CASE IN POINTVOL. IV X APRIL 2018

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Foreword

It gives me immense pleasure to present to you the nineteenth issue of Case in Point, a quarterly update on the recent legal developments in the eld of Dispute Resolution.

In this issue, we have examined the recent decision of the Supreme Court in Macquarie Bank Limited v. Shilpi Cable Technologies Ltd. wherein the Court dealt with two issues pertaining to the Insolvency and Bankruptcy Code, 2016 (“IBC”). First, the Court dealt with the issue of whether the requirement under Section 9(3)(c) of the IBC requiring an operational creditor to obtain a certicate from a nancial institution prior to initiating corporate insolvency proceedings is mandatory or directory in nature and held that this requirement is only directory and not mandatory. The Court then dealt with the issue of whether a demand notice for an unpaid operational debt under Section 8 (1) of the IBC can be issued by a lawyer on behalf of the operational creditor and held in the afrmative allowing a lawyer to issue a demand notice on behalf of an operational creditor.

We have also dealt with the recent decision of the Supreme Court in Kandla Export Corporation & Anr v. M/s OCI Corporation and Another wherein the Court dealt with the issue of whether Section 13 of the Commercial Courts Act, 2016 (“Commercial Courts Act”) provides for an additional right of appeal against an order of the Commercial Division enforcing a foreign award when such a right of appeal is not provided under Section 50 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Court held that the provision for appeal under Section 13 of the Commercial Courts Act could not be invoked

to challenge an order allowing the execution of a foreign arbitration award.

We have also examined the recent decision of the Supreme Court in BCCI v. Kochi Cricket Private Limited, wherein the Hon’ble Supreme Court considered the effect of Section 26 of the Arbitration and Conci l ia t ion (Amendment) Act , 2015 (“Amendment Act”) to post-award proceedings pending as on the date that the amendments came into force, i.e. October 23, 2015. The Hon’ble Court noted that the basic scheme of the Arbitration Act was adhered to by Section 26 of the Amendment Act and held that the Amendment Act would also apply to pending court proceedings that may have been led prior to the amendments but were pending at the time the 2015 amendments came into force i.e. October 23, 2015.

Further, we have also analysed the decisions of (i) the Bombay High Court in Jotun India Pvt. Ltd. v. PSL Limited, wherein the Court dealt with the issue of initiation of insolvency proceedings under the IBC against a debtor where the High Court has admitted winding up proceedings against the same debtor. The Court held that the High Court does not have the power to restrain the National Company Law Tribunal (“NCLT”) from proceeding with an insolvency application under the IBC even where a winding up petition has been admitted by the High Court in respect of the same debtor; and (ii) the Delhi High Court in Daiichi Sankyo Co. Ltd. v. Malvinder Mohan Singh and Ors., wherein the Court dealt with the issue of enforceability of a foreign arbitral award awarding damages against a minor, which is against

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the fundamental public policy of India. The Court, upholding both India's public policy and India's commitment to enforce foreign awards, held the award to be enforceable against all judgement debtors except the minors.

We have also analysed the recent decision ofthe National Company Law Appellate Tribunal (“NCLAT”) in State Bank of India v. Mr V. Ramakrishna and M/s. Veesons Energy Systems Pvt. Ltd. wherein the NCLAT dealt with the issue of whether a nancial creditor under the IBC can proceed against the assets of a personal guarantor of the corporate debtor while the corporate debtor is undergoing a corporate insolvency resolution process (“CIRP”). The NCLAT ruled that the ‘moratorium’ on sale of assets applies not only to assets of the corporate debtor but also to the personal guarantors’ assets. Thus NCLAT ruled that no recovery proceedings can be initiated or continued against the personal guarantors during a CIRP.

We have also included a special update on the recent proposed amendments to the Arbitration and Conciliation Act, 1996 set out in the Union Cabinet's recent press release dated March 07, 2018 which focusses on encouraging institutional arbitration for settlement of disputes and making India a centre of robust Alternative Dispute Resolution.

As always, we have also included recent legal updates in the eld of Dispute Resolution.

