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Lok Sabha passes Arbitration and Conciliation Bill (Amendment) 2018 - Jagran Josh

Google International ADR News - Sat, 2018-08-11 04:23

Jagran Josh

Lok Sabha passes Arbitration and Conciliation Bill (Amendment) 2018
Jagran Josh
The bill is part of the government's efforts to encourage institutional arbitration for settlement of commercial disputes and make India a centre of robust Alternative Dispute Resolution Mechanism. The amendments will facilitate achieving the goal of ...
LS passes arbitration bill, govt says it's a 'momentous' legislationBusiness Standard

all 32 news articles »

Another One BIT the Dust: Is the Netherlands’ Termination of Intra-EU Treaties the Latest Symptom of a Backlash Against Investor-State Arbitration?

Kluwer Arbitration Blog - Sat, 2018-08-11 03:29

Marie Davoise and Markus Burgstaller

On 6 March 2018, the Court of Justice of the European Union (“CJEU“) issued its long-awaited decision in the Achmea case (C-284/16) between the Slovak Republic and Dutch insurer Achmea BV.

In Achmea, the CJEU found investor-state dispute settlement provisions in investment treaties concluded between EU Member States (“intra-EU BITs“) to be incompatible with EU law.

The judgment will fundamentally change the landscape for arbitration in Europe, and it has been argued that as a logical consequence, EU Member States now have an obligation to amend or terminate their BITs under EU law.

The Netherlands: We Will Terminate Intra-EU BITs Through a New Multilateral Treaty

Indeed, it did not take long for the Dutch government to announce its intention to terminate all intra-EU BITs to which the Netherlands is a party. On 26 April 2018, the Dutch Minister for Foreign Trade and Development Cooperation stated that, following the Achmea judgment, the Netherlands saw “no other option” than to terminate its bilateral investment treaty with the Slovak Republic.

Minister Sigrid Kaag set out the government’s view in a letter addressed to the Chairperson of the Dutch House of Representatives. Acknowledging the impact of the Achmea judgment, the letter confirms the Dutch government’s intention to terminate its investment agreement with the Slovak Republic.

Besides the Netherlands-Slovak Republic BIT, the government will also seek to terminate the other 11 investment agreements concluded between the Netherlands and other EU Member States (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania and Slovenia). This, the letter explains, will be done by negotiating a single multilateral treaty for reasons of “clarity, speed and efficiency”.

Interestingly, the Dutch government’s decision to terminate intra-EU BITs does not apply to the Caribbean Netherlands (i.e. the islands of Bonaire, St Eustatius and Saba). Although they are “special municipalities” and considered to be “public bodies” under Dutch law, they are overseas territories of the European Union, a special status under which EU law does not automatically apply. As a result, according to the government, it is up to these municipalities to decide whether or not they want to terminate intra-EU BITs.

The letter addresses another hot topic: the application of Achmea to the Energy Charter Treaty (“ECT“). Signed in 1994, the ECT has generated more investor-state claims between the EU Member States than any other treaty. The Achmea judgment generated a lot of discussion on whether or not a similar argument could be made to render intra-EU claims brought under the ECT illegal under EU law.

On this, the European Commission has made it very clear where it stands: in its view, the ECT does not apply to investors from other Member States initiating disputes against another Member State (see, for example, paragraph 163 of decision SA.4038 in November 2017). Without going that far, the Dutch government nevertheless acknowledges that Achmea “is also relevant” to the dispute settlement mechanism contained in the ECT.

The Writing Is on the Wall for Remaining Intra-EU BITs

There are over 190 intra-EU BITs. Many of these were agreed in the 1990s, before the EU enlargements of 2004, 2007 and 2013. They were mainly struck between existing members of the EU and those who would become the “EU 13”.

According to the European Commission, those agreements’ raison d’être was to provide reassurance to investors who wanted to invest in the future “EU 13”, by strengthening investment protection (e.g., through compensation for expropriation and arbitration procedures for the settlement of investment disputes).

