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Nortel Network’s case: Need to further amend Section 11 of the Arbitration Act

Section 11 of the Arbitration Act is an important provision which provides for intervention of the court before commencement of the arbitration proceedings. It empowers the court to examine the existence of an arbitration agreement while deciding the application for appointment of an arbitrator.

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The Arbitration and Conciliation Act, 1996 (“the Arbitration Act”) provides for minimal judicial intervention. Perusal of various provisions like Sections 8, 9, 13, 16, 34, etc. would show that it provides a time period within which certain things are to be done. In other words, it deals with what can be called as the ‘effect doctrine’. For instance, when, despite the fact that a valid arbitration agreement exists between parties and a party files a civil suit for recovery of an amount, the other party/Defendant can move an application under Section 8 of the Arbitration Act before filing its first statement on defence and seek reference to arbitration. Therefore, the effect of such an application filed under the said provision is to refer the parties to arbitration if existence of arbitration agreement is not dispute. Therefore, the purpose of providing a definite time period is to kick start the arbitration proceedings at the earliest.

Though, the aforementioned provisions provided for a definite time period but, Section 11 of the Arbitration Act, which deals with appointment of arbitrator by court, does not mention any time period within which a party has to file an application for getting an arbitrator appointed. It only mentions that after sending a notice invoking arbitration under Section 21 thereof, a party has to wait for 30 days and in case, of refusal to nominate an arbitrator, a party can file an application before a court. Therefore, the issue is what is the time period within which a party is required to file an application before a court for appointing an arbitrator once the other party has refused to appoint an arbitrator or has not responded to the notice invoking arbitration and 30 days’ time period is over.

SCOPE OF SECTION 11:

Section 11 of the Arbitration Act is an important provision which provides for intervention of the Court before commencement of the arbitration proceedings. It empowers the Court to examine the existence of an arbitration agreement while deciding the application for appointment of an arbitrator.

After implementation of the Arbitration Act, an issue had arisen as to what is the nature of the power exercised by the Chief Justice or his designate under Section 11 – whether it is an administrative order or a judicial order, and also, what enquiry does the Court has to conduct before proceeding to appoint an arbitrator. Initially, the Supreme Court in Konkan Railway Corpn. Ltd. v. Mehul Construction Co., AIR 2000 SC 2821 had held that the powers of the Chief Justice under Section 11(6) of the Act of 1996 are administrative in nature and that the Chief Justice or his designate does not act as a judicial authority while appointing an arbitrator. The same view was later reiterated in Konkan Railway Corpn. Ltd. v. Rani Construction (P) Ltd., AIR 2002 SC 778. However, in the year 2005, the Constitution Bench of the Supreme Court in SBP and Co. v. Patel Engg. Ltd., AIR 2006 SC 450 (7J) over-ruled those judgments and specifically held that the order passed by the Chief Justice is not administrative but judicial in nature and hence, the same is subject to appeal under Article 136 of the Constitution of India. This judgment was, thereafter, further clarified in National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., AIR 2009 SC 170 wherein, the Court listed out certain issues which can be considered in an application filed under Section 11 that is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he can also decide, that is, issues which he may choose to decide; and (iii) issues which should be left to the Arbitral Tribunal to decide.

AMENDMENT MADE TO SECTION 11 & INSERTION OF SECTION 11(6-A)

As a result of these judgments, the door was wide open for the Chief Justice or his designate to decide a large number of preliminary aspects which could otherwise have been left to be decided by the arbitrator under Section 16 of the Arbitration Act. This position was in sharp contrast to the judgment of the Supreme Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., AIR 2005 SC 3766, where (in the context of Section 45 of the Act of 1996), it had ruled in favour of looking at the issues/controversy only prima facie.

The above position continued till the amendment was brought on 23.10.2015 in the Arbitration Act. Vide the amendment, the words “the Chief Justice or any person or institution designated by him” wherever it occurred in Section 11 was substituted by “Supreme Court or as the case may be the High Court or any person or institution designated by such Court”. Further, Section 11(6-A) was inserted by which, the power of the Court was restricted only to see whether there exists an arbitration agreement. The amended provision in sub-section (7) of Section 11 provided that the order passed under Section 11(6) shall not be appealable and thus, finality is attached to the order passed under this section. Also, sub-section (8) was inserted in Section 11 which required the prospective arbitrator to make disclosure in terms of Section 12(1) of the Act of 1996. It is important to note that sub-section (13) was also inserted in Section 11 and it casts a statutory obligation on the Court to dispose of the application filed under this provision within a period of 60 (sixty) days from the date of service of notice on respondent. Hence, after the amendment, the Court is required to only see whether an arbitration agreement exists – nothing more, nothing less. Hence, by virtue these amendments, the judgments rendered in  SBP & Co.’s case and Boghara Polyfab’s case were legislatively overruled.

NO CONCEPT OF ‘IMPLIED CONSENT’ IN APPOINTING ARBITRATOR

Further, the remedy under Section 11 of the Arbitration Act can be invoked only when the procedure prescribed under the arbitration agreement has not been complied with. For instance, if the other party upon receipt of the request to appoint an arbitrator as per the agreed procedure, does not appoint an arbitrator within 30 (thirty) days of receiving notice invoking arbitration, then a party can approach a Court by filing an application under Section 11 seeking appointment of arbitrator. There is no concept of ‘implied consent’ in appointing an arbitrator. Also, a right of the party to appoint an arbitrator does not cease immediately upon the expiry of 30 (thirty) days. It ceases or the party forfeits or waives its right to appoint an arbitrator only when the other party files an application under Section 11 before a Court. No appointment can thereafter be made by a party placing reliance on the arbitration agreement. Therefore, if a party appoints an arbitration after a period of 30 (thirty) days but, before the other party files an application under Section 11 before a Court, such appointment is valid.

NECESSITY OF FURTHER AMENDMENT IN SECTION 11

It is important to point out here that after the Insolvency and Bankruptcy Code 2016, it is the Arbitration Act which being amended very frequently by the Legislature. The Arbitration Act or the new Act was implemented to resolve issues which were being faced in the old Act that is, Arbitration Act, 1940. But, as can be seen, some problems still were left unresolved by the new Act. For instance, the Arbitration Act, 1940 did not provide a time period within which the arbitral proceedings were required to be concluded. Though, Arbitration Act, 1996 was implemented and it repealed the old Act however, the new Act also did not provide any time period to conclude arbitral proceedings. The time period to conclude arbitration was provided by Section 29-A, which was inserted by the 2015 Amendment. If the Legislature would have had the vision, it would have rectified this at the time of implementing the new Act and not by making amendment after almost 20 years.

Another instance is Section 11 of the Arbitration Act. Perusal of Section 11 would show that it does not mention any time period within which a party is supposed to file an application under Section 11 once a notice under Section 21 of the Act of 1996 has been received by the other party and no step has been taken to appoint an arbitrator within 30 days. This is in stark contrast to the other provisions like Sections 8, 9, 13, 16, 34, etc. of the Arbitration Act as well as the object and purpose of said Act.

