International Commercial Arbitration

M U M BA I S I L I C O N VA L L E Y BA N G A LO RE S I N G A P O RE M U M BA I B KC NEW DELHI MUNICH N E W YO RK
International
Commercial
Arbitration
Law and Recent Developments in
India
With inputs from -

Singapore International Arbitration Centre
(SIAC)
March 2017
© Copyright 2017 Nishith Desai Associates www.nishithdesai.com

International Commercial Arbitration
Law and Recent Developments in India
With inputs from - Singapore International Arbitration Centre (SIAC)
March 2017
MUMBAI SILICON VALLEY BANGALORE SINGAPORE MUMBAI BKC NEW DELHI MUNICH NEW YORK
[email protected]
© Nishith Desai Associates 2017

Contents
1. INTRODUCTION 01
2. INDIAN ARBITRATION REGIME 02
I. History of Arbitration in India 02

II. Background to the Arbitra- tion and Conciliation Act, 1996 02
III. Scheme of the Act 02
IV. Arbitration and Conciliation Amendment Act, 2015 03
3. INTERNATIONAL COMMERCIAL ARBITRATION – MEANING 05
4. ARBITRABILITY UNDER INDIAN LAW 06
5. INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN INDIA 07
I. Notice of arbitration 07
II. Referral to arbitration 07
III. Interim reliefs 08
IV. Appointment of arbitrators 08
V. Challenge to appointment of arbitrator 09
VI. Mandate of the arbitrator 10
VII. Challenge to jurisdiction 10
VIII. Conduct of arbitral proceedings 10
IX. Hearings and Written Proceedings 11
X. Fast track procedure 12
XI. Settlement during arbitration 12
XII. Law of limitation applicable 12
XIV. Interest and cost of arbitration 13
XV. Challenge to an award 13
XVI. Appeals 16
XVII. Enforcement and execution of the award 16
6. INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN A

RECIPROCATING COUNTRY 18
I. Referring parties to arbitration under part II 19

II. Enforcement and execution of foreign awards 20
III. Appealable orders 22
7. EMERGING ISSUES IN INDIAN ARBITRATION LAWS 23
I. Prospective applicability of the amendment act 23

II. Conundrum surrounding two indian parties having a foreign seat of arbitration 23
III. Arbitrability of oppression and mismanagement cases 24

8. CONCLUSION 25
ANNEXURE 26
I. Prospective Applicability of Arbitration and Conciliation Amendment Act, 2015 26

II. Two Indian Parties Opting for Foreign-Seated Arbitra- tion: No Bar? 29
III. Supreme Court Upholds Arbitration for a Pathologi- cal Arbitration Clause 33
IV. Bombay High Courts Rules on Arbitrability of Oppres- sion and
Mis-Management Issues 35
V. Allegations of Fraud not a Bar to Foreign Seated Arbitration 38
VI. Enforcement of Foreign Awards Becomes Easier: ‘Patent Illegality’
Removed from the Scope of Public Policy 40
VII. No Valid Arbitration if Clause in Unsigned Agreement 43
VIII. Delhi HC Adds to Uncertainty Over Applicability of the Arbitration &
Conciliation (Amendment) Act 2015 46
IX. Appellate Arbitration Permissible In India – But Should You Provide For It? 50
X. Allegations of Fraud Are Arbitrable - Even in Domestic Arbitrations in India 53
XI. Arbitration (Amendment) Act, 2015 Shall Apply Retrospectively to
Court Proceedings in Relation to Arbitral Proceedings 57
XII. In Civil Courts we ‘Trust’: Trust Disputes Inarbitrable in India 60
XIII. Employees as Arbitrators? No, Says Delhi HC 63
ABOUT SIAC 69
SIAC INFORMATION KIT 74

1. Introduction
Increasing international trade and investment is In furtherance of measures taken by the Indian gov-
accompanied by growth in cross-border commercial ernment in support of the ‘ease of doing business in
disputes. Given the need for an efficient dispute India’, and after two aborted attempts in 2001 and
resolution mechanism, international arbitration has 2010 to amend the arbitration law; on October 23,
emerged as the preferred option for resolving cross- 2015, the President of India promulgated the Arbi-
border commercial disputes and preserving business tration and Conciliation (Amendment) Ordinance,
relationships. With an influx of foreign investments, 2015 (“Ordinance”). The Ordinance incorporated the
overseas commercial transactions, and open ended essence of major rulings passed in the last two dec-
economic policies acting as a catalyst, international ades and most of the recommendations of 246th Law
commercial disputes involving India are steadily Commission Report, and have clarified major contro-
rising. This has drawn tremendous focus from the versies that arose in recent years.
international community on India’s international
Thereafter, on December 17, 2015 and December 23,
arbitration regime.
2015 respectively, the Arbitration and Con- ciliation
Due to certain controversial decisions by the Indian (Amendment) Bill, 2015 (“Bill”) was passed by the
judiciary in the last decade, particularly in cases involv- Lok Sabha and Rajya Sabha respectively, with minor
ing a foreign party; the international community has additions to the amendments introduced by the
kept a close watch on the development of arbitration Ordinance. On December 31, 2015, the President of
laws in India. The Indian judiciary has often been crit- India signed the Bill and thereafter, gazette notification
icized for its interference in international arbitrations was made on Jan- uary 1, 2016. Accordingly, the
and extra territorial application of domestic laws in for- Arbitration and Conciliation (Amendment) Act, 2015
eign seated arbitrations. (“Amend- ment Act”) came into effect, from October
23, 2015. The Amendment Act is applicable prospec-
However, the latest developments in the arbitration
tively to the arbitral proceedings commenced after
jurisprudence through recent court decisions clearly
October 23, 2015.
reflect the support of the judiciary in enabling India
to adopt best international practices. Courts have This paper aims to summarize the position under
adopted a pro-arbitration approach and a series of Indian law on international commercial arbitration
pro-arbitration rulings by the Supreme Court of India (“ICA”), seated within and outside India and discusses
(“Supreme Court”) and High Courts have attempted the recent judicial decisions in this field. The changes
to change the arbitration landscape completely introduced by the Amendment Act are a step in
for India. From 2012 to 2016, the Supreme Court the right direction towards ensuring an arbitration
delivered various landmark rulings taking a much friendly nation, and have been captured in this paper.
needed pro-arbitration approach such as declaring
the Indian arbitration law to be seat-centric;
removing the Indian judiciary’s power to interfere
with arbitrations seated outside India; referring
non-signatories to an arbitration agreement to settle
disputes through arbitration; defining the scope
of public policy in foreign-seated arbitration; and
determining that even fraud is arbitrable.
1
Provided upon request only
2. Indian Arbitration Regime

Indian party, though defined as ICA is treated akin to
I. History of Arbitration in a domestic arbitration.
India Part II of the Act deals only with foreign awards1

and enforcement under the Convention on the
Until the Arbitration and Conciliation Act, 1996 Recognition and Enforcement of Foreign Arbi- tral
(“Act”), the law governing arbitration in India Awards, 1958 (“New York Convention”) and
consisted mainly of three statutes: Convention on the Execution of Foreign Arbi- tral
Awards, 1927 (“Geneva Convention”). Part III of
i. The Arbitration (Protocol and Convention) Act,
the Act is a statutory embodiment of conciliation
1937 (“1937 Act”)
provisions.
ii. The Indian Arbitration Act, 1940 (“1940 Act”)

In Part I, Section 8 regulates the commencement of
and
arbitration in India, Sections 3, 4, 5, 6, 10 to 26, and
28 to 33 regulate the conduct of arbitration, Section
iii. The Foreign Awards (Recognition and
34 regulates the challenge to the award and Sections
Enforcement) Act, 1961 (“1961 Act”)
35 and 36 regulate the recognition and enforcement
The 1940 Act was the general law governing of the award. Sections 1, 2, 7, 9,27, 37 and 38 to 43 are
arbitration in India and resembled the English ancillary provisions that either support the arbitral
Arbitration Act of 1934. process or are struc- turally necessary. 2
The courts have found that Chapters III to VI,

II. Background to the specifically, Section 10 to 33 of Part 1 of the Act,
Arbitra- tion and Con- contain curial or procedural law which parties
would have autonomy to opt out from. The other
ciliation Act, 1996 Chapters of Part I of the Act form part of the proper
law 3, thus making those provi-sions non-derogable
To address raising concerns and with a primary by parties subjected to Part I, even by contract.
purpose to encourage arbitration as a cost-effective
Part II, on the other hand regulates arbitration only
and time-efficient mechanism for the settlement of
in respect to the commencement and recognition /
commercial disputes in a national and international
enforcement of a foreign award and no provisions
sphere, India in 1996, adopted a new legislation
under the same can be derogated by a contract
modeled on the “Model Law” in the form of the
between two parties.4
Arbitration and Conciliation Act, 1996 (“Act”).
The Act was also aimed to provide a speedy and
The objective of the Act is to provide a speedy and
efficacious dispute resolution mechanism in the
cost-effective dispute resolution mechanism which
existing judicial system which was marred with
would give parties finality in their disputes. In 1996,
inordinate delays and backlog of cases.
the Act was passed with a view to bring in winds of
change, but fell into a chasm of its own. A number of
III. Scheme of the Act decisions from the courts slowly but surely ensured
1. A foreign award is award delivered in an arbitration seated

The Act has three significant parts. Part I of the Act outside India
deals with domestic arbitrations and ICA when the 2. Bharat Aluminum Co. v. Kaiser Aluminum Technical Service,
Inc., 2012 (9) SCC 552
arbitration is seated in India. Thus, an arbitration
3. Anita Garg v. M/S. Glencore Grain Rotterdam B.V., 2011(4)
seated in India between one foreign party and an ARBLR 59 (Delhi)
4. Bharat Aluminum Co. v. Kaiser Aluminum Technical Service,
Inc., 2012 (9) SCC 552
2 © Nishith Desai Associates 2017

that the preferred seat in any cross-border contract within a period of (60) sixty days from date of
was always a heavily negotiated point and, more service of notice on the opposite party.
often than not, ended up being either Singapore,
New York, or London (the established global §§Detailed schedule on ineligibility of arbitrators
have been put in place.
arbitration centers). Foreign investors and corporates
doing business in India were just not ready to risk
with the Indian legal system.
ii. Interim reliefs
§§Flexibility has been granted to parties with

IV. Arbitration and foreign-seated arbitrations to approach Indian
courts for aid in foreign seated arbitration;
Conciliation
§§ Section 9 applications to be made directly before
Amendment Act, 2015 High Court in case of international commercial
arbitrations seated in India as well as outside.
The modifications introduced by the Amendment
Act have made significant changes to the Act and are §§Interim reliefs granted by arbitral tribunals
in the right direction to clarify several issues with seated in India are deemed to be order of courts
regard to the objectives of the Act. and are thus enforceable in the new regime.
The Amendment Act provides with strict timelines §§Post grant of interim relief, arbitration pro-
for completion of the arbitral proceedings along with ceedings must commence within 90 days or any
the scope for resolving disputes by a fast track mecha- further time as determined by the court.
nism. The Amendment Act has introduced insertion
of new provisions in addition to amendments to the
B. Arbitral proceedings
existing provisions governing the process of appoint-
ment of an arbitrator. It also clarified the grounds to
i. Expeditious disposal
challenge an arbitrator for the lack of independence
and impartiality. As a welcome move, the Amendment §§A twelve-month timeline for completion of
Act provides for assistance from Indian courts, even in arbitration seated in India has been prescribed.
foreign-seated arbitrations in the form of interim relief
before the commencement of the arbitration. Further, §§Expeditious disposal of applications along
with indicative timelines for filing arbitration
the introduction ‘cost follow the event’ regime in the
applications before courts in relation to interim
Act has been inserted to bring the Act in line with inter-
reliefs, appointment of arbitrator, and challenge
national standards. The process of enforcement and
petitions;
execution under the Act has also been streamlined so
that challenge petitions do not operate as an automatic
§§Incorporation of expedited/fast track arbitration
stay on the execution process.
procedure to resolve certain disputes within
a period of six months.
Below are the snapshots to the major amendments
introduced by the Amendment Act:
ii. Costs
A. Pre-arbitral proceedings §§Detailed provisions have been inserted in rela-
tion to determination of costs by arbitral tribu-
i. Independence and impartiality nals seated in India; introduction of ‘costs follow
the event’ regime.
§§Applications for appointment of an arbitrator
should be endeavored to be disposed of
3
C. Post-arbitral proceedings §§ Section 34 petition to be disposed of expedi-

tiously and in any event within a period of one
i. Challenge and enforcement year from date on which notice is served on
opposite party.
§§In ICA seated in India, the grounds on which
an arbitral award can be challenged has been §§Upon filing a challenge, under Section 34 of the
narrowed; Act, there will not be any automatic stay on the
execution of award – and more specifically, an
§§ Section 34 petitions to be filed directly before order has to be passed by the court expressly
High Court in case of international commercial
staying the execution proceedings.
arbitrations seated in India.

3. International Commercial Arbitration –

Meaning The scope of this section was determined by the
Section 2(1)(f) of the Act defines an ICA as a legal Supreme Court in the case of TDM Infrastruc- ture Pvt.
relationship which must be considered commercial,5 Ltd. v. UE Development India Pvt. Ltd.,6 wherein, despite
where either of the parties is a foreign national or res- TDM Infrastructure Pvt. Ltd. having a foreign control,
ident or is a foreign body corporate or is a company, it was concluded that, “a company incorporated in India
association or body of individuals whose central man- can only have Indian nationality for the purpose of the Act.”
agement or control is in foreign hands. Thus, under
Thus, though the Act recognizes companies
Indian law, an arbitration with a seat in India, but
controlled by foreign hands as a foreign body corpo-
involving a foreign party will also be regarded as an
rate, the Supreme Court has excluded its applica-
ICA, and hence subject to Part I of the Act. Where an
tion to companies registered in India and having
ICA is held outside India, Part I of the Act would have
Indian nationality. Hence, in case a corporation has
no applicability on the parties (save the stand alone
dual nationality, one based on foreign control and
provisions introduced by the Amendment Act unless
other based on registration in India, for the purpose
excluded by the parties, as discussed later) but the par-
of the Act, such corporation would not be regarded
ties would be subject to Part II of the Act.
as a foreign corporation.
The Amendment Act has deleted the words
‘a company’ from the purview of the definition
thereby restricting the definition of ICA only to the
body of individuals or association. There- fore, by
inference, it has been made clear that if a company
has its place of incorporation as India then central
management and control would be irrelevant as
far as its determination of being an “international
commercial arbitration” is concerned.
5. ‘Commercial’ should be construed broadly having regard to the

manifold activities which are an integral part of international
trade today (R.M. Investments & Trading Co. Pvt. Ltd. v. Boeing Co., AIR 1994
SC 1136). 6. 2008 (14) SCC 271
5
4. Arbitrability under Indian Law

Arbitrability is one of the issues where the contractual But the Supreme Court in Swiss Timing Limited v.
and jurisdictional facets of international commercial Organizing Committee, Commonwealth Games 2010,
arbitration meet head on. It involves the simple Delhi 9and World Sport Group (Mauritius) Ltd. v. MSM
question of what type of issues can and cannot be Satellite (Singapore) Pte. Ltd.10 held that allegations of
submitted to arbitration. fraud are not a bar to refer parties to a foreign-seated
arbitration and that the only exception to refer parties
In Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd.7
to foreign-seated arbitration are those which are
the Supreme Court discussed the concept of arbitrability
specified in Sec tion 45 of Act. For example.in cases
in detail and held that the term ‘arbitrability’ had differ-
where the arbitration agreement is either (i) null and
ent meanings in different contexts: (a) disputes capable
void; or (ii) inoperative; or (iii) incapable of being
of being adjudicated through arbitration, (b) disputes
performed. Thus, it seemed that though allegations of
covered by the arbitration agreement, and (c) disputes
fraud are not arbitrable in ICA’s with a seat in India the
that parties have referred to arbitration. It stated that in
same bar would not apply to ICA’s with a foreign seat.
principle, any dispute than can be decided by a civil court
can also be resolved through arbitration. However, certain The decision of the Supreme Court in A Ayyasamy v.
disputes may, by necessary implication, stand excluded A Paramasivam & Ors,11 has clarified that allegations
from resolution by a private forum. Such non-arbitrable of fraud are arbitrable as long as it is in relation to
disputes include: (i) disputes relating to rights and liabil- simple fraud. In A Ayyasamy , the Supreme Court held
ities which give rise to or arise out of criminal offences; that: (a) allegations of fraud are arbitrable unless they
(ii) matrimonial disputes relating to divorce, judicial sep- are serious and complex in nature; (b) unless fraud is
aration, restitution of conjugal rights, or child custody; alleged against the arbitration agreement, there is no
(iii) guardianship matters; (iv) insolvency and winding impediment in arbitrability of fraud; (c) the decision
up matters; (v) testamentary matters (grant of probate, let- in Swiss Timing did not overrule Radhakrishnan. The
ters of administration and succession certificate); and (vi) judgment differentiates between ‘simplicitor fraud’ and
eviction or tenancy matters governed by special statutes ‘serious fraud’, and concludes while ‘serious fraud’ is best
where the tenant enjoys statutory protection against evic- left to be determined by the court, ‘simplicitor fraud’
tion and only the specified courts are conferred jurisdic- can be decided by the arbitral tribunal.
tion to grant eviction or decide the disputes.
However, in Vimal Shah & Ors. v Jayesh Shah & Ors, the
Also, the Supreme Court has held in N. Radhakr- ishnan Supreme Court has held that disputes arising out of
v. M/S Maestro Engineers8 that, where fraud and serious Trust Deeds and the Indian Trusts Act, 1882 cannot be
malpractices are alleged, the matter can only be settled referred to arbitration.12
by the court and such a situation cannot be referred
to an arbitrator. The Supreme Court also observed
that fraud, financial malpractice and collusion are
allegations with criminal repercussions and as an
arbitrator is a creature of the con tract, he has limited
jurisdiction. The courts are more equipped to adjudicate
serious and complex allegations and are competent in
offering a wider range of reliefs to the parties in dispute.
9. 2014 (6) SCC 677

10. AIR 2014 SC 968
7. 2011 (5) SCC 532 11. (2016) 10 SCC 386
8. 2010 (1) SCC 72 12. Civil Appeal No. 8164 of 2016 (Arising out of SLP (C) No. 13369 of 2013)].

5. International Commercial Arbitration with

seat in India
As per the 2015 QMUL International Arbitration Act will be applicable,as against the Act with respect
Survey, the five most preferred and widely used to arbitral proceedings.
seats for international commercial arbitration are
London, Paris, Hong Kong, Singapore, and Geneva.
For instance, out of all disputes submitted to SIAC,
II. Referral to arbitration
one of the highest number of filings were generated
Under Part I, the courts can refer the parties to
from India.13 Despite an increasing number of Indian
arbitration if the subject matter of the dispute is
parties opting for arbitration to resolve their disputes,
governed by the arbitration agreement. Section 8 of
the number of such international arbitrations with
the Act provides that if an action is brought before
seat in India has not increased significantly. The laws
a judicial authority, which is subject-matter of an
applicable to ICA when seat of arbitration is India are
arbitration, upon an application by a party, the
discussed in detail below.
judicial authority is bound to refer the dispute to
arbitration. It is important to note that the above
I. Notice of arbitration application must be made by the party either before
or at the time of making his first statement on the
Arbitration is said to have commenced when the substance of the dispute and the application shall be
notice of arbitration requires the other party to accompanied by a duly certified or original copy of
take steps in connection with the arbitration or do the arbitration agreement.
something on his part in the matter of arbitration.
Under Section 21 of the Act, a notice of arbitration
Applicability of Amendment Act
has to be served to the other party, requesting that
the dispute be referred to arbitration. The day on The Amendment Act narrows the scope of the
which the respondent receives the notice, arbitral judicial authority’s power to examine the prima facie
proceedings commences under the Act. In a Notice of existence of a valid arbitration agreement, thereby
Arbitration, a party communicates: a) an intention to reducing the threshold to refer a matter before the
refer the dispute to arbitration; and b)the requirement court for an arbitration for purposes of arbitrations
that other party should do something on his part in commenced on or after October 23, 2015.
that regard. This will generally suffice to define the
More importantly, taking heed from the judgment
commencement of arbitration under the Act.
of the Supreme Court in Chloro Controls14, which
effectively applied only to foreign-seated arbitrations,
Applicability of Amendment Act the definition of the word ‘party’ to an arbitration
agreement has been expanded under the Amend-
The date of commencement of the arbitration in
ment Act to also include persons claiming through or
accordance with Section 21 of the Act is crucial with
under such party.
regards the applicability of the Amend- ment Act.
In the event, the date of commence-ment is after
October 23, 2015, the provisions of the Amendment
13. (http://siac.org.sg/images/stories/articles/annual_report/
SIAC_Annual_Report_2015.pdf) There were 91 parties which
used SIAC in the year 2015, being the highest foreign nationality
contributing to the SIAC caseload. 14. Chloro Controls India (P) Ltd. v. Severn Trent Water Purifica- tion Inc., (2013)
1 SCC 641
7
Thus, even non-signatories to an arbitration from the date of the interim protection order or
agreement, insofar as domestic arbitration or Indian within such time as the court may determine.
seated ICA, may also participate in arbitration
proceedings as long as they are proper and necessary
B. Interim reliefs under Section
parties to the agreement.15
17
III. Interim reliefs Section 17 has been amended to provide the Arbitral
Tribunal the same powers as a ‘civil court’ in relation
to the grant of interim measures. Notably, the Arbitral
Under the Act, the parties can seek interim relief from
Tribunal would have powers to grant interim relief
courts and arbitral tribunals under Section 9 and 17
post award but prior to its execution. Further, the order
respectively.
passed by an Arbitral Tribunal in arbitrations seated in
A party may, before, or during arbitral proceedings India will be deemed to be an order of the court and will
or at any time after the making of the Arbitral Award be enforceable under the Code of Civil Procedure, 1908
but before it is enforced, apply to a court for seeking (“CPC”) as if it were an order of the court, which pro-
interim measures and protections including interim vides clarity on its enforceability.
injunctions under Section 9 of the Act.
The intention appears to be vest significant powers with
The Arbitral Tribunal in accordance with Section 17 the Arbitral Tribunal and reduce the burden and backlog
can also provide interim measures of protection or ask a before the courts. There has been extensive confusion
party to provide appropriate security in connection with on the extent and scope of arbitrator’s powers to grant
the matter of dispute, as is found appropriate during the interim relief, and enforceability of such orders has
course of the arbitral proceedings. However the powers proven difficult. This issue has been aptly addressed by
of the Arbitral Tribunal were narrow compared to the making the enforceability of orders issued under Section
powers of the court under Section 9 of the Act. 9 and 17 of the Act identical in case of domestic and
international commercial arbitrations seated in India.
Applicability of Amendment Act However, in certain situations, a party will be required

to obtain an order of interim relief from a court only (e.g.
The Amendment Act has made significant changes which injunctive relief against encashment of a bank guarantee).
will affect the granting of interim relief in an arbitration
proceedings commenced after October 23, 2015.
IV. Appointment of
A. Interim reliefs under Section 9 arbitrators
a. If an arbitral tribunal has been constituted, an
The parties are free to agree on a procedure for
application for interim protection under Section
appointing the arbitrator(s). The agreement can
9 of the Act will not be entertained by the court
provide for a tribunal consisting of three arbitrators
unless the court finds that circumstances exist
and each party will appoint one arbitrator and the two
which may not render the remedy provided under
appointed arbitrators will appoint the third arbitrator
Section 17 inefficacious.
who will act as a presiding arbitrator. 16 If one of the
parties does not appoint an Arbitrator within 30 days,
b. Post the grant of interim protection under Section
or if two appointed Arbitrators do not appoint third
9 of the Act, the arbitral proceedings must
Arbitrator within 30 days, the party can request Chief
commence within a period of 90 (ninety) days
Justice of India (“CJI”) to appoint an Arbitrator in case
of international commercial arbitrations.17 The CJI
16. Section 11(3) of the Act

15. Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya, (2003) 5 SCC 531 17. Section 11(4) of the Act

can authorize any person or institution to appoint not amount to delega- tion of judicial power and is to
an Arbitrator. Some High Courts have authorized be treated as an administrative decision.
District Judge to appoint an Arbitrator. In case of
There has always been a concern in India with respect
domestic arbitrations, application has to be made to
to the time taken for appointment of arbitrators
Chief Justice of respective High Court within whose
due to the existing jurisprudence and procedure.
jurisdiction the parties are situated.18
The time-frame for such appointment was usually
12-18 months. This amendment seeks to address
Applicability of Amendment Act this delay by introduc- ing a timeline and clarifying
the procedure of appointment to be an exercise of
If one of the parties does not appoint an arbitrator
administrative power by the courts.
within 30 days, or if two appointed arbitrators do not
appoint third arbitrator within 30 days, the party can
request the Supreme Court or relevant High Court
V. Challenge to
(as applicable) to appoint an arbitrator.19 The Supreme
Court/High Court can authorize any person or insti- appointment of
tution to appoint an arbitrator.20 In case of an ICA, the
application for appointment of arbitrator has to be
arbitrator
made to the Supreme Court and in case of a domestic
An arbitrator is expected to be independent and
arbitration, the respective High Courts having territo-
impartial. If there are circumstances due to which
rial jurisdiction will appoint the Arbitrator.
his independence or impartiality can be challenged,
he must disclose the circumstances before his
The Amendment Act empowers the Supreme Court
appointment.23
in an India-seated ICA and High Courts in domestic
arbitration to examine the existence of an arbitration
Appointment of an arbitrator can be challenged only if –
agreement at the time of making such appointment.21
a. Circumstances exist that give rise to justifiable
This should be noted against the threshold contained
doubts as to his independence or impartiality;
in a Section 8 application for referring a dispute to
or,
arbitration which empowers a court only to merely
examine the prima facie existence of an arbitration b. He does not possess the qualifications agreed
agreement. A recent Delhi High Court decision22 upon by the parties. 24
has emphasized that the courts, while deciding
The challenge to appointment has to be decided
an application for appointment of an arbitrator
by the arbitrator himself. If he does not accept the
must confine their enquiry to the existence of an
challenge, the proceedings can continue and the
arbitration agreement. The question of arbitrability
arbitrator can make the arbitral award.
of the issue would be decided by the arbitral tribunal
and not the courts.
However, in such cases, application for setting aside
The application for appointment of the arbitrator the arbitral award can be made to the court under
before the Supreme Court or High Court, as the case Section 34 of the Act. If the court agrees to the challenge,
may be, is required to be disposedof as expeditiously the arbitral award can be set aside.25 Thus, even if
as possible and an endeavor shall be made to do so the arbitrator does not accept the challenge to his
within a period of 60 days; such appointment would appointment, the other party cannot stall further
arbitration proceedings by rushing to the court.
20. Section 11 (6)(b) of the Act
21. Section 11 (6)(a) of the Act 23. Section 12(1) of the Act
22. Picasso Digital Media Pvt. Ltd. v. Pick-A-Cent Consultancy Service Pvt. 24. Section 12(3) of the Act
Ltd., ARB.P. 635/2016. 25. Section 13(6) of the Act
9
The arbitration can continue and challenge can be made of an arbitrator and did not deal with the procedure
in court only after the arbitral award is made. for re-appointment. For arbitrations commencing after
October 23, 2015, a fresh application for appointment
Applicability of Amendment Act need not be filed in case of termination and substitution
may be made, however the practical application is yet
The Amendment Act provides a form for disclosure to be tested.
in the new Fifth Schedule. Such disclosure is in
This will surely help a party to ensure a time bound
accordance with internationally accepted practices
arbitration process while entering into a contract and
to be made applicable for arbitration proceedings
in compelling the arbitrator to deliver his award within
commenced on or after October 23, 2015.
the stipulated timelines. At the same time it equally
In the Amendment Act, the legislators have listed becomes important to stipulate realistic timeliness
scenarios in Seventh Schedule which may result for conclusion of an arbitration process so as to avoid
in justifiable doubts as to the independence and forced expiry of the arbitrator’s mandate despite best
impartiality of an arbitrator such as ‘relationship with efforts to deliver an award in a timely fashion.
the parties, counsel or the subject matter of the dispute,
such as that of the employee of one of the parties’.26
There is however, a decision of Punjab and Haryana High
VII. Challenge to
Court which has held that there is, no bar on a former jurisdiction
employee to sit as an arbitrator in a dispute. 27 This is an
indicative list in addition to disqualifying situations that
Under Section 16 of the Act, an Arbitral Tribu- nal has
have been affirmed by case law such as the holding of the
competence to rule on its own jurisdiction, which
Supreme Court that the arbitrator cannot be qualified to
includes ruling on any objections with respect to the
arbitrate if he is the part of the contract.28
existence or validity of the arbitration agreement. The
doctrine of ‘competence-competence’ confers jurisdiction
VI. Mandate of the on the Arbi- trators to decide challenges to the arbitration
clause itself. In S.B.P. and Co. v. Patel Engineering Ltd. and
arbitrator Anr.,30 the Supreme Court has held that where the Arbitral
Tribunal was constituted by the parties without judicial
An encouraging position of Indian arbitration law intervention, the Arbitral Tribunal could determine all
is the jurisprudence relating to the mandate of an jurisdictional issues by exercising its powers of compe-
arbitrator. The Supreme Court in its decision in NBCC tence-competence under Section 16 of the Act.
Ltd. v. J.G. Engineering Pvt. Ltd. 29 has laid down that the
mandate of the arbitrator expires in case an award is not
delivered within the time limit stipulated by the parties
VIII. Conduct of arbitral
in the arbitration agreement. proceedings
Applicability of Amendment Act A. Flexibility in Respect of
The Amendment Act has clarified the lacuna that Procedure, Place and
existed since the inception of the Act. The provision Language
earlier only dealt with the expiration of the mandate
The Arbitral Tribunal should treat the parties equally and
each party should be given full opportunity to present its
26. Section 11(5) of the Act inserted by the Amendment Act. Also see
Assignia-Vil JV v Rail Vikas Nigam Ltd, 2016 SCC Online Del 2567 case.31 The Arbitral Tribunal is not bound by the CPC or
27. Reliance Infrastructure Ltd. v. Haryana Power Generation Corporation
Ltd, Arbitration Case No. 166 of 2016 (O&M)
28. Indian Oil Corporation Ltd. v. Raja Transport Pvt. Ltd., (2009) 8 SCC 520 30. 2005 (8) SCC 618
29. 2010 (2) SCC 385 31. Section 18 of the Act