Feedback and suggestions from our readerswould be appreciated. Please feel free to send your c o m m e n t s , f e e d b a c k a n d s u g g e s t i o n s t o caseinpoint@cyrilshroff.com

Regards,

Cyril Shroff

Managing Partner

cyril.shroff@cyrilshroff.com

1. Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . 02

2. Jotun India Private Limited v. PSL Limited. . . . . . . . . . . . . . . . . . . . . . . . . 04

3. Macquarie Bank Limited v. Shilpi Cable Technologies Limited . . . . . . . 07

4. Kandla Export Corporation v. M/s OCI Corporation . . . . . . . . . . . . . . . . . . 10

5. 2018 Amendments to the Arbitration Act. . . 14

6. State Bank of India v. Mr. V. Ramakrishnaand M/s. Veesons Energy SystemsPvt. Ltd... . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

7. Board of Control for Cricket in India v.Kochi Cricket Private Limited . . . . . . . . . . 19

8. Daiichi Sankyo Co. Ltd. v.Malvinder Mohan Singh And Ors . . . . . . . . 25

9. Legal Updates . . . . . . . . . . . . . . . . . . . . . . . 28

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Jotun India Private Limited v. PSL Limited

1 2018 SCC OnLine Bom 36

In the case of Jotun India Private Limited v. PSL 1Limited, the Bombay High Court has held that a

Company Court does not have jurisdiction to stay proceedings led before the National Company Law Tribunal (“NCLT”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”) even though a previously instituted petition for winding up may have been admitted in the High Court against the same debtor.

Facts:

The decision was rendered in an application seeking recall of a nonspeaking order dated July 19, 2017, by which the Bombay High Court had granted stay on proceedings led under Section 10 of the IBC before the NCLT, Ahmedabad for insolvency resolution. The relevant facts are set out in the timeline below:

1. March 10, 2015 - Jotun India Private Limited (“Petitioner”) led a company petition against PSL Limited (“Respondent-applicant”) under Sections 433 and 434 of the Companies Act, 1956 in respect of unpaid invoices for goods supplied (“Company Petition”).

2. June 19, 2015 - The Respondent-applicant made a reference to the erstwhile Board of Industrial and Financial Reconstruction (“BIFR”) under Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”).

3. December 01, 2016 - Sick Industrial Companies (Special Provisions) Repeal Act, 2003(“Repeal Act”) was notied, repealing SICA. Simultaneously, the IBC was brought into force.

4. May 29, 2017 - The Respondent-applicant applied under Section 10 of the IBC before the NCLT, Ahmedabad for commencement of the corporate insolvency resolution process and for an order of moratorium (“IBC Application”). Section 4(b) of the Repeal Act (as amended by the IBC) allows such an application in relation to references pending before BIFR as on the December 01, 2016.

5. March 09, 2017 (prior to ling of the IBC Application) - The Company Court admitted the Company Petition but did not appoint an ofcial liquidator because the Respondent-applicant's assets were secured assets under the control of the creditors. The Petitioner was granted liberty to apply for appointment of a liquidator at a later stage.

6. July 18, 2017 - The NCLT reserved the matter for orders on the IBC Application. On the same day the Petitioner led a company application in Bombay High Court seeking the appointment of a Provisional Liquidator.

7. July 19, 2017 - After hearing the parties, the Bombay High Court passed an order restraining the NCLT from proceeding with the IBC Application.

8. September 15, 2017 - The Respondent-applicant applied to the Bombay High Court to have the impugned order dated July 19, 2017 recalled/vacated.

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Issues:

Whether a Company Court has jurisdiction to stay proceedings led by a Corporate Debtor before the NCLT where a previously instituted company petition for winding up may have been admitted, but where no provisional liquidator has been appointed.

Arguments advanced by the Respondent-applicant:

The Respondent-applicant argued that the IBC as a successor statute to SICA, would prevail over the Companies Act, 1956 which is an earlier statute. The Companies Act 1956 is overridden by virtue of Section 238 of the IBC, and there was no similar overriding provision in the Companies Act, 2013. Finally, Sections 63, 64(2) and 231 of the IBC bar jurisdiction of Civil Court to entertain proceedings on the issue over which NCLT has jurisdiction and specically curtail the power of Civil Court or any other authority to restrain any action taken or to be taken before NCLT. The statutory bar against a corporate debtor from ling an application under section 10 of the IBC operates, if and only if, there is an order of liquidation against the corporate debtor.

