According to the Indian Society of Assisted Reproduction, infertility currently affects about 10-14% of the Indian population, which infers nearly 27.5 million couples actively trying to conceive suffer from infertility in India. Such couples which are unable to conceive naturally resort to Assistive Reproductive Technology (ART) methods for giving birth to children. Assisted Reproductive Technology (ART), as commonly understood, comprises procedures such as in-vitro fertilization (IVF), intra-uterine insemination (IUI), oocyte and sperm donation, cryopreservation and includes surrogacy as well. These procedures are not new in India as the first-child delivered through IVF technology dates back to 1978 who was remarkably, the first IVF-baby in the country and second in the world. Since then the field of Assisted Reproductive Technology has developed rapidly, however, it has various legal, ethical and social issues which remains unaddressed till date. One of the contentious issues is whether or not presumption of legitimacy as embodied in Section 112 of The Evidence Act, 1872 applies in cases where children are born through Assisted Reproductive Technology (ART). The presumption under Section 112 rests on the principle that sexual intercourse is absolute essential for conception of child. It will be interesting to see how courts in times to come will apply the presumption under Section 112 to cases of Artificial Insemination, which do not require the physical presence of a man and woman for conception of child. Various nations have resolved this controversy through legislative intervention and have enacted their respective laws clarifying the legitimacy of child born out of Artificial Insemination. In India, presently there are no statutes governing Artificial Insemination and the status or rights of the children produced through such procedures. Though various states have semen banks, only Delhi has enacted The Delhi Artificial Insemination Act of 1995 for regulating the donation, sale and supply of human semen and ovum for the purpose of artificial insemination. The Indian Council of Medical Research (ICMR) laid out the ‘National Guidelines for Accreditation, Supervision and Regulation of ART Clinics in India’ (2005) but due to lack of legislative backing, these guidelines are not enforceable in a court of law.
PRESUMPTION OF LEGITIMACY UNDER SECTION 112 OF THE EVIDENCE ACT, 1872
One of the cardinal principles of evidence law is that every fact on the basis of which a party to a proceeding wants to take judgment must be proved. However, Chapter VII of The Evidence Act, 1872 lays down certain facts that can be taken into consideration by the Court without calling for proof of them. “To presume” means to accept something as true in the absence of evidence to the contrary. A presumption is not itself evidence but only makes a prima facie case for the party in whose favor it exists. Section-112 of The Evidence Act, 1872 embodies the irrebuttable presumption of legitimacy of child born out of a valid wedlock. The section establishes the fact of marriage as conclusive proof of legitimacy. The legislative intent of the provision is to protect the rights and interests of the children and chastity of women. Reading Section 112 with “conclusive proof” as defined under Sec.4, the inference drawn would be that when one fact, such as any person being born during the continuance of a valid wedlock or within 280 days after its dissolution of marriage is proved, it shall be conclusive proof that the child born shall be legitimate, as held in Banarasi Dass v. Teeku Datta, 2005 4 SCC 449. The only way to rebut the legitimacy is to prove ‘no access’ i.e. he could not possibly have had sexual intercourse with the mother of the child at any time during which she could have conceived the child born. This can be proved either by showing that the man was away in some other city or at a distance from which he could have had no possible opportunity of having sexual intercourse with the mother or by proving that he was impotent at all times at which the child could have been conceived. If however, the husband fails to prove any of these, he shall be deemed to be the father of the child born. The presumption of a child born within 280 days of the dissolution of the marriage, being legitimate is subject to the condition that the woman remains unmarried. If the woman remarries before the birth of the child, the second part of the section would have no application. The child would be presumed to be the legitimate child of the second husband under the first part of the section unless it is shown that the second husband had no access to the woman at any time when the child could have been begotten. This legal presumption is based on the maxims, ‘odiosa et inhonesta non sunt in lege prae sumenda’, which means that nothing odious will be presumed by the law and ‘pater est quem nuptioe demonstrant’ which means ‘he is the father whom the marriage indicates.’ The Supreme Court in the Nandlal Wasudeo Badwaik v. Lata Nandlal Badwaik, 2014 2 SCC 576 held, “Interest of justice is best served by ascertaining the truth and the Court should be furnished with the best available science and may not be left to bank upon presumptions, unless science has no answer to the facts in issue. In our opinion, when there is a conflict between a conclusive proof envisaged under law and a proof based on scientific advancement accepted by the world community to be correct, the latter must prevail over the former. We must understand the distinction between a legal fiction and the presumption of a fact. Legal fiction assumes existence of a fact which may not really exist. However presumption of a fact depends on satisfaction of certain circumstances. Those circumstances logically would lead to the fact sought to be presumed. Section 112 of the Evidence Act does not create a legal fiction but provides for presumption.”
WHAT IS ARTIFICIAL INSEMINATION?
Artificial Insemination, being one of the Assisted Reproductive Technology (ART) methods, is a scientific technique for artificial procreation which involves the artificial introduction of sperm into the uterus of a woman without sexual intercourse. The extension of the test of legitimacy to the children born through clinical impregnation involves the application of the legislative spirit behind Section 112 to the method used for impregnation. Hence, it is important to understand the types of methods used for artificial insemination. Broadly speaking, it can take up three forms- Homologous Artificial Insemination (AIH), where the woman is inseminated with the sperm of her husband; Heterologous Artificial Insemination (AID) where the woman is inseminated with the sperm of a donor; and Combined Artificial Insemination (CAI) where the woman is inseminated with a mixture of the sperm of her husband and donor.
LEGITIMACY OF CHILD VIS-À-VIS ARTIFICIAL INSEMINATION
The issue of foremost importance which arises here, with this legal provision, is up to what extent the test of legitimacy as laid down in Section-112 is justifiable in present times where several modern scientific developments such as sperm banks, artificial insemination, surrogacy, and many more methods which doesn’t require the physical presence of a man and woman for the conception of a child. The language of Section-112 can be easily interpreted to include cases of Homologous Artificial Insemination (AIH) because in this case, the husband is the biological or natural father of the child. This should not pose legal issues for the simple reason that in this process, the sperm of the husband is united with the ova of the wife, so the marriage is consummated artificially, although not by the normal method. As per the ICMR’s National Guidelines for Accreditation, Supervision and Regulation of ART Clinics in India (2005), “Conception of the wife through AIH does not necessarily amount to consummation of marriage and a decree of nullity may still be granted in favor of the wife on the ground of impotency of the husband or his willful refusal to consummate the marriage.” In Doornbos v. Doornbos, N. 54 S. 14981, The American Superior Court held, “Homologous Artificial Insemination (when the specimen of semen used is obtained from the husband of the woman) is not contrary to public policy and good morals, and does not present any difficulty from the legal point of view.” Also, in case of posthumous AIH, where a child born to a woman artificially inseminated with the stored sperms of her deceased husband should be considered to be a legitimate child notwithstanding the existing law of presumptions under our Evidence Act, keeping in mind the legislative intent behind Section 112.
The process of Homologous Artificial Insemination (AID) poses two legal issues, firstly, regarding the legitimacy of the child born out of AID, and secondly, if it constitutes adultery, for the purpose of dissolution of marriage. AID process involves using sperms of an unknown donor and is usually employed when either of the spouses is suffering from biological defects. Hence, a child born out of AID would not strictly fulfill the conditions of laid down in Section 112; moreover, the husband can easily prove non-access to the wife. Since this process uses donor’s sperms, the child’s DNA would match with the donor’s DNA instead of his father; hence, DNA Test would not help in establishing the paternity of the child in this scenario. Strnad v. Strnad, N.Y. Sup. Ct. 1948, was reportedly the first case in which the status of child born out of AID process was considered by the Courts. While liberally interpreting the legitimacy provisions, The Supreme Court of New York held, “The parental rights of the husband over a child born out of AID process were akin to those of an adoptive father, thus holding that the child was legitimate.” In another case, People v. Sorensen,, 68 Cal. 2d 280, the Supreme Court of California declared that a man who had consented to his wife undergoing AID was the lawful father of the child born as a result of the AID, and hence, was liable to pay child support after separating from his wife. The Court also clarified its stance on adultery, by holding, “It would be absurd for an act of AID to be classified as adultery for the doctor, the donor or the woman undergoing AID, because the doctor may be female, the donor may be thousands of miles away, or the husband may himself be inserting the semen via a syringe. Hence, the process of AID is not adulterous for the woman, the doctor or the donor.” To sum up the English law on the point, it can be said that a child born out of AID process with the consent of the husband is considered to be legitimate and he enjoys all the rights and privileges of a naturally born child of the marriage. As far as Indian law is concerned, on a meaningful and purposeful interpretation of Section 112, the husband can be regarded as the father of a child born of AID, unless he proves absence of consent on his part for undergoing AID. As per the ICMR’s National Guidelines for Accreditation, Supervision and Regulation of ART Clinics in India (2005), “Assistive Reproductive Techniques used for married woman with the consent of the husband does not amount to adultery on part of the wife or the donor. AID without the husband’s consent can, however, be a ground for divorce or judicial separation”. ICMR Guidelines further provide, “A child born through ART shall be presumed to be the legitimate child of the couple, born within wedlock, with consent of both the spouses, and with all the attendant rights of parentage, support and inheritance. Sperm/oocyte donors shall have no parental right or duties in relation to the child and their anonymity shall be protected except in certain cases.” The same reasoning can be mutatis mutandis applied to the children born out Combined Artificial Insemination (CAI) where the woman is inseminated with a mixture of the sperm of her husband and donor. Hence, the husband will be treated as the father of the child, and will have all the rights and obligations of a natural father with respect to the child. In Revanasiddappa v. Mallikarjun, (2011) 11 SCC 1 the Supreme Court opined that “while adjudicating legitimacy cases, Court must remember the objectives of the Constitution set out in the Preamble which provides that every individual has separate and individual dignity of his own. Therefore the Court has to look into the matter that illegal or immoral or illegitimate relationships of parent do not hinder the dignity of the child born out of such relationships. As a child born out of such a relationship is innocent and has all the rights granted to him under the Constitution and the status of the child must be as equal to as of child born out of valid marriage”.