the Indian Evidence Act, 1872.32 The parties to the statement of defence as forfeited under specified
arbitration are free to agree on the procedure to be circumstances. 39
followed by the Arbitral Tribunal. If the parties do
not agree to the procedure, the procedure will be as
determined by the Arbitral Tribunal.
IX. Hearings and Written
The Arbitral Tribunal has complete powers to
Proceedings
decide the procedure to be followed, unless parties
After submission of pleadings, unless the parties agree
have otherwise agreed upon the procedure to be
otherwise, the Arbitral Tribunal can decide whether
followed.33 The Arbitral Tribunal also has powers to
there will be an oral hearing or whether proceedings
determine the admissibility, relevance, materiality
can be conducted on the basis of documents and
and weight of any evidence.34 Place of arbitration
other materials. However, if one of the parties
will be decided by mutual agreement. However, if
requests the Arbitral Tribunal for a hearing, sufficient
the parties do not agree to the place, the same will
advance notice of hearing should be given to both the
be decided by the tribunal.35 Similarly, the language
parties.40 Thus, unless one party requests, oral hearing
to be used in arbitral proceedings can be mutually
is not mandatory.
agreed. Otherwise, the Arbitral Tribunal can decide
on the same.36
Applicability of Amendment
B. Submission of Statement of Act
Claim and Defense For the expeditious conclusion of the arbitration
proceedings a proviso has been introduced by the
The Claimant should submit the statement of claims,
Amendment Act on the conduct of ‘oral proceedings’
points of issue and the relief or remedy sought. The
and furnishing of ‘sufficient cause’ in order to seek
Respondent should state his defense in respect of
adjournments. The amended provision has also made
these particulars. All relevant documents must be
a room for the tribunal to impose costs including
submitted. Such claim or defense can be amended or
exemplary costs in case the party fails to provide
supplemented at any time.37
sufficient reasoning for the adjournment sought.
Applicability of Amendment By the Amendment Act, the time limit for conduct
Act of the arbitral proceedings have been streamlined
and arbitrators are mandated to complete the entire
arbitration proceedings within a span of 12 (twelve)
The Amendment Act now provides for an applica-
months from the date the Arbitral Tribunal enters
tion for counterclaim/set-off to be adjudicated upon
upon the reference.41 However, a 6 (six) months
in the same arbitration proceeding without requir-
extension may be granted to the arbitrator by
ing a fresh one.38 The Arbitral Tribunal, under the
mutual consent of the parties.42 Beyond 6 (six)
amended Section 25 of the Act, can also exercise its
months, any further extension may be granted to
discretion in treating the right of defendant to file
the arbitrator at the discretion of the court 43 or else
the proceedings shall stand terminated.44 An appli-
cation for extension of time towards completion

33. Section 19(3) of the Act 39. Section 25(b) of the Act
34. Section 19(4) of the Act 40. Section 24 of the Act
35. Section 20 of the Act 41. Section 29A(1) of the Act
38. Section 23(2-A) of the Act 44. Section 29A(4) of the Act
11
of arbitral proceedings has to be disposed of form of an arbitral award on agreed terms, which is
expeditiously.45 There is also a provision made for called consent award. Such arbitral award shall have
awarding additional fees, as consented upon by the the same force as any other arbitral award. 51
parties, to them for passing the award within the
Under Section 30 of the Act, even in the absence
time span of 6 months.46
of any provision in the arbitration agreement, the
Arbitral Tribunal can, with the express consent of
the parties, mediate or conciliate with the parties, to
X. Fast track procedure resolve the disputes referred for arbitration.
The Amendment Act has inserted new provisions to

facilitate an expedited settlement of disputes based XII. Law of limitation
solely on documents subject to the agreement of the
parties. The tribunal for this purpose consists only of
applicable
a sole arbitrator who shall be chosen by the parties.47
The Limitation Act, 1963 is applicable to arbitrations
For the stated purpose the time limit for making under Part I. For this purpose, date on which the
an award under this section has been capped at 6 aggrieved party requests other party to refer the
months from the date the Arbitral Tribunal enters matter to arbitration shall be considered. If on that
upon the reference.48 date, the claim is barred under Limitation Act, the
arbitration cannot continue.52 If arbitration award
Parties can before constitution of the Arbitral Tribunal,
is set aside by court, time spent in arbitration will
agree in writing to conduct arbitration under a fast
be excluded for the purposes of Limitation Act. This
track procedure.49 Under the fast track procedure,
enables a party to initiate a fresh action in court or
unless the parties otherwise make a request for oral
fresh arbitration without being barred by limitation.
hearing or if the arbitral tribunal considers it necessary
to have oral hearing, the Arbitral Tribunal shall
decide the dispute on the basis of written pleadings, XIII. Arbitral award
documents and submissions filed by the parties
without any oral hearing. 50 A decision of an Arbitral Tribunal is termed as
‘Arbitral Award’. An arbitral award includes interim
awards. But it does not include interim orders passed
XI. Settlement during by arbitral tribunals under Section 17. Arbitrator
arbitration can decide the dispute “injustice and in good faith”
only if both the parties expressly authorize him to
do so.53 The decision of Arbitral Tribunal will be by
It is permissible for parties to arrive at a mutual
majority.54 The Arbitral Award shall be in writing
settlement even when the arbitration proceedings are
and signed by all the members of the tribunal.55
going on. In fact, even the tribunal can make efforts
It must state the reasons for the award unless the
to encourage mutual settlement. If parties settle the
parties have agreed that no reason for the award is
dispute by mutual agreement, the arbitration shall be
to be given.56 The Award should be dated and the
terminated. However, if both parties and the Arbitral
place where it is made should be mentioned
Tribunal agree, the settlement can be recorded in the
(i.e. the seat of arbitration). A copy of the award
45. Section 29A(9) – the section endeavours the application to be

disposed of within a period of 60 days. 51. Section 30 of the Act
46. Section 29A(2) of the Act 52. Section 43(2) of the Act
47. Section 29B(2) of the Act 53. Section 28(2) of the Act
48. Section 29B(4) of the Act 54. Section 29 of the Act

should be given to each party. Arbitral Tribunals The regime for costs has been established which has
can also make interim awards.57 applicability to both arbitration proceedings as well as
the litigations arising out of arbitration.
XIV. Interest and cost of The explanation defining the term ‘costs’ for the pur-
arbitration pose of this sub-section has been added. The circum-

stances which have to be taken into account while
determining the costs have been laid down in the
The interest rate payable on damages and costs
sub-section (3) of the freshly added section (Section 31
awarded, unless the arbitral award otherwise directs,
A). In a nutshell this provision is added to determine
shall be 18 percent per annum, calculated from the
the costs incurred during the proceedings including
date of the award to the date of payment.
the ones mentioned under Section 31(8) of the Act.
Applicability of Amendment
XV. Challenge to an
Act
award
The interest rate payable on damages and costs
awarded, as per the Amendment Act shall, unless the
Section 34 provides for the manner and grounds for
arbitral award otherwise directs, shall be 2 percent
challenge of the arbitral award. The time period for
higher than the current rate of interest prevalent on
the challenge is before the expiry of 3 months from
the date of award, from the date of award to the date
the date of receipt of the arbitral award (and a further
of payment. 58
period of 30 days on sufficient cause being shown
for condonation of delay). If that period expires, the
A. Regime for Costs (Introduced award holder can apply for execution of the arbitral
by the Amendment Act) award as a decree of the court. But as long as this
period has not elapsed, enforcement is not possible.
Cost of arbitration means reasonable cost relating
to fees and expenses of Arbitrators and witnesses, Under Section 34 of the Act, a party can challenge
legal fees and expenses, administration fees of the the arbitral award on the following grounds-
institution supervising the arbitration and other
i. the parties to the agreement are under some incapacity;
expenses in connection with arbitral proceedings.
The tribunal can decide the cost and share of each
ii. the agreement is void;
party.59 If the parties refuse to pay the costs, the
Arbitral Tribunal may refuse to deliver its award. iii. the award contains decisions on matters beyond the
In such case, any party can approach the court. The scope of the arbitration agreement;
court will ask for a deposit from the parties and on iv. the composition of the arbitral authority or the
such deposit, the award will be delivered by the arbitral procedure was not in accordance with the
tribunal. Then court will decide the cost of arbitration arbitration agreement;
and shall pay the same to Arbitrators. Balance, if any,
v. the award has been set aside or suspended by
will be refunded to the party.60
a competent authority of the country in which it
was made;
vi. the subject matter of dispute cannot be settled by

arbitration under Indian law; or
58. Section 31(7)(b) of the Act vii. the enforcement of the award would be
contrary to Indian public policy.
60. Section 39 of the Act
13
Applicability of Amendment The Amendment Act clarifies that an award will not be
Act set aside by the court merely on erroneous application

of law or by re-appreciation of evidence. 61 A court
The Amendment Act has added an explanation to will not review the merits of the dispute in deciding
Section 34 of the Act. In the explanation, public whether the award is in contravention with the
policy of India has been clarified to mean only fundamental policy of Indian law. 62 The Amendment
if: (a) the making of the award was induced or Act has also introduced a new section providing that
affected by fraud or corruption or was in violation the award may be set aside if the court finds that it is
of Section 75 or 81; or (b) it is in contravention with vitiated by patent illegality which appears on the face
the fundamental policy of Indian law; or (c) it is in of the award in case of domestic arbitrations. For ICA
contravention with the most basic notions of the seated in India, ‘patent illegality’ has been keep outside
morality or justice. the purview of the arbitral challenge.63
Process for Challenge & enforcement
Domestic Award/ICA Enforcement of Award a as

seated in India Appeals
a decree
3 Months + 30 days of
the date of receipt of Rejected District court or HC
award / date of correction (as applicable), where
subject-matter of dispute
lies or where respondent
Application to set resides or carries on
Appeals business in case of
aside the Award
domestic award
61. Proviso to section 34(2A) of the Act

62. Explanation 2 to section 48 of the Act
63. Section 34(2A) of the Act

A challenge under this section can be filed only after Under the Act, there was an automatic stay once
providing prior notice to the opposite party.64 an application to set aside the award under Section 34
A challenge has to be disposed of expeditiously and in of the Act was filed before the Indian courts.
any event within a period of one year from the date of The Amendment Act now requires parties to file an
the prior notice referred above. 65 The amended section additional application and specifically seek a stay by
also states that where the time for making an applica- demonstrating the need for such stay to an Indian
tion under section 34 has expired, then subject to the court. However, there is lack of clarity on whether
provisions of the CPC, the award can be enforced. a challenge initiated after 23 October 2015 to an arbi-
tral award, passed prior to that date, would result in an
automatic stay because of conflicting High Court deci-
sions on the same.66
GROUNDS FOR CHALLENGE

Domestic Award/ICA seated in India
Pre-Amendment Post-Amendment
Ground (a) – (f) in the pre-amendment era has been retained
a. Party was under some incapacity;
with the addition of the following:
b. Arbitration agreement not valid under the governing law of
a. In the explanation to Section 34 of the Act, public policy of
the agreement;
India has been clarified to mean only if:
(a) the making of the award was induced or affected by
c. Applicant not given proper notice and not able
fraud or corruption or was in violation of Section 75 or 81;
to present its case;
or (b) it is in contravention with the fundamental policy of
Indian law; or (c) it is in contravention with the most basic
d. Award deals with a dispute not contemplated by terms of
notions of the morality or justice;
the submission to arbitration, or beyond the scope of the
submission to arbitration;
b. A new section has been inserted providing that the award
may be set aside if the court finds it vitiated by patent
e. Composition of Arbitral Tribunal or the arbitral
illegality which appears on the face of the award. For
procedure not in accordance with the agreement or not
international commercial arbitrations seated in India,
in accordance with Part I of the Act;
‘patent illegality’ has been keep outside the purview of
the arbitral challenge;
f. Subject-matter of the dispute not capable of
settlement by arbitration under the law;
c. An award will not be set aside by the court merely on erro-
neous application of law or by re-appreciation of evidence;
g. Award in conflict with the public policy of India
(if induced or affected by fraud or corruption or was in vio-
d. A court will not review the merits of the dispute
lation of confidentiality requirements of a conciliation or
in deciding whether the award is in contravention with the
where a confidential settlement proposal
fundamental policy of Indian law.
in a conciliation is introduced in an arbitration).
TIME-LINES FOR CHALLENGE
Pre-Amendment Post-Amendment
NA Challenge can be filed only after providing prior notice to the
opposite party and has to be disposed of expeditiously and in
any event within a period of one year from the date of the prior
notice.
66. New Tirupur Area Development Corporation Ltd. v. M/s. Hindustan Con-
struction Co. Ltd A. NO. 7674 of 2016 in O.P. No. 931 of 2015; Tufan Chatterjee v.
64. Section 34(5) of the Act Rangan Dhar AIR 2016 Cal 213; Ardee Infrastructure Pvt. Ltd. v. Anuradha
65. Section 34(6) of the Act Bhatia 2017 SCC Online Del 6402
15
XVI. Appeals Moreover, no second appeal shall lie from an order

passed in appeal under this Section but nothing in
Section 37 shall affect or take away any right to appeal
Only in exceptional circumstances, a court can be
to the Supreme Court.
approached under the Act. The aggrieved party can
approach the court only after arbitral award is made
or in case of an order passed under Section 17 of the
XVII. Enforcement and
Act, after the order is passed. Appeal to court is now
permissible only on certain restricted grounds. execution of the
An appeal lies from the following orders and from no award
others to the court authorized by law to hear appeals
In India, the enforcement and execution of arbitral
from original decrees of the court passing the order 67-
awards both domestic and foreign are governed by the
i. granting or refusing to grant any measure under Act read with the CPC. While the former lays down the
Section 9; substantive law governing enforceability and execution
of an award, the latter deals with the procedures required
ii. setting aside or refusing to set aside an
to be followed when seeking execution of an award.
Arbitral Award under Section 34
According to Section 35 of the Act, an arbitral award
However, a three judge Bench of the Supreme Court
shall be final and binding on the parties and persons
has recently held in Centrotrade Minerals & Metal v.
claiming under them. Thus an arbitral award becomes
Hindustan Copper 68 that parties may provide for an
immediately enforceable unless challenged under
appeal to lie from the award to an appellate arbitral
Section 34 of the Act.
tribunal. Such a clause was held not to be contrary to
the laws of the country and thus enforceable. It appears When the period for filing objections has expired
that the scope of appeal in such cases is far wider than or objections have been rejected, the award can be
an appeal to a court. enforced under the CPC in the same manner as if it were
a decree passed by a court of law.69
Applicability of Amendment Act An ex parte award passed by an Arbitral Tribunal under

Section 28 of the Act is also enforceable under Section 36.
The Amendment Act has widened the ambit
Even a settlement reached by the parties under Section 30
of appeal by including the order refusing to refer the
of the Act can be enforced under Section 36 of the Act as
parties to arbitration under Section 8 of the Act.
if it were a decree of the court.
Appeal shall also lie to a court from an order of the
Arbitral Tribunal-
A. Institution of Execution Petition
i. accepting the plea referred to in sub-section (2) or sub- For execution of an arbitral award the procedure as laid
section (3) of Section 16; or down in Order XXI of the CPC has to be followed. Order
XXI of the CPC lays down the detailed procedure for
ii. granting or refusing to grant an interim measure
enforcement of decrees. It is pertinent to note that Order
under Section 17.
XXI of the CPC is the longest order in the schedule to
the CPC consisting of 106 Rules.
67. Section 37 of the Act

69. N. Poongodi v. Tata Finance Ltd., 2005 (3) ARBLR 423
68. 2016 (12) SCALE 1015 (Madras)

Where an enforcement of an arbitral award is sought If the property is immoveable, the attachment is to
under Order XXI CPC by a decree- holder, the legal be made by an order prohibiting the judgment debt
position as to objections to it is clear. At the stage or from transferring or charging the property in any
of execution of the arbitral award, there can be no way and prohibiting all other persons from taking
challenge as to its validity.70 The court executing the any benefit from such a transfer or charge. The order
decree cannot go beyond the decree and between the must be proclaimed at some place on or adjacent to
parties or their representatives. It ought to take the the property and a copy of the order is to be affixed
decree according to its tenor and cannot entertain any on a conspicuous part of the property and upon a
objection that the decree was incorrect in law or in facts. conspicuous part of the courthouse.74
All proceedings in execution are commenced by an Where an attachment has been made, any private
application for execution. 71 The execution of a decree transfer of property attached, whether it be movable
against property of the judgment debtor can be effected or immovable, is void as against all claims enforceable
in two ways – under the attachment. 75
i. Attachment of property; and If during the pendency of the attachment, the

judgment debtor satisfies the decree through
ii. Sale of property of the judgment debtor
the court the attachment will be deemed to be
withdrawn.76 Otherwise the court will order the
The courts have been granted discretion to impose
property to be sold. 77
conditions prior to granting a stay, including a direction
for deposit. The amended section also states that where
the time for making an application under section 34 C. Sale of attached property
has expired, then subject to the provisions of the CPC,
Order XXI lays down a detailed procedure for sale of
the award can be enforced.72
attached property whether movable or immovable. If
Also, the mere fact that an application for setting aside an the property attached is a move- able property, which
arbitral award has been filed in the court does not itself is subject to speedy and natural decay, it may be sold at
render the award unenforceable unless the court grants once under Rule 43. Every sale in execution of a decree
a stay in accordance with the provisions of sub-section 3, should be conducted by an officer of the court except
in a separate application. It is the discretion of the court where the property to be sold is a negotiable instrument
to impose such conditions as it deems fit while deciding or a share in a corporation which the court may order to
the stay application. 73 be sold through a broker.78
B. Attachment of Property
‘Attachable property’ belonging to a judgment debtor may
be divided into two classes: (i) move- able property and
(ii) immoveable property.
70. Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rahman, 1970 (1) SCC
670; Bhawarlal Bhandari v. Universal Heavy Mechanical Lifting 74. O.XXI R.54 of the CPC
Enterprises, 1999 (1) SCC 558 75. Section 64 of the CPC
71. Rule 10 of the CPC 76. 0.XXI R. 55 of the CPC
72. Section 36(1) of the Act 77. 0.21 R. 64 of the CPC
73. Proviso to Section 36(3) of the Act 78. 0.XXI R.76 of the CPC
17
6. International Commercial Arbitration with seat

in a reciprocating country
Post the decision of the Supreme Court in BALCO 79, the Central Government, being satisfied that reciprocal
Indian arbitration law has been made seat-centric. The provisions made may, by notification in the Official
Amendment Act clarifies that Part I of the Act will not be Gazette, declare to be territories to which the said
applicable in foreign seated arbitrations, save and except convention applies.
the stan- dalone provisions discussed below in the table.
Pre-Balco (Bhatia Regime) Post-Balco Amendment Act

Unless impliedly or expressly exclud- Part I of the Act will not apply in case of Part I of the Act will not apply in case
ed by the parties, Part I of the Act foreign seated arbitration. The decision of foreign seated arbitration except
will apply even to a foreign seated was given prospective effect and there- Sections 9, 27 and 37 unless a contrary
arbitration. fore applied to only arbitration agree- intention appears in the arbitration
ments executed on or after September 6, agreement.
2012. If the arbitration agreement was
executed prior to September 6, 2012, The Amendment Act is applicable
necessary modifications would have to prospectively with effect from October
be made in the arbitration agreement 23, 2015 (i.e. the commencement of the
in order to be governed by the ruling in arbitral proceedings should be on or after
BALCO.80 October 23, 2015)81
8081
Part II of the Act is applicable to all foreign awards Thus, even if a country is a signatory to the New York
sought to be enforced in India and to refer parties to Convention, it does not ipso facto mean that an award
arbitration when the arbitration has a seat outside passed in such country would be enforceable in India.
India. Part II is divided into two chapters, Chapter 1 There has to be further notification by the Central
being the most rel evant one as it deals with foreign Government declaring that country to be a territory
awards delivered by the signatory territories to the to which the New York Convention applies. In the
New York Convention which have reciprocity with case of Bhatia International v Bulk Trading, 83 (“Bhatia
India, while Chapter 2 is more academic in nature as it International”) the Supreme Court expressly clarified
deals with foreign awards delivered under the Geneva that an arbitration award not made in a convention
Convention. 82 country will not be considered a foreign award.
A foreign award under Part II is defined as (i) an arbitral About 48 countries have been notified by the Indian gov-
award (ii) on differences between persons arising out ernment so far. They are:- Australia; Austria; Belgium;
of legal relationships, whether contractual or not, Botswana; Bulgaria; Central African Republic; Chile;
(iii) considered as commercial under the law in force in China (including Hong Kong and Macau) Cuba; Czech-
India, (iv) madeon or after 11th day of October, 1960 oslovak Socialist Republic; Denmark; Ecuador; Federal
(v) in pursu ance of an agreement in writing for Republic of Germany; Finland; France; German; Demo-
arbitration to which the convention set forth in the first cratic Republic; Ghana; Greece; Hungary; Italy; Japan;
schedule applies; and (vi) in one of such territories as Kuwait; Malagasy Republic; Malaysia; Mauritius, Mexico;
Morocco; Nigeria; Norway; Philippines; Poland; Republic
79. Bharat Aluminum Co. v. Kaiser Aluminum Technical Service, Inc., 2012 of Korea; Roma- nia; Russia; San Marino; Singapore; Spain;
(9) SCC 552 Sweden; Switzerland; Syrian Arab Republic; Thailand;
80. Harmony Innovation Shipping Ltd v. Gupta Coal India Ltd.& Anr, 2015 (3)
SCALE 295 (for our analysis please see: http:// www.nishithdesai.com/information/ The Arab Republic of Egypt; The Neth- erlands; Trinidad
research-and-articles/ nda-hotline/nda-hotline-single-view/article/have-you- amend-
ed-your-arbitration-agreement-post-balco.html?no_ cache=1&cHash=05954678cd27f35d- and Tobago; Tunisia; United Kingdom; United Republic of
bcb4ce62517c1fc3)
81. Recently the courts have adopted differential view with regard to ap-
Tanzania and United States of America.
plicability of the Amendment Act on the ccourt proceedings arising
out of the underlying arbitral proceedings.
82. As mostly all parties signatory to the Geneva Convention as now
members of the New York Convention, Chapter 2 of Part II remains
primarily academic. 83. AIR 2002 SC 1432

Thus, to reach the conclusion that a particular award by the court to determine the validity of the arbitral
is a foreign award, the following conditions must be agreement. The review is to be on a prima facie basis. 86
satisfied - 84
i. the award passed should be an arbitral award,

A. Distinction between Section 8
and Section 45
ii. it should be arising out of differences between the
parties; Section 8 and Section 45 of the Act, both pertaining to
court referring disputes to arbitration, vary with regards
iii. the difference should be arising out of a legal
to the threshold of discretion granted to the courts.
relationship;
The primary distinction appears to be that Section 8 of
the Act leaves no discretion with the court in the matter
iv. the legal relationship should be considered as
of referring parties to arbitration whereas Section 45 of
commercial;
the Act grants the court the power to refuse a reference to
v. it should be in pursuance of a written agreement to arbitration if it finds that the arbitration agreement is null
which the New York Convention applies;and, and void, inoperative or incapable of being performed.87
vi. the foreign award should be made in one of the The Supreme Court in World Sport Group (Mauritius)
aforementioned 47 countries. Ltd v MSM Satellite (Singapore) Pte. Ltd. 88 has opined
that no formal application is necessary to request
a court to refer the matter to arbitration under Section
I. Referring parties to 45 of the Act. In case a party so requests even through
arbitration under part II affidavit, a court is obliged to refer the matter to arbi-
tration with the only exception being cases where the
arbitration agreement is null and void, inoperative and
A judicial authority under Section 45 of the Act has
incapable of being performed, thus limiting the scope
been authorized to refer those parties to arbitration,
of judicial scrutiny at the stage of referring a dispute to
who under Section 44 85 of the Act have entered in
foreign seated arbitrations.
an arbitration agreement. The Section is based on
Article II (3) of New York Convention and with an
Thus, though Section 8 of the Act envisages the filling
in-depth reading of the Section 45 of the Act, it can be
of an application by a party to the suit seeking reference
clearly understood that it is mandatory for the judicial
of the dispute to arbitration, Section 45 needs only
authority to refer parties to the arbitration.
a ‘request’ for that purpose.
Section 45 of the Act starts with a non obstante clause,

Further, Section 45 can only be applied when the matter
giving it an overriding effect to the provision and
is the subject of a New York Conven- tion arbitration
making it prevail over anything contrary contained
agreement, whereas Section 8 applies in general to all
in Part I or the CPC. It gives the power to the Indian
arbitration clauses falling under Part I of the Act.
judicial authorities to specifically enforce the
In Chloro Controls (I) P. Ltd. v. Severn Trent Water Purifi-
arbitration agreement between the parties.
cation Inc. & Ors., 89 the Supreme Court has held that the
expression ‘person claiming through or under’ as provided
But as an essential pre-condition to specifically enforcing
under Section 45 of the Act would mean and include
the arbitration agreement, the court has to be satisfied
within its ambit multiple and multi-party agreements.
that the agreement is valid, operative and capable of
being performed. A party may not be entitled to a stay
of legal proceedings in contravention to the arbitration
86. Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre, 2005 (3) ArbLR 1; Korp Gems
agreement under Section 45 in the absence of a review (India) Pvt. Ltd. v. Precious Diamond Ltd., 2007 (3) ArbLR 32
87. 2005 (3) ArbLR 1