The question, therefore, arises is what will be the maximum time period within which a party has to file an application under Section 11 after issuance of a notice under Section 21 of the Act of 1996? It is pertinent to mention that though, the provisions of the Limitation Act, 1963 (“Limitation Act”) are applicable to arbitration proceedings however, it also does not specify the time period within which an application seeking appointment of an arbitrator is to be filed before a Court. Also, there is a difference between the period of limitation for filing an application seeking appointment of an arbitrator and period of limitation applicable to the substantive claims made in the underlying contract. For recovery of any amount, the period of limitation is 3 years from the date when the right to sue accrues. Since, none of the Articles in the Schedule to the Limitation Act provides a time period for filing an application under Section 11, therefore, it would be covered by the residual provision Article 137 of the Limitation Act which provides a period of limitation of 3 years from the date when the right to apply accures. Therefore, what flows from the above is that an application under Section 11 can be filed within a period of 3 years from the date of refusal to appoint an arbitrator after receiving notice under Section 21 thereof or, on expiry of 30 days after issuance of notice under Section 21, whichever is earlier.

NORTEL NETWORK’S JUDGEMENT

Recently, the Supreme Court in Bharat Sanchar Nigam Ltd. v. Nortel Networks India Pvt. Ltd, [2021 SCC Online SC 207, C.A. No. 843-844 of 2021 judgment dated 10.03.2021] had the occasion to dwell into this issue. In this case, a contract was awarded by the Appellant to the Respondent for planning, engineering, supply, insulation, testing and commissioning of GSM based cellular mobile network in the southern region covering Kerala, Karnataka, Tamil Nadu, Andhra Pradesh circles and Chennai telephone district. Some disputes arose under the contract and the Appellant withheld an amount of Rs. 99 crores (approx.) of Respondent towards liquidated damages and other levies. Vide letter dated 13.05.2014, the Respondent raised a claim for payment of the said amounts and in response, vide letter dated 04.08.2014, the Appellant rejected the claim. After a period of 5 ½ years, the Respondent issued a notice invoking arbitration under Section 21 of the Arbitration Act and requested appointment of an arbitrator. The Appellant responded to this letter on 09.06.2020 and stated that the claims are ex facie time barred. Thereafter, Respondent filed an application under Section 11 and the High Court referred to the disputes to arbitration. Hence, the appeal was filed by the Appellant before the Supreme Court. The Supreme Court after taking note of Sections 8, 9, 13, 16, 34, etc. of the Act of 1996 and Article 137 of the Limitation Act observed that a period of 3 years for filing an application under Section 11 would run contrary to the scheme of the Arbitration Act. However, since, there was no express provision to regulate this, it thus relied upon Article 137 of the Limitation Act and held that the application filed by Respondent under Section 11 was within limitation but, at the same time, directed the Legislature to make amendment and prescribe a specific period of limitation within which a party may move the court for making an application for appointment of the arbitrator. Further, though, the Court held that the application filed under Section 11 was maintainable but, it also held that the claims of Respondent were ex facie time barred. Hence, it allowed the appeal and set aside the order of the High Court.

CONCLUSION

Hence, the recommendation made by the Supreme Court to make amendment to Section 11 will help in speedy commencement of arbitral proceedings as sub-section (13) already casts a statutory obligation on the Court to dispose of the application filed under this provision within a period of 60 days from the date of service of notice on Respondent. In my personal opinion, an application under Section 11 should be filed within a period of 60 days from (a) the date of refusal to appoint an arbitrator after receiving the notice under Section 21 or, (b) on expiry of 30 days statutory waiting period whichever is earlier. Further, a provision should also be made for condoning delay in filing the application beyond 60 days provided sufficient cause exist. Such period should not exceed a further time of 30 days.

It is important to point out here that after the Insolvency and Bankruptcy Code 2016, it is the Arbitration Act which being amended very frequently by the legislature. The new Act was implemented to resolve issues which were being faced in the Arbitration Act, 1940. But, as can be seen, some problems still were left unresolved by the new Act.

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Right to Equality and the Indian Constitution: An analysis

Maseeh Syed Yazdani

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INTRODUCTION

The Constitution is the bedrock of the nation’s democratic and secular architecture. After a prolonged period of deliberations and debates, delegates of the Indian population drafted the Indian Constitution. The constitution of India lays down fundamental rights for its citizens in order to safeguard and protect basic rights that can be enjoyed by the Indian citizens. There are six fundamental rights that are given recognition by the Indian constitution, namely, right to equality, right against exploitation, right to freedom, right to freedom of religion, right to constitutional remedies and lastly the cultural and educational rights.

Article 14 of the Indian constitution lays down the foundation of the fundamental right to equality in India. Equality as a concept is very competitive in the sense that it can be thought as a way of levelling the field which further goes on to impact the well-being of all the citizens living in India. The right to equality in the Indian constitution is dealt by five articles- Articles 14, 15, 16, 17 and 18. Article 14 deals with the general provision on equality whereas Articles 15, 16, 17 and 18 engage with inequality specific to India. There are essentially three categories of equality- formal equality, equality of opportunity and the equality of outcomes. The Indian constitution isn’t biased towards any one of the categories as it has all of them engrained in it in some way or the other.

There are essentially two doctrines that have been established by the Supreme Court to test the constitutionality of different and diverse laws under Article 14. The first or the old doctrine is also known as the “classification test” and the second and the new doctrine is known as the “arbitrariness test.” This article will aim to focus on the classification test while shedding light on Tarnuabh Khaitan’s opinion of the same as being deferential to the State.

CLASSIFICATION TEST

This test pushes the Court towards asking two questions, first, whether the classification made by the law in question was based on an intelligible differentia, and secondly whether the classification had a reasonable relationship with the law’s intended goal. The Supreme Court, led principally by Das J, created the classification test to establish a law’s compliance with Article 14 in its early years, inspired by US jurisprudence under the Fourteenth Amendment.

The evident premise behind these inquiries was that Article 14’s guarantee to equality is only invoked when the law classifies something. Before the categorization philosophy can be applied, there must be some sort of differential treatment between two people or groups of people.

This doctrine only applies to State activity, especially addressing vertical interactions between individuals and the State (though it does cover interactions between two State bodies). Horizontal ties between private individuals remain outside its purview. The reality is that the idea of classification is basically comparative, which is quite opposite to the doctrine of arbitrariness. This indicates that, before classification doctrine is used, there must be some relative differential treatment between two people or two classes. On the other side, for any major failure to establish an action on sound reasons, the doctrine of arbitrariness is asserted. In other words, as stated by Tarnuabh Khaitan in this Chapter in the Oxford Handbook of the Indian Constitution, the doctrine of classification questions unreasonable comparisons, whereas the unique contribution of the doctrine of arbitrariness is to bring in the sphere of Article 14 the concept of non-comparative unreasonability.