Situated mostly in Central and Eastern Europe, those countries later joined the EU. This opened up a debate on the validity of intra-EU investment treaties. The European Commission took an increasingly active role in challenging intra-EU investment agreements, through amicus curiae interventions, suspension injunctions and initiation of infringement proceedings.

In 2012, Ireland ended all its intra-EU BITs, followed by Italy in 2013.

In 2015, the European Commission formally requested Austria, the Netherlands, Romania, the Slovak Republic and Sweden to end the intra-EU BITs between them, by sending letters of formal notice, i.e. the first stage of the general EU infringement procedure in article 258 of the TFEU.

In 2016, Denmark reportedly reached out to its EU counterparts to suggest mutual termination of intra-EU BITs. The same year, Austria, Finland, France, Germany and the Netherlands also proposed an EU-wide agreement to replace existing intra-EU BITs.

In 2017, Romania formally terminated all of its intra-EU BITs. The same year, Poland initiated the termination of its BIT with Portugal, the first of 23 similar agreements which Poland said it would terminate.

BIT by BIT, EU Member States are inexorably moving towards the termination of all intra-EU investment treaties. The European Commission’s determination to challenge those agreements, and its strong push towards a Multilateral Investment Court, were but one nail in the coffin of intra-EU BITs. In the wake of Achmea, it could be that the Member States consider that they have “no other option” but to end all intra-EU BITs.

The ‘Big Crunch’ of Investor-State Arbitration?

Taking a step back, we see that the Achmea judgment, and the Netherlands’ decision to terminate intra-EU treaties, should have been unsurprising to arbitration practitioners.

Over the last twenty years, investment treaty-based arbitration has grown exponentially (see Figure 1 below).


FIGURE 1 – International investment arbitration cases registered by year (1987–2016). PITAD, PluriCourts Investment Treaty Arbitration Database (PITAD) as of 1 January 2017; 831 cases in total through 1 January 2017. Source

But after investment treaty-based arbitration’s ‘big bang’ is there a ‘big crunch’ to come? It is now commonplace for commentators to note that investment treaty arbitration has suffered an accelerating backlash in the last few years.  In that sense, Achmea is only the latest manifestation of that phenomenon, and the Netherlands’ decision a natural consequence of this evolution.

What are the causes of this backlash against investment arbitration? Although many explanations have been offered (from the panels’ rigid views of contracts to the growing number of cases brought –and won- by investors against sovereign states), two in particular merit singling out. They not only reflect past sentiment about investment arbitration, but also offer a glimpse into the future of investment arbitration as a whole. These two reasons are the pushback against globalisation and the increasing importance of regionalism.

Backlash Against Globalisation and Corresponding Rise in Nationalism

Commentators have frequently mentioned that the US 2016 presidential elections and the Brexit vote were both built on the rejection of globalisation and expressed a wish, on the part of the American and British people, to re-centre policies around nationalism and domestic sovereignty.

President Trump’s proposal to renegotiate NAFTA has led to speculation as to what (if any) investor-state dispute settlement mechanism will be included in the renegotiated treaty.

In Europe, the Comprehensive Economic and Trade Agreement (CETA) and Transatlantic Trade and Investment Partnership (TTIP) were perceived by the general public as imposing North American rule(s). This translated into a rejection of investor-state dispute mechanisms as ‘secret courts’. The Brexit vote was another symptom of this desire to ‘take back control’.

Another sign of the nationalist wave sweeping the globe is the resurgence of resource nationalism – in the Americas, in Africa, in Asia. Will Europe be the next continent to experience increased nationalism in investment protection?

Focus on Regional Mechanisms, Including in Europe

Over the last decade, many states around the world overhauled their investment protection system and terminated some, and sometimes all, of the BITs they were party to.

In 2012, South Africa terminated its BIT with Belgium-Luxembourg and issued cancellation notices for its BITs with Germany and Switzerland.

In 2014, the Indonesian Government indicated that it would terminate all of its 67 bilateral investment treaties.

In 2016, India served notices to 57 countries including the UK, Germany, France and Sweden seeking termination of BITs whose initial duration has either expired or will expire soon.

