The jawans of Assam Rifles in Manipur have been ambushed and three of them martyred in the same Chandel district in which the militants had launched a deadly attack on an Indian Army convoy in June 2015 killing 18 of our soldiers. It is clear from the latest attack that the militants have started raising their ugly head and are reasserting their defiance to such an extent that they can now dare to attack the Indian security forces.
The threat of further attacks by militants in the Northeastern states and the unrest there had started to loom large the moment Chinese incursions started in the Ladakh region. China is the biggest supporter of militants in the Northeastern states and the sole purpose of creating unrest there is to not let India shift the Army stationed there anywhere else! This move of China was further confirmed in the last week of June 2020 when a huge cache of arms was caught at the Thailand-Myanmar border. All the weapons were made in China. Prima facie, it seemed that the weapons were meant for the Myanmar terrorist outfit called Arakan Army, which China keeps aiding and abetting but the experts later confirmed that the Arakan Army does not use such weapons. Through the Arakan Army, this cache of arms was being sent to the militants of the Northeastern states in India. Militant groups in Myanmar and India work in tandem. However, India has also sought information from the Thailand government regarding the stockpile of arms and requested it to provide a detailed investigation report. Our intelligence agencies are at work too.
Though this stockpile has been seized, would China not have already delivered such arms cache before, is the moot question. There is nothing to suspect otherwise. In fact, one route to deliver a consignment of Chinese weapons in Northeast India is from Myanmar, wh e r e m a ny m i l it a nt groups have links with terrorist groups in Manipur, Nagaland, Arunachal Pradesh and Tripura. The other route is from Bangladesh. The Netherlandsbased think tank European Foundation for South Asian Studies (EFSAS) has categorically stated in its report that China is continuously engaged in fomenting tension in India. It is arming the rebels of Myanmar to stand against India. Many militant outfits in the Northeast have taken refuge in Myanmar. They cross the border, carry out attacks here and go back to Myanmar with impunity. India shares good relations with the government there, but the problem is that the terrain is inaccessible and the militants hide in the forests and mountains. Many a time, the armies of India and Myanmar carry out joint operations but the network of militants is very strong, and China too may be informing them about all the activities. So they escape.
So naturally, the question is what kind of strategy which could prove effective against extremism in the Northeastern states should be adopted. The administrative machinery has been strengthened and development brought about in the region, thanks to the efforts made by the previous Congress government and now the BJP regime. The common man too wants that peace should be restored, but the militants are so dominant that people remain silent. Here, the common man is sandwiched between the militants and the security forces. Many a time, the locals suffer too during the counter-measures by security forces against the extremists. This has bred resentment among the people on many occasions. Therefore, special attention is needed. But the major problem before the government is whom it should talk to in order to establish peace. There are many militant outfits and each one of them has its own agenda. Most of the rebel leaders dance to China’s tune.
Under the circumstances, it is imperative to adopt an aggressive stand against extremism while taking care of human rights. In 2015, when the Indian Army had entered the dense forests and destroyed the militants’ hideouts to avenge the martyrdom of their fellow soldiers, it had created a sense of fear in their minds. Almost all the militant organisations had gone silent. Though there have been a few isolated incidents, the militants could not carry out any major attack after that. The need of the hour is to put in place a firm, strict and aggressive strategy for the elimination of these militants. They should be cornered and cordoned off in such a way that no external element, including China, could deliver weapons to them under any circumstances. If we are successful in doing this, the screws on extremists could definitely be tightened to a great extent. But we will have to eliminate all those leaders and elements, too, who sneak into our system, nurture extremism and help it to spread on our soil.
Vijay Darda as served as Member of Parliament, Rajya Sabha for three consecutive terms and is Chairman of the Editorial Board, Lokmat Media.
Taxing Fantasy Sports in India: A grey area that needs clarity
The legality of these sports brought a completely new aspect of them into the eyes of the law enforcement with regard to the taxation that should be applied with regard to these games. The law enforcement split the online gaming sector into two parts—one being the tax to be paid by the individual who wins an amount in the game, and the other to be paid by the company which provides for the platform of gaming.
The authorities read Section 15 of the CGST act and the Rule 31A(3) of the CGST rules 2017 together thereby resulting in a situation where there are exorbitant amounts of tax on online gaming sites. The authorities fail to notice that online gambling is not similar to the situation of horse racing or other actionable claims of the similar nature. The concept of online sports or DFS have a completely different structure and hence have to be taxed separately from the other physical forms of actionable claims.
The grey area needs to be given some clarity either by the judiciary or by the legislature or this has potential to lead to a situation where the tax authorities charge large amounts as tax and that in turn adversely impacts a budding business. The government has to be careful and make sure such entry barriers are not created as these can also lead to other situations such as only one or two companies who have a lot of capital being able to dominate a market such as this thereby killing the competition.
India has seen a surge in on- line gaming and Daily Fantasy Sports in the recent few years. After the Judgments of the Hon’ble Supreme Court in K. R. Lakshmanan v. State of Tamil Nadu various High Courts on fantasy sports and online gambling being a game of skill and hence being legal the popularity of such sports went up in large amounts in the country. The legality of these sports brought a completely new aspect of them into the eyes of the law enforcement with regard to the taxation that should be applied with regard to these games. The law enforcement split the online gaming sector into two parts one being the tax to be paid by the individual who wins an amount in the game and the other to be paid by the company which provides for the platform of gaming. The former being governed under Section 194B and 115BB of the Income tax act and the latter by Section 15 of the Central GST act and Rule 31A(3) of the GST rules. We will discuss in detail about how the following acts will fall under this section, how much tax will the following parties have to pay and how since GST is a fairly new law this grey area might seem a little problematic to the parties.
Goods and Services Tax focuses mainly on the ‘supply for a consideration by a person in the course or furtherance of business’ and such aspects of various companies.
‘Does this concept of online gaming fall under the term supply?’
The term supply is defined very broadly and is given a lot of scope so as to ensure that nothing gets left out. The term supply is inclusive and it also includes deemed and declared supply under the schedule I and II of the Act. Section 7 of the act defines Supply as
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
(2) Notwithstanding anything contained in sub-section
(1),–– (a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as pub- lic authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as— (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods.
Here Section 7(1)(b) talks about import of services for a consideration whether or not in furtherance of a business. Post the courts in India declaring the online games legal, they started registering as business entities who provide the service of gam- ing for the consideration of a registration fee. For example the registration fee that is paid to enter a room in a on- line poker game is a consideration that is paid for play- ing poker and the company that facilitates the playing of the game becomes the sup- plier of the service (i.e. the games). Since this platform of online gaming is considered as a supplier it in accordance with the GST is liable to pay tax for supply. Every supplier whose aggregate turnover is a financial year exceeds 20 lakhs rupees is required to be registered. So, in case of online games as well if the proceeds ex- ceed 20 lakhs rupees, the platform is to be registered. As till date platforms conducting online games are not included in the category of compulsory registration, they can enjoy the threshold exemption as long as they do not touch 20 lakhs as an aggregate turnover and thereafter follow the procedure prescribed under law.
‘What Is the value and amount or bracket of GST that has to be paid by these companies?’
As per section 15 (1) of the CGST Act the value of supply of goods or services shall be transaction value, which is the price actually paid or payable for the said supply of goods or services. This is where the problem arises with regard to businesses such as online sports or DFS. In the online games the platform charges a fixed amount from the player out of which a certain portion is ploughed back to the player in form of incentives, prizes, rewards etc. For example, if a game charges Rs 10 as registration, it, at the end of the game, pays Rs 6 as a reward and keeps the rest for itself as the cost of supply. Now how much of this can be taxed as GST and will the amount that is returned as the price be charged under GST or under Section 194B and 115BB of the Income tax act.
To answer this we need to look at Section 15 of the GST act very closely.
Section 15 (1) reads “The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the sup- plier and the recipient of the supply are not related and the price is the sole consideration for the supply.”