Arguments by the Petitioner:

The Petitioner argued that the NCLT could not proceed with the IBC Application because the winding up proceedings before the High Court fell within the class of “saved petitions” which were deliberately not transferred to the NCLT under Section 434 of the Companies Act, 2013 as amended by Section 255 of the IBC, read with the Companies (Transfer of Pending Proceedings) Rules 2016 notied on December 07, 2016 amended vide the Companies (Transfer of Pending Proceedings) Second Amendment Rules, 2017 notied on June 29, 2017 (together the “Transfer Rules”).

Decision:

IBC as a successor of SICA

Relying on the Supreme Court's decision in Madura 2Coats Ltd. v. Modi Rubber Ltd. and Anr, the Court

accepted that the erstwhile SICA was held to have primacy over the provisions of the Companies Act.

Section 4(b) of SICA, as amended by Section 252 of the IBC, confers an express right upon a company whose reference/inquiry pending before the BIFR stood abated by virtue of the Repeal Act. Section 4(b) allows such company to make a reference to the NCLT under the IBC within 180 days of the commencement of the IBC, to be dealt with “in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.” The Court held that in the absence of any express or implied carve out for winding up proceedings or provisions of the Companies Act, it could not take the view that the NCLT was barred from entertaining an application made pursuant to Section 4(b) so long as the application was made within the prescribed 180 day period.

Scope of the Transfer Rules

The Transfer Rules classied pending petitions in the High Court into two:

i. the Saved Petitions, being petitions pending in the High Court wherein notice was served to respondent and all other petitions pending against the same Company in the High Court where notice was not served to respondent;

ii. all petitions not saved, i.e., petitions other than those covered by (i) that may have been led in the High Court, but not served to respondent.

The Court relied on the Companies (Removal of Difculties) Fourth Order, 2016 to hold that what is saved are only the proceedings of winding up pending before the High Court and not the Company itself in relation to which such proceedings are saved by the transitional provision. The Court held that if the legislature intended, that those winding up petitions, of which the high court remain seized, would have primacy over NCLT proceedings which may be led in respect of the same company by another creditor, either the IBC or the Transfer Rules would have said so. The Court observed that “winding up petitions retained by the High Court are being decided under the Companies Act, 1956 only as a transitional provision […] cannot in any way affect the remedies available to a person under IBC vis-à-vis the

2 (2004) 4 SCC 311 para 41

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3 IB-110(PB)/20174 IB-190(PB)/2017

company against whom a petition is led and retained in the High Court, as the same would amount to treating IBC as if it did not exist on the statute book and would deprive persons of the benet of the new legislation. But even in such a case, there is no express or implied bar from other creditors of such company or the corporate debtor from ling fresh proceedings under IBC.”

High Court's power to injunct proceedings before the NCLT

The jurisdiction of the Company Court in relation to proceedings under the IBC is expressly barred by virtue of section 63 of the IBC which provides that “No civil court or authority shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code.” Further, Section 64(2) of the IBC species that no injunction shall be granted by any court, tribunal or authority in respect of any action taken, or to be taken, in pursuance of any power conferred on the NCLT under the IBC. By virtue of section 238 of IBC, it has an overriding effect over provisions of the Companies Act, 1956. Drawing on decisions of the Supreme Court upholding similar provisions on bar of jurisdiction of Civil Courts under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and under Section 22 of SICA, the Court concluded that a Company Court does not have any power to injunct the NCLT from exercising jurisdiction under the IBC.

Section 41 of the Specic Relief Act states that “an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought.” Citing authority to show that Tribunals are neither civil courts nor courts subordinate to the High Court, and that High Courts

cannot exercise their inherent powers to grant an injunction in contravention of Section 41, the Court supported its conclusion that no injunction can be granted by the High Court ruling as a Company Court against a corporate debtor from institution of proceedings in NCLT, or against the NCLT from exercising jurisdiction over such proceedings.

Analysis:

In view of a litany of authority to state that the NCLT is not subordinate to the High Court, and any case given the clear bar on jurisdiction of Courts under the IBC, the Court has correctly observed that it does not have the power to grant an injunction restraining proceedings from either being initiated or heard in the NCLT. However, the Court's ruling that the Transfer Rules do not contemplate (and therefore do not prohibit) initiation of fresh proceedings under the IBC by other creditors or the debtor itself even in respect of 'saved petitions' must be read in the limited factual context of (i) the IBC proceedings being pursuant to abated proceedings under SICA, and (ii) the Court's decision not to appoint a provisional liquidator.

