliance Deal Dispute’ (The Times of India, 9 April 2021) accessed 23 June 2021. [25] AmazonCom NV Investment Holdings LLC v Future Coupons Private Limited & Ors [2021] Supreme Court of India SLP (C) 6113-6114/2021 Order dated 19 April 2021 available at https://main.sci.gov.in/supremecourt/2021/9459/9459_2021_33_24_27640_Order_19-Apr-2021.pdf. [26] AmazonCom NV Investment Holdings LLC v Future Coupons Private Limited & Ors [2021] Supreme Court of India SLP (C) 6113-6114/2021 Order dated 22 July 2021 available at https://main.sci.gov.in/supremecourt/2021/3947/3947_2021_32_12_28754_Order_22-Jul-2021.pdf. [27] Anirudh Laskar, ‘Singapore Tribunal to Hear Amazon-Future Case on 12 July over RIL Deal’ (Mint, 6 June 2021) accessed 23 June 2021. [28] ‘The Emergency Arbitrator and Expedited Procedure in SIAC: A New Direction for Arbitration in Asia’ (Singapore International Arbitration Centre) accessed 14 July 2021. [29] ‘Singapore International Arbitration Centre Rules 2016’ para 1.3 accessed 17 July 2021 (“Award” includes a partial, interim or final award and an award of an Emergency Arbitrator;). [30] International Arbitration Act - Singapore s 2(1) (‘“arbitral tribunal” means a sole arbitrator or a panel of arbitrators or a permanent arbitral institution and includes an emergency arbitrator appointed pursuant to the rules of arbitration agreed to or adopted by the parties including the rules of arbitration of an institution or organisation’"). [31] HSBC PI Holdings Mauritius v Avitel Post Studioz High Court of Bombay (Single Judge) Arbitration Petition 1062 / 2012 decided on 22 January 2014.; Avitel Post Studioz v HSBC PI Holdings Mauritius High Court of Bombay (Division Bench) Appeal No. 196/2014 in Arbitration Petition No. 1062/2012 decided on 31 July 2014. [32] Ashwani Minda and Ors vs U-Shin Ltd and Ors High Court of Delhi - Single Judge OMP (I) (COMM.) 90/2020, MANU/DE/1043/2020. [33] Ashwani Minda and Ors vs U-shin Limited and Ors High Court of Delhi - Division Bench FAO (OS) (COMM) 65/2020, 2020 (4) ArbLR 256 (Delhi). [34] Amazon.Com NV Investment Holdings LLC v Future Coupons Private Limited & Ors (n 20). [35] ‘Amendments to the Arbitration and Conciliation Act 1996’ (Law Commission of India 2014) 246 .

*Arpit Sarangi 1. Introduction The law of Limitation is an essential legislation that prescribes an outer time limit within which a claim can be brought after the cause of action has occurred. The Limitation Act, 1963 (Hereinafter, “Act, 1963”) is made applicable to Arbitration and Conciliation Act, 1996 (Hereinafter, “Act, 1996”) through Section 43(1) of Act, 1996 which provides that the Act, 1963 “shall apply to arbitrations as it applies to proceedings in court.” The first part of the Article would analyse the application of Act, 1963 to Section 11 of Act, 1996 (i.e. application of limitation act to initiate arbitration) whereas the second part would analyse the application of Act, 1963 to Section 34 of Act, 1996 (i.e. application of limitation act to set aside or challenge an arbitral award in a Court of law). There is a fundamental difference between Section 11 and Section 34 of Act, 1996. Section 34 provides for an exclusive statutory time limit whereas Section 11 does not provide for any such time limit. 2. Application of Act, 1963 to Section 11 of Act, 1996. a. A primer on Section 11 of Act, 1996 and the current position of law. Section 11 provides for the procedure to initiate arbitration. It can further be divided into two issues. The first issue is relating to an application to Court to appoint an arbitrator and the other being an issue of claim to a cause of action. For the first issue, the limitation period begins from the date of refusal to appoint an arbitrator by the other party or on expiry of thirty days, whichever is earlier. Moreover, for the second issue, the period of limitation begins from the “Cause of Action”. In the case of Bharat Sanchar Nigam Limited v. M/s Nortel Networks India Pvt. Ltd.[1], the Court held that both of the above issues should not be time-barred to allow an application under Section 11. Consequently, in the above case, the first issue was within limitation but as the second issue (i.e. Cause of Action) was barred by limitation, the application of Section 11, of Act, 1996 was denied. When does a “cause of action” arise? The Supreme Court (SC) in the case of Grasim Industries v. State of Kerala[2] has held that the provisions of Art. 137 of the Act, 1963 would apply to the Act, 1996. Any application under Section 11 of the Act, 1996 should be initiated within three years from the date when the cause of action arose. Article 137 of the Act, 1963 provides for an outer time limit of three years from the time the “right to apply accrues” to applications for which no exclusive time period of limitation is provided elsewhere in the Division of Act, 1963. As, Section 11 of Act, 1996 did not have any specific mention in the division, consequently, Article 137 of Act, 1963 was applied.[3] Now, the question arises what is the cause of action under arbitration law? The Supreme Court in the case of State of Orissa v. Damodar Das observed that “cause of action” under Arbitration law is treated to be similar to those of civil suits[4]and generally arises when there is a dispute. Further, in the case of Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority, the Supreme Court held that the dispute can be said to arise only when “a claim is asserted by one party and denied by the other on whatever grounds. Mere failure or inaction to pay does not lead to the inference of the existence of dispute. Dispute entails a positive element and assertion of denying, not merely inaction to accede to a claim or a request.”[5] The Courts have also inclined to hold that the “cause of action” arises when the final bill handed over to the other party became due.[6] However, where final bills have not been prepared, the Courts have held that the cause of action arises when- · There was an assertion of claim yet there was no payment.[7] · the notice demanding the disputed amount remains unanswered[8] · There is a clear and unequivocal denial of that right asserted by the other party in a notice.[9] The Supreme Court has held that a party cannot postpone the accrual of a cause of action by writing or sending reminders.[10] However, if the parties are in constant negotiation in some specific matters, certain exceptions were seen to be made. In the case of Hari Shankar Singhania & Ors vs Gaur Hari Singhania & Ors., the Supreme Court held that certain exceptions can be made in the case of family settlement. The Court differentiated a family settlement from a commercial settlement as the former results in peace and goodwill among the family members. The Court held that the well-being of a family is to be considered of prime importance. The process of arbitration would begin only when a dispute cannot be settled by conciliation. Consequently, if the parties are in dialogue even after the disputes have appeared, the limitation under Article 137 of Act 1963 cannot be considered to have commenced.[11] Hence, a narrow approach was provided to the application of Article 137 of Act 1963 to Act, 1996 in case of family disputes. b. What is the current settled position? The above discussion suggests that the point of law on the application of Act, 1963 to Act, 1996 is not clear. Moreover, in the recent case of Geo Miller v. Rajasthan Vidyut Nigam[12] Court had an opportunity to deal with similar issues. The judgment to the above issues are as follows What is the time limit for application for appointment of an Arbitrator under 11(6) of Act, 1996? The Court held that by application of Article 137 to the Act 1963, the limitation period for a reference of a dispute to arbitration or to appoint an arbitrator under Section 11 of Act, 1996 is three years from the date on which the cause of action or the claim which is required to be arbitrated first arise. Further, mere interaction between the parties in the form of letters or reminders will not extend the statute of limitations. What is the “cause of action” to determine the beginning of the time limit under the Act, 1963? The Courts were inclined to hold that the “cause of action” arises when the final bill became due. However, after perusing the decision of Major (Retd.) Inder Singh Rekhi[13] and Hari Shankar Singhania[14] the Court made an interesting observation. It held that- “Having perused through the relevant precedents, we agree that on a certain set of facts and circumstances, the period during which the parties were bona fide negotiating towards an amicable settlement may be excluded for the purpose of computing the period of limitation for reference to arbitration under the 1996 Act. However, in such cases the entire negotiation history between the parties must be specifically pleaded and placed on the record. The Court upon careful consideration of such history must find out what was the ‘breaking point’ at which any reasonable party would have abandoned efforts at arriving at a settlement and contemplated referral of the dispute for arbitration. This ‘breaking point’ would then be treated as the date on which the cause of action arises, for the purpose of limitation. The threshold for determining when such a point arises will be lower in the case of commercial disputes, where the party’s primary interest is in securing the payment due to them, than in family disputes where it may be said that the parties have a greater stake in settling the dispute amicably, and therefore delaying formal adjudication of the claim.” An analysis of the Geo-Miller judgment. An analysis of the Geo Miller judgment would suggest to us that Court has moved away from a strict interpretation of “cause of action”. In earlier decisions, the act of negotiation delayed the beginning of “cause of action” only in family settlements. However, after the Geo Miller judgment, negotiation can also delay the beginning of the time period in commercial matters to compute limitation. However, the Court did introduce the caveat of “breaking point” during the negotiations which would mark the beginning of the limitation period. Moreover, the threshold of the “breaking point” would be lower in commercial disputes than in the case of family settlements. The Author believes that Geo Miller’s judgement would allow more time for settlement of dispute via negotiation but it would also make the determination of “cause of action” more subjective and confusing. 3. Application of Act, 1963 to Section 34 of Act, 1996. a. A primer on Section 34, of Act, 1996 and current position of law. The second part of the Article discusses the application of Act, 1963 to challenge and finally set aside an arbitral award under Section 34 of Act, 1996. Hence, this part would discuss the application of Act, 1963 to Act, 1996 after an award is delivered. Section 34 of Act, 1996 provides that any party to an arbitral award can take recourse to a Court to set aside the same award if any of the conditions mentioned under Section 34(2) of Act, 1996 is satisfied. Further, Section 34 (3) of Act, 1996 provides that- “An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.[15]” It can be observed that Section 34(3) of Act, 1996 prescribes an outer time limit of three months from the date on which the party challenging the arbitral award received the award or, from the date on which the request under Section 33 of Act, 1996 is answered. The proviso to the above section allows an additional thirty days to challenge the arbitral award but only if the Court is satisfied. In the above context of Section 34 (3) of Act, 1996 it is pertinent to refer the Section 29 (2) of the Act, 1963 which provides that if any special law provides for a period of limitation distinct from the time-limit prescribed under the Act, 1963, then the time limit prescribed under the special act would apply and provisions under Sections 4 to 24 of the Act, 1963 apply only in so far as they are not excluded by the special law.[16] Section 4 to 24 of Act, 1963 mostly provides for exclusion of certain time-period in the computation of the period of limitation. The Courts have observed that Act, 1996 is a special Law.[17] b. Application of Section 5 of Act, 1963 to Act, 1996. The SC in the case of UOI v. Popular Construction[18] was asked to determine whether Section 5 of the Act, 1963 apply to an application contesting an award filed under Section 34 of the Act, 1996. The Court held that the 1996 Act is a 'special law' as required under Section 29 (2) of Act, 1963 and that Section 34 of Act, 1996 provides for a period of limitation distinct from the Limitation Act.[19] Further, the Court noticed that proviso to Section 34(3) of the Act 1996 contain the words 'but not thereafter' and observed that this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Act 1963. Furthermore, the Court held that to consider an application to set aside the Award beyond the proviso's extended timeframe would render the words 'but not thereafter' completely meaningless.[20] Analysis of the above judgment. The quick and timely execution of arbitral awards is essential to give complete effect and strength to arbitration laws in any country. The Court discarding the application of Section 5 of Act, 1963 helps in quick disposal of arbitral awards in three ways. Firstly, it creates certainty in determining the period of limitation as an application of Section 5 of Act, 1963 may lead to a situation where the beginning of the time period would be different from what is statutorily provided under Section 34(3) of Act, 1996 (i.e. from receive of arbitral award or disposal of the request under Section 33.). Secondly, the non-application is in consonance with Section 34(3) of Act, 1996. Thirdly, it helps in making arbitration a quick and efficacious remedy. c. Application of Section 14 of Act, 1963 to Act, 1996. Section 14 of the Act, 1963 allows for the exclusion of time spent in bona fide proceedings in a Court sans jurisdiction to compute the limitation period. The SC in the case of Consolidated Engineering Enterprises vs Principal Secretary Irrigation Department[21] was asked to determine whether Section 14 of Act, 1963 would apply to an application submitted under Section 34 of Act, 1996. Section 14(2) of Act, 1963 provides that “In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[22]” The Court began by observing that it would be preposterous to assume that just because Section 5 of Act, 1963 does not apply to Act, 1996, it would suo-moto result in non-application of Section 14, Act 1963 to Act, 1996. The Court further went to interpret Section 14 of Act, 1963 and held that a justice-oriented approach is to be taken than an approach that aborts the proceedings.[23] Further, no provisions in the Act, 1996 expressly or impliedly prevent the application of Section 14 of the Act, 1963. On the contrary, the Court held that Section 43(4) of Act, 1996 encourages the application of Section 14 of Act, 1963 as the former section allows exclusion of the time period between the commencement of the arbitration proceedings and the date in which the award is set aside in computing the limitation period for initiating any proceeding with respect to the dispute.[24] Analysis of the above judgment. The author believes that the SC was correct in applying Section 14 of Act, 1963 to Act, 1996 as the application doesn’t provide for a new period of limitation but only provides for exclusion of a certain period that is wasted in the Court of wrong jurisdiction. This doesn’t create any uncertainty in determining the period of limitation. The period of limitation still begins from as statutorily mentioned under Section 34 (3) of Act, 1996. Further, Section 34 (3) provides for a strict timeline of 90 days with a further extension of 30 days on approval of Court and there may be genuine cases where parties may wrongfully approach a Court with different jurisdiction due to confusion to set aside an arbitral award under Section 34 of Act, 1996. A blanket non-application of Section 14 of Act, 1963 would lead to the washing away of rights of the parties without any substantive wrongdoing on the part of parties. d. Application of Section 18 of Act 1963 to Act, 1996. In the case of P. Radha Bai v. P. Ashok Kumar[25] the SC was asked to determine whether Section 17 of Act, 1963 would be applicable in computing the period of limitation under Section 34(3) of the Arbitration Act? Section 17 of the Act, 1963 provides that where any fraudulent act has been committed by any person and consequently the plaintiff or the applicant is restricted from establishing his right, the time period for the purpose of limitation would only begin to run when the plaintiff or applicant has discovered the fraud or could, with reasonable diligence would have discovered it.[26] The Court referred to the case of Hukumdev Narain Dev v. Lalit Narain Mishra[27] wherein it was observed that an express exclusion of Section 4 to 24 of Act, 1963 is not required to be made under the Special act and an implied exclusion would suffice. Further, the implied exclusion has to be determined from the scheme, subject matter and object of Special law. Therefore, the Court in the P. Radha Bai case went on to analyze the implication of application of Section 17 of Act, 1963 to Section 34(3) of Act, 1996 and also the characteristics of the above Sections. The Court started by observing that Section 17 of Act, 1963 neither extends nor breaks the limitation period. It delays or postpones the start of the limitation period which is evident from the use of the statement "the period of limitation shall not begin to run".[28] Subsequently, the Court provided the characteristics of Section 34 of Act, 1996. It observed that 1. The phrase "may not be made" used in Section 34(3) has to be interpreted to mean "cannot be made". 2. The use of the phrase "but not thereafter" in the proviso to Section 34(3) of Act 1996 showcases the legislative intent not to allow any period beyond the time limit mentioned or else the phrase would become otiose. 3. The period to enforce the award under Section 36 of Act 1996 begins once the time limit to challenge the award under Section 34 of Act, 1996 expires. Moreover, if Section 17 of Act 1996 were to be used to calculate the limitation period under Section 34(3), the date of discovery of the alleged fraud or error would be the beginning of the limitation period. It would result in a different starting point of limitation than provided under Section 34 (3) of Act, 1996 and would result in undermining of the Special Law.[29] Analysis of the above judgment. Dr. Peter Binder in International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdiction had observed that the period to challenge and set aside an arbitral award should be an “unbreakable time” for sake of “certainty and expediency”. Hence, “time” and “certainty” were always considered to be a sine qua non for an efficient arbitral system. The author believes that SC was correct in discarding the application of Section 17, of Act 1963 to Act 1996 in three ways. Firstly, it creates certainty in the commencement of the limitation period. Secondly, it is in consonance with Section 34(3), Act 1996 which statutorily recognizes a beginning time period of limitation. Thirdly, it is in consonance with the reasoning of SC’s other judgments like Consolidated Engineering Enterprises vs Principal Secretary Irrigation Department and UOI v. Popular Construction. 4. Conclusion The SC has provided a time limit of three years to approach the Court to initiate arbitration. However, it can be observed from the above cases that “time is of the essence” for the cases under Arbitration. Consequently, a time limit of three years seems a bit too long to resurrect a dispute. This flaw or deficiency has also been pointed out by SC in the case of Bharat Sanchar Nigam Limited v. M/s Nortel Networks India Pvt. Ltd.[30]Further, the concept of “breaking point” also adds to the ambiguity and subjectivity of the provision. Hence, it can be concluded that Section 11 of Act, 1996 has some flaws and should be rectified by the legislature. However, analysis of the second part or application of Act, 1963 to Section 34 of Act, 1996 suggests that the SC has been moving in the right direction and the point of law is clear and without any ambiguity. *Arpit Sarangi, final year student of Hidayatullah National Law University, arpitsarangi12@gmail.com. [1] Civil Appeal No. 843-844 of 2021 [2] (2018) 14 SCC 265 [3] Article 137, The Limitation Act, 1963. [4] State of Orisaa v. Damodar Das, (1996) 2 SCC 216. [5] Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority 1988 AIR 1007 [6] Ibid. [7] Ibid. [8] SAIL v. JC Budharaja, 1999 AIR (SC) 3275 [9] Supra 3. [10] Supra 5. [11] Hari Shankar Singhania & Ors vs Gaur Hari Singhania & Ors., (2006) 4 SCC 658. [12] 2019 SCC OnLine SC 1137 [13] Supra 6. [14] Supra 12. [15] Section 34 (3), Arbitration and Conciliation Act, 1996 [16] Section 29(2), The Limitation Act, 1963. [17] UOI v. Popular Construction, (2001) 8 SCC 470 [18] (2001) 8 SCC 470 [19] Ibid. [20] Ibid. [21] (2008) 7 SCC 169 [22] Section 14(2), The Limitation Act, 1963. [23] Supra 22. [24] Ibid. [25] AIR 2018 SC 5013 [26] Section 17, The Limitation Act, 1963 [27] 1974 2 SCC 133 [28] Supra 26. [29] Ibid. [30] Supra 2