WHY THE TEST IS DEFERENTIAL TO THE STATE

Tarunabh Khaitan in his Chapter in the Oxford Handbook of the Indian Constitution projects the idea that a highly deferential, astonishingly constrained, and formalist principle for State action is the basis of the classification doctrine, which is designed to address unjustified comparisons among individuals and classes of individuals. He basis the idea of the doctrine being highly deferential in the view that the Court gives the claim of the State a great deal of weight on what the facts are, how the facts should be assessed and whether or not specific standards have been broken.

The argument that the doctrine is deferential is sound in nature and through the supreme court rulings that this article will examine in the next section, it will become clearer that the Supreme Court has went on to provide a leeway to the State when it comes to establishing a violation of the fundamental right to equality under Article 14. A tight screening of the test of proportionality appears to have been used in the Court in many cases, but there are compelling grounds to believe that these declarations were in many of these cases only theatrical covers in which a very deferent evaluation norm could still be used. Furthermore, the fact that the doctrine is limited and formalistic only goes on to add to its deferential nature as by limiting the number of questions that this doctrine can present the Supreme Court fails to go into depth of how the right to equality was violated to start with. The ideology is officialist since the two questions generally satisfy the prima facie wording of the regulation and overlook its influence on people and groups in the real world. It is important to take into consideration the fact that the Supreme Court is capable of expanding the questions that can be asked through this doctrine that could eventually result in a larger burden of pressure on the State to prove why a given right has been violated which in turn could then further result into a lesser deferential doctrine that isn’t biased towards anyone of the sides.

SUPREME COURT RULINGS

The first case that this essay will look into for substantiating the stance of the classification doctrine being deferential is Air India Vs Nargesh Meerza (1981) . In this case the Supreme Court in light of a declaration made by the Central Government itself states that,

“[T]he declaration is presumptive proof of the fact that in the matter of allowances, conditions of service and other types of remuneration, no discrimination has been made on the ground of sex only. The declaration by the Central Government, therefore, completely concludes the matter.”

Essentially, the Court held that the various earnings of air hostesses and flight pursers did not have sex as presumptive proof as a basis of a government declaration. It is imperative to understand that the court gave this statement on just the basis of a government declaration which stated that the categories of employees are divided on the basis of different conditions of service and not on the difference of sex. The court in this case basically relies on the central government’s declaration using the classification doctrine without doing any investigation of its own. The above statement made by the court is clearly problematic in nature and highlights the deferential treatment of the doctrine towards the State.

In the case of Tamil Nadu Electricity Board vs R, Veeraswamy And Ors (1999) ¸ the supreme court was yet again seen applying the doctrine of classification in favour of the State. The supreme court in this case failed to categorise the people who retired before 1st July 1986 and those who retired after the date into one class and due to this reason, the people who retired before 1st July 1986 wouldn’t be able to avail the benefits of the new pension scheme. The court in this case gives a lot of room and attention to the grounds provided by the state which clearly highlight a deferential treatment. the court can be seen stating that,

“The appellant-Board had given well-founded reasons for introducing the pension scheme from 1.7.1986 including financial constraints, a valid ground. We are of the view that the retired employees (respondents), who had retired from service before 1.7.1986 and those who were in employment on the said date, cannot be treated alike as they do not belong to one class”

Further, a limiting and formalistic approach can also be seen applied by the Supreme Court while analysing The Kerala Education Bill as the Court refused to investigate the designation of the Bill to target Christian schools.

CONCLUSION

The doctrine of classification is the oldest doctrine which helps in determining whether a law has been violative of article 14. However, the doctrine carries with it many limitations which also includes it being deferential towards the state. The problems with the doctrine are further solidified by the subsequent Supreme Court decisions which fail to recognise and improvise the limitations of the doctrine. The deferential treatment towards the state eventually results that is discriminatory towards the citizens of India. It is high time that the limitations of the classification doctrine are recognised, and a more solid and coherent doctrine is established which keeps in mind both the interests of the citizens and the state.

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The brawl to brace arms: Challenging the Vermont carry of Texas

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INTRODUCTION

In the United States, gun regulation has always been a tendentious affair. Fuel was once again added to fire when Gov. Greg Abbott signed the House Bill of 1927 presented in the Texas legislative session 2021, applauding the ‘permit less carry’ or ‘constitutional carry laws’. It has been postulated by proponents that it is the reinstitution of the second amendment of the US Constitution, which is contentious in itself. The opponents and even some intellectuals are asserting that this permit less carry in the entire state can lead to precariousness as this enactment is propounding a direct threat to human life. Texas arm regulations lucidly inculcates the idea that possession of arms by citizens are subjected to justifiable restrictions which would further be surveilled by the state to avert the misdemeanors or violation of rights of individuals.

SECOND AMENDMENT TO THE US CONSTITUTION: AN ANTINOMY OF AMERICAN CONSERVATISM

The Second Amendment of the United States Constitution, 1791 reads: “A well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed”, thereby meaning that the people have the right to possess arms for a rightful purpose, such as self- defense and state militias shall not infringe the rights of the civilians owing to the security of the state.

In District of Columbia v. Heller, the US Supreme Court held that the “Second Amendment to the United States Constitution protects an individual’s right to keep and bear arms, detached from service in a militia, for conventionally lawful purposes, such as self-defense, and that the District of Columbia’s handgun embargo and condition that lawfully owned rifles and shotguns be kept ‘unloaded and disassembled or bound by a trigger lock’ contravened with the said guarantee. It also stated that the right to bear arms is not absolute and that it would be regulated and controlled by the state.” This was the foremost Supreme Court case to settle the acrimony as to whether the Second Amendment protects an individual right to keep and bear arms for self-defense or it was planned to grant greater power to the state militias.

In McDonald v. City of Chicago, the Supreme Court of the United States held that the “right of an individual to ‘keep and bear arms’, as protected under the Second Amendment, is incorporated by the ‘Due Process Clause’ of the Fourteenth Amendment and is thereby enforceable against the states, in lieu of use of arms for legitimate purposes.” This judgement sorted out the miasma of uncertainty that was created in the wake of District of Columbia v. Heller.

STATE RIGHT TO BEAR MUNITIONS IN TEXAS

Article 1, § 23 of the Texas Constitution states: “Every citizen shall have the right to keep and bear arms in the lawful defense of himself or the State; but the Legislature shall have power, by law, to regulate the wearing of arms, with a view to prevent crime”, thereby intending that every citizen shall have the right to hold on to arms for a legitimate purpose and Legislature has the authority to undertake measures to stave off felony, and thus imposing fair- minded curtailment on the right to retain arms.

