SPECIAL LEAVE PETITION

supreme-court

 

“An unjust law is itself a species of violence. Arrest for its breach is more so.”Mahatma Gandhi

 

Under Article 136, the Constitution of India gives power to the Supreme Court to grant special permission or leave to an aggrieved party to appeal against an order passed in any of the lower courts or tribunals in India.

MEANING OF SPECIAL LEAVE PETITION

Special leave petition (SLP) means that an individual takes special permission to be heard in appeal against any high court/tribunal verdict. Thus it is not an appeal but a petition filed for an appeal. So after an SLP is filed, the Supreme Court may hear the matter and if it deems fit, it may grant the ‘leave’ and convert that petition into an ‘appeal’. SLP shall then become an Appeal and the Court will hear the matter and pass a judgment.

SLP CAN BE PRESENTED UNDER FOLLOWING CIRCUMSTANCE

  • It can be filed against any judgment or decree or order of any high court /tribunal in the territory of India, or
  • It can be filed in case a high court refuses to grant the certificate of fitness for appeal to Supreme Court of India.

 

TIME LIMIT TO FILE SLP

  • It can be filed against any judgment of a high court within 90 days from the date of judgment, or
  • It can be filed within 60 days against the order of a high court refusing to grant the certificate of fitness for appeal to Supreme Court.

 

WHO CAN FILE SLP

Any aggrieved party can file an SLP against the judgment or order of refusal of grant of certificate.

Through SLP, an aggrieved party can appeal to the Supreme Court against any judgement passed by any lower court or tribunal. This leave is granted when the case involves a question of law. Mere errors of fact, mis-appreciation of evidence or even findings of fact arrived at wrongly are not grounds of appeal before the Supreme Court. The Supreme Court is only concerned with question of law i.e. if the law was correctly applied, whether the interpretation of law was in accordance with the settled principles of law etc.

The aggrieved party or the petitioner filing SLP has to give a brief synopsis of the facts and issues presented in the case along with a list of dates specifying the chronology of events pertinent to the judgement. Along with this, the petitioner has to formulate questions of law to appeal against the judgement. These questions should pertain to laws relevant to the general public as well.

Once registered and presented in the Supreme Court, the petitioner will get a hearing before the Court. Subsequently, depending on the merits of the case, the Supreme Court will issue a notice to the opposite parties who will then file a counter affidavit stating their views. It’s at this point that the Supreme Court will decide whether to grant leave to the petitioner or not. If the Court grants leave, the case is then converted into a civil appeal and will be argued afresh in the Supreme Court.

The Supreme Court can rescind or revoke the earlier judgement, modify it or allow it. The Court can also send the case back to the relevant lower court for fresh adjudication in light of principles laid down by it or on account of any issues missed out by the lower court.

Article 133–136 of the Constitution of India defines the appellate jurisdiction of the Supreme Court. Article 133 provides for civil appeals from orders of the High Court, Article 134 provides for criminal appeals and Article 136 provides for special leave petition. If a case does not fall within Article 133 or Article 134 then under Article 136 the Supreme Court may be moved and a special permission may sought to grant leave to appeal.

DISCRETIONARY POWER

Appeal to Supreme Court is not a matter of right but it is matter of privilege which only the Supreme Court will grant to any individual if there exists an important constitutional or legal issue involved. Appeals are regulated by the Constitution of India and Supreme Court Rules, 2013.

According to Article 141 of the Indian Constitution, the Supreme Court’s judgement is declared as law of the land and is binding on all courts in India.

 

Parul

Senior Associate

The Indian Lawyer

Model shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016

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The Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 is a welfare legislation which intends to bring equality in regulation of employment and conditions of service throughout the country. According to the Ministry of Labour and Employment, this Bill is a bold step towards employment generation. It will give a boost to employment opportunities to women as they will be permitted to work during night shifts with adequate safety and security provisions. States have been granted autonomy to adopt and modify this Bill as per their requirement, as this subject falls within the State List. This Model Bill would be applicable to shops and establishments employing ten or more workers except manufacturing units. However, the States can change this as per their needs.

The Cabinet in its meeting held on 29th June, 2016 considered the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 to be sent to States who will modify their individual Acts, if they so desire either by adopting the said Bill as it is or after modifying its provisions as per the requirement of that particular State/UTs. This Bill was approved by the Union Cabinet on June 29, 2016. The Bill was finalized after detailed discussions with public, through internet and with employees/labour representatives, employer’s association and State Governments through Tripartite Consultations process.