Mr. Ashford, welcome to the Arbitration Workshop! Firstly, we are highly honoured to have you agree to give us your interview. Secondly, we appreciate your initiative to share your perspective with our readers. Q. Before we delve in, may we request you to kindly introduce yourself and tell us about the origins of your interest in the field of arbitration? A. I am a Partner and the Co-Head of International Arbitration at Fox Williams LLP. I was formerly a disputes partner at the firm now known as Cripps Pemberton Greenish. I am a Fellow of the Chartered Institute of Arbitrators. I am regularly appointed as arbitrator alongside my practice as counsel and I have current appointments in ICC, LCIA and LCAM arbitrations. I have been working in international arbitration for around 20 years, before which I was a general commercial litigator doing a fair amount of domestic arbitration. I am a widely published author, commentator and lecturer, including the Handbook on International Commercial Arbitration published by Juris Publishing of New York in 2014; the Guide to the IBA Rules on the Taking of Evidence in International Arbitration and the Guide to the IBA Guidelines on Party Representation in International Arbitration, both published by Cambridge University Press in early 2013 and mid-2016 respectively. I am writing A Guide to the IBA Guidelines on Conflict of Interest in International Arbitration, with publication anticipated in 2022. Q. What discernible trends in commercial and investment arbitration do you see emerging due to the COVID-19 pandemic? What considerations do you think future Claimants should take into due notice before initiating arbitrations? A. The pandemic has affected us all but whatever deprivations we have each suffered, the pandemic has changed, and possibly for the better, arbitration procedure. The pandemic has shown the arbitration community that life can go on much as it did before albeit with virtual, rather than in-person, conferences and hearings. After an initial thought of whether hearings could simply be adjourned until ‘better times’ it became apparent that these better times were some way off and we ought simply to get on with things. I think these changes reflect a permanent shift in the way that things are done and will influence how we do things long after the pandemic. That is not to say that we will remain as we are doing nearly everything virtually. Equally, we will not go back to doing everything in-person: the best of both will be retained. Time zones have been a relatively minor issue. Advance thought needs to be given to local times for all participants. The most extreme example I have experienced has been a 13-hour time difference between participants on an evidentiary hearing but in the end it worked well. The fundamental thing for Claimants remains that they must have confidence that they are pursuing a respondent that will be able to meet any award, or substantial part of it. That has only become a more important factor in light of the pandemic when the fortunes of companies have either improved or deteriorated depending on their sector and other factors. Q. How important do you think it is to arrest arbitrator bias? How are you advising your clients to arrest arbitrator bias in light of Halliburton v Chubb? A. It is a fundamental issue. Justice must not only be done, it must be seen to be done. Of course, we very rarely see, or even suspect, actual bias, it is apparent bias that invariably is the issue. The word ‘biased’, has, in other contexts, a far more pejorative connotation, but we use it to mean an absence of demonstrated independence or impartiality (Yiacoub v The Queen [2014] UKPC 22). The objective is to exclude any legitimate doubt as to the tribunal's independence and impartiality. The key to this is enquiry and disclosure: the parties must tell the arbitrator about themselves, their counsel, witnesses, experts and perhaps funders or others with a financial interest. The arbitrator must then make all appropriate enquiries and make consequential disclosures. If conducted properly, this exercise should bring everything into the sunlight and permit the parties to decide whether to accept the position, or whether to object. Q. In India, the Indian Arbitration Act, 1996 addresses issues of arbitrator bias in two schedules 5 and 7 – if the situation is caught under the ambit of schedule 7, then that would lead to an automatic exclusion of the impugned arbitrator. On the other hand, if it comes under the purview of schedule 5, then there would be a challenge proceeding before the tribunal etc. Internationally, do you think a similar system must be put in place either in UNCITRAL Model Law or a similar instrument that is not soft law (IBA) to combat the issue of arbitrator bias? A. I would hope that the international arbitration community can get its own house in order without the need for legislation or other hard law. Consent is fundamental, if the parties are happy with an arbitrator who, whilst impartial, is not, say, independent, then that is a matter entirely for them: a village elder is a classic example and works well as everyone knows that the village elder has connections and relationships such that he (or she) cannot claim to be independent but the parties trust the impartiality. In England, Halliburton and another case, Newcastle United Football, have dented my confidence that we are sorting this out properly. There is no doubt that the arbitrators in Halliburton and Newcastle did things that ought not to have been done. All courts found as much. Yet both arbitrators were able to continue, their behaviour criticised and yet forgiven by the courts. A large part of that forgiveness was centred on their repute – there was confidence that they would render a fair decision in the end. That is simply not good enough if justice must be seen to be done as we cannot look inside the minds of an arbitrator to see what might have, subconsciously, affected the decision and/or the decision-making process. I prefer the approach in Almazeedi: non-disclosure is a flaw in an arbitrator’s independence which makes him unsuitable – it is that simple. It must be recalled that bias is the absence of demonstrable independence – by failing to make the disclosures that they were obliged to make, the arbitrators failed to demonstrate the very independence that was required of them. At the very least, there was an asymmetry of information such that the party with less information may always feel aggrieved. Q. What is your take on third-party funding in commercial arbitration? Do you think third-party funders should be joined to arbitration proceedings given their alleged influence on arbitration proceedings? A. Funding is inevitable and may well see an uptick in light of the pandemic. Claimants will see the benefit of de-risking and taking off balance sheet the costs and risks of the dispute. Claimants will use funding for that process especially when funding arbitrations themselves will divert valuable resources from the recovery post-pandemic. It should not be forgotten however, that funding is not a panacea: it is very expensive money and a well-resourced and capitalised company may well choose to either fund itself or take one of the very many insurance products that are available and which can achieve much the same result with a lower cost. No, I don’t think that funders should be parties, they are strangers to the underlying contract under which the dispute has arisen. The parties have not agreed to arbitrate with a funder who has come into the dispute at a relatively late stage. Some solution may need to be crafted to ensure that a funder of an unsuccessful claimant might be held responsible for costs but there are other routes to do that. Q. Commercial arbitration entails strict adherence to the contract, however, there might be occasions wherein specific terms of the contract are unconscionable or not in line with the Contract law of the country. How do you deal with such clauses in arbitrations where the tribunal itself is a feature of the contract and might not be inclined to decide the dispute dehors the provisions of the contract itself? A. A lot will depend on the governing law. English law, for example, has a key characteristic that the courts will normally uphold what the parties agreed, subject to some basic principles of contract. For example, in the classic Monday/Friday case of The Laconia, the hire fell due on a Sunday; so, the charterer paid on Monday. The money was sent back and the ship repossessed on Monday. The hire was payable in advance so it should have been paid on Friday. It was held by the House of Lords that the shipowner was entitled to repossess. That gives certainty and predictability even if the result can appear harsh. Those same consistent results do not seem to be available in the case of, say, French, German or even New York law. They all have statutory overrides for ‘good faith’ and to override their disclaimers. French contract reforms from 2016 require parties to disclose any information that is ‘essential’ for the other contracting part. In the US, juries impose their own idea of fairness. However, if parties wish the deal that they negotiated to be upheld, then the English courts will normally honour that objective, an objective that the courts consider to be not unreasonable between commercial parties in their business dealings in the absence of some manifest vitiating factor. If parties choosing English law prefer that good faith should apply in their contract to potentially override its terms, then they can insert a good faith clause and other provisions for mediation, cooling-off, grace periods, notices of action and the like. The English courts respect good faith clauses: the difference is that in the case of English law, it is the parties themselves who are trusted to decide the ideology. Q. Most Commercial arbitrations would deal with the contract between the parties and extensive evidence including letters and other related communications written to each other during the execution of contracts. How necessary do you believe oral evidence is in such commercial arbitrations? A. Far less than we probably imagine. In England April 2021 saw the implementation of the recommendations of the Witness Evidence Working Group (reporting to the Business and Property Courts Board) with a radical approach to the gathering and content of witness evidence. In 2020 the ICC Commission reported on The Accuracy of Fact Witness Memory in International Arbitration and cautioned the reliability of witness evidence and made recommendations for the future. The general point is that, assuming that they are not forgeries, the documents do not lie. They might not tell the whole story and may need some supplementation by oral testimony, but they are generally the most reliable source of the truth. The most famous critique of witness evidence is that of Leggatt J (as he then was) in Gestim v Credit Suisse. Leggatt J said the following about the approach to witness evidence: “…place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.” Witness Statements are, at least supposed to be, a reflection of the witness’ recollection or memory of the events that they can speak to. That is often not the case, rather they were lawyer crafted aspirational accounts of what the lawyers would like the witness to say. We lawyers ensure that the witnesses speak to events about which they might never have been involved and, even if they were, have little or no recollection of. The result was overly long, largely inadmissible accounts where the witness appeared to recall events with the utmost clarity. With that criticism, it is nevertheless important that there is a forum for the party to put over its case and tell its story to the tribunal. The witness statement is a convenient place for that to happen but the two purposes need to be borne carefully in mind. Q. The (Indian) Arbitration and Conciliation Act, 1996 has a provision on the settlement between the parties, which encourages the arbitrators to attempt settlement of the matter between the parties and if the parties come to a consensus, a consent award is passed. As a Lawyer, how do you advise your clients regarding their options to settle the matter prior to initiating or during the arbitration? Are such negotiated settlements a realistic option in high-profile arbitrations? A. Arbitrators are wary of entering into the settlement arena for fear of being accused of pre-judging and hence appearing to be biased. Some laws, as you point out, expressly permit or encourage the tribunal to descend into the settlement arena, but absent that, most arbitrators will avoid any participation in settlement discussions. They may ask the parties whether they have or wish to discuss settlement but will rarely go further than that and will certainly not be involved in settlement discussions. The settlement rate in international arbitration is lower than in many domestic disputes before national courts. Quite why that is, is not clear but I suggest two causes: firstly, the amounts involved can be very large and the costs a relatively small proportion and hence it is worth, ‘rolling the dice’ to try and get a win. Secondly, there are cultural barriers and parties do not know how to broach settlement when there may be language barriers and different approached to without prejudice discussions. More work needs to be done in this area and it may be that a specialist type of mediator, experienced in international arbitration, needs to come to the fore. Q. Are there any specifics of arbitral practices that you particularly enjoy? What practices do you employ to engage and keep up with the recent trends in arbitration? Is there any particular practice you would recommend young lawyers to regularly engage in to become better in the field? A. I love a good Redfern Schedule! As counsel it permits written advocacy outside of pleadings or memorials and it gives a chance to summarise your case (and your opponent’s) in a less formal environment and to request or resist documents based on what is truly in dispute. As the question acknowledges, there is always something new in international arbitration. There is no substitute to having a voracious appetite for reading, reflecting on and debating current issues. Those debates do not have to be formal and chatting with a colleague over a coffee can be very informative. My top tip would be get your narrative right and get it simple: ideally capable of expression in 3 sentences. We start off in the law thinking that the law reports will have all the answers. But the biggest task of a disputes lawyer is to take the information from the client and turn it into a persuasive narrative. Everything else is easy. Practice and practice that skill. You can start by describing your home, family or holiday. If you can master that 3 sentence narrative, try explaining a case you are working on in that way and build from there. Q. What would be your word of advice to the readers trying to make a name for themselves in the transnational practice of international arbitration? What books are a part of your library that is a must-have for a commercial arbitration practitioner (Counsel and Arbitrator)? A. There will be no substitute for hard work and challenging or critical thinking: do not accept the orthodoxy - it might not be right. Try and be as international as possible and do not expect your domestic norms to be carried over into international practice. The answer should be the most efficient way that something can be done, not what has been done before. Needless to say, all of my own books are on my shelf! But probably don’t get too constrained by what others say. By all means look at what, say, Gary Born has to say on a particular subject. Then consider whether you agree and why. The wonderful thing about international arbitration is that in many things there is no doctrine of precedent and your tribunal can probably do what it likes. The Editorial Team at the Arbitration Workshop would like to thank Mr. Peter Ashford for taking out time from his busy schedule and for sharing his perspectives with us!

-Harshvardhan Tripathi* India has witnessed a rapid evolution in the judicial opinion on the choice of ‘seat’/ ‘venue' of arbitration in recent times. The conceptual distinction between the ‘seat’ and the ‘venue’ is of immense importance and has implications for both, international commercial arbitration and domestic arbitration based in India. Most importantly, the choice of a ‘seat’ of arbitration provides exclusive jurisdiction to the Courts of the seat to regulate the arbitral proceedings arising out of the agreement between the parties. On the other hand, the choice of a venue has no such legal consequence and is merely a convenient place for the stakeholders to meet and conduct the arbitral proceedings. The venue can be changed as per the convenience of the parties and has no legal impact on the arbitration or the court proceedings arising out of it. Jurisprudential Development in seat vs venue debate so far The Arbitration and Conciliation Act, 1996 (‘Act’) uses the word ‘place’ of arbitration instead of ‘seat’ or ‘venue’ of the arbitration. Section 20 of the Act provides that either the parties can choose the place of arbitration mutually, in which case it would fall under Section 20(1) of the Act, or otherwise the Arbitral Tribunal can determine the place of arbitration under Article 20(2). In the same vein, the parties can choose a convenient place for holding arbitration proceedings as per Article 20(3) of the Act. Even though ‘seat’ and ‘venue’ have not been incorporated explicitly in the Act, the Supreme Court of India (‘SC’) in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services, Inc., (‘BALCO’) held the ‘place’ mentioned in Section 20(2) refers to the seat of arbitration, and in Section 20(3) refers to the venue of the Arbitration.In order to bring clarity and align the Act in line with BALCO, the Law Commission of India in its 246th Report suggested substituting ‘place’ in Section 20(2) with seat and with ‘venue in Section 20(3). However, these changes were not implemented in the 2015 Amendment and the statute still does not make an explicit reference to the ‘seat’and‘venue’ of arbitration. Although ‘seat’ and ‘venue’ have not been actively legislated upon, these concepts have been discussed and developed significantly by the Courts in India. For the purpose of this article, the key development in the seat vs venue conundrum in the context of domestic arbitration in India are discussed below In the 2017 decision of Indus Mobile Distribution Private Ltd v. Datawind Innovations Private & Ors (‘Indus Mobile’) the SC transplanted the international concept of ‘seat’ of arbitration in the context of domestic arbitration and ruled that if the arbitration clause confers exclusive jurisdiction upon the Courts of a particular city/state it is tantamount to designating that place as the ‘seat’ of arbitration and Courts of only that city/state will have the supervisor power over the conduct of the arbitration proceedings and provide relief. Principles laid down by the England and Wales High Court in Shashoua v Sharma were incorporated by the SC in the 2017 decision of Roger Shashoua & Ors v Mukesh Sharma, (‘Roger Shashoua’). The main principles that emerge out of Roger Shashoua are 1. The venue of arbitration is not automatically the same as the seat of arbitration. 2. The exception to (1) is a situation when the arbitration agreement defines the ‘venue’ of arbitration and mentions the supranational body of rules governing the arbitration without designating a seat explicitly. In such a scenario, if there are no other significant contrary indicia i.e. any information that leads to the opposite conclusion, then the venue of the arbitration is actually the seat of arbitration. The Courts have to analyze this issue based on the facts of each case. In the 2018 ruling of the Union of India v. Hardy Exploration and Production (India) Inc., (‘Hardy Exploration’) a three-judge bench of the SC laid down the following principle of determining the seat of arbitration 1. The venue of arbitration is not automatically the same as the seat of arbitration However if a concomitant factor is added to the venue, only then can the venue be equivalent to the seat of arbitration (‘concomitant factor test’). 2. If the arbitration agreement mentions the ‘place’ of arbitration, that in itself is not sufficient to consider it equivalent to the seat of arbitration. The presence of any contrary evidence would lead to the place not being the same as the seat of arbitration. 3. If the arbitration agreement mentions a condition precedent in connection to the place of arbitration, then the condition must be satisfied and only then can the place of arbitration be the same as the seat. In the 2019 decision of Brahmani River Pellets v. Kamachi Industries, (‘Brahmani’), the SC blurred the distinction between seat and venue as laid down in BALCO and held that merely specifying the venue of arbitration is sufficient to infer that the parties also intended to designate the venue as the seat of arbitration. Brahmani ignored the concomitant factor test of Hardy Exploration and simply equated the venue with the seat of arbitration. This question was revisited by the three-bench judge bench of SC in BGS SGS SOMA JV v NHPC Ltd., (‘BGS’). In BGS, the Court further developed the Roger Shashuatest and held that ‘venue’ of arbitration can also be the seat of arbitration if : 1. The seat of arbitration has not been designated in the arbitration agreement, and; 2. There is an express designation of ‘venue’ in the arbitration agreement combined with a supranational body of rules governing arbitration, and; 3. There are no significant contrary indicia The Court held that intention of the parties with respect to choosing a place as the seat of arbitration is to be gathered from the language of the arbitration agreement. BGS declared that Hardy Exploration was not in line with the 5 judge bench decision in BALCO, and therefore it was not good in law. In 2020, A three-judge bench of the SC in Mankastu Impex Pvt. Ltd. v. Airvisual Ltd., (‘Mankastu’)again aligned the reasoning with the concomitant factor test inHardy Exploration and held that place of arbitration does not automatically refer to the seat of arbitration. The Court has to gather the intention of the parties in connection to the seat of arbitration from a holistic reading of the arbitration agreement. In addition to the arbitration agreement, the conduct of the parties is also to be considered. The conundrum surrounding the seat/venue of the arbitration resurfaced recently in the context of domestic arbitration in M/s Inox Renewables Ltd v Jayesh Electricals Ltd.