According to Article I, § 13 of the Texas Constitution, carrying of arms is not absolute and is subjected to reasonable restrictions. It also states that the Legislature has power to regulate holding of firearms and thus laws prohibiting the carrying of arms in specified situations does not infringe the right to “bear arms”. The same was reiterated by the Supreme Court of Texas in the case of English v. State and State v. Duke.

HISTORICAL OVERVIEW OF THE CONSTITUTIONAL CONCEALED CARRY IN THE US

In 1973, Texas imposed a “duty to retreat” legislation pertaining to claims of self- defence. In order to validate the use of force, an individual had to show imminent danger and reasonable threat to their life. However, force used must be proportionate to the harm or threat faced. This condition under common law is referred to as a “retreat to the wall” essential.

But in 1995, Texas law slackened, putting on a “castle doctrine,” which states that an individual has a right to carry arms in public and doesn’t need to do a lord lucan if it’s done for the purpose of self- defence. This law bolstered in 2007, when the Texas Legislature stated that “individuals didn’t need to beat a hasty retreat at all, rather they just needed to evince that they had a legal right to be present during the act of defense.” This approach is commonly referred to as a “Stand Your Ground” law.

In 2015, The state Legislature permitted college students, faculty and visitors across Texas to carry properly licensed guns on state university campuses and openly carry arms in a lanyard.

CONSTITUTIONAL CARRY: THE HOLY GRAIL OF GUN LAWS

The commencement of September 2021 would be recorded in the chronicles of Texas. After years of eschewing what some proponents of the second amendment of the US called the ‘crowning glory’ of gun laws, the Republican in Texas legislature enacted new legislation which “authorized Texans to carry or possess pistols or handguns without any licenses.” Now Texas will officially be recognized as a “Second Amendment sanctuary.” The inception of this law in Texas and its immediate effect from the 1st of September has shuddered the whole world. With this legislation, Texas would be joining the group of 19 other states having “constitutional carry laws” or “permit less carry laws” and 5 other states having declared themselves “Second Amendment sanctuaries.” The constitutional carry law of Texas has been illuminated in detail below.

VERMONT CARRY: AN INTRICATE ANALYSIS

The House Bill of 1927 introduced in the 87th session of legislature 2021 has revamped the entire scenario of procuring guns in Texas. The proponents of the bill called it a ‘constitutional carry’ law. The bill was concerned with carrying of handguns or pistols openly or concealed by an individual who is 21 years or above without any state-issued license. The competency required is that individuals should not be expelled from state or federal law from possessing firearms. In a nutshell, it can be asserted that legislation rescinded the provision of attaining a state issued license which necessitated proficiency examination with background check. However, those who want licenses can opt for it from the Texas Department of Public Safety (TDPS) after the new law commences. The extra-aid which the licensee would get after the commencement of this law is that some places are interdicted for non-licensees, but are unlatched for licensees. Another characteristic of this law is that non-licensees are not authorized to cross the extremities of the state with guns or pistols. It means that the applicability of the law is confined to the state of Texas.

UPSHOT OF THE GUN- RIGHTS MOVEMENT SWEEPING TEXAS

According to the opponents of the bill, it foisted inexorable menace to human society and their entitlements. The gun laws in Texas were not very stringent since 1995, Texans were authorized to possess pistols or handguns in the public sphere, but licenses were inescapable for the same. If we examine the chronicles of Texas, it can be tracked down that this legislation can prove to be a lethal weapon which can create cataclysmic situations in the coming future. In Texas, back to back mass shootings have been unearthed, a very recent one that transpired at El Paso and Ohio in 2019, trembled the whole world. After the eventuality, some Republican leaders pledged to commend gun laws and instigated stern monitoring policies for the same. Yet the legislative session came with something bolt from the blue which can lead to disastrous outcomes. This legislation not only poses endangerment to civilians, but state authorities, including police officers’ life, are also at stake. It seems that this legislation is pig in a poke as without any doubt it would be escalating the crime rate.

CONCLUSION

The world’s most developed nation is in a state of trepidation due to the enactment of a legislation which has the potential to cause a catastrophic state of affairs in the near future. DaShanne Stokes truly states “When a country with less than five percent of the world’s population has nearly half of the world’s privately owned guns and makes up nearly a third of the world’s mass shootings, it’s time to stop saying guns make us safer”, thereby accentuating the fact that the newly enacted legislation of Texas, not only jeopardize national security by escalating the casualties of mass shootings, but also account for gross violation of human rights. As we all know, the lustre of a nation lies not in being more astucious than other nations, but rather in the propensity to overhaul its glaring mistakes, hence both the centre and the state should leave no stone unturned to enact stern arm laws before this issue becomes refractory.

**AUTHOR’S BIO:

Prachi Tripathi, a second year law student at Jamia Millia Islamia, has great enthusiasm for reading and writing on contemporary legal developments and challenges happening around.

Zubia Rehan is a second year law student at Jamia Millia Islamia. A writer by day and a reader by night, she is open to new and ingenious ideas. She believes that- to be oneself in a world that is constantly trying to make us something else, is the biggest achievement.

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Learning from present challenges: Time to adopt a human rights based approach to data

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data security

The recent spike in data breach cases around the world certainly makes us ponder its impact on the important aspect concerning human rights. Data being the new currency of the modern world is deeply integrated with Sustainable Development Goals (SDGs) which seek to realize the human rights of all. It is an affirmative fact that humans are experiencing a phase of triple transition from the resource economy to the digital economy, from centralized governance to multi-governance, and from industrial civilization to the phase of digital civilization. This significant transformation in the journey of Human Rights essentially paves the way for the reconstruction of the system of rights and interests. 