Major reforms proposed by this Bill:

Working hours: Establishments are allowed to function on all days in a year and can also decide their opening and closing timings. The Bill puts a limit that employees can work for a maximum of 9 hours a day and 48 hours a week, and upto a maximum overtime of 125 hours in a quarter. Highly skilled workers (for e.g. workers employed in IT, Biotechnology and R&D division) are exempted from these provisions of maximum working hours. This flexibility will enable the establishment to better services to their clients who cater to international customers especially in the IT sector.

Welfare provisions: A number of welfare provisions like drinking water, crèche, canteen facilities, etc. have been proposed by this Bill.

Women: The Model Bill proposes no discrimination against female employees in matters of recruitment, transfers, promotion, etc. It grants liberty to women to work in a night shift only if the employer provides facilities like night crèche, protection from sexual harassment, transportation from establishment to their residence doorstep, etc.

Leave:  The Model Bill entitles every employee 8 days casual leave, one day for every 20 days of work for every worker who has worked for 240 days in subsequent year and 8 days of paid leave for festival holidays.

In addition to the above mentioned reforms, this Model Bill would promote fair competition among the States in improving the Governance and ease of doing business. The enhancement of working hours in shops and establishments 24×7 with adequate provision for protection of the workers will give rise to requirement for additional manpower which will result in additional employment. It is expected that the Bill if adopted by State will lead to growth in jobs especially in the retail, IT, hospitality and services sector.

The Model Bill is a suggestive piece of legislation and has been finalized keeping in view the spirit of co-operative federalism. It is a much awaited reform, aimed at protecting the interest of the employees. This gives liberty to States for fine tuning the Model Bill to suit their requirements. It is indeed an applaudable step by Central Government towards employment generation. This is expected to generate competitive and challenging spirit amongst the States and create an environment which is conducive for large scale employment generation at every level, especially in smaller and medium towns. It will give a boost to employment opportunities to women as they will be permitted to work during night shifts with adequate safety and security provisions. We hope that this Model Bill would be enforced soon and sees light of the day to bring uniformity in regulation and conditions of service across the country.

 

Sanchayeeta Das

Associate

The Indian Lawyer

ENFORCEMENT OF FOREIGN AWARDS IN INDIA

 

Part II of the Arbitration and Conciliation Act, 1996 (the Act) amended by the Arbitration and Conciliation (Amendment) Act, 2015 deals with enforcement of certain foreign awards. India recognises foreign awards under the New York Convention and the Geneva Convention.

CHAPTER I – NEW YORK CONVENTION AWARDS

1.        DEFINITION OF FOREIGN AWARD

According to Section 44 of the Act a foreign award means an arbitral award on disputes arising between parties to arbitration, whether in contractual or non-contractual relationship, considered as commercial under Indian laws enacted on or after the 11th day of October, 1960. But the country must be a signatory to the New York Convention and recognised by the Central Government of India as a Convention country and the award shall be passed in the territory of another contracting country which is a reciprocating territory, i.e the Central Government of India has notified it as Convention country in its Official Gazette.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 45 of the Act empowers a judicial authority to refer the parties to arbitration at the request of one of the parties or any person claiming through or under him except in the situation when the agreement is found to be void, inoperative or incapable of being performed.

3.  FOREIGN AWARD WHEN BINDING

Section 46 of the Act provides that any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 47 of the Act a person seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; original arbitration agreement or its duly certified copy; and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award. The burden of proof is on the party seeking to enforce the foreign arbitral award to prove that it is a genuine foreign award and the aforesaid documents form a prima facie evidence to establish the same.

5. CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

  1. As per section 48 (1) of the Act, a foreign award may not be enforced in India if it is proved by the party against whom it is sought to be enforced that:
  2. the parties to the agreement were under some incapacity to perform under the law to which they were subjected to and in the absence of any mention of such law, the law of the country where the award was made, i.e. the place of arbitration, or,
  3. the agreement was invalid under the law to which the parties have subjected it and in the absence of any mention of such law, the law of the country where the award was made, or,
  • a fair trial was not conducted by the tribunal passing the award by failing to adhere to the principles of fair hearing, or,
  1. the award passed was partly or wholly beyond the scope of the arbitration agreement, in which case the part of the award exceeding the scope of submission to arbitration may be separated from rest of the award, or,
  2. the composition of the arbitral tribunal or authority and/or the procedure of its appointment was not in accordance with the arbitration agreement or in the absence of any mention of the same in the agreement, it was not in accordance with the law of the country where the arbitration proceedings were held, i.e. the place of arbitration, or,
  3. the award has not yet been made binding on the parties or has been set aside or suspended by a competent authority of the country which is either the place or seat of arbitration.

