fbpx

UNDER INDIAN LAW ONLY SIGNATORIES TO THE AGREEMENT INVARIABLY PROPER PARTIES TO THE ARBITRATION AGREEMENT? DOES INTERNATIONAL PRINCIPLES  OF “GROUP OF COMPANIES” APPLY TO INDIAN ARBITRATION ?

September 11, 2021

Provisions of Law discussed: Now let us first see what does Act mean by an Agreement and what is format of an Arbitration Agreement? Arbitration Act,1996 7 Arbitration agreement. — (1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in— (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. PARITIES TO ARBITRATION: 8.Power to refer parties to arbitration where there is an arbitration agreement.—1 [(1)A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.] (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof: 2 [Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.] (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. PART II ENFORCEMENT OF CERTAIN FOREIGN AWARDS CHAPTER I  New York Convention Awards Power of judicial authority to refer parties to arbitration.—Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908),a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one […]

Read more

EMERGENCY ARBITRATION, WHETHER VALID IN INDIA UNDER ARBITRATION ACT,1996?

September 9, 2021

This interesting issue came up before Delhi High Court in Amazon.Com Nv Investment vs Future Coupons Private Limited & ors passed on 18 March, 2021 Three important questions arose for consideration before Delhi High Court :- What is the legal status of an Emergency Arbitrator i.e. whether the Emergency Arbitrator is an arbitrator and whether the interim order of the Emergency Arbitrator is an order under Section 17 (1) and is enforceable under 17(2) of the Arbitration and Conciliation Act? Observed: Section 2(8) of the Indian Arbitration Act 1996 expressly provides that where Part I of the Indian Arbitration Act 1996 refers to an ―agreement of the parties‖, such agreement shall include the arbitration rules referred to in the parties’ agreement. In this way, the Indian Arbitration Act 1996 provides that any arbitration rules agreed to by the parties are incorporated into the arbitration agreement. Unless expressly excluded, it is trite that the parties cannot resile from the terms of their arbitration agreement, including their agreement to allow either party to request the appointment of an emergency arbitrator. Further, Section 17 of the Indian Arbitration Act 1996, which empowers an arbitral tribunal to grant interim reliefs, does not preclude or intimate that parties cannot agree to institutional rules which allow recourse to emergency arbitration. In the absence of a mandatory prohibition contained in the Indian Arbitration Act 1996 or public policy constraints, the parties may agree to any arbitral procedure. Whether the Emergency Arbitrator misapplied the Group of Companies doctrine which applies only to proceedings under Section 8 of the Arbitration and Conciliation Act? Held The Indian Arbitration Act 1996, does not preclude parties from agreeing to arbitrate under institutional rules that allow either party to request appropriate reliefs from an emergency arbitrator. The Respondents’ references to the 246th Law Commission Report do not assist its submissions on this issue in a meaningful way. It is just as plausible that Parliament, in its wisdom, did not consider it necessary to amend the Indian Arbitration Act 1996 to make a specific reference to emergency arbitrators because it was legally unnecessary – that is to say, it might have been an instance of the Law Commission making a suggestion to gild the lily. There was no need for statutory recognition if the courts and case law did not find this a problematic issue. Indeed, given the prevalence, even then, in the employment and use of this useful procedure internationally, this is likely to have been the case. It is also noteworthy that the power to appoint an emergency arbitrator is currently recognized in a number of domestic Indian arbitration institution rules, including (a) the Delhi International Arbitration Centre of the Delhi High Court; (b) the Mumbai Centre for International Arbitration; and (c) the Madras High Court Arbitration Centre, all of which include, under their rules, provisions for emergency arbitration and set out the appointment process, applicable procedures, and timing as well as the powers of an emergency arbitrator. Emergency Arbitrators are recognised under the Indian Arbitration Framework The Claimant rightly asserts that the Respondents’ insistence that the notion of emergency arbitration is […]

Read more

Vexatious Litigation Act

June 7, 2020

Maharashtra has provision to stop vexatious litigant, while for Central Government a Bill No XI is introduced in Rajya Sabha on 11th March 2016. What is Vexatious? In common parlance, “To vex” means anger by a slight or a petty annoyance; irritate. “Vexation” means the act or an instance of vexing or annoying or distressing thing. “Vexatious” means such as to cause vexation. (See The Oxford English Reference Dictionary, Edition 1995). The term “vexatious”, when used in law, signifies an action not having sufficient ground therefore and seeking only to annoy *7* appln. 3397.03. sxw the adversary. The Advanced Law Lexicon, 3rd Edition Reprint 2007, defines the term “Vexation” as under: “The action of troubling or harassing by aggression or interference; the action of troubling or irritating by physical means.” “Vexatious” has been defined as causing or likely to cause vexation. The “vexatious action” or “vexatious proceedings” has been defined as under: “An action brought for the purpose of annoying the opponent and with no reasonable prospect of success.” 10 Black’s Law Dictionary, Eighth Edition, defines the words “vex”, “vexation”, “vexatious”, “vexatious litigant” and “vexatious proceeding” as under: (a) Vex : to harass, disquiet, or annoy.(b) Vexation : The damage that is suffered as a result of another’s trickery or malice.(c) Vexatious : (Of conduct) without reasonable or probable cause or excuse; harassing; annoying.(d) Vexatious litigant : A litigant who repeatedly files frivolous lawsuits.(e) Vexatious proceeding : A lawsuit instituted maliciously and without good cause. The Object and Reasons of the Bill are : Frivolous and vexatious litigations are the cause of concern for the courts for quite some time. Often, this matter has been highlighted by various courts and the Law Commission as well which favoured for a check on the filing of frivolous and vexatious proceedings. Attimes, it has been seen that many persons abuse the process of law and indulge in the habitual and intentional filing of frivolous and vexatious civil or criminal proceedings to harass other persons without any reasonable ground. It has also been observed by the courts that some persons habitually and persistently file cases on the issues, which have already been decided once or more than once against some parties or their successors or against different parties. Besides the harassment, filing of such proceedings also leads to wastage of the precious time of the law courts which are already burdened. Such frivolous litigation cause unnecessary and avoidable strain on the States’ resources in the area of dispensation of justice. There is no denying of the fact that every person has right to file civil or criminal proceedings against any other person, but a check is necessary to allow the court to examine the bona fide of a person filing the proceeding. Many countries in the world, like the USA, the UK have enacted a law on the filing of frivolous and vexatious litigation. In our country also, there is a law on the subject in two States, i.e., Tamil Nadu and Maharashtra. In view of the concern expressed by the courts, it is necessary that a central law be enacted to prevent the […]

Read more