Since 2020, high profile cyberattacks and state sponsored attempts at security breaches have been steadily increasing which puts at stake the protection of human rights because the personal data collected or sensitive personal data collected should only be handled with the express consent of the concerned individual according to Art 6 (1) (a) of GDPR. In the recent case of the United States, the Federal Communications Commission affirmed an investigation for the data breach as disclosed by T-Mobile U.S. Inc. which impacted more than 47 million customers.  This incident witnessed a breach of personal data, including social security numbers and license information of approximately more than 40 million users. This T-Mobile’s data breach is the latest high profile cyber-attack in the current times because the digital thieves took the advantage of weak security because of work-from-home policies triggered due to COVID-19 Pandemic. No sector is immune against the increasing cases of cyber theft as it has engulfed the airline industry like in the case of Indigo’s servers were hacked and the company contemplated that the stolen information can be sold by hackers on public websites. Within a span of six months, India witnessed a massive data breach in Air India. The attack compromised personal data (such as Name of the passenger, contact information, passport information) of millions of its customers. To prevent such incidents, comprehensive data protection laws are imperative for the protection of human rights predominately the right to privacy, and also many other related freedoms that depend on one’s ability to make choices about how and with whom information is to be shared. As a robust measure to this problem, there was an enactment of the EU General Data Protection Regulation is one of the comprehensive attempts globally to regulate the collection as well as the use of personal data by both the government and the private sphere. The new safeguard for the regulations is particularly focused on the importance of human rights in the digital age. Recent scandals involving Facebook and Cambridge Analytica and the incidents which were discussed in the light of data breaches have driven calls for greater control over how personal data is collected and how it should be used further. The objective of GDPR is to avert abusive intrusions in the digital age through data, it is the personal data which is intrinsically connected to people’s private lives which in turn preserves a range of other human rights. However, there are certain conundrums associated with the GDPR, one of them is the broad ambit of ‘legitimate interests’ wherein the organisations are permitted to use the data collected without the consent provided legitimate interest of the entity outweighs person’s rights and freedoms. Therefore, such ambiguous terms of GDPR can invite a stream of court cases against enforcement actions. There is essentially a need for all the countries to adopt a comprehensive data protection law that place human rights at the central point. Though the GDPR is imperfect in some places, but it is certainly one of the fundamental data protection regimes in force. The private sector’s treatment of personal data should be regulated by the Governments with transparent laws, and restricting the collection and use of people’s data to protect their rights. There should be data collection for accountability and accountability in data collection, once this particular factor is established and implemented on the part of the State then most of the cases can get reduced. To make this data for accountability more concrete in nature there was a recommendation put forward by OHCHR suggesting that a framework of structural process and outcome indicators are beneficial to progress towards Human Rights standards and this particular framework can be developed by striking a collaborative work between human rights experts and the statisticians.

The digital space should be construed differently than the physical space attributed to its borderless nature. Therefore, there should be a separate body for adjudicating all the data breach and allied matters at the international forum by constituting Experts (Human rights specialists, data professionals, statisticians) to expedite such massive data theft cases. Though it will invite some administrative expenses and inconveniences but as the saying goes no pain, no gain.

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Special Marriage Act, 1954: A panacea for Indian society?

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“The course of true love did never run smooth” is one of the finest quotes by Shakespeare which has not only described the turmoil one has to face in a love story but also in order to get married while not honoring the society’s morals, customs and boundaries in India. Even in the present day when the Indian tricolour flag stands with immense pride on distant planets light years away, two consenting individuals still undergo a huge amount of turmoil in order to solemnize and register their marriage.

INTRODUCTION

In India, marriage has always had a sacrosanct value in the society where people place the union of two people as a couple on a very high pedestal. Throughout the history, the process of marriage has gathered a huge number of customs and ethos that it has led to becoming a union of two families than two individuals. Very often, there is a high quantum of social involvement in marriage while choosing partners for a marriage. For instance, in many parts of India, marriage between the same social class or caste has become the norm where inter – caste marriages are highly discouraged.

Inter – religious marriages, on the other hand is a taboo where individuals are even outcasted or socially boycotted just for marrying someone of their choice who does not have the same set of religious beliefs and practices as them. Various vigilante groups have also added to the problems of the couples where they even have to undergo a huge struggle in order to ensure that their life and safety is not violated.

The religious laws in India, for instance The Hindu Marriage Act, 1955 or the registration of marriage under Muslim personal laws has not been able to accommodate and regulate the marriages between inter – faith or inter caste couples who do not want to associate and solemnize their marriage according to any particular religious laws since the colonial era. Thus, taking cognizance of this stumbling block which prohibited two consenting eligible adults from entering into a wedlock and upholding the hallowed value of secularism in the society, the British Government in India enacted The Special Marriage Act, 1872. The present Special Marriage Act, 1955 was thus formulated and enacted on the lines of the colonial statute in the newly independent India which was highly necessary to ensure that the secular fabric of the country remained closely knit after it had been substantially torn due to the after effects of the partition of 1947.

Therefore, the only rationale for enactment of this special legislation by the government of the newly independent India was to find an effective alternative for the earlier colonial law and provide a straight – jacket remedy to the individuals who wanted separate provisions for solemnization and registration of marriages through a civil contract since the Right to Marry has also been included as a Fundamental Right under Right to Life and Personal Liberty under Art. 21 of the Indian Constitution.

However, the laws which were framed during the colonial era and hence were incorporated into a specific legislation later on do have a huge number of loopholes and do not perfectly fit into the constitutional setup of the present – day India and thus, lies in a dire need to be amended to fit into the present society and

REGISTRATION OF MARRIAGE – A PRIVACY MASSACRE

The much-needed Right to Privacy has been constitutionally recognized as a part of Right to Life under Article 21 of the Constitution of India by a nine-judge bench in the eminent judgment of K.S Puttaswamy V. Union of India. However, there are various provisions of the SMA, 1955 which have been completely inconsistent with the right to privacy of couples intending to marry under this act.

According to Section 5 and 6 of the SMA 1954, the couple who want to solemnize and register their marriage under this act need to give a public notice in writing to the Marriage Officer of the district in which they have been residing for not less than thirty days. The above-mentioned notice shall then be entered into the records of the Marriage Officer and shall be open for public display and inspection for any person who wants to scrutinize the records and raise objections. Another aspect of this provision is that the public notice includes nearly all the pertinent personal details of the individuals such as contact details, name, occupation and residence address which is left in open for any one who, on their whims and fancies can go through them. This is one of the most erroneous provisions of this act which affects the sacrosanct and fundamental right to life under Article 21 of the Indian Constitution in a two – fold manner.

First of all, due to the public display of the notice given by the couple intending to marry, the sensitive details of the individuals are left without any firewall which in – turn bestows a deep cut on their privacy. This can thus lead to making the inter – caste or inter – religious couple vulnerable to vigilante attacks, pressure of religious groups, family pressure, extremists etc. who may try to influence their decision of marriage during the course of thirty days. Hence this clearly goes against the precedent set down by the longest judgment in the history of Indian judiciary i.e., K.S Puttaswamy V. Union of India

Secondly, the non – adherence to the privacy norms makes the couple vulnerable as it exposes them to various anti – social elements of the society which may even try to harm their life and liberty in order to prevent the union and marriage of the couple. Thus, any orthodox and extremist individual with access to the records and details of the individuals can be a huge potential harm. The history has been a witness to many such incidents where a considerable number of couple faced corporeal harm including honour killings as seen in landmark cases of Lata Singh V. State of U.P where the couple had to undergo severe harassment just for marking someone of their choice.

On similar lines, in the case of Mayakaur Baldevsingh Sardar V. The State of Maharashtra, a whole family was devastated and the couple were stripped of their fundamental right to marry and spend their live together just for belonging to different castes. Such dire consequences for merely marrying not in accordance with the society – made norms is a very high price to pay in a democratic and liberty – worshipping country like India. Thus, such incidents show an utter failure on the part of the state and the legislature to act according to the need of the present – day society than being bound in the chains of the colonial era legislations which hardly hold any substance in the 21st century India.