In 2017, Ecuador terminated all 16 of its remaining BITs, having previously ended treaties in 2008 and 2010.

A global pattern starts to emerge, with various states terminating BITs and relying on regional multilateral frameworks instead.

For example, Indonesia explicitly embraced regionalism in its approach to foreign investment, relying on the ASEAN Comprehensive Investment Agreement (which provides BIT protections, including investor-state dispute settlement provisions).

Similarly, in 2017 MERCOSUR signed a Protocol on Investment Cooperation and Facilitation, which coordinated the regional bloc’s approach to investment disputes and most notably excluded investor-state arbitration.

Regional instruments are being increasingly used to grant investment protection, and regional organisations are a force to be reckoned with on the international investment legal scene.

This is, of course, particularly poignant in Europe. As noted above, the European Commission has been a vocal opponent of intra-EU treaties. It recently received the green light to negotiate, on behalf of the European Union, a convention establishing a multilateral court for the settlement of investment disputes (the “MIC”). The MIC would be Europe’s permanent body to settle investment disputes, eventually replacing the bilateral investment court systems included in EU trade and investment agreements.

Much has been written about Achmea and its consequences. However, it is crucial for practitioners and academics to also look at the judgment through a global and cross-disciplinary lens.

In particular, the investment arbitration community would be well-advised to actively engage with regional organisations and to take heed of the growing discontent against investor-state dispute mechanisms.

More from our authors: International Arbitration and the Rule of Law
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The post Another One BIT the Dust: Is the Netherlands’ Termination of Intra-EU Treaties the Latest Symptom of a Backlash Against Investor-State Arbitration? appeared first on Kluwer Arbitration Blog.

Lok Sabha OKs bill to help make India hub for domestic, global arbitration - Times of India

Google International ADR News - Fri, 2018-08-10 18:28

The Indian Express

Lok Sabha OKs bill to help make India hub for domestic, global arbitration
Times of India
Calling The Arbitration and Conciliation (Amendment) Bill 2018 “a “momentous and important legislation”, law minister Ravi Shankar Prasad said, “We want India to become a hub of domestic and international arbitration. So there is a need for robust ...
Lok Sabha passes Bill to encourage institutional arbitrationBusiness Standard
LS passes arbitration billDaily Excelsior
Lok Sabha passes Arbitration and Conciliation Bill (Amendment) 2018Jagran Josh
The Quint
all 32 news articles »

Arbitrary on arbitration: Proposed amendment in arbitration law needs to be dropped - Financial Express

Google International ADR News - Fri, 2018-08-10 17:52

Financial Express

Arbitrary on arbitration: Proposed amendment in arbitration law needs to be dropped
Financial Express
Despite several years of the law being in place, however, the alternative dispute resolution mechanism hasn't really taken off. If that is so, it is due to the government's obduracy as well as the fact that the initial law had some critical lacunae ...

Lok Sabha passes arbitration bill - HERE. NOW

Google International ADR News - Fri, 2018-08-10 14:41

HERE. NOW

Lok Sabha passes arbitration bill
HERE. NOW
The bill, which amends the 1996 Act, is part of the government's efforts to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution Mechanism. Earlier, while moving the bill ...

Lok Sabha passes Bill to encourage institutional arbitration - Business Standard

Google International ADR News - Fri, 2018-08-10 10:38

Business Standard

Lok Sabha passes Bill to encourage institutional arbitration
Business Standard
The Lok Sabha on Friday passed a bill that seeks to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution (ADR) mechanism. Replying to debate on the Bill, Law Minister Ravi ...
Lok Sabha takes up bill to encourage institutional arbitration ...Daijiworld.com
LS passes arbitration billDaily Excelsior
LS-ARBITRATIONTHE WEEK

all 23 news articles »

Lok Sabha takes up bill to encourage institutional arbitration - Business Standard

Google International ADR News - Fri, 2018-08-10 06:02

Business Standard

Lok Sabha takes up bill to encourage institutional arbitration
Business Standard
The Lok Sabha on Friday took up for discussion a bill that seeks to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution (ADR) mechanism. The Arbitration and Conciliation ...
LS-ARBITRATIONTHE WEEK
LS passes arbitration billDaily Excelsior

all 18 news articles »

