The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Frances Kellow, a co-founder of the American Arbitration Association, noted that ‘of all mankind’s adventures in search of peace and justice, arbitration is amongst the earliest. Long before laws were established, or courts were organized, or judges formulated principles of law, men had resorted to arbitration for the resolving of discord, the adjustment of differences, and the settlement of disputes’[1]. When International Arbitration and its practices can traced back to the ancient world, in India, Arbitration as a form of Alternative Dispute Resolution develop only during the 1940s. The constantly evolving ADR methods enjoys significant advantages, including low costs, greater flexibility of process, higher confidentiality, greater likelihood of settlement, choice of forum, choice of solutions. With Arbitration becoming a buzz word in the present day business contracts, this article attempts to comprehensively trace the legal development of Arbitration in India.
Contents hide
4.1 We would now take a look into a few of the landmark decisions on Arbitration Law:
4.2 Mother Boon Foods Pvt Ltd v. Mindscape One Marketing Pvt Ltd
4.3 K.K. Modi v. K.N. Modi; Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd
4.4 Brahmani River Pellets Limited v. Kamachi Industries Limited
4.5 Booz Allen and Hamilton Inc v. SBI Home Finance Ltd
4.6 Tulsi Narayan Garg v. The M.P. Road Development Authority, Bhopal and Ors
4.6.1 Mahanagar Telephone Nigam Limited Vs. Canara Bank & Ors
5 The Arbitration And Conciliation Act (Amendment) Ordinance, 2020
Broadly there are two types of Arbitration (a) Ad hoc Arbitration (b) Institutional Arbitration[2]. In an Ad Hoc Arbitration, the rules to be followed by the tribunals have been agreed upon between the parties, or the rules laid down by the tribunal are followed in case of non-existence of agreement between parties[3]. Therefore, these Ad hoc arbitrational tribunals help in having greater control over the arbitration process, the flexibility to decide the procedure which also ensures cost-effectiveness. In contrast, in an Institutional Arbitration, the adjudication through arbitration would be in accordance with the rules of procedure of an institution[4].
These help in setting out a clear set of arbitration rules, a clear timeline to conduct an arbitration, a certain panel of arbitrators to choose from, assistance from highly trained staff, helps when parties lack proper knowledge regarding arbitral proceedings. Currently, there are 35 Arbitral Institutions for Domestic disputes, for International disputes, PSUs, Trade and merchant associations; and for City-specific chambers of commerce and industry. These institutions either have their own rules or are govern by the rules of UNCITRAL.
The Indian regime with respect to Arbitration laws is broadly based on the English Common Law. The Arbitration and Conciliation Act 1996 (“1996 Act”), is the governing legislation which derives its basis from the UNCITRAL model on International Commercial Arbitration 1985 and the UNCITRAL Arbitration Rules of 1976. Before the 1996 Act the earlier statutory were contain in three enactments a) The Arbitration Act 1940; b) The Arbitration (Protocol and Convention) Act 1937; c)
The Foreign Awards (Recognition and Enforcement) Act 1961. These Acts and Rules have repealed with the introduction of the “1996 Act”. In 2015, the 1996 Act further stood amended by the Arbitration and Conciliation (Amendment) Act of 2015 (“2015 amendment”) which progressed the face of arbitration in India. Through the 2015 amendment, a) Domestic Arbitration b) International Commercial Arbitration c) Enforcement of Foreign Arbitral Awards, were also under the purview of the Act. The Arbitration and Conciliation (Amendment) Act, 2019 (“2019 Amendment Act”), was pass by Lok Sabha on 1 August 2019 and pass by Rajya Sabha on 18 July 2019. This amendment was one of the most awaited and it encapsulated the recommendations made by the High-Level Committee (Committee) formed under the Chairmanship of Justice B N Srikrishna, Retired Judge, Supreme Court of India which submitted its Report on 30 July 2017.
Significant changes including setting up of the Arbitration Council of India, introducing time-lines of six months for filing pleadings, procedures for the appointment of Arbitrators by Arbitral Institution instead of courts in India, making international arbitrations beyond the purview of the twelve months adjudication period prescribed under S. 29, changing the scope of Section 17, Section 45, Section 50 of the Arbitration Act and introducing Section 87 to clarify the prospective effect of the 2015 Amendment Act. This further helped in improving Arbitration as an efficient mode of redressal.
Given that is constantly evolving, it fell on the judiciary’s hand to develop and straighten out the ambiguities as it had the potential of transforming into hurdles for efficient implementation.
In Mother Boon Foods Pvt Ltd v. Mindscape One Marketing Pvt Ltd[5], the court reiterated the importance of a written Arbitration agreement and the same could not be superseded by any oral demand or agreement.
