Volume 5, Issue 1 (July 2016)

 

TABLE OF CONTENTS

 

EDITORIAL

Recent Developments in International Arbitration

Gary B. Born

 

 

 

 

1

ARTICLES

The Public Policy Exception – A Comparison of the Indian And Swiss Perspectives

Pierre Tercier & Dilber DeVitre

The ‘public policy’ concept is a ground for setting aside arbitral awards in both Indian and Swiss legislation. The apex courts in both countries have, however, taken drastically different approaches to the interpretation and application of this concept, with the Swiss Federal Tribunal adopting a narrow approach and the Indian Supreme Court taking a broader view. This article demonstrates and contrasts the jurisprudence of the Indian Supreme Court with that of the Swiss Federal Tribunal when applying the concept of public policy to the setting aside of arbitral awards. The authors conclude that a middle ground approach that strikes a balance between finality and justice best serves the purposes of the arbitration community.

 

 

7

The Extension of Arbitration Agreements to Non-Signatories – A Global Perspective

M.P. Bharucha, Sneha Jaisingh & Shreya Gupta

The present article is aimed at analysing the various modes by which a non-signatory may be bound by an arbitration agreement, and the varying positions adopted by different jurisdictions across the globe on this issue. In the opinion of the authors, this aspect has gained particular importance in the wake of the popularity that arbitration has gained as the most preferred mode of dispute resolution – especially with respect to disputes between parties or corporations of different nationalities. Undoubtedly, the first step towards initiating arbitration is ensuring that a valid arbitration agreement exists between the parties. The scheme of dispute resolution has seen an evolution over the years but it remains undecided whether the archaic formalistic requirements of writing and signature in relation to arbitration agreements still hold water, or whether other factors may be considered to ascertain the intention of the parties. Lastly, given the consensual nature of arbitration, it is not uncommon for parties to choose a foreign governing law – in fact choosing the most arbitration friendly jurisdiction as the seat of arbitration is the foremost consideration in drafting an arbitration clause. It is for this purpose that the authors have considered the position taken by a few of the more popular arbitration venues in their analysis.

 

35

Legitimate Expectations in Investment Arbitration: At the End of its Life-cycle

Nikhil Teggi

The doctrine of legitimate expectations has become a central element of the fair and equitable standard. However, the author argues that the use of the doctrine of legitimate expectations by investment tribunals is erroneous and unnecessary. In order to do so, the author analyses the roots and scope of the doctrine, the manner in which it has been expanded upon by tribunals and the manner in which States have responded to this arbitral innovation. The article concludes with the argument that the use of the doctrine of legitimate expectations is perhaps bound for a decline.

 

64

The Arbitration (Scotland) Act 2010: A Great Collaborative Success and an Innovative Model for Other Jurisdictions to Follow

Hew Dundas

This article is in three parts: the first summarising the history of arbitration in Scotland and the law as it existed pre-2010; the second outlining the numerous innovative provisions of the Arbitration (Scotland) Act 2010 (never recorded in print in this form before) and looking at those innovations; and the third examining post-2010 Scottish jurisprudence in arbitral matters. The article concludes both (i) that matters in Scotland are in good order and in excellent hands and (ii) that other jurisdictions can advantageously ‘borrow from‘ the Scottish achievements … at no cost!

 

81

Cooperation among Arbitrators in International Arbitration

Ugo Draetta

The issues dealt with in this article are as follows: 1. Collegiality of arbitrators despite possible differences in their respective roles. – 2. Deliberation as a process which extends throughout the duration of the arbitration proceedings. – 2.1. During the process of appointment of the President. – 2.2. Prior to and during the Case Management Conference. – 2.3. During the phase of submission by the parties of their briefings. – 2.4. Before and during the course of the Evidentiary Hearing. – 2.5. After the Evidentiary Hearing and before the Deliberation Meeting in its strict sense. – 2.6. During the Deliberation Meeting in its strict sense. – 2.7. “Split-the-baby” decisions. – 2.8. During the process of drafting the award. – 2.9. Majority decisions and dissent by one arbitrator. – 3. Conclusions on cooperation among arbitrators.

 

107

Perspectives and Best Practices in Quantifying Damages, Business Valuations and Expert Witnesses

Vidya Rajarao

The article brings into spotlight the nuances of quantifying damages, expert witnesses and business valuations. Statistics from some of the leading International Arbitration institutions echo the thought of arbitration being favoured over litigation. With respect to determining damages, the type of damages that can be claimed and the elements of what must constitute a robust valuation framework are important. Fundamental to the concept of valuation is also the approach one adopts to calculate the same as computing quantum of damages is not always simple. Another significant trend that has emerged over the recent years is the use of damage experts, consequent to an increase in international arbitration. There are, however, certain considerations to be borne in mind before one selects an expert; which range from evaluating the technical expertise of the expert, prior experience in providing expert reports and testimony before an arbitration tribunal etc. However, one must also be well aware of the challenges associated with the use of quantum experts. To realise maximum value of appointing damage experts, they must retain independence and not find a middle ground owing to counsel or client demands. With respect to the overall arbitration landscape, the trend of increasing number of corporations using international arbitration is anticipated in the future as well. It is critical to make certain that with time the process advances and the associated challenges are restrained to the maximum extent possible.