The Section reads as the “price actually paid or payable for the said supply of good and services or both”. Here it is important that one stresses at the term ‘actually paid’. So here it means the amount that is left with these gaming companies post the distribution of winning prices that is actually used to run/ conduct the competition is what is the price that will be charged under Section 15 at the rate of 28% but this does not end here. With regard to online gaming, Section 15 of the CGST act is read with Rule 31A(3) of the CGST Rules of 2017.
This rules reads as “The value of supply of actionable claim in the form of chance to win in betting, gambling or horse racing in a race club shall be 100% of the face value of the bet or the amount paid into the totalisator.”
The authorities read Section 15 of the CGST act and the Rule 31A(3) of the CGST rules 2017 together thereby resulting in a situation where there are exorbitant amounts of tax on online gaming sites. The authorities fail to notice that online gambling is not similar to the situation of Horse racing or other actionable claims of the similar nature. The concept of online sports or DFS have a completely different structure and hence have to be taxed separately from the other physical forms of actionable claims.
Since the concept of DFS and other online sports is very new in India and there isn’t much clarity on their structure of operation, there is a grey area which is created in enforcement of law wherein it is not clear as to under which section shall tax be levied on such acts. The authorities here have turned this grey area into an opportunity to read both sections together so as to charge larger amounts of tax on this budding field.
Once this money is taxed, the Income tax department also charges the amount of winings under Section 194B and 115BB of the Income tax act from the winner/player/ user of the online gaming site. It is very important here to reiterate here that a portion of the money that is used to place a bet and used to file the registration fees is only used by the online gaming site as rewards that is sent back to the players. This becomes a case of double taxation solely because of the fact that the authorities charge tax under Rule 31A(3) of the CGST rules 2017. This is so because this rules takes tax from the bet that is placed by the Player and then the authorities also tax the winning of the player, thereby charging the player twice.
‘Does this amount to double taxation and is that valid in law?’
The authorities will at this point either have to forgo charging the tax under Section 115BB and 194B or under Rule 31A(3) so as to avoid this situation of double taxation. The Hon’ble Supreme Court in the case of Uttar Pradesh v. Raze Buland Sugar Co. Ltd. held that the principle that is applicable in tax statutes is that the income is subject to tax in the hands of the same person only once. Thus, if an association or a firm is taxed in respect of its in- come the same income can- not be charged again in the hands of the members individually and vice versa”.
The Hon’ble apex court in the case of CIT v. Damani Brothers held that, “…There can be, no dispute that double levy of interest is not permissible. But this principle is applicable only when the interest is chargeable more than once for the same set of refractions. If the provisions under which interests are charged operate in different fields, there is no statutory bar on levying the interest because in essence it does not amount to double levy of interest but levy of interest separately for different refractions.”
Now both these Judgments talk about how taxing the same individual twice is not sound in law, but do the authorities ‘on paper’ tax the same individual twice?
Technically the bet that is placed by an individual goes to the company that runs the online gambling site which in turn returns all this bet money to the winner of that game. The tax authorities tax the gambling company 100% of the bet amount under Rule 31A(3). Here it is very important to notice that the online gambling sites are not allowed under law to make any profits out of the betting activity any such profits will be illegal. What the gambling companies do at this point is that they make profit through other sources such as advertisements. They merely rotate the betting amount by collecting it and finally giving it to the winner as rewards. So when the tax authorities charge the company under Rule 31A(3), on paper they charge the company but then the source of that income is actually the player/ user himself. This isn’t entirely fair on the company because they are not allowed to hold back any of those funds either and hence most of these companies have to end up paying exorbitant amounts as taxes.
This grey area needs to be given some clarity either by the judiciary or by the legislature or this has potential to lead to a situation where the tax authorities charge large amounts as tax and that in turn adversely impacts a budding business. The government has to be careful and make sure such entry barriers are not created as these can also lead to other situations such as only one or two companies who have a lot of capital being able to dominate a market such as this thereby killing the competition. Hence it is necessary that the government come up with some clarity on this regard so as to set a fixed amount of tax for this sector of online sports.
(Shubhendu Anand is Part- ner, Atharva Legal LLP. V Sai Shank is a final year law student at SASTRA University, Thanjavur.)
Undoing the agri-marketing muddle in India
Treatises have been and shall continue to be written on each of the above, yet to summarily encapsulate the extent of the issue one must stare at the starkness of the fall of primary sector’s contribution to the national income (Gross Value Added) from 18.2% in 2014-15 to 16.5% in 2019-20 while continuing to be the single-largest source of livelihood in our country with more than 70% rural households still depending on the agri-sector for sustenance.
The new e-trading platform was merely a collectivisation over electronic means of the existing mandis; evidently the reliance upon the APMC was as prevalent as ever. Despite the reformative outlook, the e-NAM system still enjoined the farmers to bring their produce to the local mandi for finding prospective buyers and thus the mandis continued to hold substantial sway. The goal, therefore, of a unified national market for agricultural produce remains woefully unrealised.
‘Fragmentation’ is perhaps the single most dreaded concept in India’s agricultural economy and yet “fragmentated” is the oft-quoted adjective employed to define the Indian agricultural market. Despite record shattering grain production year-on-year and an almost assembly line rollout of welfare schemes, the primary economic sector along with the primary producer has spectacularly failed at upending the continuous fall in marginal productivity and output. Multiple systemic ills associated with lack of research, absent mechanisation, patchy irrigation, credit availability and tightly controlled procurement and marketing continue to plague the farm sector
Treatises have been and shall continue to be written on each of the above, yet to summarily encapsulate the extent of the issue one must stare at the starkness of the fall of primary sector’s contribution to the national income (Gross Value Added) from 18.2% in 2014-15 to 16.5% in 2019-20 while continuing to be the single largest source of livelihood in our country with more than 70% rural households still depending on the agri-sector for sustenance. In fact, the fall in share of the primary sector goes directly against the mission of this government to double farmers’ incomes by 2022.
The woeful condition as above is a direct function of low rates of farm mechanisation, unwarranted government market intervention, poorly directed farm credit programmes, unplanned trade shocks implemented in the form of sudden restrictions on exports, restricted market access, undeveloped food processing and allied sectors such as fisheries, animal husbandry and dairy. In fact the latest Economic Survey 2019-20 skilfully encapsulates the root of the issue as below;
“4.20. In the grain markets in India, Government has sought to achieve food security while ensuring remunerative prices to producers and safeguarding the interest of consumers by making supplies available at affordable prices. In trying to achieve this, the state controls input prices such as those of fertilizer, water, and electricity, sets output prices, undertakes storage and procurement through an administrative machinery, and distributes cereals across the country through the PDS.” [‘Undermining Markets: When Government Intervention Hurts More than it Helps’, The Economic Survey 2019-20 (Vol-I, p. 82).
Evidently thus, it cannot be anyone’s case that the powers that be remain unaware of the ills that face our agri-markets. Interestingly, the lowest hanging fruit towards long-standing reform has always been related to procurement and marketing practices and yet it is here that the legislative noose has for most of India’s post-independence history been firmly constrictive. In fact, the constitutive states of the Union of India, drawing upon their constitutional mandate to legislate unto “Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases” [See Entry 14, State List (List-II), 7th Schedule to the Constitution of India], have enacted their own laws thereby giving birth to the Agricultural Produce Marketing Committee (APMC), archetypally referred to as the ‘mandi’. The APMC or the mandi thus became the first point of sale for notified produce ranging from cereals to pulses to vegetables as well as meat, poultry and fisheries.
CASCADING LEVIES AND ARTIFICIAL CONTROLS
Though the APMC does to an extent assist in price discovery, the multiplicity of taxes/fees/cesses/levies at every step of the process manifest themselves into cascading prices. The result is that an inflationary trend in retail prices ensues whereas the benefit to the producer, i.e. the farmer is nominal. The most damaging aspect of the APMC mandi hegemony is the legislatively imposed monopsony. Furthermore, the presence of almost 2500 geographically divided APMCs and approximately 5000 sub-markets drastically skews the entire operation of procurement and marketing into fragmented silos that doesn’t lend itself to actual price discovery owing to severe geographical limitations.