88. Swiss Timing Limited v. Organizing Committee, Commonwealth Games
84. National Ability S.A. v. Tinna Oil Chemicals Ltd., 2008 (3) ARBLR 37 2010, Delhi, 2014 (6) SCC 677
85. Section 44 of the Act 89. 2013 (1) SCC 641
19
Hence even non-signatory parties to some of the worded formally or be in accordance with a particu-
agreements can pray and be referred to arbitration. lar format.
This ruling has widespread implications for foreign

investors and parties as now, in certain exceptional
C. Agreement must be valid
cases involving composite transactions and inter-
The foreign award must be valid and arise from
linked agreements, even non-parties such as a parent
an enforceable commercial agreement. In the case
company, subsidiary, group companies or directors
of Khardah Company v. Raymon & Co. (India), 91
can be referred to and made parties to an ICA.
the Supreme Court held that an arbitration clause
cannot be enforceable when the agreement of which
II. Enforcement and it forms an integral part is declared illegal. Recently,

the Delhi High Court in Virgoz Oils and Fats Pte. Ltd.v
execution of foreign National Agricultural Marketing Federation of India
awards has held that a contract containing an arbitration

agreement must be signed by all parties to the
contract, in order to make the arbitration agreement
When a party seeking enforcement of a New York
valid and binding upon the parties.92
Convention award under the provisions of the Act,
must make an application to the Court of competent
jurisdiction with the following documents – D. Award must be unambiguous
i. The original/duly authenticated copy of the award; In the case of Koch Navigation v. Hindustan Petroleum
Corp., 93the Supreme Court held that courts must
ii. The original/duly authenticated copy of the
give effect to an award that is clear, unambiguous
agreement; and
and capable of resolution under Indian law.
iii. Such evidence as may be necessary to prove that the

Under Section 48 of the Act, in case of a New York
award is a foreign award.
Convention award, an Indian court can refuse to
enforce a foreign arbitral award if it falls within the
There are several requirements for a foreign
scope of the following statutory defenses –
arbitral award to be enforceable under the Act –
i. the parties to the agreement are under some

A. Commercial transaction incapacity;
The award must be given in a convention country ii. the agreement is void;
to resolve commercial disputes arising out of a legal
iii. the award contains decisions on matters beyond the
relationship. In the case of RM Invest- ment & Trading
scope of the arbitration agreement;
v. Boeing, 90 the Supreme Court observed that the
term “commercial” should be liberally construed as
iv. the composition of the arbitral authority or the
having regard to manifold activities which are an
arbitral procedure was not in accordance with the
integral part of international trade.
arbitration agreement;
B. Written agreement v. the award has been set aside or suspended by a

competent authority of the country in which it was
The Geneva Convention and the New York Conven- made;
tion provide that a foreign arbitral agreement must
be made in writing, although it does not have to be
91. AIR 1962 SC 1810
92. Virgoz Oils and Fats Pte. Ltd.v National Agricultural Marketing Federation of
India, Ex. P. 149/2015 & EA (OS) No. 66/2016]
90. AIR 1994 SC 1136 93. AIR 1989 SC 2198

vi. the subject matter of dispute cannot be settled by fundamental policy of Indian law; or (ii) the interests
arbitration under Indian law; or, of India; or (iii) justice or morality. The wider meaning
given to the expression “public policy of India” occurring
vii. the enforcement of the award would be contrary to
in Section 34(2)(b)(ii) in Saw Pipes97 is not applicable
Indian public policy.
where objection is raised to the enforcement of the for-
eign award under Section 48(2)(b). The Supreme Court
The term “public policy” as mentioned under Section
further discussed Phulchand Exports Limited v. O.O.O.
48 (2) (b) is one of the conditions to be satisfied before
Patriot98(“Phulchand”), wherein it was accepted that
enforcing a foreign award. The Supreme Court in
the meaning given to the expression “public policy of
Renusagar Power Co. Ltd. v. General Electric Co., 94
India” in Section 34 in Saw Pipes, must be applied to the
(“Renusagar”) held that the enforcement of foreign
same expression occurring in Section 48(2)(b) of the
award would be refused on the ground that it is
1996 Act. The Supreme Court concluded that “public
contrary to public policy if such enforcement would
policy of India used in Section 48(2) (b) has to be given
be contrary to –
a wider meaning and the award could be set aside, if it
(i) fundamental policy of India; or is patently illegal” does not lay down correct law, and
has hence overruled the earlier decisions on this point.
(ii) the interest of India; or
On fulfilling the statutory conditions mentioned
(iii) justice or morality.
above, a foreign award will be deemed a decree of the
Indian court enforcing the award and thereafter will
Thus by the above decisions, the courts in India have
be binding for all purposes on the parties subject to
laid down certain threshold which defines “public
the award.
policy” for enforcing foreign awards in India. The
courts, after the land mark judgment, have further
The Supreme Court has held that no separate
narrowed down the meaning of the words “public
application needed be filed for execution of the
policy” in order to give effect to the Act.
award. A single application for enforcement of
award would undergo a two-stage process. In the
In Penn Racquet Sport v. Mayor International Ltd.95,,
first stage, the enforceability of the award, having
the petitioner, a company based in Arizona, sought to
regard to the requirements of the Act (New York
enforce in India an Interna- tional Chamber of Com-
Convention grounds) would be determined. Foreign
merce (“ICC”) award passed in its favor. The respond-
arbitration awards, if valid, are treated on par with
ent, an Indian company, challenged the execution of
a decree passed by an Indian civil court and they are
the award on grounds, inter alia, that the award was
enforceable by Indian courts having jurisdiction as
contrary to the public policy of India. In a well-rea-
if the decree had been passed by such courts.99
soned decision, the Delhi High Court, rejected the
objections raised by the Indian company and held that
Once the court decides that the foreign award is
the foreign award passed in favor of the American com-
enforceable, it shall proceed to take further steps for
pany was enforceable in India. It held that because the
execution of the same, the process of which is identical
award went against the interest of an Indian company
to the process of execution of a domestic award.
was not enough to qualify as working against the “pub-
lic policy of India”. The Amendment Act seems to have taken into
account the findings of the court in pro-arbitra-
However, in Shri Lal Mahal Ltd. v. Progetto Grano Spa
tion judgments such as Shri Lal Mahal Ltd. vs
96(“Lal Mahal”), it was held that enforcement of for-
Progetto Grand Spa by now specifically providing an
eign award would be refused under Section 48(2) (b)
explanation in Section 48, for the avoidance of all
only if such enforcement would be contrary to (i)
94. (1994) 2 Arb LR 405 97. Oil and Natural Gas Corporation Ltd. v. Saw Pipes, AIR 2003 SC 2629
95. 2011 (1) ArbLR 244 (Delhi) 98. 2011 (10) SCC 300
96. 2013 (8) SCALE 489 99. Section 49 of the Act
21
doubts, that an award is in conflict with the public Out of several issues raised in Jindal Exports Ltd. v.
policy of India, only if (i) the making of the award Fuerst Day Lawson Ltd., 101 one was whether
was induced or affected by fraud or corruption or a letters patent appeal would lie against an order
was in violation of section 75 or section 81; or (ii) it under Section 50 of the Act wherein a petition
is in contravention with the fundamental policy of seeking execution of an award was dismissed and
Indian law; or (iii) it is in conflict with the most basic no appeal was maintainable under the Act. Further,
notions of morality or justice. the single judge, under Section 45, refused to refer
the parties to arbitration. A letters patent appeal
was filed against the impugned order. The matter
III. Appealable orders was later referred to the Supreme Court to clarify
whether the appeal was maintainable.
Under Section 50 of the Act, an appeal can be
filed by a party against those orders passed under
The Supreme Court in its decision held –
Section 45 and Section 48 of the Act. How- ever, no
second appeal can be filed against the order passed
under this Section. These orders are only appealable
“… In light of the discussions made above, it must be
under Article 136 of the Con- stitution of India
held that no letters patent appeal will lie against an
(“Constitution”) and such an appeal is filed before order which is not appealable under Section 50 of the
the Supreme Court. Arbitration and Conciliation Act, 1996…”
The Supreme Court in Shin-Etsu Chemical Co. Ltd. v.

Aksh Optifibre Ltd., held that- Thus it is clearly understood that an order under
Section 45 is only appealable under Article 136 of the
Constitution.
“While a second appeal is barred by Section 50, appeal
under Article 136 of the Constitution
of India to the Supreme Court has not been taken
away. However, Article 136 does not provide a party
a right to an appeal;
it is a discretion which the Supreme Court may choose
to exercise. Thus, where there existed an alternative
remedy in the form of a revision under Section 115
of the Civil Procedure Code or under Article 227 of
the Constitution before the High Court, the Supreme
Court refused to hear an appeal under Article
136 even though special leave had initially been
granted…”100
100. 2005 (3) ArbLR 1 101. (2000) 4 RAJ 227

7. Emerging Issues in Indian Arbitration Laws

In the recent past, there has been a lot of enthusiasm of the Act so long as arbitration was invoked in the
on evolving laws of arbitration in India and the preamendment era. 104
emerging issues therein, such as (a) prospective
applicability of the Amendment Act; (b) whether
two Indian parties can chose a foreign seat of
II. Conundrum
arbitration; (c) whether it is possible to arbitrate a surrounding two
dispute arising over allegations of oppression and
mismanagement. indian parties having
a foreign seat of
I. Prospective applicability arbitration
of the amendment act
Even though this issue has been addressed by
a number of High Courts in the past, there is still
There are conflicting decisions of various High
no clarity on ability of two Indian parties to choose
Courts. The Madras High Court in New Tripur Area
a foreign seat of arbitration. In Addhar Mercantile
Development Corporation Limited v. M/s. Hindustan
Private Limited v. Shree Jagdamba Agrico Exports Pvt.
Construction Co. Ltd. & Ors., 102 had ruled that
Ltd., 105 the Bombay High Court expressed a view
the language used in the Section 26103 of the
that two Indian parties choosing a foreign seat
Amendment Act only refers to arbitral proceedings
and a foreign law governing the arbitration agree-
and not court proceedings due to deletion of
ment could be considered to be opposed to public
the language “in relation to.” Section 26 of the
policy of the country.
Amendment Act is not applicable to the stage post
arbitral proceedings. This view has been supported
Recently, in the case of Sasan Power Ltd v. North
by the division bench of Calcutta High Court in
America Coal Corporation India Pvt. Ltd.,106, the Madhya
Tufan Chatterjee v. Rangan Dhar AIR 2016 Cal 213;
Pradesh High Court opined that two Indian parties
may conduct arbitration in a foreign seat under
However, the division bench of Delhi High Court
English law.
in Ardee Infrastructure Pvt. Ltd. v. Anuradha Bhatia
has held that the amended provisions would not
The Madhya Pradesh High Court primarily relied
be applicable to ‘court proceedings’ initiated post-
on the ruling in the case of Atlas Exports Industries
amendments, unless they were merely ‘procedural’
v. Kotak & Company,107 wherein the Supreme Court
and did not affect any ‘accrued right’. Therefore,
ruled that two Indian parties could contract to have
if a challenge petition is filed post amendment,
a foreign-seated arbitration; although, the judgment
it would be governed by the un-amended Section 34
was in context of the 1940 Arbitration Act. Under
appeal, although expected, the Supreme Court did
not opine on this issue.
102. Application No. 7674 of 2015 in O.P. No. 931 of 2015

103. Section 26 Act not to apply to pending arbitral proceed-
ings: - Nothing contained in this Act shall apply to the arbitral 104. Ardee Infrastructure Pvt. Ltd. v. Anuradha Bhatia 2017 SCC Online Del
proceedings commenced, in accordance with the provisions 6402
of Section 21 of the principal Act, before the commencement 105. Judgment in Arbitration Petition No. 910/2013 dated June 12, 2015.
of this Act unless the parties otherwise agree but this Act shall
apply in relation to arbitral proceedings commenced or on after 106. Judgment in First Appeal No. 310/2015 dated September 11, 2015.
the date of commencement of this Act 107. (1999) 7 SCC 61
23
However, one must be wary of the ruling in TDM The Bombay High Court opined that a petition
Infrastructure, 108 wherein the court ruled that two under Sections 397 and 398 of the Companies
Indian parties could not derogate from Indian law by Act, 1953 may comprise of conduct of clandestine
agreeing to conduct arbitration with a foreign seat non-contractual actions that result in the mis-
and a foreign law. But as TDM Infrastructure was management of the company’s affairs or in the
a judgment under Section 11 of the Act, there are oppression of the minority shareholders, or both.
questions on its precedential value. 109
In such cases, even if there is an arbitration agreement,
it is not necessary that every single act must, ipso
III. Arbitrability of facto, relate to that arbitration agreement. Further,
oppression and the fact that the dispute might affect rights of third
parties who are not party to the arbitration agreement
mismanagement renders such disputes non-arbitrable. In addition
to the above emerging issues, please find enclosed
cases Annexure containing detailed list of our hotlines
which cover the analysis of the recent judgments and
A landmark judgment on this issue was delivered
issues faced in the arbitration regime in India.
by the Bombay High Court in Rakesh Malhotra
v. Rajinder Kumar Malhotra, 110 wherein the court
held that disputes regarding oppression and
mismanagement cannot be arbitrated, and must
be adjudicated upon by the judicial authority itself.
However, in case the judicial authority finds that the
petition is mala fide or vexatious and is an attempt
to avoid an arbitration clause, the dispute must be
referred to arbitration. Arguably, this could have
an unintended impact on the prima facie standard
in section 8, as amended and introduced by the
Amendment Act.
108. TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd., (2008) 14
SCC 271
109. West Bengal v, Associated Contractors, 2015) 1 SCC 32

110. Rakesh Malhotra v. Rajinder Kumar Malhotra, (2015) 2 CompLJ 288 (Bom).

8. Conclusion
A fast-growing economy requires a reliable stable With the pro-arbitration approach of the courts and
dispute resolution process in order to be able to the Amendment Act in place, there is cause to look
attract foreign investment. With the extreme forward to best practices being adopted in Indian
backlog before Indian courts, commercial players in arbitration law in the near future. Exciting times are
India and abroad have developed a strong preference ahead for Indian arbitration jurisprudence and our
to resolve disputes via arbitration. courts are ready to take on several matters dealing
with the interpretation of the Amendment Act.
In spite of India being one of the original signatories
of the New York Convention, arbitration in India has
not always kept up with international best practices.
However, the last five years have seen a significant
positive change in approach. Courts and legislators
have acted with a view to bringing Indian arbitration
law in line with international practice.
25
Annexure
I. Prospective Applicability B. Introduction and Factual

of Arbitration and Con- Matrix
ciliation Amendment Act, The Madras High Court (“Madras HC”) in its
2015 recent judgment of New Tirupur Area Devel- opment

Corporation Ltd. (“NTADCL”) v. M/s Hindustan
Construction Co. Ltd. (“HCC”)112 has dealt with
the interpretation and applicability of Section 26
of the Amendment Act. The Madras HC held that
§§Prospective applicability of Arbitration & Section 26 of the Amendment Act is not applicable
Conciliation (Amendment) Act 2015 would
to post arbitral proceedings and therefore separate
be limited to arbitral proceedings and not to
application needs to be filed under Section 36 (2) of
court proceedings;
the Act as required under the amended provisions to
stay enforcement proceedings pending challenge of
§§ Section 26 of the Amendment Act cannot be
an arbitral award.
extended to include post arbitration proceed-
ings, when the award is passed before the
Section 36 (2) and (3) as introduced by the Arbi-
commencement of the Amendment Act;
tration Ordinance, 2015113 with effect from October
23, 2015 stipulates a condition for filing a separate
§§ Separate application needs to be filed to
application along with the Section 34 petition
stay enforcement of arbitral award as court
for setting aside the arbitral award to stay the
proceedings are distinct from arbitral
enforcement proceedings.
proceedings.
C. Contentions of the Parties

A. Background
NTADCL had filed certain applications under
Section 36 (2) of the Act for stay on enforcement of
The Arbitration and Conciliation Amendment Act,
arbitral awards in the on-going petitions for setting
2015 (“Amendment Act”) has introduced certain
aside the arbitral awards dated August 17, 2015
amendments to the provisions of the Arbitration and
before the Madras HC. The issue before the Madras
Conciliation Act, 1996 (“Act”) and is deemed to be
HC in the present case pertains to interpretation
effective from October 23, 2015. However, Section
and applicability of Section 26 of the Amendment
26111 inserted in the newly enacted Amendment
Act to post arbitral proceedings.
Act stipulates that “nothing in the Amended Act,
shall apply to ‘arbitral proceedings’ commenced as per
Section 21 of the Act, before the commencement of the
Amendment Act.”
112. Application No. 7674 of 2015 in O.P. No. 931 of 2015
113. Section 36 (2) “Where an application to set aside the arbitral
award has been filed in the Court under section 34, the filing
of such an application shall not by itself render the award un-
111. Section 26 Act not to apply to pending arbitral proceed- enforceable, unless upon a separate application made for that
ings: - Nothing contained in this Act shall apply to the arbitral purpose, the Court grants stay of the operation of the award
proceedings commenced, in accordance with the provisions in accordance with the provisions of sub-section (3) hereof;”
of Section 21 of the principal Act, before the commencement Section 36 (3) “Upon filing of the separate application under
of this Act unless the parties otherwise agree but this Act shall subsection (2) for stay of the operation of the award, the court
apply in relation to arbitral proceedings commenced or on after may, subject to such conditions as it may deem fit, grant stay of
the date of commencement of this Act. the operation of the award for reasons to be recorded in writing.”

NTADCL had filed its challenge to an arbitral award D. Judgement and Analysis
and contended that since Section 26 of the Amend-
Based on the comparative study of Section 26 of
ment Act clarifies that it is not applicable to arbitra-
the Amended Act and Section 85(2) of the Act,
tion proceedings commenced under the Act, there
the Madras HC held that the legislative intention
is no requirement to file a separate stay application.
under Section 85 (2) of the Act was to apply the
By virtue of filing the challenge petition under Sec-
provisions in relation to arbitral proceedings which
tion 34 of the Act, the arbitral award automatically
commenced before the Act and included court
becomes unenforceable till such time the challenge
proceedings within its ambit.
petition under section 34 of the Act is disposed of.
The court held that the legislative intent of making

Further relying on the Supreme Court ruling of Thys-
the provisions of the Amendment Act applicable to
sen Stahl Union GMBH v. Steel Authority of India Ltd.114,
court proceedings was clear in view of the following:
NTADCL argued that the requirement of filing of
separate stay application under the amended Section
1. In section 26, the expression “in relation to”
36 (2) would apply only in relation to arbitral proceed-
before “arbitral proceedings” is deleted. In
ings commenced on or after the date of commence-
Thyssen, the Supreme Court interpreting the
ment of the Amendment Act. The Supreme Court
repeal and savings clause held that the usage
in Thyssen held that the expression “in relation to
of the words “in relation to arbitral proceedings”
arbitral proceedings” would also cover court proceed-
threw an ambiguity and could not be interpreted
ings within its ambit due to the usage of the words “in
in a narrow manner to mean only pendency of
relation to”. The judgment was rendered in the con-
the arbitration proceedings before Arbitrator but
text of repeal and savings clause. Section 85(2) of the
would also cover proceedings before court;
Act is applicable in two limbs which clarifies that pro-
visions of the old act would apply to arbitral proceed-
2. absence of the expression “court proceedings” in
ings which commenced prior to the Act coming into
section 26;
force unless otherwise agreed by the parties and Act
would apply in relation to arbitral proceedings which 3. Insertion of the Section 36(2), which in the facts
commenced on or after the Act came into force. of this particular case, specifically provides
The usage of the words “in relation to” cannot be for filing a separate application to stay the
interpreted in a narrow manner and would include enforcement of the award.
all proceedings including court proceedings.
The Madras HC held that the interpretation of
HCC contended that there is a difference between Section 26 cannot be extended to include post
arbitral proceedings and court proceedings and literal arbitral proceeding (including court proceedings),
interpretation needs to be given to the language of the even where the award has been passed before the
statute. Accordingly, HCC contended that though pro- commencement of the Amendment Act. Section 36
visions of the Amendment Act, would not apply to any (2) & (3) have been inserted for a specific purpose
arbitral proceedings initiated prior to the commence- to ensure that an application challenging the
ment of the Amendment Act but nothing prevents the award does not automatically render the award
application of the provisions of the Amendment Act to unenforceable but a separate application is required
court proceedings initiated after October 23, 2015. Sec- to be filed to stay enforcement proceedings.
tion 26 of the Amendment Act provides that it will not
These sections are applicable to post arbitral proceed-
be applicable to arbitration proceedings commenced
ings. The procedure to be followed during the stage
prior to coming into effect of the Amendment Act.
of arbitral proceedings and after the award are distinct.
Court proceedings are not arbitral proceedings. There-
fore the Madras HC held that the applicability of the
114. 1999 (9) SCC 334
27
provisions of the Amendment Act should be read with This judgment deals only with the scenario of
the new provisions (Section 26 read with amended Sec- post arbitral proceedings however the ruling may
tion 36 (2) of the Act). have a much wider impact in case of other types
of court proceedings (interim reliefs, seeking
Interestingly the applicability of Amendment Act
evidence, appeals) initiated post October 23, 2015
has been considered by the Calcutta High Court and
in cases where arbitration proceedings may have
contrary decision has been passed. The Calcutta
commenced prior to coming into force of the
High Court in the case of Electro Steel Casting Limited
Amendment Act. There will be two set of laws
v. Reacon (India) Pvt. Ltd.115 while explaining the
applicable in such cases with no clarity on the
application of Section 26 on arbitral proceedings,
practical implementation of the different regimes to
held that where arbitration proceedings commences
arbitral and court proceedings.
before the commencement of Amendment Act, the
provisions of the Act would apply, and enforcement –Payel Chatterjee, Moazzam Khan & Vyapak Desai
of the award would be stayed automatically upon You can direct your queries or comments to the
the filing of application for setting aside an award. authors
115. Application No. 1710 of 2015 decided on January 14, 2016

II. Two Indian Parties B. Factual Matrix

Opting for Foreign- Sasan Power entered into an association agree-
Seated Arbitra- tion: ment with North American Coal Corporation-US

(“NACC-US”) in 2007 (“Agreement”). The Agree-
No Bar? ment, inter alia, provided for resolution of disputes
by way of arbitration to be administered by ICC in
London, England, under laws of the United King-
dom. In 2011, NACC-US assigned its rights, liabil-
ities and obligations under the Agreement to the
§§Madhya Pradesh High Court upholds arbi-
Respondent - North America Coal Corporation India
tration agreement mandating two Indian
Pvt Ltd. (“NACC-India”) by way of an Assignment
Parties to take recourse to a foreign-seated
Agreement. Interestingly, whilst an assignment to
arbitration with foreign substantive law;
NACC-India was conducted, it appears that the obli-
§§Holds that the resultant award would be gations and liabilities of NACC-US under the Agree-
a ‘foreign award’, as envisaged under Part II of ment continued.
the Arbitration & Conciliation Act, 1996;
In 2014, NACC-India terminated the Agree- ment and
§§This is a step forward in the longstanding filed a request for arbitration claiming compensation
debate on whether arbitration proceedings of INR 1,82,59,301. Sasan Power filed its objection to
between two Indian entities can be seated in a this request for arbitration. Sasan Power, thereafter,
foreign country. filed a suit before the District Court and sought an
anti-arbitration injunction. The injunction was
granted by the District Court.
A. Background
A second request for arbitration was filed by NACC-US
before the ICC. Sasan Power filed a second suit chal-
The Madhya Pradesh High Court (“Court”) in its
lenging the request for arbitration filed by NACC-US.
recent decision in Sasan Power Ltd v. North America
Coal Corporation India Pvt Ltd 116 has held that two
NACC-India filed applications for rejection of
Indian parties may conduct arbitration in a foreign
plaint under Order VII Rule 11 of the Code of Civil
seat under English law.
Procedure, 1908 (“Code”) read with Section 45 of
the Arbitration & Conciliation Act, 1996 (“Act”) and
The Court relied upon an earlier decision of
vacation of the anti-arbitration injunction granted by
a Division Bench of the Supreme Court of India
District Court (“Applica- tions”), before the District
(“Supreme Court”) in Atlas Exports Industries v.
Court. The District Court allowed the Applications
Kotak & Company117 (“Atlas Exports”) wherein the
moved by NACC-India and dismissed the suit filed
Supreme Court, under the Arbitration Act, 1940
by Sasan Power. Consequently, Sasan Power filed
(“1940 Act”), had held that it was not against the
this appeal under Section 96 of the Code.
public policy of India when two Indian parties
contract to have a foreign-seated arbitration.
Whilst this judgment provides certain answers in

the longstanding and yet inconclusive debate on the
issue of whether two Indian parties can seat their
arbitration abroad, it also throws up larger questions.
116. First Appeal 310 of 2015

117. (1999) 7 SCC 61
29
C. Issues arbitration under Section 45 of the Act and dismissed

the appeal, while providing the following reasons:
The Court, amongst other things, considered:
1. The Court observed that only orders refusing to
1. Whether the appeal filed by Sasan Power was
refer parties to arbitration could be appealed as
maintainable in light of Section 50 of the Act?
per Section 50 of the Act.
2. Whether two Indian parties could choose to seat

2. The Court, while, placing reliance on the judg-
their arbitration in a foreign country?
ment in Atlas Exports, observed that Section 28 of
the Indian Contract Act, 1872 read with the Excep-
D. Gist of Arguments tion 1 would not be a bar to a foreign seated arbi-
tration. Further, it was observed that when two
Sasan Power contended that TDM Infrastructure did
Indian parties had willingly entered into an agree-
not permit two Indian parties to derogate from Indian
ment in relation to arbitration, the contention
law by agreeing to conduct arbitration with a foreign
that a foreign seated arbitration would be opposed
seat and a foreign substantive law. Further, reliance
to Indian public policy was untenable.
on Atlas Exports was erroneous since it was a judg-
ment under the 1940 Act and only the Act would be 3. The Court stated that the principle laid down in
applicable to the present case. The mandate of Section Atlas Exports (that was by a larger bench than
45 of the Act would not be attracted since an arbitra- TDM Infrastructure) would, in light of the decision
tion clause contemplating a foreign seated arbitration in Fuerst Day Lawson Ltd v. Jindal Exports 118,
between two Indian parties was invalid; hence Applica- wherein it was observed by the Supreme Court
tions based on such a void, null and inoperative arbitra- that there was not much difference between
tion clause would not be maintainable. provisions of the Act and 1940 Act; be binding
precedent in relation to the issue at hand.
NACC-India argued that that no appeal laid against
an order passed under Section 45 of the Act. Further, 4. The Court noted that in TDM Infrastructure
it was argued that TDM Infrastruc- ture was limited the Supreme Court had clarified by way of an
in scope to appointment of an arbitrator during Official Corrigendum that:
proceedings under Section 11(6) of the Act, where the
“It is, however, made clear that any findings/
seat of arbitration was India. The provisions of Section
observations made hereinbefore were only for the
28(1) of the Act were not applicable in the present purpose of determining the jurisdiction of this Court
situation since the seat of arbitration was England. as envisaged under Section 11 of the 1996 Act and not
Atlas Exports, wherein it was stated that by virtue of for any other purpose.”
the Exception 1 to Section 28 of the Contract Act, two
5. The Court observed that the scheme of the
Indian parties could have a foreign seated arbitration;
Act indicated that the classification of an
would apply. Given that Atlas Exports was passed by
arbitration as an international commercial
a two- judge bench, it would be considered precedent
arbitration depended only on the nationality
even assuming TDM Infrastructure were to apply not
of the parties, which is only relevant for the
only in cases related to Section 11(6) of the Act .
appointment arbitrators as contemplated
under Section 11 of the Act.
E. Highlights of the Judgment
6. The Court opined that the nationality of the
The Court saw no reason to interfere with the
parties would not influence the applicability
impugned judgment which referred the parties to
of Part II of the Act, the applicability of which
would flow depending on the seat of arbitration.
118. (2011) 8 SCC 333

7. The Court, relying upon Enercon (India) Private by the restriction contained in Section 28(1) of the
Limited v. Enercon GMBH 119and Chatterjee Act and parties would not be permitted to choose
Petroleum v. Haldia Petro Chemicals 120, was of a foreign substantive law when only parties having
the opinion that where the parties had agreed to Indian nationality were involved. The court clarified
resolve their disputes through arbitration, the the same stating that when the seat of arbitration is
courts were to give effect to the intention of the outside India, the conflict of law rules of the country
parties and interfere only when the agreement in which the arbitration takes place would have to
was null or void or inoperative. be applied and it would not be an arbitration under
Part I of the Act.
8. The Court observed that once parties by mutual
agreement had agreed to resolve their disputes by That being said, the restrictive interpretation of TDM
a foreign-seated arbitration, Part I of the Act would Infrastructure adopted by the Court may, in effect,
not apply. Further where the agreement fulfilled be a reading down of a judgment that categorically
the requirements of Section 44, provisions of Part states that Indian parties cannot derogate from
II of the Act would apply. It was held that a court, Indian law, as a matter of public policy. The resultant
under Section 45, would have to refer parties to issues that it raises, needing further consideration,
arbitration where it was found that the agreement are (i) whether Indian parties would be allowed to
was not null or void or inoperative. choose a foreign substantive law; and (ii) whether,
as held in Bharat Aluminium Co. v. Kaiser
Aluminium Technical Services Inc 121, by choosing
F. Analysis
a foreign seat the non- derogable substantive
provisions of Part 1 would not be available to parties,
This judgment interprets the scheme of the Act,
thereby denying access to Indian courts.
whereby it clarifies that applicability of Part II of
the Act is not based on the nationality of the parties
This issue may require greater clarity from the
but on the basis of where the arbitration is “seated”.
Supreme Court in light of a recent decision of the
If arbitration is seated outside India, irrespective
Bombay High Court in M/s Addhar Mer- cantile
of the nationality of the parties involved, it will be
Private Limited v. Shree Jagdamba Agrico Exports
considered to be a “foreign award”.
Pvt Ltd122 which interpreted a vague arbitration
The issue before the court was whether two Indian clause which provided for “Arbitration in India or
parties could seat an arbitration in a foreign country Singapore and English law to be apply” between
with foreign law as the substantive law governing the two Indian parties. The court found that the clause
dispute. The concern with allowing the same has been to mean arbitration in India with Indian law
the permissibility for Indian parties to be governed by applicable taking a view that arbitration would have
laws other than the laws of India. The consequence of to be conducted in India and making English law
such an act, allowing Indian parties to expressly con- applicable would make the clause pathological.
tract out of Indian law, being arguably against Indian
However, the Court also noted that position was
public policy; is a matter of concern since it would
qualified with a statement that “if the seat of
impact the enforceability of the award.
arbitration would have been at Singapore,
The present judgment applies Atlas Exports, while certainly English law will have to be applied”.
restricting the applicability of TDM Infrastructure to It is pertinent to note that this was in relation to an
issues related to Section 11(6) of the Act, to reiterate application for appointment of arbitrators under
the legality of two Indian parties choosing to seat Section 11, therefore, the Bombay High Court was
their arbitration in foreign country. An argument bound by the decision of the Supreme Court in TDM
was raised that such arbitrations would be limited Infrastructure.
119. 2014 (5) SCC 1 121. (2012) 9 SCC 552

120. 2013 ARBLR 456 (SC) 122. Arbitration Application 197 of 2014
31
Should this judgment be upheld, another potential At the very least, enforcement of such award still
issue that may arise is that since the arbitrability remains untested and may prove to be a challenge.
of a dispute is determined by the law of the seat, it In light of the contentious point of law and the
would not be unimaginable for Indian parties to refer various issues, it is expected that this matter may
disputes, which would otherwise not be arbitrable find its way before the Supreme Court in due course.
in India, to binding arbitration merely by choosing The judgment of the Supreme Court is eagerly
foreign seat. awaited in this respect.
In the meanwhile, this judgment would come -International Dispute Resolution and
as some relief for Indian companies (especially Arbitration Practice
subsidiaries of foreign companies) that may have
You can direct your queries or comments to the
unwittingly entered into arbitration agreements
authors
providing for a foreign seat and a foreign substan-
tive law, with other Indian parties; perhaps una-
ware of the complexities surrounding this issue.