(“Inox”) (2021), where the division bench of the Supreme Court of India found that when the parties decided to shift the venue mentioned in the arbitration agreement from Jaipur to Ahmedabad through a mutual consensus, they intended the new ‘venue’ to in fact be the ‘seat’ of arbitration and not a mere ‘venue’. Therefore, the Courts of the ‘seat’ i.e. Ahmadabad will have exclusive jurisdiction to deal with the Section 34 application filed by M/s. Inox Renewables Ltd. (“Appellant”). Background Facts: The first contract was a purchase order agreement’ (“POA”) entered between M/s Gujarat Fluorochemicals Ltd. [“GFL”] and Jayesh Electricals Ltd. [“Respondent”] in 2012 for the manufacture and supply of power transformers at wind farms. The purchase order contained an arbitration clause that specified Jaipur as the venue for Arbitration and courts in Rajasthan to have exclusive jurisdiction to supervise the arbitration proceedings. However, in 2012 GFL transferred its entire business to the Appellant through a ‘business transfer agreement’ (“BTA”), to which the Respondent was not a party. This second agreement between GFL and Appellant fixed Vadodra as the seat of arbitration and gave exclusive jurisdiction to Courts in Vadodra. Procedural History: When the dispute between the appellant and respondent arose, the respondent approached the Gujarat High Court under Section 11 of the Indian Arbitration and Conciliation Act, 1996 (“Act”) for the appointment of an arbitrator. Accepting the request, the Gujarat High Court appointed a retired judge of the Gujarat High Court as the sole arbitrator. The arbitrator passed the award in 2018 in favour of the respondent. Aggrieved by the findings of the award, the appellant filed a Section 34 petition in Ahmedabad to set aside the award passed by the sole arbitrator. The Commercial Court of Ahmedabad held that it did not have the jurisdiction to entertain the Section 34 application because the arbitration clause in the BTA vests the Courts of Vadodara with the exclusive jurisdiction. The Appellant filed an appeal in the Gujarat High Court against this decision. The division bench of the High Court opined that the Commercial Court of Ahmedabad had erred by looking at the arbitration clause in the BTA. As mentioned before, the respondent was not a party to the BTA, and therefore the Commercial Court should have looked at the arbitration clause in the POA instead of the BTA. After pointing this out, the High Court held that the Courts of Rajasthan have been vested with the exclusive jurisdiction as per the arbitration clause in the POA. Therefore, the High Court dismissed the application filed by the appellant. Appeal against this decision came before the division bench comprising J Nariman and J Hrishikesh Roy. Reasoning: The Apex Court first looked at the observation made by the arbitrator in para 12.3 of the award with respect to the venue/place of the arbitration: “ 12.3 . . . However, the parties have mutually agreed, irrespective of a specific clause as to the [venue, that the place] of the arbitration would be at Ahmedabad and not at Jaipur. The proceedings, thus, have been conducted at Ahmedabad on the constitution of the Tribunal by the learned Nominee Judge of the Hon’ble High Court of Gujarat.”(Emphasis applied) It concluded that “by mutual agreement, parties have specifically shifted the venue/ place of arbitration from Jaipur to Ahmedabad.” Reaffirmation of the principle expounded in BSG SGS Soma The Supreme Court heavily relied on its previous decision in BGS SGS, wherein it was held that in the absence of any “significant contrary indicia” (i.e. significant contrary information), if the arbitration agreement names a place as a venue of arbitration, it is indicative of the parties intention to anchor the proceedings in that place and make it the seat of arbitration. In Inox, such contrary indicia was absent and there existed evidence of the positive intention of the party to designate Ahmedabad as the seat of arbitration: 1. The parties approached the Gujarat High Court for the appointment of the Sole arbitrator, which indicates that the parties had mutually formed the intention to override the exclusive jurisdiction clause in the arbitration agreement to make Ahmedabad the status of the seat of arbitration. 2. The arbitrator’s finding recorded the finding that the unequivocal intention of the parties was to shift the ‘seat’ of the arbitration from Jaipur to Ahmedabad through mutual consent. This finding was not objected to by the Respondent at that stage. Besides the finding, the conduct of the parties reveals that Ahmedabad was not merely a convenient venue for holding a few proceedings. The parties consciously novated their choice of seat. 3. The award was passed at Ahmedabad and was accordingly recorded in the arbitration award as the place of pronouncement and delivery of the award. Following the rule in BGS SGS, the Court reached the correct inference that in this case, Ahmedabad displayed attributes of the ‘seat’ of the arbitration and not merely the ‘venue’, and this was in fact intended by the parties through their mutual consent. It is appreciable that the Apex Court did not adopt a literal interpretation of the arbitration clause like the Gujarat High Court, and rather paid attention to the intention that the parties expressed in choosing to make Ahmedabad the new seat for arbitration through mutual consent. Applying the Concomitant factors test to the facts of Inox Before Inox, there seems to be developing two distinct lines of judicial opinion in determining the seat of arbitration: one line follows the principle in Roger Shahshua as consolidated in BGS SGS and believes that venue of the arbitration can also be the seat if there are no significant contrary indicia, and the other line of judicial opinion favours the concomitant factor test of Hardy Exploration along with the addition made by Mankatsu to it. Inox has clearly chosen to follow the BGS SGS line of judicial opinion. However, it would be instructive from an academic perspective to apply the contrasting approach in Hardy Exploration to inspect how it might have affected the Court’s conclusion in Inox. The Apex Court had adopted a contrasting approach to BGS SGS in its three-judge bench decision of Union of India v. Hardy Exploration and Production (India) Inc. (“Hardy Exploration”) in 2018, wherein it had observed that the venue can become the seat of arbitration only if ‘something else is added to it as a concomitant’. Even though BGS SGS held Hardy Exploration to be contrary to Supreme Court’s ruling in BALCO, it cannot be said that Hardy Exploration has been overruled because of the equal bench strength in Hardy Exploration and BGS SGS. As held in the 2004 Supreme Court decision of five bench in Central Board of Dawoodi Bohra Community &Anr v. State of Maharashtra &Anr, a bench of coequal strength can only doubt the correctness of a previous bench of coequal strength, but cannot overrule it or hold a previous decision by such coequal bench to be per incurium. Until the question is finally settled by a bench of 5 judge strength, it cannot be conclusively said that Hardy Exploration has been overruled by BGS SGS. The ‘concomitant’ factors in favour of Ahmedabad were: 1. That the parties first approached the Gujarat High Court in Ahmedabad for the appointment of the arbitrator and expressed clear intent of designating Ahmedabad as the seat of the arbitration. 2. A similar intention was reiterated before the sole arbitrator and the same was recorded in the award. These factors also satisfy the test laid down in Mankatsu wherein the three-judge bench of SC followed Hardy Exploration’s dictum and held that the venue of arbitration does not automatically become its seat. The test in Mankatsu gave primacy to the intention of the parties which could be gathered from a holistic reading of the arbitration clause and considering the conduct of parties. Considering the chain of events holistically, the arbitration clause was novated. Even the conduct of the parties as evident from the above two points clearly indicates that the parties intended Ahmedabad to be the seat of arbitration. Can the seat of arbitration be shifted only through a written agreement? The Court in Inox correctly distinguished the instant fact scenario from the 2011 division bench decision of Videocon Industries Limited vs. Union of India & Anr.(“Videocon”). In Videocon, the arbitration agreement contained an amendment clause that allowed for amendment or modification of contract only through a written agreement between the parties. Giving heed to this explicit requirement imposed by the arbitration agreement, the Apex Court had held that if the parties wanted to amend the contract and change the seat of arbitration through mutual agreement, it could only be done when the agreement is recorded in writing. However as J Nariman aptly pointed out in Inox, the ruling in Videocon cannot be extended to those cases where a similar clause in the arbitration agreement mandating ‘amendment only through written agreement’ is absent. Hence, Videocon does not lay down the general principle of law that the place of arbitration can only be shifted through a written agreement, and is rather a fact-specific decision that has no applicability to the factual matrix in Inox. A surprising conversion of venue to the seat of arbitration? Although the decision in Inox lays down the correct law, it has not sufficiently dealt with an important facet highlighted by division bench of Delhi High Court in its 2019 ruling of Dwarika Projects Limited v. Superintending Engineer, Karnal, PWD (B&R), Haryana that ‘the parties cannot be taken by surprise and be told that the venue for arbitration had morphed into the juridical seat of arbitration.’ The arbitral tribunal should fix the jurisdictional seat of the arbitration only after deliberation with the parties involved. Can it then be said that the Respondent was not ad idem with the appellant and therefore was taken by surprise about Ahmedabad being the seat of the arbitration as opposed to a mere venue? It seems unlikely that the respondent was taken by surprise, because at the time of the appointment of the arbitrator, it had made joint submissions before the Gujarat High Court along with the appellant, and displayed consensus of making Ahmedabad both the seat and the venue of the arbitration. Thus, the respondent consciously novated the venue of arbitration specified in the purchase order, with a new choice of ‘seat’ through their express averments before the Court. Conclusion Litigation on the determination of the seat/venue conundrum is becoming increasingly rampant. This case highlights the need for the arbitration clauses to be drafted carefully and with precision. Arbitration clauses should specify the ‘seat’ and ‘venue’ of arbitration distinctly to ensure that the effectiveness and finality of the arbitration mechanism are not eclipsed by long-drawn litigation proceedings afterwards. Furthermore, clarity can be brought into Section 20 itself by implementing the suggestions of the 246th Law Commission of India Report. Usage of the word ‘Place’ has caused immense confusion and therefore to bring the Arbitration Act in line with the judicial interpretation, ‘place’ should be replaced with ‘seat’ in Section 20(2) and with ‘venue’ in Section 20(3). The Arbitral Tribunal can also play a pivotal role in this respect to reduce litigation on the vexed question of determining the seat/venue of arbitration. Similar to Inox, wherein the Sole Arbitrator recorded the intention of the parties to affix Ahmedabad with the status of the seat in the Arbitral Award itself, Arbitral Tribunals in other proceedings can record the party’s intentions in clear unambiguous language. If the matter then goes before the Courts, such clear expression with respect to the party’s intention would greatly facilitate the Courts in deciding the question. Inox will be binding on such cases before the Indian Courts where the seat of the arbitration has not been declared and only the venue of arbitration has been identified in the arbitration clause. If the conduct of the parties shows that the venue was in fact intended to be the seat, then the Court would consider the venue to be tantamount to the seat of arbitration in such cases. It is indeed appreciable that by determining the seat of arbitration in the context of the intention displayed by the parties and by looking at the conceptual essence of a seat vis-à-vis venue of arbitration, the Supreme Court of India in Inox has successfully managed to digress from the narrow reasoning adopted by the Gujarat High Court that took a literal interpretation of the arbitration clause. Such an approach is welcome and it can be expected that this case law will set the evolving Indian jurisprudence on the seat/venue conundrum of the arbitration on the correct course of development. *-Harshvardhan Tripathi is a 5th-year student at NALSAR University of Law, Hyderabad.

- Pranshi Gaur & Samarth Kapoor* The recent amendments to the Arbitration and Conciliation Act, 1996 (hereinafter, “the Act”) have been aimed to bolster the arbitration laws in India. The amendments were made with the intention to reduce judicial intervention in arbitration proceedings, develop a framework for speedy completion of arbitral proceedings, and make India a commercial arbitration hub. Anti-Arbitration injunctions are restraint orders granted by the courts against the continuation or the commencement of arbitration proceedings. The way the judiciary has performed its duty by promoting and upholding the sanctity of arbitration agreements is very much appreciated. However, the judiciary has been intervening in such matters by issuing injunctions against arbitral proceedings. This is because certain powers are granted by the Act u/s 8 and 45, to the courts to intervene in cases where the agreement seems to be vitiated by fraud, is null and void, is incapable of being performed, or is oppressive. This article would endeavor to understand the nuances of this principle as well as the circumstances under which, courts are entitled to grant such an injunction. What is Anti-Arbitration Injunction? The terminology used in, an injunction granted by the civil courts which negate the continuation or even the commencement of arbitration proceedings is called an anti-arbitration injunction.[i] Generally, the parties take this recourse before the commencement of the arbitration proceedings, but it is not restricted to that and the same can be availed before the tribunal passes the final award. Many say this rule vitiates the very essence of the idea behind making arbitral tribunals independent of judicial intervention; the power for which has been given u/s 16[ii] read with s. 5[iii] of the Act. However, the proponents of this remedy argue that this rule will be helpful in streamlining the arbitration procedure itself. It will play a key role in weeding out the cases where there is no arbitration agreement in the first place, or the agreement is vitiated by fraud or, where the initiation of arbitration proceedings in itself would be considered “oppressive” or “vexatious” in nature. There is neither any explicit bar nor any mention in the Act regarding injunctions to be granted by the Indian courts. The provision that revolves around this principle and the provision which rebuts the idea of judicial intervention in arbitration proceedings is enshrined in the Act. However, they are not directly linked with this remedy. Critics of this remedy rely on s. 5 and 16 of the Act. S. 5 provides for the independence of the arbitral tribunal to resolve all disputes related to any arbitration matter before it. On the same footing, s. 16 talks about the competence of an arbitral tribunal to rule on matters pertaining to its jurisdiction. This includes matters that relate to the validity of the arbitration agreement. The provision further states that the only remedy that an aggrieved has is to challenge the award passed u/s 34[iv] of the Act. The deliberate exclusion of s. 48 of the Act makes it clear that the provision is only applicable in domestic arbitration and not in the case of foreign arbitration. Also, the critics of this remedy, while arguing for the exclusion of the judicial intervention, forget to cite s. 8 and 45 of the Act.[v] While the Act backs minimal judicial intervention, it does not completely rule out the probability of it. S. 8[vi] of the Act talks about the duty of the court to refer parties to the arbitration. This provision got amended in 2015 to state that reference to arbitration should not be made if the court is prima facie satisfied that the agreement is null and void. It also mentions certain pre-conditions that are to be fulfilled before referring a matter to arbitration. In the case of P. Anand Gajapathi Raju v. P.V.G. Raju (Died),[vii] while analyzing the provision, the Hon’ble Apex Court held that, “The conditions which are required to be satisfied under Sub-sections (1) and (2) of Section 8 before the Court can exercise its powers are (1) there is an arbitration agreement; (2) a party to the agreement brings an action in the Court against the other party; (3) subject matter of the action is the same as the subject matter of the arbitration agreement; (4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. .... The language of Section 8 is per-emptory.” S. 45[viii] of the Act deals with the duty of the Courts to refer the matter to arbitration in case of foreign arbitration. However, the provision clearly states that in case the courts, prima facie, find that the agreement is void or is incapable of being performed, then such reference shall not be made. Now, by a conjoint reading of the provisions of s. 8 & 45, one can clearly make out that the remedy provided in the form of anti-arbitration injunction suits has its place in the Act itself in the form of limited judicial intervention. The Hon’ble Apex Court has, on many occasions,[ix] held that courts are free to decline application seeking reference to arbitration if there exist some serious allegations of fraud for which heavy scrutiny of evidence is needed and courts guided by the Indian Evidence Act, Code of Criminal Procedure, and Code of Civil Procedure may be more competent to decide the issue. The Kompetenz-Kompetenz Principle Indian arbitration law follows the principle of Kompetenz-Kompetenz (or Competence-Competence) which is enshrined u/s 16 of the Act. According to this provision, the arbitral tribunal is sufficient to determine and rule out the issue of its own jurisdiction, including the validity of the arbitration agreement. This cardinal principle finds its place in the Indian arbitration law with an objective to ensure that the arbitration proceedings won’t be hindered just because of the primary objection raised by one of the parties. This principle is recognized by many scholars as the “backbone principle” of arbitration law and finds its place in laws governing arbitration globally. In the case of Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd.,[x] the Supreme Court, while examining and interpreting the provisions of s. 11 & 16 applied the principle of Kompetenz-Kompetenz and held that the dispute related to the arbitrability should be decided by the tribunal itself and courts can interfere only when there is no agreement at all or whether the consent to enter into an agreement is vitiated by fraud or misrepresentation.[xi] Similarly, the recent case of N.N. Global Mercantile v. Indo Unique Flame Ltd.[xii] observed the Kompetenz-Kompetenz principle and held that, “The doctrine of kompetenz-kompetenz implies that the arbitral tribunal has the competence to determine and Rule on its own jurisdiction, including objections with respect to the existence, validity, and scope of the arbitration agreement, in the first instance, which is subject to judicial scrutiny by the courts at a later stage of the proceedings. Under the Arbitration Act, the challenge before the Court is maintainable only after the final award is passed as provided by Sub-section (6) of Section 16.” Further, the decisions of the Supreme Court in the cases of SBP & Co. v. Patel Engineering Ltd.[xiii] and Kvaerner Cementation India Ltd. v. Bajranglal Agarwal[xiv] are also in line with this judgment as both the cases interpreted s. 16 to determine whether the tribunal has exclusive jurisdiction due to the Kompetenz-Kompetenz principle. In both, the judgments court had emphasized this principle, but the issue still persists. With so many judgments quoting different opinions, one cannot render a position of exclusivity to the tribunal to decide matters of jurisdiction including the issue of the validity of arbitration agreements. Precedents laid down: The jurisprudence regarding the law Courts in India have, in the past, dealt with the issue of granting anti-arbitration injunctions on many occasions. Even after numerous deliberations and discussions about the same, the issue stands unresolved and the jurisprudence evolved is still not conclusive. In the case of Kvaerner Cementation, the Hon’ble Apex Court, while dealing with the issue of granting an anti-arbitration injunction held that civil court does not have the power to determine the jurisdiction of arbitration tribunals-(including the validity of arbitration agreement). With this judgment, the Supreme Court emphasized the objectives of the Act and the need for minimal intervention of the judiciary in arbitration matters. This judgment was reaffirmed in the case of A. Ayyasamy v. A. Paramasivam.