An already distorted and disjointed market has for decades further been undermined by artificial stock limits vide the draconian Essential Commodities Act, 1955 (ECA) and even though its inefficacy has been outlined by time and again, it continues to stifle the agricultural economy of India. Coupled with the various state APMC laws, the ECA gives almost unbridled power to the state governments to impose stifling and often ill- timed, illjudged and ill-fated control orders resulting in severe restrictions on stocking limits and inter-state movement of goods along with the grant of draconian powers of seizure and penalties in case of non-compliance. As has aptly been outlined by the Economic Adviser to the Government of India, many if not most of the market distortions in the realm of agrimarkets are a direct result of the ECA induced market disruptions, undermining of storage and warehousing and the resultant non-development of food processing industries.
E-NAM TOWARDS FARMERS’ LIBERATION
The policy makers in the Department of Economic Affairs (Ministry of Finance), being acutely aware of the plethora of issues emanating from the APMC mandi system, sought to remedy the same by introducing the e- National Agricultural Market (e-NAM) during the central government’s first term in office. The goal was to gear the agricultural economy of India towards open market trading and in consonance with that the vision of breaking the APMC/mandi stranglehold was succinctly laid out in the Economic Survey 2014-2015;
“The 2014 budget recognizes the need for setting up a national market and stated that the central government will work closely with the state governments to reorient their respective APMC Acts to provide for the establishment of private market yards/private markets. The budget also announced that the state governments will also be encouraged to develop farmers” markets in towns to enable farmers to sell their produce directly.” [‘A National Market for Agricultural Commodities – Some Issues and the Way Forward’, The Economic Survey 2014-15 (Vol-I, p. 126)]
As the name suggests, eNAM was intended to connect the mandis across the country and develop an online marketing platform. However since the same was predicated upon states’ participation in the project, it had a limited reach which reflects in the fact that only ‘585 wholesale regulated markets in 16 States and 2 UTs having connected to e-NAM” [‘Thalinomics: The Economics of a Plate of Food in India’, The Economic Survey 2019-20 (Vol-I,p. 276)], till date.
Since its launch in April 2016, the e-NAM has seen low to moderate trade on its platform and by no stretch of imagination was it a panacea for the ills facing the linkages between farmers and consumers/buyers. As outlined above, the state APMC participation was tepid at best and issues surrounding infrastructure, connectivity and lack of familiarity translated into continuing hegemony of the traditional mandi system. The new etrading platform was merely a collectivisation over electronic means of the existing mandis; evidently the reliance upon the APMC was as prevalent as ever. Despite the reformative outlook, the e-NAM system still enjoined the farmers to bring their produce to the local mandi for finding prospective buyers and thus the mandis continued to hold substantial sway. The goal, therefore, of a unified national market for agricultural produce remains woefully unrealised.
LEGISLATIVE COURSE CORRECTION
It is here that the central government, following up on the Finance Minister’s announcement, promulgated three crucial pieces of legislation on 5 June 2020; the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 (hereinafter ‘Produce Trade Ordinance’); the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 (hereinafter ‘Price Assurance Ordinance’); and the Essential Commodities (Amendment) Ordinance, 2020 (hereinafter ‘ECA Ordinance’). The goal was not only to dismantle the APMC hegemony and ECA distortions, but to further deliver tangible reforms in agricultural production, procurement and marketing with both the Produce Trade Ordinance and the Price Assurance Ordinance primed towards disentangling the farmer and his produce from the monopsonistic mandi model.
Notably, the Produce Trade Ordinance firmly establishes the ‘freedom to conduct trade and commerce in a trade area’ along with granting freedom to engage in interState trade or intra-State trade of scheduled farmers’ produce” [Section 3 and 4, Produce Trade Ordinance]. In fact, the concerned ordinance goes so far as to exempt the ‘scheduled farmers’ produce’ [Section 2(j)] from the excessive market fee, cess and levies charged by the APMC in the usual course of business [Section 6]. This ordinance is also a break away from the e-NAM for it doesn’t resign e-trading of farmers’ produce to the mandi set up. In fact, electronic trading platforms can be established by any “person” (not being an individual), “farmer producer organization” or “agricultural cooperative society” [Section 5].
ims to break the physical and geographical constraints of the APMC mandi, the Price Assurance Ordinance is a step towards ensuring marketability of the farmers’ produce via, primarily, contract farming. The foremost step was to ensure that the mandi no longer remains the first point of sale and in line with that ‘farming produce’ [See Section 2(a); The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020] was „exempted from the application of any State Act…established for the purpose of regulation of sale and purchase of such farming produce’ [Section 7]. In furtherance of its stated objective, the said ordinance lays out the broad contours and associated safeguards and is perched on three pillars being the producer, i.e. the “farmer”; the purchaser, i.e. the “sponsor”; and the pre-production pact between them outlining the farming produce, its quality and quantity along with the associated “farm services” to be provided by the concerned sponsor, i.e. the “farming agreement” [Sections 2(e), (f), (h) & (o)]
At the same time, while the said promulgations by way of Ordinance(s) directs towards a promising and effective market to the farmers, nevertheless, the predicament to end the existing system of government grain procurement at Minimum Support Prices (‘MSP’) still looks beyond reach. This directly point towards an obvious narration that while the Ordinance attempts to mark Centre’s exit from the procurement of farm yields, at the same time, it gives equal monopoly to the state government to regulate the same by earning substantial money from various levies on the value of produce transacted in APMCs. For instance, Punjab’s annual revenues from mandi fees and ‘rural development’ cess – which adds up to 6% on paddy and wheat, 4% on basmati and 2% on cotton and maize – are estimated at Rs. 3500- 3600 crores [see The Indian Express, ‘Three Ordinances and a protest – Why are Haryana and Punjab farmers angry?’ (12.09.2020)], which will definitely get hit if trades were to move from the APMC mandis.
A critical perusal of the Ordinances highlights that although the massive reforms were necessary as a part of the COVID relief package, the new laws have far-reaching implications, not just from legal but also socio-economic point of view, which cannot be unheeded at any cost.
Given a liberal trade environment to the farmers’ to trade outside APMC mandi, only on the strength of PAN card [Section 5: Produce Trade Ordinance], it is equally necessary for the state government to keep a tab on private stocks. This is easily achievable by making the registration of warehouses mandatory with the Warehousing (Development and Regulation) Act, 2007 (hereinafter referred to as ‘Act of 2007’). Under the said Act, there is already a provision of issue of electronic warehousing receipt [Section 2 (m), 2(u) r/w Chapter IV, Section 11-15, Act of 2007]. The same can also be used to keep a track on the limit of stock available and the same can even be used to raise loans.
SIDESTEPPING THE STATES ON FARM REFORMS
The APMC mandi reforms via the e-NAM mode were from the very beginning predicated upon each state ensuring that certain prerequisites were met; ‘(i) a single license to be valid across the state, (ii) single point levy of market fee and (iii) provision for electronic auction as a mode for price discovery.’ [‘Prices, Agriculture and Food Management’, The Economic Survey 2015- 16 (Vol-II, p. 120)]. However, with promulgation of the above ordinances, the government of the day has effectively sidestepped its reliance on states and their perceived ineptness in failing to reform and given an impetus to farm deregulation and privatization.
Further, with the coming in of the ECA Ordinance which in effect limits the draconian measures of the Essential Commodities Act, 1955 to ‘extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature’, [Section 2; The Essential Commodities (Amendment) Ordinance, 2020] the resolve to walk the talk on ensuring deregulated farmlands and integrated markets must be seen to be real and robust.