In K.K. Modi v. K.N. Modi; Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd[6], the Apex Court of India had the occasion to refer to the attributes or essential elements of an arbitration agreement. It was observe that the ‘clause’ in a contract would consider as an ‘arbitration agreement’ only if it has ‘express’ or ‘implied’ provisions spelling out that the parties have agreed to refer disputes or differences to arbitration. The court further added that if there is only a mere ‘possibility’ of the parties agreeing to arbitration in future, then, there is no valid and binding arbitration agreement.
In Brahmani River Pellets Limited v. Kamachi Industries Limited[7]the court by relying on Swastik Gases (P) Ltd. Vs. Indian Oil Corporation Ltd.[8]observed that words/phrases ‘exclusive jurisdiction’, ‘only’, ‘exclusive’, ‘alone’ are not decisive factors and does not make any material difference in deciding jurisdiction. If the contract specifies the jurisdiction of a forum at a particular place, only such forum will have the jurisdiction to deal with the matter and the parties intended to exclude all other courts. In this case, the parties had agreed for Bhubaneshwar as the ‘venue’ for arbitration proceedings. Therefore, it was also the intention of the parties to exclude jurisdiction of all other courts. Finally, the Supreme Court held that the High Court of Madras had no jurisdiction to entertain jurisdiction under Section 11(6) of the Arbitration & Conciliation Act, 1996.
The Apex court in Booz Allen and Hamilton Inc v. SBI Home Finance Ltd[9], set out the standard for arbitrality of cases and identified a non-exhaustive list of matters in which arbitration can’t be referred to, including matters involving criminal offences, guardianship matters, insolvency and winding up proceedings, matters of probate, letters of administration, succession certificate etc, eviction proceedings, patents, trademarks, copyright, Anti-Trust/ competition law matters, Bribery/Corruption Laws.
In Uttarakhand PurvSainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd[10], the court relied on the doctrine of kompetenz – kompetenz which is enumerated in Section 16 of the Arbitration & Conciliation Act, 1996 to observe that legislative intent was to restrict judicial intervention at pre-reference stage in an arbitral proceeding and that an issue of limitation would be decided by an arbitrator.It was also reiterated that the legislative intent of the Act is ‘party autonomy and minimal judicial interference’ in the process. Therefore, once an arbitrator has appointed, all objections and issues are to decide by the arbitrator.
In Hindustan Construction Company Limited & Anr. v. Union of India & Ors[11], a member bench of the Apex Court, struck down Section 87of the 1996 Act which provided for automatic stay on an arbitral award when it is challenged in court. The court observed that it was ‘manifestly arbitrary’ in terms of Article 14 of the Constitution of India and for being in contravention to the intention of the legislators of 2015 Amendment. As a result, like a ‘return of the jedi’[12], Section 26 of the 2015 Amendment was revived by the Supreme Court.With the introduction of 2019 Amendment Act which amended Section 87, the application of diverging view are yet to be straightened out.
In Tulsi Narayan Garg v. The M.P. Road Development Authority, Bhopal and Ors[13], reaffirmed the position of law laid down in State of Karnataka v. Shree Rameshwara Rice Mills Thirthahalli[14] which observed that a party to an agreement cannot be the arbiter in their own cause.
In Mahanagar Telephone Nigam Limited Vs. Canara Bank & Ors[15], byinvoking the doctrine of “Group Companies” allowed a non-signatory to an arbitration agreement to be part of the arbitration proceedings. The court was of the opinion that if a non-signatory could be bound by an arbitration agreement ‘where the parent or holding company, or a member of the group of companies is a signatory to the arbitration agreement and the non-signatory entity on the group has been engaged in the negotiation or performance of the commercial contract, or made statements indicating its intention to be bound by the contract’, then such an non-signatory party would be bound and benefitted by the relevant contracts and could be part of the proceedings.
In an intriguing decision, the court in Vinod Bhaiyalal Jain v Wadhwani Parmeshwari Cold Storage Ptv Ltd[16]., set aside the arbitral awardas the Appellants had a ‘reasonable basis to doubt the arbitrator’s ability to be independent and impartial in pronouncing the arbitral award’. The court was faced with the question of whether there was a reasonable apprehension of bias and in this matter arbitrator who rendered the final arbitral award in the arbitration was an acting as counsel for one of the parties in another litigation. The Apex Court interpreted the 1996 Act, as the present case applied the law as it stood prior to the 2015 amendment and was of the opinion that a reasonable basis existed.