III. Supreme Court “In case of such failure, the dispute shall be referred
to sole arbitrator to be mutually agreed upon by the
Upholds Arbitration Parties. In case the parties are not able to arrive at
for a Pathologi- cal such an arbitrator, the arbitrator shall be appointed

in accordance with the rules of arbitration of the Sin-
Arbitration Clause gapore Chamber of Commerce.”
The JVA also provided that (a) the arbitration

proceedings would be held at Singapore; and
(b)it would be governed and construed in accordance
§§The Supreme Court: with the laws of India.
§§ reasonably and meaningfully construes a Disputes arose between the parties and since they
pathological arbitration clause, ensuring that
were unable to agree on a sole arbitrator, Johnson,
the arbitral process is not derailed;
construing the said reference to the “Singapore
Chamber of Commerce” to be SIAC, moved SIAC for
§§ acknowledges that the Court cannot question
the appointment of an arbitrator. SIAC, exercising
the appointment of a sole arbitrator by the SIAC
its powers under Section 8(2)124 and 8(3)125 of the
Chairman and the partial award passed by the
Singapore Interna-tional Arbitration Act (“IAA”),
sole arbitrator on the issue of jurisdiction in
appointed one Mr. Steven Lim as a sole arbitrator.
proceedings under Section 11(6) of the Act;
In the preliminary meeting, Pricol participated
§§ sends out a strong pro-arbitration signal; and indicated that it would be challenging the
jurisdiction of the sole arbitrator. After exchange
of written submissions, a hearing on the question
A. Introduction of jurisdiction was held in Singapore. The sole
arbitrator passed a partial award holding that
The Supreme Court of India (“Court”), in the case
the appointment made by the SIAC under the IAA
of Pricol Limited (“Pricol”) v. Johnson Controls Enter-
is valid as the parties had expressly agreed that
prise Ltd. (“Johnson”) & Ors.123 once again demon-
Singapore would be the seat of Arbitration.
strated its pro-arbitration approach by reasonably
and meaningfully construing a pathological arbi- The main contentions of Pricol were that the rights
tration agreement. Further, the Court held that of the parties are to be governed by the laws of India;
(a) appointment of a sole arbitrator by the Singapore therefore, in the absence of any contrary intention,
International Arbitration Centre (“SIAC”); and even the arbitration agreement would be governed
(b) a partial award having being passed by the by Indian Law. The seat of arbitration continued to
arbitral tribunal on the issue of jurisdiction; cannot be India inas- much as the parties had only expressed
be examined in a petition under Section 11(6) of the Singa- pore to be the venue for proceedings. Part 1 of
Arbitration Act. the Arbitration & Conciliation Act, 1996 (“Act”),
would continue to apply and the procedural law
B. Facts governing the conduct of the arbitration would be

the law prevailing in India. Even assuming that the
The parties entered into a Joint Venture Agreement seat of arbitration was held to be Singapore, the
on December 26, 2011(“JVA”). The JVA contained an
arbitration agreement which provided as under.
124. 8(2) The Chairman of the Singapore International Arbi- tration
Centre shall be taken to have been specified as the authority
competent to perform the functions under Article 11(3) and (4)
of the Model Law;
125. 8(3) The Chief Justice may, if he thinks fit, by notification
published in the Gazette, appoint any other person to exercise
the powers of the Chairman of the Singapore Inter- national
123. Arbitration Case (Civil) No. 30 of 2014; Arbitration Centre under subsection (2).
33
rights of the parties are to be governed by Indian appointment of the sole arbitrator by SIAC and the
law. It is only the curial law of Singapore that partial award on the issue of jurisdiction cannot be
would apply to regulate the proceedings after the questioned in proceedings under Section 11(6) of
appointment of the Arbitrator and till the passing of the Act. If that were done, it would amount to the
the award. Pricol argued that the appointment of the Court sitting in appeal over the decision of SIAC as
sole arbitrator by SIAC was without jurisdiction and well as the partial award, which would be wholly
the Court ought to proceed to exercise its powers inappropriate
under the Act.
Johnson contended that the parties had agreed that

D. Analysis
the seat of arbitration would be Singapore and while
In the present case, the Court has undertaken a rea-
substantive law would be Indian law, the appoint-
sonable and meaningful construction of a patho-
ment of the arbitrator would be in terms of the arbi-
logical arbitration agreement. The real intention of
tration agreement. Pleading a reasonable understand-
parties to arbitrate, not withstanding the fact that
ing of the arbitration agreement, the Respondents
it was under a non-existent institution, has been
argued that in light of the “Singapore Chamber of
given due recognition and upheld. In doing so,
Commerce” not being an Arbitral Institution, the real
the Supreme Court effectively ensured that the
intention of the parties was to approach the SIAC for
arbitral process was not derailed and parties would
appointment of an Arbitrator in the event of failure
not spend time, effort and money in litigating fur-
of a mutual agreement. Johnson also pointed out
ther on this issue.
Pricol’s conduct of dragging its feet as well as the fact
that a partial award had already been passed by the The Court has also, rather significantly, acknowl-
arbitrator on the issue of jurisdiction. edged that any order passed by it would, in effect,
amount to it sitting in appeal over the decision of
C. Judgment SIAC and/or the partial award passed by the sole

arbitrator, which would be inappropriate.
Giving a reasonable and meaningful construction to
While this approach bodes well for the litigant who
a pathological arbitration agreement, the Court held
wants to arbitrate, it once again reminds us of the
that reference to “Singapore Chamber of Commerce”,
care that is imperative whilst drafting an arbitration
which was admittedly not an Arbitration institution
agreement so that such needless issues are not
having its own rules for appointment of Arbitrators,
permitted to fester. An arbitration agreement must
actually meant SIAC.
be well-drafted and must not permit mischievous
Without dealing with Pricol’s contentions regarding interpretation.
the issue of the procedural law that would govern
– Siddharth Ratho, Sahil Kanuga & Vyapak Desai You
the conduct of arbitration, the Court noted that
can direct your queries or comments to the authors
the proceedings before the SIAC were first in time
and had resulted in the appointment of a sole
arbitrator as well as the partial award on the issue of
jurisdiction. The Court acknowledged that the

IV. Bombay High Courts were several companies in this group, both in India
as well as overseas. Following a restructuring in
Rules on Arbitrability of 2008 all the assets, business and plants that belonged
Oppres- sion and Mis- to Indian companies were transferred to a newly

incorporated company under the control of Rakesh
Management Issues Malhotra (“Appellant”), RKM’s elder son. However,
RKM along with his wife and younger son continued
to hold some equity in those Indian companies.
During the course of restructuring, a Subscription and

§§Bombay High Court holds that oppression Shareholding Deed (“SSD”), Supplementary Deed
and mis-management claims fall outside the
along with other business agreements, were executed
purview of an arbitration proceeding.
that gave Appellant the sole authority to represent
the Respondent in all transactions. The Appellant also
§§Petitions filed before Company Law Board if
became the sole bank account operating authority
malafide, vexatious or oppressive and is merely
and deployed funds received by Indian companies
a dressed up to avoid arbitration, then it can be
held by RKM to, inter-alia, guarantee bank loans and
referred to arbitration.
other facilities to the newly formed company under
§§Company Law Board is bound by the orders of his control. The SSD contained an arbitration clause
a foreign court if ruling on the same issue and providing for resolution of disputes in Geneva under
not entitled to take its own view, subject to the rules of London Court of International Arbitration.
complying with principles under Section 13 of By virtue of the restructuring, all the directors of the
Civil Procedure Code. RKM- held Indian companies became employees
of the entities controlled and held by the Appellant.
Subsequently, no information was divulged to RKM
The Bombay High Court recently in the case of Rakesh
related to funds deployed or other liabilities incurred
Malhotra v. Rajinder Kumar Malhotra126 held that
due to Appellant’s actions.
maintainability of oppression and mis-management
claims by minority shareholders as referred under RKM along with others, to prevent diversion of funds,
Section 241 read with Section 242 of the Companies filed several company petitions before Company Law
Act, 2013 or Sections 397 and 398 read with Section Board (“CLB”) at different locations u/s 397, 398 read
402 of the Companies Act, 1956 (“Companies with S. 402 of the Companies Act, alleging oppres-
Act”), would not be affected by the existence of an sion and mis-management, seeking wide orders of
arbitration clause. Allegations of oppression and mis- removal and appointment of directors, setting aside
management fall outside the purview of an arbitration the re-structuring. During the same period, Appel-
agreement, a sine qua non for an arbitration proceeding. lant obtained an ex-parte anti-suit injunction from
the Commercial Court of Queen’s Bench Division
A. Facts of the Royal Courts of Justice (“UK Court”) restrain-

ing Respondent from proceedings before CLB, which
Supremax Group, world’s second largest man- was subsequently over-turned as proceedings before
ufacturer of razor blades and allied products, was run CLB related to post-restructuring dealings and trans-
by Rajindra Kumar Malhotra (“RKM/ Respondent”) actions. The Appellant thereafter filed applications
and his family members. Major portion of the before CLB seeking orders to refer the dispute to arbi-
business was controlled by RKM and his wife along tration under S. 45 of the Arbitration & Conciliation
with his younger son Rajiv and his wife Kunika, who Act, 1996 (“Act”).
had small share- holdings therein. There are and
126. [2015] 53 taxmann.com 135 (Bombay)
35
The application was dismissed and CLB held that no Further with respect to applicability of Sections 397
such reference could be made to arbitration in case and 398 and their allied sections it was submitted
of allegations of oppression and mis-management. that they do not confer exclusive jurisdiction on
CLB also appointed an independent Observer-cum- CLB to exclude the jurisdiction of the Civil Court.
Facilitator on the Board. The present dispute arose It is therefore wholly illogical to say that an action
from a group of appeals filed against the CLB order seeking an alternate remedy under Sections 397
on the issue whether disputes arising out of SSD and 398 by the same party under same agreement
should be referred to arbitration. cannot be referred to arbitration, although, had that
very party come to a civil court, the reference to
B. Issues arbitration would have been inevitable.
The primary issue before the Bombay High Court ii. Respondent’s Arguments
(“Bombay HC”) was whether disputes under Section
The Respondent submitted that any dispute invoking
397 and 398 read with S. 402 of the Companies Act
the powers under Section 402 of the Companies Act
can ever be referred to arbitration. While deciding
is inherently incapable of being referred to a private
the same, the Bombay HC also looked into the aspect
dispute resolution tribunal. There need not be an
whether decisions of foreign court (“UK Commercial
express ouster or bar. How- ever, the test must be in
Court”) was binding on CLB.
relation to the source of power and not on how the
relief is casted or split up. Equally it is not possible
C. Contentions to refer some reliefs to an arbitral resolution while
retaining others for a determination by the CLB.
i. Appellant’s Arguments
The Respondent relied on several past deci-sions128
The Appellant contended that there should not be
and submitted that issue arises whether the source
any blanket embargo on reference to arbitration.
itself permits any such reference to a private dispute
If a dispute falls within the realm of an arbitration
resolution. Jurisdiction of CLB under Sections 397
agreement, then such reference must be made
and 398 is statutory and therefore it cannot be ousted
regardless of the kind of relief arbitral tribunal can
by an arbitration clause. The Respondent contended
provide. The Appellant relying on Sec- tion 45 of the
that disputes before CLB were outside the purview of
Act submitted that it makes no reference to relief or
arbitration clause in the SSD as it involved different
power but only to the dispute.
parties, therefore the ruling of the UK Court was
conclusive and binding, thus the Appellant could
The Appellant also submitted that CLB is not bound
not re-agitate the same issue in another forum,
by the decision of UK Commercial Court as it was
having lost in the one of his own choice.
contrary to the Supreme Court decision in Chloro
Controls India (P.) Ltd. v. Severn Trent Water Puri-
fication Inc.127 which held that in case of several D. Judgment and Analysis
agreements constituting a composite transaction,
the court may for an effective and complete imple- The Bombay HC dismissed the appeal dealing with
mentation make reference to arbitration even of the the following issues.
disputes existing between signatory or non-signatory
parties. Therefore, order passed by CLB that current
disputes are not covered by arbitration is not conclu-
sive under S. 13(c) of CPC.
128. Surendra Kumar Dhawan v. R. Vir, [1977] 47 Comp Cas 276 (Delhi); See also
127. [2013] 1 SCC 641 Manavendra Chitnis v. Leela Chitnis Studios P. Ltd., 1985 (58) Comp Cas 113

i. Case of Oppression and Mis- that if CLB’s plenary and expansive powers are
management not to be referred to properly invoked and petitions are not mala fide,
arbitration oppressive, vexatious or an attempt at dressing up
to evade an arbitral clause, then a narrowly tailored
The Bombay HC while examining the issue arbitral proceeding or merely the existence of an
of oppression and mis-management before an arbitration agreement is not sufficient to capture
arbitral tribunal, analysed all the provisions of the the broad and far reaching reliefs that can likely be
Companies Act in relation to oppression and mis- sought by parties in such cases. CLB is vested with
management, held they are not capable of being the powers to refer disputes to arbitration if petition
referred to arbitration, having regard to the nature is mischievous, vexatious and malafide.
and scope of the power invoked.
ii. Decision of a foreign court is binding
S. 8 and 45 of the Act use the expression “a judicial
on the CLB
authority, when seized of an action in a matter in respect of
which the parties have made an agreement” (S. 45), and
The Bombay HC held that the decision given by UK
“a judicial authority before which an action is brought in a
court, on the issue whether petition before CLB was
matter which is the subject of an arbitration agreement” (S.
covered by the aforementioned arbitration clause, was
8). The operative word here appears to be “matter”.
not covered by any of the exceptions to S. 13 of Code
Therefore, the “matter” must be the one in respect of
of Civil Procedure, 1908 (“CPC”). Therefore, it bound
which there is an arbitration agreement in order to be
the CLB, and the CLB was not, as it held, “free to take its
referred to arbitration. In an oppression and misman-
own view”. That being so, there is no question of any
agement “action” before the CLB, the “matter” invokes
reference being made to arbitration. Conclusive and
CLB’s statutory powers under those sections includ-
binding nature of judgment is decided based on the
ing S. 402 and not exercisable by a civil court. The
issues before it. The Bombay HC held that UK Court
civil courts are vested with the power to entertain an
decision was on the same issues which were before
action in oppression and mis-management, however,
the CLB and therefore the reasoning given by the CLB
not the same as vested with CLB under S. 402 of the
for not being bound by the orders of the foreign court
Companies Act. Therefore, disputes in oppression and
were untenable.
mis-management cases are those such that demand
the exercise by the CLB of its wide powers under S. 402
and not those that can be exercised by a civil court, cer-
D. Conclusion
tainly not by an arbitral forum.
This ruling marks an important step in clarifying the
issues related to overlap of arbitration proceedings
Several precedents were considered and were
and maintainability of oppression and mis-manage-
referred to analyse powers of CLB in an oppres-
ment claims before CLB. The judgment has thrown
sion and mis-management cases and whether it
light upon the limita tions of an arbitral tribunal to
was in the nature of an action in rem. The Bombay
entertain cases of oppression and mis-management.
HC relying on past decisions including Haryana
However, at the same time it has clarified that CLB
Telecom Ltd. v. Sterlite Industries (India) Ltd.129 , is bound by the orders made by a foreign court if
which held that though petition for winding up is
ruled on the same issue. Thus, from the commercial
a matter in rem, no agreement between parties can
perspective, parties should be mindful at the stage of
vest an arbitral panel with such power of winding
drafting their arbitration clause and depending on
up. Similarly, no arbitration agreement can vest an
the relief sought, should approach the correct forum
arbitral tribunal with the powers to grant the kind
as both are mutually exclusive.
of reliefs against oppression and mismanagement
that the CLB might provide. The Bombay HC held –Payel Chatterjee & Vyapak Desai
authors
129. [1999] 2 SCL 156 (SC)
37
V. Allegations of Fraud entered into a Deed for Provision of Facilitation

Services (Facilitation Deed”), where under MSM was
not a Bar to Foreign to pay WSG ₹ 4,250,000,000 as facilitation fees. The
Seated Arbitration Facilitation Deed was governed by English Law and

parties had agreed to settle their disputes through
arbitration before the International Chamber of
Commerce (“ICC”), with a seat of arbitration in
Singapore (“Arbitration Agreement”).
§§ Supreme Court held that allegation of Fraud
Eventually, MSM rescinded the Facilitation Deed
is not a bar to refer parties to foreign seated
alleging certain misrepresentations and fraud against
arbitrations;
WSG and initiated a civil action before the Bombay
§§The law does not require a formal application HC for inter alia a declara- tion that the Facilitation
to refer parties to arbitration; Deed was void an for recovery of sums already paid
to WSG. WSG filed a request for arbitration with ICC
§§If an arbitration agreement exists and a party and ICC issued notice to the MSM to file its answer.
seeks reference to a foreign seated arbitration,
In response MSM filed initiated a fresh action seek-
court is obliged to refer the parties to
ing an anti-arbitration injunction against WSG from
arbitration;
proceeding with the ICC arbitration.
§§The only exception is in cases where the court

finds the arbitration agreement to be null C. MSM’s Case
and void or inoperative or incapable of being
It was MSM’s case that since the Facilitation Deed,
performed.
which contained the Arbitration Agreement, in null
and void on account of the misrepresentation and
A. Introduction fraud of WSG, the Arbitration Agreement itself was

void and could not be invoked.
In a landmark decision the Supreme Court of India

has expressly removed allegations of fraud as a bar D. WSG’s Case
to refer parties to foreign seated arbitrations. The
It was WSG’s case unless the Arbitration Agreement,
Supreme Court by its decision dated January 24, 2014
itself, apart from the Facilitation Deed, is assailed as
in World Sport Group (Mauritius) Ltd (“WSG”) v. MSM
vitiated by fraud or misrepresentation; the Arbitral
Satellite (Singapore) Pte. Ltd (“MSM”) set aside the
Tribunal will have jurisdiction to decide all issues
judgment of the Division Bench of the Bombay High
including validity and scope of the arbitration
Court (“Bombay HC”) in MSM Satellite (Singapore)
agreement.
Pte. Ltd v. World Sport Group (Mauritius) Ltd dated
September 17, 2010 (“Impugned Judgment”).
Previously as the law stood, allegations of fraud E. Impugned Judgment
were arguably not arbitrable under Indian Law.
The Bombay HC had, in the impugned Judg- ment,
The Supreme Court has now clarified the position,
held that disputes where allegation of fraud and
removing another possible hurdle that one could face
serious malpractice on the part of a party are in issue,
while arbitration against Indian Parties outside India.
it is only the court which can decide these issues
through furtherance of judicial evidence by the party
B. Background and these issues cannot be properly gone into by
the arbitrator, thereby granting the anti-arbitration
The dispute pertained to obtaining media rights for
injunction sought for. This decision of the Bombay
the Indian sub-continent from the Board of Cricket
HC was the only judgment where an Indian Court
Control of India. In this regards WSG and MSM

had held allegations of fraud as a bar to foreign seated The Supreme Court also opined that no formal
arbitrations, though such findings were prevalent in application is necessary to request a court to refer
the sphere of domestic arbitrations. the matter to arbitration under Section 45 of the Act
and in case a party so requests even through affidavit,
F. Judgment of the Supreme a court is obliged to refer the matter to arbitration

with the only exception being cases where the
Court arbitration agreement is null and void, inoperative
and incapable of being performed, thus limiting the
The Supreme Court, by re-enforcing its pro-arbitra-
scope of judicial scrutiny at the stage of referring a
tion approach, set aside the Impugned Judgment and
dispute to foreign seated arbitrations.
held that only bar to refer parties to foreign seated
arbitrations are those which are specified in Section
45 of the Indian Arbitra- tion and Conciliation Act, G. Analysis
1996 (“Act”) i.e. in cases where the arbitration agree-
This is a welcome decision for foreign parties having
ment is either (i) null and void or (ii) inoperative or
arbitration agreements with Indian counter-parts.
(iii) incapable of being performed.
Before this judgment was delivered, Indian parties
While explaining the term null and void, the were increasing challenging arbitrability of disputes
Supreme Court clarified that the arbitration where allegations of fraud were made against them,
agreement being a separate agreement does not relying of the Supreme Court’s own decision in the
stand vitiated if the main contract is terminated, case of N. Radhakrishnan v. Masestro Engineers & Ors130
frustrated or is voidable at the option of one party. (“N Radhakrishnan”). By this decision the Supreme
The Supreme Court held that a court will have to see Court has limited the applicability of its decision in
in each case whether the arbitration agreement is N Radhakrishnan to domestic arbitrations hence
also void along with the main agreement or whether clarifying that, allegations of fraud against a party or
the arbitration agreement stands apart from the consequential rescission of the main agreement is not
main agreement and is not null and void, thus a bar on arbitrability of disputes between the parties
accepting the submissions of WSG. under Indian Law, when the seat of arbitration is
outside India.
The Supreme Court interpreted the terms inop-
erative and incapable narrowly, adopting the –Ashish Kabra, Prateek Bagaria & Vyapak Desai You
interpretation of the international authors of these can direct your queries or comments to the authors
terms in Article II (3) of the Convention on the
Recognition and Enforcement of Foreign Arbitral
Awards, 1958 (“New York Conven- tion”). The
expression ‘inoperative’ is understood to cover
situations where the arbitration agreement has
ceased to have effect such as where parties may have
by conduct or otherwise revoked the arbitration
agreement. Further, ‘incapable of being performed’ covers
situations where the arbitration cannot be effectively
set into motion and covers the practical aspects of
the prospective arbitration. Accordingly, the court
held that arbitration agreements do not become
“inoperative and incapable of being performed” where
allegations of fraud have to be inquired into and the
court cannot refuse to refer the parties to arbitration
as provided in Section 45 of the Act.
130. (2010) 1 SCC 72
39
VI. Enforcement of A. Facts

Foreign Awards The dispute arose out of a contract between an
Indian seller (“Appellant”) and a foreign buyer
Becomes Easier: (“Respondent”) whereby the Appellant had agreed
‘Patent Illegality’ to supply certain type of wheat to the Respondent.

The Respondent had alleged that the wheat supplied
Removed from the was not of the quality as agreed to by the parties and
Scope of Public Policy as a result it had suffered significant damages.
The matter was referred to the Arbitral Tribunal of the

The ever-growing judicial support to international Grain and Feed Trade Association, London (“GAFTA”),
commercial arbitration and the seminal shift in which passed an award in favour of the Respondent.
judicial mindset is now more than established from Thereafter, the Appellant carried such award in appeal
yet another landmark ruling of the apex court of the before the Board of Appeal of GAFTA, which also
land in Shri Lal Mahal Ltd. v. Progetto Grano Spa 131, passed the award in favour of the Respondent. The
where the court has gone ahead to in fact overrule awards were then challenged by the Appellant before
its own decision passed less than two years back. the courts in U.K., where again the awards were upheld.
The Supreme Court while dealing with objections
The Respondent then sought the enforcement of the
to enforceability of certain foreign awards on the
awards in India in accordance with the provisions
grounds that such awards are opposed to the public
of the Act, to which the Appellant took objection
policy of India, has significantly curtailed the scope
by asserting that the award is against the public
of the expression ‘public policy’ as found under
policy of India and accordingly enforcement of such
Section 48(2)(b) of the Arbitration and Concilia- tion
awards in India ought to be refused.
Act, 1996 (“Act”) and thereby have limited the scope
of challenge to enforcement of awards passed in
The Appellant contended the award to be opposed to
foreign seated arbitrations.
public policy of India on the ground that such award
was contrary to clearly terms of the contract entered
The judgment unmistakably establishes a difference
into by the parties. The questions pertained to the
between the scope of objections to the enforceability
certification provided by the expert regarding the
of a foreign award under Section 48 132 of the Act and
quality of the wheat and whether such certification
a challenge to set aside an award altogether under
was in the form which was agreed by the parties.
section 34 133of the Act.
The Respondent on the other hand argued that the

131. Civil Appeal No. 5085 of 2013 arising from SLP(c) No. 13721 of 2012
matters as raised by the Appellant were questions
132. 48.Conditions for enforcement of foreign awards.
(2)Enforcement of an arbitral award may also be refused if the court finds that-
(a)the subject -matter of the difference is not capable of settlement by arbitration
regarding appreciation of evidence and were
under the law of India; or
(b)the enforcement of the award would be contrary to the public policy of India. questions of fact which could not be gone into at the
Explanation: Without prejudice to the generality of clause (b), it is hereby stage of challenge to enforcement of a foreign award
declared, for the avoidance of any doubt, that an award is in conflict with the public
policy of India if the making of the award was induced or affected by fraud or
corruption under section 48 of the Act.
133. 34.Application for setting aside arbitral award.
(1) Recourse to a Court against an arbitral award may be made only
by an application for setting aside such award in accordance
with sub-section (2) and sub-section (3).
B. Issue
(2) An arbitral award may be set aside by the Court only if
(a) Thus, issue arose regarding the scope and inter-
(b) the Court finds that
pretation of the expression ‘public policy’ which
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or is provided as a ground to refuse enforcement of a
(ii) the arbitral award is in conflict with the public policy of India.
Explanation: Without prejudice to the generality of sub-clause (ii), it foreign award under section 48(2)(b) of the Act and
is hereby declared , for the avoidance of any doubt, that an award whether the enforcement of the awards could be
is in conflict with the public policy of India if the making of the
award was induced of affected by fraud or corruption or was in refused on the grounds as alleged by the Appellant.
violation of section 75 or section 81.