Taking into cognizance the above provision in the SMA 1954, the Allahabad High Court has rightly noted that compromising with someone’s private data is a devil’s deal in the present-day scenario as data is the biggest weapon today. Hence, the court has rightly set down a precedent that publication of a 30 – day notice for registration of marriage is not an essential requirement of this act and couples can forego this practice in order to avoid the interference of state and non – state actors in their marriage. This judgment has thus shown a ray of light in acknowledging that the fundamental right to marry as established in “Hadiya Case” is upheld without any eclipse from other procedures or provisions of any statute. However, any directive or precedent from the apex court or the legislature itself is awaited till date.

RAISING OBJECTIONS – AN OBJECTION TO SECULARISM?

Section 7 of the act empowers any individual to raise an objection against the marriage of couple intending to marry under this special legislation on the grounds explicitly stated in this act. Any provision of such nature does not find any place in other laws and statutes regulating marriages under different religious laws and the above provision is unique to this act.

Technically, this provision has given a right to any individual, even completely unrelated to the couple to poke his/her nose in the business of the couple and question their autonomy to lead their life according to their wishes. Thus, this provision is completely inconsistent with Freedom of Choice and Expression guaranteed in the Indian Constitution under Article 19, Right to Equality under Article 14, Right to Privacy under Article 21 and the fundamentally core value of secularism which was deeply embedded into the Indian Constitution by the founding fathers of this sacred document.

The law does carry power to lay down provisions in order to regulate the solemnization and registration of marriage, but they too need to follow the due procedure of law along with the values of constitutionalism in order to avoid arbitrariness and become unreasonable. It is pertinent to note that freedom of choice and expression is one of the basic human right and thus is an obligation on the state to fulfill all the criteria required to ensure all citizens get this right fulfilled. The much-revered constitutional bench judgment of Common Cause V. Union of India has also acknowledged the pivotal role of this right in the life of every citizen.

RIGHT TO EQUALITY – ANOTHER FUNDAMENTAL RIGHT HAMPERED ?

As mentioned above, the act has given power to any person willing to inspect the notice book which contains the pertinent details of the couple intending to marry and raise objections if one feels like. Any such provision of this nature is completely absent in all the other laws governing marriage according to one’s religious faiths. Thus, the only difference between marrying under this act and marrying under any other religious law is the criteria of inter – religious or inter – caste and marrying outside one’s religion or caste. This cannot be considered as a valid basis of differentiating people and thus lies outside the category of “intelligible differentia”.

Thus, the basis of classification of couples just on the basis of their religion or caste and setting up a mandatory provision of public notice is unjust, unfair and not in accordance with the reasonable grounds of equality enshrined in the India Constitution and rests its basis merely on the colonial era norms which have become completely obsolete with the progress in society.

Moreover, the couples of the same faith who intend to marry under this act and not under their own religious laws face an extra layer of procedural norms and guidelines which they need to follow.

This has led to not only defeating the purpose of a special legislation for societal and public interest but also becoming a burden on the intrinsic value of secularism in the country.

THE WAY FORWARD

The Special Marriage Act which was once set up with a noble premise to protect the couples who went on to exercise their fundamental rights of marrying, exercising their own choice and liberty now stands on shaky grounds and needs a huge revamp in its provisions.

First of all, there is a dire need to mold the act in such a way that it does not remain to be “too constitutional” and acts in line with the Right to Privacy. This means that the legislature needs to wake up to the sensitivity of the data being shared by the couple for the purpose of registration of marriage and its public display which is without any rhyme and rhythm.

Secondly, proper security needs to be provided to the couples from sources which can act as a threat to their union and marriage for the greater good of the society and proper following of the constitution in letter and spirit. Also, it would be an added advantage if certain provisions of penal nature are also added in this act in order to punish those individuals who violate any norm or guideline in this act to strengthen the enforcement of this statute and protect its sanctity and existence.

CONCLUSION

The Rule of Law which holds a prime importance in any law – abiding society needs to be protected and enforced in any cost. In order to accomplish that, we need proper mechanism of enforcement of fundamental rights, especially those closely relate to life and liberty of individuals in a democratic set – up like India.

Thus, the Special Marriage Act needs to be revamped to suit the demands of the modern-day couples and act in consonance to the present day 21st Century India. Moreover, the legislature by the way of amendment needs to induce certain reforms in this act to escape the colonial and archaic provisions and ensure that laws remain up – to date with the society of the present day.

The author is a law student residing in Delhi, India. Views are completely personal and factual and do not correspond to any political or ideological background.

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Identity politics, elections and the Representation of the People Act, 1951

J. Sai Deepak

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In 2017, a seven-Judge Bench of the Hon’ble Supreme Court of India in Abhiram Singh vs C.D. Commachen (Dead) By Lrs.& Ors delivered a judgement on Section 123(3) of the Representation of the People Act, 1951. The limited issue which the Supreme Court was called upon to decide was whether the language of Section 123(3) of the Representation of the People Act, 1951 allowed for an expansive reading of corrupt electoral practices proscribed by the provision so as to prohibit any and all reference to religion as part of an election campaign. To understand the issue better, let’s take a look at sub-Sections (3) and (3A) of Section 123, both of which are relevant to the discussion:

123. Corrupt practices—The following shall be deemed to be corrupt practices for the purposes of this Act:

(3) The appeal by a candidate or his agent or by any other person with the consent of a candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language or the use of, or appeal to religious symbols or the use of, or appeal to, national symbols, such as the national flag or the national emblem, for the furtherance of the prospects of the election of that candidate or for prejudicially affecting the election of any candidate

Provided that no symbol allotted under this Act to a candidate shall be deemed to be a religious symbol or a national symbol for the purposes of this clause.

(3A) The promotion of, or attempt to promote, feelings of enmity or hatred between different classes of the citizens of India on grounds of religion, race, caste, community, or language, by a candidate or his agent or any other person with the consent of a candidate or his election agent for the furtherance of the prospects of the election of that candidate or for prejudicially affecting the election of any candidate.

In a nutshell, the discussion in the judgement revolved around the interpretation of the underscored pronoun “his” in sub-section (3). The minority view in the judgement was that “his” had to be given its due based on the plain and express language of the provision. In practice, this would mean that the bar under the provision is limited to an appeal made to voters in an election by a candidate (including his agent or any other person making the appeal with the candidate’s or the agent’s consent) on the ground of his (candidate’s) own religion or the religion of a rival candidate.

However, the majority view was that, apart from the candidate’s own religion or that of the rival candidate, “his” includes a reference to (a) the religion of the candidate’s agent or (b) the religion of any other person who makes a religious appeal with the consent of the candidate or the candidate’s agent or (c) the religion of the voters to whom the appeal was being made. In arriving at this view, four judges of the Supreme Court resorted to what is known as “purposive construction” of the language of sub-Section (3) by relying upon (i) the origins of the provision, (ii) the history of its amendments including the amendment in 1961, (iii) the contemporaneous amendment to Section 153A of the Indian Penal Code, and (iv) resorting to what the majority has called “social context adjudication”.