Recently the Hon’ble President of India promulgated and Conciliation Act (Amendment) Ordinance, 2020. To further amend the Arbitration and Conciliation Act, 1996. With the object of addressing the concerns raised by the stakeholders after the Arbitration and Conciliation (Amendment) Act, 2019. There were two main changes brought in by the ordinance, firstly, the amendment of Section 36(Enforcement) of the Act. Secondly, the amendment of Section 43 J (Norms for accreditation) and omission of the 8th Schedule. Through the enactment of the Arbitration & Conciliation (Amendment) Act, 2015 the parliament wanted to do settle the position on the automatic stay rule and inserted Section 36(2) which enumerated that operation of a domestic arbitral award ‘shall not by itself render that award unenforceable’ merely on the application for granting stay under Section 34 of the Act.
Further, through the 2015 amendment, the parliament had clarified via Section 34(1)(b) of the Act. That any Arbitral awards induced or affected by fraud. Or corruption would be consider to be in conflict with the public policy. Now, the Ordinance has amended Section 36(3) by inserting a second proviso, where it enumerates that if the court is prima-facie’[17] satisfied that a) agreement or contract of arbitration; b)making of the award, was induce by fraud or corruption, an ‘unconditional stay’ can be granted. Power to grant the same is derived from Section 34 of the Act and the court has further clarified via the explanation inserted in Section 36[18], that the ordinance would be applicable to all courts irrespective of whether they were commenced prior to or after the commencement of 2015 amendment.
Therefore, its’s said ordinance has retrospective application too which raises. The concern of floodgate of re-litigation and delaying the process of enforcement. Further, it provides an additional ground for an applicant under Section 36(3) of the act. To seek a stay on the enforcement even if the arbitration agreement or contract is induce by fraud or corruption. It must be note that section 36(3) already provides the ground for granting a stay on conditions. That the court ‘may deem fit, after recording the reasons in writing. The need for promulgating an ordinance to carve out a special ground. For such an unconditional stay hasn’t been justified by the government. But the constantly evolving law through amendments and ordinances signifies. The importance that Arbitration Law has gained in the eyes of the legislatures in India.
We can see that there is yet development in law and also infrastructural development. That is require for promoting Arbitration as an efficient redressal method. One such significant step is the formation of Arbitration Council of India (ACI) through the 2019 Act. The main goals of ACI are ‘to promote and encourage’ ADR in the country. ‘Grade the arbitral institutions’ and also the arbitrators. Shortly put, it aims at boosting the institutional arbitration in the country.
The 2019 Amendment Act has taken many progressive approaches but interestingly. Certain provisions of the 2019 Amendment Act have not yet been notified. We would have to see how these amendments will be implemented. Which will mainly depend on the functioning of the Arbitration Council of India. As Justice Sabyasachi Mukharji in F.C.I. V. Joginderpal Mohinderpal[19], ‘we should make the law of arbitration simple, less technical and more responsible to the actual realities of the situation, but must be responsive to the canons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties but by creating a sense that justice appears to have been done.’
[1] FRANCES KELLOR, AMERICAN ARBITRATION: ITS HISTORY, FUNCTIONS AND ACHIEVEMENTS, (Harper and Bros1948)
[2] Surya Saxena &NishthaKaura, Ad-Hoc Arbitration to Institutional Arbitration in India: A Way Forward, 10 PENNCLAIMS (2020).
[3] Id.
[4] Id.
[5] OMP COMM 136/2017
[6] (1998) 3 SCC 573; Bihar State Mineral Development Corpn. v. Encon Builders Pvt.Ltd(2003) 7 SCC 418; and State of Orissa v. Damodar Das(1996) 2 SCC 216.
[7] 2019 SCC OnLine SC 929.
[8] (2013) 9 SCC 32
[9] (2011) 5 SCC 532
[10] Special Leave Petition (C) No. 11476 of 2018
[11] 2019 (6) ARBLR 171 (SC)
[12] Mohammad Kamran, Ashish Kabra&Vyapak Desai, NISHITH DESAI, (January 7, 2021) https://nishithdesai.com/information/news-storage/news-details/article/return-of-the-jedi-supreme-court-strikes-down-section-87-of-the-arbitration act.html#:~:text=No%20automatic%20stay%20on%20enforcement,along%20with%20the%20BCCI%20Judgment.
[13] Order dated 30 August 2019 in Civil Appeal Nos. 6726 – 6729 of 2019.
[14] 1987 (2) SCC 160.
[15] Judgment dated 08 August 2019 in Civil Appeal No. 6202-6205 of 2019.
[16] Judgment dated 24 July 2019 in Civil Appeal No. 6960 of 2011.
[17] Section 2 of the Arbitration And Conciliation (Amendment) Ordinance, 2020, https://legalaffairs.gov.in/sites/default/files/The%20Arbitration%20and%20Conciliation%20%28Amendment%29%20Ordinance%202020.pdf
[18] Id.
[19] (1989) 2 SCC 347
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