Lok Sabha takes up bill to encourage institutional arbitration - Daijiworld.com

Google International ADR News - Fri, 2018-08-10 05:55

Daijiworld.com

Lok Sabha takes up bill to encourage institutional arbitration
Daijiworld.com
New Delhi, Aug 10 (IANS): The Lok Sabha on Friday took up for discussion a bill that seeks to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution (ADR) mechanism. The ...
Lok Sabha passes Bill to encourage institutional arbitrationBusiness Standard
LS passes arbitration billDaily Excelsior
LS-ARBITRATIONTHE WEEK

all 27 news articles »

Experts converge at the 6th annual Economic Times Infra Focus Summit - Times of India

Google International ADR News - Fri, 2018-08-10 05:35

Times of India

Experts converge at the 6th annual Economic Times Infra Focus Summit
Times of India
... Rohit Modi, Chief Executive Officer, Essel Infra & Smart Utilities, Essel Infra; B.S. Saluja, Secretary General, The International Centre for Alternative Dispute Resolution; Bipin Pradeep Kumar, Co-Founder & Director, Product Development, Gaia ...

Singapore: Arb-Med-Arb: Connecting The Dots Between Arbitration And Mediation - Mondaq News Alerts

Google International ADR News - Fri, 2018-08-10 03:15

Singapore: Arb-Med-Arb: Connecting The Dots Between Arbitration And Mediation
Mondaq News Alerts
The Singapore International Arbitration Centre (“SIAC”) and the Singapore International Mediation Centre (“SIMC”) have formalised their very own SIAC-SIMC Arb-Med-Arb Protocol (“AMA Protocol”) to handle disputes in accordance with an “Arb-Med-Arb ...

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Bribery, Corruption, and Fraud in Investor-State Disputes: How Should Tribunals Approach Economic Crimes?

Kluwer Arbitration Blog - Fri, 2018-08-10 03:00

Yarik Kryvoi

Investor-state tribunals frequently face allegations of economic crimes, especially in jurisdictions with a weak rule of law.

For instance, the largest ever investor–State award of $50 billion in Yukos v Russian Federation, primarily concerned a criminal investigation of alleged tax evasion, fraud and embezzlement by what was then the largest Russian oil company. The tribunal ruled that instead of collecting taxes, Russia’s main objective was to bankrupt the investor and expropriate its assets.

Economic crimes which arise in investor-State disputes include bribery, tax evasion, bank, accounting and securities fraud, and other forms of malpractice. Allegations of money laundering may arise in the context of claims related to fake asset sales, intentional selling of overpriced goods, and in reimbursement scams.

Investor-State tribunals are not normally expected to deal with criminal liability because they normally do not have the necessary expertise, powers and resources to conduct independent criminal investigations. The ICSID Convention and investment treaties also do not regulate these matters. Nonetheless, allegations of economic crime may have a profound impact on the disputes before them.

Jurisdiction or Admissibility?

At the very beginning, tribunals may decide to decline jurisdiction over claims tainted by economic crimes or rule that such claims are inadmissible.

The practice of tribunals remains largely inconsistent, as it ranges from exonerating the State from its responsibility for involvement in an economic crime (e.g., World Duty Free v Kenya) to awarding investors significant amounts of compensation (e.g. Yukos v Russian Federation). In this context, the language of the treaty, or other instrument, in which the parties consent to arbitration, helps to distinguish jurisdiction from admissibility.

In case the treaty or the arbitration agreement requires the investment to be made in accordance with law, tribunals usually consider economic crimes at the jurisdictional stage of arbitration (See, e.g. Methanex v United States of America, Inceysa v El Salvador). Otherwise, committing an economic crime when acquiring an investment may result in the claim being ruled inadmissible at the merits phase (See, e.g. Churchill Mining v Indonesia).

