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Month: October 2023

International Commercial Arbitration

International Commercial Arbitration is a process of resolving disputes between parties in different countries through an arbitrator or a panel of arbitrators. It involves submitting the dispute to arbitration instead of pursuing litigation in a court of law. The arbitrator or panel of arbitrators will make a binding decision on the dispute.

International commercial arbitration can be used to resolve various disputes, including those related to contracts, intellectual property, investments, and construction. It is often used in cases where the parties involved in the dispute have a commercial relationship and wish to maintain a working relationship after the dispute is resolved.

Section 2(1)(f) of the Arbitration and Conciliation Act defines international commercial arbitration as disputes arising out of a legal relationship where one of the parties is a citizen, resident, or habitually residing out of India. International commercial arbitration is used by the traders of different countries as a way of settling their business conflicts. International commercial arbitration is an alternative method of resolving disputes between private parties arising out of commercial transactions conducted across national boundaries that allows the parties to avoid litigation in national courts. It helps to resolve disputes among the international parties arising out of the internal commercial agreements.

Advantages of International Commercial Arbitration

There are several advantages to using international commercial arbitration to resolve cross-border disputes. 

  • Arbitration is often faster and more efficient than traditional litigation. This is because arbitration proceedings are usually less formal and more flexible than court proceedings, which can be time-consuming and costly.
  • Arbitration allows the parties involved in the dispute to choose their own arbitrator or panel of arbitrators. This means that the parties can select an arbitrator or arbitrators who have expertise in the subject matter of the dispute, leading to a more informed and fair decision.
  • Arbitration is often more confidential than traditional litigation. Court proceedings are usually public, which means that sensitive information about the parties involved in the dispute can be made public. In contrast, arbitration proceedings are usually private, which means that the parties can keep the details of the dispute confidential.
  • Arbitration awards are easier to enforce across borders than court judgments. This is because most countries have signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which provides a framework for the recognition and enforcement of arbitration awards in different countries

Case Laws:

  1. Enercon (India) Ltd. & Ors v. Enercon GmbH & Anr, (2014) 5 SCC 1

It was held that the “venue” of an arbitration is the geographical location chosen based on the convenience of the parties and is different from the “seat” of arbitration, which decides the appropriate jurisdiction.

  1. Shri Lal Mahal Ltd. vs. Progetto Grano Spa (Civil Appeal No. 5085 of 2013 arising from SLP(c) No. 13721 of 2012)

A seminal judgment was passed that established a distinction between the scope of objections to the enforceability of a foreign award under Section 48 of the 1996 Act, and challenges to set aside an award under Section 34 of the 1996 Act. The scope of the expression’ public policy’ was substantially curtailed by the Supreme Court. 

  1. Bharat Aluminium Co. vs Kaiser Aluminium Ltd. (Civil Appeal No. 3678 of 2007)

The Constitution Bench has held that Part I and Part II are mutually exclusive and that the Parliament while enacting the statute had unequivocally adopted the principle of territoriality over the subject matter of arbitration. In other words, the Constitution Bench has inter-alia, held that the centre of gravity for international commercial arbitrations having a foreign seat was the juridical seat of arbitration and not where the contract had to be performed.

Fee Structure:

New Registration Fee for International Commercial Arbitration:
l Non-Refundable Registration Fee of U S Dollars 1,650 plus applicable taxes (No Change)
(C) New Registration Fee for Maritime Arbitration
l Non-Refundable Registration Fee of Rs.15,000/- plus applicable taxes for claims up to Rs. 1 Crore
l Non-Refundable Registration Fee of Rs.30,000/- plus applicable taxes for claims above Rs. 1 Crore.

Indian Council of Arbitration
The Indian Council of Arbitration (ICA) was established in 1965 and is regarded as India’s preeminent arbitral
institution.
Many users remain cautious about seating arbitrations in India, noting the interventionist attitudes of Indian
courts and other concerns.
The ICA handled eight international arbitrations in 2010 and five in 2011.

