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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 […]

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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 […]

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