Thanks to this view, thenceforth there could be no references to religion, race, caste, community or language as part of electoral discourse in India. Frankly, one is astounded both by the reasoning and the conclusion because they went well beyond what was intended to be curbed by the Parliament through the amendment effected to Section 123 in 1961. This is because, in the process of purposively interpreting the 1961 amendment, the majority view had misconstrued the very purpose it claimed to further.

The limited Legislative intention behind the amendment in 1961 was only to curb even solitary attempts by candidates in an election to seek votes by appealing to their religion, caste, community or language, or by targeting the religion, caste, community or language of a rival candidate. The goal was to prevent anyone from being elected or from being boycotted in an election on grounds of her or his religious identity- no one should be elected or boycotted because she or he is a Hindu or a Muslim.

However, it was never nor could have been the intention of the Parliament to pixelate religion, caste, community or language altogether from electoral discourse because such an amendment would have been vulnerable to a constitutional challenge. Here’s why- according to the interpretation of the provision prior to the current decision of the Supreme Court, had Ambedkar been alive and had he contested elections post the 1961 amendment to Section 123, he could not have legally appealed to voters citing his caste, but he could have legitimately and constitutionally appealed to voters of a certain caste citing the caste-based discrimination they suffered (and still suffer). Not just that, Section 123(3A) read with Section 153A of the IPC would have acted as a safeguard by preventing Ambedkar from using a caste-based appeal under sub-Section (3) to sow seeds of hatred and enmity between people of different castes. Simply put, under the previous interpretation, while an appeal based on the caste of the voters was not barred, using that as a façade to promote enmity between castes was forbidden. This is an illustration of the balanced interplay between sub-Sections (3) and (3A) of Section 123, and Section 153A of the IPC, which was in vogue prior to the judgement under discussion. This balanced approach was rendered illegal by the majority view of the Supreme Court.

The long and short of it is that the majority view stands in the way of political empowerment of communities. What is also anomalous and impractical about the reasoning is that it treats as permissible any reference to religion, caste, community or language in a non-electoral political context, but somehow expects an election campaign, the very festival of celebration of democracy, to be insulated and hermetically sealed from all such references. This approach is at loggerheads with constitutional secularism, which the majority view claimed to be religiously faithful to, since the Constitution itself is not indifferent or hostile or oblivious to religion, caste, language or community and the role they play in social mobilisation. This nuance has been captured brilliantly in the minority view authored on behalf of three Judges of the Court by Justice Chandrachud. Here are a few excerpts:

“The expression ‘his’ means belonging to or associated with a person previously mentioned. The expression “his” used in conjunction with religion, race, caste, community or language is in reference to the religion, race, caste, community or language of the candidate (in whose favour the appeal to cast a vote is made) or that of a rival candidate (when an appeal is made to refrain from voting for another). It is impossible to construe sub-section (3) as referring to the religion, race, caste, community or language of the voter. The provision, it is significant, adverts to “a candidate” or “his agent”, or “by any other person with the consent of a candidate or his election agent”. This is a reference to the person making the appeal….

While establishing that notion, the Constitution is not oblivious of history or to the real injustices which have been perpetrated against large segments of the population on grounds of religion, race, caste and language…. Electoral politics in a democratic polity is about mobilisation. Social mobilisation is an integral element of the search for authority and legitimacy. Hence, it would be far-fetched to assume that in legislating to adopt Section 123(3), Parliament intended to obliterate or outlaw references to religion, caste, race, community or language in the hurly burly of the great festival of democracy.”

From a legal standpoint as well, apart from having gone beyond the Legislature’s intent in amending Section 123, it is this author’s humble view that the very application of “purposive construction” was without basis. Here are the rules regarding application of purposive construction to a statutory provision, which demonstrate the problems with the reasoning of the majority:

Purposive construction, as a rule, is warranted only if a plain and literal reading of the provision (a) gives rise to multiple reasonable interpretations or (b) leads to patent absurdity. Simply put, if there are more than one plausible and reasonable interpretations of a provision or the construction leads to absurdity, reference to the context in which the provision was brought about becomes necessary, particularly if the language is the product of an amendment(s);

However, merely because a provision has been subjected to multiple amendments, it wouldn’t be permissible for the Court to invoke purposive construction if the language is otherwise clear and is not at loggerheads with the rest of the statute;

Critically, if a provision is meant to curb mischief or forbid conduct which it deems corrupt, and also has the consequence of disqualifying an individual from taking part in the electoral process altogether, the provision is not meant to be interpreted liberally and expansively no matter how noble intention of the Court may be.

Applying these principles to the language of Section 123(3), it becomes evident that the majority view came at the expense of the express content of the provision, besides turning the rules of grammar and syntax relating to the use of pronouns on their heads. It is as plain as day that “his” in Section 123(3) refers only to the candidate or his rival, and not to the voter because there is no reference to the voter which would have justified his inclusion in “his”. And yet, the majority resorted to purposive construction when the provision did not call for its application in the first place, besides getting the purpose wrong.

In light of this, one cannot help but wonder if the majority view is the result of putting the cart before the horse. It almost seems as though the provision was “purposively” interpreted to further a predetermined view. In doing so, the majority view of the Court had blurred the necessary lines between what the law is as enacted by the Parliament and what it ought to be according to the Court. This, as one understands it, is not the role of the Judiciary, especially the highest Court of the land.

By reading into the language of the provision more than it warranted, by ascribing more to the will of the Legislature than history permitted and by justifying it all in the name of “social context adjudication”, it appears that the Court sees itself as the sole and final arbiter of what is good for a secular pluralist democracy and what constitutes one. Clearly, separation of powers, which is equally an integral and critical part of the basic structure of the Constitution, is the casualty in the process and does not bode well for the health of the very democracy the majority view professes to protect.

J. Sai Deepak is an Advocate practising as an arguing counsel before the Supreme Court and the High Court of Delhi.

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Seat v Venue: Which one is the lex arbitri of an arbitration?

Kritika Sethi

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Arbitration was introduced as an alternative dispute resolution method to the court. Fundamentally, the concept’s foundation lies in ‘party autonomy’, ‘confidentiality’, and ‘speedy and efficient resolution’. Owing to this flexible and convenient nature, it has gained popularity among multinational companies and businesses in this globalised world and has become one of the preferred modes of dispute resolution. It provides autonomy to the parties to choose the law applicable on the contractual agreement, place where they want to conduct proceedings, or court to approach when any dispute arises. Parties agree on the substantive law (i.e. law applicable to the dispute between the parties), lex arbitri or the curial law (i.e. the law which governs the procedure to be followed in the arbitration etc. In essence, ‘lex arbitri’ refers to the law of the seat of the arbitration. In light of the significance of the same, as elucidated below, the distinction between seat and venue gains significance.

SEAT V VENUE: WHAT IS IT ALL ABOUT?