International Chamber of Commerce International Court of Arbitration
The ICC’s International Court of Arbitration was established in Paris in 1923. It is generally described as
the world’s leading international commercial arbitration institution, with less of a national character than any
other leading arbitral institution.
The ICC’s International Court of Arbitration is not, in fact, a court, and does not itself decide disputes or act
as an arbitrator. It is rather an administrative body that acts in a supervisory and appointing capacity under
the ICC Rules.
The ICC does not maintain a list of potential arbitrators and instead relies heavily on the experience of its
Secretariat and also on the ICC’s National Committees in making arbitrator appointments.
The ICC’s Rules have been criticized as expensive and cumbersome. Despite continuing criticisms about
cost and efficiency, there are reasonable grounds for believing that the ICC will continue to be the institution
of preference for many sophisticated commercial users

ONLINE DISPUTE RESOLUTION(ODR)

The use of Internet technology to settle conflicts between parties outside of the public court system is known as online dispute resolution (ODR). ODR, in its simplest form, is the practice of using technology to resolve conflicts.
It involves using technology actively to settle the issue, such as through video conferencing for hearings or electronic document sharing for filing, rather than just integrating it in some general way (such as online arranging a session).
Despite being evolved from ADR, ODR’s advantages go beyond e-ADR or ADR that is technologically supported.
ODR can make use of AI/ML-powered technology tools in the form of script-based solutions, automated dispute resolution, and curated platforms that are tailored to particular types of conflicts.

Benefits of ODR

It is cost-effective, convenient, and efficient, allows for customizable processes to be developed and can limit
unconscious bias that results from human interactions. In terms of layers of justice, ODR can help in dispute
avoidance, dispute containment and dispute resolution. Its widespread use can improve the legal health of
society, ensure increased enforcement of contracts and thereby improve the Ease of Doing Business Ranking
for India. Over time, the benefits of ODR and Digital Courts (technology in the public court system) together can
transform the legal paradigm as a whole.

  1. Cost-effective: The cost of conflict resolution frequently transforms the procedure into a penalty and obstructs access to justice. In this regard, ODR presents a way of conflict settlement that both neutrals and disputants may afford. For instance, businesses experience a loss of productive time, a decline in employee health, a decline in investor confidence, a reduction in investments, and a slowdown in economic growth. While ODR cannot entirely eliminate all of these effects, it can help in their mitigation, which will make it cost-effective.
  2. Convenient and quick: ODR can address such delays by providing a faster and more convenient process for the resolution of disputes. In itself, ADR employs simpler procedures and a fixed timeline for processes leading to efficient dispute resolution. To add to such benefits, ODR eliminates the need for travel and synchronisation of schedules. Similarly, the use of ODR within businesses such as e-commerce entities also provides consumers a one-stop avenue to resolve their disputes thereby making dispute resolution quicker and more convenient.
  3. Allows for customisable processes: Numerous ADR variants have emerged in recent years that go beyond standard ADR procedures like arbitration and mediation. Med-arb, med-arb-med, and arb-med-arb are a few of the hybrid variations. In terms of the kinds of models that can be built, ODR’s integration with such non-traditional ODR procedures and the use of artificial intelligence may open up countless possibilities. ODR can therefore, in some kinds of instances, provide multi-door conflict resolution through curated and tailored processes. As a result, the user may find the dispute resolution procedure to be more convenient and cost-effective.
  4. Encourages dispute resolution: By addressing important issues including lack of access to actual courts or ADR centres, the cost of conflict resolution, and limitations resulting from disability, ODR can dramatically enhance access to a range of dispute resolution processes. ODR methods, such as online negotiation and mediation, make the dispute resolution process less combative and challenging for the parties because they are predicated on reaching an agreement together. The dispute resolution procedure may seem more approachable to users if issues are settled in the privacy of their own homes. This enhancement in the entire experience may persuade more parties to choose this formal process over not asserting their rights at all in order to settle their disagreements.
  5. Limits implicit bias caused by human judgment: There have been some worries raised about the influence of biases, prejudice, and stereotypes on decision-making processes and outcomes as a result of the heightened awareness of race, caste, and gender justice. Studies have shown that implicit bias and reluctance to interact with people from other communities might affect how mediation turns out. When settling conflicts, ODR procedures might minimize the Neutral’s implicit prejudice. ODR platforms, particularly those based on texts and emails, help resolve disputes based on the claims and information given by the disputing parties, rather than on the identities of these parties, by removing audio-visual cues relating to gender, socioeconomic standing, ethnicity, race, etc.