The measures taken here are surely far from perfect, in fact the central government has failed to look into a major reason for the failure of the e- NAM scheme, i.e. assaying and grading of produce. Towards the same, while the Price Assurance Ordinance leaves it to the farming agreement between the farmer and the sponsor, the Produce Trade Ordinance provides that the central government may prescribe modalities in that regard and thus it’s a possibility that rules and regulations will be prescribed sooner than later.
Though the said move by the Centre may be termed as an ‘historic agriculture development’, yet, considering the recent protests by farmers across Punjab and Haryana, one cannot overlook the fact that prima facie, the intent of the Ordinances seems to have inclination towards agri-business and not towards the security of farmers. At present, farmers in India needs exclusive state-supported schemes so as to ensure that the farmers are being adequately paid for damaged crops during any calamities or may even get minimum subsidies from the state government. This is also because considering how farmers are vulnerable and susceptible; it would be a massive challenge for them to enter into contracts with large corporates, owing to unequal interface with the market.
Even legally, as per the Constitution of India, Entry 14 of List II comprises agriculture as the subject of the state. Therefore, the three ordinances passed by the Centre are in violation of the Constitution of India as also, these ordinances are a direct encroachment upon the functions of the states and are against the spirit of co-operative federalism enshrined therein. This is also alarming as considering the ECA Ordinance, the Centre by taking the Ordinance route, had bypassed the parliamentary process. It is because when a proposed amendment is introduced in Parliament, the said subject is open to debate, scrutiny, comments and inputs from all the stakeholders.
Considering the overall scheme of the ordinances and the Amendment Act, it is clear that the same provides for regulation only in extraordinary circumstances which ideally may include any grave calamity, be it natural or man-made. Since the said expression is not defined anywhere in the Amendment Act, the preconditions of price rise of perishable and non- perishable goods will be frequently met even in remote situations of failure of monsoon (as in 2014-15 or 2015-16) or even excessive rains (as for soyabean in 2019-20) or pest attack (as in case of the Fall Armyworm attack on maize in 2019-20) [see The Wire, ‘The Fine Print of the Essential Commodities Act Ordinance Must be Carefully Parsed’ (22.06.2020)].
Needless to say, the said policies ought to have ensured sustainable farm growth taking into consideration the factors like climate change, land holdings, farmers’ interests and consumer capacity. India is still dependent on monsoon for producing sufficient food grains and majority of farm holding in India is small and marginal. In light of these factors, the accountability and effectiveness at each level ought to be balanced so as to expect fruitful outcome.
Another important aspect that necessitates comprehensive re-assessment is that a lot more clarity is needed on the management of food stocks as the Centre/State government do not have the requisite data so as to keep track of the stocks being held by private sectors. For centrally pooled stocks, the data is well within the public domain and the same is managed through computerized stock management system of the Food Corporation of India. However, no such system exists for privately held stocks. While the removal of restrictions on trading through Produce Trade Ordinance is a welcome step for the agriculture sector, the government should procure more information on private trade viz., demand of a commodity, stocks being held up by the private sectors and the estimated production vis-à-vis desired availability of stock.
In conclusion, it must be put forth that regardless of the above legislations coming about as a direct result of pandemic induced privations, the hope and assumption is that resumption of Parliamentary processes will only further endure the reforms brought about herein.
Indic Traditionalism & International Environmental Law: Tangible realities and ideation strategies
Noted historian Ian Morris, in his incredible works on Civilisational Economics, focuses on the nativity of geographical realities that cause industrialisation, mercantilism and other phenomena. E ven within the Indic parameter, it is possible that we understand and transform the operational basis and considerations of how the targets can be achieved. Sustainable development is a more overarching and discoverable conception in international environmental law.
The internalisation of economic liberties is another interesting reality that can be met through glocalisation. We must remember that China used glocalisation to uplift the middle class under Deng Xiaoping. The problem with the current establishment under Xi Jinping is that his BRI project and the string of pearls render debt trap and hostage diplomacy. However, it does not support any generic benefit to the Chinese people because the Chinese Communist Party has lost the cultural-geographic capabilities of the Chinese state due to its socialist policies.
Civilizations have an inherent connect towards the conception and relativity of its commitments in any period. Currently, while civilizations have transcended from monarchies and empires to democracies (in most of the cases), it is important to note how the legal and ethical commitments of every civilization would relatively transform. India is no different to any of it. However, while civilizations emerge and globalization is transformed, it is very important to realize that the nature of implementation and fulfilment of such commitments cannot be deemed as ethnocentric, whether by a top-to-down legal approach, or whether by contemporaneous but out-of-touch policy suggestions. No law and policy can survive civilizational and rational issues in a contemporary post-modern age, where it is proposed to adopt ‘globalist’ or too much generalist standards over issues related to either environment or cybersecurity. Environment issues, like technology – are politically consensual and motivated. It always depends on the balance struck and obviated.
Let us understand the conception of Indic traditionalism to deal with the issue of environment protection in the Indian context. Indic traditionalism refers to a plethora of schools of thought in Indian jurisprudence, anthropology and philosophy. Indic traditionalists believe that the conception of law and politics must have a naturalized and geographic purpose, which fits the naturality of cultures and social orders created in the state. Experts such as Sanjeev Sanyal, Subhash Kak & David Frawley have often regarded this as a culturalgeographic way of understanding issues of economics, environment, rule of law and others. Unlike socialism and capitalism, where profit and power are at the centre of action, the Dharmic way of protecting environment is – in line with the European model of Kuznets curve, where once developed countries attain relevant economic growth, they can optimise their developmental activities to focus on ecological solutions.
The Indic view is proposed to be better and effective than the Western view towards ideas such as Responsibility to Protect, Sustainable Development and Carbon Taxation in International Law in this work, due to the reasons as enumerated: • The Indic worldview is not expansionist and thus, does effectively discriminate power and competence with sheer and clear dissection, even within the ambit of law; • Since competence and responsibility are essential for post-civilizational democracies (even postcolonial in the case of the Global South), it is clear to state that the discourses and analyses on issues related to human rights shall not be based on ideological, political or metaphysical obscuration; • The Indic worldview does not reckon itself as the best and final means to endorse solutions, nor any worldview has been. Instead of calling out civilizational ideas as experimental, within the Indic worldview, we must look at the problems in different worldviews and considerations holistically, with a sense of positive conviction.
In the realm of environment law, Indic traditionalism focuses on a culturalgeographic conception of natural law, unlike a metaphysical and imaginatively materialistic conception of Catholics & Protestants, Communists and Islamists. The Indic worldview does not focus on extreme crony capitalism to defy natural order, neither it can rely on socialism to deprive individuals and communities from their indigenous economic liberties. Since, many civilizational texts are lost, and some of them are traceable and observable, it would be better to assume that the Indic worldview cannot be dogmatic. However, the propensity and reasonability of interpretations should always be idea-centric and practical. Vedic philosophers have analyzed wideranging texts and rituals which glorify various elements of Nature such as Mother Earth (Prithivi), atmosphere (Bhuvah), air (Vayu), space(akash), water (Aapa), and fire (Agni), all together known as Pancha Mahabhutas. The notion that Earth being the sustainer of all life and that human activity should not devastate the equilibrium the evident leitmotif of the Vedas. Swami Vivekananda also focuses on the Vedic view as a quote by him speaks clearly:
Man is first to be saved; he must be given food, education and spirituality.
HOW CAN INDIA PERCEIVE SUSTAINABLE DEVELOPMENT UNDER INDIC LENS?