The court may call upon such party making an application under section 48 (1) to provide evidence to prove the existence of any or all of the grounds for refusal of enforcement of award as mentioned above.

  1. As per section 48 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:
  2. the settlement of the award is not as per Indian arbitration laws, or
  3. the enforcement of the award is contrary to the public policy of India. This defense should be construed narrowly. It has to be something more than mere contravention of law to attract this defense. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it was in violation of the of the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

Section 48 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

It is further provided that if an application for the setting aside or suspension of the award has been made to a competent authority, the court may, if it considers it proper adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

6. ENFORCEMENT OF FOREIGN AWARDS

As per section 49 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court and no appeal shall lie against the award so upheld except for a discretionary appeal to Supreme Court of India under Article 136 of the Constitution of India when it is a question of fundamental importance or public interest. But in the case of an award held to be non-enforceable by the court, an appeal may be allowed under section 50 (1) (b) of the Act.

The decree shall be executed, on application by the decree-holder, in accordance with the provisions of CPC by the court which passed it.

CHAPTER II – GENEVA CONVENTION AWARDS

  1. INTERPRETATION

As per section 53 of the Act a foreign award is an arbitral award on disputes relating to matters which are considered commercial under Indian laws enacted after 28th day of July, 1924 and comply with the following conditions:

  • The award is in accordance with the agreement for arbitration to which the Protocol laid down in the Second Schedule of the Act is applicable;
  • The award is with respect to the persons, one of whom is subjected to the jurisdiction of the country which has been recognised as a Convention party by the Central Government of India vide notification in the Official Gazette and the other who is subject to the jurisdiction of any other Convention country so recognised by India through notification in the Official Gazette.
  • The award has been made in any of the Convention countries so recognised by the Central Government of India vide notification in the Official Gazette and the award shall be deemed final only if no legal proceedings or appeal against such award is not pending in such jurisdictions.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 54 of the Act empowers a judicial authority at the request of one of the parties or any person claiming through or under him to refer the parties to arbitration if it is satisfied about the validity of the agreement. The section is attracted only if there is an actual reference to the arbitration.

3. FOREIGN AWARD WHEN BINDING

Section 55 of the Act provides that an award which satisfies the conditions of enforceability mentioned under section 57 of the Act is enforceable and is to be treated as binding for all purposes and also on persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India. Any references to enforcing a foreign award shall be construed as including references to relying on an award.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 56 of the Act a party seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; evidence to prove that the award has become final and is in pursuance with section 57 (1) (a) and (c); and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award.

If the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English. As per the Amendment Act, 2015 the application for enforcement of a foreign award will only lie to a high court having jurisdiction.

5.  CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

As per section 57 (1) of the Act, there are certain conditions for enforcement of foreign awards under the Geneva Convention, such as:

  • The award has been passed in accordance with the submission to arbitration by parties;
  • The Indian laws of arbitration allow the settlement of the award;
  • The award has been passed in accordance with the arbitration agreement by the tribunal or arbitral authority as determined by the parties mutually and according to the law governing the arbitration;
  • The award has become final in the country where it has been passed and no objections or appeal or any other proceedings are pending against it;
  • The enforcement of the award is not contrary to the public policy or the laws of India. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it is in violation of confidentiality provisions of an attempted conciliation under the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

As per section 57 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:

  1. the award has been declared null and void by courts in the country in which it was made;
  2. fair trial was not held by the arbitrator, in the sense, that the party was not given a fair opportunity to be heard or that he was not properly represented by an advocate, pending which the award has been passed;
  3. the award is beyond the scope of the submission to arbitration: Provided that if the award has not covered all the disputes submitted to the arbitral tribunal, the court may either postpone such enforcement or grant it subject to such guarantee as the court may decide.

Section 57 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

The party against whom the award has been passed, if he proves, that there exists any other ground other than mentioned above to challenge the validity of the award, then the court, may, either refuse the enforcement of such award or postpone the proceedings and give the party sufficient time to get the award cancelled by the competent tribunal.

6.  ENFORCEMENT OF FOREIGN AWARDS

As per section 58 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court. The Arbitration Act and interpretations by the Supreme Court provide that every final arbitral award is enforced in the same manner as if it were a decree of the court and as per section 59 of the Act appeals may lie against the order refusing to refer the parties to arbitration under section 54; refusing to enforce a foreign award under section 57. Generally, no second appeal shall lie from the order passed in the appeal under section 58 but right to appeal to Supreme Court is not barred.

 

Reference:

[1] Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644

[2] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).