Several questions in relation to parallel proceedings arose before a Special Bench of the NCLT in Union of

3India v. Era Infra Engineering Ltd. And Alchemist Asset Reconstruction Company Ltd. v. Tirupati Buildings & Ofces Ltd. 4 By an Order dated August 21, 2017 the Bench was pleased to refer the matter to a larger Bench to answer inter alia whether (and in what cases) the process under the IBC can be triggered in the face of pendency of winding up proceedings before a High Court; whether winding up proceedings and the process under the IBC are independent of each other; and if not, what the transfer mechanism would be. The Bench has reserved the matter for orders, and the decision is expected to bring some much needed clarity to the IBC landscape before different High Courts and NCLT Benches take inconsistent views on the issue.

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1 (2018) 2 SCC 674

Macquarie Bank Limited v.Shilpi Cable Technologies Limited

In the case of Macquarie Bank Limited v. Shilpi 1Cable Technologies Ltd., the Supreme Court was

confronted with two pertinent questions in relation to the Insolvency and Bankruptcy Code, 2016 (“Code”). Firstly, whether the requirement of an operational creditor, to provide a certicate from a nancial institution in terms of Section 9(3)(c) of the Code for initiation of corporate insolvency resolution process is mandatory or directory in nature. Secondly, whether a demand notice for an unpaid operational debt under Section 8 (1) of the Code can be issued by a lawyer on behalf of the operational creditor.

The Supreme Court held that the requirement for an operational creditor to provide a certicate from a nancial institution under Section 9(3)(c) of the Code is directory and not mandatory and that a demand notice for unpaid operational debt can be sent by a lawyer on behalf of an operational creditor.

Facts:

In the present case, the Supreme Court disposed of three appeals with similar factual scenarios. In one illustrative case, Shilpi Cable Technologies Limited (“Respondent”) had entered into a contract of sale with S. V. Oversees Private Limited (“Supplier”) to purchase Copper Rods on credit. In terms of the contract of sale, the Respondent agreed to purchase the invoiced quantity of copper rods from the Supplier from time to time against purchase orders placed. The payment was to be made on demand by the Respondent upon presentation of commercial invoice by the Bank. In the meanwhile, the Supplier requested Macquarie Bank Limited, Singapore (“Appellant”) to purchase the receivables arising out of its agreement with the Respondent. Accordingly, the Appellant became the assignee of the debt owed by the Respondent to the Supplier. Since amounts under

the invoices were due for payment, the Appellant issued a demand notice dated March 8, 2017 under Section 8 of the Code at the registered ofce of the Respondent, calling upon it to pay the outstanding amount of USD 3.87 million. The Respondent sought extension for payment but the same was denied by the Appellant. Consequently, the Appellant initiated corporate insolvency proceedings against the Respondent by ling a petition under Section 9 of the Code before National Company Law Tribunal, Delhi (“NCLT”).

NCLT, by its order dated May 24, 2017, admitted the petition and declared moratorium in terms of Section 13 of the Code and appointed an ‘Interim Insolvency Resolution Professional’.

Aggrieved by NCLT's order, Respondent preferred an appeal before the National Company Law Appellate Tribunal (“NCLAT”). NCLAT, relying upon its earlier order of July 17, 2017 in Macquarie Bank Ltd. v. Uttam Galva Metallics Limited, set aside NCLT's order of May 24, 2017 and dismissed the Section 9 application against the Respondent on account of non-compliance with the mandatory provision contained in Section 9(3)(c) of the Code.

In Macquarie Bank Ltd. v. Uttam Galva Metallics Limited, NCLAT vide its order of July 17, 2017 had already held that the certicate given by the Appellant could not be relied upon, to decide default of debt as Appellant was not a ‘nancial institution’ within the meaning of Section 3(14) of the Code. NCLAT further noted that the notice under Section 8 cannot be issued by the lawyer/Chartered Account or a Company Secretary, in absence of any authority by the ‘Operational Creditor’ more so when such persons does not hold any position with or in relation to the ‘Operational Creditor’, he cannot issue notice under Section 8 of the Code.