Sustainable Development Goals of 2030, like the Millennium Development Goals – have been predicated on imaginative basis of humanist outlook towards the international community. More or less, the predicated understanding of the UN targets has been proposed with good faith, with no successful implementation till date. Noted historian, Ian Morris, in his incredible works on Civilizational Economics, focuses on the nativity of geographical realities that cause industrialization, mercantilism and other phenomena. Even within the Indic upfront, it is possible that we understand and transform the operational basis and considerations of how the targets can be achieved. Since sustainable development is a more overarching and discoverable conception in international environmental law, let us understand despite the fact that India does have its own limitations in terms of implementation and pause to lead to environment protection, it is with humble submission that the Indic take or worldview does not ignore the problems and fallacies that might emerge in the approach. However, it would be appropriate to proceed with the aesthetic propositions that the Indic worldview can provide to improve the legal and ethical ethos of SDGs in international law:
1. That since power and competence are separated, the scope of the sustainable development goals is to be considered within the sovereign considerations of states, and policies cum solutions must be tailormade, not internationalized until the approach is geographically cogent;
2. That a top-to-down approach to policy solutions does not serve the real cause of SDGs, and would threaten the cause of international environmental law;
3. Trust is an important consideration, but instead of discussing climate crisis and its mediation, it would be more appropriate to focus on the glocalization of the economic liberties and environmental necessities of the state, which are based on open, fairly bargained and politically consensual aspects of environmental problems;
4. Implementation reforms cannot be based on mere judicial overreach or review: it is seriously imperative that while a freer basis of democracy and dialogue is given, it must be based on the notion of responsibility, and not attractive and technocratic liability;
Let us discuss some of the important sustainable development goals, and their targets in the Indic context, to understand the fallacies and probable solutions that can be provided in order to lead towards better and transformative solutions:
• With respect to SDG 7 – which espouses emancipation of clean energy, India can enforce solar, geothermal and nuclear energy to render sustainable and cost-effective solutions. Even PM Modi inaugurated the Rewa solar plant amidst the COVID19 pandemic and emphasized on the One Sun One World One Grid initiative. However, a cost-benefit analysis is strictly necessary so that it does not become an economic failure like the Belt and Road Initiative by China. At the same time, India can focus on clean energy based on the characteristics of its ecological diversity and geographical abundance. However, having a rendition of renewables cannot combat climate change, and therefore, the principled usage of nuclear, solar and geothermal power must be based on support and self-prosperity considerations, which can be a good starting point with utmost humility.
• SDG 9, which is central to industrial development, entrepreneurship and innovation, is a great opportunity the Indian state has to achieve. The current socialist establishment which is wrongly enforced by a 42nd Amendment Act in the Indian Constitution is an obstruction to India’s economic and ecological development. Even the interpretations by the Hon’ble Supreme Court on ecocentric environment laws, especially by Justice Radhakrishnan, is good on paper, but on implementation, does not merit any support to the conception and practice of rule of law in economics and development. It is therefore important that India’s innovation strategies are not regarded as merely frugal. Like Africa, we can form frugal and cheap solutions and services. However, the Indic worldview can help here in this way – (1) instead of monopolizing services and products for an ultimatum of profit, it would be better to focus on the internalization of profiteering of indigenous entities such as MSMEs and proprietors; (2) taxation must be limited gradually but competition must be reasonable so that monopolistic considerations and corporatism are regulated with better geo-economic understandings, including the frugality & ingenuity of cyberspace and splinternet, based on the doctrines of Arthashastra by Vishnugupta Chanakya; and (3) conflict economics, ideology economics, or any means of economics, which defies the autonomy, integrity and dignity of any economic liberty exercised by an individual, a company or any other entity (legal);
• SDG 16 on Peace, Justice and Strong Institutions, for example can be achieved. However, the Indic worldview does not believe in the micromanagement of law and order circumstances. Regionalization and federalism are already within the ambit of the Indian Constitution from Arts 245 to 254. To expand its purpose, the socialist estimate of governance and administrative law, inherited from common law democracies such as the British (colonial) must be removed and replaced with better governance initiatives. However, a top to down approach will fail as it always has, and thus, it does not serve the cause of a rules-based international order. Instead, like the Gujarat Model, state governments in India can make a good example of competitive federalism, with a special focus on collective and cultural liberties, while maintaining the scope of individual liberties by removing the dichotomous behavior asserted by Western scholars across the globe. In the case of environment issues, Indic traditionalism can instrument cultural-geographic patterns from the states and UTs, which eventually can force the Central establishment to implement reforms. Even if the current political map of India does not support the same, the Indic worldview provides a patient, consultative and reasonable approach.
CAN INDIC TRADITIONALISM OVER ECOLOGY ISSUES TRIUMPH INTERNATIONAL REGULATIONS?
The approach of international law towards environmental issues stands in various domains, and has transformed in capitalist economies. However, there are some conflicting behaviours that most of the principles of international environmental law certify, which is important to be understood:
• International Environmental Law does not discriminate between issues of power and competence. Inducing a strictly technocratic conception of green criminology does not render any solutions to the problematic behaviour of liability frameworks;
• IEL instruments cannot internalize the rule of law issues that exist separately in the Global North countries and the Global South countries. While in the Global North regions, the issue is more related to the influence of corporatism over the corrosion of the geographic and civilizational originality of the regions, the Global South faces economic and skill issues at large. Immigration, excess volunteerism and too much financial stimulus to the Global South countries granted by developed countries sometimes turns out to be in contradiction with any possible chance that a cost-benefit analysis must have been done or the same might be a debt trap;
• Internationalization of liabilities does not help out in ecological issues, because in private international law, countries stay in disagreements & the nature of disagreements differ a lot in the Global North and Global South regions;
• The post-modern approach of international environmental law cannot be based on climate activism, extreme veganism and cultural Marxism. If radical legal principles are made and implemented, then it would not be just some topto-down approach imposed on indigenous economies, but it would also not support the cause of IEL, leading to its bitter collapse, which is possible even in the case of multilateral bodies such as the IPCC, WHO and UNICEF;
The Indic worldview therefore at an international level, can be based on these following underpinnings:
1. Foreign Relations and Eco-diplomacy;
2. Internalizing economic liberties;
3. Prevent hyphenation of environment policies and ideological manifestos;
Foreign Relations and Policy issues define but not enforce the peremptory norms of IEL. Therefore, a smooth transformation of IEL can be based on by seeking the diversification and lubrication of implementation mechanisms in various countries. There cannot be globalized approaches to appropriate ecological solutions. Sustainability can be based on autonomy of profit and trust, therefore protecting economic liberties, and harmonizing the environment. The internalization of economic liberties is another interesting reality that can be met through glocalization. We must remember that China used glocalization to uplift the middle class under Den Xiaoping. The problem with the current establishment under Xi Jinping is that his BRI project and the string of pearls, renders debt trap and hostage diplomacy. However, it does not support any generic benefit to the Chinese people because the Chinese Communist Party has lost the culturalgeographic capabilities of the Chinese state due to its socialist policies. Cashing support does not mean you can cause development schemes that can pay you back. This is the reason why the CCP has to face the middle income trap, which they can never overcome until 20-30 years or maybe more. India’s glocalization therefore must not be sensitive, but conscious – so that at communitarian levels, judicial overreach is avoided and better anthropological interpretations are done to serve both ecological and economic causes. Mainstreaming economics is one of the failures of American capitalism, and it must be taken into consideration anyways.
The hyphenation of environment policies and ideological manifestos is not helpful for the jurisprudential development of international law and politics. No jurist can define topto-down policies, which cannot serve proper and realistic causes. The best examples can be taken from the Kyoto Protocol, which again lacks at implementation, and enforces standards. In most of the cases, the focus on the equality of outcome is given. In reality, the equality of opportunity is lost the most. The Indian civilization has the inalienable right to earn some equality of opportunity, which must be internalized and free. If at a civilizational level, equality of opportunity is granted, then it is for sure that solutions to fix international environmental law are not far trodden.
Abhivardhan is Chief Executive Officer, Internationalism™ C/O AbhiGlobal Legal Research and Media LLP. Founder, Chairperson & Managing Trustee, Indian Society of Artificial Intelligence and Law And Member, MIT Technology Review Global Panel.
Sports & Commercial Arbitration: How both the ends meet
Modern organised sports trace their roots to sporting clubs and associations which believed in setting out their own private rules in order to minimise the role of the State.