[3]Fuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8 SCC 333- It was held that no appeal including a letters patent appeal shall be allowed.

[4] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).

ARBITRATION LAW IN INDIA

Arbitration proceedings in India are conducted under the Arbitration and Conciliation 1996 as amended by the Arbitration and Conciliation (Amendment) Act, 2015 (the Act). The Act is based on the UNCITRAL Model Law. This ensures that there is a certain level of uniformity in the Law.
For international commercial arbitration, India is a party to the New York Convention. It has exercised both the reciprocity and commerciality reservations. However, notification is required in the Official Gazette in relation to each specific country. Not all countries that have ratified the New York Convention have been notified in the Official Gazette of the Government of India. The Act distinguishes between purely domestic arbitration involving Indian parties (“Domestic Arbitration”), arbitrations having an international element but seated in India (“International Arbitration”), and arbitrations seated outside of India (“Foreign Arbitration”). The provisions of the Act (other than Part II of the Act dealing with enforcement of certain foreign awards) are normally not applicable to foreign arbitrations, except where specifically provided.
1. TYPES OF ARBITRATION:

There are two main types of arbitration procedures namely (a) ad- hoc arbitration; and (b) institutional arbitration
A. Ad-Hoc Arbitration: In ad-hoc arbitration the tribunal conducts the arbitration between the parties, following the rules which have been agreed by the parties by prior agreement or by following the rules which have been laid down by the tribunal, in case the parties do not have any agreement between them.
B. Institutional Arbitration: In the case of institutional arbitration, the disputing parties submit their issue to an institution that has been designated to administer the arbitrational process. The institution then arbitrates the dispute according to the rules laid by them in front of the parties. The institute selects a panel which administers the whole process.
2. EXISTENCE OF THE ARBITRATION AGREEMENT
Section 7 of the Act provides that an arbitration agreement may be in form of an arbitration clause in a contract or in the form of separate agreement. It also provides that where there is a reference in a contract to a document containing an arbitration clause, such reference constitutes an arbitration agreement, if the reference is such as to make that arbitration clause as a part of the contract. An agreement must be in writing. An agreement can said to be in writing if it is contained in –
 A document signed by the parties.
 An exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement.
 An exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. Section 8 of the Act provides power to refer parties to arbitration proceedings where there is an arbitration agreement. The Act also requires the courts to refer parties to arbitration if, prima facie, an arbitration agreement is found to exist.

3. INTERIM MEASURES Section 9 and 17 of the Act empowers the court and arbitral tribunal respectively to make interim orders and proceedings. A party may apply to the court or arbitral tribunal, (a) before, (b) during arbitral proceedings, or (c) after the making of the final award, but before it is enforced in accordance with the Act. A party may apply to a court or arbitral tribunal for an interim measure of protection in respect of any of the following matters, namely –

 The preservation, interim custody or sale of any good which is the subject-matter of the arbitration proceeding.

 Securing the amount in dispute in the arbitration.

 The detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purposes of obtaining full information or evidence.

 Interim injunction or the appointment of a receiver. Section 9 of the Act envisages that if the court passes an interim measure of protection under this section before commencement of arbitral proceedings, then the arbitral proceedings shall have to commence within a period of 90 days from the date of such order or within such time as the court may determine.

Under Section 9 of the Act the court shall not entertain any application unless it finds that circumstances exist which may not render the remedy under Section 17 (interim measures ordered by arbitral tribunal) efficacious.
4. COMPOSITION OF ARBITRAL TRIBUNAL
 Number of Arbitrators: Section 10 of the Act provides that the parties are free to determine the number of arbitrators but it shall not be an even number.

 Section 11 of the Act provides that a person of any nationality may be an arbitrator unless otherwise agreed by the parties and also clarifies that the power to appoint arbitrators is not a judicial function. The Act also clarifies that the power to appoint arbitrators can be delegated by the Supreme Court or the High Court to any person or institution. This is an important statutory recognition of the role of institutions in arbitral proceedings. The Act requires the courts to aim to dispose of an application for appointment of arbitrators within 60 days from the date of service of notice to the other party.

 Grounds for challenge: Section 12 of the Act clarifies the grounds available to challenge appointment of arbitrators on grounds that the appointment raises justifiable doubts as to his/her impartiality or independence and he does not possess the qualification agreed to by the parties. The Act contains two schedules that list various grounds for challenge –

(A) Fifth Schedule which lists the grounds that would give rise to justifiable doubt to independence and impartiality of arbitrator and the circumstances given in Fifth Schedule are very exhaustive. Any person not falling under any of the grounds mentioned in the Fifth Schedule is likely to be independent and impartial in all respects.