The Committee for Reforms in Criminal Laws, 2020 as constituted by the Ministry of Home Affairs should take into consideration the modern technological and scientific advancements and suitable modifications should be brought about to keep the law attuned to the changing socio-cultural scenario. In the Indian context, such a change in scientific temper and social outlook is manifest in the Malimath Committee Report on Reforms of the Criminal Justice System as well as The Law Commission of India Reports. In order to protect the rights of the child, the rights and obligations of the husband and the donor also need to be codified in order to balance conflicting rights. There is dire need to streamline the process of Artificial Insemination in India and address the legal, ethical as well as technical issues that follow by legislative intervention. The Assisted Reproductive Technology (Regulation) Bill, 2020 which attempts to augment and streamline the process of artificial insemination is currently under review. It expressly lays down that a child born through Assistive Reproductive Technology (ART) will be deemed to be a biological child of the commissioning couple and will be entitled to the rights and privileges available to a natural child of the commissioning couple. However, the Bill fails to address various legal, medical and ethical aspects. One of many drawbacks of the Bill being it only allows married couples and single unmarried women to access Assistive Reproductive Technology and excludes single unmarried men, LGBTQ individuals and couples. In Devika Biswas v. Union of India, (2016) 10 SCC 726, the Supreme Court recognized the right to reproduction as an important component of the ‘right to life’ under Article 21. Thus, restricting ART only to heterosexual relationships within a certain age group and denying reproductive choices to LGBTQ, single men and older couples would be a clear violation of Article 14 and 21. In times of changing social structures where fertility is declining and single parenthood is becoming common, the legislature must come up with laws which enhance the reproductive choices and cater to the changing social needs of the people.
The Authors are Advocates practising in Delhi High Court)
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NEW SOCIAL MEDIA CODE AND THE BIRTH OF A NEW REGIME OF INTERMEDIARY LIABILITY
On 26 February 2021, the Ministry of Electronics and Information Technology (MeITY) proposed the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 for social media platforms, OTT services and digital media. The Code is a reinforcement of the Information Technology (Intermediaries Guidelines) Rules, 2018 wherein the regulation of social media companies has been strengthened making them more accountable for content on their platforms. The most debated provision of the new code has been the categorisation of media intermediaries and the birth of the ‘responsibility-liability’ regime of intermediaries.
The proposition of intermediary liability is not new, in the past, a scandal involving the sale of a pornographic clip on Baazee.com (now ebay.in) and the subsequent arrest of the company’s CEO led to the creation of a committee to re-evaluate the Information Technology Act. The committee recommended that intermediaries must do their ‘due diligence’ in order to receive immunity, which was accepted by the government. Also, the Supreme Court has in Shreya Singhal v. Union of India and My Space Inc. v. Super Cassettes Industries Ltd., acknowledged the concept of actual and specific knowledge and observed that intermediaries can be held liable if they have actual or specific knowledge of the existence of infringing content on their website from content owners and despite such notice, they do not take down the content. For these reasons, the Information Technology (Intermediary Guidelines) Rules, 2011 was introduced to create more accountability on the part of intermediaries.
In 2018, the intermediary liability rules were reconsidered and it was triggered by the misuse of social media by criminals and anti-national elements. Digital platforms have failed to proactively deal with cases that led to misuse of data and free speech majorly owing to their enormous size. There is harmful content on various platforms from fake news to child pornography. More recently, Twitter Inc. permanently banned former U.S. President Donald Trump’s account alleging that he had been breaking the rules against glorifying violence, manipulating media and sharing unsubstantiated information regarding the U.S. elections.
The need for stringent laws with regards to the liability of social media platforms in India escalated after the incident of Farmer’s protest taking a violent turn on 26th January 2021. The MeITY directed Twitter to take down accounts that used incendiary hashtags during the violence however, the company did not comply with it and the ministry said that the platform had to adhere to the authority’s directions and non-compliance will lead to criminal charges against the platform.
The Information Technology Act, 2000 along with the Intermediaries Guidelines, 2011 provided a safe harbour for the Intermediaries in India however, a need has been felt for content curation and also holding intermediaries liable for content published on social media platforms. The term “intermediary” has been defined under Section 2(w) of the IT Act as “any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, web-housing service providers, search engines, online payment sites, online auction sites, online market places and cyber cafes.”
The role of an intermediary is not to create information, but to receive, store and transmit it. The safe harbour protection under the IT Act applies only to “passive intermediaries”. The Delhi High Court in Christian Louboutin SAS v. Nakul Bajaj and Ors. held that as long as intermediaries are mere conduits or passive transmitters of the records or of the information, they continue to be intermediaries and they should not be “active participant”.
The Information Technology Act, 2000 is the primary legislation dealing with the liability of intermediaries for content generated by third parties. The act was amended in 2008 to include safe harbour under section 79 of the act and also to amend the definition of intermediaries. Thereafter, the intermediary guidelines, 2011 were introduced to incorporate due diligence in pursuance of the rules stated therein, in order to claim safe harbour protection under the IT Act. The IT Act and the Intermediaries guidelines, 2011 were to be read in consonance with each other.
The intermediaries do not create the content available on their platform, they merely act as a bridge between the content creators and consumers. The traditional point of law was based on the nation that intermediaries cannot be held liable and accountable for everything posted by any third party considering the vast amount of data produced every day. Another point of technical concern was the impossibility to track every act that qualifies as harmful or controversial.
The Supreme Court in Shreya Singhal case has also observed that “it would be very difficult for intermediaries like Google, Facebook etc. to act when millions of requests are made and the intermediary is then to judge as to which of such requests are legitimate and which are not.” Similarly, in the case of Kent Ro Systems Ltd & Anr vs Amit Kotak & Ors, the Court observed, “to require an intermediary to do screening would be an unreasonable interference with the rights of the intermediary to carry on its business.”
The new code provides that intermediaries will have to proactively monitor and filter their users’ content through appropriate mechanisms, and be able to trace the originator of questionable content to avoid liability for users’ actions. It also distinguishes between a significant and a regular social media intermediary as per their user traffic. Social media companies will have to establish a proper Grievance Redressal Mechanism to deal with user complaints. Further, the platforms will have to disclose the first originator of a mischievous tweet or message as the case may be. Additionally, intermediaries are required to provide assistance to government agencies, who must clearly state in writing or electronic means the purpose of seeking such information within 72 hours. Upon notification, an intermediary will have 24 hours to remove or disable unlawful content.
Section 79(1) of the IT Act grants safe harbour protection to the intermediaries for any kind of third-party content. This section grants an immunity to the intermediary irrespective of the content under the due diligence doctrine. Section 79(2) provides that the immunity is afforded upon an intermediary who has neither knowledge nor control over the information transmitted or stored. They are under a mandate to remove any content under a ‘notice and takedown’ regime as per Section 79(3). It requires an intermediary to remove information that does not adequately fulfil the test of being lawful upon receiving “actual knowledge”. However, according to Rule 3(4) Intermediary Guidelines, 2011, the intermediary can be made directly liable for its inability to remove the unlawful content which was being stored and perhaps transferred through its platform.
In Europe, legal discourse to address misinformation and disinformation began with the 2017 EU resolution on “Online Platforms and the Digital Single Market”. This later formulated into a High-Level Group to “advise on policy initiatives to counter fake news and the spread of disinformation online”. In turn, this facilitated the “Action Plan Against Disinformation,” and eventually in 2018, Codes of Practice on Disinformation, a voluntary self-regulatory commitment comprised of “signatories” representing multiple high profile technological companies was developed. While these codes provide helpful principles and guidelines, they are self-regulatory and voluntary and not legally binding measures.
The rules of the new code make it mandatory for a ‘significant social media intermediary’ that provides information primarily in the nature of messages (such as WhatsApp or Twitter) to enable the identification of the “first originator” of the information. This is a move aimed at tracking down people who indulge in circulation of fake news or carry out illegal activities, however, this will require the companies to break end to end encryption provided to the users. Such a requirement can affect user experience in India, by exposing users to cybersecurity threats and cybercrimes. The exposition of the “first originator” also brings in serious questions on the right to privacy.
The right to privacy is founded on the autonomy of the individual. The Apex Court in K.S. Puttaswamy case held that the right to privacy is a fundamental right. Moreover, one of the major concerns in India is the lack of a Data Protection law and it still being in the pipeline there is no mechanism to protect personal data. In such a scenario, protection of personal data being an intrinsic right under Article 21, it becomes the most vital duty of protecting the right in question in absence of proper legislation to that effect.
It is also pertinent to note that, section 69(1) of the IT Act already empowers the Central and State government to intercept, monitor or decrypt any information through computer resource only for the reasons provided under Article 19(2) of the Indian Constitution. Further, Section 69A allows the Centre to issue directions for blocking public access of any information through any computer resource.
Union Minister Ravi Shankar Prasad at the press conference while introducing the new Code reiterated that the right to internet is not a fundamental right itself, but it is a fundamental mechanism to realise other fundamental rights enshrined under Part III of the Constitution. This structure enables the Government to take substantial measures to proportionately and legitimately regulate the mechanism. While concerns have been raised on issues like decrypting end-to-encryption, the privacy of users and non-consultation with the stakeholders, these issues are expected to be resolved with the policy coming into the implementation stage. Considering the socio-economic impact of digital technologies, with a specific legislative mechanism in place, the new legal framework will ensure enforcement of rule of law and lead to a balanced digital ecosystem.
