Author name: CBCL

[Nitya Jain]   The author is a 3rd year student of Nirma University. Introduction With growing transactions and declining approachability in trade and commerce, disputes inevitably arise. Today, irrespective of whether a dispute is domestic or international, parties prefer an unbiased forum for resolving their disputes. Effectively, Arbitration is the most suited method when it comes to sidestepping the lengthy procedures of court. The capability of parties to achieve a speedy relief is fundamental to any arbitration proceeding. In order to safeguard and further uphold party autonomy, major arbitration institutions develop mechanisms and procedures that eliminate judicial involvement in arbitration proceedings. When a party seeks an interim relief, they either resort to domestic courts or wait for the constitution of the tribunal. Resorting to courts undermined the very purpose of choosing arbitration over litigation and pendency of tribunal formation gravely hampers the expedite procedure.[i]In order to address the aforementioned fallacy international institutions and various countries have developed the concept of Emergency arbitrator. A party appoints an Emergency Arbitrator when it urgently requires a relief that if not granted, will lead to grave loss of asset or evidence. Proceedings of such an arbitration is governed by agreement and consensus of the parties. Emergency arbitrator is not a part of the tribunal in fact, his job ends with the granting of relief and he is not to decide the case on merits. The types of emergency reliefs sought  are broadly categorized in four broad headers- (i) anti-suit injunctions ; (ii) reliefs aimed at restoring status quo of the disputant ; (iii) measured intended at safeguarding enforcement of a future award and (iv) orders for interim payments. A good amount of time has passed since the concept of Emergency Arbitrator has been around. The institutions are continuously introducing provisions and rules as an attempt to improve the workability of the concept of emergency arbitrator. Various countries in their domestic laws have also adopted the concept.  Though the novel concept of emergency arbitrator is highly appreciated in the arbitration community globally, enforcement of the order passed by the arbitrator is still debatable. It eventually boils down to the subjectivity of various national courts and laws of the respective countries as to whether an order passed by an emergency arbitrator is enforceable or not.  Except Hong Kong and Singapore all other national laws are silent on the question of enforceability of emergency arbitrator’s decision. Provisions under Indian Law The Indian law does not expressly recognize the concept emergency arbitrator. In an attempt to abide by the global trend and also to provide statutory recognition to the awards passed under institutional rules like SIAC and ICC, the 246thLaw commission report did recommend the adoption of the concept of emergency arbitrator under sec 2(d) of the Act which stated “Arbitral tribunal” means a sole arbitrator or a panel of arbitrators and, in the case of an arbitration conducted under the rules of an institution providing for appointment of an emergency arbitrator, includes such emergency arbitrator.” However the same was rejected by the legislature while amending the Arbitration and Conciliation Act, 1996 and thereby the concept is not a part of the Arbitration and Conciliation Act, 2015. There is also no express judicial recognition of the awards passed by emergency arbitrator or its enforcement. Till date the Indian courts, for that matter, had no opportunity to test the validity of the same.[ii]Due to the non- recognition of the concept of emergency arbitrator in India the trend has been such that parties after obtaining an emergency arbitrator award outside India, enforce the same in India via seeking interim order under Sec 9 of the Arbitration and Conciliation Act.[iii] The Indian legislature consciously omitted the inclusion of the provision of Emergency arbitration in the amended Indian Arbitration and conciliation Act. The non-acceptability of Emergency Arbitration in India has numerous probable reasons behind it. Firstly, Emergency arbitration fails to address the issues of third party i.e. an emergency arbitrator cannot grant measures against a third party. An emergency arbitrator’s jurisdiction is limited to the signatories and cannot be extended beyond. On the contrary, Indian courts, like courts of other jurisdictions, can grant interim relief against third parties under certain circumstances (for example, where such orders are necessary to protect the subject matter of the arbitration).  Secondly, unlike domestic courts, emergency arbitrators cannot pass ex-parteorders as this would go against the purpose of their constitution – both parties won’t be provided with an equal opportunity. Indian courts, like other jurisdictions, can grant ex parte orders in exceptional circumstances. Ex parte orders become necessary in some special circumstances where if the respondent comes to know about the order he might displace the assets or other similar grounds. Thirdly, an award passed by an emergency arbitrator is to be further scrutinized by the actual tribunal and can also be overturned, this however is not the case with the interim orders passed by the domestic courts. Lastly, enforceability of emergency arbitrator’s award is again a controversial question. The scant judgments passed by the Indian Judiciary only have dealt with the enforceability of the awards passed in Singapore or Hong Kong.[iv]India is yet to clarify its position regarding the enforceability of awards in other jurisdictions. Conclusion However, it is undeniable that Emergency arbitration ensures minimum court intervention which is the need of the hour in order to develop India as a pro-arbitration country. It would a progressive step towards making India a global hub for arbitration, like Hong Kong and Singapore. Often emergency arbitration proceedings are hassle free and ensure efficiency, which eventually develop a set standard of behavior for the parties. Experience also shows that parties are more likely to comply and abide by the orders passed by emergency arbitrators. An emergency award if recognized in India will definitely be beneficial for parties if the parties against whom the claim is made have their assets in a different jurisdiction which recognizes emergency awards. For India to become a pro-arbitration country, it is high time