(B) Seventh Schedule which lists the grounds that notwithstanding any prior agreement of the parties, if the arbitrator’s relationship with the parties or the counsel or the subject matter of dispute falls in any of the categories mentioned in the Seventh Schedule, it would act as an ineligibility to act as an arbitrator. However, subsequent to disputes having arisen, parties may by expressly entering into a written agreement waive the applicability of these provisions.

 Challenge Procedure: Section 13 of the Act provides that the parties have the liberty to agree on a procedure to challenge the appointment of an arbitrator.
5. CONDUCT OF ARBITRAL PROCEEDINGS
 Section 20 of the Act talks about the place of the arbitration. The parties are free to agree on the place of arbitration. Failing this it can be determine by the arbitral tribunal as per the convenience of the parties.
 Section 21 of the Act provides that the arbitral proceedings in respect of a particular dispute commences on the date on which a request for that dispute to be referred to arbitration is received by the respondent.
 Section 23 of the Act provides that within the period of time agreed by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought and the respondent shall state his defence in respect to these particulars unless the parties have agreed otherwise. The respondent, in support of his case, may also submit a counterclaim or a set-off, if such counterclaim or set-off falls within the scope of the arbitration agreement. The parties may amend or supplement his claim or defence during the course of the arbitral proceeding unless the arbitral tribunal considers it inappropriate.
 Section 24 of the Act provides that unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearing for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials.
It is provided that the arbitral tribunal shall hold oral hearing for the presentation of evidence or oral arguments on a day-to-day basis and shall not grant any adjournments without any sufficient cause.
 Section 25 of the Act provides that the right of the respondent to file the statement of defense has been forfeited, if the respondent fails to communicate such statement in accordance with the time line agreed by the parties or the arbitral tribunal without reasonable cause.
6. RULES APPLICABLE TO SUBSTANCE OF DISPUTE

Section 28 of the Act provides that the arbitral tribunal shall decide the dispute in accordance with the substantive law for the time being in force in India in arbitration other than an international commercial arbitration. The arbitral tribunal while deciding and making an award, shall take into account the terms of the contract and trade usages applicable to the transaction. In international commercial arbitration, the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute unless not in conflict with the rule of law.
7. TIME LIMIT FOR ARBITRAL AWARD Section 29A of the Act provides:

 Every award must be made within twelve (12) months from the date the arbitrator receives a written notice of appointment.

 The parties may mutually decide to extend the time limit by not more than six (6) months.

 If the award is not made within eighteen (18) months, only a court can extend the period as it may deem fit, upon an application filed by any of the parties and showing sufficient cause.

 Further if, the court, while extending the time for making the award, finds that the delay was attributable to the tribunal, it may order a reduction in the arbitrator’s fee by an amount not exceeding 5 per cent for each month of such delay.

 The court while extending a time limit, also has the right to change arbitrators as it may deem fit and can also impose certain conditions on the parties and the arbitrators.

 An application to the court should be disposed off by the court within sixty (60) days from the date the opposite party receives the notice.

 If an award is made within six (6) months, the arbitrators shall be entitled to receive such additional fees as the parties may agree.
8. FAST TRACK PROCEDURE Section 29B of the Act provides for a fast track mechanism. The following are the salient features of the said mechanism:

 The parties can agree in writing to a fast track procedure at any stage before, or at the time of appointment of the arbitral tribunal and while agreeing to the fast track procedure, the parties can also agree to a sole arbitrator.

 The award shall be made within a period of six (6) months from the date the arbitral tribunal enters upon the reference or the Arbitral tribunal is constituted.

 The dispute shall be decided based upon written pleadings, documents and submissions filed by the parties without any oral hearing.

 Oral hearing can be held only if all parties request or the arbitral tribunal considers it necessary for clarifying certain issues.

 The arbitral tribunal shall have the power to call for any further information that it may deem fit.