Energy sector, laws and Budget 2021-22
The Budget has also announced strategic disinvestment of public sector enterprises with an objective of minimising presence of the CPSEs to create a new space for private sector investment and has classified various sectors as strategic and non-strategic. The power sector has been classified as a strategic sector and it is proposed that it will have bare minimum presence of CPSEs and the remaining CPSEs will be privatised, merged with other CPSEs or closed.
The 2021-22 Budget tabled in the Parliament by the Finance Minister, Nirmala Sitharaman, has received a mixed response from stakeholders in the energy sector. While the massive outlay for revamping the power distribution sector was lauded across the board, the response to the Budget proposals from the renewable energy sector was not too enthusiastic.
The industry is positive about the Budget outlays for Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency Limited (IREDA).
Some of the key proposals in the Budget include:
• 3.05 trillion (~$41.92 billion) outlay for a revamped reforms-based result-linked power distribution sector program over five years
• Infusion of additional capital of Rs.10 billion (~$137 million) in SECI and Rs.15 billion (~$205.6 million) in IREDA
• Increase in customs duty on solar inverters from 5% to 20% and on solar lanterns from 5% to 15% to encourage domestic production
The finance minister also said that a phased manufacturing plan for solar cells and solar modules would be announced soon to build up India’s solar capacity.
In Budget 2020, an allocation of Rs.220 billion (~$3.08 billion) went to the power and renewable sector.
Some of the major budget outlays in the power sector include the Rs.26 billion (~$356 million) for solar power and Rs.11 billion (~$150 million) for wind power. The largest outlay was for the Integrated Power Development Scheme (IPDS), which received a whopping $53 billion (~$724 million). One of the main programs of IPDS is smart meter installations.
The Union Budget of 2021-22 has been met with a general sense of optimism but also a few reservations. One such review is that is that the budget is public sector centric and the private sector has largely been left to fend for itself. Whilst participants in the power sector may have even more reason to justify this sentiment, there have been certain welcome announcements. It will be crucial to see how these measures are implemented.
The key announcements are as follows:
DISCOM reform has been identified as a major agenda item for the present Government and has seen significant focus. It has been proposed that a revamped reforms based result linked power distribution sector scheme will be launched with an outlay of INR 3,05,984 crores over a period of five years to provide assistance to DISCOMS for infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems which are connected with financial improvements. This is a welcome step to curb mounting aggregate technical and commercial losses (AT&C Losses).
The Finance Minister has also proposed that a framework will be put in place to give consumers the power to decide their choice of supply from among more than one distribution companies (DISCOMS). As a large number of DISOMS are state owned, monopolistic and strapped of liquidity, these distribution utilities are ineffective in ensuring round the clock supply of power to consumers.
If implemented well, this could be a first (and major) step in introducing competitiveness and thus forcing DISCOMS to focus more on the needs of the final consumer. However, it is unclear how this move would and could be implemented at the individual consumer level. Extensive infrastructure development along with co-ordination and co-operation would be required not only with the supply chain, but also amongst DISCOMS in order to implement this on a meaningful scale.
It would be remiss not to mention here that there are massive outstanding regulatory assets. Despite the provision of a liquidity package infusing INR 1.2 lakh crore which helped at reducing systemic stress over the DISCOMS, the financial viability of DISCOMS is still a serious concern as has also been highlighted in the budget speech. The high regulatory assets/liabilities of DISCOMS has also been a major issue with respect to attracting private investment in the distribution sector, and attempts to privatise DISCOMS in the Union Territories have not seen major progress.
Although, the proposals in the Budget are a step in the right direction to promote competition in the sector and provide relief to the consumers, it will be important to see what impact this move could have on the financial position of DISCOMS. There is a concern that in the current status of things, such state owned or debt ridden DISCOMS are being set up for failure.
Perhaps, the renewables sector will feel most let down by this budget. Not only have the asks of the sector not been addressed but some of the existing benefits have also been taken away. A critical and unwelcome change in this regard relates to the custom duty for items of machinery, instruments, appliances, components or auxiliary equipment (including those required for testing and quality control) for setting up of solar power generation projects, which was capped at a 5% ad valorem rate previously. This exemption has been taken away. Developers would now be burdened by the increased costs of import and this would also lead to litigation under the power purchase agreements for change in law claims (adding to the burgeoning list including safeguard duty, GST et al).
Nevertheless, the announcement of the ‘Hydrogen Energy Mission’ (generating hydrogen from green sources) and the announcement of additional capital infusion into Solar Energy Corporation of India (Rs 1000 Crores) and Indian renewable Energy Development Agency (Rs 1500 Crores) are a few welcome measures in relation to an otherwise damp budget for the renewables sector.
‘Minimum Government and Maximum Governance’ is one out of the six pillars for this budget under over which it has been proposed by the government that in order to promote ease of doing business for those who deal with government or central public sector enterprises (CPSEs) and carry out contracts, a conciliation mechanism for quick resolution of contractual disputes will be set up. It is however unclear whether such a mechanism will be extended to disputes with DISCOMs, which are predominantly state owned and how such a conciliation mechanism will co-exist with the prevailing contractual and regulatory mechanism available to the participants of the sector. The key to the success of any such mechanism would depend on the relevant institution/authority having adequate non-governmental participation as resolution professionals and not showing any tendency to subscribe to the view of the government and the efficacy. Given past experiences, it would be difficult to win over the trust of the private sector in any such government driven conciliation and therefore this would have to be time tested in order for it to bring any considerable reform to the sector.
FUNDING STRUCTURES AND DISINVESTMENT
The budget has also announced strategic disinvestment of public sector enterprises with an objective of minimising presence of the CPSEs to create a new space for private sector investment and has classified various sectors as strategic and non-strategic. The power sector has been classified as a strategic sector and it is proposed that it will have bare minimum presence of CPSEs and the remaining CPSEs will be privatised, merged with other CPSEs or closed. This appears to be a conducive step towards reform in the sector which is dominated by public sector enterprises, however in order to attract private sector investment the government has to work towards resolving the debt situation of the DISCOMS and generally ease the regulatory burden on entities in the sector.
An asset reconstruction company is being proposed to be set up, essentially as a “bad bank”, to take over stressed debt of the public sector banks, then manage and dispose of the assets to AIFs and other potential investors. This will go a long way in managing the non-performing status of several power sector debts and potentially rejuvenate several stalled projects.
Another welcome suggestion is the setting up of a development finance institution (DFI), the National Bank for Financing Infrastructure & Development (NaBFID). The intention is to reduce the burden on banks which are struggling to provide liquidity to the power sector, as well as to be able to raise long term capital at low rates from the international market. NaBFID will however face quite a few challenges, not least the continued lack of maturity of the corporate debt market and the problem with identifying a sustainable source for long-term funds.
Additional relaxations have been made for InVITs, including allowing FPIs to invest in debt instruments issued by InVITs and a proposal that dividends from project companies to the InVIT will be exempted from taxation.
In the previous budget, the Government had provided a tax exemption for sovereign wealth funds and pension funds investing in infrastructure. This was subject to certain conditions which were difficult to meet. The present budget proposes to ease some of these restrictions including the prohibition on private funding, prohibition on loans and borrowings and restriction on commercial activities and direct investment in infrastructure. The ability to attract long term funds in infrastructure is a critical aspect for continued growth and these changes should be crucial from this perspective.
RATIONALISATION OF PROVISIONS RELATING TO SOVEREIGN WEALTH FUNDS OR PENSION FUNDS
Traditionally, investments in the infrastructure or energy sector are made using a non-operating holding company structure, which, in turn, holds investments in power generating SPVs. In line with the stated intent and objective of the exemption, it is now proposed that the benefit of tax exemption is proposed to be extended to sovereign wealth funds or pension funds making investments in an Indian non-operating holding company or NBFC, registered as infrastructure finance company or infrastructure debt fund which, in turn, makes investment in wholly-owned subsidiaries, joint ventures, or SPVs carrying on specified infrastructure projects. Further, there is a relaxation of condition from 100% investment in eligible infrastructure company, to 50% investment in an eligible infrastructure company. Apart from this, certain additional amendments have been proposed to remove the difficulties faced by these funds in meeting the condition required for seeking tax exemption.
No TDS on dividends paid to a business trust by the special purpose vehicle
While the dividends paid to a business trust by the special purpose vehicle are exempt under the existing tax provisions, the withholding tax provisions did not provide any specific exclusion for not withholding the tax when making dividend payouts to business trust. This lacunae has now been plugged by inserting a second proviso to Section 194 of the Act, to exclude the applicability of withholding tax on dividend paid to business trust.
Expanding TDS provisions on purchase of goods by energy players
While the previous Budget introduced TCS provisions on sale of goods, this Budget has proposed to replace the same with tax deduction on purchase of goods @ 0.1% subject to conditions prescribed. Hence, the liability to deposit taxes has been shifted to energy companies making payments towards the purchase of equipment / goods, subject to satisfaction of other conditions. The amendment may create unintended litigation in future, especially on composite contracts which may be subject to TDS under other provisions of the Act at a higher rate.
Also, higher tax rate is proposed for specified persons who have not filed income tax returns in earlier 2 years for which time limit of filing the tax return is already expired and taxes are more than INR 50,000 in each of these years. This would put an additional burden on energy players to obtain additional documentation from payees while deducting the taxes, while making payments.
GOODWILL NO LONGER A DEPRECIABLE ASSET
The contentious issue on whether goodwill is a depreciable asset has now been put to rest by amending the relevant tax provisions to state that goodwill is not a depreciable asset and would not be eligible for depreciation under Section 32 of the Act, thereby, overriding the SC decision in this context. Further, if this acquired goodwill is transferred, then appropriate long-term or short-term capital gains would be levied after deducting the cost paid in this regard.