At the same time, it appears that the autonomous nature of the arbitration agreement presumes that tribunals should assert their jurisdiction, even if the investor breached its obligations when securing the investment. With occasional exceptions, such as that of Plama v Bulgaria, which relied on the separability concept to explain the nonapplication of most-favoured-nation clauses to dispute settlement provisions of a treaty, it is difficult to find cases when tribunals rely on this essential principle of arbitration law.

It Takes Two to Bribe?

In cases where economic crimes have allegedly occurred in an investor–State dispute, the State is more than just a party to the arbitration. The State also remains the entity which regulates, investigates, adjudicates and enforces in relation to such crimes within its territory. Prosecuting economic crimes might itself breach a State’s international obligations, leading to an investor-State claim against it. On the other hand, the State can assert a counterclaim for the investor’s misconduct.

When State representatives commit economic crimes themselves, investment tribunals should pay more attention to the principle of contributory fault. For instance, bribery typically presumes misconduct of two parties — the one making an illicit payment and the other accepting it. Penalizing only the investor by rejecting its claims or only the State would seem unfair and contradict generally accepted principles of international law, such as those reflected in the ILC Articles on State Responsibility.

Tribunals should also take into account the failure of a State to comply with its international obligations, including the obligation to effectively combat bribery and corruption. Furthermore, the commission of an economic crime by an investor should be reflected in damages awards, as the Yukos tribunal did by reducing the amount due to be paid to the investor.

Towards Greater Certainty on the Effect of Economic Crimes

The system of investor-State dispute settlement has been recently criticized for a lack of predictability, legitimacy and for excessive intervention with the exercise of the sovereign powers of States.

As States rely on criminal law to deal with economic crimes, they expect predictability from international tribunals reviewing their conduct. Investors too would benefit from greater consistency exercised by tribunals on issues related to economic crimes.

The silence of investment treaties on the consequences of economic crimes combined with the inconsistent application of internal law results in increased uncertainty, expensive proceedings and controversial decisions. In deciding on the admissibility of claims related to economic crimes, tribunals could draw inspiration from national best practices, such as the UK Bribery Act.

Instead of introducing strict liability on businesses for bribery, this Act reverses the burden of proof and introduces an offence of failing to prevent bribery for all companies, including parent companies. The Bribery Act also establishes an ‘adequate procedures’ defence to avoid liability for bribery.

The Act’s official guidance on the defence of adequate procedures lists risk assessment procedures, due diligence, engagement by senior management, communication and training, as well as monitoring and review of existing procedures. Hence, organizations would not be liable for bribes paid on their behalf under the Act if they could prove, on the balance of probabilities, that they had ‘adequate procedures’ in place to prevent them.

The Act’s logic could help tribunals in approaching issues not properly regulated in other domestic legal systems and help to build consensus on the ‘adequate procedures’ expected of States and investors when it comes to bribery, corruption and other economic crimes.

To ensure legal certainty concerning the effect of bribery, money laundering and other economic crimes in international investment law, treaties must include provisions on the effect of economic crimes. States should facilitate the consolidation of international investment agreements by adopting joint interpretative statements on previously concluded treaties, or by replacing old treaties with modern bilateral treaties, either one at a time or through regional agreements.

A new generation of investment treaties should take into account both applicable domestic law and the existing sources of international law concerning economic crimes together with national best practice. The same holds true for the practice of investment tribunals.

More legal certainty within the investor-State dispute resolution system will facilitate international efforts to reform investment agreements. It would also improve the legitimacy and predictability of the system of investor-State disputes and reconcile the combating of economic crime with the protection of foreign investors.

 

A longer article on this topic appeared in the International and Comparative Law Quarterly in July 2018.  It is available here.

 

More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


The post Bribery, Corruption, and Fraud in Investor-State Disputes: How Should Tribunals Approach Economic Crimes? appeared first on Kluwer Arbitration Blog.

Binding Mediation: An Inexpensive Option for ADR - Lexology

Google International ADR News - Thu, 2018-08-09 09:56

Binding Mediation: An Inexpensive Option for ADR
Lexology
The hope and promise of alternative dispute resolution (“ADR”) processes is that they will resolve disputes more efficiently and with less expense than litigation. But, when the parties ... Qwest Communications International, Inc., No. 08 MA 212, 2010 ...