The idea of fairness given the context must be an essential asset as it doesn’t refer to the sports competition, rather it refers to the commercial status of sports entity. In Club Rangers de Talca v. Fédération Internationale de Football Association (FIFA), the dispute comprised of payment to a football player while the Chilean football club, Club Ranger, was going through insolvency procedures. Once the club had been declared bankrupt in 2009, FIFA Dispute Resolution Chamber ordered Rangers de Talca to pay the amount of $21,000 to one of its former football players. Since the payment wasn’t made, the player initiated disciplinary proceedings against the Rangers in FIFA.
The worldwide practice of resorting to arbitration in terms of dealing with sports-related disputes did not really transpire instantaneously; It rather emanated from the general consensus among the sports sectors’ stakeholders who used to dwell upon the fact that arbitration was preferable over ordinary litigation before State courts. Given the context, sporting communities of recent times are also aligned with the same perception, that the sporting sector embodies several peculiarities that can be better understood by a specialized hearing body than by ordinary judges. Such preferential importance of sports arbitration forms its basis emphasizing the fact that sports sectors have always been favoring a “result-oriented” approach over a “truth-oriented” one as speed and finality are the two fundamental needs of organized sports competition and of related disputes. Within the said ambit, arbitration appears to be the only resolution mechanism that can provide both the sports competition as well as the disputes related to such competition with the proper resolution than that of ordinary litigation.
In order to exemplify the above-mentioned preference of result-oriented approach in sports competition and in disputes related to it, the Court of Arbitration for Sports (CAS) and its awards emphasizing the so-called “field of play” doctrine, stating that sports referees or judges can make their own decisions on the field and these decisions cannot be reviewed by CAS arbitrators unless these decisions are influenced by arbitrariness or bad faith – must be referred.
In Mendy v. AIBA (CAS OG 96/06), a referee’s decision to disqualify a boxer for a low blow had been challenged, and the CAS ad-hoc Panel even after accepting the jurisdiction over a game rule, considered it inappropriate to exercise the same. Given the context, the ad hoc Panel was of the opinion that the referee’s decision, being purely technical and pertaining to the rules of the concerned federation, could not be reviewed regarding the application of these rules. The restraint was way more complicated because, from the perspective of the area where the action took place, the ad hoc Panel was not as suitably positioned as the referee in the ring or ring judges who decided the matter. The Panel, at the same time, also enunciated that such restraint must be limited to technical decisions or standards; it doesn’t apply when an official’s field of play decision seems to be tainted by fraud or arbitrariness or corruption.
In Segura v. IAAF (CAS OG 00/13), the CAS arbitrators had shown their incapability to review the decision taken on the playing field by judges, referees, umpires, or other officials if any, who are empowered with applying what is sometimes called “rules of the game” or “field of play” whereas the exception lies on the circumstances when such rules have been applied in bad faith, e.g. as a consequence of corruption. And since the aforementioned did happen at the relevant event, CAS arbitrators were mere spectators with no official role.
In addition, the award ordered in Swedish National Olympic Committee & Swedish Triathlon Federation v. International Triathlon Union (CAS OG 12/10) had been pursuant of the same line of CAS jurisprudence which delineated that, the CAS would only review a field ofplay decision in case the circumstances related to that decision is taken arbitrarily or in bad faith.
or in bad faith. Understanding the basis of field of-play principle within the CAS jurisprudence, the following opinion of the Hon. Michel Beloff QC in Yang Tae Young v. FIG (CAS 2004/A/704) seems to be of utmost importance.
“Finality is in this area allimportant: rough justice may be all that sport can tolerate”.
ARBITRATION & SPORTS: WHERE THE CONNECTION LIES
From the perspective of common socio-cultural background, the profound reasons existed in the said context are self-explanatory to the sports sector’s extensive resort to arbitration. Given the prospect, reference must be made in relation to the transition of how the following six features of both, commercial arbitration and modern competitive sports, within or without the Olympic movement were meant to meet and marry.
Tracing the Origin: Given the context, both modern commercial arbitration and modern organized sports trace their origins to the nineteenth century. It was the time when the Industrial Revolution sparked the development of economic liberty and caused an exponential growth of technology, manufacture, and commerce. This revolutionary era apart from the above developments and growth also brought into realization the following two prospects which, in recent times, were served as the stepping stones for both the commercial arbitration and organized sporting sectors.
The merchants of that time felt the need for a quick and specialized response to disputes which was why the concept of arbitration could come to the surface
The need for increasing the leisure time allowing individuals of the rising middle class to engage in sports, either as performers or as spectators, was felt. As a result, the first sporting clubs and sports associations were established back then.
Contractual Autonomy & Associational Freedom: When it relates to international arbitration and organized sports, both of them share the expression of contractual autonomy and associational freedom. In order to make this terminology more explicit with the given subject matter, it is to be considered that the parties often agree to submit their disputes to arbitration while selecting a private mechanism for dispute resolution that tends to minimize the role of sovereign States. With proper observance, it seems to be no coincidence that arbitration traces many of its roots to the trade association, commercial guilds, and religious associations. Given each of these arrangements, the members of a community most often get into disputes with each other but their ways to resolve such disputes tend to revolve around a mechanism of their own choice and design. Parties given the context prefers such because they desire to minimize the effects of their disputes on their underlying and shared community. At its fundamental context, parties agree to arbitrate at times of disputes because it guarantees them maximum autonomy and control over the resolution of their disputes and at the same time the parties can be assured that the resolution of these disputes would not disrupt or damage their underlying relationship, out of which the disputes arose in the first place.
On a similar token, modern organized sports also trace its roots to sporting clubs and associations which believed in setting out their own private rules in order to minimize the role of the State. Not very coincidentally, the entire sports system also dwells upon the same quote – contractual autonomy and associational freedom – as the participation of athletes and teams in the competition are subjected to their own consent for registering themselves with sports associations and entering the competitions. In the said context, athletes and teams fall under the contractual obligations to comply with the rules of the game and to abide by all decisions imposed on behalf of the sport’s governing bodies, such as those issued by referees on the field or by disciplinary judges off the field. Considering the recent practice of the widespread acceptance by people within the sporting community of rules and decisions issued by such private authorities – it is now well evident that such sports authorities in relation to their legislative and judicial mechanism dwell strongly upon their own choice and design.
Resentments towards Intervention of State Judges: In line with the above-discussed point, both the commercial arbitration community, as well as the sports community, oppose the intervention of State judges into their own disputed matters. Given the context, such resentments towards the intervention of State judges have its relevance in the light of maintaining privacy, expertise, and finality in their dispute settlement process. Further, the State judges are not very enthusiastic about such a dispute resolution mechanism which is why these judges have often been hostile towards the private process of settling disputes within both, the commercial and sports domains.
Transnational System of Justice: Arbitration and Sports have respectively developed set of rules that, while interacting in many respects with States’ legal system, tend to form complex private law system within the ambit of its own transnational levels. Having said that, international arbitration doesn’t only belong to a transnational system of justice but has also been characterized as expressing a transnational autonomous legal system that is often known as “Ordre Juridique Arbitral” or “Arbitral Legal Order”. On the other, organized sports have also been famous for its peculiar transnational branch of law as sports law, which has developed “under its own impetus, without any legislative underpinning to speak of” and is “inherently international in character”. Sports law, given its coherent transnational system of law, has also been characterized as “Ordre Juridique Sportif” or “Sports Legal Order” by State courts, legislators, and many scholars who with the help of some Italian jurists applied the notion of ‘legal pluralism’ to sports many decades ago.