[Mreganka Kukreja]   The author is a 4th year student of SLS, Pune.   Introduction The seat versus venue debate, owing to the simultaneous convergence and polarity of the two theories, has been a matter of long-standing deliberation before the courts. The Indian Judiciary in the case of Union of India v. Hardy Exploration and Production (India) Inc., [1] was once again required to substantiate the relationship between the two concepts. The author discusses the background of the case; the decision of the court and the implications of the pronouncement on the arbitration regime in India. Background The dispute between Hardy Exploration and Production (India) Inc. (hereinafter “Hardy”) and Union of India (hereinafter “India”) arose under the Production Sharing Contract concerning oil and gas exploration rights in India’s territorial waters. In 2006, Hardy claimed that it had discovered natural gas in India’s Southeastern coasts, which, under the contract, entitled it to a five-year appraisal period to ascertain the commercial viability of the extraction. India disagreed on the proposition, claiming that the discovery was of crude oil, which entitled Hardy to an appraisal period of two years. On expiry of the two-year time period, India relinquished Hardy’s rights to the block on the ground that Hardy has failed to submit the commercial viability in a timely manner. This prompted Hardy to initiate arbitration proceedings against India. On February 2, 2013, the arbitrators, sitting in Kuala Lumpur, issued an arbitral award in favour of Hardy. India knocked the doors of Delhi High Court to set aside the said award under S.34 of the Indian Arbitration and Conciliation Act 1996 (hereinafter “the Act”). The Delhi High Court upheld Hardy’s preliminary objection that the court had no jurisdiction over the matter and Part I of the Act is inapplicable, thereby rejecting India’s argument that Kuala Lumpur was merely a physical venue where the arbitration between the parties was concluded. [2] India appealed this decision to the Supreme Court. A two-judge bench of the Supreme Court referred the matter to a larger bench to determine the seat of arbitration and consequently, Indian Court’s jurisdiction in the present case. [3] Therefore, the present case came before a three-judge bench of the Supreme Court. Earlier in the month of June, the United States District Court for Columbia had not considered India’s request to stay the order for enforcement of arbitral award owing to pending proceedings in the Indian Court, however, the court ultimately refused to enforce the arbitral award. [4] Hence, the US District Court did not make any observations on the seat of arbitration or the competency of the Indian courts to hear the matter. Issue When the arbitration agreement specifies the ‘venue’ of arbitration, but does not specify the ‘seat’ of arbitration, then on what basis and principle is the ‘seat’ of arbitration proceedings determined? Judgment [A.] A reflection on the existing jurisprudence and non-application of Sumitomo case  The appellant had relied on the case of Sumitomo Heavy Industries Limited v. ONGC Limited & Ors [5] to argue that in the absence of an expressed seat of arbitration, the proper law of the contract (lex contractus), which in the present case was that of India, must govern the arbitration proceedings. The court observed that discussion in the Sumitomo case pertained to the Arbitration Act, 1940 and Foreign Awards (Recognition and Enforcement) Act, 1961. Further, the developments subsequent to the Bharat Aluminum Company v Kaiser Aluminum Technical Services Inc.[6] has rendered the Sumitomo case irrelevant and therefore, non-applicable in the present case. The court discussed a plethora of judicial pronouncements that had already discussed the relationship between the seat of and venue of arbitration [7] and explained the difference between the terms, pointing that while the former is concerned with the law of arbitration, the latter is merely restricted to a geographical location of the award. Thereafter, the Court reiterated that the arbitration clause of a contract has to be read in a holistic manner, and if there is a mention of venue and additional information pertaining to the venue, then depending upon the information appended, the court could conclude that there is an implied exclusion of Part I of the Act. The applications of these principles in the light of facts of the case were discussed as elaborated below. [B.] Approaches when the parties have not agreed to the juridical seat  The court discussed the course of action when the arbitration agreement does not provide for a seat of arbitration. First, the court said that the seat of arbitration could be inferred on the basis of the venue of the arbitration in conjunction with concomitant factors pointing towards the venue. [8] Second, on reading Art. 20 and Art. 31 of the UNCITRAL Model Law, the court said that in the absence of an expressed seat of arbitration, the arbitral tribunal is competent to ‘determine’ the seat of arbitration. The court discussed the case of Imax Corporation v. E-City Entertainment (India) Pvt. Limited, wherein the arbitration agreement provided that as per the ICC Rules, the arbitral tribunal would decide the place of arbitration, and therefore, Arbitral tribunal’s decision to hold the seat as London was upheld, as opposed to party’s plea for Paris to be the seat. [9] [C.] The constructs of arbitral tribunal’s ‘determination’   The court held that determination by the arbitral tribunal requires a ‘positive act to be done’ and the same must be considered contextually. Reliance was placed on Ashok Leyland Limited and State of T.N. and anr. as per which, the test of determination was laid down as an expressive opinion. [10.] In the present case, there was no adjudication and expression of opinion of the arbitral tribunal and the only act that was done was that the award was given in Kuala Lumpur. The Court held that Indian Courts have jurisdiction and the order passed by the Delhi High Court must therefore be side aside. The court’s position could be summarized in the following words: “The word ‘place’ cannot