The issue further was whether the expression ‘public final. Thus, it was seen that under Section 34 the
policy’ shall have the same meaning and purport under expression public policy would also entail within its
section 34(2)(b)(ii) and section 48(2)(b) of the Act? folds any ‘patent illegality’ for setting aside the award.
Accordingly, the court held that:

C. Judgment
“enforcement of foreign award would be refused under
As the question revolved around the interpretation
Section 48(2)(b) only if such enforcement would be
of the scope of the expression ‘public policy’ the
contrary to
Supreme Court considered the following three
landmark rulings in this regard: 1. fundamental policy of Indian law; or
1. Oil and Natural Gas Corporation Ltd. v. Saw Pipes 2. the interests of India; or
Ltd.134 (“ONGC”);
3. justice or morality.
2. Phulchand Exports Limited v. O.OO.
The wider meaning given to the expression “public
Patriot135(“Phulchand”); and
policy of India” occurring in Section 34(2)(b) (ii) in Saw
3. Renusagar Power Co. Limited v. General Elec- tric Pipes (ONGC) is not applicable where objection is raised
Company136 (“Renusagar”). to the enforcement of the foreign award under Section
48(2)(b).”
The Supreme Court overruling the judgment in
Phulchand held that the meaning of the expression Thus, relying on the above law, the Supreme Court
‘public policy’ under Section 48 was narrower as observed that the same ground had also been raised
compared to section 34. Relying on Renusagar, the by the Appellant before the courts in U.K. to have the
Court made a highly important observation that award set aside. However, the High Court of Justice at
there is a fine distinction between applying the rule London did not consider the ground to be sufficient
of public policy in a matter governed by domestic enough for the award to be set aside. Thus, the court
laws and a matter involving conflict of laws as is the viewed that the same argument could hardly be good
case in majority of international commercial arbitra- enough to refuse enforcement. The court further
tions. The court observed that the applicability of the provided that section 48 does not offer an opportunity
doctrine of public policy is comparatively limited to have a second look at the foreign award at the
in cases involving conflict of laws and matters enforcement stage. The court affirmed that section 48
involving foreign element such as a foreign seated does not permit review of the award on merits and also
arbitration, the courts would not be easily inclined to that procedural defects in course of foreign arbitration
invoke such doctrine. do not necessarily imply that foreign award would be
unenforceable. Accordingly, the appeal was dismissed
The court further observed that ONGC dealt with
by the court and that award was held to be enforceable.
a situation where the arbitral award was sought
to be set aside under section 34 as opposed to an
application to refuse enforcement of an award
D. Analysis
under section 48. It was stated that the expression
The judgment in ONGC led to expansion of the
‘public policy of India’ under 34 was required to be
meaning of the expression ‘public policy’ as pro-
interpreted in the context of the jurisdiction of the
vided under section 34 of the Act, which opened the
court where the validity of the award is challenged
floodgates to petitions challenging the arbitral award
before it becomes final and executable in con-
on the ground of ‘patent illegality’. The decision was
trast to enforcement of award after it becomes
criticized as it allowed the parties to have a second bite
at the matter, to the extent that the ground of patent
134. (2003) 5 SCC 705
illegality was viewed broad/y.
135. (2011) 10 SCC 300
136. 1994 Supp (1) SCC 644
41
The above decision coupled with the pre- BALCO137 Therefore, now enforcement of foreign awards would
scenario i.e. applying the law as enunciated under not be refused so easily. Thus, a practical takeaway
the Bhatia International case138, permitted awards from the above would be to give preference to
passed in arbitrations seated outside India to be a foreign seated arbitration as a mechanism for
challenged under section 34 in certain cases. This dispute resolution as this would afford a speedy
led to a very broad ground being available to remedy without significant court interference.
parties to set aside awards passed in international
-Ashish Kabra, Payel Chatterjee and Vyapak Desai
commercial arbitrations. Though, the BALCO
decision has now clarified that awards passed in
authors
foreign seated arbitra- tions139cannot be challenged
under section 34, the difficulty arose on account of
the judgment of Phulchand.
Phulchand140 expanded the meaning of the

expression ‘public policy’ as provided under section
48 of the Act and provided that the scope and purport
of the expression under section 34 and 48 would
be the same. The decision of Phulchand thus also
received heavy criticism. Surprisingly, Hon’ble
Justice R.M. Lodha, who previously wrote the
judgment in Phulchand on behalf of the bench has
now himself, overruled the decision of the court of
Phulchand and it has now been laid down that the
meaning of the expression ‘public policy’ is narrower
under section 48 as compared to section 34.
137. Bharat Aluminium Company and Ors. v. Kaiser Aluminium Techni-

cal Service, Inc. and Ors., (2012) 9 SCC 552
138. Bhatia International v. Bulk Trading S.A. and Anr., (2002) 4 SCC
105
139. Where the arbitration agreement has been entered into after
September 6, 2012
140. Please refer to our hotline titled ‘’Enforcement of Awards- Eras- ing
the distinction between Domestic and Foreign Award’

VII. No Valid Arbitration contracts were formed, which were transmitted to

NAFED by the broker. NAFED, upon receipt of the
if Clause in Unsigned same, requested a deferred date of shipment of the
Agreement goods to the broker, who in turn, communicated

the same to Virgoz. The contracts were amended
accordingly by Virgoz with the changes in the date of
shipment being the only material alteration.
DELHI HIGH COURT: The contracts were signed by the broker and Virgoz,
but not by NAFED or its representatives (“Impugned
§§Reaffirms the criteria to deem a foreign Contracts”). Virgoz, proceeded, with its obligations
arbitral award valid under section 44 of the under the Impugned Contracts assuming the same
Arbitration and Conciliation Act, 1996 and to have become effectively concluded between the
the Convention on the Recognition and parties and shipped the goods to NAFED. Upon
Enforcement of Awards, 1958. NAFED’s failure to provide a Letter of Credit, as per
the terms of the Impugned Contracts, Vigoz declared
§§A contract containing an arbitration NAFED to be in default. Thereafter, Virgoz proceeded
agreement must be signed by all parties to
to initiate arbitration proceedings before an arbitral
the contract, in order to make the arbitration
tribunal constituted under the Palm Oil Refiners
agreement valid and binding upon the parties.
Association of Malaysia, Rules of Arbitration and
Appeal (“PORAM Rules”), in accordance with the
arbitration clause contained in the contracts.
A. Introduction
The Tribunal passed an award on April 5, 2012, which
The Delhi High Court (“Court”) in the case of
accepted two key submissions advanced by Virgoz
Virgoz Oils and Fats Pte. Ltd. (“Vigoz”) v National
being (a) a letter dated July 29, 2008, from NAFED
Agricultural Marketing Federation of India 141
requesting a deferred date of shipment while making
(“NAFED”) has refused the enforcement of a foreign
reference to the contracts, was evidence of the
arbitral award after allowing an objection to its
existence of a contractual arrangement between the
enforcement under Section 48 of the Arbitration
parties and (b) the signing of an Agreement by a broker
and Conciliation Act, 1996 (“The Act”). The Court
on behalf of the buyer, was ‘common practice’ in the
has referred to and relied upon the requirements set
industry. The award was passed in favor of Virgoz.
out under the Convention on the Recognition and
Enforcement of Awards, 1958 (“The Convention”) Virgoz, vide an enforcement petition filed before the
and the Act, to examine the requirements of a valid Court sought to enforce the award against NAFED
arbitration agreement. Applying these guidelines, and its assets in India.
the Court has held that the arbitration agreement
between the parties in the present matter, was a
C. Issue
part of a written agreement which was not signed
by NAFED. Thereby, rendering the arbitration Whether there existed a valid arbitration agreement
agreement inoperable and invalid against NAFED. between the parties.
B. Facts D. Contentions
Virgoz and NAFED, through a broker, had entered Virgoz advanced two primary contentions to
into negotiations for the sale of edible oil by Virgoz establish that the award being a foreign award must
to NAFED. Through the negotiations, a series of sales be enforced under Part II of the Act, they were
(a) the parties were dealing with each other through
141. EX.P. 149/2015 & EA(OS) No. 66/2016 a broker and therefore there was no requirement for
43
NAFED to sign the Impugned Contract and (b) the 1. Although NAFED was described as a buyer,
Letter dated July 29, 2008, indicated that NAFED had with a specific provision for its signature in the
accepted the terms of the Impugned Contract and Impugned Contract, no signatures appear by
requested a deferred date of shipment. NAFED at the designated parts of the Impugned
Contracts.
NAFED, stated that there were no communications
directly between Virgoz and NAFED implying 2. The broker signed the Impugned Contract in
that NAFED had consented to the terms of the his own capacity and not for and on behalf of
Impugned Contract. Further, NAFED had not signed NAFED
the Impugned Contract thereby making it invalid
3. There were no correspondences exchanged
against NAFED.
between the parties establishing a meeting
of minds as to their intention to submit their
E. Judgment disputes to arbitration.
The Court analyzed the definition of a ‘foreign award’

Thus, the Court concluded that under section 48,
under section 44 of the Act, which stipulates that
there were valid reasons to refuse the recognition
the award must be rendered in pursuance of an
and enforcement of the award and passed orders
arbitration agreement in writing between the parties,
effecting the same.
to which the Convention shall apply. In order to
examine whether there was a valid arbitration
agreement in terms of the Convention, the Court
F. Analysis
analyzed Paragraph 2 of Article II of the Convention,
The judgment of the Court, might be construed as
which states that an ‘agreement in writing’ would
a departure from the pro-arbitration stance adopted by
inter alia mean an arbitration clause contained in
the judiciary of late. If an appeal was to be preferred it
a contract signed by the parties or contained in an
would be interesting to observe whether the Appellate
exchange of letters or telegrams.
Court would consider (a) the usual trade practice
between parties trading in palm oil in India to have
The Court held that, Virgoz had relied upon an
unsigned contracts; (b) the correspondence exchanged
arbitration agreement contained in the Impugned
between the parties by which the Impugned Contract
Contracts and not in any correspondence exchanged
was deliberated upon and amended and (c) the verdict
between the parties. Therefore, as per the aforemen-
of an expert body mandated to preside over disputes in
tioned requirements under the Convention, the
that particular industry.
Impugned Contracts should have been signed by all
parties to the contract in order to deem it as a valid
However, it must be noted that the legal analysis con-
arbitration agreement. This requirement was not met
ducted by the Court which formed the basis of the
as NAFED had not signed the contracts, thus, result-
judgment is sound. The requirement of an agreement
ing in the arbitration agreement becoming invalid
in writing, when evidenced in an arbitration agree-
and inoperative with respect to NAFED. The Court
ment, results in the consequent requirement that the
also examined the communications between the par-
agreement must be of the nature of a valid contract.
ties, holding that the Letter dated July 29, 2008,
The lack of a party’s signature upon the contract,
did not evidence the intention of NAFED to bind
would be strong evidence as to the lack of the party’s
itself to the terms of the Impugned Contract or the
consent to the agreement and consequently to an arbi-
arbitration clause contained therein.
tration clause contained therein.
The Court based its judgment on the following

reasoning:-

A valuable take away from this pronouncement is into commercial transactions basis communications
to ensure that all parties to a contract containing exchanged, then they must ensure to incorporate
the arbitration agreement should sign the same a dispute resolution mechanism in the same.
even if they are being represented by another for all
– Arjun Gupta & Vyapak Desai
practical purposes. Further, if parties intend to enter
authors
45
VIII. Delhi HC Adds Act 2015 (“Amendment Act”) clarified that the
amendment will be prospectively applicable.
to Uncertainty However, the Madras143 and Calcutta High
Over Applicability Courts144 have previously held that the prospective

applicability of the Amendment Act would be
of the Arbitration limited to ‘arbitral proceedings’ and not to ‘court
proceedings’. The Bombay High Court145 took
& Conciliation a slightly different view: wherein it was held that
(Amendment) Act “it makes no difference if the application under Section
34 filed by the award-debtor was prior to 23rd October,
2015 2015” (discussed later).
Similar issue came up for consideration before

the Delhi High Court (“Court”) in the decision
of Ardee Infrastructure Pvt. Ltd. (“Appellant”) v.
§§Delhi High Court has held that the amended Anuradha Bhatia (“Respondent”)146 with Ardee
provisions would not be applicable to ‘court
Infrastructure Pvt. Ltd. (“Appellant”) v. Yashpal &
proceedings’ initiated post-amendments, unless
Sons (“Respondents”).147
they were merely ‘procedural’ and did not affect
any ‘accrued right’;
B. Facts and Arguments
§§It has been held that amendments to Sections Advanced
34 and 36 of the Act, which pertain to the
enforceability of an award, affect the accrued A final award was made in favour of the Respondents
rights of the parties. on 13 October 2015, which was challenged under
Section 34 of the Act on 4 January 2016. The Single
§§Contrary to earlier decisions, it has been held that Judge issued notice on Respondents challenge petition
a challenge petition filed post amendment would
under Section 34 of the Act, subject to deposit of a sum
be governed by un-amended Section 34 of the
of Rs. 2.70 crores. Subsequently, an appeal was filed
Arbitration and Conciliation Act, 1996 so long as
against Single Judge’s order before the Division Bench.
arbitration was invoked in the pre-amendment
era; The primary contention was the applicability of
the Amendment Act and whether merely filing a
§§A challenge to a pre-amendment arbitral award challenge under Section 34 of the Act would lead to
filed post the amendment, would necessarily
an automatic stay on the enforcement proceedings.
result in an automatic stay on enforcement of
the award;
i. Arguments by the Appellant
The Appellant contended that the petitions under
A. Introduction Section 34 of the Act would be governed by the
un-amended provisions of, inter alia, Sections 34 and
The applicability of the amendments to Indian 36, therefore, entitled to the right of an automatic
Arbitration & Conciliation Act, 1996 (“Act”) have
been the bone of contention in several cases. Section after the date of commencement of this Act.”
26142of the Arbitration & Conciliation (Amendment) 143. New Tirupur Area Development Corporation Ltd. v. M/s. Hindustan
Construction Co. Ltd A. NO. 7674 of 2016 in O.P. No. 931 of 2015 judgment dated
27 January 2016 (Madras High Court) [click here for our hotline]
144. Tufan Chatterjee v. Rangan Dhar AIR 2016 Cal 213

142. Section 26 of the Amendment Act provides that: “Nothing con-
145. Rendezvous Sports World v. the Board of Control for Cricket in India,
tained in this Act shall apply to the arbitral proceedings commenced, in 2016 SCC Online Bom 255.
accordance with the provisions of section 21 of the principal Act, before
the commencement of this Act unless the parties otherwise agree but 146. 2017 SCC Online Del 6402
this Act shall apply in relation to arbitral proceedings commenced on or 147. ibid

stay on the filing of the petitions under Section 34 of The Court referred to the Thyssen judgment where
the said Act. The basic premise of the Appellant for the Supreme Court had observed that the right
adopting a prospective interpretation of Section 26 of to enforce an award “when arbitral proceedings
the Amendment Act was that the amendment tends commenced under the old Act under that very Act was
to take away vested rights (substantive rights) of the certainly an accrued right” and, “there is no necessity
party challenging the award, to have an automatic that legal proceedings must be pending when the new
stay on the award. Act comes into force.” The Court construed this as
equivalent to arbitral proceedings commenced prior
ii. Arguments by the Respondents to 23 October 2015, and an award being made prior
to 23 October 2015 but challenge being made post-
The Respondents argued that the amended provisions
amendments, which is the present case.
would apply to court proceedings and, therefore, there
would be no question of any automatic stay and that The Court accepted that the second part of Section 26
the order made by the Single Judge was within his covers both, proceedings before the arbitral tribunal
powers. The Respondents relied on the case of Thyssen as well as court proceedings in relation thereto or
Stahlunion Gmbh v. Steel Authority of India Limited148 connected therewith. However, the Court opined
(“Thyssen”) to interpret the difference between that if the applicability of the amendments to both
“to arbitral proceedings” and “in relation to arbitral parts are treated differently, it would lead to serious
proceedings” in Section 26, as the latter referring to not anomalies. This is primarily because of the fact that
only proceedings pending before the court but also there have been amendments to Section 9 as well
proceedings emanating from or related to such arbitral as Section 17 of Act149 and, in respect of arbitral
proceedings like court proceedings etc. related to the proceedings commenced prior to 23 October 2015,
arbitration. It was also argued that the amendment the amended provisions would apply to proceedings
leading to disentitlement of having an automatic stay under Section 9 of the Act, but not to Section 17
subsequent to a challenge of an award, does not divest thereof. Thus, the expression “to arbitral proceedings”
a party’s right to challenge, rather it only introduces should be given the same expansive meaning as “in
minor changes to such an interim relief, which is not relation to arbitral proceedings” so that “all” arbitral
a vested or accrued substantive right. proceedings (including court proceedings) that
commenced prior to 23 October 2015 are governed
C. Judgment by the un-amended provisions. To further illustrate

all the arbitral proceedings, which commenced in
On examining the contentions put forth by the accordance with the provisions of Section 21 of the
parties and the contents of Section 26 of the Act prior to 23 October 2015, the Court referred to
Amendment Act, the Court came to a finding that the following graphical representation:
the date of commencement of the Amending Act,
that is, 23 October 2015, is what separates Section
26 into two parts: (i) the amendments shall not
apply “to arbitral proceedings” commenced before
the commencement of the Amendment Act, and
(ii) the amendments shall apply “in relation to
arbitral proceedings” commenced on or after the
commencement of the Amendment Act.
149. Section 9 deals with the power of the court to grant interim mea-
sures, while Section 17 deals with powers of the arbitral tribunal
148. 1999 (9) SCC 334. to grant interim measures.
47
“Category I
Arbitral
proceedings
commence award S.34 petition
t0 t1 t2 Time
23/10/2015
Proceedings before Arbitral Tribunal Proceedings before court
Category II
Arbitral
proceedings
t0 t1 t2 Time
23/10/2015
Category III
Arbitral
proceedings
t0 t1 t2 Time
23/10/2015
t0 = date on which arbitral proceedings commence
t1 = date of award
t2 = date of filing of petition under section 34 of the said act
23/10/2015 = date on which amending act commenced.”

Based on this representation, the Court concluded removed, by way of the amendments. Meanwhile,
that if the first part of Section 26 applies only to the rights of the award-debtor were kept intact to the
arbitral proceedings in the sense of proceedings extent that interim reliefs can be sought from the
before arbitral tribunals and not to court proceedings, court during the pendency of an application of chal-
then, it is obvious that Section 26 is silent on second lenge under Section 34. Thus, the Bombay High Court
and third categories of cases. Thus, no contrary concluded that “removal of such a shadow over the rights
intention of retrospectivity could be inferred upon of the award-holder cannot be said to be prejudicial to the
a reading of Section 26 of the Amending Act. award-holder.”
The Court, expanded the scope of the right to enforce There is a risk of extension of ‘automatic stay principle’
an award as an accrued right to be inclusive of the which was prevalent in the pre-arbitration regime,
negative right of the award-debtor to not have the debated and purposely omitted in the amendments
award enforced. Thus, on considering that the right to the Act. This judgment, if followed may defeat the
to have an automatic stay on the enforcement of the intention of the amended Section 36 of the Act.
award has ceased, pursuant to the amendments, the
The decision of the Bombay High Court has been
Court concluded that these amendments are to be
appealed and pending adjudication before Supreme
treated as prospective in operation.
Court of India. Hopefully, the Supreme Court will
settle the position on applicability of the Amendment
D. Analysis Act and bring the divergent views of various High
Courts to an end.
This judgment clearly conflicts with the earlier
observations of the Madras High Court150 and the
– Shweta Sahu, Alipak Banerjee & Vyapak Desai
Calcutta High Court,151 wherein it was clarified
You can direct your queries or comments
that ‘arbitral proceedings’ do not include ‘court
to the authors
proceedings’ and by virtue of Section 26 of the
Amendment Act, the amendments would apply to
court proceedings but not to arbitral proceedings.
Undoubtedly, these judgments rightfully establish
the distinction between arbitral proceedings and
proceedings emanating from or related to such
arbitral proceedings as expressed in Section 26 of
the Amendment Act, which has been diluted by the
Court in this judgment.
The Bombay High Court152 looked into the inten-

tion behind the amendments and observed that the
amendments to Section 36 sought to balance between
the rights and liabilities of the award-holder and the
award-debtor, thus prospective in nature. Earlier,
a challenge under Section 34 would cast a shadow on
the award-holder’s right to enforce the award since
an automatic stay would operate. Subsequently, this
shadow over the rights of the award-holder was
150. New Tirupur Area Development Corporation Ltd. v. M/s. Hindustan

Construction Co. Ltd A. NO. 7674 of 2016 in O.P. No. 931 of 2015 judgment dated
27 January 2016 (Madras High Court)
151. Tufan Chatterjee v. Rangan Dhar AIR 2016 Cal 213

152. Rendezvous Sports World v. the Board of Control for Cricket in India,
2016 SCC Online Bom 255
49
IX. Appellate Arbitration If either party is in disagreement with the arbitration

result in India, either party will have the right to appeal
Permissible In India to a second arbitration in London, UK in accordance
with the Rules of Conciliation and Arbitration of the
– But Should You International Chamber of Commerce in effect on the
date hereof and the result of this second arbitration
Provide For It? will be binding on both the parties. Judgment upon the
award may be entered in any court in jurisdiction
It is also relevant to note that the applicable

substantive law was also Indian law.
§§ Supreme Court permits two-tier i.e. appellate
arbitration in India
B. Judgment
§§Party autonomy is paramount in arbitration The SC first noted that a plain reading of the
under the Indian Arbitration & Conciliation
arbitration agreement indicated that the intention
Act, 1996.
of the parties was to provide for two opportunities at
resolving their disputes or differences. Let’s label the
§§No express and implied prohibition of appellate
decision of the first tribunal as First Award and that
arbitration is contained in the Arbitration &
of the second tribunal as the Second Award.
Conciliation Act, 1996.
The SC addressed several argument raised by counsel

in the judgment, of which the significant ones are
A three-judge bench, of the Supreme Court of India
listed below:
(SC), in Centrotrade Minerals & Metal v. Hindustan
Copper has found that parties may provide for an
A. Is the First Award an “arbitral award”?
appeal in their arbitration clause and such a choice
would not be contrary to the laws of India. The issue, The SC noted that the First Award is an arbitral
originally heard in 2006, had been referred to a higher award and not just a decision rendered by
bench due to a difference of opinion between the two a tribunal with no enforceable effect. The reasons for
judges hearing the case. this finding were two fold-
1. The First Award contained all the elements and

A. The Dispute Resolution ingredients of an arbitration award; and
Clause
2. If the decision was not considered to be an
The question before the SC was whether a settle- arbitral award, a legal vacuum would exist post
ment of disputes or difference through a two tier the arbitration result.
arbitration procedure provided for in the con-
While the SC has found that no such vacuum can be
tract between the parties was permissible under
read to exist and such an award would be enforceable
Indian law. The arbitration agreement contained in
under the Indian Arbitration & Conciliation Act,
Clause 14 of the contract provided:
1996 (A&C Act, 1996), it has not addressed whether
14. Arbitration - All disputes or differences whatsoever or not the First Award can be enforced while the
arising between the parties out of, or relating to, the con- second tribunal is hearing the matter in appeal.
struction, meaning and operation or effect of the contract
or the breach thereof shall be settled by arbitration in B. Is appellate arbitration contrary to the laws of
India through the arbitration panel of the Indian Council
India?
of Arbitration in accordance with the Rules of Arbitra-
tion of the Indian Council of Arbitration.
The SC noted that it was inappropriate to argue that
appellate arbitration is contrary to the laws of India
because that would indicate that the party knowingly

entered into a contract wherein one of the provisions The SC found that an award being “final and binding”
of the contract was contrary to the laws of India. indicates that it has legal effect and doesn’t preclude
This could amount to serious fraud and would have appellate arbitration.
serious long-term ramifications on international
As for the public policy argument, the court dismissed
commercial contracts with Indian parties.
the same stating that there is nothing fundamentally
The SC then divided the argument raised in appeal objectionable in the parties preferring and accepting
into three parts: a two-tier appellate arbitration mechanism. Such
a choice would not violate any mandatory provision
1. Whether the A&C Act, 1996 does not sanction
of the A&C Act, 1996.
appellate arbitration;
Lastly and most importantly, the SC has placed
2. Whether the A&C Act, 1996 contains an implied
significant emphasis on party autonomy while
prohibition to appellate arbitration; and
arriving at this decision, even noting that it is
“virtually the backbone of arbitration” and that the
3. Whether appellate arbitration is contrary to
intention in the A&C Act, 1996 “is not to throttle the
Indian public policy.
autonomy of parties or preclude them from adopting any
The SC took note of the Report of the UNCITRAL other acceptable method of redressal such as appellate
Working Group, the Arbitration Act of 1940, arbitration. Therefore, there is nothing in the A&C
referred to some commentaries, as well as previous Act, 1996 that prohibits the parties from explicitly or
judgments to find that appellate arbitration has implicitly agreeing on appellate arbitration.
historically been considered valid. The SC duly
considered this and found that that the legislature
C. Analysis
would be aware of such a practice at the time
of drafting the A&C Act, 1996 and the lack of The present judgment continues the line of pro-
specific proscription would indicate that appellate arbitration judgments in India. Special mention
arbitration is permissible in India. should be made to the increasing respect being
accorded by courts to party autonomy in arbitration.
The SC took note of the argument that the right
of appeal can only be provided by statute. After One cannot ignore that parties may be concerned
studying various precedents on the issue, the SC about the possibility of error in high-stakes disputes
noted that the right of appeal is a substantive right and appellate arbitration may safeguard the integrity
and is not just a mere matter of procedure. On this of the arbitration process and protect parties from such
ground, the SC distinguished appellate arbitration errors. Similarly, the knowledge of the availability
vis a vis statutory appeals before courts and tribunals, of an appeal, may also serve as an encouragement to
to find that an appeal procedure contained in an parties to complete the first proceeding expeditiously.
arbitration agreement was a substantive right Arbitration can no longer take a standard, one-size-fits-
created by the parties by mutual consensus. all approach and it must evolve to address the interests
of parties in different disputes of varying quantum.
In regards the implied prohibition contained in
These manifold pros of an appeals procedure has also
the A&C Act, 1996, the court read Section 34-36 in
been noted in investor state arbitration and and an
together to find that the availability of recourse to
optional appeals procedure has been made available to
a court for challenging an award, contained in the
give the process greater legitimacy.
statue, does not ipso facto prohibit the parties from
mutually agreeing to a “second look”. Furthermore, While the judgment can be hailed for its party-
the idea that an arbitration award is “final and autonomy oriented approach to the issue which
binding” does not necessary rule out the possibility echoes the adoption of appellate mechanisms in
of an appeal. arbitration in other jurisdictions, it is pertinent to ask –
51
While appellate arbitration has been found to be It is up to arbitral institutions now to draft and
permissible in India, is it good for your dispute? provide appellate procedure rules that can cover
operational issues that are likely to arise. Some
The availability of an appeals mechanism also
examples are questions regarding which issues
has various cons. A simple example could be that
can be submitted to an appeal as against the
it provides a recalcitrant respondent yet another
commencement of de novo procedures; when would
delaying tactic. However, the larger concern is the
time for the purposes of limitation stop running; or
lack of clarity on how the availability of an appellate
how soon would an appeal need to be filed.
mechanism in arbitration will affect the arbitration
system as a whole. Parties choose arbitration over While this judgment is surely an interesting
litigation for its final and binding effect at first development in Indian arbitration law, its
instance. While the need for an appeal mechanism implications remain to be seen.
to protect legitimate interests of parties must be
– Niyati Gandhi & Vyapak Desai
acknowledged, the mechanics will surely implement
the structure and spirit of international arbitration.
authors