[xv] In the case of National Aluminium Company Ltd. v. Subhash Infra Engineers Pvt. Ltd.,[xvi] the Supreme Court relied on the Kvaerner Cementation judgment and held that any dispute, whether in relation to jurisdiction[xvii] or the validity of the arbitration agreement, should be raised before the arbitrator only and Civil Courts have no jurisdiction over the matter. While some judgments rule out judicial intervention by relying on Kvaerner Cementation judgment, there are some judgments that support the idea of judicial intervention to some extent. In the case of SBP & Co., the Supreme Court partially overruled the Kvaerner Cementation Judgment, however as the 2001 judgment was reported after 11 years, i.e., in 2012, so it is quite difficult to adjudge that whether the Kvaerner Cementation has been overruled or is still contingent. In the SBP judgment, the Supreme Court held that the courts have the duty to first scrutinize the arbitration agreement before referring the matter to arbitration. The Supreme Court interpreted the provision of s. 16 and held that arbitral tribunals are competent only in those cases where the issue is raised before the arbitrator. This decision by the Supreme Court in the case of SBP & Co. was referred to in many subsequent cases. In the case of Chatterjee Petrochem Co. v. Haldia Petrochemicals Ltd.,[xviii] the Supreme Court accepted the power of the courts to grant an injunction and to rule on the validity of the arbitration agreement. Similarly, the Calcutta High Court in the case of The Board of Trustees of the Port of Kolkata v. Louis Dreyfus Armatures SAS,[xix] held that with respect to s. 8 and 45 of the Act, the courts have the power to grant the anti-arbitration injunctions in cases where the agreement is null and void, it is oppressive to continue the proceedings, or the agreement is incapable of being performed. Relying on Chatterjee Petrochem judgment, the Supreme Court in the case of World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd.,[xx] held that there is no explicit bar under the Act on the maintainability of anti-arbitration Injunction suits, hence the suit is maintainable. Similarly, in the case of McDonald’s India Pvt. Ltd. v. Vikram Bakshi,[xxi] Delhi High Court relied on the judgment of World Sport Group and held that if there is proof of the agreement being null and void, then the Civil Courts have the jurisdiction to grant anti-arbitration injunctions. A way to move ahead As discussed above, the jurisprudence around this concept remains unclear and confusing because of the different stance taken by the High Courts and the Supreme Court. However, it is clear by the judgments that Courts only grant injunctions in the cases of “Compelling Circumstances,” i.e., only in those cases where the agreement is null and void, or is prima facie incapable of being performed, or it would be oppressive to continue with arbitration. Going by the latest judgment of Delhi High Court in the case of Bina Modi v. Lalit Kumar Modi,[xxii] referring to s. 16 of the Act and relying on the judgments of Kvaerner Cementation and National Aluminium, the Court held that the Civil Court has no power to restrain or grant anti-arbitration injunctions in view of the Kompetenz-Kompetenz principle. Also, it was held that the Act is in itself a complete code and it empowers the tribunal to rule on its own jurisdiction, including cases w.r.t validity of arbitration agreement. However, the tables were turned by the Calcutta High Court in the case of Balasore Alloys Ltd. v. Medima LLC,[xxiii] where it was held that Indian Courts have the jurisdiction to grant anti-arbitration injunctions and the judgment given by the Delhi High Court in the Bina Modi case does not hold any precedential value. The important question that needs to be addressed is, “whether there is a need to amend the present Act to add a proviso to completely exclude judicial intervention and everything will be decided by the tribunal itself?”. The answer to this question will be negative as there is a fine balance between the autonomy of an arbitral tribunal and the power of courts under the Act, as according to the provisions of the Act, courts can intervene in compelling circumstances only. There is no doubt with regards to the Pro-Arbitration approach that India should adopt, but some situations can arise where judicial intervention is required. The law on this aspect is still evolving but it will be interesting to see what will be the approach of the Supreme Court and the High Courts in coming years with regard to the power of the Civil Court and the maintainability of anti-arbitration injunction suits. * 3rd Year Students (Batch of 2018-23), B.A., LL.B. (Hons.), Maharashtra National Law University, Aurangabad. [i] Lomesh Kiran Nidumuri, India's approach to anti-arbitration injunction suits: Step in the right direction?, Bar and Bench (May 7, 2021, 9:34 PM), https://www.barandbench.com/columns/indias-approach-to-anti-arbitration-injunction-suits-step-in-the-right-direction. [ii] The Arbitration and Conciliation Act, 1996, No. 26 of 1996, Acts of Parliament, 1996, §16. [iii] The Arbitration and Conciliation Act, 1996, No. 26 of 1996, Acts of Parliament, 1996, §5. [iv] The Arbitration and Conciliation Act, 1996, No. 26 of 1996, Acts of Parliament, 1996, §34. [v] Rajat Jaiswal & Shruti Khanijow, Anti-Arbitration Injunctions: Use and Controversy, Lexology (May 7, 2021, 1:48 AM), https://www.lexology.com/library/detail.aspx?g=34200c24-71f4-4484-9f74-93a79aeba604. [vi] The Arbitration and Conciliation Act, 1996, No. 26 of 1996, Acts of Parliament, 1996, §8. [vii] P. Anand Gajapathi Raju v. P.V.G. Raju (Died), (2000) 4 SCC 539. [viii] The Arbitration and Conciliation Act, 1996, No. 26 of 1996, Acts of Parliament, 1996, §45. [ix]N. Radhakrishnan v. Maestro Engineers and Ors., 2009 (13) SCALE 403; A. Ayyaswamy v. A. Paramasivam, AIR 2016 SC 4675; Avitel Post Studioz Limited and Ors. v. HSBC PI Holdings (Mauritius) Limited and Ors., (2020) 6 MLJ 544. [x] Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., AIR 2020 SC 979. [xi] Mayank Jain, A-Z of ADR: Kompetenz-Kompetenz Principle, BIMACC (May 7, 2021, 5:14 PM), https://www.bimacc.org/a-z-of-adr-kompetenz-kompetenz-principle/. [xii] N.N. Global Mercantile v. Indo Unique Flame Ltd., (2021) 1 MLJ 708. [xiii] SBP & Co. v. Patel Engineering, AIR 2006 SC 4675. [xiv] Kvaerner Cementation India Ltd. v. Bajranglal Agarwal, (2012) 5 SCC 214. [xv] A. Ayyasamy v. A. Paramasivam, AIR 2016 SC 4675. [xvi] National Aluminium Company Ltd. v. Subhash Infra Engineers Pvt. Ltd., 2019 (5) ArbLR 254 (SC). [xvii] Ravi Arya v. Palmview Investments Overseas, 2019 (6) ArbLR 321 (Bom.). [xviii] Chatterjee Petrochem Co. v. Haldia Petrochemicals Ltd., 2013 (15) SCALE 45. [xix] The Board of Trustees of the Port of Kolkata v. Louis Dreyfus Armatures SAS, 2014 SCC Online Cal. 17695. [xx] World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd., (2014) 11 SCC 639. [xxi] McDonald’s India Pvt. Ltd. v. Vikram Bakshi, 2016 (4) ArbLR 250 (Delhi). [xxii] Bina Modi v. Lalit Kumar Modi, 2021 (1) ArbLR 1 (Delhi). [xxiii] Balasore Alloys Ltd. v. Medima LLC, (2020) SCC Online Cal. 1698.

- Utkarsha Singh[1] & Iesha sharma[2] Introduction In India, the enforcement of arbitral awards is covered in two parts by the Indian Arbitration and Conciliation Act 1996. Part I of the act applies to the arbitration proceedings seated in India and includes purely domestic arbitrations (between Indian parties) as well as international commercial arbitrations (where at least one party is foreign). Part II of the law applies to foreign arbitration and is concerned with the recognition and enforcement of foreign awards. In addition, the Act specifies that arbitration between an Indian and a foreign party may be governed by foreign law and may have a foreign seat. However, the question of whether two parties of Indian origin can agree on a foreign seat of arbitration is not expressly addressed by the Act. Multinational companies often prefer a foreign arbitration venue for contracts involving their subsidiaries incorporated in India. However, they were discouraged from choosing a foreign seat due to uncertainty regarding the stand of the Indian laws and courts regarding this matter. These ambiguities stand resolved after the latest landmark judgment of the Supreme Court of India. Factual Background The parameters for choosing a foreign seat of arbitration were set in the recent case of PASL Wind solutions Private Limited V. GE Power conversion India Private Limited[3]the two companies were incorporated under the Companies Act, 1956. The facts of the case arose from the order placed by PASL for the purchases of three converters (used for wind turbines) involving the dispute regarding the Warranty (Quality) of goods supplied. The settlement agreement between the parties consisted of the clause for Dispute resolution if at all the settlement lapsed between the parties. The Clause also reflected that such matter should be resolved by an “Arbitration Proceeding in Zurich, Switzerland” with adherence to the rules by the International Chamber of commerce (ICC). The imperative understanding of the Agreement which the parties entered was incorporated under the Indian Contract Act, 1872. The parties failed to resolve the issue, and went ahead to settle the dispute through arbitration. PASL filed for the arbitration proceedings on grounds that GE did not adhere to the agreement. The seat for arbitration was decided to be in Mumbai, India. During the pendency of the arbitral proceedings, GE believed that the ICC Tribunal had no jurisdiction when it comes to determining the proceedings of two Indian corporations for the foreign seat of arbitration. PASL argued that there was no such bar in the Indian Law. GE did not challenge such a decision, the final award was in the favor of GE, and PASL refused the payment of the final award. However, in consonance with this award, GE filed for interim measures before the Honourable Gujarat High Court to enforce the award passed by the Tribunal under Section 47 and 49 of Arbitration and Conciliation Act, 1996 also for pending enforcement of an award under Section 9 of Arbitration Act. The PASL objected to the enforcement of the award as it was in contravention of the public policy and did not permit arbitration in a foreign seat and that the seat of arbitration should be in Mumbai. The Gujarat High Court enumerated that a petition under Section 9 of the Act was not maintainable and upheld the award in favour of GE. Both PASL and GE challenged the High court’s decision on the validity of the seat of arbitration. Pronouncement of the Case The Key arguments raised by the Parties in the Supreme Court concerning the designation of the seat of the arbitration outside India as read-in with the provision of the Indian laws. The Indian parties are free to choose the foreign seat of the arbitration, wherein the Indian company is a subsidiary of a foreign company, it may prefer to resolve the dispute at a neutral forum. The complexity of the transition contained therein is “Party-Centric” - which involves the agreements between the parties to select a substantive and procedural law for governance during their arbitration proceeding. The development resolves to assume the relevance of such cases for mutual exclusivity, where it complies with the Indian laws, the parties can have different seats for different contracts that are part of the same transaction. The choice of the commonly designated seat for the arbitration across the agreement is no longer applicable, irrespective of their nationality. The award passed outside India will be considered as a foreign award, it would be susceptible to be challenged in India during the execution proceeding in Indian Court on the narrow grounds of the New York Convention, Part II of the Arbitration Act, with the respect to the foreign award under Section 44 of the Arbitration Act. The Indian parties can opt for the foreign seat, and they have the recourse for interim relief in the Indian courts if the asset against which the foreign award is given for seeking the interim relief, is in India. There is an Exception that if the parties are in the agreement which is contrary as specified in Section 2(2), then parties are prevented from taking recourse under section 9 of the Arbitration Act. The option for the Indian parties to choose India as the seat for the arbitration remains open under Part I of the arbitration act and would be governed under Section 28 of the Arbitration act. The Court relented that the test of the seat for the applicability of section 28 of the Indian contract act is restricted to the substantive law of the contract and does not apply to the seat of the arbitration[4]. The Indian Contract Act does not expressly define the term “public policy” or “opposed to public policy”. Exception 1 of Section 28 of the Contract Law specifically and expressly saves the arbitration of disputes between two persons without reference to the nationality of the persons who may resort to arbitration where parties get the freedom of contract and it creates a balance with clear and undeniable harm to the public, even if the facts of a particular case do not fit within the crystallized principles listed in well-established "heads" of public policy. The court in the case Atlas Export Industries v. Kotak & Co[5], referred to the said exception to Section 28 and found that there is nothing in section 23 or section 28 that prohibits two Indian parties from having their disputes arbitrated in a neutral forum outside India. Therefore it can be clearly understood that the doctrine of public policy provided in the Indian substantive law does not prevent two Indian parties from referring their disputes to arbitration in a neutral forum outside India while exercising their right of party autonomy. Conclusive Analysis and Way Forward The decision in the case came as a relief on various fronts. Firstly, it provided recognition to the doctrine of party autonomy and highlighted the fact that the Indian laws do not place any bar over the parties to choose a foreign seat of arbitration. Secondly, the decision, in this case, brought to rest many conflicting decisions of the High Courts and of the Supreme Court itself. Thirdly, it is possible to infer from the judgment that there is no obstacle for two Indian parties while choosing a foreign substantive law to govern their contract, as long as the arbitration proceeding is seated outside India.[6] In this context, it is relevant to mention the recent decision of the Delhi High Court in the case of Dholi Spintex Pvt Ltd v. Louis Dreyfus Company India Pvt Ltd, according to which two Indian parties can normally choose a foreign law to govern arbitration proceedings. The Court relied on the decision of three Supreme Court justices in Centrotrade Minerals and Metal Inc. v. Hindustan Copper Ltd. which emphasized the principle of party autonomy in arbitration and came to the conclusion that parties are allowed to adopt foreign law as their own arbitration law. The Delhi High Court, therefore, held that to reject a foreign law only because it is contrary to an Indian law would go against the very basis of private international law, to which India unquestionably and undisputedly subscribes. The question regarding the possibility for Indian parties to choose a foreign seat was critical for foreign companies (such as GE France and GE USA) which had their subsidiaries in India. The decision, in this case, came as a turning point in the history of foreign arbitration. These foreign companies preferred settling the disputes between Indian subsidiaries and other Indian parties outside India for various reasons such as neutrality, efficient supervision of courts, speedy and efficient disposal of cases in the court in case a challenge regarding the arbitration award arises. While the impact of the Supreme Court decision, in this case, remains to be seen, it has immensely contributed to generating an element of judicial certainty. [1] The name of the author of this article is Utkarsha Singh. She is a Fourth-Year student studying at the University of Petroleum and energy studies, Dehradun Email id- Utkarshasingh669@gmail.com [2] The name of the author of this article is Iesha Sharma. She is a Fourth-Year student studying at the University of Petroleum and energy studies, Dehradun Email id- ieshasharma2000.5678@gmail.com [3]SLP (CIVIL) NO.3936 OF 2021 [4] Bharat Aluminium Co. V Kaiser Aluminium Inc. (2012)9 SCC 552 [5] Atlas Export Industries v. Kotak & Co (1999) 7 SCC 61 [6] Paragraph 51 of the Judgment

-Rohan Gulati* INTRODUCTION While unraveling the curtains of party autonomy in arbitration, the aspect of two Indian parties selecting a foreign seat of arbitration had always been a hard tussle. This tussle was solely attributed to conflicting judgments delivered by the courts in India. Varied interpretations, fallacies, and at times, overlooking logical intricacies, the issue of selecting a foreign seat has certainly been a book with many chapters. Fortunately, the Hon’ble Supreme Court of India (“Court”) decided to write the last chapter of this book and settle all mounting issues on the subject once and for all. Recently, in the case of PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd.[1] (“PASL Wind”) the Court has affirmed that two Indian parties may select a foreign seat of arbitration and that nothing would stand in the way of brooding party autonomy. Whilst the judgment is laudable in every sense, there are a few red flags that stakeholders must be aware of as a result of this decision and moving forward. As a caveat, the purpose of this article is not to dim the lights upon the arbitration landscape in India and neither to portray a critique of the judgment in the case of PASL Wind. FLAGGING CERTAIN WORDS OF CAUTION The judgment of the Court in PASL Wind is certainly a flag bearer of the pro-arbitration stance that has been maintained by the Court. However, there exist certain pivotal aspects that may hinder and disrupt two Indian parties arbitrating outside India. These facets are predominantly an offshoot of the judgments in the past. Accordingly, this part succinctly discusses certain facets that stakeholders must be cautious of, in light of the recent decision in PASL Wind. A. The Absence of Patent Illegality in International Commercial Arbitration Section 34(2A) encapsulates Patent Illegality as a ground for setting aside an arbitral award under Part I of the Arbitration and Conciliation Act, 1996 (“1996 Act”). Before deep-diving into the moot point, it is perhaps appropriate to first understand the concept of Patent Illegality. An authoritative explanation of Patent Illegality was given by the Court in the case of Associate Builders v. DDA[2] (“Associate Builders”) wherein it observed that Patent Illegality would mean (i) contravention to the substantive law of India, (ii) contravention of the 1996 Act itself, or (iii) in case the arbitrator construes the terms of the contract in a way that no reasonable person could do. However, Section 34(2A) being exclusive to Part I of the 1996 Act, does not apply to Part II, as provided by the Arbitration and Conciliation (Amendment) Act, 2015. Section 48 is based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) replicates Article V for refusing enforcement of foreign awards. Due to the absence of Patent Illegality under Section 48, the parties could potentially escape the scrutiny of such ground as Section 34(2A) would have no operation in a foreign seated arbitration. This may have certain ramifications to an extent. For instance, an arbitral award that lacks reasoning and is essentially a non-speaking award is considered to be perverse and liable to be set aside on the ground of being patently illegal. This finds support from the case of Ssangyong Engg. & Construction Co. Ltd. v. NHAI[3] (“Ssangyong”)wherein the Court observed as follows: “41. What is important to note is that a decision which is perverse, as understood in paras 31 and 32 of Associate Builders… while no longer being a ground for challenge under “public policy of India”, would certainly amount to a patent illegality appearing on the face of the award. Thus, 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 ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse.” Notably, transporting the afore-stated observation and applying the same to the case of Campos Brothers Farms v. Matru Bhumi Supply Chain Pvt. Ltd.[4], the Delhi High Court, while adjudicating upon a foreign award that lacked reasons, had refused to enforce the award on the ground being contrary to the public policy of India. At this stage, considering the absence of Patent Illegality under Section 48 and its components thereof, was the decision necessitated to be forced into the head of public policy? On this point, the decision in the case of Ssangyong had observed – what cannot be found to be contrary to the public policy of India certainly cannot be brought in by the backdoor of patent illegality. When read with the decision of the Court in PASL Wind, in case two Indian parties decide to arbitrate outside India, the parties would be able to escape the ground of Patent Illegality. Prima facie, this may not seem problematic. Albeit, from the afore-stated instance and the precedents so far, it is likely to raise certain questions as to the facets that parties could potentially derogate from. These facets perhaps reflect pertinent principles of arbitration law in India and at times the non-availability of such a ground may trouble the award-debtor and preclude him from pleading the same. Therefore, it remains indispensable that stakeholders are conscious and well aware of not being able to rely upon Patent Illegality as a ground for resisting enforcement under Section 48 of the 1996 Act. On the other hand, the courts must be cautious about trying to fit square pegs in a round hole. B. The Choice of Institutional Rules vis-à-vis Interim Relief under Section 9 Notably, the Delhi High Court in the case of Ashwani Minda v. U-Shin Ltd.[5] (“Ashwani Minda”), had made certain interesting observations concerning the choice of institutional rules and its effect on the availability of Section 9 of the 1996 Act. The Delhi High Court while dismissing the Section 9 petition had observed that as the parties agreed to arbitrate in accordance with the Japanese Commercial Arbitration Association (“JCAA”) Rules, and that there was an ‘implied’ essence of an agreement to exclude Part I of the 1996 Act in its entirety. Whereas, under Section 2(2) of the 1996 Act, there must be an [express] agreement to the contrary i.e., an agreement between parties to exclude the availability of reliefs that could be claimed under Section 9 of the 1996 Act in a foreign seated arbitration. Interestingly, there never existed any agreement to the contrary between the parties,[6] and neither did the JCAA Rules preclude parties from seeking interim relief from a national court. Thus, the Delhi High Court impliedly observed that the choice of institutional rules may potentially disentitle the parties from seeking relief under Section 9 of the 1996 Act in case of international commercial arbitration.