9. SETTLEMENT
Section 30 of the Act recognises the freedom of the parties to arrive at a settlement. In fact in terms of this section the arbitral tribunal has been enjoined to encourage settlement of dispute and for facilitating such settlement the arbitral tribunal can resort to mediation, conciliation and other procedures at any time during the arbitral proceedings. In case parties coming to a settlement at any time during the proceedings the arbitral tribunal may terminate the proceedings and an arbitral award on the basis of agreed settlement will have the same status and force as an arbitral award on merits i.e. an award rendered after the completion of arbitral proceedings.
10. INTEREST AND REGIME FOR COST
Section 31 of the Act gives power to the arbitrators to order interest. It prescribes a default rule of awarding interest post-award at market rate (as periodically determined by the Reserve Bank of India) plus 2% unless agreed otherwise by the parties.
Section 31A of the Act gives wide powers to the arbitral tribunal to impose costs and the general rule of making the unsuccessful party pay costs to the successful party has been introduced. The costs may include fees and expenses of the arbitrators, courts and witnesses, legal fees and expenses, administrative costs of the institution and any other costs incurred in relation to the arbitral or court proceedings and the arbitral award.
While awarding costs, the arbitral tribunal shall have regard to the circumstances including the conduct of parties, whether a party refused a reasonable offer to settle by the other party and if a party has made a frivolous claim.
11. TERMINATION OF PROCEEDINGS
Section 32 of the Act provides that the arbitral tribunal shall terminate the arbitral proceedings by an order if a claimant withdraws his claim or if the parties agree to it unless the respondent objects and the arbitral tribunal feels that the respondent has legitimate interest for continuance of the proceedings and obtaining and final settlement of the dispute or if the arbitral tribunal comes to a conclusion that the continuance of the proceedings has for any reason become unnecessary or it is not possible to continue the proceedings. The proceeding is automatically terminated with the delivery of the final award by the arbitrator.
12. CORRECTION AND INTERPRETATION OF AWARD
Section 33 of the Act indicates that unless another period of time has been agreed by the parties, an application for correction of any computational errors or typographical errors and to give an interpretation of a specific point or part of the award, with notice to the other party, has to be made to the arbitral tribunal within the 30 days from the receipt of the arbitral award. Any delay cannot be condoned.
13. APPLICATION FOR SETTING ASIDE AN ARBITRAL AWARD
Section 34 of the Act provides that an application for setting aside an award can be made by a party only after issuing a prior notice to the other party if,
 a party was under some incapacity; or
 the arbitration agreement was not valid under the governing law; or
 a party was not given proper notice of the appointment of the arbitrator or on the arbitral proceedings; or
 the award deals with a dispute not contemplated by or not falling within the terms of submissions to arbitration or it contains decisions beyond the scope of the submissions; or
 the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; or
 If the court finds that: (a) that the subject matter of the dispute is not capable of settlement by arbitration; or (b) the arbitral award is in conflict with the public policy of India.
The term “public policy” includes:
a) If the making of the award was affected by fraud or corruption.
b) If it is in conflict with the fundamental policy of India.
c) If it is in contravention to basic notions of morality or justice.
The application made under this section shall be disposed of within a period of one year from the date on which the notice is served upon the other party.
Limitation of Time: Section 34(3) of the Act provides that an application for setting aside an award shall not be entertained by the court if it is made after three months have elapsed from the date on which the applicant had received the arbitral award. A further period of 30 days can be provided if the court satisfied that the applicant shows sufficient cause for the delay.
14. FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS Section 35 of the Act provides an arbitral award shall be final and binding on the parties and persons claiming under them. Section 36 of the Act provides a mere filing of an appeal challenging the arbitral award does not amount to a stay of the award. A separate application for stay would have to be filed by the losing party and the court will have to record its reasons in writing for granting a stay of the award and while doing so, the court has the power to direct the losing party to deposit amounts or provide reasonable security as a pre-condition for the grant of stay of the arbitral award. The arbitral award becomes enforceable when the time for making an application to set-aside an arbitral award under Section 34 of this Act has expired, or when such application is made, but refused by court on merits.
15. CONFIDENTIALITY
There is no provision for confidentiality in arbitrations under Indian law but an agreement or a clause on confidentiality may be included in the arbitration agreements.

BILATERAL INVESTMENT TREATY

BIT

 

Bilateral Investment Treaty is an agreement between two countries to ensure, among other things, that:

  1. Investors of either country are allowed to hire top management personnel of any nationality.
  2. Have the right to make investment related transfers.
  3. Assets belonging to one country’s investors in the country can only be expropriated in accordance with the international law.
  4. Investors will have access to building international arbitration in dispute settlement.

 

These are basically international agreements establishing the terms and conditions for private investment by nationals and companies of one state in another state.

The first generation of these treaties were Friendship, Commerce and Navigation Treaties (FCNs), which required the host state to treat foreign investments on the same level as investments from any other state, including in some instances treatment that was as favorable as the host nation treated its own investments. FCNs also established the terms of trade and shipping between the parties, and the rights of foreigners to conduct business and own property in the host state.