X. Allegations of Fraud B. Facts

Are Arbitrable - Even in The parties entered into a partnership deed on 1 April
1994 for running a hotel. While the Appellant was
Domestic Arbitrations entrusted with administration, the Respondents
in India alleged that the Appellant had failed to make regular

deposits of money into the common operating bank
account and had fraudulently siphoned off an amount
The Supreme Court has held that: of INR 10,00,050. In a separate raid conducted by the
CBI on premises of the Appellant’s relative, an amount
of INR 45,00,000 was seized and alleged to have been
given by the Appellant for business of the hotel.
§§Allegations of fraud are arbitrable unless serious
and complex in nature;
The Respondents filed a civil suit seeking right
of administration of the hotel. The Appellant
§§N. Radhakrishnan did not make blanket
sought reference of the dispute to arbitration
exclusion of fraud from the purview of
under Section 8 of the Arbitration & Conciliation
arbitration;
Act, 1996 (“A&C Act”). The High Court rejected
§§Swiss Timing does not over-rule N. the Appellant’s application on the ground that the
Radhakrishnan since it arose under Section 11 of dispute involved allegations of fraud. Aggrieved
the A&C Act; by the decision, the Appellant preferred an appeal
before the Supreme Court.
§§Issues of fraud are arbitrable unless the
arbitration agreement itself is impeached.
C. Contentions of the
Respondents
A. Introduction
The Respondents made the following contentions:
The Supreme Court of India (“Supreme Court”), in
A. Ayyasamy (Appellant) v. A. Paramasivam & Ors. §§The allegations constituted acts of fraud which
were attributed to the Appellant.
(Respondents)153 has held that disputes involving
allegations of fraud arising out of contracts bearing
§§Where allegations of fraud are involved, civil
an arbitration clause shall be referred to arbitration.
courts are the appropriate forum for adjudication.
The Respondents took recourse to judgment of
Distinguishing, yet not casting away, the oft-
the Supreme Court in N. Radhakrishnan wherein
cited ruling of the Supreme Court in the case of
disputes revolved around serious malpractices,
N. Radhakrishnan v. Maestro Engineers154 in matters
manipulation of accounts and cheating by the
involving arbitrability of fraud, a division bench of
partners. The Supreme Court had held that
the Supreme Court has held that N. Radhakrishnan
since the allegations were serious and required
did not subscribe to the blanket proposition of non-
evaluation of detailed evidence, they could “not
arbitrability of fraud and that allegations which
be properly gone into by the Arbitrator”.
could be adjudicated upon in courts could also be
adjudicated upon in arbitral proceedings, subject to
certain carve-outs.
153. Civil Appeal Nos. 8245 and 8246 of 2016

154. (2010)1 SCC 72
53
D. Findings of the Supreme matters,155 trusts 156 and consumer protection.157

Court However, it held that the law did not exclude issues
of fraud as being non-arbitrable.
i. Minimum intervention by courts

iii. N. Radhakrishnan is frequently
The Supreme Court delved into the underlying misread
objective of the A&C Act to minimize court
interference in disputes involving arbitration. It held The Court held that N. Radhakrishnan involved serious
that Section 8 of the A&C Act mandated reference allegations of fraud which necessitated evaluation of
to arbitration unless, on a prima facie evaluation, detailed evidence. This could only be done properly by
the arbitration agreement was found to be invalid. Courts. However, the Supreme Court considered that
It noted that Section 8 offered little discretion to in ruling so, N. Radhakrishnan had relied extensively
courts to assume jurisdiction and made a conscious on the judgment of Abdul Kadir Shamsuddin Bubere
departure from the language of its equivalent v. Madhav Prabhakar Oak 158 which arose under the
provision under the UNCITRAL Model Law where Arbitration and Conciliation Act, 1940 - offering wide
reference could be rejected on wider grounds (viz. discretion to courts to assume jurisdiction. However,
where the arbitration agreement was null and void, the A&C Act had limited court discretion and
inoperative or incapable of being performed). intervention under Section 8.
The Court held that Section 16 of the A&C Act also Despite the aforesaid observation, the Supreme
operated in the same vein while equipping the Court did not expressly reject the reasoning in N.
arbitrator to rule upon its own jurisdiction and Radhakrishnan and held that serious allegations of
minimizing court intervention. Further, the doctrine fraud were non-arbitrable, while mere allegations of
of separability (where the arbitration agreement fraud would be arbitrable. It distinguished, by way of
survived nullity, even if embodied in a contract example, between simple and serious allegations of
assailed on the grounds of fraud), helped to retain fraud. However, it emphasized that it was incumbent
powers of the arbitral tribunal and adjudicate upon upon courts to sift through the materials and identify,
nullity of the contract. Thus, tribunals are vested on a prima facie basis, if the case involved allegations
with jurisdiction to consider issues of fraud. of a serious nature. Since the present dispute did
not involve complex issues but merely matters of
ii. No demarcation of arbitrable and accounts, the Supreme Court held that the allegations
non-arbitrable disputes under the could be easily ascertained by the arbitrator.
A&C Act
iv. Swiss Timing does not over-rule N.
Noting that arbitrability is quintessential to ensure Radhakrishnan
enforcement of awards and that the A&C Act is silent
on types of non-arbitrable disputes, the Supreme The Supreme Court considered the ruling in
Court outlined judicially enumerated issues which Swiss Timings Ltd. v. Commonwealth Games 2010
cannot be referred to arbitration - based on analysis Organizing Committee 159 where a Single Judge of
of the types of rights involved (rights in rem or in the Supreme Court held that N. Radhakrishnan
personam), conferment of jurisdiction on special (delivered by Division Bench) was per incuriam.
courts or on public policy. These include matters The Supreme Court clarified that Swiss Timing dealt
involving crimes, matrimony, insolvency and with Section 11(6) of the A&C Act which conferred
winding up, guardianship, tenancy, testamentary
155. Booz Allen & Hamilton vs. SBI Home Finance Ltd., (2011)5 SCC 532
156. Vimal Kishore Shah vs. Jayesh Dinesh Shah, Civil Appeal No. 8614 of 2016
157. Skypak Courier Ltd. Vs. Tata Chemical Ltd., (2000)5 SCC 294
158. AIR 1962 SC 406
159. (2014) 6 SCC 677. Our analysis of the judgment can be viewed here

power on the Chief Judge of India or the Chief World Sport Group (Mauritius) Ltd. v. MSM Satellite
Justice of the High Court as a designate to appoint an (Singapore) Pte. Ltd.162 had held that allegations
arbitrator. The exercise of power by the Court under of fraud did not prevent the court from making
Section 11 and the judgment so delivered could not reference to arbitration under Section 45 of the A&C
be deemed to have precedential value. Therefore, Act. However, in the case of India seated domestic
it cannot be deemed to have overruled the arbitrations, there was a cloud on efficacy of arbitral
proposition of law laid down in N. Radhakrishnan. proceedings to resolve issues of fraud, particularly in
light of the ruling in N. Radhakrishnan.
v. Reliance on foreign case law to focus
on party intent The present judgment sets to rest the conundrum
created by N. Radhakrishnan. It recognizes that
Relying on decisions of the UK courts 160, the Court disputes which can be adjudicated upon by courts
held that it is inconceivable that ordinary businessmen can, by default, be adjudicated upon by arbitral
would engage in a contractual tug of war by intending tribunals and that exceptions to this rule lie
that questions of nullity of contract would be decided in limited frontiers of public policy, statutory
by the arbitrator while issues of fraud would be legislation and rights in rem. It carefully pulls the
decided by the court. Arbitration is intended to be rope bearing the weight of N. Radhakrishnan – its
a one-stop forum unless parties expressly excluded cer- primary reliance on the judgment in Abdul Kadir.
tain disputes from its ambit. Therefore, unless the arbi- It clarifies that N. Radhakrishnan can be applied
tration clause itself is impeached on grounds of fraud, only where serious and complex allegations
the disputes will be capable of reference to arbitration. of fraud necessitating extensive evaluation of
However, it was rare for a party to procure an arbitra- evidence are involved. Pursuant to this ruling,
tion agreement fraudulently, even in cases where the N. Radhakrishnan cannot be used for the purpose
contract may have borne connection with fraud. of making an unimpeachable statement on
non-arbitrability of fraud, nor can it be used
vi. Multiple allegations of civil and as a subterfuge to detract from jurisdiction of
criminal wrongdoing the arbitral tribunal by masking allegations as
fraud. Every allegation of fraud would need to be
Rejecting the general notion that elements of criminal weighed on a scale of seriousness and complexity,
wrongdoing or statutory violation detracted from with an eye that sifts through material to identify
the jurisdiction of the arbitral tribunal, the Supreme veracity of the allegations.
Court held that contractual power did not conflict
The Court has also subtly stated that allegations of
with statutory power. Parties could exercise the power
fraud can be adjudicated upon in courts when the
under the arbitration agreement; thereby giving teeth
person against whom such allegations are levelled
to the well accepted phenomenon of acceptance of
desires to be tried in court. This will be an additional
criminal and contractual procedures.161
factor to be considered by courts in deciding
applications for reference to arbitration. It will also
E. Analysis be crucial for courts to scrutinize if fraud is directed
at the arbitration agreement, thereby impeaching
The judgment is seminal in the arena of fraud related
the agreement (and the resultant arbitration, the
disputes arising out of contracts bearing arbitration
same being creature of the arbitration agreement),
clauses in India seated domestic arbitrations. In case
as contra-distinguished from the main contract.
of foreign seated arbitrations, the Supreme Court in
160. Fiona Trust & Holding Corporation vs. Yuri Privalov (2007)1 AllER
(Comm) 891; Premium Nafta Products Ltd. vs. Fily Shipping Co. Ltd.
(2007) UKHL 40
161. Hindustan Petroleum Corporation Ltd. Vs. Pinkcity Midway Petroleum, 162. AIR 2014 SC 968; Our analysis of the judgment can be viewed
(2003) 6 SCC 503 here
55
The judgment acts as a fail-safe judgment as it takes intention of the judiciary to be a partner in arbitral
into account universally-accepted principles of proceedings and offer support, both in an active and
kompetenz kompetenz, separability and party autonomy passive manner, where questions arise with respect to
as the epicenter of arbitration, and accords due reference to arbitration.
respect to ordinary business rationale underlying
- Kshama Loya Modani, Shweta Sahu & Vyapak Desai
arbitration clauses in contracts. It fortifies the
authors

XI. Arbitration A. Brief Facts

(Amendment) Act, Recently, the Delhi High Court (“Court”) in Raffles
Design International India Pvt Ltd. (“Petitioner”) vs.
2015 Shall Apply Educomp Professional Education Ltd.164 (“Respondent”)
Retrospectively to allowed a petition seeking interim relief under

Section 9 of the Act (“Petition”) in a Singapore
Court Proceedings seated arbitration, and held that the provisions of the
in Relation to Arbitral Amendment Act would apply to all court proceedings

in relation to arbitral proceedings instituted after
Proceedings the Amendment Act came into force, even if the
arbitration commenced prior to the Amendment Act.
The parties had agreed to resolve their disputes

The Delhi High Court
through arbitration seated in Singapore, with the
governing law as Singapore Law, and arbitration to
be conducted in accordance with the rules of the
§§Holds that provisions of the Arbitration Singapore International Arbitration Centre (“SIAC”).
& Conciliation ( Amendment Act), 2015 Certain disputes arose between parties wherein
(“Amendment Act”) to apply retrospectively the Petitioner proceeded to initiating arbitration in
to all court proceedings related to arbitration Singapore and also filed for the appointment of an
proceedings instituted post the Amendment emergency arbitrator under the SIAC rules, pursuant
Act even if the arbitration commenced prior to to which certain reliefs were granted to the Petitioner
the Amendment Act; which were later confirmed by the arbitral tribunal.
Due to subsequent contravention of the emergency
§§Recognizes that the position regarding non- award by the Respondent, the Petitioner filed the
applicability of Part I of the Arbitration &
present Petition before the Court, to which the
Conciliation Act, 1996 (“Act”) with respect to
Respondent raised a preliminary objection regarding
foreign seated arbitrations stands amended by
its maintainability.
virtue of Section 2 (2)163 of the amended Act
thereby making Section 9 of the Act available
to parties even in case of a foreign seated
B. Respondent’s Objections
arbitration even if the arbitration commenced
The Respondent’s primary objection was on the
prior to the Amendment Act;
ground that Part I of the Act is inapplicable to proceed-
ings held outside India and that by choosing Singapore
§§Holds that choosing a foreign law or foreign seat
as the Seat, the parties have impliedly excluded the
or foreign institutional rules does not amount
applicability of Section 9 of the Act and that therefore
to implied exclusion of Section 9 of the Act;
the present Petition is not maintainable. The Respond-
ent’s also contended that the Amendment Act is inap-
plicable to the present arbitral proceedings by virtue of
Section 26165 of the Amendment Act, as the arbitral
163. Section 2 ( 2) This Part shall apply where the place of arbitration
is in India: 164. O.M.P.(I) ( COMM.) 23/2015 & CCP (O) 59/2016, IA Nos. 25949/2015 & 2179/2016
[Provided that subject to an agreement to the contrary, the provisions 165. Section 26 : Nothing contained in this Act shall apply to the arbi-
of sections 9, 27 and clause (a) of sub-section (1) and sub-section tral proceedings commenced, in accordance with the provisions
(3) of Section 37 shall also apply to international commercial ar- of section 21 of the principal Act, before the commencement
bitration, even if the place of arbitration is outside India, and an of this Act unless the parties otherwise agree but this Act shall
arbitral award made or to be made in such place is enforceable apply in relation to arbitral proceedings commenced on or after
and recognized under the provisions of Part II of this Act.] the date of commencement of this Act” (Emphasis supplied)
57
proceedings had commenced prior to the date of com- In coming to such a conclusion, the Court has
mencement of the Amendment Act. upheld recent judgments of the Madras High Court
[Click Here to access NDA hotline],167 the Bombay
High Court168 and the Calcutta High Court 169
C. Petitioner’s Contentions
which came to similar conclusions.
The Petitioner contended that the very purpose for
The Court however, also observes that the two limbs
the amended Section 2 (2) was to confer jurisdiction
of Section 26 of the Amendment Act are not exhaus-
on Indian Courts in respect of Sections 9 and 27 of the
tive as the first limb refers only to proceedings
Act, even if the seat is foreign and that the expression
commenced in accordance with Section 21 (found
“subject to an agreement to the contrary” as found in
in Part 1) of the Act, and that therefore Section 26 is
the amended Section 2 (2) would mean and require
silent regarding applicability of the Amendment Act
something more than mere choice of law and seat of
to proceedings which are not expressly indicated
arbitration. It was also contended that the expression
therein. Due to the lack of any express indication as
“to arbitral proceedings” as used in the first limb of
to the applicability of the Amendment Act to arbitra-
Section 26 does not apply to court proceedings and
tions instituted outside India, the Court adopts a pur-
that therefore the Amendment Act ought to apply to
posive interpretation, sets out the legislative intent
the present case.
behind the Amendment Act, and holds that even in
cases where there is no express provision regarding
D. Issues Before The Court retrospective applicability of the new law, the Courts
should look to further intention of the legislature.
§§Whether the provisions of the Amendment Act
were applicable to the present Petition?
Considering that the very purpose of the amended
Section 2 (2) of the Act was to enable a party to
§§If the answer to the above is in the affirmative,
approach Indian Courts for interim relief even in
whether the parties had excluded application
foreign seated arbitrations, the Court clarifies that
of Part I of the Act, since the arbitration was
the position regarding non-applicability of Part I
seated in Singapore with the governing law being
of the Act in foreign seated arbitrations, as held in
Singapore Law?
Bharat Aluminium Company Vs. Kaiser Aluminium
Technical Services Inc. 170 , stands amended as far as
E. Judgment & Analysis Section 2 (2) of the Act is concerned and that parties
now have recourse to Section 9 of the Act even in
The Court clarifies that Section 26 of the
foreign seated arbitrations. The Court therefore
Amendment Act is in two parts, the first couched
allows the present Petition and makes it clear that
in negative form, and the second in the affirmative.
choice of a foreign law or a foreign seat or foreign
Relying upon the decision of the Supreme Court in
institutional rules does not amount to implied
Thyssen Stahlunion Gmbh vs. Steel Authority of India166
exclusion of Section 9 of the Act.
the Court observes that the usage of the word ‘to’ in
the first limb instead of ‘in relation to’ clearly restricts
the import of the first limb of Section 26. The Court
therefore holds that the use of the phrase “in relation
to” indicates that the legislature intended the second
limb of the provision to have a wider sweep thus
covering all proceedings connected to arbitral
proceedings, and that therefore the amendments
would apply to Court proceedings instituted post 167. New Tirupur Area Development Corporation vs. Hindustan Con-
struction limited, Madras High Court, A.No. 7674 of 2016 in O.P. No. 931 of 2015
commencement of the Amendment Act. 168. Rendesvous Sports World vs. the Board of Control for Cricket in India,
Bombay High Court, Chamber Summons No. 1530 of 2015
169. Sri Tufan Chatterjee vs. Sri Rangan Dhar, 2016 SCC Online Cal 483
166. (1999) 9 SCC 334 170. (2012) 9 SCC 552

The Court has demonstrated its pro-arbitration a foreign seat and foreign law and still retain the
approach in adopting an effective and purposive benefit of seeking recourse to Indian courts for
interpretation of the provisions to further the inten- interim measures. The question of law regarding the
tion of the legislature regardless of an apparent retrospective applicability of the Amendment Act to
lacuna in the law so as to make the provisions of arbitral proceedings vis-à-vis court proceedings how-
the Amendment Act effective immediately. Such an ever, is currently pending before the Supreme Court.
approach adopted by Courts would go a long way in
– Siddharth Ratho & Vyapak Desai
enhancing the effectiveness of the alternate dispute
resolution scenario in India. Parties can now choose
authors
59
XII. In Civil Courts we strained, especially in cases where the trustee is

given discretionary powers on various aspects
‘Trust’: Trust Disputes (including distributions to beneficiaries, investment
Inarbitrable in India decisions, etc.), such arbitration provisions have been

considered highly important, given key advantages
such as timely resolution of disputes, confidentiality,
efficiency and the flexibility to appoint arbitrators
who have knowledge about the affairs of the family,
§§Disputes arising out of Trust Deeds and the etc. Moreover, in the past few years appointment
Indian Trusts Act, 1882 cannot be referred to of institutional trustees have been on the rise on
arbitration. account of their ability to act independently and
professionally. When institutional trustees are so
§§Clauses providing for arbitration in a Trust appointed, arbitration clauses give such institutional
Deed do not constitute an “arbitration
trustees a lot of comfort in terms of taking up the
agreement”.
role of a trustee, particularly, as trustees are bound by
fiduciary obligations, which are subjective in nature.
§§Provisions governing dispute resolution
and legal remedies in the Trusts Act act as
an implied bar to arbitration of trust related B. Background
disputes.
A Trust is a legal obligation annexed to the ownership
of property and is not a separate legal entity.
A. Introduction A Trust arises out of confidence placed by a person

(referred to as the settlor) in another (the trustee),
The Supreme Court of India (“SC”), in Vimal Shah for the benefit of certain persons (the beneficiaries)
& Ors. vs Jayesh Shah & Ors.171, recently held that as identified by the settlor. The trustee is the legal
disputes arising between beneficiaries or trustees and beneficial owner of the trust property. A Trust
of a Trust cannot be referred to arbitration as an Deed is an instrument by which the settlor reposes
arbitration clause contained in a Trust Deed is not an confidence in a trustee and settles property into the
“arbitration agreement” between the trustees inter Trust. Typically, a trust deed is only executed by the
se, between the beneficiaries inter se or between the settlor and the trustees.
trustees and the beneficiaries for the purposes of the
In the present case, a family trust deed (“Trust
Arbitration & Conciliation Act, 1996 (“Arbitration
Deed”) had been executed in favor of six minor
Act”) unless the respective parties specifically agree
beneficiaries. Clause 20 of the Trust Deed contained
to the same.
an arbitration clause, providing that
It was further held that all disputes arising out of a
“any dispute or differences dispute or difference arising
Trust Deed and the Indian Trusts Act, 1882 (“Trust
regarding the interpretation of the Trust Deed or any
Act”) are not arbitrable in India.
disputes arising inter se trustees, between the trustees
This ruling is significant because, currently, several and beneficiaries or inter se beneficiaries shall be resolved
trust deeds of private trusts governed by the Trust under the Indian Arbitration Act, 1940 and the decision
Act contain arbitration clauses in relation to of the arbitrator(s) shall be final and shall bind the
resolution of disputes between trustees, between parties to the arbitration.”
beneficiaries and between trustees and beneficiaries.
Differences arose among the beneficiaries with respect
Due to the high likelihood of potential disputes
to the conduct of the affairs and business of the trust.
when relationship between family members get
An application under Section 11 of the Arbitration
Act was made by some of the beneficiaries to refer the
171. Civil Appeal No. 8164 of 2016 disputes to arbitration in accordance with Clause 20

of the Trust Deed. The Bombay High Court allowed carry out the terms of the Trust Deed in accordance
the application referring the disputes to arbitration. with applicable law. Further, it was held that
Aggrieved by such order, other beneficiaries filed an interpreting arbitration clause in a trust deed as an
appeal before the SC by way of special leave. arbitration agreement inter se the trustees would
be absurd as the arbitration clause does not satisfy
C. Issues a basic requirement for constituting an agreement

inter-se the trustees, i.e., there is no proposal and
The following issues were before the SC for acceptance between them.
determination in the present appeal:
The SC held that similar to the above, merely by virtue
1. Was an arbitration clause contained in a Trust of Beneficiaries accepting a trust deed by accepting
Deed a valid arbitration agreement for resolution benefits under the Trust, the trust deed cannot be
of disputes between beneficiaries of a Trust? interpreted as an agreement inter se the beneficiaries
and the present dispute could not be referred to
2. Whether trust-related disputes are arbitrable in
arbitration for want of a valid arbitration agreement.
India?
2. Are trust disputes arbitrable in India?
D. Judgment Arbitration is a private dispute resolution mechanism

available to resolve civil and commercial disputes.
1. Is an arbitration clause in a Trust Deed a valid
However, certain varieties of disputes are considered
“arbitration agreement” under the Act?
inarbitrable in the interest of public policy and can
The SC found that an arbitration clause contained only be addressed in a competent public forum. In an
in a Trust Deed does not meet the requirements earlier judgment of Booz Allen &Hamilton Inc. vs SBI
of a valid arbitration agreement prescribed in the Home Finance Ltd 174, the Supreme Court of India has
Arbitration Act. listed six varieties of disputes as inarbitrable in India.
They are: (i) rights and liabilities arising out of or giving
The SC relied on its earlier judgment in Vijay
rise to criminal offences; (ii) matrimonial disputes;
Kumar Sharma 172which held that an arbitration
(iii) guardianship matters; (iv) insolvency and winding
clause contained in a Will is not a valid arbitration
up; (v) testamentary matters; (vi) eviction or tenancy
agreements since the legatees are not signatories
matters where tenants enjoy statutory protection. In
to the testamentary document. Comparing Trust
the present case, the SC laid down an additional cat-
Deeds with testamentary documents, the SC held
egory of cases to the list of disputes considered to be
that beneficiaries of a trust, like legatees to a Will, are
inarbitrable in India i.e. disputes arising out of a Trust
not parties to an arbitration agreement since they do
Deed or otherwise covered by the Trusts Act.
not execute the trust deed containing the arbitration
clause. Furthermore, the SC clarified that even if the The SC analyzed the scheme of the Trust Act finding
beneficiaries are considered to have accepted the trust that it comprehensively and adequately covers
deed vis-à-vis the settlor by accepting the benefits each subject pertaining to trust law, right from the
thereunder, such acceptance does not imply that an creation of the trust and extending to management
arbitration agreement exists for the resolution of of the trust as well as provisions relating to
disputes between beneficiaries, trustees, or between beneficiaries and trustees, including remedies
trustees and beneficiaries. available to get grievances settled. Specifically on
the point of legal remedies, the SC observed that the
The SC further referred to the Calcutta High Court
Trust Act provides specifically for the resolution
ruling in Bijoy Ballav Kundu 173which held that upon
of various disputes and confers jurisdiction for
signing a Trust Deed, trustees only undertake to
the same on Civil Courts. The SC referred to the
172. 2010 (2) SCC 486

173. AIR 1965 Calcutta 628 174. (2011) 5 SCC 532
61
principle of interpretation that where a specific or Settlor and that therefore, an arbitration clause
remedy is prescribed by statute, the person facing in a Trust Deed is not a valid agreement to arbitrate
such a grievance is denied of any other remedy. for disputes between beneficiaries. To that extent, the
Therefore, the SC concluded that the presence of SC does not deviate from the HC’s ruling. However,
provisions in the Trust Act specifically dealing the court did not consider trust-related disputes to be
with the forum for dispute resolution reflects inarbitrable, per se, and it recognized that a separate
the intention of the legislature to impliedly bar arbitration agreement between beneficiaries could
arbitration of such disputes. constitute a valid arbitration agreement. The present
SC judgment was in appeal to a judgment of the Bom-
E. Analysis bay High Court which had found that the beneficiary
is in a contractual relationship with the Trustee and a
Trusts may be public (i.e., charitable or religious) or Settlor. The present judgment confirms that the nature
private. Public trust are governed by specific state of the relationship is not contractual on the same lines
legislations on charitable and religious trusts and as what was held by the Delhi HC. However, it remains
are not particularly governed by the Trust Act, even to be clarified if the beneficiaries among themselves
though general common law principles underlying can create a contractual relationship with regards the
the Trust Act are also applicable to public trusts. distribution of benefits of the trust.
It may be against the public policy of a country to
Having said that, in the context of the recent ruling
allow arbitration of disputes arising in public trusts.
and in the context of the importance of arbitration
However, extending that principle to private trusts,
options for private trusts, for trust disputes to be
including commercial trusts, may not be in best
arbitrable in India, a statutory amendment to the
interest of the stakeholders involved. In terms of
Trusts Act appears to be necessary in line with those
value of assets held in trust, the vast majority are
found in various other jurisdictions.176 In the interim,
trusts of a commercial nature, including but not
parties can seek mediation and binding conciliation
limited to pension schemes and investment funds.
of disputes as an alternatives to the remedies available
Disputes listed as inarbitrable in India in the earlier under the Trusts Act.
ruling of Booz Allen have been found to be better
– Ishaan Vyas, Niyati Gandhi & T.P. Janani
resolved in public fora as a matter of public policy.
However, given the benefits of arbitration which
authors
are well-known and manifold, various disputes
arising out of Trust Deeds are better suited to
arbitration, such as disputes involving: (a) fees and
176. For example, section 63 of the Trusts (Guernsey) Law 2007pro-
costs, including trustee’s fees and legal fees; (b) vides that,
Settlement of action against trustee by alternative dispute
appropriateness of investments; (c) interpretation resolution to be binding on beneficiaries.
of trust deed; (d) protection of trust corpus and 63. (1) Where –
(a) the terms of a trust direct or authorise, or the Court so orders, that
income; (e) trust termination & severances; (f) trust any claim against a trustee founded on breach of trust may be
accounting; (f) appointment, removal and retirement referred to alternative dispute resolution (“ADR“),
(b) such a claim arises and, in accordance with the terms of the trust
of trustees; etc. or the Court’s order, is referred to ADR, and
(c) the ADR results in a settlement of the claim which is recorded in a
document signed by or on behalf of all parties,
The finding that disputes arising out of Trust Deeds the settlement is binding on all beneficiaries of the trust, whether or
and in relation to the Trust Act are inarbitrable is not yet ascertained or in existence, and whether or not minors
or persons under legal disability.
a departure from the previous position taken by the (2) Subsection (1) applies in respect of a beneficiary only if –
(a) he was represented in the ADR proceedings (whether personally,
Delhi High Court in Chhaya Shriram.175 In that case,
or by his guardian, or as the member of a class, or otherwise), or
the court had held that beneficiary has benefits in the (b) if not so represented, he had notice of the ADR proceedings and
a reasonable opportunity of being heard,and only if, in the
trust not by virtue of a contract with the Trustee(s) and/ case of a beneficiary who is not yet ascertained or in existence,
or who is a minor or person under legal disability, the person
conducting the ADR proceedings certifies that he was inde-
pendently represented by a person appointed for the purpose
175. AAP 61 of 2008, dated 19 February 2008. by a court of law.