Ghana: 3 More Courts in Ashanti Region to Practise Adr - AllAfrica.com

Google International ADR News - Thu, 2018-08-09 08:20

Ghana: 3 More Courts in Ashanti Region to Practise Adr
AllAfrica.com
The Judicial Service is planning to introduce Alternative Dispute Resolution (ADR) in three more courts in the Ashanti Region. They are the Juaso Circuit Court, Agona District Court and Manso-Nkwanta District Court, bringing the total ... The ADR ...

India’s Treatment of Interconnected Agreements to Arbitrate

Kluwer Arbitration Blog - Thu, 2018-08-09 07:00

Ritvik Kulkarni

A plethora of business transactions today have evolved into complex structures of multi-faceted sub-transactions. Multiple parties enter into several distinct, yet interconnected and interdependent agreements towards achieving a common commercial goal.

Every so often, however, one or more of these interconnected agreements will lack an arbitration agreement; whereas the others will contain similar/related arbitration clauses. Disputing parties may then initiate parallel litigation and arbitration proceedings against each other.

One disputing faction would most likely request the relevant State Court to refer all the parties to one tribunal. Conversely, the other faction would resist any request for arbitral reference on grounds that it is a non-party to the arbitration agreement; and/or oppose a composite reference on grounds that the parties have clearly entered into several separate agreements.

I argue here that in such disputes, the Indian Supreme Court (SC) has realigned its focus on determining the commonality and end goal of composite transactions, instead of merely dissecting them into separate agreements based on a strict interpretation.

One Agreement, One Tribunal

India’s treatment of these issues has been previously analysed here on this blog. The most recent judgment discussed in the aforesaid post is the SC’s decision in Duro Felguera v. Gangavaram Port  (2017 SCC OnLine SC 1233) [Duro].

In Duro, the SC was faced with a request for a composite arbitral reference in relation to disputes arising out of six agreements. An original tri-partite agreement between all parties was subsequently restructured into five new agreements. The sixth agreement was a related bank guarantee. All six agreements were entered into in respect of one main project and had identical arbitration clauses.

In Chloro Controls v. Severn Trent (2013) 1 SCC 641 (Chloro Controls), the SC had referred even non-signatories to a single international arbitration since the ‘mother agreement’ among the agreements in question, contained an arbitration clause. However, the SC distinguished Chloro Controls because the arbitration clauses in Duro lacked the wide terms: [disputes arising] ‘under and in connection with’ [this agreement].

Even though it was observed in Duro that there had been “no novation by substitution of all five agreements”, the SC declined a composite reference mainly on grounds that Section 11(6A) of the Arbitration Act, 1996 (the Act) restricts the scope of judicial inquiry merely to determining the existence of an arbitration agreement. Having found six separate arbitration agreements, the parties were referred to four domestic and two international arbitrations, albeit presided over by the same set of arbitrators.

Paradigm Shift?

In this backdrop, the SC was yet again required to adjudicate a similar dispute in Ameet Lalchand Shah & Ors. v. Rishabh Enterprises and Another (Ameet Shah) [Civil Appeal No. 4690 of 2018].

Briefly put, four parties executed a total of four contemporaneous agreements for the purpose of commissioning a photovoltaic solar plant in Uttar Pradesh, India (the Solar Plant). Three of these four interconnected agreements contained an arbitration clause. When disputes arose, one of the parties issued a notice of arbitration, whereas the opposing party filed a suit before a Single Judge of the Delhi High Court (HC). In the suit, the plaintiff levelled serious allegations of misrepresentation and fraud in respect of the subject matter covering all four agreements. In Ameet Shah, the SC has also discussed a few contours of arbitrability of fraud. However, I have not delved into this aspect of the judgment in this post.

The defendant in the suit then filed an application under Section 8 of the Act and sought the dispute to be referred to arbitration. This request was rejected by the Single Judge, as also by the Division Bench (DB) on appeal.