This amendment may act as a deal breaker, wherein acquiring company would now not be eligible for tax deduction (by way of depreciation) on the excess consideration paid. Also, it would be interesting to note that the aforesaid amendment though prospective in nature, may prompt tax authorities to contend to deny the depreciation benefit to earlier years as well.
Advance Tax applicable on dividend income only on declaration /payment basis.
With the abolition of DDT, shareholders were made liable to pay tax on such dividends. However advance tax was applicable on such dividend income. Considering this genuine hardship, the advance tax requirement on dividends (other than dividend under Section 2(22)(e)) is now applicable only on declaration or payment basis.
PROCEDURES FOR REOPENING OF ASSESSMENTS REVAMPED
With the advent of the technology and integration of information from all reporting agencies, the government has realised that it is now far more simpler to track down the income escapement cases. Therefore, the Budget has revamped the reopening provisions and reduced the time limit from the current 6 years to a period of 3 years. Further, in case of serious income escapement exceeding INR 50 lakhs or more in a year, the reopening may happen up to a period of 10 years after prior approval. However, considering the income escape limit, in a way, this amendment would now provide the reopening up to 10 years (unlike 6 years in earlier regime). Also, a notice would be issued before reopening the assessment to provide the opportunity of being heard and order in this regard would be passed by the assessing officer before initiating the assessment.
The other amendments covered reduction in the time limit for filing revised and belated tax returns, completion of assessments, faceless ITAT appeals and revamping the AAR. Few key demands of power sector such as concessional withholding tax rates for Indian ECBs, relaxations in thin cap provisions etc. remained unmet. Holistically, this Budget had more to do with clarificatory and compliance-oriented amendments.
In conclusion, the budget announcements for the coming financial year have placed strong emphasis on revival of the public sector in India, however in respect of the power and energy sector the government could have introduced more systemic reforms like tax consolidation schemes for large energy projects, relaxations in indirect taxes, incentives for renewables etc. Overall, for the time being, it appears that all the eggs for the sector continue to be placed in one basket of the “Electricity (Amendment) Bill 2020” (Bill). The Bill has seen opposition from power sector workers and is also one of the items of protest under the current farmers agitation. In the backdrop of the current budget, it becomes even more critical that the government shows political will to pass this legislation on a fast track basis, to ensure meaningful reforms in the sector. As regards the budget, the effectiveness of the positive announcements made in the budget will depend on the will of the public sector enterprises to implement or exploit these changes until such time that the Bill is made into law.
Exception of customary divorce under Hindu Marriage Act not attracted in absence of declaration from civil court regarding its validity: Calcutta High Court
The sum and substance of this judgement is that merely obtaining a customary divorce will certainly not attract the exception envisaged under Section 29(2) of the Hindu Marriage Act. It merits no reiteration that for Section 29(2) of the 1955 Act to be invoked, it has to be established by the party relying on a custom that the right of the party was recognised by custom to obtain the dissolution of a Hindu marriage.
In a recent, remarkable, righteous and rational decision titled Smt. Krishna Veni Vs The Union of India and others in WPA No. 2346 of 2018 delivered on February 18, 2021, the single Judge Bench of Justice Sabyasachi Bhattacharyya has held that merely obtaining a customary divorce will not attract the exception envisaged under Section 29(2) of the Hindu Marriage Act. It has been made absolutely clear that the validity of such a divorce has to be established by a deed of declaration. Very rightly so!
To start with, the ball is set rolling in para 1 of this notable judgment wherein it is put forth that, “The present challenge has been preferred by Smt. Krishna Veni, the second wife of Sardar Natha Singh (since deceased), who was a freedom fighter getting pension from the Central Government under the Swatantra Sainik Samman Pension Scheme, 1980 till his demise on August 25, 1984. The petitioner, relying on a deed of declaration of divorce, purportedly executed by respondent no.11, the first wife and Sardar Natha Singh, the husband of the petitioner, claimed widow pension under the said Scheme, which was refused by a communication dated March 6, 2012 issued by the Assistant Secretary to the Government of West Bengal on the ground that such deed of divorce dated December 19, 1956 was not acceptable under the Hindu Marriage Act, 1955, in the absence of a decree for divorce obtained from a competent court of law.”
To put things in perspective, it is then laid down in para 10 that, “For Section 29(2) of the 1955 Act to be invoked, it has to be established by the party relying on a custom that the right of the party was recognized by custom, to obtain the dissolution of a Hindu marriage. In the present case, the petitioner did not approach the civil court for declaration regarding validity of the divorce deed.”
As it turned out, the Bench then states in para 11 that, “There was nothing to prevent the petitioner from approaching the competent civil court for such declaration. The burden and initial onus lies on the petitioner to prove the existence of a custom having the force of law, to be proved by evidence – oral or documentary – in order to attract the benefit of Section 29(2) of the Hindu Marriage Act.”
Needless to say, it is then stated in para 12 that, “Section 2(1)(b) of the Hindu Marriage Act, 1955 stipulates that the Act applies to Sikhs as well. Thus, the provisions of the Act, including Section 13 thereof (pertaining to divorce), applies to Sikhs in general. Admittedly, the petitioner, respondent no.11 and their deceased husband are/were Sikhs by religion. Hence, the marriage between the respondent no.11 and her deceased husband could only be dissolved by a decree of divorce passed by a competent court on any of the grounds as mentioned in Section 13 of the Act, unless the existence of any contrary custom was proved by evidence.”
Be it noted, it is then pointed out in para 13 that, “. In order to justify an exception to Section 13 within the purview of Section 29(2), the petitioner had to approach a civil court and establish by evidence that the dissolution of the marriage between the respondent no.11 and her deceased husband was recognized by custom. All Sikhs do not come within the purview of such exception, unless any custom to the contrary is proved by cogent evidence. The respondent-authorities do not have the jurisdiction in law to decide the matrimonial status of the private parties and/or the validity of the deed of declaration, which could only be done by adduction of adequate evidence before a civil court. Unfortunately, neither does the writ court, with its constraints in taking evidence on disputed questions of fact, has the scope to decide such issue.”
While elaborating further along with the relevant case law, it is then envisaged in para 14 that, “In Gurdit Singh (supra), the Supreme Court was dealing with an issue which arose in a civil suit. The trial court had decreed the marriage-in-question to be valid. The appellate court reversed such decree on the premise that the marriage between the parties was invalid, being not justified by any custom. Upon the issue being remitted to the trial court, after giving the parties an opportunity to lead further evidence, the trial court answered the issue regarding the existence of such custom in the negative, which was endorsed by the appellate court. In second appeal, the High Court held that a custom was proved under which Mst. Angrez Kaur, respondent could validly marry Sunder Singh, even though her first husband was alive. While considering such matter, the Supreme Court observed that the witnesses examined on behalf of the appellant had admitted the existence of a custom permitting the Hindu husband to divorce his wife. Upon such premise, the Supreme Court proceeded to endorse such view.”
While citing yet another relevant case law, the Bench then observes in para 15 that, “ In Balwinder Singh (supra), the matter in issue before the Supreme Court also arose from a civil suit, wherein the trial court declared the marriage solemnized between the parties in accordance with Hindu rites and ceremony as null and void and granted a decree of nullity of marriage. The appellate court had found that the evidence adduced by the appellant was not sufficient and reliable enough to establish the existence of the custom amongst the Sikhs Jats of District Amritsar to which District the appellant and its parents belonged, under which the marriage between the appellant and his previous wife could be dissolved otherwise than through court as per the provisions of the Hindu Marriage Act.”
It would be pertinent to mention that it is then stated in para 16 that, “While dealing with such question, the Delhi High Court considered the evidence adduced by the parties and sanctioned the dissolution of marriage by execution of a deed of divorce.”
Simply put, it is then mentioned in para 17 that, “The Andhra Pradesh High Court, in Doddi Appa Rao (supra), was also considering a case where a civil court had decreed a suit for declaration that the marriage of the plaintiff and the defendant therein was dissolved as per caste custom and usage. In such context, it was held by the Division Bench of the Andhra Pradesh High Court that the Central Administrative Tribunal ought to have honoured such decree.”
It would be useful to also note that it is then specified in para 18 that, “In G. Thimma Reddy (supra), the learned Single Judge considered several factors apart from the registered deed of divorce, including that the factum of divorce was disregarded on a flimsy ground that the stamp affixed to the document of divorce was in the name of a wrong person. The court also took into consideration the fact that the spouses were living separately and in possession of lands settled in their favour, for which no need for divorce was there. Oral evidence was also adduced by several witnesses, one of them a caste elder who had also attested the document. P.Ws 1 to 3 therein spoke of existing custom in the caste of the spouses sanctioning such divorce. Moreover, the adjudication in the said report was in the context of a land dispute between the parties.”
As a corollary, it is then pointed out in para 19 that, “As such, in each of the judgments cited by the petitioner, a valid decree, sectioning the respective documents of divorce, had been passed by competent civil courts. In the present case, however, no such decree was obtained by the petitioner.”
In addition, it is then also brought out in para 20 that, “That apart, it is pleaded by the writ petitioner herself that the Government of India, Ministry of Home Affairs, New Delhi, sanctioned payment of political pension to the first wife, that is, respondent no.11 with effect from August 26, 1984 by a letter dated February 14, 1986 and Pension Payment Order was issued accordingly in favour of respondent no.11. For whatever reason such pension might have been withheld subsequently, the initial grant of pension to respondent no. 11 is an endorsement of the fact that the first wife was found eligible for such pension by the respondent authorities and she had already started getting pension.”