XIII. Employees as consisted of serving and retired employees of

the Respondent and was constituted before the
Arbitrators? No, Says commencement of the Amendment Act.
Delhi HC During the pendency of the First Dispute, an extension

of time for completion of work was granted to the
Petitioner, however before this period had lapsed
the Respondent served a notice of termination to the
Petitioner due to faulty execution of the Work.
§§The Delhi High Court clarifies applicability of
The Petitioner opposed the termination and sought
Arbitration and Conciliation Amendment Act,
losses suffered due to untimely termination. As
2015 (“Amendment Act”) in case of invocation
the attempt to resolve disputes amicable failed, the
of arbitrations post October 23, 2015.
Petitioner by its letter dated October 26, 2015 invoked
§§The Delhi High Court stresses the significance arbitration (“Second Dispute”) and called upon the
of adhering to the detailed guidelines on Petitioner to suggest five names for constituting an
ineligibility of arbitrators as provided in the independent arbitral tribunal. The Respondent’s failure
Seventh Schedule to the Amendment Act. to respond to the said invocation of arbitration, lead to
the present application under Section 11 (6) of the Act.
§§Positive move to do away with the practice
of appointment of in-house arbitrators for
resolution of disputes.
C. Issue
The issue before the Delhi HC was whether the
dispute relating to the termination of the Contract
A. Introduction had to be referred to the First Tribunal for resolution,
or to a newly constituted independent arbitral
The Delhi High Court (“Delhi HC”) in one of its
tribunal, in view of the Amendment Act.
recent judgment in Assignia-Vil (“Petitioner”) JV
v Rail Vikas Nigam Ltd.(“Respondent”)177, taking
cognizance of the amendment to Section 12(5) of the D. Arguments
Arbitration & Conciliation Act, 1996 (“Act”) held
Contentions of the Petitioner
that under the Amendment Act, the court is duty
bound to secure appointment of an independent and
The Petitioner based their arguments on the
impartial Arbitral Tribunal.
following main contentions:-
B. Brief Facts 1. Issue of termination of Contract constitutes

a distinct and complicated issue;
The parties entered into a works contract
(“Contract”) under which the Petitioner undertook 2. First Tribunal had been constituted to adjudicate
to carry out certain construction works (“Work”) specific issues and only to deal with the three
for the Respondent, to be completed by February 15, original claims;
2015. Certain disputes arose between the parties. The
3. Nomination of arbitrators who are serving
Petitioner had raised three claims (“First Dispute”)
or retired employees would not constitute an
against the Respondents during the execution of
independent and unbiased tribunal;
the Contract and sought payments. Due to failure of
Respondent, to resolve issues amicably, an arbitral
4. Arbitration with respect to the Second Dispute
tribunal (“the First Tribunal”) was constituted in
was invoked post October 23, 2016, making
relation to these three claims. The First Tribunal
provisions of the Amendment Act applicable.
177. Arbitration Petition No. 677 of 2015
63
The Second Dispute, therefore cannot be referred The Respondents had relied upon certain case
to First Tribunal. laws to argue that ‘all disputes’ arising out of an
agreement could be referred to the same Arbitral
Contentions of the Respondent Tribunal, and that therefore the issue of the untimely
termination of the contract should also be referred
1. The Respondent argued that there was already
to the first Tribunal. The Delhi HC refered to the
an existing tribunal and new claims could be
Supreme Court’s decision in Dolphin Drilling Limited
added to the pending arbitration. The Respondent
v Oil and Natural Gas Corporation Limited 181 which
had given its consent to add/modify claims
had dealt with the issue of disputes arising between
subsequent to the termination of contract, to
the parties prior to the invocation of arbitration and
be considered by First Tribunal itself. Placing
those arising during the pendency of the arbitration
reliance on State of Orissa v Asis Ranjan178and HL
dealing with the past disputes.
Batra & Co. v State of Haryana179and Shyam Charan
Agarwal & Sons180 the Respondent argued that The Delhi HC thereafter noted that the First Dispute
additional claims could be raised before the First was invoked before the commencement of the
Tribunal and that there was no legal justification Amendment Act and the Second Dispute was invoked
in restricting the scope of arbitration, as the aim post commencement. On the question of applicability
of the procedure was to settle all disputes between of the Amendment Act, the Delhi HC highlighted that
the parties and avoid future litigation. the arbitration clause in the Contract encompassed
statutory modifications to the Arbitration and
2. No objections were raised on the independence
Conciliation Act, 1996, and therefore, since the
or impartiality of the First Tribunal by the
amendments came into force prior to the invocation
Petitioner till date and therefore the Second
of arbitration of the Second Dispute, the provisions of
Dispute may also be dealt with by the same
the Amendment Act would apply.182
tribunal. The Respondent contended that the
Petitioner could not demand constitution of In light of the amendments brought about by the
a new Tribunal and take benefit of its own Amendment Act, the Delhi HC held that it was the
mistake, after failing to participate in the prerogative of the Petitioner to seek constitution of
proceedings before the First Tribunal an independent and impartial Arbitral Tribunal for
adjudicating the issue of termination of the Contract,
E. Judgment due to change in law under Section 11 (8) of the

Act183and the fact that the First Tribunal comprised
The Delhi HC, after hearing all the submissions, of employees of the Respondent. Having the same
held that in the normal course, with due consent of
parties, the issue of termination of Contract could
be referred to the First Tribunal in the pending
arbitration proceedings itself. This would be in 181. (2010) 3 SCC 267
the interest of time, cost- efficiency and to avoid 182. Section 26 of the Amending Act –
Act not to apply to pending arbitral proceedings- Nothing
conflicting decisions. contained in this Act shall apply to the arbitral proceedings
commenced, in accordance with the provisions of Section 21 of
the principal Act, before the commencement of this Act unless
the parties otherwise agree but this Act shall apply in relation
to arbitral proceedings commenced on or after the date of com-
mencement of this Act.
183. Section 11(8) of the Amendment Act-
“(8) The Supreme Court or, as the case may be, the High Court
or the person or institution designated by such Court, before
appointing an arbitrator, shall seek a disclosure in writing from
the prospective arbitrator in terms of sub-section (1) of section
12, and have due regard to— (a) any qualifications required
178. (1999) 9 SCC 249 for the arbitrator by the agreement of the parties; and (b) the
contents of the disclosure and other considerations as are likely
179. (1999) 9 SCC 188 to secure the appointment of an independent and impartial
180. (2002) 6 SCC 201 arbitrator.”;

tribunal resolve the Second Dispute would negate In the short term, this judgment may result in the
the very purpose of the amendments to Section 12 of constitution of multiple tribunals dealing with
the Amendment Act.184 disputes under the same agreement if new disputes
have arisen post the Amendment Act, while
proceedings are pending for previous disputes
F. Analysis before an arbitrator tribunal, unless both parties
consent otherwise.
The recent judgment may be amongst the first of
many heralding a new era for the arbitration regime
This judgment marks the end of such in-house arbi-
in India, bringing it in line with international
trators and stresses the importance of compliance
best practices having stringent conflict of interest
with guidelines provided under Section 12(5) read
regimes. It has been common practice for public
with Seventh Schedule of the Amendment Act for
sector undertakings in India to have a panel of
appointment of arbitrators to maintain independ-
in-house arbitrators that are technically proficient in
ence and impartiality. Interestingly, the Delhi HC,
that particular sector, leading to an unfair advantage
by directing the parties to appear before the Delhi
over the opposite party.
International Arbitration Centre, may have taken
a conscious decision to go in for institutional arbi-
This judgment has dealt with several aspects in rela-
tration, instead of ad-hoc. This may also be in line
tion to appointment of arbitrators and procedure
with the push for institutional arbitration as was
required to be followed pre and post amendment
envisaged under the law commission report but did
of the Act. The recourse to statutory provisions for
not find place in the Amendment Act.
appointment of arbitrator under Section 11(6) arises
only upon failure of one party to follow procedure
– Siddharth Ratho, Alipak Banerjee,
based on terms and conditions of the agreement. It is
Payel Chatterjee & Vyapak Desai
settled law that in the event of a corporation forfeit-
ing its right to appoint an arbitrator, with similar
authors
clauses providing for employees as Arbitrators,
the courts are entitled to appoint an independent and
impartial arbitrator, giving a go-bye to the terms of
the arbitration clause.185
184. Section 12 (5) of the Act read with the newly enacted Seventh
Schedule identifies three categories of situations in which
people would be ineligible to serve as arbitrators on an arbitral
tribunal (i) when the arbitrator has a relationship with one of
the parties; (ii) has provided advice/an opinion to a party to the
dispute, or; (iii) has an interest in the outcome of the dispute. The
first category of situations identifies a relationship of employment between the
arbitrator and a party to the dispute. The Fifth Schedule elucidates that justifiable
doubts as to the independence or impartiality of the arbitrator would arise when he
is an employee.
185. Deep Trading Company v. Indian Oil Corporation and Ors. (2013) 4 SCC 35
and North Eastern Railway v. Tripple Engineering Works. (2014) 9 SCC 288
65
With Institutional
Inputs from SIAC

About SIAC
Established in 1991 as an independent, not-for- Recognising the need for dedicated expertise in cases
profit organisation, the Singapore International dealing with intellectual property (IP)rights, SIAC set
Arbitration Centre (SIAC) has a proven track record up an exclusive panel of IP arbi-trators in early 2014
in providing neutral arbitration services to the global (the SIAC IP panel). The SIAC IP Panel complements
business community. SIAC arbitration awards have SIAC’s existing multi-jurisdictional panel of over 400
been enforced in many countries including Australia, leading arbitrators from across 40 jurisdictions.
China, Hong Kong, India, Indonesia, UK, USA and
In 2015, SIAC consolidated its position as one of the
Vietnam, amongst other New York Convention
world’s leading arbitral centres. For the last three
countries. In 2015, SIAC a received a record number
years, SIAC consistently received over 200 new cases
of 271 fresh cases and issued a total of 116 SIAC
each year. Over the last 10 years new case filings
awards. These included 3 awards / orders issued by
at SIAC grew by almost 200%, thereby reinforcing
emergency arbitrators for urgent interim relief.
its position as one of the fastest growing arbitral
Integrity, fair rules and procedures, efficiency and institutions in the world.
competence are key to SIAC’s success. SIAC’s case
SIAC established its first overseas liaison office
management services are supervised by a ‘Court
in Mumbai, India in 2013 (the Indian office)
of Arbitration’ that comprises of 18 of the most
in recognition of the significant role played by
eminent, experienced and diverse international
India towards SIAC’s success over the years as an
arbitration practitioners. The Court of Arbitration
international arbitral institution. This was followed
is headed by its President, and offers a wealth of
later that year with the opening of a second overseas
experience and specialist knowledge in international
liaison office at the International Dispute Resolution
dispute resolution from all major jurisdictions,
Centre in Seoul, South Korea. Recently, SIAC has
including Australia, Belgium, China, France, India,
opened an office in the Free Trade zone in Shanghai,
Japan, Korea, UK, USA and Singapore.
China and has also entered into an MoA with GIFT,
SIAC’s operations, business strategy and devel- Gujarat to open a presence in GIFT City. The Indian
opment, as well as corporate governance matters office is the embodiment of SIAC’s commitment to
are overseen by the ‘Board of Directors’ compris- develop a greater awareness and consciousness of
ing of senior members of the legal and business international arbitration in India. The Head of South
communities. SIAC’s Board of Directors consists of Asia at SIAC is based and operates out of the Indian
well-respected lawyers and corporate leaders from office and leads its business development initiatives
China, India, Korea, UK, HongKong and Singapore. in the region as well as oversees operations.
SIAC’s multinational and multi-lingual Secretariat The primary objectives of the liaison offices
comprises of dual qualified and experienced are the dissemination of practical information on
arbitration lawyers from both civil and common-law arbitration at SIAC and in Singapore;
jurisdictions including Belgium, Canada, China, India, to promote the use of institutional arbitration;
Korea, Philippines, Singapore and the USA. Headed to create a line of communication for SIAC and
by the Registrar, SIAC’s Secretariat supervises and the community in Singapore with key players in
monitors the progress of each case and also scrutinises international arbitration in India and South Korea;
draft awards to enhance the enforceability of awards to obtain feedback on SIAC’s services as an arbitral
and minimise the risk of challenges. institution; and to exchange ideas on local “hot
topics” and issues in international arbitration.
69
The physical presence of SIAC in India, South Korea under the SIAC Rules. As a result, SIAC interacts
and China has proved immensely beneficial over closely with companies and the legal community in
the past couple of years, with users and the legal India and South Korea, thereby strengthening ties
community reaching out to further understand with its current and potential users.
thebenefits of arbitration

I. SIAC Facilitates the Effi- §§EA deals with requests for urgent interim relief
before a Tribunal is constituted
cient Resolution of Your
§§ SIAC is an international leader in terms of the
Dispute number of EA cases handled
§§We provide the certainty of established and

tested Rules, so there is less risk of tactical delay
B. Why the need?
or obstruction of the process
§§Challenges with seeking interim relief from
§§We appoint arbitrators where parties are unable courts
to agree under the SIAC Rules, UNCITRAL
Rules and ad hoc cases. Appointments are made §§Lack of confidence in national courts
on the basis of our specialist knowledge of an
§§Desire for confidentiality
arbitrator’s expertise, experience and track record
§§There are strict standards of admission for SIAC’s C. How to apply?

Panel of Arbitrators, thus minimising the risk of
challenges and delays §§Application in writing to the Registrar: - Con-
current with or following filing of Notice of
§§Our full-time staff manage all the financial Arbitration - Prior to constitution of Tribunal
aspects of the arbitration, including: Regular
rendering of accounts; Collecting deposits §§Notify Registrar and all other parties in writing
of: - Nature of relief sought - Why party is entitled
towards the costs of the arbitration; and
to such relief - Reasons why such relief is required
Processing the Tribunal’s fees and expenses
on emergency basis
§§Transparent financial management of the
case according to published guidelines allows §§Application has to be accompanied by payment
of any deposits set by Registrar
legal representatives to provide accurate cost
projections, timelines and costs for each stage of
the arbitration process to their clients D. Who decides?
§§We supervise and monitor the progress of the §§President of SIAC Court of Arbitration
case. We conduct a scrutiny of the arbitral award,
thus minimizing the likelihood of challenges to
E. Who will be the EA and what
enforcement
powers does EA have?
§§ SIAC’s administration fees are competitive in
comparison with all the major international §§ SIAC Panel of Arbitrators with * by an arbitra-
tor’s name indicates willingness to act as EA
arbitral institutions and are based on an ad
valorem model
§§EA has : - Same powers as Tribunal - Power to
order or award any form of interim relief - To give
II. Special Procedures at reasons in writing for decision - No power to act

after the Tribunal is constituted
SIAC
§§Tribunal may reconsider, modify or vacate the
interim award by EA
A. Emergency Arbitrator (EA)
§§If Tribunal is not constituted within 90 days,
§§ 1st international arbitral institution in Asia to EA’s order or award ceases to have effect
introduce EA provisions in July 2010
71
F. How long does it take?

Action Time
Appointment of EA Within 1 day of receipt by Registrar of application and
payment of fee
Challenge to appointment of EA Within 2 days of communication by Registrar of appointment
and circumstances disclosed
Schedule for consideration of application by EA Within 2 days of appointment
G. When will EA’s award or §§If parties agree

order be issued? §§In cases of exceptional urgency
§§Average time for issuance of EA order or award is B. Who decides?

8.5 to 10 days after appointment of EA, but can be
faster
§§President of SIAC Court of Arbitration
H. Is EA’s order or award C. What is the procedure?

enforceable?
§§Dispute will be referred to sole arbitrator
§§EA’s orders and awards are enforceable in both
Singapore-seated and foreign-seated arbitrations §§Award will be made within 6 months from date
under the International Arbitration Act of constitution of Tribunal
§§In practice, high rate of voluntary compliance
I. Common types of relief Singapore … “The most preferred seat

of Arbitration in Asia”
sought?
Global market survey on international arbitration
§§Preservation orders by Queen Mary University of London
§§Freezing orders
§§General injunctive relief

IV. The SIAC Growth Story
III. Expedited Procedure §§Active case load of over 600 cases
§§Fast-track 6-month procedure introduced in July §§ 84% of new cases filed with SIAC in 2015 were
2010 international in nature
§§Popular procedure for lower value, less complex §§About half of our new cases involve foreign
disputes parties with no connection whatsoever to
Singapore
A. When to use it? §§Indian parties – largest contingent of cases at

SIAC in 2009, 2010, 2011, 2013 & 2015
§§If sum in dispute does not exceed
SGD 6,000,000

§§Average sum in dispute for Indian cases in 2015

was SGD 8 million with highest sum in dispute The Tribunal shall consist of ______________
of SGD 85.1 million (1 or 3) arbitrator(s).
The language of the arbitration shall be ______.
V. Singapore and SIAC Applicable Law

offer The applicable law clause should be drafted under
legal advice. The following is a simple model
§§Over 400 arbitrators from across 40 jurisdic- clause:
tions
This contract is governed by the laws of ______**.
§§UNCITRAL Model Law and a judiciary that
provides maximum support & minimum ** State the country or jurisdiction
intervention in arbitrations
§§Freedom of choice of counsel in arbitration Contacts

proceedings regardless of nationality.
Pranav Mago
§§No restriction on foreign law firms engaging in Head (South Asia)
and advising on arbitration in Singapore. e: [email protected]
m: +91 9811335519
§§Competitive cost structure
§§ SIAC arbitration awards enforced in over 150

countries
§§Unmatched connectivity to India with over 360

flights a week
Influence your business outcome with the SIAC

Model Clause
In drawing up international contracts,

we recommend that parties include the
following arbitration clause:
Any dispute arising out of or in connection with

this contract, including any question regarding its
existence, validity or termination, shall be referred
to and finally resolved by arbitration administered
by the Singapore International Arbitration Centre
(“SIAC”) in accordance with the Arbitration Rules of
the Singapore International Arbitration Centre (“SIAC
Rules”) for the time being in force, which
rules are deemed to be incorporated by reference
in this clause.
The seat of the arbitration shall be [Singapore]*.

*If the parties wish to select an alternative seat to
Singapore, please replace “[Singapore]” with the

city and country of choice (e.g., “[City, Country]”).
73
SIAC Information Kit

beginning of the case and follow that schedule,
I. Why SIAC? including for the hearing.
§§Choosing an institution guarantees defined §§Hearings are only conducted for the purpose
rules and procedures. of final submissions and cross-examination of
witnesses and not for parties to file documents
§§Choosing an institution guarantees that you have and pleadings.
a Secretariat which supervises the entire process
and consistently guides parties and arbitrators §§ SIAC also provides special procedures such as:
through the process.
a. a fast track procedure (expedited procedure)
§§ SIAC’s Court of Arbitration consists of some of which guarantees an award in 6 months from
the most eminent practitioners of international the constitution of the tribunal
arbitration who supervise case management at
b. a procedure to seek urgent interim relief
SIAC.
from an emergency arbitrator appointed for
§§Choosing SIAC guarantees that arbitrators’ fees that purpose – an emergency arbitrator is
are subject to a maximum cap in accordance normally appointed in 24 hours and deals with
with the SIAC schedule of fees. request for interim relief (having heard both
parties) in a matter of days
§§ SIAC controls how arbitrators are paid and
determines arbitrator fees on actual work done §§If Singapore is chosen as the seat, Singapore
(not hours spent). courts will not normally interfere in the arbitral
proceedings and will not review the award on
§§ SIAC controls timelines of cases. The average merits in a challenge.
time for completion of a case is 9 to 12 months.
§§ Singapore is the most popular seat for inter-
§§ SIAC scrutinises awards to ensure that they are national arbitration in Asia. It is cost effective,
enforceable in any jurisdiction. SIAC awards
well connected, neutral, permits foreign counsel,
have been successfully enforced in Australia,
and has an arbitration legislation in place that is
China, Hong Kong, India, Indonesia, UK,
most up to date with international practices and
USA and Vietnam, amongst other New York
jurisprudence.
Convention countries.
§§ SIAC appoints arbitrators from a qualified and II. Statistics

publicly available panel of over 400 accredited
and trained arbitrators from across
The SIAC’s Annual Report for 2015 which is
40 jurisdictions.
available on the Centre’s website http://www.
siac.org.sg/ will give you details of the numbers
§§Hearings are not conducted once every month
and value of cases handled by SIAC in 2015. Some
in SIAC cases. There is typically only one or two
important facts are as follows:
hearings. Parties need not incur costs to fly down
to Singapore for a hearing. They can conduct a
i. In 2015, SIAC consolidated its position as one
hearing where convenient.
of the world’s leading arbitral centres. For the
last three years, SIAC consistently received over
§§Arbitrators appointed by SIAC will set out
200 new cases each year. Over the last 10 years,
a schedule for the conduct of the case at the
new case filings at SIAC grew by almost 200%,

reinforcing its position as one of the fastest It is indisputable that India’s significant contribution
growing arbitral institutions in the world. continues to remain a key factor to SIAC’s unwa-
vering success as an international arbitral institu-
ii. In 2015, SIAC received 271 new cases from
tion. Recognising this, SIAC opened its first overseas
parties from 55 jurisdictions spanning six
office in Mumbai, India in May 2013. SIAC’s Indian
continents. 84% of these new cases filed with
office facilitates SIAC’s interactions and information
SIAC were international in nature. For new
sharing on a regular basis with current and potential
cases filed in 2015, the total sum in dispute
users from India. Soon SIAC will be opening another
amounted to S$6.23 billion and the highest
office in GIFT City, Gujarat which is India’s first
amount claimed was S$2.03 billion. This was a
approved IFSC.
new milestone as the highest number of cases
were filed in 2015,
a 22% increase from 2014. III. Costs at SIAC
iii. A diverse range of claims was filed at SIAC
The cost of an arbitration at SIAC is determined
in 2015, arising from key sectors such as
in accordance with the Schedule of Fees. It can
commercial, trade, shipping/maritime, corporate,
be easily calculated on our website using the Fee
construction/ engineering, insurance, mining,
Calculator http://www.siac.org.sg/component/
energy, IP/IT, financial services and aviation.
siaccalculator/?Itemid=448
Trade and commercial disputes have been key
areas in relation to which disputes have been On costs, it is important to note that the SIAC’s cost
filed at SIAC and this remained the case in 2015. structure comprises of the following:
iv. In 2015, the highest number of filings was 1. Filing fees for a claim or counter claim;
generated by parties from India, with 91 Indian
ii. Administration Fees;
parties having used SIAC, followed by parties
from the China and South Korea. Parties
iii. Arbitrators’ Fees;
from China and India have remained strong
contributors of cases to SIAC over the past five iv. Expenses of the arbitration
years. Parties from the USA were a close fourth
SIAC revised its Schedule of Fees on 1 August 2014,
and were consistent with the number of cases
applicable to all arbitrations commenced on or after
received last year from them. Cases involving
this date.
parties from Australia, Vietnam and Hong Kong
also increased in 2015. The other parties in
From the Schedule of Fees, which is available on the
the top ten list of foreign users were Indonesia,
website http://www.siac.org.sg/estimate- your-
British Virgin Islands and Malaysia.
fees/siac-schedule-of-fees, it is possible to see that:
v. The largest case for 2015 involving an Indian

i. Arbitrators’ and SIAC’s fees are determined on an
party dealt with a sum in dispute
ad valorem rate; and
of over SGD 85.1 million.
ii. the fees are caps (or ceilings) that are applicable
vi. The average value of a dispute at the SIAC in
to the administration fees
2015 was over SGD 23 million, and the highest
and arbitrators’ fees.
claim amount in 2015 was SGD 2.03 billion.
In the first instance, when an arbitration commences,
vii. The average sum in dispute at the SIAC for 2015
the SIAC estimates the costs
in cases involving Indian parties was SGD 8
of arbitration as comprising of:
million.
75
i. SIAC; option for parties. For more information on cost

comparisons with other institutions, do feel free to
ii. fees and expenses of the Tribunal; and
contact us.
iii. facilities and services required for the physical

conduct of the arbitration
IV. Duration of an Arbitra-
Deposits are sought from the parties on the basis of tion at SIAC
this estimate of the costs of arbitration. The actual
cost is determined by the Registrar of the SIAC at the
While there is no absolute data on the duration
conclusion of a case on the basis of the stage at which
of a case at the SIAC, experience suggests that an
the matter has been concluded. Hence, the actual
arbitration with a sole arbitrator is likely to require
cost of an arbitration will always be lesser than the
between 9 and 12 months from commencement of
cap indicated in the Schedule of Fees for a dispute
arbitration to the delivery of an award. Similarly, in
of a particular sum. Moreover, this aids the Registrar
a three-member arbitral tribunal, owing to factors
in an objective determination of the arbitrators’ fees
such as the complexity and quantum of the dispute
based on work performed and the stage at which
and other logistical issues, it would appear that an
a case concludes. Parties are also free to agree upon
arbitration would require between 15 and 18 months
alternative methods of determining tribunals’ fees in
from commencement of arbitration to the delivery
SIAC arbitrations.
of an award. Needless to say, this depends entirely
on the particularities of a case and the attitude of the
Several international surveys have been conducted
parties, and can vary.
comparing costs at various international arbitral
institutions, which categorise SIAC as a cost effective
The following is a depiction of caseflow at the SIAC:
Month 1 2 3 4 5 6 7 8 9 10 11 12
Notice of Arbitration
SIAC writes to parties on
commencement
Calculation of estimated
costs of arbitration
Response to Notice
1st tranche of deposits
Constitution of Tribunal
2nd tranche of deposits
Preliminary meeting
Statement of Claim
Statement of Defence
Replies, if any
Request to produce docu-
ments
Ruling on requests
3rd tranche of deposits
Witness statements
Reply witness statements
Expert reports, if any
Written opening submissions
for hearing
Hearing tranche

(1-5 days)
Written closing submissions
Submissions on Costs
Draft award sent to SIAC
Determination of costs of
arbitration
Signed award issued to par-
ties
A few examples are below.