The successful integration and co-option of ODR across the world, has ultimately led to the development of
a few models of ODR all of which have been running in parallel across the globe. They are:

  1. In-house private ODR Platforms run by individual businesses;
  2. Private ODR Platforms or service providers catering to different categories of disputes and multiple
    modes of resolution;
  3. Government-run or state-sponsored ODR programs and platforms and
  4. Court-annexed ODR systems

New Guidelines for Senior Counsel 2023

Under Section 16 of the Advocates Act 1961 two classes of advocates are classified; Senior Advocate and Junior or those who are not designated as seniors. The Senior advocates play the role of legal experts in India who have significant knowledge in the field of law. They are associated with many prominent cases as they are good contributors to the principle of the Rule of Law.

How to become a Senior Counsel?

  • Section 16(2) of the Advocates Act, 1961 and Rule 2(a) of Order IV of the Supreme Court Rules, 1966 provide certain guidelines to be followed for the designation of a senior counsel.
  • As per these provisions:
    • The Chief Justice and other judges of the concerned court should believe that a particular advocate is fit to hold the position of a senior advocate.
    • The concerned advocate should have exceptional legal expertise and knowledge of the law.
    • The consent of such an advocate should be obtained prior.
    • The selection should be on the sole ground of his knowledge and expertise in the area of law.

What are the restrictions imposed on a Senior Advocate?

  • A senior advocate is not permitted to appear without an Advocate-on-record or any junior.
  • He/she is refrained from drafting pleadings or affidavits before any court or authority mentioned under Section 30 of the act.
  • He/she shall not accept directly from a client any brief or instructions to appear in any Court.
  • A senior cannot file any pleading or represent his client neither can draft an application in his own handwriting.
  • The senior advocate must maintain a code of conduct, different from the other advocates.
  • India’s first woman Senior Advocate Indira Jaising filed a petition in SC challenging the existing process of designation.
  • She termed this process as opaque, arbitrary and fraught with nepotism and sought greater transparency in the process of designating.
  • As a result, the Apex Court decided to lay down guidelines for itself and all High Courts on the process of designating senior advocates.
  • The judgment decided the setup:
    • A permanent committee, and 
    • a permanent secretariat,
      • The secretariat was tasked with receiving and compiling all applications for designation with relevant data, information, and the number of reported and unreported judgments. Besides creating permanent bodies, the verdict laid down the procedures and assessment criteria for the designation process.

Indira Jaising v Supreme Court of India, 2023 SCC OnLine SC 614, decided on 12-05-2023

In an application filed by Senior Advocate Indira Jaising against the existing system of designation of Senior Advocates, terming it flawed as it was not objective, fair, and transparent, and thus did not take into account considerations of merit and ability, the 3-Judge Bench of Sanjay Kishan Kaul*, Ahsanuddin Amanullah, and Aravind Kumar, JJ. has fine-tuned the guidelines laid down in the 2017 Judgment to bring in greater transparency and objectivity in the designation process. The Supreme Court has published new guidelines for the designation of senior advocates practising mainly in the Apex Court. These guidelines come after the May 12 ruling delivered by a three-judge bench led by Justice SK Kaul in a case seeking modification in the conferment of ‘senior advocate’ designation guidelines rendered in a 2017 SC ruling.

New guidelines for the designation of senior advocates in the SC

What do the new guidelines say?

  • Minimum age to apply for the senior advocate designation
    • The new guidelines prescribe the minimum age as 45 years to apply for the ‘senior advocate’ designation. 
    • This age limit may, however, be relaxed by the Committee, the Chief Justice of India, or a Supreme Court judge if they have recommended an advocate’s name.
      • The 2017 guidelines say that the CJI along with any judge can recommend an advocate’s name for designation.
      • However, the 2023 guidelines specify that the CJI along with any Judge of the Supreme Court may recommend in writing the name of an advocate for designation.
  • Marks set aside for publications
    • Earlier, the guidelines stated that 15 marks were set aside for publications. 
    • However, the new guidelines state that only 5 marks will be given for:
      • publication of academic articles, experience of teaching assignments in the field of law, and 
      • guest lectures delivered in law schools and professional institutions connected with law.
  • Weightage given to reported and unreported judgements
    • The weightage given to reported and unreported judgements (excluding orders that do not lay down any principle of law) has increased from 40 to 50 points in the new guidelines.