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Aggrieved by the order of the NCLAT, Appellant preferred an appeal before the Hon’ble Supreme Court.

Issues:

i. Whether the requirement of an operational creditor to provide a certicate from a nancial institution in terms of Section 9(3)(c) of the Code for initiation of corporate insolvency resolution process by an operational creditor is mandatory or directory in nature?

ii. Whether a demand notice of an unpaid operational debt under Section 8 (1) of the Code can be issued by a lawyer on behalf of the operational creditor?

Arguments of the Appellant:

i. On a conjoint reading of Section 9(3)(c), Rule 6 and Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (“Rules”), it is clear that Section 9(3)(c) is not mandatory, but only directory. At the end of Form 5, a copy of the relevant accounts from banks/nancial institutions maintaining accounts of the operational creditor conrming that there is no payment of the operational debt has to be attached only “if available”.

ii. Section 9(3)(c) is a procedural section, which is not a condition precedent to the allowing of an application led under Section 9(1). This is further clear from the fact that under Section 9(5), if there is no such certicate, the application does not need to be rejected.

iii. If a copy of the certicate under Section 9(3)(c) can only be from a “nancial institution” as dened under Section 3(14) of the Code, and if the non-resident bank such as the Appellant is not included under Section 3(14), it is clear that Section 9(3)(c) cannot operate to non-suit the Appellant, as it would be impossible to get a certicate from a nancial institution as dened.

iv. On a perusal of Form 5, it is clear that a “person authorised to act on behalf of the operational creditor” is a person who can sign Form 5 on behalf of the operational creditor. Further, the expression “position with or in relation to the operational creditor” shows that a lawyer, who

is authorized by the operational creditor, is certainly within the said expression.

Arguments of the Respondent:

i. The Code is a draconian piece of legislation and must, therefore, be construed strictly. Accordingly, Section 9(3)(c) is mandatory and requires to be complied with strictly.

ii. Section 9(3)(c) is a jurisdictional condition precedent, which is clear from the expression “initiation” and the expression “shall”, both showing that the Section is a mandatory condition precedent. Failure in furnishing a copy of the certicate under Section 9(3)(c) would therefore result in the application being dismissed.

iii. It is only where operational creditors have dealings with banks which fall within the denition of “nancial institution” under section 3(14), that they can avail the opportunity of declaring a corporate debtor as insolvent under Sections 8 and 9 of the Code. Persons who may be residents outside India and who bank with entities that are not contained within the denition of Section 3(14) would, therefore, be outside the Code.

iv. A lawyer’s notice cannot be given under Section 8, read with the Adjudicating Authority Rules and Form 5 therein. Either the operational creditor himself must send the requisite notice, or a duly authorized agent on his behalf should do so, and such authorized agent can only be an “insider”, namely, a person who is authorized by the operational creditor, being an employee, director or other person from within who alone can send the notice and sign the application.

Supreme Court's Decision:

The Supreme Court allowed the appeals and set aside the judgments of NCLAT. The Court noted the following:

1. The requirement under Section 9(3)(c) of the Code is directory and a Certicate by a Financial Institution is merely conrmatory evidence

l The requirement of furnishing of a copy of the certicate from a nancial institution

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maintaining accounts of the operational creditor conrming non-payment of operational debt in term of Section 9(3)(c) of the Code is not a condition precedent to triggering the insolvency process under the Code. The expression “conrming” makes it clear that this is only a piece of evidence, which merely “conrms” that there is no payment of an unpaid operational debt.

l Even in Annexure III in Form 5 of theRules, copies of relevant accounts kept by banks/nancial institutions maintaining accounts of the operational creditor, conrming that there is no payment of the unpaid operational debt, is required to be attached only “if available”. Therefore, such accounts are not a pre-condition to trigger the Code, and that if such accounts are not available, a certicate based on such accounts cannot be given. Section 9(3)(c) is a procedural provision, which is directory in nature.

l There may be situations where an operational creditor may have as his banker a non-scheduled bank, in which case, it would be impossible for him to fulll the condition under Section 9(3)(c). The Code cannot be construed in a discriminatory fashion so as to include only those operational creditors who happen to bank with nancial institutions which may be included under section 3(14) of the Code.