 

147

Laying old ghosts to rest, or not? – The ‘Section 9’ enigma continues …

Rajendra Barot & Sonali Mathur

India has faced criticism from global investors due to delay in disposal of court cases. Consequently, in the last three decades, there has been an increasing impetus towards employing arbitration as the alternate and preferred dispute resolution mechanism in most commercial transactions. This is due to several factors such as speed, flexibility, confidentiality and efficiency. The strategy of arbitration and mechanics of the arbitration clause (such as the seat, venue, institution, applicable law) are often driven by one key driver – the ability to obtain effective interim reliefs. Section 9 of the Arbitration and Conciliation Act, 1996, which enables parties to approach courts for interim reliefs, has since long been considered as the Achilles’ heel of Indian arbitration jurisprudence. The present Article discusses the challenges faced by parties in domestic and foreign-seated arbitrations while seeking interim reliefs under Section 9 of the Act. While some of the challenges are sought to be overcome by the 2015 amendment to the Act, the question is whether the intended reforms have met their goals.

 

168

Standards Applicable To Interim Reliefs In India: A Comprehensive Analytical Investigation

Sarthak Malhotra & Sujoy Sur

The issue of standards and guidelines applicable to court-ordered and tribunal-ordered interim reliefs in arbitrations in India is an important issue insofar as it allows for court intervention, thus putting a question to the efficiency, independence and effectiveness of the whole process. In this article, an analysis has been charted out by discussing the relevant case laws and an attempt has been made to discern the plausibility of conditions applicable to interim reliefs ordered by a court. Further, the authors discuss the standards followed in different jurisdictions along with the best practices followed in international arbitration. This is followed by a comparative analysis of internationally accepted standards and the standards adopted by Indian courts. It can be seen that there has been an attempt globally, as well as in India, to not shun the involvement of objective standards established by the law and applied by the courts, but to embrace them as pragmatically possible, thus, aiming to make the mechanism more efficacious and uniform. Though the moot point cannot be said to settled, the practice of Indian courts while dealing with the issue of interim reliefs seems to be in line with the internationally accepted standards and guidelines.

 

183

The Conundrum underlying Section 26 of the Arbitration Amendment Act, 2015: Prospective or Retrospective?

Gracious Timothy

The Arbitration and Conciliation (Amendment) Act, 2015, deemed to have commenced on October 23, 2015, has transfigured the Arbitration and Conciliation Act, 1996. The recent trend of the High Courts in India has been too diverse and unclear to arrive at the correct position of law as to the interpretation of Section 26 of the Arbitration Amendment Act, 2015 and the prospective application of the Amendment Act. This piece discusses how the prospectivity of the Amendment Act is limited to the arbitral proceedings after the commencement of the Amendment Act, as well as the court proceedings in relation to the same. It further argues that Section 26 does not logically extend to include post-arbitration proceedings, for instance, where an award was passed before the commencement of the Amendment Act. Amongst the divergent views about Section 26, this piece is an attempt to highlight the relevant questions and provide clarity on the practical implementation of the old and the new regimes.

 

205

NOTES

International Arbitration in New York - A Practical Perspective

John Fellas, Hagit Elul & Apoorva Patel

This article explores the legal frameworks and practical considerations underlying international arbitration in New York. The means by which New York courts can assist parties involved in international arbitration include imposing time limits for certain objections, obtaining evidence, enforcing a tribunal’s third-party subpoena, issuing an order of attachment or preliminary injunction, and confirming an arbitral award. This article discusses key considerations and challenges concerning these modes of judicial action, and also provides an overview of other factors contributing to New York’s role in the field of arbitration.

 

 

222

Post Amendments: What Plagues Arbitration in India?

Tejas Karia, Ila Kapoor & Ananya Aggarwal

The amendment to the Arbitration and Conciliation Act, 1996 brought about a much needed change and was aimed at revolutionising the arbitration regime in India. Some of the important amendments will have a significant impact on the way arbitrations are conducted in India and will bring a positive change to India’s reputation as a seat for international commercial arbitration. Despite these changes, certain areas of Indian arbitration are still uncertain and require clarification. We examine three such areas of concern; one area of confusion arises when parties have not specified the law governing the arbitration agreement, the lex arbitri, in their arbitration agreement. Indian courts have taken a differing stand from other jurisdictions as to how to determine what this law will be. The article also discusses whether two Indian parties can arbitrate outside India. The status of such an arbitration is unclear as it is neither a domestic arbitration nor an international commercial arbitration for the purposes of the Arbitration and Conciliation Act, 1996. Different High Courts have given varied judgments in this area and there is an urgent need for an authoritative Supreme Court ruling. Lastly, the article throws some light on the concept of emergency arbitrators and the status of their orders/awards in India. In the present scenario, under the Act, emergency arbitrators are not included in the definition of ‘arbitral tribunal’. Therefore, any orders given by emergency arbitrators will not be enforceable. The article explores this lacunae and how it can be removed.

230