[7] Given the judgment in the case of PASL Wind, two Indian parties arbitrating outside India under the aegis of certain institutional rules could very well be impacted by the decision in the case of Ashwani Minda. For instance, in case two Indian parties select the JCAA Rules for arbitration, and due to the absence of any rules qua the compatibility of JCAA Rules with interim relief from national courts, by applying the judgment of Ashwani Minda, such parties may not be able to seek interim reliefs from courts in India. On the other hand, in case two Indian parties decide to arbitrate as per the Singapore International Arbitration Centre (“SIAC”) Rules, they may be safeguarded by neatly drafted provisions such as Rule 30.3 of SIAC Rules allowing parties to seek interim relief from national courts that reads as follows: “30.3 A request for interim relief made by a party to a judicial authority prior to the constitution of the Tribunal, or in exceptional circumstances thereafter, is not incompatible with these Rules.” Therefore, while the decision of PASL Wind may seem lucrative enough, it remains imperative for parties to be cautious of institutional rules that are silent upon compatibility with claiming interim relief from national courts. Judgments like Ashwani Minda must be learning lessons and precursors to decisions like PASL Wind and the parties being inspired by the same. C. Indian Courts must not revive the Doctrine of Double Exequatur Interestingly, in the decision of PASL Wind, the Court observed that award-debtors will have ‘two bites at the cherry’ i.e., (i) when availing recourse to a court or tribunal in a country outside India for setting aside the award, and (ii) when resisting enforcement under Section 48 of the 1996 Act in the Indian courts. The point that the parties could have two bites at the cherry could perhaps lead to the revival of the Doctrine of Double Exequatur. Under the Convention on Execution of Foreign Arbitral Awards (“Geneva Convention”) 1927, there existed a requirement that the award-holder must obtain leave from the court at the seat of arbitration first, and only then could the award be enforced in the secondary jurisdiction. This prerequisite under the Geneva Convention was termed as Double Exequatur. However, this requirement was done away with by the New York Convention, which superseded the Geneva Convention and does not require the award-holder to obtain leave from the court of the seat, under the laws of which, the award was made. Under the Indian framework, Section 48(1)(e) 1996 Act replicated Article V(e) of the New York Convention that dispenses the requirement of Double Exequatur. On the international front, the New York Convention did away with the concept, and in India, it was expressly put to rest in the case of Escorts Ltd. v. Universal Tractor Holding[8] (“Escorts Ltd”). The Court had held that Double Exequatur is not applicable in India in light of the 1996 Act and rejected the argument that a foreign award could not be enforced in India unless the relevant foreign court affirms the same. Pertinently, it is not necessary for the Indian court to adjourn the enforcement proceedings on account of the award-debtor having merely filed an application to set aside the award before the court at the seat of the arbitration. If it is done, it would lead to the revival of Double Exequatur that is incompatible with not only the New York Convention but also contrary to the judgment in Escorts Ltd. Therefore, merely because two Indian parties are arbitrating outside India and have impliedly agreed to have two bites at the cherry, must not put the Indian courts in a situation that may revive Double Exequatur. If there really exists a brooding sense of party autonomy, in appropriate cases, foreign awards must be enforced in India notwithstanding any judicial review before the court at the seat of arbitration. D. The (mis)use of Right to Appeal under Section 50 Section 50(1)(b) of the 1996 Act is a statutory sword essentially for the award-holder in a case where the court in India may decide to refuse enforcement of the award. However, this statutory sword has often been deployed by the award-debtor in light of sub-section (2) attached to Section 50 by way of a Special Leave to Appeal under Article 136 of the Constitution of India. The words – ‘right to appeal’ under Section 50 has been wrongly construed by award-debtors on several occasions. In this regard, the Court in the case of Shin-Etsu Chemical Company Ltd. & Ors. v. Vindhya Telelinks Ltd. & Ors.[9] had categorically observed that, in the absence of a constitutional or statutory provision for an appeal as of right, an appellant could not contend that it had a right to appeal to the Court. Article 136 does not confer a right to appeal but rather a discretion on the Court to grant leave in appropriate cases. Insofar as the contours of Section 50 are concerned, in the case of Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL & Ors.[10], the Court authoritatively observed that, firstly, as per the travaux préparatoires, there ought to be only shot that the award-debtor may have i.e., at the instance of resisting enforcement under Section 48. Secondly, the Court’s jurisdiction under Article 136 cannot be used to circumvent the legislative policy and would only be open when there arises a sui generis question of law that has previously not been answered by the Court. Through a combined reading of the afore-stated decisions on Section 50, the avenue remains narrow and exceptional, and given the direction of precedents so far, the Court is likely to adjudicate with a mindset to not interfere with the foreign award on the first instance. Unnecessarily circumventing the law without any prospect of success, and utilizing the same as a dilatory tactic may attract heavy costs on the award-debtors as evidenced in the case of Responsive Industries Ltd. v. Banyan Tree Growth Capital LLC & Ors.[11] (“Responsive Industries”). In light of two Indian parties arbitrating outside, and enforcing the foreign award in India, must be alive to the fact that the contours of Section 50(2) must not be abused to flood the docket of the Court under Article 136 without any possibility of success. This must be a strong caveat to all award-debtors given the turn of events in the case of Responsive Industries. CONCLUSION The decision of PASL Wind gives strength and clarifies the position regarding two Indian parties arbitrating in a foreign jurisdiction of their choice. However, there are multiple stakeholders that range from the judiciary to the litigants and to the multi-national corporations who must be aware of the caveats concerning two Indian parties arbitrating outside India. Indian courts must be cautious during enforcement proceedings to not create unnecessary hurdles and impediments in enforcing foreign awards. Concurrently, award-debtors must not unnecessarily tangle genuine award-holders in several rounds of litigation as it may lead to adverse orders. It is imperative that all stakeholders understand the nuances carefully, stand well versed with the red flags, observe caution where needed, as arbitration in India is now ‘a whole new ball game.’ * Rohan Gulati is a Junior Staff Editor for the Arbitration Workshop Blog. He is currently a fourth-year law student pursuing BB.A LL.B at Symbiosis Law School, Hyderabad. His primary area of interest is Alternative Dispute Resolution (ADR) with a specific focus on arbitration law. He can be contacted at rohan.gulati@student.slsh.edu.in [1] 2021 SCC OnLine SC 331. [2] (2015) 3 SCC 49. [3] (2019) 15 SCC 131. [4] 2019 SCC OnLine Del 8350. [5] 2020 SCC OnLine Del 1648. [6] Ratan K. Singh and Gracious Timothy Dunna, “India and Interim Measures in International Commercial Arbitration: Impressions from Bitter Experience” (Scconline.com, 17 April, 2021) accessed April 28, 2021. [7] Id. [8] (2013) 10 SCC 717. [9] (2009) 14 SCC 16. [10] 2020 SCC OnLine SC 177. [11] Special Leave Petition (SLP) Nos. 11404-11405/2020.

Alexandros-Cătălin Bakos Introduction: By the end of 2020, the Cairn Energy PLC and Cairn UK Holdings Limited (the Claimants) v. India Tribunal (sat in the Hague) rendered an Award which might prove to be of high importance for the world of international investment law, owing to the multitude of issues that it raises for states, investors, and for stakeholders in general (a brief presentation of the Award and of possible – but not exhaustive – issues of interest is made below), especially in the area of taxation and the limits that international investment law may bring to state discretion in this area. At the same time, an interesting, but less evident, issue that was clarified by the Cairn v. India Tribunal is the extent to which works that may be connected to the applicable investment treaty in a dispute may be relevant to the interpretation of that treaty as travaux preparatoires (or preparatory works). Before moving on to this aspect of treaty interpretation and the Tribunal’s findings as regards it, however, a brief presentation of the dispute is in order. Background to the dispute: It would not be an exaggeration to claim that one of the most important developments in international investment arbitration – and international investment relations, in general – in 2020 was the Cairn v. India Award. Without going into too many details – as the Award’s contents were aptly summarized elsewhere – it is sufficient, for present purposes, to discuss the main aspects of the dispute. Essentially, it revolved around retroactive taxation of capital gains (which had not been taxable at the moment they occurred) – pursuant to intra-group restructuring activities. This was something that the arbitral tribunal considered to have been done in violation of the applicable bilateral investment treaty (BIT). More specifically, in violation of the fair and equitable (FET) treatment standard that was guaranteed via the United Kingdom (UK)-India investment treaty to UK investors committing their capital to India. The impact of this Award – both on the world of international investment arbitration, in general, and on India, in particular – cannot be understated. To start with, the amount of the damages (exceeding $1.2 billion) that were awarded to the successful claimants could potentially raise questions as to the Indian Government’s ability to pay what it owes pursuant to the Award. Irrespective of this the Claimants found a possible solution to this potential obstacle, as they moved to enforce the award before US courts. And they targeted assets owned not by India itself, but by one of its state-owned enterprises, Air India. Something reminiscent of recognition and enforcement proceedings brought by investors who had obtained favourable awards against Venezuela before investment treaty tribunals. This will clarify even further how, and to what extent, the exception to the separate legal personality of states and state-owned enterprises applies in such investment cases. Thus, it is not a far-fetched assertion to state that, in the context of a backlash against investment treaty arbitration and in the context of a multitude of reform discussions concerning investor-state dispute settlement (mostly via arbitration) – the most popular ones being, perhaps, the UNICTRAL Working Group III discussions – the Cairn v. India dispute will most probably be cited by proponents of reform to underpin their arguments. Nonetheless, the Cairn Energy award goes both ways. It is not the only time that India found itself a losing respondent before an investment treaty arbitral tribunal for its retroactive tax measures. Such outcomes may negatively affect the reputation of a host state looking to attract foreign investors, since the latter usually put a premium on the general regulatory framework concerning taxation – including enforcement practices – of a state to which they might commit their capital. Even if this is not necessarily a determinative factor to an investor’s decision to invest, it might nonetheless tip the balance towards a decision which would be unfavourable to the state looking to attract foreign investment. Travaux preparatoires and the Cairn v. India Tribunal’s assessment of their content Beyond the immediate impact of the Cairn v. India Award lies a plethora of other not so apparent, but nonetheless interesting, legal aspects. One of them is the public international law issue of preparatory works of a treaty. And the multitude of interesting questions that are raised when applying the interpretation rules of the 1969 Vienna Convention on the Law of Treaties (VCLT) (or their customary law equivalent) pertaining to whether, and to what extent, can travaux preparatoires be resorted to when interpreting an international (investment protection) treaty: More specifically, Article 32 (Supplementary means of interpretation) of the Convention reads as follows: “Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.” This provision, if read textually, comes as an aid, if the aforementioned conditions are satisfied, to the tribunal applying Article 31 of the Convention, which mandates the adjudicator to interpret a treaty provision “in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose”. In other words, if after following these steps the meaning of a treaty provision is ambiguous or obscure or if the result is manifestly absurd or unreasonable, resort may be had to preparatory works or the circumstances of a treaty’s conclusion. It is beyond the scope of this brief blog post to discuss the multitude of issues raised by these provisions and their specific application to investment arbitration proceedings. Fortunately, this has been done before. Commentators would focus, for instance, on issues such as fairness, legitimacy, and consent and their role in using travaux preparatoires when interpreting investment agreements, with Vasani and Ugale arguing that “the need to resort to supplementary means of interpretation (in investment treaty arbitration) is even greater, as the system is based on voluntary compliance and depends on its being perceived as fair and legitimate. A well-reasoned decision drawn within the limits of the parties’ consent and the contracting parties’ intent assures the public and the parties that discretion is being exercised fairly. In this way, the entire system succeeds”. In any case, before going into any in-depth analysis of the need to resort to travaux preparatoires (although, logically, this might come first), it is perhaps better to ask a simpler question, but of equal importance – what exactly amounts to preparatory works of a treaty? To ask such a question, however, might seem somewhat counter-intuitive. Even if Article 32 of the VCLT does not define the type of materials that may amount to travaux preparatoires (for a take on what might be included, see this article by Shirlow and Waibel), it may not be entirely clear why disputes could arise as regards this issue. But one of the contested issues that arose before the Cairn v. India tribunal was exactly this. Essentially, India tried to argue that the UK-India BIT’s FET standard did not have an autonomous meaning, but one grounded in the customary international law minimum standard of treatment (see para. 1704, fn 2146 of the Award). For practical purposes, it is enough to mention here that the difference between the two standards – generally speaking – is that applying the minimum standard of treatment (MST) could potentially lead to a higher threshold that must be reached in order to hold the state liable for not observing its international obligations (at the same time, it must also be acknowledged that the MST may have evolved towards greater protection for investors, as found by the Bilcon v. Canada tribunal, in the NAFTA context – especially at paras. 434-8). Of course, whether this would have been the case in Cairn v. India is another issue, which I will not address here. Moving back to India’s argument, what is most interesting about the present Award is that the Respondent tried to underpin its position by linking the FET standard to the MST one by reference to a journal article, written by Eileen Denza and Shelagh Brooks, two of the officials involved in the negotiations of the UK’s investment treaties, and published in 1987. This would qualify as preparatory work to the UK-India BIT, India’s argument goes, and would clarify the way in which the FET standard should be interpreted. Essentially, the authors discussed in the cited article how one of the UK’s draft BIT (among those preceding the UK-India BIT) was heavily influenced by the 1967 OECD Draft Convention on the Protection of Foreign Property (pp. 910-1 of Denza’s and Brooks’ article). This Draft Convention essentially equated the FET standard with the minimum standard of treatment (see p. 9 of the forecited Draft Convention, with comments). The Tribunal, however, avoided discussing the merits of the article and its substantial relevance (historically, the UK changed its Model BIT in 1991, after Denza’s and Brooks’ article was published, and before concluding its BIT with India) or the influence of the Draft Convention on the UK’s treaty practice. It simply stated that “[t]he Denza and Brooks article, the historical accuracy of which the Tribunal has no reason to doubt, does not qualify as travaux préparatoires within the meaning of the Vienna Convention. Nor have any such materials developed by the Contracting Parties to the present Treaty been submitted into the record of this arbitration, which would show that the negotiators expressed a shared understanding (or even exchanged views) that FET, as used in Article 3 [of the applicable treaty], was to be understood in the light of the 1967 OECD draft Convention's commentary. In short, there is no evidence that FET is to be interpreted other than in accordance with Articles 31 and 32 of the Vienna Convention, which in the absence of (i) proper travaux préparatoires, (ii) a subsequent agreement between the Parties regarding the interpretation of the Treaty or the application of its provisions, (iii) evidence of a subsequent practice of the Parties which establishes the agreement of the Parties regarding the Treaty's interpretation, or (iv) evidence that a special meaning is to be given to FET showing that a different meaning than that borne by the plain meaning of the text, mandates the interpreter to give effect to the plain meaning of the words used in the Treaty.” (para. 1704 of the Award, fn 2146). While it is not entirely clear from the Award what exactly was argued by the Respondent to constitute travaux preparatoires, it seems that Denza’s and Brooks’ article was considered an indispensable link in the Respondent’s argument. The Tribunal also expressly denied the relevance of such scholarship as a form of preparatory work, so it is reasonable to assume that this is what India attempted to qualify as travaux preparatoires. In fact, what the Cairn tribunal seems to have done (albeit implicitly) in rejecting the relevance of Denza’s and Brooks’ article was to clearly separate the treaty provision (containing the FET standard) – and its interpretation by possible reference to historical preparatory works, if existing – from a different secondary source of international law: the “the teachings of the most highly qualified publicists of the various nations” (as provided for in Article 38 contained in the Statute of the International Court of Justice). In other words, it did not matter that these teachings (in this case, writings, to be more precise) belonged to persons taking part in the negotiation of the treaty under consideration before the arbitral tribunal. And it did not matter that what was written therein was related to the treaty that was being interpreted by the arbitral tribunal. As long as what was mentioned in those teachings/writings was formally contained in a secondary source of international law, it would be treated as such. To be considered preparatory works, the relevant sources need to satisfy other criteria. For instance, the Inceysa v. El Salvador tribunal considered that communications sent between the parties to the applicable treaty in that dispute before that agreement entered into force satisfied such criteria (para. 192). Thus, the emphasis there was on exchanges between the parties, which could be qualified as pointing to a common intent. Somewhat more liberally, for instance, the Berschader v. Russia tribunal seems to have leaned towards accepting unilateral declarations by the organs of one state party to the applicable treaty, made in connection with the ratification of that treaty, as a form of travaux (para. 158). Such liberal approaches might raise the question of the extent to which arbitral tribunals are willing go when construing the relevance of certain documents, or acts, as preparatory works influencing a treaty’s interpretation. It is in this context that the Cairn v. India tribunal findings must be considered. The added value of the Tribunal’s decision, thus, is that the Tribunal seems to have clarified what cannot amount to travaux preparatoires, even if connected to officials involved in treaty negotiations. Conclusion: While at first it may not necessarily seem so, the Cairn v. India Tribunal’s clarification that academic writings pertaining to officials who took part in the negotiations of the applicable treaty in a dispute may not be used as preparatory works with a view to interpreting that agreement is a welcome development. Since even domestic explanatory materials could be qualified as travaux preparatoires (or as relevant to the conclusion of a treaty), thus going beyond what is strictly discussed, and debated, during treaty negotiations, it is important to show to what extent can an interpreter go beyond such treaty negotiations. Of course, since there is no formal duty of binding precedent in investment treaty arbitration, there is no guarantee that the Cairn v. India Tribunal’s approach will be replicated – especially if a different Tribunal might consider the former’s approach incorrect.