While deciding the request for a single reference, the SC first revisited its ratio in Chloro Controls. Here, it will be recalled, the SC had given a purposive construction not only to the arbitration clause in the mother agreement, but also to the transaction as a whole. Importing its formative analysis from Chloro Controls, the SC in Ameet Shah observed that all parties could be covered by the arbitration clause in the main agreement as all four agreements were clearly interconnected and meant for achieving the single commercial goal of setting up the Solar Plant at Uttar Pradesh, India. Unlike in Duro, the Apex Court did not mandate the presence of a particular widely worded arbitration clause, as the one in Chloro Controls, to enable a single arbitral reference.

Further, the SC in Ameet Shah steered clear of its earlier decision in Sukanya Holdings v. Jayesh H. Pandya (2003) 5 SCC 531 (Sukanya). In Sukanya, it was held that a matter cannot be referred to arbitration if all parties to a civil suit are not privy to the arbitration agreement; as there is no provision in the Act for a partial reference to arbitration. The SC in Ameet Shah rightly adverted to the 2015 Amendments to the Act, and noted that the amended in the amended Section 8(1) clearly entitles even persons claiming through or under a party to the arbitration agreement to seek an arbitral reference, notwithstanding any judicial precedent. The SC then went on to refer all disputing parties to arbitration. Notably, while the SC has not returned a concrete finding to this effect, Sukanya should effectively stand overruled in light of the amended Section 8 and the SC’s decision in Ameet Shah.

Missed Chances

Interestingly though, Duro does not feature at all in the Ameet Shah analysis; and as such it has not been expressly overruled. Parties in future disputes may still seek to rely upon Duro to resist a composite reference if governed by both domestic as well as international agreements.

The SC has rightly applied Chloro Controls in Ameet Shah. However, it has done so only after having identified a principal/mother agreement among the four agreements. Therefore, Ameet Shah may impede the application of Chloro Controls in a similar multi-contract dispute which lacks the centrifugal force of a mother agreement. Hopefully, Indian Courts will nevertheless discard a Shylockian interpretation of contract and apply the Chloro Controls ratio in all multi-contract disputes where the overall transaction is common and comprises inextricably linked components.

Concluding Remarks

As Lord Hoffman has remarked in Fiona Trusts v. Primalov [2007] UKHL 40, the construction of an arbitration clause should start with the assumption that parties, as rational businessmen, are likely to have intended that any dispute arising out of their commercial relationship should be decided by the same tribunal. Perhaps India had a good opportunity to have formally adopted this presumption in Ameet Shah. Nonetheless, the SC’s purposive approach towards commercial transactions is a refreshing development in India’s arbitration landscape.

That said, would a party be permitted to reintroduce its grievance to consolidation as a ground for challenging the arbitral award? Most leading arbitral institutions now provide for consolidation (Article 28 of the 2013 HKIAC Rules, Article 8 of the 2016 SIAC Rules, Article 10 of the 2017 ICC Rules, Article 15 of the 2017 SCC Rules, and Article 22(ix) and (x) of the 2014 LCIA Rules). It has been previously argued on this blog that an institution’s decision on consolidation is administrative in nature and cannot by itself be challenged. However, the tribunal of the consolidated proceedings can determine the validity of the consolidation order since it retains kompetenz-kompetenz to decide its own jurisdiction, including a challenge based on the institution’s decision to consolidate.

Insofar as a tribunal’s decision on consolidation is jurisdictional, parties in an Indian arbitration may raise it as a ground for setting aside an award before the relevant Court (Sections 16(6) and 34(2)(a)(v) of the Act). In PR Shah v. BHH Securities (Civil Appeal No. 9238/2003), an award was challenged because the tribunal had permitted a common arbitration when a party raised related claims against two parties under separate arbitration agreements. The SC dismissed the objections against consolidation and observed that denying the benefit of a single arbitration against the two parties would lead to multiplicity of proceedings, conflicting decisions and cause injustice.