Lex Mercatoria & Lex Sportiva: In relation to the above-discussed point, international arbitration and organized sports have both yielded the application of substantive transnational principles, standards, and rules which are respectively known as “Lex Mercatoria” and “Lex Sportiva”. As per Oxford Public International Law, the term “lex mercatoria” or law merchant is used to designate the concept of a national body of legal rules and principles, which are developed primarily by the international business community itself on the basis of their custom, industry practice, and general principles of law that are applied in commercial arbitrations as well as international in order to govern transactions between private parties and States, in transborder trade, commerce, and finance. Given the context, if there is no express choice of law in the arbitration agreement allowing the parties to act as amiable compositors, arbitrators may apply the source of “lex mercatoria.” In Sapphire International Petroleum Ltd. v. National Iranian Oil Company, the tribunal while considering the conflict of law rules, concluded that Iranian law should be followed to solve the dispute. Nevertheless, the parties’ intention and the fact that the contract had no governing law helped the tribunal reconsider that the use of Iranian law was not contemplated by the parties. As a result, the arbitrators determined those general principles of law accepted by civilized nations which are also known as the principle of “lex marcatoria” should be employed to decide the dispute.
On the other, the term “lex sportiva” has been defined to be constituted by a set of unwritten legal principles of sports law, having been derived from the interaction between the sports rules and general principles of law, developed and consolidated along the years through the arbitral settlement of sports disputes, both at the CAS and the at other dispute settlement institutions specialized in sports. In consideration of the above prospect, the existence and nature of such sets of rules despite being hotly debated, and often doubted, by scholars and practitioners, forms the entire basis through which disputes are regularly adjudicated both in commerce and sports. Having said that, adjudication of this kind doesn’t only depend on State laws but also on the basis of principles, standards, and rules derived from usages, practice, and the never-ending spirit of trade and competition. Apart from that, the idea of fairness given the context must be an essential asset as it doesn’t refer to the sports competition, rather it refers to the commercial status of sports entity. In Club Rangers de Talca v. Fédération Internationale de Football Association (FIFA), the dispute comprised of payment to a football player while the Chilean football club, Club Ranger was going through insolvency procedures. Once the club had been declared bankrupt in 2009, FIFA Dispute Resolution Chamber ordered Rangers de Talca to pay the amount of USD 21,000 to one of its former football players. Since the payment wasn’t made, the Player initiated disciplinary proceedings against the Rangers in FIFA. Consequently, assets of the Rangers were acquired by Piduco S.A.D.P. Knowing about the debt owed by Rangers, Piduco informed FIFA that it had no liability towards the prior debt corresponding to the Club. FIFA pondering upon the fact considered Chilean Insolvency Law on the basis of which employees have a privileged credit and they get paid first. The court, therefore, opined that the player failed to join the creditor’s list of the bankrupt club while he was well aware of such procedure. The court, considering the said aspect, concluded that the player was responsible for the sanction imposed by FIFA DRC in 2009. While analyzing the cases of bankruptcy, the FIFA DRC Panel was of the opinion that the declaration bankruptcy of different legal system disables the bankrupt entity to make further payments until there is a decision of insolvency proceedings. This gave birth to inequities as all clubs play at the same competition but the clubs in bankruptcy stay under the protection of bankruptcy laws, whereas the other clubs must make their payments when they are due. In the opinion of CAS ‘such inequity of treatment and opportunities is contradictory towards the essence of the so-called principles of “lex sportiva”’.
Institutional Framework: Keeping in mind the discussed situation, both arbitration and organized sports have now given rise to important and influential non-governmental organizations which further led to the establishment of an institutional framework within their respective domains. On the one hand, disputes related to commercial contracts are nowadays commonly arbitrated under the administration of several private arbitration institutions such as the International Chambers of Commerce (ICC), The London Court of International Arbitration (LCIA), American Arbitration Association (AAA), etc; On the other hand, international sports institutions likewise International Olympic Committee (IOC), Fédération Internationale de Football Association (FIFA), The Union of European Football Associations (UEFA), etc. over the years have also emerged as a prominent aspect in the context of international relations. Also, in the eyes of the public opinion, it has gained emergence with respect to the fact that they often deal on equal footing with sovereign States in relation to the bids for organizing the major sports events.
Given the premise of such interweaving relationship mentioned above between arbitration and modernized sports sectors, a specialized or to some extent simplified model of arbitration known as Sports Arbitration with peculiar features of its own, got introduced in the sports fraternity in order to amicably resolve the dispute arises in the field of sports. Talking about disputes in conformity with the above principle of contractual party autonomy in both commercial arbitration and modern sports, it seems indispensable to construe whether “lex sportiva” being the transnational source of sports law, can become the governing law to sports’ contracts in the same manner that today, “lex mercatoria” being the transnational source of arbitration has become the preferred choice of law in a contract for the parties in disputes.
Lex Sportiva: A governing law for Sports’ Contracts
Given the terminology of “lex sportiva”, it usually speaks of two of its major viewpoints that really define its true perspectives in the world of sports. The first perspective having been emanated from a narrow viewpoint, emphasizes the concept of “lex sportiva” to be made of reiterated decisions in awards issued by CAS, and the second one, based on a broader viewpoint, entitles that the said concept doesn’t only depend on to the CAS decision but also belongs to Sports Governing Body (SGB) regulation. In consideration with the broader perspective mentioned above, “lex sportiva” being the SGB regulation higher the possibilities to become the governing law for sports contracts. The only clarification needed in this regard to make the viewpoint prevalent in the world of sports is to ensure that the contractual party rather than having a clause in the contract expressly stating that “lex sportiva” is the governing law and a specific set of SGB regulations is the contractual choice of law, must, on the other, imply “lex sportiva” as their governing law. Having said that, the aforementioned concept of “lex sportiva” under the realm of its narrow viewpoint seems to be emanated from the CAS decisions that eventually enforce the SGB regulations. The scrutiny in this regard appears to be a bit challenging as “lex sportiva” doesn’t only belong to SGB regulation but also refers to CAS decisions on how to interpret such regulations. However, the SGB regulations being not so self-sufficient in the given aspects, the principle of “lex sportiva” usually complements such regulation with respect to the feasible grey areas in the law.
However, the principle of party autonomy, to a larger extent, favors the party itself in empowering them to select their preferred law whose nature-given certain situations, may not always have to be the domestic law, in order to rule their agreement. Having said that, parties while drafting their arbitration clause selecting CAS as the institution to host their upcoming arbitral disputes arising out of contract, must keep in mind that CAS already has its own models of standard clauses for facilitating the said procedure.
According to such clause, it only specifies that disputes will be ‘resolved definitively in accordance with the Code of sports-related arbitration’.
The said Code, unlike other model clauses available in other arbitral institutions, comprises the CAS rules as well as the regulations of the federation, association, or sports-related body in order to ensure resolution according to the clause of such Code.
Therefore, parties referring to their applicable laws would not be considered enough for CAS to offer them such a possibility in return. Considering all if parties still willing to have “lex sportiva” as their rules of law, should perhaps draft an arbitration clause based on the standard provided by CAS with an inclusion of a text stating that the governing law of the contract will be “lex sportiva”
And they turned heroine Kangana into a ‘hero’
Equating Mumbai with POK is condemnable, no doubt, but making a mountain out of a molehill is not any wiser too.
During a discussion hosted by the Lokmat Media group’s annual magazine ‘Deepotsav’, Kangana once said, “I will get all the work if I have talent.” It seems that it was not proper to cross swords with such a doughty girl from the Himalayas. Sharad Pawar too advised the chief minister to ignore the issue but much water had flown down the creek by then.
I am astonished by the way Kangana Ranaut’s case has received such prominence. Is she such a big social or political celebrity as to cause a storm by her irresponsible statement? I am displeased with her statement vis-a-vis the Mumbai Police and the one likening Mumbai to PoK, but I do not think it is necessary to give it so much importance! She is a film heroine but politics turned her into a ‘hero’.
There has always been a respect and esteem for Balasaheb Thackeray’s place ‘Matoshree’ throughout Mumbai. It also inspired fear but Kangana has shattered that fear or, in her own words, arrogance. I was reminded of the film industry of the South where MGR, NTR, Karunanidhi and Jayalalithaa became the real life heroes in politics after playing several characters in their films. Kangana’s speciality is that she did not bow down to the stardom of Bollywood people. She has been fighting with impunity. She never compromised.