V. Innovations in
Reducing Cost and i. Case Study 1
Time in International In one of the cases decided under the Expedited

Procedure, the following were the brief facts of the case:
Arbitrations at SIAC
§§The parties were a Japanese claimant and
Of some additional interest are the SIAC Rules 2010 an Indian respondent
and 2013, which introduced two new mechanisms
to reduce the duration of proceedings or be used in §§The dispute was an international trade dispute
regarding shipment of iron ore in the sum of SGD
cases where urgent or emergency relief is required.
1,600,537
A. Expedited Procedure §§1 October 2010 – Claimant filed notice of

arbitration and request for Expedited Proce-
Parties can choose to apply the SIAC’s Expedited Pro-
dure nominating a particular individual to be
cedure under Rule 5 of the SIAC Rules (i) in their con-
appointed as the sole arbitrator
tract by using the SIAC Expedited Procedure Model
Clause (which is available on our website); or §§3 November 2010 – Respondent agreed to the
(ii) post-dispute by agreement between parties. Expedited Procedure and to the appointment of
the Claimant’s nominee
Alternatively, a party can choose to make an
application to the SIAC for the Expedited Proce- dure if §§19 November 2010 – SIAC Chairman deter-
the amount in dispute does not exceed the equivalent mined that the arbitral proceedings in this
amount of SGD 5,000,000 or in cases of exceptional reference shall be conducted in accordance
urgency. This amount has been increased to SGD with the Expedited Procedure. The parties were
6,000,000 in the recent amendments to the SIAC Rules. informed of this decision and SIAC approached
the parties’ joint nominee regarding his
If the President of the SIAC Court of Arbitration
prospective appointment on that day
determines that the arbitral proceedings should
be conducted in accordance with the Expedited §§26 November 2010 – Nominee was appointed by
Procedure, an award will be made within six months the Chairman as the sole arbitrator in this matter
of the constitution of the tribunal.
§§30 November 2010 – Tribunal communicated
As of June 2015, SIAC received 184 requests for the to the parties regarding further conduct of this
application of the Expedited Procedure, of which arbitration and circulated the draft Procedural
SIAC accepted 129 requests. Timetable.
§§10 December 2010 –Tribunal held the first

preliminary meeting with the parties via tele-
phonic conference
77
§§ 9 May 2011 – Hearing on merits took place at §§31 August 2011 – SIAC approached a prospec-
Maxwell Chambers, Singapore tive arbitrator for appointment in the case
§§11 May 2011 – SIAC received the draft award §§01 September 2011 – Prospective arbitrator
from the Tribunal for scrutiny reverted to accept appointment on the condi-
tion that the hearing be held in January 2012
§§25 May 2011 – Tribunal issued the signed Award
§§02 September 2011 – Parties were informed of
§§Total time between filing and rendering of Award the arbitrator’s condition and their views were
– 7 months, 25 days
requested
§§Total time between constitution of Tribunal and

§§16 September 2011 – Parties accepted the pro-
rendering of Award – 6 months
spective arbitrator’s condition on the hearing to
be held in January 2012
ii. Case Study 2
§§19 September 2011 – Arbitrator appointed by
In another case to which the Expedited Procedure
Chairman, SIAC
was applied, the following was the timeline:
§§23 September 2011 – Arbitrator informed
§§The parties were an Indian claimant and a Hong parties that given their different locations, the
Kong SAR incorporated respondent
preliminary meeting did not require a physcal
meeting
§§The dispute was an international trade dispute
regarding shipment of coal with a claim amount
§§04 October 2011 – All procedural steps and
in the sum of about SGD 1 million
timelines finalised
§§06 June 2011 – Claimant filed notice of arbi-

§§29 November 2011 – Parties settled the dipute and
tration and request for Expedited Procedure
consent terms agreed
nominating a particular individual to be
appointed as the sole arbitrator §§Total time between commencement and com-
pletion of proceedings – 5 months, 22 days
§§08 June 2011 – Arbitration deemed commenced
§§Total time between constitution of Tribunal and
§§29 August 2011 – Chairman, SIAC was requested completion – 2 months, 11 days
to determine whether the Expedited Procedure
ought to be applied on the basis of the parties’
The following is a depiction of caseflow at the SIAC
submissions up to such date
for an Expedited Procedure case:
§§30 August 2011 – Chairman, SIAC determined

that the Expedited Procedure ought to be applied

Month 1 2 3 4 5 6 7
Notice of Arbitration
SIAC writes to parties on commencement
Calculation of estimated costs of arbitration
Response to Notice
1st tranche of deposits
Determination of Expedited Procedure Application
Constitution of Tribunal
2nd tranche of deposits
Preliminary meeting
Statement of Claim
Statement of Defence
Replies, if any
Request to produce documents
Ruling on requests
3rd tranche of deposits
Witness statements
Reply witness statements
Expert reports, if any
Written opening submissions for hearing
Hearing tranche (1-5 days)
Written closing submissions
Submissions on Costs
Draft award sent to SIAC
Determination of costs of arbitration
Signed award issued to parties
B. Emergency Arbitrator Singapore’s international Arbitration Act was

amended in 2012 to provide for the enforceability of
A party in need of emergency relief prior to the awards and orders issued by emergency arbitrators
constitution of the Tribunal may apply for such in Singapore. This makes Singapore the first
relief pursuant to Rule 30.2 and Schedule 1 of the jurisdiction globally to adopt legislation for the
SIAC Rules. Under this mechanism: enforceability of such awards and orders. Most cases
handled by SIAC under these provisions have seen
i. the President, SIAC Court of Arbitration will
voluntary compliance of the orders and awards
appoint an Emergency Arbitrator within one
issued by emergency arbitrators.
business day of deciding to accept an application
for emergency relief under these provisions; The SIAC was the first Asian arbitral institution to
introduce these provisions. In 2015, SIAC received
ii. any challenge to the appointment of the
12 applications to appoint an emergency arbitrator.
Emergency Arbitrator must be made within one
SIAC accepted all 5 requests, taking the total number
business day of his appointment;
of emergency arbitrator applications accepted by
SIAC to 50 (as at July 2016), since the introduction of
iii. the Emergency Arbitrator must establish
these provisions in the SIAC Rules in July 2010.
a schedule for considering the application for
emergency relief within two business days of his
Interestingly, a 2014 decision of the Bombay
appointment;
High Court in HSBC v Avitel endorsed, validated
and effectively enforced interim awards issued
79
by an emergency arbitrator appointed in SIAC §§The Emergency Arbitrator passed an ad-interim

administered arbitrations under the SIAC 2010 Rules, order one day thereafter
wherein the emergency arbitrator had issued interim
protective orders. §§Parties, by consent, amended the terms of
the order and the main arbitral tribunal was
A few examples of case studies involving the constituted
emergency arbitrator procedure are below.
§§Parties, thereafter, settled the case.
i. Case Study 1 §§Number of days between request for emergency
relief & first interim order: 4 days
In the first case where an Emergency Arbitrator was
appointed, the following were the brief facts of the
§§Number of days from First interim order to
case:
Award on interim relief: 9 days
§§Claimant: Indian
§§Whether the interim relief sought was granted by
the EA: Yes
§§Respondent: Indian
§§Broad nature of interim relief sought: ii. Case Study 2

The Claimant sought an injunction restraining In another case where an Emergency Arbitrator was
the Respondent from calling upon certain per- appointed, the brief facts were as follows:
formance bank guarantees provided under
a contract for provision of dredging services by §§Claimant: Indian
the Claimant at a port in India.
§§Respondent: BVI
§§The SIAC received the application at 21:30 hrs

§§Broad nature of interim relief sought:
Singapore Time
The Indian company filed an application for
§§The Chairman, SIAC determined that the emergency interim relief seeking an order
application should be accepted and on the basis
(i) restraining the BVI company from breaching
of the nature of dispute, nationality of parties
the confidentiality provisions; and (ii) abiding by
and relief sought, appointed the Emergency
the contractual dispute resolution mechanism of
Arbitrator the next day
arbitration at the SIAC
§§The Emergency Arbitrator appointed was well

§§The Claimant initiated arbitration on the basis
recognised as a leading international arbitrator,
that the BVI company had breached the share-
having sat as arbitrator in more than 170 cases
holders agreement and was alleging that it would
and written numerous awards
breach the confidentiality obligation by initiating
court action in multiple jurisdictions
§§Within one day of his appointment, the
Emergency Arbitrator established a schedule
§§Within 20 hrs of the receipt of the application,
for consideration of the application for
the SIAC appointed the Emergency Arbitrator
emergency relief
§§A preliminary hearing was scheduled within
§§As per the schedule, the parties made one day of the appointment of the Emergency
written submissions on the application and
Arbitrator
a telephonic hearing was conducted within
one week of the appointment of the Emergency §§An preliminary order was issued on the same day
Arbitrator to preserve the status quo

§§An interim award was issued two days thereafter §§Number of days between request for emergency
and a supplemental interim thereafter relief & first interim order: 1 day
§§The parties, thereafter, settled the matter §§Number of days from First interim order to
§§Number of days between request for emergency
relief & first interim order: 1 day §§Whether the interim relief sought was granted by
the EA: Yes
§§Number of days from First interim order to
C. ARB – MED – ARB
§§Whether the interim relief sought was granted by
Arb-Med-Arb is a process where a dispute is first
the EA: Yes
referred to arbitration before mediation is attempted.
If parties are able to settle their dispute through
iii. Case Study 3
mediation, their mediated settlement may be
In a third case where an Emergency Arbitrator was recorded as a consent award. The consent award
appointed, the brief facts were as follows: is generally accepted as an arbitral award, and,
subject to any local legislation and/or requirements,
§§Claimant: Indonesian is generally enforceable in approximately 150
countries under the New York Convention. If parties
§§Respondent: Chinese
are unable to settle their dispute through mediation,
§§Broad nature of interim relief sought: they may continue with the arbitration proceedings.
This occurred over the Chinese New Year Holiday Parties wishing to take advantage of this tiered
dispute resolution mechanism as administered by
§§The dispute between a Chinese company and SIAC and SIMC, may consider incorporating the
an Indonesian company was in relation to the
following Arb-Med-Arb Clause in their contracts:
quality of a shipment of coal
Any dispute arising out of or in connection with this
§§The Indonesian shipper wanted to sell the cargo contract, including any question regarding its existence,
of coal pending the resolution of the dispute as
validity or termination, shall be referred to and finally
the cargo was deteriorating
resolved by arbitration administered by the Singapore
International Arbitration Centre (“SIAC”) in accordance
§§They contacted the SIAC on Monday morn-
with the Arbitration Rules of the Singapore International
ing warning us of their intention to make an
Arbitration Centre (“SIAC Rules”) for the time being
emergency arbitrator application
in force, which rules are deemed to be incorporated by
§§The Indonesian applicant filed their papers at reference in this clause.
2pm and by 5pm, an experienced Singaporean
The seat of the arbitration shall be [Singapore]*.
shipping lawyer was appointed as the Emer-
gency Arbitrator *If the parties wish to select an alternative seat to
Singapore, please replace “[Singapore]” with the city

§§The Emergency Arbitrator gave his prelim-
and country of choice (e.g., “[City, Country]”).
inary directions that evening and a hearing was
scheduled for the next day
The Tribunal shall consist of ____________
(1 or 3) arbitrator(s).
§§On the next day, he made an order permit-
ting the sale and directing the respondents to
The language of the arbitration shall be ___________.
co-operate to permit the cargo to leave the port
The parties further agree that following the commence-
ment of arbitration, they will attempt in good faith to
81
resolve the Dispute through mediation at the Singapore Parties are free to choose anybody outside the Panel
International Mediation Centre (“SIMC”), in accordance while nominating arbitrators in their cases at the SIAC.
with the SIAC-SIMC Arb-Med-Arb Protocol for the time In 2015, 35% of the party appointed arbitrators were
being in force. Any settlement reached in the course of from Singapore, 11% from the UK and 2% from India.
the mediation shall be referred to the arbitral tribunal
appointed by SIAC and may be made a consent award
on agreed terms
VII. Confidentiality
Confidentiality is a key advantage of international
VI. Arbitrators arbitration. Arbitration proceedings conducted at the
SIAC are private and confidential in nature. Under
SIAC retains a Panel of accredited arbitrators of local as the SIAC Rules, 2016:
well as international experts, from which the majority
i. unless the parties agree otherwise, all meetings
of SIAC appointments of arbitrators are made.
and hearings shall be in private, and any record-
In addition to administering entire arbitrations, SIAC
ings, transcripts, or documents used shall remain
also offers a service for the appointment of arbitrators
confidential [Rule 24.4];
in ad hoc arbitrations seated in Singapore, including
those under the UNCITRAL Arbitration Rules. SIAC
ii. the parties and the Tribunal are required to treat
performs this function as the statutory appointing
all matters relating to the proceedings and any
authority under applicable legislation in Singapore.
award as confidential [Rule 39.1];
As of 31 December 2015, SIAC had made a total of
126 individual appointments of arbitrators to 86 sole iii. the obligation in respect of confidentiality
arbitrator tribunals and 40 three-member tribunals. Of extends to the existence of the proceedings, the
these arbitrator appointments, 116 were appointments pleadings, evidence and other materials in the
made under the SIAC Rules, whilst the remaining arbitration proceedings, all other documents
10 were appointments made under the UNCITRAL produced by a party in the proceedings and
Arbitration Rules and in ad hoc arbitrations. The SIAC the award arising from the proceedings, but
Panel of Arbitrators and their curriculum vitae are excludes any matter that is otherwise in the
publicly available on our website http://www.siac.org. public domain [Rule 39.3];
sg/our-arbitrators/siac-panel
iv. the Tribunal is vested with the power to take
Recognising the need for dedicated expertise in appropriate measures including issuing an order
cases dealing with intellectual property (IP) rights, or award for sanctions or costs if a party breaches
SIAC set up an exclusive panel of IP arbitrators in the provisions under Rule 35 enumerated above
early 2014 (the SIAC IP panel) which complements [Rule 39.4];
SIAC’s existing multi-jurisdictional panel of over 400
v. there are certain recognized exceptions provided
leading arbitrators from 40 jurisdictions.
to the obligations of confidentiality. Hence, a
The Panel also has several strict standards for party or any arbitrator shall not, without the
admission including e.g. minimum 10 years PQE, prior written consent of all the parties, disclose
fellowship accreditation, acted as arbitrator in at to a third party any such confidential matter
least 5 cases, written at least 2 awards. The Board of except:
the SIAC determines the applications to be added on
a. for the purpose of making an application to
the Panel.
any competent court of any State to enforce or
challenge the award;
b. pursuant to the order of or a subpoena issued

by a court of competent jurisdiction;

c. for the purpose of pursuing or enforcing a

IX. Traning and Develop-
legal right or claim;
d. in compliance with the provisions of the laws ment
of any State which are binding on the party
making the disclosure;
A. SIAC Arbitration Training
e. in compliance with the request or requirement Video
of any regulatory body or other authority; or
The SIAC Arbitration Training Video is
f. pursuant to an order by the Tribunal on a unique and innovative tool, conceptualised
application by a party with proper notice to and developed by SIAC to demonstrate a typical
the other parties [Rule 41.2] international commercial arbitration administered
under the SIAC Rules 2013.
The SIAC Code of Ethics for arbitrators found
http://www.siac.org.sg/our-rules/code-of-ethics- SIAC decided to produce the video to demystify
for-an-arbitrator also prescribes that arbitration international arbitration. Given the confidential
proceedings shall remain confidential and that an nature of arbitral proceedings, SIAC felt it would
arbitrator should not use confidential information be useful for those who have never experienced
acquired during the course of the proceedings to gain an international arbitration before to have a visual
personal advantage or advantage for others, or to guide to take them through the various stages of an
adversely affect the interest of others. arbitral process.
The video is a user-friendly learning and teaching

VIII. Enforceability tool for arbitrators, practitioners, in-house counsel,
judges and university students, and has been
The SIAC scrutinises awards in draft form before well received at SIAC workshops in India, China,
they are made and issued to parties by tribunals in Indonesia, Japan, Korea and the Philippines. In
order to ensure consistency and enforceability under addition to being an educational tool, the video
the New York Convention. Under the SIAC Rules, promotes Singapore as a neutral seat and convenient
the Registrar may suggest ‘modifications as to the form location for international
of the award’ and without affecting the Tribunal’s
arbitration. The three and a half hour film was shot
liberty of decision also ‘draw attention to points of
mostly on location in the state-of-the-art hearing
substance’. The SIAC performs this duty also with a
facilities at Maxwell Chambers in Singapore, to
view to its general duty to ensure enforceability of
showcase Singapore’s world-class hearing venue and
any SIAC award under rule 41.2.
modern video-conferencing technology.
SIAC awards have been enforced in many juris-
The video is based on a fictitious fact situation,
dictions across the world including Australia, China,
and includes scenes on a range of topics such as
Hong Kong, India, Indonesia, Vietnam, UK and the
commencement of an arbitration, emergency
USA.
arbitrator hearing, appointment of and challenge
to arbitrators, hearing on jurisdiction, cross-
examination of witnesses, scrutiny of the draft award,
costs of arbitration and enforcement. Further details
can be found on our website http://www.siac.org.
sg/2013-09- 18-01-57-20/2013-09-22-01-20-47/siac-
arbitration-training-video
83
B. Young SIAC (YSIAC) and to provide a platform for young professionals to

work together to address the unique challenges faced
SIAC rejuvenated its Young SIAC membership (for
by the legal and business communities across a diverse
younger lawyers aged below 40) by rebranding the
range of Asian jurisdictions and cultures. Membership
group as “YSIAC” and forming a new Committee to
to YSIAC is free of charge and can be acessed http://
spearhead and implement initiatives. The YSIAC
www.siac.org.sg/ysiac/ about-us/how-to-join-ysiac
Committee’s mandate is to promote the use of
international arbitration and other forms of alternative
For more information on SIAC, please visit our
dispute resolution, both regionally and internationally,
website at www.siac.org.sg

About NDA
Nishith Desai Associates (NDA) is a research based international law firm with offices in Mumbai, Bangalore,
Palo Alto (Silicon Valley), Singapore, New Delhi, Munich and New York. We provide strategic legal, regulatory,
and tax advice coupled with industry expertise in an integrated manner.
As a firm of specialists, we work with select clients in select verticals on very complex and innovative
transactions and disputes.
Our forte includes innovation and strategic advice in futuristic areas of law such as those relating to Bitcoins
(block chain), Internet of Things (IOT), Autonomous Vehicles, Artificial Intelligence, Privatization of Outer
Space, Drones, ‎Robotics, Virtual Reality, Med-Tech, Ed-Tech and Medical Devices and Nanotechnology.
We specialize in Globalization, International Tax, Fund Formation, Corporate & M&A, Private Equity &
Venture Capital, Intellectual Property, International Litigation and Dispute Resolution; Employment and
HR, Intellectual Property, International Commercial Law and Private Client. Our industry expertise spans
Automobile, Funds, Financial Services, IT and Telecom, Pharma and Healthcare, Media and Entertainment, Real
Estate, Infrastructure and Education. Our key clientele comprise marquee Fortune 500 corporations.
According to the recent report by India Brand Equity Foundation (IBEF), India’s Civil Aviation Industry is on a
high-growth trajectory expected to grow from being the 9th largest aviation market in the world with a size of
around US$ 16 billion to being the 3rd biggest by 2020 and the largest by 2030.
The Government of India (GOI) also envisions airport infrastructure investment of US$ 11.4 billion under
the Twelfth Five Year Plan (2012-17). It has opened up the airport sector to private participation. The Airports
Authority of India (AAI) also aims to bring around 250 airports under operation across the country by 2020.We
at NDA accordingly prepare ahead, envisaging the coming 10 to 15 years, in order to provide clients appropriate
insights based on our understanding of current as well as future legal and regulatory issues.
Our ability to innovate is endorsed through the numerous accolades gained over the years and we are also
commended by industry peers for our inventive excellence that inspires others.
Most recently, NDA was ranked the ‘Most Innovative Asia Pacific Law Firm in 2016’ by the Financial Times - RSG
Consulting Group in its prestigious FT Innovative Lawyers Asia-Pacific 2016 Awards. While this recognition
marks NDA’s ingress as an innovator among the globe’s best law firms, NDA has previously won the award for
the ‘Most Innovative Indian Law Firm’ for two consecutive years in 2014 and 2015.
As a research-centric firm, we strongly believe in constant knowledge expansion enabled through our dynamic
Knowledge Management (‘KM’) and Continuing Education (‘CE’) programs. Our constant output through
Webinars, Nishith.TV and ‘Hotlines’ also serves as effective platforms for cross pollination of ideas and latest
trends.
Our trust-based, non-hierarchical, democratically managed organization that leverages research and knowledge
to deliver premium services, high value, and a unique employer proposition has been developed into a global
case study and published by John Wiley & Sons, USA in a feature titled ‘Management by Trust in a Democratic
Enterprise: A Law Firm Shapes Organizational Behavior to Create Competitive Advantage’ in the September
2009 issue of Global Business and Organizational Excellence (GBOE).

A brief below chronicles our firm’s global acclaim for its achievements and prowess through the years.
§§IDEX Legal Awards: In 2015, NDA won the “M&A Deal of the year”, “Best Dispute Management lawyer”,
“Best Use of Innovation and Technology in a law firm” and “Best Dispute Management Firm”. Nishith Desai
was also recognized as the ‘Managing Partner of the Year’ in 2014.
§§Merger Market: has recognized NDA as the fastest growing M&A law firm in India for the year 2015.
§§Legal 500 has ranked us in tier 1 for Investment Funds, Tax and Technology-Media-Telecom (TMT) practices
(2011, 2012, 2013, 2014)
§§International Financial Law Review (a Euromoney publication) in its IFLR1000 has placed Nishith Desai
Associates in Tier 1 for Private Equity (2014). For three consecutive years, IFLR recognized us as the Indian
“Firm of the Year” (2010-2013) for our Technology - Media - Telecom (TMT) practice.
§§Chambers and Partners has ranked us # 1 for Tax and Technology-Media-Telecom (2015 & 2014); #1 in
Employment Law (2015); # 1 in Tax, TMT and Private Equity (2013); and # 1 for Tax, TMT and Real Estate –
FDI (2011).
§§India Business Law Journal (IBLJ) has awarded Nishith Desai Associates for Private Equity, Structured
Finance & Securitization, TMT, and Taxation in 2015 & 2014; for Employment Law in 2015
§§Legal Era recognized Nishith Desai Associates as the Best Tax Law Firm of the Year (2013).
87
Please see the last page of this paper for the most recent research papers by our experts.
Disclaimer
This report is a copyright of Nishith Desai Associates. No reader should act on the basis of any statement
contained herein without seeking professional advice. The authors and the firm expressly disclaim all and any
liability to any person who has read this report, or otherwise, in respect of anything, and of consequences of
anything done, or omitted to be done by any such person in reliance upon the contents of this report.
Contact
For any help or assistance please email us on [email protected] or
visit us at www.nishithdesai.com

The following research papers and much more are available on our Knowledge Site: www.nishithdesai.com
EdTech: E-Commerce in The Curious Case

From IT to AI India of the Indian
Gaming Laws
July 2016 September 2015

July 2015
Corporate Social Joint-Ventures in Preparing For

Responsibility & India a Driverless Future
Social Business
Models in India
March 2016 November 2014 June 2016
Internet of Things Doing Business in Private Equity

India and Private Debt
Investments in
India
April 2016 June 2016 June 2015
NDA Insights
TITLE TYPE DATE
ING Vysya - Kotak Bank : Rising M&As in Banking Sector M&A Lab January 2016
Cairn – Vedanta : ‘Fair’ or Socializing Vedanta’s Debt? M&A Lab January 2016
Reliance – Pipavav : Anil Ambani scoops Pipavav Defence M&A Lab January 2016
Sun Pharma – Ranbaxy: A Panacea for Ranbaxy’s ills? M&A Lab January 2015
Reliance – Network18: Reliance tunes into Network18! M&A Lab January 2015
Thomas Cook – Sterling Holiday: Let’s Holiday Together! M&A Lab January 2015
Jet Etihad Jet Gets a Co-Pilot M&A Lab May 2014
Apollo’s Bumpy Ride in Pursuit of Cooper M&A Lab May 2014
Diageo-USL- ‘King of Good Times; Hands over Crown Jewel to Diageo M&A Lab May 2014
Copyright Amendment Bill 2012 receives Indian Parliament’s assent IP Lab September 2013
Public M&A’s in India: Takeover Code Dissected M&A Lab August 2013
File Foreign Application Prosecution History With Indian Patent
IP Lab April 2013
Office
Warburg - Future Capital - Deal Dissected M&A Lab January 2013
Real Financing - Onshore and Offshore Debt Funding Realty in India Realty Check May 2012
Pharma Patent Case Study IP Lab March 2012
Patni plays to iGate’s tunes M&A Lab January 2012
Vedanta Acquires Control Over Cairn India M&A Lab January 2012
89
Research @ NDA
Research is the DNA of NDA. In early 1980s, our firm emerged from an extensive, and then pioneering,
research by Nishith M. Desai on the taxation of cross-border transactions. The research book written by him
provided the foundation for our international tax practice. Since then, we have relied upon research to be the
cornerstone of our practice development. Today, research is fully ingrained
in the firm’s culture.
Research has offered us the way to create thought leadership in various areas of law and public policy. Through
research, we discover new thinking, approaches, skills, reflections on jurisprudence,
and ultimately deliver superior value to our clients.
Over the years, we have produced some outstanding research papers, reports and articles. Almost on
a daily basis, we analyze and offer our perspective on latest legal developments through our “Hotlines”. These
Hotlines provide immediate awareness and quick reference, and have been eagerly received.
We also provide expanded commentary on issues through detailed articles for publication in newspapers and peri-
odicals for dissemination to wider audience. Our NDA Insights dissect and analyze a published, distinctive legal
transaction using multiple lenses and offer various perspectives, including some even overlooked by the execu-
tors of the transaction.
We regularly write extensive research papers and disseminate them through our website. Although we invest
heavily in terms of associates’ time and expenses in our research activities, we are happy
to provide unlimited access to our research to our clients and the community for greater good.
Our research has also contributed to public policy discourse, helped state and central governments
in drafting statutes, and provided regulators with a much needed comparative base for rule making.
Our ThinkTank discourses on Taxation of eCommerce, Arbitration, and Direct Tax Code have been widely
acknowledged.
As we continue to grow through our research-based approach, we are now in the second phase
of establishing a four-acre, state-of-the-art research center, just a 45-minute ferry ride from Mumbai
but in the middle of verdant hills of reclusive Alibaug-Raigadh district. The center will become the hub for
research activities involving our own associates as well as legal and tax researchers from world over.
It will also provide the platform to internationally renowned professionals to share their expertise
and experience with our associates and select clients.
We would love to hear from you about any suggestions you may have on our research reports.
Please feel free to contact us at

[email protected]

M U M BA I S I L I C O N VA L L E Y BA NG A LO RE
93 B, Mittal Court, Nariman Point 220 S California Ave., Suite 201 Prestige Loka, G01, 7/1 Brunton Rd
Mumbai 400 021, India Palo Alto, California 94306, USA Bangalore 560 025, India
tel +91 22 6669 5000 tel +1 650 325 7100 tel +91 80 6693 5000
fax +91 22 6669 5001 fax +1 650 325 7300 fax +91 80 6693 5001
S I NG A P O RE M U M BA I B KC N E W DE L HI
Level 30, Six Battery Road 3, North Avenue, Maker Maxity C–5, Defence Colony
Singapore 049 909 Bandra–Kurla Complex New Delhi 110 024, India
Mumbai 400 051, India
tel +65 6550 9856 tel +91 11 4906 5000
tel +91 22 6159 5000 fax +91 11 4906 5001
fax +91 22 6159 5001
MUNICH N E W YO RK
Maximilianstraße 13 375 Park Ave Suite 2607

80539 Munich, Germany New York, NY 10152
tel +49 89 203 006 268 tel +1 212 763 0080
fax +49 89 203 006 450
International Commercial Arbitration — Law and Recent Developments in India


International Commercial Arbitration

Uploaded by

Copyright:

Available Formats

International Commercial Arbitration

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

International Commercial Arbitration

Uploaded by

Copyright:

Available Formats

M U M BA I S I L I C O N VA L L E Y BA N G A LO RE S I N G A P O RE M U M BA I B KC NEW DELHI MUNICH N E W YO RK

With inputs from -

© Copyright 2017 Nishith Desai Associates www.nishithdesai.com

With inputs from - Singapore International Arbitration Centre (SIAC)

© Nishith Desai Associates 2017

2. INDIAN ARBITRATION REGIME 02

I. History of Arbitration in India 02

3. INTERNATIONAL COMMERCIAL ARBITRATION – MEANING 05

4. ARBITRABILITY UNDER INDIAN LAW 06

5. INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN INDIA 07

6. INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN A

I. Referring parties to arbitra- tion under part II 19

7. EMERGING ISSUES IN INDIAN ARBITRATION LAWS 23

I. Prospective applicability of the amendment act 23

© Nishith Desai Associates 2017

I. Prospective Applicability of Arbitration and Conciliation Amendment Act, 2015 26

SIAC INFORMATION KIT 74

© Nishith Desai Associates 2017

2. Indian Arbitration Regime

India Part II of the Act deals only with foreign awards1

ii. The Indian Arbitration Act, 1940 (“1940 Act”)

The courts have found that Chapters III to VI,

1. A foreign award is award delivered in an arbitration seated

2 © Nishith Desai Associates 2017

§§Flexibility has been granted to parties with

C. Post-arbitral proceedings §§ Section 34 petition to be disposed of expedi-

4 © Nishith Desai Associates 2017

3. International Commercial Arbitration –

5. ‘Commercial’ should be construed broadly having regard to the

4. Arbitrability under Indian Law

9. 2014 (6) SCC 677

6 © Nishith Desai Associates 2017

5. International Commercial Arbitration with

Applicability of Amendment Act However, in certain situations, a party will be required

16. Section 11(3) of the Act

8 © Nishith Desai Associates 2017

10 © Nishith Desai Associates 2017

32. Section 19(1) of the Act

The Amendment Act has inserted new provisions to

45. Section 29A(9) – the section endeavours the application to be

12 © Nishith Desai Associates 2017

arbitration pose of this sub-section has been added. The circum-

vi. the subject matter of dispute cannot be settled by

Act set aside by the court merely on erroneous application

Process for Challenge & enforcement

Domestic Award/ICA Enforcement of Award a as

61. Proviso to section 34(2A) of the Act

14 © Nishith Desai Associates 2017

GROUNDS FOR CHALLENGE

XVI. Appeals Moreover, no second appeal shall lie from an order

Applicability of Amendment Act An ex parte award passed by an Arbitral Tribunal under

67. Section 37 of the Act

16 © Nishith Desai Associates 2017

i. Attachment of property; and If during the pendency of the attachment, the

6. International Commercial Arbitration with seat

Pre-Balco (Bhatia Regime) Post-Balco Amendment Act

18 © Nishith Desai Associates 2017

i. the award passed should be an arbitral award,

Section 45 of the Act starts with a non obstante clause,

87. 2005 (3) ArbLR 1