Perhaps more crucially, it is then elaborated in para 21 that, “It is relevant to mention here that a suit-in-question was filed by respondent no.11, inter alia, for declaration that she was the only married wife and the only widow of Sardar Natha Singh (since deceased) and was entitled to widow pension and that the present petitioner was not the wife and widow of Sardar Natha Singh. Learned counsel for the petitioner argues that the said suit was dismissed for default and the subsequent restoration application filed by respondent no.11 met with the same fate. As such, it is contended that respondent no.11 is debarred from raising the contentions on which declaration was sought by her in the dismissed suit.”
To state the obvious, the Bench then notes in para 22 that, “Order IX Rule 9 of the Code of Civil Procedure debars a plaintiff from bringing a fresh suit in respect of the same cause of action in the event of dismissal of a suit for default. However, it is well-settled that such a dismissal, ipso facto, would not take away the right of the plaintiff which was under consideration in the suit. Such right, if available otherwise to the plaintiff in accordance with law, subsists despite the dismissal of the suit for default. The plaintiff in such a suit may very well raise a defence on the basis of such right in a different suit or legal action and/or may agitate the same right in a suit filed by her on a subsequent cause of action.”
Of course, it is then rightly stated in para 23 that, “Thus, in the present case, the dismissal of the suit of respondent no.11 for default does not preclude the said respondent from staking her claim before any authority other than a civil court, that too in a suit filed by her on the self-same cause of action, and/or setting up a defence in the writ petition on the basis of such claim.”
Most significantly, it is then aptly observed in para 24 that, “In the utter absence of any evidence, let alone conclusive, that the divorce decree executed purportedly between respondent no.11 and her deceased husband was endorsed by any valid custom, the exception envisaged in Section 29(2) of the 1955 Hindu Marriage Act would not be attracted. Thus, the spouses had to revert back to Section 13 of the Act, which sanctions dissolution of marriage only by a decree of divorce, for the dissolution of marriage to be valid in the eye of law.”
What’s more, it is then also pointed out in para 25 that, “Such facts, coupled with the fact that pension was granted earlier in favour of respondent no.11 upon a valid sanction being issued by the respondent-authorities, it would be unjust to deprive respondent no.11 from such pension at the behest of the petitioner, merely on the basis of the petitioner’s assertion on oath in this writ petition that a deed of divorce, supported by valid and recognized customs, was executed between respondent no.11 and her deceased husband.”
As was anticipated, the Bench then goes on to add in para 26 that, “ I must note that, in view of the long-pending litigation between the private parties, it would be lucrative to direct pension to be paid equally between the petitioner and respondent no.11. However, such a course of action would be grossly illegal. Although my empathy goes fully with the petitioner, who is an unemployed lady of about 63 years as per her own affidavit, this court does not have the power to enact law but is bound by the provisions of law as the Parliament, in its wisdom, chose to promulgate. Where a conflict arises between individual conscience of the concerned Judge and judicial conscience, supported by law of the land, the former has to give way to the latter.”
Now coming to the concluding paras. It is held in para 27 that, “In such view of the matter, the writ petition fails. Accordingly, WPA No.2346 of 2018 is dismissed on contest without any order as to costs.” Finally, it is then held in the last para 28 that, “Urgent certified copies of this order shall be supplied to the parties applying for the same, upon due compliance of all requisite formalities.”
To conclude, the sum and substance of this noteworthy judgment is that that merely obtaining a customary divorce will certainly not attract the exception envisaged under Section 29(2) of the Hindu Marriage Act. It merits no reiteration that for Section 29(2) of the 1955 Act to be invoked, it has to be established by the party relying on a custom that the right of the party was recognized by custom to obtain the dissolution of a Hindu marriage. Very rightly so!
REFUSAL TO GIVE TEA NOT SUDDEN OR GRAVE PROVOCATION: BOMBAY HC
In an enduring, empowering, enlightening, enriching and encouraging judgment for women titled Santosh Mahadev Atkar vs The State of Maharashtra in Criminal Appeal No. 544 of 2019 delivered recently on February 2, 2021, the Bombay High Court has observed that the medieval notion of the wife being the ‘property of the husband to do as he wishes, still persists’. The Bombay High Court thus refused to show any leniency to a man convicted for culpable homicide not amounting to murder. A single Judge Bench of Justice Revati Mohite Dere held clearly, cogently and convincingly that the husband’s contention that his wife, by refusing to make tea, offered a grave and sudden provocation to be “ludicrous”, “clearly untenable and unsustainable”. It must be mentioned here categorically, clearly and cogently that the wife, struck by her husband with a hammer for suspecting her character and refusing to make tea had eventually succumbed to her injuries.
To start with, the ball is set rolling in para 2 of this learned, latest, laudable and landmark judgment by first and foremost observing that, “The appellant has impugned the judgment and order dated 1st July 2016 passed by the learned Additional Sessions Judge, Pandharpur in Sessions Case No. 13/2014, convicting and sentencing the appellant as under :
– for the offence punishable under 304, Part II of the Indian Penal Code, to suffer rigorous imprisonment for 10 years and to pay a fine of Rs.5,000/-, in default of payment of fine, to suffer simple imprisonment for 6 months;
– for the offence punishable under Section 201 of the Indian Penal Code, to suffer rigorous imprisonment for 2 years and to pay a fine of Rs.3,000/-, in default of payment of fine, to suffer simple imprisonment for 3 months.
Both the aforesaid sentences were directed to run concurrently.”
To put things in perspective, it is then stated in para 3 while elaborating on the facts of the case that, “A few facts as are necessary to decide the case are as under :
The appellant is the husband, who was married to Manisha (deceased) on 15th December 2005. From the said wedlock, the appellant and Manisha were blessed with a daughter-Rohini. The appellant and Manisha were residing in the Servants’ Quarters of Vitthal Hospital at Pandharpur along with the appellant’s mother, who was serving in the said Hospital. According to the prosecution, the appellant was suspecting Manisha’s character, as a result of which, there used to be frequent quarrels between them. The incident is stated to have taken place on 19th December 2013 at about 6:00 a.m. It is the prosecution case that Manisha was leaving the house on the said date and time, without preparing tea, on account of which, there was exchange of words between the appellant and deceased Manisha. As the appellant was suspecting Manisha’s character and as she refused to make tea for the appellant, the appellant is alleged to have given a blow on Manisha’s head from behind, with a hammer. The said incident is alleged to have been witnessed by Rohini (appellant and Manisha’s daughter), who, at the relevant time, was aged 6 years. It is the prosecution case that soon after Manisha was assaulted, the appellant gave her a bath, wiped the blood-stains from the spot and thereafter took Manisha to Vitthal Hospital. As Manisha’s condition was critical, the doctor who treated Manisha asked the appellant to shift Manisha to the Civil Hospital, Solapur. Pursuant thereto, Manisha was shifted to the Civil Hospital, Solapur. Throughout, Manisha’s condition was critical and she was unable to speak and eventually on 25th December 2013, Manisha succumbed to her injury.
In the meantime, i.e. on 19th December 2013, Manisha’s uncle Macchindra Waghmare (PW 4), on learning that Manisha was admitted to the hospital, immediately rushed to the hospital i.e. Vitthal Hospital, where the appellant informed Macchindra that he had assaulted Manisha. Pursuant thereto, Macchindra Waghmare (PW 4) lodged a complaint with the Pandharpur Police Station. On registration of the FIR, investigation commenced, statements of witnesses were recorded, panchanamas were drawn and after investigation, charge-sheet was filed as against the appellant for the offence punishable under Section 302 and 201 of the Indian Penal Code, in the Court of the learned Magistrate at Pandharpur.
The said offence being Sessions triable, the case was committed to the Court of Sessions at Pandharpur. Charge was framed against the appellant for the aforesaid offence, to which, the appellant pleaded not guilty and claimed to be tried. The prosecution, in support of its case, examined 12 witnesses. Thereafter, Section 313 statement of the appellant was recorded. The learned Judge, after hearing the parties, was pleased to convict the appellant for the offence as stated in para 2 hereinabove.”
As it turned out, after hearing both the parties, Justice Revati then observed in para 6 that, “Perused the papers. Having heard learned counsel for the appellant and the learned A.P.P at length and after considering the submissions canvassed by them and after perusing the evidence on record, I am of the opinion that no interference is warranted in the impugned judgment and order, for the reasons set-out hereunder; As noted above, the prosecution allegation as against the appellant is that the appellant would suspect the character of his wifeManisha. The said fact is borne out from the evidence of PW 4- Macchindra (Manisha’s uncle, who is the first informant in the said case) as well as the evidence of PW 6-Nandabai (Manisha’s mother). Both the said witnesses have categorically in their evidence stated about the ill-treatment meted out by the appellant to Manisha i.e. of suspecting her character and of physical assault. The incident in question is alleged to have taken place on 19th December 2013 at about 6:00 a.m. at the Servants’ Quarter, where the appellant was staying with Manisha and their daughter Rohini. The said Servants’ Quarter belonged to the appellant’s mother, who was working in the hospital. It is not in dispute that at the relevant time, the appellant’s mother was not present in the house. As noted above, there is also an extra-judicial confession made by the appellant to PW 4- Macchindra, PW 6-Nandabai and PW 7-Dr. Dhotre (Medical Officer at Vitthal Hospital, Pandharpur).”