· A fair construction of Section 9(3)(c), in consonance with the object of the Code, would lead to the conclusion that it cannot be construed as a threshold bar or a condition precedent.

2. Notice under Section 8 of the Code can be sent by an advocate or a lawyer on behalf of the operational creditor

l Section 8 of the Code envisages of an operational creditor “delivering” a demand notice. Had the legislature wished to restrict such demand notice being sent by the operational creditor himself, the expression used would perhaps have been “issued” and not

“delivered”. Delivery, therefore, would postulate that such notice could be made by an authorized agent.

l In terms of Form 3 and Form 5 of the Rules, the signature of the person “authorized to act” on behalf of the operational creditor must be appended to both the demand notice as well as the application under Section 9 of the Code. Such authorized agent is required in terms of the Rules, to state his position with or in relation to the operational creditor. The expression“in relation to” is a very wide expression and a lawyer acting on behalf of his client is included within the aforesaid expression.

l Section 30 of the Advocates Act, 1961 deals with the advocate's right to practice. The expression “practice” is an expression of extremely wide import and would include all preparatory steps leading to the ling of an application before a Tribunal.

l A conjoint reading of Section 30 of the Advocates Act, 1961 and Sections 8 and 9 of the Code together with the Rules and Forms thereunder would yield the result that a notice sent on behalf of an operational creditor by a lawyer would be in order.

Analysis:

In this landmark judgment, the Supreme Court has claried the scope of Section 9(3)(c) of the Code and has streamlined the process for operational creditors to initiate proceedings under the Code. By applying principles of harmonious construction, the Court has sought to remove procedural/technical hurdles and furthered the objects of the Code. It has removed an important procedural hurdle for operational creditors not associated with “nancial institutions” as dened under the Code. By holding that the said provision is directory in nature, it has paved the way for operational creditors to initiate corporate insolvency process and recover their debts in an efcient manner. It would also prevent debtors from evading their liability by pulling out procedural loopholes and delay the process at the expense of the creditor.

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Kandla Export Corporation v. M/s OCI Corporation

1 Civil Appeal Nos. 1661-1663 of 2018. ( Supreme Court of India)

by the Appellant noted that the award had become nal as per English Law and was enforceable.

Aggrieved by the order dated August 8, 2017, the Appellant led an appeal before the Commercial Appellate Division of the High Court of Gujarat, which appeal was also dismissed by a judgment dated

th28 September, 2017. The dismissal was based on the ground that the Appellant's appeal was from an order not specically mentioned in Section 50 of the Arbitration Act and that Commercial Courts Act did not provide any additional right of appeal which is not otherwise available to the Appellants under the Arbitration Act.

Aggrieved by the order dated September 28, 2017, the Appellants moved the Supreme Court by way of Special Leave Petition.

Issue:

Does Section 13 (1) of the Commercial Courts Act provide an additional right of appeal which is not provided for in Section 50 of the Arbitration Act?

Arguments on behalf of the Appellants:

l Section 13 of the Commercial Courts Act provides for an appeal to any person aggrieved by the decision of a commercial division of the High Court, and as Section 50 of the Arbitration Act nds no place in the proviso to Section 13(1) of the Commercial Courts Act, the wide language of Section 13(1) would confer a right of appeal, notwithstanding anything contained in Section 50 of the Arbitration Act.

In the recent judgment of Kandla Export Corporation 1& Anr v. M/s OCI Corporation and Anr., the

Supreme Court examined the scope of Section 13 of the Commercial Courts Act (“Commercial Courts Act”) and Section 50 of the Arbitration and Conciliation Act (“Arbitration Act”). In this case, the Court dealt with the issue of whether Section 13 of the Commercial Courts Act provides for an additional right of appeal against an order of the Commercial Division enforcing a foreign award when such a right of appeal is not provided under Section 50 of the Arbitration Act.

The Supreme Court held that the provision for appeal, as provided under Section 13 of the Commercial Courts Act could not be invoked to challenge an order allowing the execution of foreign arbitration award.

Facts:

Dispute arose between Kandla Export Corporation (“Appellant”) and M/s. OCI Corporat ion (“Respondent”) and was settled by way of an arbitration award dated April 28, 2014 by GAFTA (“Grain and Free Trade Association”), London in favour of the Respondent.