The second generations of these treaties are Bilateral Investment Treaties (BITs), which set forth actionable standards of conduct that applied to governments in their treatment of investors from other states, including:

  • Fair and equitable treatment
  • Protection from expropriation
  • Free transfers of means and full protection and security.

 

The distinct feature of many BITs is that they allow for an alternative dispute resolution mechanism, whereby an investor whose rights under the BIT have been violated could have recourse to International Arbitration, often under the auspices of the ICSID (International Center for the Settlement of Investment Disputes), rather than suing the host State in its own Courts.

India and BIT

The Government of India initiated the BITs in the mid 90s. The reason behind this instigation was to present favorable conditions and treaty based protection to the foreign investors and investments. It results in increased investment inflows, encourages a transfer of technology and modern management skills.

India’s participation to various BITs will give us a clear picture that each BIT is quite different from the other though there are many common characters present. These common characters are in the form of specific rights. The basic principle is that the Government will not put the investors and their investments to risks which are either unreasonable or inappropriate.

However, it is of utmost important to note that the Indian Government retains the freedom to determine which sectors are open to foreign investments and under what terms and conditions can those investments be made. The investments that are made in India must be established or acquired in accordance with the national laws of India.

Principles of BIT

Investor-State Dispute Resolution

An investor can directly initiate arbitral proceeding against a State without approaching its own government under a BIT. The investors under the Indian BITs have an option of approaching the International Centre for Settlement of Investment Disputes (ICSID) or approaching the United Nations Commission on International Trade Law (UNCITRAL).

National Treatment

The principle of National Treatment is the most important part of all the Indian BITs. It ensures that a foreign investor is treated at par with the domestic investor and is not subject to any unfair treatment.

Applicability

The Indian BITs generally apply to existing and future investments pursuant to the date on which India entered into the BIT. It gives a very wide definition to the terms investment and investor. In such circumstances, the foreign investor even if its home State is not having a BIT with India, can have the benefits by creating a Special Purpose Vehicle (SPV)/Special Purpose Business (SPB) in a State, which has a BIT with India.

Expropriation

Expropriation is the act of a government in taking privately owned property, to be used for purposes designed to benefit the overall public. The following conditions are necessary for a legal expropriation:

  • It must have a public purpose.
  • It should not be discriminatory or arbitrary.
  • It must be conducted in accordance with due process.
  • It must be accompanied by adequate compensation.

There are two types of expropriation:

  • Direct
  • Indirect

 

The Indian BIT entails to direct expropriation.

Fair and Equitable Treatment

Fair and Equitable Treatment (FET) is again one of the most important principle that all the Indian BITs hold. A number of successful investment claims are based on breach of FET standard. There are four pillars which have developed over the period with regard to the FET standard which are:

  • Protection of legitimate expectations of investors.
  • Transparency and stability.
  • Non-denial of justice.
  • Prohibition of coercion and harassment.

 

Full Protection and Security

Full Protection and Security (FPS) is a principle which protects the assets of the investments from physical violence. The violence may be by the host State or even by third parties.

In India, there are a number of BITs requiring the host State to provide protection and security.

India has had some unpleasant experiences with the BITs. However, India has been meaning to satisfy the protections given to foreign investors under the BITs. With the increasing exposure of BITs, a lot can be seen in the near future.

 

Sanchayeeta Das

Associate

The Indian Lawyer

DISCRIMINATION

equality-non-discrimination

 

“The only difference between man and man all the world over is one of degree, and not of kind, even as there is between trees of the same species.
Where in is the cause for anger, envy or discrimination?”
― Mahatma Gandhi

[All human beings are born free and equal in dignity and rights] Article 1 of the Universal Declaration of Human Rights.

The Fundamental Rights as assured under the Constitution of India guarantees to protect the basic human rights of all citizens of India and are put into effect by the courts, subject to some limitations. One of such fundamental rights is the Right to Equality. Right to Equality means that every person, who lives within the territory of India, has an equal right before the law and there shall be no discrimination based on religion, race, caste, sex and place of birth. It is not only the right of Indian citizens but also a right of non­citizens. It also includes equality of prospects in matters of employment, abolition of untouchability and abolition of titles. Articles 14, 15, 16, 17 and 18 of the Constitution of India highlight the Right to Equality in detail. This Fundamental Right is the major foundation of all other rights and privileges granted to Indian citizens.

Thus, it is imperative that every citizen of India has easy access to the courts to exercise his/her Right to Equality. It ensures the guarantee to every person the right to equality before law and equal protection of the laws and prohibits the discrimination. Article 14 emphatically says that “the State shall not deny to any person equality before the law or the equal protection of the laws” and Article 15 says that the State shall not discriminate against a person only on the basis of religion, race, sex, place of birth or any of them.