To be sure, it is then stated in para 7 that, “Coming to the evidence on record with respect to ill-treatment meted out by the applicant to Manisha and the extra-judicial confession made by the applicant, the relevant witnesses in this regard are PW 4- Macchindra and PW 6-Nandabai. As far as PW 4-Macchindra’s evidence is concerned, he has stated that deceased-Manisha was his niece; that she was married to the appellant on 15th December 2005; that they were living in a Servants’ Quarter of Vitthal Hospital for about 3 years prior to the incident; that Rohini (appellant and Manisha’s daughter) was also residing with them; that the appellant was suspecting Manisha’s character and would quarrel with her on account of the same and that on 19th December 2013, the appellant assaulted Manisha on her head, resulting in serious injuries, pursuant to which, the appellant admitted Manisha to Vitthal Hospital. PW 4-Macchindra has further stated that Manisha was shifted from Vitthal Hospital to Civil Hospital, as she was seriously injured. He has stated that Manisha was unconscious and had sustained injuries on her head. He has further stated that when he questioned the appellant as to what had happened, the appellant disclosed to him that at 6:00 a.m, he had asked Manisha to prepare tea and that when she refused to prepare tea, he assaulted her with a hammer on her head, pursuant to which, he brought her to the Civil Hospital. PW 4-Macchindra, on the basis of the said disclosure made by the appellant, lodged a complaint/FIR, as against the appellant with the Pandharpur Police Station. The said FIR is at Exhibit-23. Although several suggestions were made to the said witness, nothing is elicited in his cross-examination to disbelieve the said witness. A suggestion was also made to the said witness that the deceased fell, as a result of which, she sustained an injury on her head, which suggestion was denied by the witness. It was also brought on record that the appellant had filed a complaint against the said witness and Manisha’s parents in 2010, as a result of which, they were falsely implicating him in the said case, which suggestion was also denied by the said witness.”
Be it noted, it is then enunciated in para 8 that, “The evidence of PW 6-Nandabai (Manisha’s mother) is similar to the evidence of PW 4-Macchindra with respect to the ill-treatment meted out by the appellant to her daughter-Manisha i.e. the appellant used to suspect Manisha’s character; would quarrel with her and also assault her. PW 6-Nandabai has stated that when she, along with others, visited the Civil Hospital, Solapur, they learnt that Manisha was serious; that she was not opening her eyes nor could she talk. She has stated that when she asked the appellant what had happened, the appellant disclosed that in the morning at 6:00 a.m, as Manisha had not given him tea and as he suspected her character, he hit her on her head, resulting in Manisha sustaining an injury. Again, nothing material is brought in the cross-examination, so as to disbelieve or discredit this witness. The suggestions made to the said witness i.e. PW 6-Nandabai have been categorically denied by her i.e. that Manisha was injured in an accident; that no such disclosure was made by the appellant to her; and that they had lodged a false complaint against him because of an earlier complaint lodged by the appellant against them in 2010. Thus, from the evidence on record, it is evident that the appellant would suspect Manisha’s character and that the appellant had made an extra-judicial confession to PW 4-Macchindra and PW 6-Nandabai that he had assaulted Manisha.”
It is also really worth noting that it is then observed in para 9 that, “It is pertinent to note that the evidence of both the aforesaid witnesses i.e. PW 4-Macchindra and PW 6-Nandabai is, duly corroborated by an independent witness i.e. PW 7- Dr. Bajrang Dhotre.
PW 7- Dr. Dhotre was working as a Medical Officer at Vitthal Hospital, Pandharpur at the relevant time. He has stated that on 19th December 2013 at about 7:00 a.m., Manisha was admitted in the hospital; that when he examined her, he found that she was in a serious condition, as she had suffered heavy bleeding. He had stated that the said patient was brought by Santosh Atkar (appellant). He has further stated that the appellant informed him i.e. gave history that he had hit Manisha at 6:30 a.m. in the morning with a hammer at the residential quarters of Vitthal Hospital. PW 7-Dr. Dhotre has stated that the said history given by the appellant was reduced into writing by him in the appellant’s words. PW 7-Dr. Dhotre has identified his handwriting on the case papers which are exhibited at Exhibit-28. Exhibit 28 i.e. case papers of Manisha read as under :
“Patient brought by Mr. Santosh Mahadeo Aatkar c alleged history an assault, he hited by hammer (हातोडा), today morning at about 6:30 A.M.; at Vitthal Hospital residence quarters.”
PW 7- Dr. Dhotre found the following injuries on Manisha :
i) C.L.W. measuring 4 Cms. X 3.5 Cms., oozing of blood was present. It was present at left parietal region, 5 Cms. away from the midline, and was placed anterio posteriorely. On clinical examination it was depressed fracture of skull.
ii) C.L.W. measuring 3 X 1 Cm. was vertical in direction, was muscle deep and blood mark was present. It was situated at medial aspect of left forearm in its lower 1/3rd part.
iii) C.L.W. measuring 2 X 0.5 Cm. was vertical in direction, and blood mark was present, and was at medial to injury No.2 and it was parallel to it.
iv) C.L.W. measuring 1 X 0.5 Cm. was horizontal in direction, and blood mark was present and was at dorsum of left little finger on its terminal part of 1st digit.
v) Haematoma measuring 5 X 3 Cms. was tender and was at dorsum of right hand.
vi) Abrasion 2 X 1 Cm. was read in colour and was at right patellor region. It is simple in nature.
All injuries are within 6 hours old. Injury Nos. 1, 2, 3, 4 was caused by hard and blunt and hard and rough object. Injury Nos. 5 and 6 are caused by hard and rough object.”
PW 7-Dr. Dhotre advised CT-Scan of the patient-Manisha and asked her to be shifted to a higher center for further treatment, pursuant to which, Manisha was taken to the Civil Hospital at Solapur. Thus, the extrajudicial confession made by the appellant to PW 4-Macchindra and PW 6- Nandabai is duly corroborated by PW 7-Dr. Dhotre and is supported by Exhibit 28 i.e. the case papers. It appears that after Manisha was shifted to the Civil Hospital at Solapur, efforts were made by the police to record her statement, however, she was not found in a condition to record her statement. On 25th December 2013, Manisha succumbed to her injuries. The cause of death was stated to be head injury. Column 19 of the postmortem report reveals the following internal injuries :
“(i) Underscalp haematoma present over left side fronto parieto tempora occipital region size 13 cm x 7 cm;
(ii) Comminuted depressed fracture of left parietal bone of size 4 cm x 3.5 cm;
(iii) – Extradural haematoma present over left parietal region about 50 gms,
– Subdural haematoma present all over brain about 100 gms;
– Subarachnoid haemorrhage present all over brain surface as think blood film,
– Meninges torn,
– Brain congested & ocetomatovy.””
Needless to say, it is then stated in para 10 that, “Thus, it appears that the appellant assaulted Manisha on her head with a hammer from behind, resulting in a grievous injury on the head and other injuries on her person. The situs of injury is consistent with the evidence on record.”
As we see, Justice Revati then mentions in para 14 that, “Learned counsel for the appellant relied on the judgment of the Apex Court in the case of Madanlal vs. State of Punjab [1992 Supp (2) SCC 233] . He submitted that in the said case, the accused was convicted for the offence under Section 304 Part (II) of the Indian Penal Code and was sentenced to suffer imprisonment of 4 years. He submitted that as the accused’s act was a result of grave and sudden provocation, his sentence was reduced to the period undergone. According to the learned counsel for the appellant, since the appellant in the present case, acted under grave and sudden provocation, the appellant’s sentence also be reduced to the period undergone by him.”
More appropriately, Justice Revati then while making the right reasoning points out in para 15 that, “A perusal of the said judgment relied upon by the learned counsel is clearly distinguishable and has no bearing on the facts in the present case. The case before the Apex Court was that the appellant therein, had caused serious injury to the deceased with a handle of a pump; the motive of the crime was that the accused therein was hungry for 3 days and when he asked for food from the deceased Sewadar of the `Dera’ where free food was being supplied, the deceased refused and consequently, the appellant, in a fit of anger, attacked the deceased on being deprived of the power of self control. Admittedly, in that case, the appellant and the deceased were not known to each other and the motive was hunger for 3 days. In the present case, the appellant was suspecting his wife’s character and would assault her on account of the same. On the day of the incident on being refused tea, the appellant assaulted Manisha with a hammer. The deceased-Manisha, by refusing to make tea for the appellant, by no stretch of imagination, can be said to have offered grave and sudden provocation for the appellant to assault her, much less, such a brutal assault.”
Most significantly and most remarkably, what forms the cornerstone and bedrock of this judgment is then waxed eloquently, elegantly and effectively as stated in para 16 that, “It would not be out of place to observe that a wife is not a chattel or an object. Marriage ideally is a partnership based on equality. More often than not, it is far from that. Cases such as these, are not uncommon. Such cases, reflect the imbalance of gender – skewed patriarchy, the socio-cultural milieu one has grown up in, which often seeps into a marital relationship. There is imbalance of gender roles, where wife as a homemaker is expected to do all the household chores. Emotional labour in a marriage is also expected to be done by the wife. Coupled with these imbalances in the equation, is the imbalance of expectation and subjugation. Social conditions of women also make them handover themselves to their spouses. Thus, men, in such cases, consider themselves as primary partners and their wives, `chattel’. To quote from a study, ‘The Man Who Mistook His Wife For Chattel’ by Margo Wilson and Martin Daly:
“by `proprietary’, we mean first that men lay claim to particular women as songbirds lay claim to territories, as lions lay claim to a kill, or as people of both sexes lay claim to valuables. Having located an individually recognizable and potentially defensible resource packet, the proprietary creature proceeds to advertise and exercise the intention of defending it from rivals. Proprietariness has the further implication, possibly peculiar to the human case, of a sense of right or entitlement”.