Why are the guidelines being changed after the Indira Jaising Case?

In February 2023, the Central government sought to change guidelines for the designation of senior lawyers.

  • These guidelines were issued by the Supreme Court in the aftermath of its 2017 ruling in the case of ‘Indira Jaising vs. Union of India’.
  • The designation guidelines for lawyers are based on a point-based system, which awarded 40% weightage to publications, personality, and suitability gauged through the interview. 
  • The Centre argued that this system is subjective, ineffective, and dilutes the esteem and dignity of the honour being conferred traditionally.
  • It pointed to the rampant circulation of bogus and sham journals where people can publish their articles without any academic evaluation of the contents and quality of the articles.
  • The Centre also sought to reinstate the rule of a simple majority by a secret ballot, where the judges can express their views about the suitability of any candidate without any embarrassment.
    • The existing guidelines discouraged the system of voting by secret ballot, except in cases where it was unavoidable.

Justice Leila Seth

Justice Leila Seth was appointed as the first female judge of the Delhi High Court on August 5, 1991. She achieved history by becoming the first woman to place first in the 1958 London Bar exam. She was born in Lucknow in October 1930. In 1959, she started her journey by deciding to become an advocate. She excelled in the Patna High Court’s jurisdiction, managing a wide variety of cases including complex tax difficulties, civil disputes, corporate affairs, criminal trials, marriage issues, and cases involving the public interest.

She expanded her legal services to include the Supreme Court, handling challenging cases like tax appeals, constitutional questions, and civil and criminal cases. Her remarkable legal abilities were acknowledged, which resulted in her nomination as a member of the team of attorneys defending the West Bengal administration before the Supreme Court beginning in June 1974. When she was appointed Senior Advocate by the Supreme Court on January 10, 1977, her status became official.

She first held the position of Chief Justice of a High Court at the Himachal Pradesh High Court in 1992 after serving as a judge on the Delhi High Court.

Strongly supporting equality, she spearheaded attempts to change the Hindu Succession Act to guarantee daughters’ equal inheritance rights in joint family property. In Shakuntala Kumari v. Om Parkash Ghai, Justice Leila Seth concluded that a wife’s threat to harm herself could be viewed as cruel behaviour toward her husband. In the famous case of NG Dastane v. S Dastane, it was determined using the same justification that a wife is being cruel to her husband if she threatens to kill herself and confirmed by another bench.

In her autobiography published in 2003 under the title On Balance, Justice Seth described her experience as a lawyer and the challenges she had in juggling work and family. Her commitment to education was demonstrated in the 2010 film We, The Children of India. She discussed numerous notable cases she was engaged with throughout the course of her lengthy fifty-year legal career in her 2014 book Talking of Justice. These included, among other things, promoting gender awareness within the judiciary, improving the management of the judicial system, combating violence against women, promoting the welfare of young girls, supporting a uniform civil code, upholding women’s rights, guaranteeing prisoners’ rights, and upholding women’s rights.

She criticized the Supreme Court’s ruling in the Naz Foundation case, which nullified the Delhi High Court’s historic decision altering section 377 of the Indian Penal Code. She emphasized that the fact that the verdict did not recognize the significant social stigma associated with this punishment showed a lack of empathy for the suffering of individuals and families.

Justice Seth has made a significant difference because of her essential support for Hindu daughters’ equal succession rights. In partnership with the Law Commission, she pushed for changes to the Hindu Succession Act that would grant daughters equal rights to inherited property. She was persistent in fighting for women’s inheritance rights because she recognized that in a patriarchal society, women might be capable of being self-sufficient financially. Her accomplishments inspired women and showed her tremendous influence in the legal and humanitarian fields, which was felt by people of all generations.