Fundamental Rights are not absolute rights and Parliament could put reasonable restrictions. The grounds for the restriction may be for the advancement of SCs, STs, OBCs, women and children or general public order or decency, mortality, sovereignty and integrity of India or security of state, friendly relations with foreign states etc.

PROTECTIVE DISCRIMINATION

This measure has been adopted for uplifting the weaker sections of a society by several countries including India. For a society as a whole to grow it is necessary that every section of the society must take part in the development of the society. At the same time every section should also receive the benefits of the growth. A society can never grow if several sections of the society are exploited. Further, it is also true that historically several sections of our society have been discriminated against and there exists a prejudice against them in the socially uplifted sections. The purpose of protective discrimination is to bring such weaker sections of the society at the same or comparable level.

From article 15(3) onwards, the Constitution starts Protective Discrimination. Article 15(3) empowers the State to make special provisions for women and children. Article 15(4) empowers the State to make special provisions for advancement of socially and educationally backwards or SC/STs. Article 15(5) goes one step further and empowers the State to make reservation in admission into education institutions including private schools or colleges whether or not aided by government. Only minority educational institutions (such as Madarsas) have been left out of this provision. Thus, article 15(3) and 15(4) are basis of reservation in the country.

Article 16(3), 16(4), 16(4-A) and 16 (4-B) provide further strength to all sorts of discrimination among the people on account of their unequal status. Article 16(3) allows the State to make any law making residence qualifications necessary in the case of government jobs, thus making the domicile provisions stronger. Article 16(4) allows the State to make reservation for any backward class of citizens which in the opinion of the State is not adequately represented in services. This opens door for Other Backward Classes (OBC) reservations. Article 16(4-A) empowers the State to make reservation in promotions also for SCs, STs and OBCs. Article 17 abolishes untouchability. Article 19(5) allows State to impose reasonable restrictions on freedom of movement and occupation to protect the interest of scheduled tribes.

Under Directive Principles of State Policy, Articles 40, 42, and 45, strive to give several benefits to weaker sections including reservation in panchayats for women and backward classes, free pregnancy care and delivery, and prevention of exploitation of children. Article 46 enjoins the State to take special care in promoting the social and educational interests of weaker sections of the society specially SCs and STs and to protect them from injustice. No provision made under Article 46 can be challenged on the grounds that it violates Fundamental Rights given in Part III of the Indian Constitution. The Supreme Court has directed the States to try to implement Article 44 to ensure equal treatment of women under all religions.

Article 164 provides Provision of Special Minister of State for Tribal Welfare for the States of MP, Bihar, and Orissa. Article 275 allows grant in aids to States for promoting tribal welfare. Article 330 and 332 allows reservation of seats for SC and ST in Lok Sabha and State Assemblies. Article 335 has been amended to allow relaxation of qualifying marks for SCs and STs in examinations for educational institutes or promotion in jobs. Article 338, 338 A, and 339 provides for the establishment of National Commission of Scheduled Castes and Scheduled Tribes. Under 339, Centre can direct the States to implement and execute policies for the betterment of Scheduled Tribes. Article 340 allows the president to appoint a commission to investigate the conditions of socially and educationally backward classes and table the report in Parliament.

EMPLOYMENT DISCRIMINATION LAW IN PRIVATE SECTOR

Last year a Muslim MBA student Zeeshan Khan having been refused employment by a private company Hari Krishna Exports Pvt. Ltd. on the ground that he is a Muslim, had attracted a lot of media attention. The police registered an offence in this case on the grounds of religious discrimination.

Now the question arises, whether the law against religious discrimination is applicable to a private company? Whether an offence could have been registered against the said private company on the ground of religious discrimination?

NO CONSTITUTIONAL PROTECTION – Article 14 of the Constitution emphatically says that “the State shall not deny to any person equality before the law or the equal protection of the laws”. Article 15 prohibits the State from discriminating on grounds of religion alone. Article 16, too, protects Indian citizens from being discriminated against on grounds of religion in matters of employment under the State.

The “State”, as defined by Article 12 of the Constitution, includes “the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India”.

Thus the fundamental rights contained in Articles 14, 15 and 16 cannot be applied in the case of a private company.

CRIMINAL SANCTIONS – Under the provisions of the Indian Penal Code, 1860 it is an offence to publish in written form that a person should be deprived of their rights as citizens of India by reason of their being a member of a particular religious group.

 

Parul

Senior Associate

The Indian Lawyer