Where the decision of consolidation is made by a court of the arbitral seat in accordance with its laws, as argued in the above post, it would be difficult to sustain a challenge to the award on the ground that the arbitral procedure and/or constitution of the tribunal was not in accordance the parties’ agreement(s) or with the law of the seat of arbitration.

Of course, this is not to suggest that every dispute with multiple contracts must automatically be referred to a single arbitral tribunal. Even in multi-party transactions involving several related contracts, parties may consciously structure the agreements to create distinct obligations on each set of contracting parties.

In Trust Risk Group v. AmTrust Europe [2015] EWCA Civ 437, the parties’ contractual arrangements comprised (i) a standard London-form agreement with  dispute resolution under English law and jurisdiction and (ii) a subsequent framework agreement structured closer to the Italian market, which provided for arbitration in Milan under Italian law. It was observed that both agreements dealt with different parts of the parties’ commercial relationship, and the parties’ decision to have different dispute resolution was founded on a rational basis. The Court dismissed the argument that all disputes between the parties must be referred to arbitration under the latter agreement. Accordingly, such disputes could indeed be referred to separate tribunals even though they arise out of related transactions.

 

Views expressed in the post are the personal opinion of the author and do not necessarily reflect those of his law firm.

 

More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
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The post India’s Treatment of Interconnected Agreements to Arbitrate appeared first on Kluwer Arbitration Blog.

JPO commissioner will stay at the reins as her signature ADR initiative gets off the ground - IAM (blog)

Google International ADR News - Thu, 2018-08-09 03:52

IAM (blog)

JPO commissioner will stay at the reins as her signature ADR initiative gets off the ground
IAM (blog)
The JPO has promoted a greater role for alternative dispute resolution (ADR) in patent licensing disputes. ... It's appealing to have a group of international and prominent figures in IP dispute resolution who could deliver predictable and accurate ...

JPO commissioner will stay at the reins as her signature ADR initiative gets off the ground - IAM (blog)

Google International ADR News - Thu, 2018-08-09 03:52

IAM (blog)

JPO commissioner will stay at the reins as her signature ADR initiative gets off the ground
IAM (blog)
The JPO has promoted a greater role for alternative dispute resolution (ADR) in patent licensing disputes. It also released a ... On the ADR front, the JPO announced the creation of the International Arbitration Center in Tokyo (IACT) to focus on ...

King & Wood Mallesons Expands in New York, Tokyo - Law.com

Google International ADR News - Wed, 2018-08-08 13:04

Law.com

King & Wood Mallesons Expands in New York, Tokyo
Law.com
McGonigal, who will lead the international dispute resolution practice at King & Wood Mallesons in Tokyo, specializes in alternative dispute resolution, international arbitration and commercial litigation. He joined Hill Dickinson in London two years ...

AAA new alternative fee arrangements helps control arbitration costs - The Global Legal Post

Google International ADR News - Wed, 2018-08-08 10:39

The Global Legal Post

AAA new alternative fee arrangements helps control arbitration costs
The Global Legal Post
In a first-of-its-kind offering for parties in alternative dispute resolution, the American Arbitration Association (AAA) has made a commitment to adding cost savings, fee transparency and predictability to the arbitral process. ... India Johnson ...

Judicial Service Extends ADR To Three More Courts In Ashanti - Peace FM Online

Google International ADR News - Wed, 2018-08-08 05:02

Peace FM Online

Judicial Service Extends ADR To Three More Courts In Ashanti
Peace FM Online
The Judicial Service is in the process of introducing Alternative Dispute Resolution (ADR) in three more courts in the Ashanti Region. They are the Juaso Circuit Court, Agona District Court and Manso-Nkwanta District Court, bringing the total ... The ...

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Judicial Service extends ADR to three more courts in Ashanti Region - Ghana Business News

Google International ADR News - Wed, 2018-08-08 04:44

Judicial Service extends ADR to three more courts in Ashanti Region
Ghana Business News
The Judicial Service is in the process of introducing Alternative Dispute Resolution (ADR) in three more courts in the Ashanti Region. They are the Juaso Circuit Court, Agona District Court and Manso-Nkwanta District Court, bringing the total number of ...

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