The Respondent led an execution application under Section 48 of the Arbitration Act on June 29, 2015 before the Gandhidham District Court which were transferred to the Commercial Division of the Gujarat High Court after the commencement of the Commercial Courts Act. This execution application was allowed by the Commercial Division of the Gujarat High Court by way of its order dated August 8, 2017. The Court, while dismissing the objections led

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l Section 37 of the Arbitration act, which is expressly mentioned in the proviso to Section 13(1) of the Commercial Courts Act, clearly speaks of the enumerated appeals and uses the expression “and no others” which expression is absent under Section 50 of the Arbitration Act.

l The width of Section 13(1) of the Commercial Courts Act embraces “decisions”, judgments and/or orders by the Commercial Division of a High Court, and that the impugned judgment of the Gujarat High Court would certainly be a decision/judgment which would expressly be covered by the wide terms contained in Section 13(1) of the Commercial Courts Act.

l The Appellants relied upon Section 13(2) of the Commercial Courts Act which states that appeals lie only in the manner indicated in the Act and not otherwise than in accordance with the provisions of the Commercial Courts Act. Reference was drawn to the scheme of the Act, which shows that in all matters over Rs. 1 crore, the legislative intent was to provide an appeal, which under Section 14, is required to be expeditiously disposed of within a period of6 months from the date of ling of such appeal.

l Reliance was placed on Section 5 of the Arbitration Act, which contains a non-obstante clause in so far as Part I of the Arbitration Act is concerned, and it was stated that absence of a similar non-obstante clause, so far as Part II is concerned, is signicant. It was argued that since there are no competing non-obstante clauses, Section 21 of the Commercial Courts Act must be given full play.

Arguments on behalf of the Respondents:

l Reliance was placed on Sections 10 and 11 of the Commercial Courts Act. It was stated that the explanation to Section 47 of the Arbitration Act, when read along with Section 11 of the Commercial Courts Act, makes it amply clear that the non-obstante clause contained in Section 21 of the Commercial Courts Act has to give way to Section 11, and that since Section 50 of the Arbitration Act impliedly bars appeals

against applications allowing execution of a foreign award. As per Section 50(2), an order refusing to enforce a foreign award is appealable, but an order allowing execution of a foreign award is not appealable.

l The judgment of Fuerst Day Lawson Limited v. Jindal Exports Limited [(2011) 8 SCC 333] was heavily relied upon. The Respondents stated that the Arbitration Act is a self-contained code on all matters pertaining to arbitration, which would exclude the applicability of the general law contained in Section 13 of the Commercial Courts Act. It was stated that the object of both the Commercial Courts Act and the Arbitration Act is to speedily determine matters pertaining to arbitration and/or commercial disputes and the providing of an extra appeal by the Commercial Courts Act, which is impliedly excluded by the Arbitration act, would militate against the object of both acts.

l Respondents further argued that in cases of enforcement of foreign awards of an amount below Rs. 1 crore, admittedly, no appeal would lie. It was stated that merely because the amount contained in the foreign award was above Rs. 1 crore, it cannot be maintained that an extra appeal would be provided and that the Appellants were merely trying to delay proceedings.

Supreme Court's judgment:

The Supreme Court dismissed the appeal and noted the following:

l The Hon’ble Court examined in detail the statement of objects and reasons of the Commercial Courts Act and the Arbitration Act. The statement of objects and reasons brings out that both the acts aim at providing speedy resolution of commercial disputes and emphasise the need for an independent mechanism for early resolution of disputes.