In any arbitration, be it domestic or international; parties may approach a court for, inter alia, an interim relief, taking directions to seek evidence, for appointment of arbitrator et al. The seat, all in all, determines “the law that governs the procedural aspect of arbitration” and “the court that would exercise supervisory jurisdiction over the arbitral proceedings”. Venue, however, is a place/location chosen by parties for conducting arbitration hearings. It may vary based on the convenience of the parties. To clarify, let’s say two companies A and B, incorporated in England and India respectively, entered into an agreement to construct hotels in China. They chose New Delhi as the seat of arbitration and Russia as the venue of arbitration in their agreement. It means that the Indian Arbitration and Conciliation Act, 1996 (“A&C Act”) will be applicable to procedural matters and Indian courts would have the supervisory jurisdiction when any dispute arises between them. Russia, herein, is merely a place chosen by the parties for the purpose of arbitration proceedings as per the convenience of the parties.

The seat and venue of the arbitration play a significant role in legal framework of any arbitration proceedings. Even though the A&C Act does not define the term ‘seat’ and ‘venue’ but its essence is evident in the principles laid down in precedents by the Hon’ble Supreme Court and Hon’ble High Courts. Several disputes concerning ‘seat’ and ‘venue’ have arisen before the Indian Courts. The main reason behind this confusion lies within Section 20 of the A&C Act. The provision refers to ‘place’ which is misinterpreted with ‘seat’ and ‘venue’. The said misinterpretation happens due to the manner in which dispute resolution clauses are drafted by parties in their agreements. Vague clauses create ambiguity in relation to interpretation of designated seat of arbitration, as intended by the parties. For instance, ‘the Arbitration shall be administered in New Delhi and the ‘place’ of arbitration is New Delhi while the disputes arising shall decide before the Bombay High Court’. This is a clear example of ‘vaguely drafted clause’ where there is no clarity between ‘seat’ and ‘venue’. When the courts are faced with an interpretation of such clauses, they have to interpret the agreement and determine the ‘seat’ by interpreting the intention of parties through other clauses and language used in the contract. However, in the process of interpreting such vague clauses, the courts have created conflicting precedents and interchangeably used seat and venue creating additional confusion.

PRECEDENTS INTERPRETING SEAT AND VENUE IN AN ARBITRATION

In the Bharat Aluminum Co. v. Kaiser Aluminum Technical Services Inc. (“BALCO Case”), the Court first time differentiated between ‘seat’ and ‘venue’ in Section 20 of the A&C Act. The Court approved the Shashoua principle as per which once the parties have selected the ‘place’ as the venue of the arbitration without mentioning about the seat, it can be inferred that the ‘venue’ is the seat of the arbitration provided that there exists no indication to the contrary and a certain supranational body of rules has been selected for arbitration.

However, the controversy began in 2018, in the case of Union of India v. Hardy Exploration and Production Inc. (“Hardy Case”) The Court deviating from the landmark BALCO Case and Shashoua principle stated that the “venue” can be “seat” only if there exists some other concomitant factor supporting it as seat. Herein, the “Kuala Lumpur” was designated as venue but there exists no indication substantiating it as the “seat”. Thus, Kuala Lumpur was not declared as the seat of the arbitration.

In 2019, another three-judge bench BGS SGS Soma Jv v. NHPC Ltd. (“BGS Soma Case”), diverged from the Hardy Case and upheld the Shashoua principle. It held that the Hardy Case was not good law. The Hon’ble court held that when the particular place has been expressly specified as “venue” of arbitration, then the same should be considered as the “seat” of the arbitration subject to any contrary indication that venue is not the seat of the arbitration.

Later, in 2020, the Supreme Court faced a similar issue in Mankashu Impex Pvt. Ltd. v. Airvisual Ltd. (“Mankanshu Case”)., i.e. whether the ‘venue’ of the arbitration is the ‘seat’ of the arbitration. In this case, the Agreement mentions that ‘the arbitration would be administered in Hong Kong and the place of the arbitration was Hong Kong’. It also stated that the courts of New Delhi shall have the jurisdiction over the matter. It took a different approach and declared Hong Kong as the seat of the arbitration because the agreement clearly states that the arbitration should be administered in Hong Kong. It was held that by only mentioning place of arbitration, one cannot presume it as the seat of the arbitration. Other factors like clauses of the agreement and the intention of the parties while entering into the contract are guiding factors which aid in ascertaining the seat of the arbitration.

Recently, in S.P. Singla Constructions Pvt. Ltd. v. Construction and Design Services, UPJL (“SP Singla Case”), the Hon’ble Delhi High Court followed the principle laid down in BGS SOMA Case. In this case, the agreement between the parties provided for “Lucknow” as the venue of the arbitration and the application of ICADR Rules, New Delhi to the dispute. It was held that the ICADR Rules would be applicable only after the constitution of arbitral tribunal. Hence, ‘Lucknow’ was declared as the seat of the arbitration and the courts therein were held to have the exclusive jurisdiction.

WHAT IS THE ISSUE?

While the decisions of the Hon’ble Supreme Court in the Hardy Case and Mankashu Case may have been held to not be good law, the same have not been overruled by a larger bench of the Hon’ble Supreme Court as all are three-judge bench rulings.

From the afore-mentioned precedents, it may be appreciated that a need for such interpretation arises from vague dispute resolution clause, terminological inconsistency et al. Arbitration is preferred over litigation because of its features including, inter alia, confidentiality, speedy dispute resolution, and minimum court interference. However, such vaguely drafted clauses have increased court interference and delayed the dispute resolution process, defeating the fundamental objectives of arbitration.

Further, in the SP Singla Case, the Hon’ble Delhi High Court interpreted the rules of ICADR, an arbitration institution, and held that the same provided for the seat of the dispute to be governed by the agreement between the parties. WeVaad, an online dispute resolution platform, strikes a balance between providing a seat of arbitration and allowing autonomy to the parties to govern the same. Firstly, it provides a draft dispute resolution clause to the parties to be incorporated in their agreement. The said dispute resolution clause clearly enlists the seat and venue of the arbitration and thereby, avoids any misinterpretation of the dispute resolution clause in the future. Secondly, the Rules provide for the seat of the arbitration, which may be distinguished, as per the agreement between the parties at the first hearing of the arbitration.

How to avoid such confusion after disputes have arisen between the parties

It will be beneficial for the parties to ensure that the dispute resolution clauses, specifically the arbitration agreements are drafted to clearly provide for substantive law and seat of the arbitration. The principles laid down by the Hon’ble Supreme Court are the guiding principles in how such clauses must be drafted to clearly enlist seat and venue/place of the arbitration.

A ruling by a larger bench of the Hon’ble Supreme Court/legislative amendment in this regard would be a welcome step. Until then, it is important that the aforementioned principles are kept in mind while drafting such clauses to avoid any ambiguity that may require court intervention for interpretation.

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