Harsh Patidar & Monish Raghuwanshi* PART - II This part of the Article succinctly coruscates Third-Party Funding by highlighting its merits, demerits, and complexities that can be ascribed to third-party funding. In peroration, this article curtly ails to delineate certain recommendations and suggestions in the form of remedies to get rid of all the complexities associated with TPF and to make the arrangement of TPF an effective and viable route for litigation funding. Benefits of Third-Party funding IN ARBITRATION The business of law is evolving in recent time which mandates the need to have third party funding in domestic and international arbitration. In the middle of this context, it is not only increasingly timely but extremely important to explore the interplay between conflict funding and arbitration. A way to reconcile the increasing need of business for the funding of legal issues with maintaining the dignity and ultimate enforceability of awards should be found out. Dispute settlement proceedings can be a considerable burden for the parties and as a result of the dispute itself, financial problems occur. Companies that are eventually party to arbitration disputes should take into account the possible benefits of third-party funding and should be aware of the potential risks. I. Provides access to justice to under-resourced parties Third-Party Funding of an arbitration dispute has the potential to provide adequate justice and access to justice for parties having fewer resources and are facing financial burden. This enables under-resourced parties to go ahead with the arbitration proceedings which would otherwise be halted due to lack of finances. II. Reduces the arbitration costs The exorbitant costs of claiming and advancing arbitration can be discouraging. Third-Party funding in arbitration supports claims which are worthwhile but would not be followed simply because of the substantial costs otherwise. Even a business with a substantial amount of funds should consider third party funding to their arbitration dispute. This reduces the expenses involved and affects positively its cash flows and allows capital that would otherwise be incurred in legal fees to be allocated to other productive areas of that business. Also, without a set mold of a third-party funding agreement, parties can negotiate on the terms and conditions of the agreement making it flexible and a less costly affair. III. Minimises the risk Arbitration proceedings are associated with risks making the parties unwilling to take such risks. Third-Party Funding eliminates the risk factor involved in an arbitration proceeding as the costs involved therein are relieved for the parties. The third-party funder does not play any role in taking decisions on the case or the negotiations involved in order to reach a consensus in the arbitration matter. The emphasis of the third party is on properly evaluating the potential of success of the case for which the funding is proposed, taking into account all of the considerations such as the competency and experience of the legal representative of the claimant, increasing or lowering the speed in the execution of the proceedings. Also, the funder cannot at any time interfere with the process or with the decisions of the claimant. IV. Extra layer of scrutiny The additional layer of oversight that comes with the third-party funding may be another benefit of a funding arrangement with an external party. A third-party funder is like any other organization and it is doubtful that they will back a claim unless they are optimistic about its success. The funder only takes into account the cases that guarantee merit. This acts as a validation for the party and could also contribute to an early settlement. Third-party funders also have their own legal advisors to review claims and often evaluate the merits of a claim by independent research and evaluation. They give an objective and independent assessment of the situation and provides an extra layer of scrutiny by a realistic approach. Plugging the complexities ASSOCIATED with third-party funding in arbitration & litigation In India, there exists no legal embargo to third-party funding arrangements, yet, there are certain convolutions associated with third-party funding. They are as follow: I. Public Policy Considerations The laws of “public policy” do not ascribe to a customary or a fixed rule. The main question of whether an agreement is against the public policy or not is to be determined on formal doctrines only. Public policy can a constitute breach of an Act and whatever is contrary to the acceptable principles when made the main consideration of a contract. II. Mere right to sue In pursuant to the contention that the contract is against the public policy, one can contend that a specific arrangement is nothing but an assignment of a right to sue that is inhibited by Section 6(e) of the Transfer of Property Act, 1882. Further, in the Sri Sarada Mills case,[1] the Supreme Court of India held, “claims to damages for breach of contract or claims to damages for tort and assignment of the mere right of litigation, are bad. The reason behind this rule is that a bare right of action for damages is not assignable because the law will not recognize any transaction which may savour maintenance or champerty. It is only when there is some interest in the subject matter that a transaction can be saved from the imputation of maintenance. That interest must exist apart from the assignment, and to that extent, must be independent of it.”[2] III. Conflict of interest In TPF, a funder can resort to a pre-established connection with a person belonging to the Arbitral Tribunal, in that case, the autonomy and impartiality of an arbitrator might be alleged if such facts appear before opposite party. From fifth Schedule of the Arbitration Act,[3] which takes an arbitrator’s indirect interest into consideration, one can infer that it might envisage third-party funding. IV. Confidentiality In India, the Arbitration Act[4] has added Section 43A that binds the parties and Arbitral Tribunal to restore the confidentiality of all the proceedings pertaining to arbitration. Thus, there exists a possibility of the opposite party challenging violation of confidentiality on the ground of such a third-party funding arrangement cannot be set at naught. Emerging International Trends in Third-Party Funding A. Innovative risk transfer arrangements The third-party funding arrangements for the party comprise of the cases where the party does not want to incur the costs of litigation but would pay from his pocket, a share of the envisaged value of a triumphant party, upon dismissal of the averment. The parties not only want the litigation connected costs funded but also the risk of a contrary decision transferred. For this, the market includes certain paraphernalia which provides insurance and some sort of arrangements that transfer the risk of an issue for a plummeted price paid by the funder. B. Proliferating legal imposition for third party funding Countries like Australia, Hong Kong, etc, are abandoning the clunky common law principles of champerty, and maintenance, and have made third-party funding legal. Recently, Singapore brought the amended Civil Law Act and the Civil Law Regulations, 2017 legalizing third-party funding in arbitration. C. Emergence of artificial intelligence Nowadays, Artificial Intelligence abled algorithms are being used to ascertain the results of disputes, and to assess and price the risk in funding a matter. For example, “Legalist”, a tech third-party funding entity, uses an Algorithm that ascertains the possibilities of winning the matter using its database of 10 million court disputes before making an investment. D. The portfolio funding Under portfolio funding, a plenitude of averments brought by a claimant in contrast to identical or non-identical defendants is funded. This aids the claimant to seek more favourable terms since the funder’s finding and return is rampant across the averments, trivializing exposure to only one claim. Further, funders are being contacted to carry out transactions such as payment to creditors of an insolvent entity who would otherwise have to await the output of a claim before receiving the payment, proliferating the proceeds of a settlement, and even funding the expenses of the business, which may be based on a triumphant claim. The Future Ahead In India, states like Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh, Orissa, Andhra Pradesh, and Tamil Nadu have recognized third-party funding after amending Order 25 Rule 1 of the Civil Procedure Code, 1908. This Order authorizes the courts to secure expenses for litigation by asking the financier to fund by becoming a party in order to deposit the costs in court. On adverting to some infrastructure companies such as Patel Engineering and Hindustan Construction Company have countenanced third-party funding in relation to their unresolved and unsettled averments in the sphere of arbitrations. The pivotal purpose seems to be to relax their advantageous status and position. It is axiomatic that third-party funding is evolving as an endeared path for alleviating tensions and conflicts in debt-laden construction entities. The ambiguity prevailing over the market demands emanating in the light of COVID-19 pandemic, coupled with the worldwide economic nosedive, can discourage claimants from making cogent and strong averments by adverting to these on the basis of a monetary deficit. Arbitration financing as a means in the current financial health can help micro-level entities and other claimants encountering difficulties in accomplishing their administration and maintenance costs or widening their regime by saturating the fund saved on litigation. Conclusion Third-Party Funding in Arbitration is a new emerging trend all over the world. With an upsurge in the arbitration claims and costs and risks involved in it, third-party funding gives relief to businesses and commercial organizations. The benefits of third-party funding clearly exceed any supposed shortcomings which have been noted in the above discussion. However, the complexities revolving around the adoption of this concept in arbitration needs to be addressed by means of adequate contractual regulation. Given the increased number of new third-party funders entering the market as well as globalization, many funders are operating across many jurisdictions. Therefore, the implementation of uniform external regulations is needed for different jurisdictions. In India, there is no clear regulation regarding third-party funding. It is, however, established by judicial precedents that third-party funding other than that of advocates is an accepted practice in India in litigation proceedings. Such an agreement between the third-party funder and party to a dispute takes into account the doctrine of public policy and the principles of justice, equity and good conscience. As there is no fundamental difference between litigation and arbitration proceedings, the third-party funding in the arbitration claims should be validated in India through a statute. *Harsh Patidar is a III Year, B.A. LL.B. (Hons.) student at National Law Institute University, Bhopal, harshpatidar.ug@nliu.ac.in Monish Raghuwanshi is a II Year, B.A. LL.B. (Hons.) student at National Law Institute University, Bhopal, monishraghuwanshi.ug@nliu.ac.in [1] Sri Sarada Mills Ltd. V. Union of India, (1973) AIR 281. [2] Id. [3] The Arbitration and Conciliation Act, 1996, No. 26, Acts of Parliament, 1996 (India). [4] Id. § 43, cl. A.

Harsh Patidar & Monish Raghuwanshi [1] PART- I Abstract India’s development as one of the main five economies on the planet made it quite possibly the favoured countries for wooing foreign investment lately. Nonetheless, hassles and interruptions brought by the COVID-19 pandemic could bring about another influx of matters related to litigation. The COVID-19 has hit hard the economy, due to which parties to litigation matters may get themselves incapable to bear the significant expenses of litigation or arbitration. Nevertheless, India is a cost-preferred jurisdiction for litigation and arbitration. Accordingly, bringing back the emphasis on the resource class being TPF (third-party funding). This article is divided into two parts. In this part, the authors have dealt with an introduction to TPF, the third-party funding in the Indian context, and the TPF under various other jurisdictions such as Singapore, Australia, etc. Introduction Third-party funding[2] refers to an agreement by a third party to the dispute to provide a party, funds or other material support in order to finance part or all of the cost of the proceedings, either individually or as part of a specific range of cases. Such support or financing is either provided in exchange for remuneration or reimbursement that is wholly or partially dependent on the outcome of the dispute or provided through a grant or in return for a premium payment. Such an agreement between the litigant and the third-party funder is profoundly known as the Champerty agreement and the remuneration or share in the proceeds is maintenance.[3] Champerty is defined[4] as “a bargain between a plaintiff or defendant in a suit and a third person, campum partire, to divide between them the land or other matter sued for in the event of the litigant being successful in the suit, whereupon the champertor is to carry on the party's suit or action at his own expense; the purchasing of an interest in the thing in dispute, with the object of maintaining and taking part in the litigation”.[5] This concept of champerty first came in the United Kingdom where it was regarded as a tool for access to justice for poor litigants who are unable to bear the exorbitant costs of litigation. However, this process was widely abused as a stranger without any substantial interest in the litigation was “officious intermeddling” in litigation, which often resulted in the oppression of the person against whom the action is brought.[6] This form of gambling and trafficking by the stranger to litigation attracted tortious and criminal liability. But, gradually rising costs of litigation increased the demand for third-party funding which led to the abolition of the common law offense of champerty[7] making it an accepted practice in litigation proceedings. However, such an agreement should not per se be opposed to public policy and should be in furtherance of justice and to resist oppression. Arbitration in the current scenario is being extensively used for the settlement of commercial disputes all over the world. With such a rise in the arena of arbitration, the cost involved therein is in upsurge which mandates the need for third-party funding in the arbitration proceedings. However, the question that comes flagging here is whether this principle of champerty in litigation is applicable to arbitration proceedings or not? Third-Party Funding in THE Indian Context The arbitration is in the embryonic stage in India and the institutionalization and stride taken by the Indian Courts have led to an upsurge in the arbitration commercial settlement claims. Due to the Covid-19, lots of businesses are in disruption in India and the costs of the dispute settlement mechanisms from litigation to arbitration are on a hike. The funding of arbitration costs by a third party may ease such economic distress of the businesses and commercial organizations. However, the position of third-party funding is not clear and there is an absence of statute regarding the validation or prohibition in this regard. Indian Courts have not explicitly disregarded the concept of third-party funding to a party in litigation or arbitration proceeding. The judicial precedents of the Privy Council and Supreme Court on many occasions have dealt with this issue. Earlier, in 1825, in the case of Ram Gholam Singh v. Keerut Singh[8], the Sudder court declared “a contract to give half of a large estate for a comparatively small advance as unfair and called the transaction as savoured strongly of gambling”. Later, in the case of Tara Soonduree Chowdhrain v. The Court of Wards[9], a champerty agreement was held void on the grounds of being contrary to the public policy. Later, the courts started recognising a champerty and maintenance agreement in India. On the question of the applicability of English law, making champerty and maintenance an offence in India, Sir R. Couch, C.J. in the English case of Pechell v. Watson[10] observed that “the English Common Law, and the Statutes as to maintenance and champerty, are not applicable, and are considered as having no force in India”. In furtherance to this, the Privy Council in the case of Chedambara Chetty v. Renga Krishna Mithu Vira Puchaiya Naickar[11] held that “the law in India is not the same as it is in England. The Statute of Champerty being part of the Statute Law of England, has, of course, no effect in the mofussil of India; and the Courts of India do admit the validity of many transactions of that nature, which would not be recognized or treated as valid by the Courts of England”.[12] However the Courts will administer according to the principles of justice, equity and good conscience and will take into account the question that “whether the transaction is merely the acquisition of an interest in the subject of litigation bona fide entered into, or whether it is an unfair or illegitimate transaction got up for the purpose merely of spoil, or of litigation, disturbing the peace of families, and carried on from a corrupt and improper motive”. The validity of a third-party funding agreement depends on the Indian Contract Act, 1872[13] under which such an agreement should not violate the doctrine of public policy. This doctrine of public policy is based on the maxim “ex turpi causa non oritur actio” which means that an agreement against public policy would be void without any effect.[14] The Privy Council on the question of the applicability of the doctrine of public policy in the champerty and maintenance agreement, in the case of Ram Coomar Coondoo and Anr v. Chunder Canto Mookerjee[15], observed that “a fair agreement to supply funds to carry on a suit in consideration of having a share of the property, if recovered, may not be opposed to public policy. But agreements of this kind ought to be carefully watched, and when found to be extortionate, and unconscionable, so as to be inequitable against the party; or to be made, not with the bona fide object of assisting a claim believed to be just, and of obtaining a reasonable recompense therefor, but for improper objects, as for the purpose of gambling in litigation, or of injuring or oppressing others by abetting and encouraging unrighteous suits, so as to be contrary to public policy, the effect ought not to be given to them”.[16] The Supreme Court of India in In Re: G, A Senior Advocate of the Supreme Court[17], further cleared its position on the validity of champerty and maintenance observing that “it can be accepted at once that a contract of this kind would be legally unobjectionable if no lawyer was involved. The rigid English rules of champerty and maintenance do not apply in India, so if this agreement had been between what we might term third parties, it would have been legally enforceable and good. It follows that there is nothing morally wrong, nothing to shock the conscience, nothing against public policy and public morals in such a transaction per se, that is to say when a legal practitioner is not concerned”.[18] Now it is a well-settled law that a champerty and maintenance agreement is valid in India.[19] However, this should not be opposed to public policy under the Indian Contract Act, 1872. The interpretation of public policy is wide and non-exhaustive. The question that lies here is whether a champerty agreement is void in India if an advocate is the third party. The Supreme Court in Bar Council of India v. AK Balaji[20] dealt with this question of law and went on to hold that “funding of litigation by an advocate is impermissible. However, there appears to be no restriction on third parties (non-lawyers) funding the litigation and getting repaid after the outcome of the litigation”. The concept of third-party funding is a recognised practice in litigation. The development in the adoption of the practice of third-party funding in arbitration proceedings is in a nascent stage in India. There is no fundamental difference in the litigation and arbitration proceedings as both resort to the settlement of disputes and work in furtherance of the principle of justice, equity and good conscience.[21] In this regard, the English Court in Bevan Ashford vs. Geoff Yeandle Ltd. observed that “The law of champerty has its origins in, and must still be based upon, perceptions of the requirements of public policy. I find it quite impossible to discern any difference between court proceedings on the one hand and arbitration proceedings on the other that would cause contingency fee agreements to offend public policy in the former case but not in the latter...If it is contrary to public policy to traffic in causes of action without a sufficient interest to sustain the transaction, what does it matter if the cause of action is to be prosecuted in court or in an arbitration?”.[22] Therefore, the validity of a third-party funding agreement in the arbitration proceeding in India would fundamentally depend on the doctrine of public policy under the Indian Contract Act, 1872. A Comparative Study: EVINCING DIASPORA OF TPF IN OTHER COUNTRIES A. Position in Australia In Australia, TPF is allowed. However, the situation is becoming knotty with a galore of juridical and law-making advancements in the year in review, affecting the arrangements of TPF and the advancements regarding TPF of representative proceedings, with TPF being kept under a certain level of regulation and control. Despite legislation, the status under the jurisdiction of Australia is that the formal tenets of the law of contract, in pursuance of which a contract might be considered as antithetical to public policy or illegal, are not disconcerted. This indicates that a TPF in the contract can be set at naught by the courts in Australia if it were not in consonance with common law public policy provisions and considerations.[23] There exists no legal regulatory framework that is applicable to litigation funding. The funding by the litigants is regulated and controlled under the administration of the Court, the Trade Practices Act 1974, the Federal Court of Australia Act 1976 and various other State consumer protection laws and regulations. In common law, there exist no legal limitations for TPF in the litigation sphere and mechanisms other than the Rules of the Court and the Court’s acknowledgment of whether the proceedings result in abuse of procedure pertaining to third party funding. Notably, in the judgments of the High Court in the Fostif case[24] and Trendlen case,[25] there appears to be relevant satellite litigation in third party funding issues comprising of frivolous litigation over the legality of the funding mechanisms. Many legal scholars have contended that the absence of a legal setup and framework for TPF at the State level might proliferate ambiguity, notwithstanding the stance of the High Court on TPF in litigation. Indisputably, there has been a clarion call to set up a legal framework as well as a monetary framework for the regulation of third-party funding, to safeguard the interests of the litigants and to ensure the existence of third-party litigation funding. Talking about the limitations on the charges and additional amount in the form of interest funders can claim that no law extant in Australia imposes any restrictions on the costs that a funder could ask from the party. The court in the Fostif case ruled that “contract law considerations such as illegality, unconscionability and public policy may still arise in relation to a litigation funding agreement but there is no objective standard against which the fairness of the agreement may be measured. Accordingly, whether a particular clause in a litigation funding agreement may contravene public policy will be answered having regard to the circumstances of each particular case”.