There is a boldness and passion in her. She exhibited the courage to fight the people of the industry from where people earn their livelihood and where they get prestige and honour. She has been fighting the high and mighty of the Bollywood without thinking what will happen to her next? In Bollywood, I have seen big heroes and heroines making compromises, but is not ready to budge an inch and works on her terms. During a discussion hosted by the Lokmat Media group’s annual magazine Deepotsav, she once said, “I will get all the work if I have talent.” It seems that it was not proper to cross swords with such a doughty girl from the Himalayas. Sharad Pawar too advised the chief minister to ignore the issue but much water had flown down the creek by then.
Kangana was asked not to return to Mumbai! The war of words that followed provided unusual entertainment to the people during corona crisis. Kangana hit back and declared that she would return to Mumbai soon. The way she arrived in Mumbai and exited the airport, I felt like I was watching a scene from a film. Escorted by armed commandos, she moved like a queen. The way she got into the car was testimony to the fact that she was neither under stress nor had any fear. When she reached home, she saw some portion of the office demolished. Immediately, she raised the issue of Kashmiri Pandits and established herself as a symbol of resistance to Shiv Sena.
Actually, there was no need for the Shiv Sena to give the kind of response it gave to her statement. A few days later, no one would have even remembered what Kangana Ranaut had said.
In politics, especially when a party is in power, it should take every step with much caution and deliberation. The reaction to an action should be analysed. Many things have to be ignored. This makes sense, but the kind of reaction that came from Shiv Sena made Kangana ride on a wave of sympathy. On the social media, people are now asking the government as to what happened to the list of 4,000 illegal buildings prepared in 1992? Have they all been demolished? Have the thousands of other small illegal constructions been razed too? Social media is abuzz with reactions that such an action was taken against Kangana because she is questioning the government. In politics, a true leader is the one who keeps an eye on every turn of event. On its part, New Delhi (the powers that be) grabbed the opportunity and jumped in, extending ‘Y plus’ security cover to Kangana. A tug of war between Mumbai and New Delhi was already going on. This gave the governor a chance to step in to lecture the state government. It is not usual that a prominent person like the governor intervenes in a matter like demolition of an illegal construction.
The BJP has criticised Kangana’s statement about PoK, but has termed the demolition of her office an act of retaliation. Then the sages and saints of Ayodhya have come out in support of Kangana. Akhara Parishad president Mahant Narendra Giri and Hanuman Garhi’s Mahant Raju Das have warned that if Uddhav Thackeray comes to Ayodhya, he will face opposition.
In fact, there was no point in blowing the Kangana episode out of proportion. The Shiv Sena has always supported the Mumbai film industry and there is no harm in saying that it has always protected it. When the underworld dons like Dawood Ibrahim, Chhota Rajan and Ravi Pujari terrorised the entire film industry, the Mumbai police and Balasaheb Thackeray offered them full protection. Balasaheb left no stone unturned to rein in these criminal gangs. Matoshree became a place of reverence for one and all. Balasaheb supported all the artistes, new and old, alike. He had a deep and personal relationship with everyone. Uddhav Thackeray’s relations have also been good. In this background, one wonders what made the Shiv Sena government to turn a heroine opposing its action into a ‘hero’!
The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha.
Making Things Happen: Technology & Financial Sector
The Prime Minister has time and again emphasised the need of technology in various spheres of governance and in delivery of services. In tune with this approach, digital initiative in the country, especially the one in financial sector, was also at the behest of PM Narendra Modi.
Ministry of Corporate Affairs has authorised just five banks (Indian Bank, HDFC, ICICI, PNB, UBI and SBI) for collection of MCA21 fee. By implication, only the account holders of these banks can avail Internet banking facility. Further, payment via challan can only be made in the authorised branches of these above five banks.
COVID has brought forth new and unforeseen challenges before the government and the people. Each sector has been hit but the worst is being faced by the small scale units. This, in turn, has impacted employment. How to get the economy back on track? There are no easy answers. There is indeed grave risk of inflation if the government prints more currency as the poorest are hit the most by inflation. One of the options, however, is to use COVID as an opportunity to streamline processes and leverage such developments as have the potential of reviving economic activity. This doesn’t cost money.
Everyone agrees that technology can be a game-changer. The Prime Minister has time and again emphasized the need of technology in various spheres of governance and in delivery of services. In tune with this approach, digital initiative in the country, especially the one in financial sector, was also at the behest of the Prime Minister. This initiative has started paying dividend. Digital Index of India has moved up substantially making India one of the most digitally connected country in world. This has been more pronounced in payment space where India has become a world leader in last five years. The effort should now be to take it to the next stage and enable even the smaller financial entities to come on board. This is possible and would be of utmost benefit to units belonging to the beleaguered Medium, Small Scale and Micro Enterprises sector
At present, 25 banks are linked to enable their customer to pay their Income Tax through internet banking or by cash deposit at branches of these Banks. However, customers of only 6 banks are permitted to pay through credit cards and debit cards issued by these banks and no payment can be made by UPI.
For Goods and Services Tax (GST) too, only 25 banks are linked to enable their customer to pay by internet banking or by cash deposit at branches of these Banks. However, ironically, no one is permitted to pay by using any credit card and debit card .Payment can’t be made by UPI either.
Ministry of Corporate Affairs has authorized just five banks (Indian Bank, HDFC, ICICI, PNB, UBI and SBI) for collection of MCA21 fee. By implication, only the account holders of these banks can avail internet banking facility. Further, payment via challan can only be made in the authorized branches of these above five banks.
Customers of only 17 banks are permitted payment through credit cards and debit cards issued by these banks. RuPay cards are not accepted. In this case too, payment can be made by UPI.
India has more than 2000 banks, with over 900 million debit cards and over 100 million credit cards. If a person does not have account in one of these banks, he has to go to one of these bank and furnish cash or cheque and then pay.
All e-commerce sites, even in the private domain, are enabled to accept all debit cards and credit cards including global cards. NPCI has issued of RuPay that has emerged as our national card. It has over 700 million customers. Other issuers are Master Card and Visa. As a consequence of the existing protocol for payment, all NRI and PIO find it hard to pay taxes on-line. Practice all over the world is that a person or any entity can use debit card or credit card to make payment of taxes to government.
To overcome the handicap arising out of only limited number of instruments and banks being allowed to carry out the aforementioned transactions, many large business entities in India maintain accounts in banks which are authorized to carry out such transactions while their main banking is with a bank which is not permitted to process these payments. The biggest sufferers are the MSME as they find it difficult to maintain and manage multiple bank accounts.
There is another associated problem. No e-commerce site charges any fee for payments. However, as per RBI guidelines, Banks levy a fee are paid for every transaction relating to such payments.
The existing arrangement that leads to non-digital transaction results in unnecessary visits to bank branches and paper work (as a consequence of issue of cheques and documentation) which not only has additional financial cost but is also environment un-friendly.
Each collector of payment, in this case CBDT, MCA and GST has bank accounts approved by CGA or GST Council. Any payment made by any method-Internet Banking, Debit card, Credit card and UPI will be credited to one of these account only. Hence no fresh account approval is needed from CGA or GST council to enable all cards and UPI
This will require integration of these sites with those of card issuers namely NPCI, Master card and Visa. It should not be a difficult proposition for these agencies to do this back-end integration as this has been done by even small e-commerce companies
Digital payment is an integral part of ease of doing business. Hence, it would be worthwhile mandating for all the payments received by various agencies to accept all debit and credit cards of all the banks and payments by UPI. It will not only enable swifter transactions but will help real-time accounting and elimination of paper work, one of the objectives outlined for going digital. It will also induce even smaller entities to go digital. Above all, this will fulfil PM’s dream of taking digital transactions and benefits of digitalization to masses.
Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Office. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.
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