This medieval notion of the wife being the property of the husband to do as he wishes, unfortunately, still persists in the majority mindset. Nothing but notions of patriarchy. Thus, the submission of the learned counsel for the appellant that the deceased by refusing to make tea for the appellant offered grave and sudden provocation, is ludicrous, clearly untenable and unsustainable and as such deserves to be rejected. In the facts, the appellant not only assaulted his wife, but also after assaulting her, wasted precious and crucial time i.e. around one hour, in covering his act by destroying evidence, by wiping the blood from the spot and bathing Manisha before taking her to the hospital. If the appellant had rushed Manisha to the hospital, soon after the incident, possibly her life could have been saved and Rohini would not have lost her mother.”
Finally and as a corollary, it is then stated by Justice Revati in para 17 that, “Considering the overwhelming evidence on record pointing to the complicity, no infirmity can be found in the impugned judgment and order convicting and sentencing the appellant for the offences mentioned in para 2 hereinabove. The facts on record also do not warrant any reduction in the sentence awarded to the appellant. Accordingly, the appeal is dismissed.”
On an unflattering note, it must be stated quite uprightly that Justice Revati Mohite Dere has written a very bold, brilliant, brief, balanced and blunt judgment which makes it absolutely clear in no uncertain terms that violence by a husband against her wife cannot be justified on the pretext of grave and sudden provocation as cited here which simply does not hold any water! This alone explains why Justice Revati has rightly termed in her 19-page order that the husband’s contention that his wife by refusing to make tea offered a grave and sudden provocation was “ludicrous”, “clearly untenable and unsustainable”. Very rightly so! It is a worth emulating judgment in similar such cases!
Sanjeev Sirohi, Advocate,
SEDITION: DISAFFECTION VS DISAPPROBATION
In my last piece, I had started a discussion on Section 124A of the IPC which deals with sedition. I had broadly set out the history of the provision, including its original language in 1870 and the amendments undertaken in 1898 and thereafter, leading to the provision as it stands today. In this piece, I will discuss a few landmark judgements which were delivered before the Constitution came into force on January 26, 1950 to understand the treatment of the provision by British Indian Courts.
The first such judgement is Queen-Empress vs Jogendra Chunder Bose And Ors. (1891) delivered by the Calcutta High Court at a time when the provision read as under:
124A. EXCITING DISAFFECTION
Whoever by words, either spoken or intended to be read, or by signs, or by visible representation, or otherwise, excites, or attempts to excite, feelings of disaffection to the Government established by law in British India, shall be punished with transportation for life or for any term, to which, fine may be added, or with imprisonment for a term which may extend to three years, to which fine may be added, or with fine.
Explanation-Such a disapprobation of the measures of the Government as is compatible with a disposition to render obedience to the lawful authority of the Government and to support the lawful authority of the Government against unlawful attempts to subvert or resist that authority, is not disaffection. Therefore, the making of comments on the measures of the Government, with the intention of exciting only this species of disapprobation, is not an offence within this clause.
A reading of the provision makes it clear that it struck a distinction between exciting feelings of “disaffection” on the one hand, and “disapprobation” of the measures of the Government on the other. According to the Calcutta High Court in 1891, the former referred to a challenge to the lawful authority of the government whereas the latter referred to disapproval of the Government’s measures without calling for disobedience to the authority of the government. Therefore, words, written or spoken, or signs or any form of visible representation which were intended to excite feelings of disaffection towards the government, which were distinct from merely disapprobation or disapproval of the government’s measures, attracted the provision. Mere intention to create disaffection as deciphered from the written or spoken word or visible representation was sufficient, without the need for that intention to have achieved fruition. Following are the relevant extracts from the judgement:
“If a person uses either spoken or written words calculated to create in the minds of the persons to whom they are addressed a disposition not to obey the lawful authority of the Government, or to subvert or resist that authority, if and when occasion should arise, and if he does so with the intention of creating such a disposition in his hearers or readers, he will be guilty of the offence of attempting to excite disaffection within the meaning of the section, though no disturbance is brought about by his words or any feeling of disaffection, in fact, produced by them. It is sufficient for the purposes of the section that the words used are calculated to excite feelings of ill-will against the Government and to hold it up to the hatred and contempt of the people, and that they were used with the intention to create such feeling. The second question for you, gentlemen of the Jury, then, will be whether, upon the evidence before you, you think that the articles circulated by the prisoners were calculated to create such feelings in the minds of their readers, and if so, whether they intended to create such feeling by their circulation.”
Subsequently, in Queen-Empress v. Amba Prasad (1897), on the meaning of “disaffection” and contrasting it with “disapprobation”, the Bombay High Court reiterated as follows the earlier judgement of the Calcutta High Court:
“It (disaffection) means hatred, enmity, dislike, hostility, contempt and every form of ill-will to the Government. ‘Disloyalty’ is perhaps the best general term, comprehending every possible form of bad feeling to the Government. That is what the law means by the disaffection which a man must not excite or attempt to excite: he must not make or try to make others feel enmity of any kind towards the Government. You will observe that the amount or intensity of the disaffection is absolutely immaterial, except perhaps in dealing with the question of punishment: if a man excites or attempts to excite feelings of disaffection, great or small, he is guilty under the section. In the next place it is absolutely immaterial whether any feelings of disaffection have been excited or not by the publication in question.
.. The offence consists in exciting or attempting to excite in others certain bad feelings towards the Government. It is not the exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance, great or small. Whether any disturbance or outbreak was caused by these articles is absolutely immaterial. If the accused intended by the articles to excite rebellion or disturbance, his act would doubtless fall within Section 124A, and would probably fall within other sections of the Penal Code. But even if he neither excited nor intended to excite any rebellion, or outbreak or forcible resistance to the authority of the Government, still, if he tried to excite feelings of enmity to the Government, that is sufficient to make him guilty under the section.
It (the provision) does not apply to any writing which consists not merely of comments upon Government measures, but of attacks upon the Government itself. It would apply to any criticisms of legislative enactments, such as the Epidemic Diseases Act, or any particular tax, or of administrative measures, such as the steps taken by the Government for the suppression of plague or famine. But if you come to the conclusion that these writings are an attack, not merely upon such measures as these, but upon the Government itself, its existence, its essential characteristics, its motives or its feelings towards the people, then you must put aside the explanation altogether and apply the first clause of the section.
What is the meaning of ‘disapprobation’ of Government measures as contrasted with ‘disaffection’ to the Government? I agree with Sir Comer Petheram that while disaffection means the absence of affection, or enmity, disapprobation means simply disapproval; and that it is quite possible to like or be loyal to anyone, whether an individual or a Government, and at the same time to disapprove strongly of his or its measures. This distinction is the essence of the section. It shows clearly what a public speaker or writer may do, and what he may not do. A man may criticise or comment upon any measure or act of the Government, whether legislative or executive, and freely express his opinion upon it. He may discuss the Income-Tax Act, the Epidemic Diseases Act, or any military expedition, or the suppression of plague or famine, or the administration of justice. He may express the strongest condemnation of such measures and he may do so severely, and even unreasonably, perversely and unfairly. So long as he confines himself to that, he will be protected by the explanation. But if he goes beyond that, and, whether in the course of comments upon measures or not, holds up the Government itself to the hatred or contempt of his readers,–as, for instance, by attributing to it every sort of evil and misfortune suffered by the people, or dwelling adversely on its foreign origin and character, or imputing to it base motives, or accusing it of hostility or indifference to the welfare of the people-then he is guilty under the section, and the explanation will not save him.
To come within the protection of the explanation, a writing must not only be the making of comments on Government measures with the intention of exciting only disapprobation of them as distinguished from disaffection to the Government, but the disapprobation must be ‘compatible’ with a disposition to render obedience to the lawful authority of the Government and to support the lawful authority of the Government against unlawful attempts to subvert or resist that authority.”
This position was endorsed in subsequent cases. However, to clarify the scope of the provision as well as the exceptions carved out in the explanation, the provision was amended as follows in 1898 and the word sedition was used in title for the first time:
Whoever by words, either spoken or written, or by signs or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards Her Majesty or the Government established by law in British India, shall be punished with transportation for life or any shorter term, to which fine may be added, or with imprisonment which may extend to three years, to which fine may be added, or with fine.
Explanation 1.–The expression ‘disaffection’ includes disloyalty and all feelings of enmity.
Explanation 2.–Comments expressing disapprobation of the measures of the Government with a view to obtain their alteration by lawful means, without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section.
Explanation 3.–Comments expressing disapprobation of the administrative or other action of the Government without exciting or attempting to excite hatred, contempt or disaffection do not constitute an offence under this section
In the next piece, I will discuss the debates in the Constituent Assembly relating to “sedition”.
J. Sai Deepak is an Advocate practising as an arguing counsel before the Supreme Court of India and the High Court of Delhi.
Enka Insaat vs Chubb: What UK Supreme Court affirmed?
The five-judge bench of UK Supreme Court on 9 October 2020 pronounced a landmark judgment in Enka Insaat Vs Sanayi AS vs OOO Insurance Company Chubb  UKSC 38, which is considered to be a leading authority in the arbitration regime on the governing law of arbitration agreements and the role of the courts of the seat in granting anti-suit relief.
The claimant (“Enka”) is a Turkish company carrying on an international construction and engineering business based in Turkey but with a substantial presence and history of operations in Russia whereas the First Defendant (“Chubb Russia”) is a Russian company and part of the well-known Chubb insurance group. In the present case Enka was one of the subcontractors amongst others providing services in connection with a power plant for the Defendant (“Chubb Russia”).
On 1st February 2016 a severe fire caused massive damage to the plant. The owner, Unipro, claimed from its insurer, Chubb (in this case). In May 2019 Chubb Russia commenced proceedings against Enka and 10 other parties in the Russia (“Russian Proceedings” in Arbitrazh Court), seeking damages in relation to a massive fire in February 2016 at the power plant in Russia. However, over this claim, Chubb Russia asserted that “the accident was caused by defects (deficiencies) in the design, structures, fabrication and installation of the [power plant] including fuel oil pipelines”. To all this, Enka asserted that it had no liability and could have no liability, on the basis that in November 2014 the works which were alleged to have caused the fire had been excluded from the scope of works to be performed by Enka and had subsequently been performed by another contractor.