[26] A priori, the courts in Australia can nullify a TPF in litigation funding agreement in circumstances where the interest owned by the funders’ amounts to an equitable subterfuge in the perception that it indulged captivating a barter by resorting to clandestinely benefiting of a person’s incompetency to adjudge for him, on grounds of inability, requirement, lack of awareness, etc. B. Position in the UK In the United Kingdom, Section 58B of the Courts and Legal Services Act, 1990 allows TPF agreements between legal service contributors and litigants and allows TPF in litigation, whereby the third party could get a portion in the form of a share of the “damages”. Section 58B (1) of the Act reads as follows: “A litigation funding agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of it being a litigation funding agreement”. Further, Section 58B (2) defines litigation funding agreement as: “(a) a person agrees to fund the provision of advocacy or litigation services to another person, and (b) the litigant agrees to pay a sum to the funder in specified circumstances”. Thus, third-party funding is legally regulated. Additionally, the report of the legal department (1996) had anointed “maintenance” and “champerty” as “the procurement, by direct or indirect financial assistance, of another person to institute, or carry on or defend civil proceedings without lawful justification. Champerty is a particular form of maintenance, where the maintainer’s agreement with the litigant gives them a share in the proceeds or subject matter of the action; action referred to as a division of the spoils”. The woes of the courts date back to the medieval time frame and the main dispute of the shielding of the sanctity of the justice delivered to the public. A bastion of TPF in litigation can distort the judicial procedure; they can whip up dubious or frivolous legal assertions to conceal evidence or even witnesses, or artificially alter the amount of any damages that can be remedied. In these ways, a crusader can try to guarantee a triumph in the court of law as a way of hounding or exhorting pressure on their adversaries. The judiciary in England has shown a casual attitude toward third-party funding set up, taking exigencies of funding problems into consideration, and proclaiming that access to justice for litigants is of paramount importance. In the year 2009, Lord Justice Jackson was questioned by the Master of the Roster, “to review the rules and principles governing the costs of civil litigation and to make recommendations in order to promote access to justice at proportionate cost”. In the conclusive report presented by him, he patronaged TPF as supplementing an amplification and sometimes the only way of TPF in litigation, assisting ingress to justice: “I accept that third party funding is still nascent in England and Wales and that in the first instance what is required is a satisfactory voluntary code, to which all litigation funders subscribe. At the present time, parties who use third party funding are generally commercial or similar enterprises with access to full legal advice. In the future, however, if the use of third- party funding expands, then full statutory regulation may well be required. In 2010, the Civil Justice Council, an advisory non-departmental public authority funded by the Ministry of Justice came with a consultation paper titled, A Self-regulatory Code for Third-Party Funding”. C. Position in Singapore At present, third-party funding is prohibited in Singapore. The present prohibitions extend to funding for international arbitration proceedings. As a common law nation, Singapore’s laws on third-party funding have their existence in English law. Singapore law disallows third-party funding in two ways: “Firstly, Singapore law generally treats third-party funding agreements as contrary to public policy or illegal – and for that reason, unenforceable. This policy is informed by the common law doctrines of maintenance and champerty. In brief, maintenance is the giving of assistance or encouragement to a litigant by a person who has neither an interest in the proceedings nor any other motive recognised by law as justifying his or her interference. Champerty is a subset of maintenance – it is the maintenance of an action in exchange for a promise to give the maintainer a share in the fruits of the proceedings. Typical third-party funding agreements fall foul of both doctrines and are therefore generally unenforceable under Singapore law”; and secondly, “Singapore law regards maintenance and champerty as torts at common law. An affected party could (at least in theory) sue the party (or parties) in tort if the affected party has suffered special damage as a result of the relevant tortious arrangement”. The embargo on third-party funding under Singapore law is far fetching. The Singapore Court of Appeal has delineated that “the principles behind the doctrine of champerty apply to all types of legal disputes and claims, including arbitration proceedings”.[27] There are various statutory and common law exceptions to it: Firstly, the Singapore Companies Act allows the liquidator belonging to an insolvent entity to sell to the third party who will provide funding.[28] Secondly, a TPF agreement would not be repealed if that same agreement is ancillary to the circumstance where the property interest gets transferred. Additionally, the factum that the funder may be benefited from a third-party funding agreement does not mean that the funding set up falls foul of the principle of champerty and maintenance.[29] Further, Singapore has decided to follow the “light touch” approach to govern and regulate third-party funding agreements. For instance, the Law Ministry of Singapore has made its target as important to “precedence to party autonomy and flexibility, with disclosure as the foundational principle, taking light touch mindset into consideration for the sake of regulation which had been accepted in jurisdictions where TPF is allowed”. It is undeniable that in order to be victorious, monitoring shall be commensurate with the real stakes in existence. However, scanty monitoring of a high-stake company could result in market misconduct, immoderate monitoring of a high-stake company or an entity stultifies growth. Since funding is “non-recourse”, it is self-regulating in nature: funders would lose their cash cows if they fund frivolous and vexatious claims. To be cont. [1] Harsh Patidar is a III Year, B.A. LL.B. (Hons.) student at National Law Institute University, Bhopal, harshpatidar.ug@nliu.ac.in Monish Raghuwanshi is a II Year, B.A. LL.B. (Hons.) student at National Law Institute University, Bhopal, monishraghuwanshi.ug@nliu.ac.in [2] INTERNATIONAL COUNCIL FOR COMMERCIAL ARBITRATION, REPORT NO. 4, QUEEN MARY TASK FORCE ON THIRD-PARTY FUNDING IN INTERNATIONAL ARBITRATION, 50, (2018). [3] Winnie Lo v HKSAR, (2012) 15 HKCFAR 16. [4] JOWITT'S DICTIONARY OF ENGLISH LAW, (Daniel Greenberg, Jowitts, 5th ed. 2019). [5] Damodar Kilikar & Ors. v. Oosman Abdul Gani & Anr., 1961 KLJ 356. [6] Legislative Council Panel on Administration of Justice and Legal Services, Abolition of the common law offence of champerty, March 25, 2014, https://www.doj.gov.hk/en/legco/pdf/ajls20140325e2.pdf (Last visited on Mar. 28, 2021). [7] Criminal Law Act, 1967, § 13, No. 58, Acts of Parliament, 1967 (UK). [8] Ram Gholam Singh v. Keerut Singh, 4 Sel. Rep. 12. [9] Tara Soonduree Chowdhrain v. The Court of Wards, 13 B.L.R. 495. [10] Pechell v. Watson, 8 M.& W. 691. [11] Chedambara Chetty v. Renga Krishna Mithu Vira Puchaiya Naickar, L.R. 1 Ind. Ap. 241. [12] Id. ¶ 15. [13] Indian Contract Act, 1872, No. 9, Acts of Parliament, 1872 (India). [14] Kamarbai and Ors. v. Badrinarayan & Anr., AIR 1977 Bom 228. [15] Ram Coomar Coondoo and Anr v. Chunder Canto Mookerjee, (1876) ILR 2 CAL 233. [16] Id. ¶ 38. [17] In Re: G, A Senior Advocate of the Supreme Court, 1955 1 SCR 490. [18] Id. ¶ 11. [19] DAMODAR KILIKAR, supra note 5. [20] Bar Council of India v. AK Balaji, 2018 SCC OnLine SC 214. [21] Kshama Loya Modani and Vyapak Desai, Asia no longer third to Third Party Funding-Meets the Financing world of Arbitration, KAULA LUMPUR REGIONAL CENTRE FOR ARBITRATION (Dec. 2017), https://nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/News%20Articles/180129_A_Asia-No-Longer-Third-To-Third-Party-Funding.pdf (Last visited on Mar. 28, 2021). [22] Bevan Ashford v. Geoff Yeandle Ltd., [1998] 3 W.L.R. 172. [23] Clyne v. NSW Bar Association, [1960] 104 CLR 186. [24] Campbells Cash and Carry Pty Ltd v. Fostif Pty Ltd, [2006] 229 CLR 386. [25] Mobil Oil Australia Pty Ltd v. Trendlen Pty Ltd, [2006] HCA 42. [26] CAMPBELLS, supra note 24. [27] Otech Pakistan Pvt Ltd v. Clough Engineering Ltd and Anr., [2007] 1 SLR(R) 989. [28] Re Vanguard Energy Pte Ltd, [2015] 4 SLR 597. [29] Lim Lie Hoa and another v. Ong Rebecca Jane, [1997] 1 SLR(R) 775.

-Alpesh Yadav[1] INTRODUCTION Even as the global economy has grappled with the effects of pandemic COVID-19, the urgency of addressing climate change has remained unchanged rather has further intensified. The recent flash flood which occurred on 7th February 2021 in the State of Uttarakhand washed away two hydroelectric projects in the outer Garhwal Himalaya region, impacted several other major hydro projects located downstream, took lives of hundreds of villagers and damaged properties and infrastructure of the region. The sudden flooding is believed to be caused due to glacial lake outbursts releasing water trapped behind the ice causing flood. The Government proclaimed the calamitous event as a natural disaster. However, if we believe the reports published in international newspapers[2] of the very next day, they quoted that scientists had warned the Government long back that the Himalayas had been warming at a dangerously high rate and the region's ecosystem had become too physically exposed to the dangers of development projects. The scientific committee appointed by Supreme Court in 2014[3], had also advised against building dams in the paraglacial zone, i.e., river valleys in which the floor is higher than 7,000 feet, but such objections were disregarded. Both the hydropower projects that washed away in the flood were constructed in this zone. The Scientific Committee appointed by the Apex Court of India in 2020[4] advised against the construction of 33 feet wide 500 miles of highway in high Himalayans hills of Uttarakhand but such advice was also ignored. While climate change is on high priority on the global political and business agendas, balancing the infrastructural requirements and environmental risk could always be difficult and there could be several such claims and conflicts. Public and private parties are increasingly subjected to regulations, impacting commercial relationships, and therefore rise in potential for disputes is inevitable. It is not within the remit of the present article to put forth a detailed analysis or critique on India’s approach towards the impact of climate change. What is attempted herein is only a primer on the important legislations related to the environment and how it could be practical to adopt arbitration to resolve climate-related disputes. CHANGED CLIMATE Climate is the pattern of variation in temperature, humidity, atmospheric pressure, wind, precipitation, atmospheric particle count and other meteorological variables in a given region over long periods. The climate of a location is also affected by its latitude, terrain, and altitude as well as nearby water bodies and their currents. Earth's climate is dynamic and is always changing through a natural cycle. However, the changes that are occurring now are at an alarming speed and human activities contribute maximum to its causes. The excessive carbon dioxide released in the atmosphere acts as a blanket, trapping heat and warming the planet. Change in climate and global warming are amongst the most serious challenges that mankind is facing today. If we look at the issue from India’s perspective, we are one of the most vulnerable countries to climate change. About half of India's population is dependent upon agriculture or other climate-sensitive sectors. About 12% of India is flood-prone while 16% is drought-prone. India is the third-largest emitter of greenhouse gases in the world after China and the United States. The underlying causes of environmental degradation in India can be classified as social, economic, and institutional. The social factors include excessive population, poverty, and unchecked urbanization, the economic factors include non-existent or poorly functioning markets for environmental goods and services, unprecedented industrial growth without any measures to check the resultant environmental degradation. The institutional factors are lack of awareness and poor infrastructure making the implementation of environmental law extremely difficult and ineffective. CLIMATE CHANGE DISPUTES Climate change is not just another issue, it has several aspects and interconnections with science, technology, economy, trade, diplomacy, and politics and can be the mother of many issues. It is inherently a global concern because of the interconnectedness of our ecosystems and communities, small changes can ripple out throughout the world and eventually affects all living organisms. It is different from other problems faced by humanity, and it compels us to think differently at many levels. The concept of climate change is broad, and disputes arising in these contexts can be in myriad forms. DEVELOPMENT OF ENVIRONMENTAL LAW IN INDIA Environmental legislations existed in India right from the British Regime, however, a well-developed framework came into existence only after the United Nations Conference on the Human Environment in Stockholm in 1972. The outcome of this conference was the constitution of the National Council for Environmental Policy and Planning within the Department of Science and Technology in 1972. This Council later in 1985 evolved into a full-fledged Ministry of Environment and Forests (MoEF), an apex administrative body in the country for regulating and ensuring environmental protection. Constitutional sanction was given to environmental concerns by incorporating them into the Directive Principles of State Policy and Fundamental Rights and Duties by way of the 42nd Amendment to the Constitution after the Stockholm Conference, 1976. The Directive Principles of State Policy and the Fundamental Duties chapters explicitly enunciate the national commitment to protect and improve the environment. Substantive laws for the prevention and/or regulation of any activity that may cause climate change that existed/existing in India: During the British Regime ● Shore Nuisance (Bombay and Kolaba) Act, 1853 ● The Indian Penal Code, 1860 ● The Indian Easements Act, 1882 ● The Fisheries Act, 1897 ● The Factories Act, 1897 ● The Bengal Smoke Nuisance Act, 1905 ● The Bombay Smoke Nuisance Act, 1912 ● The Elephant's Preservation Act, 1879 ● Wild Birds and Animals Protection Act, 1912. Post-Independence of India National Council for Environmental Policy and Planning was set up in 1972 and later evolved into the Ministry of Environment and Forests (MoEF) in 1985. Policy Statement for Abatement of Pollution and the National Conservation Strategy and Policy Statement on Environment and Development brought out by the MoEF in 1992. Environmental Action Programme (EAP) formulated in 1993 with the objective of improving environmental services and integrating environmental considerations into development programmes. ● National Environment Policy, 2006. ● Water (Prevention and Control of Pollution) Act, 1974. ● Water (Prevention and Control of Pollution) Cess Act, 1977. ● Air (Prevention and Control of Pollution) Act, 1981. ● Atomic Energy Act of 1982. ● Motor Vehicles Act,1988. ● The Wildlife (Protection) Act, 1972. ● The Forest (Conservation) Act, 1980. ● Environment (Protection) Act, 1986 (EPA). ● The National Environment Appellate Authority Act, 1997. ● Public Liability Insurance Act, 1991 (PLIA). ● National Environment Tribunal Act, 1995. ● Environment Impact Assessment (EIA) Notifications. The National Action Plan on Climate Change (NAPCC), Prime Minister's Council for Climate Change, laid the framework to address India's development concerns and defined its approach for mitigation and adaptation of climate challenges. The Eight Missions developed for satisfying the principles of the National Action Plan on Climate Change are: ● National Solar Mission (started in 2010). ● National Mission for Enhanced Energy Efficiency (approved in 2009). ● National Mission on Sustainable Habitat (approved in 2011). ● National Water Mission. ● National Mission for Sustaining the Himalayan Ecosystem (approved in 2014). ● National Mission for a Green India (approved in 2014). ● National Mission for Sustainable Agriculture (approved in 2010) and ● National Mission on Strategic Knowledge for Climate Change. Besides the above legislations, rules and policies, there are several other plans and incentives by the governments for energy conservation and to mitigate the impact of climate change. Each State also has its own Action Plans on climate change. The Indian Constitution is one of the few in the world that contains specific provisions on the environment. The three constitutional provisions which have a direct bearing on environmental matters are: ● First and foremost, Article 21 states: "No person shall be deprived of his life or personal liberty except according to procedure established by law." The Apex Court has recognized that the several liberties that are implied by Article 21 include the right to a healthy environment.[5] ● Second, Article 48A requires that "the State shall endeavor to protect and improve the environment and to safeguard the forests and wildlife of the country." ● Third, Article 51A establishes that "it shall be the duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers, and wildlife and to have compassion for living creatures." The Indian Judiciary has been playing a vital role in implementing environmental principles, ensuring social justice, and protecting human rights. It can be rather said that, while adjudicating the environmental matters, the Supreme Court has actually brought the pattern of "judge-driven implementation" of environmental administration in India. The Courts have played a crucial role in implementing the environment law and doctrine of Polluter Pays, Precautionary Principle and the most significant Public Trust Doctrine[6]. The National Green Tribunal set up under the National Green Tribunal Act, 2010 is a specialized court to adjudicate and ensure disposal of environmental disputes. The NGT has jurisdiction to deal with violations of environmental law, to provide compensation to victims of pollution, relief for environmental damage and restitution of the environment. The Tribunal is also empowered with appellate jurisdiction against orders passed by regulatory agencies. SUITABILITY OF ARBITRATION FOR CLIMATE CHANGE DISPUTES India, today has a plethora of constitutional and legislative provisions on environmental protection. The mainstream judiciary and NGT have played a pivotal role by developing and strengthening the environmental jurisprudence in India. Despite such a robust system in place, there are several glaring concerns that underpin the overall legal mechanism. Improper implementation of policies, callousness in enforcing judicial rulings, lack of expertise and technical know-how amidst the legal fraternity, loopholes in the legislative framework are still areas of concern. Moreover, the dynamic nature of environmental problems requires quick decision-making, whereas our Constitutional Courts are so overburdened with other pressing cases that it is difficult for them to give sufficient attention to environmental matters. The NGT is neither administrative tribunals nor constitutional tribunals and does not have the power for judicial review. The jurisdiction of the NGT is limited to only 7 statutes which act as a barrier for taking up environmental matters which do not fall within these statutes. Bench(s) at the NGT are not updated with legal developments in environmental law, as can be evident from the fact that several judgments delivered still talk about strict liability when the rule of absolute liability exists for quite some time. The Bench also lacks diversity and does not include stakeholders from various sectors/places. The existing strength of the tribunal is just six apart from the chairman, whereas the NCT Act mandates the appointment of 20 members (10 judicial and 10 experts) for the 10 benches in five zones with two courts in each zone. The fact is the premier institutions which is required to deal with the environmental issues that cannot be countenance never had full strength. Even though Central Pollution Control Board (“CPCB”) and State Pollution Control Board (“SPCB”) have quasi-judicial powers, but the issue is that not everyone empowered to file appeals there. Also, the members appointed to the CPCB and SPCBs do not have sufficient knowledge about the environment and most appointments are made based on political interest by MLAs, MPs, and bureaucrats[7]. In an age when India is witnessing a staggering rise in industrialization and development, the country is correspondingly facing environmental issues at a rapid pace. The present legislative structure to resolve environmental disputes is still not sufficiently equipped to meet the needs of the hour. It is therefore necessary to refer the issues to an autonomous multi-specialty body depending on the nature and complexity of the issues to address concern effectively. Also, due to the strict liability provisions in environmental statutes, parties in commercial arrangements typically allocate environmental risk in their contract. There may be an indemnity or exclusions to an indemnity clause. There may be a release or allocation of liability provision. There may be an “as is” clause. These are amongst the clauses that may generate disputes. Provisions for arbitration in contracts to include the resolution of such disputes could be a good way for effective resolution. Although some types of environment and climate-related disputes may not lend themselves to arbitration. Nonetheless, disputes with an environmental component that may arise in the context of contractual and commercial disputes can be resolved through commercial arbitration in India. Arbitration can have a unique role to play in the resolution of disputes that arise from the transition to a greener economy. The specific features of arbitration which make it ideally suited to resolve environment-related disputes include: a) the ability of the parties to choose arbitrators and experts with appropriate scientific and environment-related expertise, b) the ability to expedite proceedings and apply interim and conservatory measures particularly in cases involving potentially irreversible damage to the environment, c) the ability to apply specific governing or applicable law, including relevant environment-related statues, d) preservation of confidentiality and at the same time taking steps toward increased transparency in accordance with parties’ requirement and taking into consideration public interest involved, e) arbitral rules are flexible enough that they can be applied to any case. In a testament to the flexibility of arbitration, the continuity of arbitration proceedings in the global pandemic adapting virtual mode has demonstrated arbitration can be an optimal process to resolve disputes given its key advantages as an effective, customizable, and efficient mechanism. The arbitration community has shown its ability to pivot quickly and adapt seamlessly in changing global circumstances to better suit the reality of disputes in the uncertain landscape. The ability to customize the process, proceed efficiently and maintain confidentiality, hallmark the advantage and suitability of arbitration for climate change-related disputes. Customization Arbitrations allow parties to calibrate the right balance of procedural protections to efficiency. It gives the parties ability to select institutional rules or ad hoc rules that are conducive for resolving their dispute efficiently. They can select arbitrators best suited to resolve their dispute. An arbitrator with relevant experience and familiarity in an industry could expedite the resolution of a dispute significantly. This is especially true for environment-related disputes involving a high degree of technical knowledge. Efficiency The arbitration process is generally more efficient than pursuing the dispute in courts, especially considering the backlog of cases the courts have. It also gives parties more flexible and immediate options which may be crucial for resolving climate-related disputes. Further arbitrators can encourage settlement where appropriate and if parties agree to explore such possibilities. The tribunal itself can even conduct mediation, conciliation, or other procedures as appropriate to settle the dispute in such cases. Confidentiality Unlike courts, arbitrations are generally private allowing for confidentiality (including sensitive information) which may be important in the context of climate-related disputes. Furthermore, climate change and environment-related disputes invariably have an international dimension and therefore the inherent flexibility, an option of choosing a neutral forum, neutral venue and internationalism of the arbitral process make commercial arbitration an ideal dispute resolution method for climate-related disputes. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 which is overwhelmingly signed and ratified by the majority of countries allows for seamless award enforcement possibilities worldwide. The United Nations Framework Convention on Climate Change, Article 14 (2) expressly anticipates arbitration for resolution of interstate disputes arising out of the breach of its provisions “in accordance with procedures to be adopted by the Conference of the Parties as soon as practicable, in an annex on arbitration”. This was reaffirmed in Article 24 of the Paris Agreement on 12th December 2015[8]. Even in the side events at 21st Conference of Parties[9] (COP21) to UNFCCC held in Paris, wherein the historic Paris Agreement was signed, COP22 held in Morocco, 2016 and COP23 held in Germany, 2017, the importance of arbitration for redressal of climate-related disputes were discussed and commended. The International Bar Association Report published in 2014[10] also recognized arbitration may offer a number of advantages to the parties looking to resolve the disputes related to climate change. The IBA Report recommends institutions to develop rules and expertise specific to the resolution of environmental disputes to adapt arbitration for climate change disputes. Mr. David W. Rivkin, President of the International Bar Association (IBA), in his keynote address at the United Nations Conference on Climate Change (COP 21) held in Paris, December 2015 emphasized the importance of accessible and enforceable dispute resolution mechanism frameworks. Mr. Rivkin, while emphasizing on benefits of arbitration, stated that international arbitration has been used at least since ancient Greek times to resolve important disputes and to avert major political and diplomatic crises. In so doing, it has helped create the rule of law. International arbitration should similarly play a critical role in developing the legal framework of the post COP21 world. Mr. Rivkin further said international arbitration is flexible, not only in its procedural rules and tribunal appointment processes but in the different types of parties that may choose to use it and the types of disputes it can be applied to. Arbitration allows parties to provide for the independent, impartial resolution of disputes. By holding parties to their agreements and creating predictability and certainty, arbitral tribunals have promoted international rule of law and international commerce. Mr. Rivkin expresses his thought that affected populations should be able to participate in the arbitral process, provided the terms of the arbitration agreement or the rules used clearly encompass their rights and protections. Finally, Mr. Rivkin said that the commercial stakeholders in climate change-related issues, such as international monetary lenders, insurers, construction companies, states, and extraction industries, all stand to benefit from the certainty of contract, including in respect of internationally or state or industry imposed climate change or sustainable development objectives and targets. Mr. Rivkin concluded that there is huge potential to consider how the existing use of international arbitration and ADR mechanisms in resolving climate change-related disputes may be advanced and expanded, both in the context of contractual obligations and treaty mechanisms. Internationally, arbitration institutions such as ICC, PCA, SCC, HKIAC, LCIA, AAA, etc. are already administering a copious number of cases related to environmental disputes under private commercial and public-private partnership contracts and parties are benefitted in redressing the disputes in a reasonable time. Resolution of environment-related disputes through arbitration is not something new to India, the prominent amongst such arbitration was for the resolution of the dispute which arose between India and Pakistan over the construction of 330 MW Kishenganga Hydroelectric Project in the then State of J&K. Pakistan took India to arbitration at Permanent Court of Arbitration (“PCA”), a Hague based institution, in 2010. The provision for arbitration paved its path from the Indus Waters Treaty Agreement, a World Bank brokered agreement designating commercial use of the Indus River system. The PCA partially ruled in favour of India by allowing India its right under the Treaty to divert waters from the Kishanganga for power generation in J&K. The PCA, however, maintain that India shall release a minimum flow of nine cubic metres per second into the Kishanganga river (known as Neelam in Pakistan) at all times to maintain environmental flows. The American Arbitration Association (“AAA”) has expressly listed environmental disputes, which include pollution control, environmental clean-up, chemical regulation, landfills, etc., as one of its areas of expertise. The International Chambers of Commerce (“ICC”) formed a task force on “Arbitration of Climate Change Related Disputes” to explore how ICC arbitration can be used to tackle climate change-related disputes. The ICC in its Report published in November 2019[11] concluded that it is uniquely positioned to arbitrate climate-related disputes and indicated a willingness to accommodate and administer such disputes. Interestingly, expenses guidelines of the Stockholm Chamber of Commerce (“SCC”), London Court of International Arbitration (“LCIA”), Korean Commercial Arbitration Board (“KCAB”) and the China International Economic and Trade Arbitration Commission, provide for the reimbursement of costs or expenses reasonably incurred by arbitrators, which include the cost of carbon offsetting their flights to and from case-related proceedings. CONCLUSION The need for a green economical architecture has widened the scope for diverse and complex legal relationships amongst private and public stakeholders and also the potential for the use of flexibly adapted dispute resolution mechanisms such as arbitration. The climate change-related action and regulations have increased dramatically after the Paris Agreement came into force and as a consequence of legislative developments thereafter, environment-related disputes are on increase and so will be the commercial arbitrations on climate disputes. If our country’s dream to become Global Arbitration Hub is to be achieved, it would be crucial for our system to widen the scope of arbitration and adopt and adapt arbitration for climate change-related disputes, at the international as well as domestic level. [1]* Mr. Alpesh holds Engineers Degree from Mumbai University and PGs in Construction Management from NICMAR and Institute of Engineers. He is pursuing Master of Business Law and PGD in Environmental Law from NLSIU. He has over 16 years of experience in Contracts Management and Arbitration. He can be contacted at alpesh.yadav@hotmail.com. [2] Article published in New York Times on 8th February 2021. [3] As advised by Dr Ravi Chopra, Director People’s Science Institute, Uttarakhand. [4] Committee led by Dr Ravi Chopra, Director People’s Science Institute, Uttarakhand. [5] Subhash Kumar v. State of Bihar, A.I.R 1991 SC 420, and Virendra Gaur v. State of Haryana, (1995) 2 SCC 577. [6] Adopted by the Hon'ble Supreme Court of India in M.C. Mehta vs Kamal Nath & Ors. [1997(1) SCC388]. [7] As stated in Bhattacharya Committee Report, 1984, the Menon Committee Report and Supreme Court Judgement in Techi Tagi Tara v. Rejendra Singh Bhandari & Ors., 2017. [8] Art. 14(1) of the UNFCCC / Art. 24 of the Paris Agreement (by incorporation: “The provisions of Article 14 of the Convention on settlement of disputes shall apply mutatis mutandis to this Agreement”). [9] Formal Meeting UNFCCC Parties (Conference of Parties) (COP) held every year to assess progress in dealing with climate change. [10] IBA Climate Change Justice and Human Right Task Force published the report Achieving Justice and Human Rights in an Era of Climate Disruption (IBA Report). [11] This Report was prepared by the Task Force chaired by Mr. Windy Miles and Mr. Patrick Thieffry. The Report was unanimously approved by the ICC’s Commission on Arbitration and ADR in a meeting held on 2nd April 2019 in Paris. The Report is available at www.iccwbo.org and http://library.iccwbo.org/.

Shivangi Tiwari[1] and Nishtha Pandey[2] Case study Malibu Lagoon Task Force [3] In March 2000, business interests, resource agencies, conservation groups, and property owners initiated a programme to look after the health of the environmental lagoon. This initiative was taken up to address the improvement in native plants and animal species, protection of human health, and restoration of the function of the wetlands. The mediator worked with the participants and created a holistic membership list that had all the potential stakeholders. The members were grouped into 4 subcommittees and were assigned to review two of the eight chapters of the report by UNEP. They were asked to develop criteria for selecting a strategy, to rank each strategy, and further to reduce it to three from fifteen. The first attempt by the group led to commotion amongst them, the mediator then suggested that rather than fighting over the list, the group should agree upon a set of recommendations that included short-term and long-term high priority recommendations for wetland restoration projects and short-term and long-term priority projects for wetland treatment projects. The final historic recommendations report that was forwarded to the state and federal agencies represented a compromise on the issue that was a hindrance in the peaceful resolution of the problem, which is the timing and scope of work. The ground of consensus was the group agreeing to the fact that starting small and learning from the experiences in each step was always better than fighting over who would pay for the ultimate solution. Application of ADR in climate related disputes Environmental problems are the most widespread and equally challenging for the present as well as future generations. These problems revolve around important aspects of every sphere, ranging from science, sociology, economics, history and culture, property rights, and legal or regulatory constraints, and its effect could be seen on private individuals, the general public, multiple regulatory jurisdictions, and special interests. These problems are even more dangerous as they require an assessment based on unknown consequences. Moreover, when these disputes have impact on the common public they may become emotionally charged and push stakeholders toward rigid postures making it more difficult to negotiate. However, it is important to note that regulatory regimes and legal actions are only marginally effective as they cannot holistically solve the problem at hand. In this situation, ADR methods could exhaustively examine the challenge posed by the ubiquitous environmental problem. There is an increasing need to handle the environmental problems through the joint efforts of all the stakeholders so that the difficulty of ignorance and omission can be eliminated. Otherwise, a uniform approach would be unproductive with regard to the local needs. Hence the need of the hour is to devise a gradual mechanism that is applicable to all mediation processes and enables the mediators to effectively carry out the process. The process is the make-or-break segment of the entire resolution mechanism. If the process that is undertaken is efficient enough, it could result in achievable goals and better environmental outcomes and durable agreements. Examples of ADR successes ADR is increasingly applied to resolve environmental disputes. These are some examples to illustrate the diversity of processes, differences in the structure, and variety of products that are the outcome of ADR application to environmental disputes in various fields like of transportation, hydroelectric dams, and toxic waste sites. Washington State was facing several challenges associated with the permitting, design, and construction of major transportation projects. These included conflicting rules, delays in the permit processes, questionable environmental outcomes, and frustration by tribes that their cultural artefacts and environmental concerns were not being considered. Consequently, TPEAC process to resolve a number of disputes regarding the permitting of transportation projects in Washington was established by the legislature. The process aimed to streamline permits and achieve better environmental results on transportation projects. Consultants were hired to help develop the structure and processes. The committee initiated six technical subcommittees, with broad stakeholder representation, to work on different aspects of the problem.[4] The subcommittees were co-chaired by at least two members of the committee, which had different perspectives on the problems being addressed. Outside consultants acted as facilitators to get the process up. Subcommittees were modified over to meet new challenges. All resolutions by the subcommittee were unanimously adopted. The committee and the participating agencies adopted numerous products as standard practices. All participants acknowledged the establishment of trust relationships among the participants. After four and a half years a decision was made to ask the members of TPEAC to assume the new products and processes as part of their standard operating procedures and not to seek extra funding in the next budget cycle. The Washington State Office of Regulatory Assistance has adopted these products and processes as a model for all of state government. In California, the Dispute Resolution Service of the Federal Energy Regulatory Commission (FERC) and the FERC Office of Litigation initiated a mediated process to re-license several hydroelectric facilities. The issue was the balancing of ecological populations, hydro-power production, and municipal and agricultural uses for the water resources. The other issues included water rights for water districts, 100-year-old water rights applicants, a recent energy crisis, lack of reliable historical data, and a drought. Numerous administrative and legal challenges to the process were the product of past re-licensing processes. The settlement was reached using ADR after addressing the concerns. This permitted the licensee to file their pre convened terms and conditions of the project without any dissent and disapproval. In the GE-Pittsfield case in Western Massachusetts, PCB contamination that caused high levels of public concern was involved. ADR was used to address four major areas. Which are as follows: The liability responsibility of GE for clean-up; The community’s input on impacts of the clean-up process; The establishment of a panel of neutral experts to make recommendations for remediation in the near future; Finally, the agreement to use ADR in order to resolve any dispute that may arise during the implementation of the remediation plan. (EPA website, unknown) Stakeholders were neighbors, business entities, environmental groups, and regulatory agencies. It is important to note that the settlement agreement had strategies for adaptive management. This process necessitated extensive public outreach and community meetings to address all of the interests in the area. (EPA website, unknown) Concerns relating to ADR The use of ADR methods to resolve complex environmental issues includes a number of difficulties that need to be addressed. The question which is frequently asked is who is included and who is excluded in the process. The relevance of this question is substantially increased due to the notion that dispute resolution is an alternative to the traditional environmental decision-making processes which require significant public participation. As a general rule of thumb, stakeholders should be defined as broadly as possible. If the agreements and solutions devised are going to receive broad political and public acceptance, it becomes crucial. A group of stakeholders which is too narrow may simply lead to future disputes that will require all parties to return to the negotiating table or face litigation.[5] Processes involving public entities are to be open for the various interest groups which form a major part of the process; these groups must be given opportunities so that their views are considered even if they do not wish to be a regular participant. Moreover, the leeway to add more stakeholders should also be opened at all times during the process so that the interest which was not considered could be accommodated even at the later stages. Cost is one the major consideration, as although in limited issues, mediation is less expensive than litigation, however, it is not the case with environmental disputes as they involve multiple issues from a wide range of problems, so monetary consideration plays a huge role. Moreover, a lot of time is consumed while researching a particular topic. Hence many times the final agreement is reached on the consensus arrived at by the scientists and the concerned parties. The inclusion of the entire stakeholder is one of the important aspects of ADR (thomas-larner 2004). BATANA needs to be discussed with all the concerned parties, if even one of the parties is hesitant or does not participate with good faith in the process, it is better to postpone or terminate the process. The effectiveness and durability of any agreements are determined by the critical stakeholder involvement and therefore it should be a matter of early discussion. One of the strategies that could be used is to meet the reluctant parties and explain the ADR process to them, as in many cases their hesitation is the result of their ignorance about the ADR methods. Another strategy that could be applied, is to meet any representative of the reluctant parties, this also opens the avenue of another set of stakeholders and makes the resolution process even more inclusive. At last, it is up to the “willing party” to decide as to whether progress could be made with the available participants. Conclusion A host of events stretching from storms of historical segments to mundane events that influence a meagre number of people may give rise to Weather and climate disputes. Ensuing legal disputes vary all over the map. Looking upon some of the various reasons why mediation and arbitration are effective, it can be inferred that many such disputes are uniquely befitted to mediation and arbitration. The Paris Climate Agreement proved to be a milestone for Climate change, as it was for the first time the international community came forth to combat climate change and disputes ensuing thereof. Arbitration could be a boon to resolve disputes revolving around climate change. However, one of the major drawbacks of the Paris Climate Agreement is its inability to cater to the needs of the countries which are not a party to it. To address this shortcoming, many nations have put forward a proposal relating to the same before the International Environment Court, which would hopefully prove itself to be beneficial in such matters. The resolution of disputes relating to climate change by using ADR is growing rapidly, the reason for the same could be attributed to the fact that it helps to deal with the critical legal claims having a wide impact, which is not the case in conventional litigation. This is because climate change disputes could not be framed under a given set of regulations as they are very wide and complex. One of the benefits of ADR is that the parties could be asked to chip in their views and opinions and a middle path could be assessed for its acceptability and amenability to a large group of population. Moreover, ADR methods are also making their way to the legislation in several countries. However, it must be noted that ADR is not effective in every legal case, especially where the problem is very complex. Hence, mandates from the legal bodies and courts to resolve cases using ADR are still necessary. Application of administrative ADR helps in finding out the potential environmental threats and conflicts at an initial stage, when they are relatively easier to resolve, which indeed has a positive impact on the dispute resolution methods. It is overwhelming to note that the principles applied in Environmental ADR are in sync with the international environmental principles. [1] The author is a third-year law student at Hidayatullah National Law University and can be reached at shivangi.1995@hnlu.ac.in [2] The author is a third-year law student at Dr.Ram Manohar Lohiya National Law University and can be reached at nishthapandey3103@gmail.com [3] Alana Knaster, ‘Resolving Conflicts Over Climate Change Solutions: Making the Case for Mediation’ (2010) accessed 29 March 2021. [4] Dan Swecker, 'Applying Alternative Dispute Resolution to Environmental Problems' (Mediate India - Everything Mediation, 5 July 2006) accessed 22 April 2021. [5] ibid