On 17 September 2019 Enka filed a motion in the Russian proceedings to have Chubb Russia’s claim against it dismissed (or “left without consideration”) pursuant to article 148(5) of the Arbitrazh Procedure Code, which is intended to give effect to Russia’s obligations under article II(3) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“the New York Convention”) to refer to arbitration parties who have agreed to submit to arbitration a dispute of which a court of a contracting state is seized. It was well argued and contended by Enka that the claim against it fell within the scope of the arbitration agreement contained in article 50.1 of the construction contract and ought therefore to be resolved, not by the Russian courts, but by an arbitration conducted in accordance with that provision in London. Interestingly after some hearings, the judge in the Russian proceedings announced her decisions (a) not to grant Enka’s motion to refer the claim against it to arbitration and (b) to dismiss Chubb Russia’s claims against all the defendants on the merits. Meanwhile, Enka had on 16 September 2019 brought an arbitration claim in the Commercial Court in London seeking an anti-suit injunction to restrain Chubb Russia from further pursuing the Russian proceedings against Enka on the ground that this was a breach of the arbitration agreement in article 50.1 of the construction contract.
DECISIONS OF THE LOWER COURTS
On 15 October 2019 Carr J declined to grant an interim anti-suit injunction but gave directions for an expedited trial. The trial took place on 11 and 12 December 2019 before Andrew Baker J. He gave judgment on 20 December 2019, dismissing Enka’s claims against all the defendants. His primary reason for doing so was that he considered the appropriate forum to decide whether Chubb Russia’s claim against Enka falls within the arbitration agreement to be the Moscow Arbitrazh Court and not the English Commercial Court.
To note, Andrew Baker also relied on the fact that Enka did not seek an interim order from an arbitral tribunal, and that it did participate to some extent in the Russian court proceedings.
Aggrieved by the decision, Enka applied to the Court of Appeal for permission to appeal from this decision. The application was granted on 6 February 2020 and the appeal was heard on 7 and 8 April 2020. On 29 April 2020 the Court of Appeal (Flaux, Males and Popplewell LJJ) allowed Enka’s appeal and issued an anti-suit injunction restraining Chubb Russia from continuing the Russian proceedings. This appellate court swept the decision of Andrew Baker on the court that he made a wrong decision regarding the law governing the Arbitration Proceeding.
THE COURT OF APPEAL
The court also added that On forum non conveniens grounds, the previous decision was wrong in principle.
First, the choice of the seat of the arbitration is an agreement by the parties to submit to the jurisdiction of the courts of that seat.
Secondly, the grant of an anti-suit injunction to restrain a breach or threatened breach of the arbitration agreement is an exercise of such powers.
The English Court as the court of the seat of the arbitration is for that reason the appropriate forum to exercise the jurisdiction to grant anti-suit relief. It is required to decide whether threatened or actual proceedings constitute a breach of the arbitration agreement, and if they do, to protect the integrity of the arbitration agreement by granting anti-suit relief unless there is a strong reason for not doing so. That is part of the supervisory jurisdiction of the court of the seat, to which the parties submit by choosing the place of the seat. There is no room for the application of any forum non conveniens consideration: either the forum conveniens question does not arise or it is automatically answered in favour of the English Court as the court of the seat.
Further, In order to decide whether to make an anti-suit injunction, the Court would need to decide whether the arbitration clause covered the dispute in question. This required a decision as to what law governed the arbitration agreement. This cannot be decided simply on the basis that the contract provides for the law governing the whole contract, because the arbitration agreement is considered a separate agreement whose governing law might be different (but usually is not). This is particularly possible where the seat of arbitration is different from the governing law, because that opens the way for the argument that it would make more sense for the arbitration agreement to be governed by the law of the place where the arbitration will be seated. Generally there is a presumption that the governing law of the arbitration agreement will be the same as the seat of arbitration.
Therefore, in light of these considerations, The Court of appeal concluded in this case that, even if the main contract was governed by Russian law, it made more sense for the arbitration agreement to be governed by the law of England, which the parties had chosen as the seat of arbitration and hence On the main issue of determining the proper law of the arbitration agreement, the Court of Appeal clarified the relevant principles. It is well established that the proper law of an arbitration agreement (“AA law”) may not be the same as the proper law of the main contract.
The court also clarified that the English Courts will exercise their “curial Jurisdiction” to grant anti-injunction based on the parties choice of London as an arbitration seat and regardless of the law governing the AA. The court also emphasized that the “anti-suit injunction jurisdiction is concerned to protect and enforce the integrity of arbitration agreement” and hence the role of the curial court is to “interrogate the substantive jurisdiction of the arbitral tribunal (or the putative or potential tribunal if none has been or is intended to be appointed) in determining whether the foreign proceedings are a breach of the agreement to arbitrate the dispute in question.” The court also pointed out that even in cases where the AA is governed by foreign law, consideration of foreign conveniens and comity should not be taken into account by English Courts in deciding the grant of anti-suit injunctions.
DECISION OF THE SUPREME COURT
In the landmark judgment given by Lord Hamblen and Lord Leggatt (with which Lord Kerr agreed), the Supreme Court confirmed that, under English common law, the search for the main contract law is governed by the Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament, see Article 3.1 and 4). However, Questions regarding the law governing arbitration agreements, on the other hand, are not covered by the Rome I Regulation and is excluded from the preview of Article 1(2)(e). The AA law is to be determined by applying the three stage test required by English common law conflict of laws rules, namely:
IS THERE AN EXPRESS CHOICE OF LAW?
If not, is there an implied choice of law?
If not, with what system of law does the arbitration agreement have its closest and most real connection?
The rules of English law on contractual interpretation will be applied by the English Court to decide the issue.
The court then relied on a previous decision where the valiant attempt by Hamblen J (as he then was) in Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi AS v VSC Steel Co Ltd  EWHC 4071 (Comm);  1 Lloyd’s Rep 479, to set out, as clearly as possible, the relevant principles to determine the law governing the AA.
Even if an arbitration agreement forms part of a matrix contract (as is commonly the case), its proper law may not be the same as that of the matrix contract.
The proper law is to be determined by undertaking a three-stage enquiry into (i) express choice, (ii) implied choice and (iii) the system of law with which the arbitration agreement has the closest and most real connection.
Where the matrix contract does not contain an express governing law clause, the significance of the choice of seat of the arbitration is likely to be “overwhelming”. That is because the system of law of the country seat will usually be that with which the arbitration agreement has its closest and most real connection.
Where the matrix contract contains an express choice of law, this is a strong indication or pointer in relation to the parties’ intention as to the governing law of the agreement to arbitrate, in the absence of any indication to the contrary.
The choice of a different country for the seat of the arbitration is a factor pointing the other way. However, it may not in itself be sufficient to displace the indication of choice implicit in the express choice of law to govern the matrix contract.
Where there are sufficient factors pointing the other way to negate the implied choice derived from the express choice of law in the matrix contract the arbitration agreement will be governed by the law with which it has the closest and most real connection. That is likely to be the law of the country of seat, being the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective.”
The principal rationale for treating an express choice of main contract law as indicative of a choice of AA law is because businessmen do not usually intend that their relationship should be governed by more than one system of law (see Sulamerica Cia Nacional de Seguros SA v Enesa Engelharia SA  1 WLR 102 per Moore-Bick LJ at ).
The Court of Appeal stipulated that “this is a sensible starting point where there is no arbitration clause with a different seat; but it ceases to have any application where there is. In such cases, whatever the AA law, the parties have necessarily chosen their relationship to be governed in some respects by two systems of law, namely the curial law and the main contract law” (paragraph 95, emphasis added). Overall, as emphasised by Lord Neuberger in Sulamerica at , determining the proper law of the arbitration agreement was in each case a matter of contractual interpretation.
Applying these principles set above, the Court of Appeal found that the AA law in the Contract was governed by English law. Whilst the governing law of the Contract was Russian law, this was not by express choice.
Further, In this case, there was no choice of law to govern the contract as a whole and the general rule would be applied in that situation so that the law of the seat of arbitration governs the arbitration agreement.
Therefore English law governed the arbitration agreement and the Court of Appeal›s basis for granting the anti-suit injunction remains sound.
The Supreme Court considered the possibility that, where the law governing the contract also governs the arbitration agreement, this would nullify the arbitration agreement fully or partially. The Court acknowledged the possibility that might justify a departure from the general rule in order to give effect to the principle that generally, contracts should be construed so as to avoid invalidity.
The Supreme Court also confirmed the Court of Appeal›s decision that it was appropriate for the court to consider whether to grant the anti-suit injunction, given that England was the seat of arbitration.
Interestingly, Lord Burrows and Lord Sales partially dissented from the decision of three judges in this case.
This is a remarkable judgment by the Supreme Court of England and is going to be an authority in the pro-arbitration regime. The court has clearly clarified the position and power of the English courts to exercise the curial law in order to grant anti-suit injunctions as a matter of relief. As pointed out by Lord Justice Popplewell in paragraph 109 that “the scope of the curial law is not limited to the exercise of purely procedural powers. It involves the curial court determining aspects of the substantive rights of the parties under their arbitration agreement by reference to the curial law.” Saying this, Lord Justice Popplewell has vested a responsibility on the draftsman to draft the AA more diligently. The law set out with regard to the governing law of the arbitration agreement will also be considered to be a remarkable authority and will be a helpful percent for complicated cases in future.
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