· Section 13(1) of the Commercial Courts Act is a provision which provides for appeals from judgments, orders and decrees of the

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Commercial Division of the High Court. To Section 13(1) an exception has been carved out by the proviso, which states that an appeal will lie from Commercial Division orders of the High Court which have been specically enumerated under Order XLII of the Code of Civil Procedure and Section 37 of the Arbitration Act and are appeals that can be made to the commercial appellate division of a High Court.

l Countering the main argument of the Appellants that Section 50 of the Arbitration Act does not nd any mention in the proviso to Section 13(1) of the Commercial Courts Act and, therefore, notwithstanding that an appeal would not lie under Section 50 of the Arbitration Act, it would lie under Section 13(1) of the Commercial Courts Act, the Supreme Court relying on Fuerst Day Lawson v. Jindal Exports Limited [(2011) 8 SCC 333] held that in the event that the Special Act sets out a self-contained code, the applicability of the general law of procedure would be impliedly excluded. The Supreme Court further reasoned that since no change was made in Section 50 of the Arbitration Act, when the Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters pertaining to arbitration, which is exhaustive in nature. This meant that appeals which are not mentioned, therein are not permissible. The Supreme Court held that it was clear that Section 13(1) of the Commercial Courts Act, being a general provision vis-a-vis appeals arising out of commercial disputes, it would not apply to cases covered by Section 50 of the Arbitration Act.

l When dealing with the reference of Section 37 in the proviso to Section 13 of the Commercial Courts Act, the Supreme Court observed that the said provision may have been introduced out of abundant caution. Another reason for the addition would have been that Section 37, itself was amended by the Arbitration Amendment Act, 2015 which came into force on the same

day as the Commercial Courts Act and that therefore Parliament, in its wisdom thought that it was necessary to emphasise that the amended Section 37 would have precedence over the general provision contained in Section 13(1) of the Commercial Courts Act.

l It was held that in all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides for an appeal. Having provided for an appeal, the forum of appeal is left to the court authorized by law to hear appeals from such orders. Section 50 properly read would, therefore mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial Courts Act be attracted as laying down the forum which will hear and decide such an appeal. The present case is a parallel instance of Section 50 of the Arbitration Act providing for an appeal and Section 13(1) of the Commercial Courts Act providing the forum for such appeal.

l The Supreme Court also observed that as Section 50 of the Arbitration Act provides for an appeal, the appeal has to be adjudicated within the parameters of Sec t ion 50 a lone . Concomitantly, where Section 50 excludes an appeal, no such appeal would lie.

l The Supreme Court did not accept the Appellants’ arguments based on Section 21 of the Commercial Courts Act and stated that Section 21 would only apply if Section 13(1) were to apply in the rst place which it did not.

l The Supreme Court concluded by emphasising that enforcement of foreign awards should take place as soon as possible if India is to remain an equal partner in the international community. In point of fact, the raison d'etre for the enactment of the Commercial Courts Act is that commercial disputes involving high amounts of money should be speedily decided. When Section 50 does away with an appeal as to speedily enforce foreign awards, if one was providing an additional appeal under Section 13(1) of the Commercial Courts Act, one would

13

be turning the Arbitration Act and the Commercial Courts act on its head. Any construction of Section 13 of the Commercial Courts Act, which would lead to further delay, instead of an expeditious enforcement of a foreign award must, therefore, be eschewed. The Supreme Court stated that even if harmonious construction is applied to both the statutes, it is clear that they are best harmonized by giving effect to the special statute i.e. the Arbitration Act, vis-a-vis the more general one, namely the Commercial Courts Act, being left to spheres other than arbitration.

Analysis:

The Supreme Court with this case claries that Section 50 of the Arbitration Act, which expressly provides for a right to appeal takes precedence over Section 13 of the Commercial Courts Act, the Arbitration Act being the special statute. This judgment gives effect to the objects of both the Acts, which provide for speedy resolution of disputes between the parties. The judgment holds that an appeal under Section 13 of the Commercial Courts Act is not maintainable independent of Section 50 of the Arbitration Act. While Section 13(1) provides for the forum of appeals and the same is left open under Section 50, in this case, since no appeal lies under Section 50 of the Arbitration Act, no forum can be provided for under Section 13(1) of the Commercial Courts Act.

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2018 Amendments to the Arbitration Act

has evolved. This is also a welcome move, many international institutions release yearbooks that publish excerpts of awards and the introduction of this repository will help develop the jurisprudence in India.

It is suggested that the chairperson of the Council should be a retired Supreme or High Court judge or “any eminent person”, including academics, nominees of the Government etc. The Sri Krishna Committee had, however, advised that the Council should be autonomous of and free f rom, any Governmental involvement. This is pertinent particularly since in arbitrations involving the Governmentas a party, accreditation of arbitrators by Government nominees would bring in potential conict of interest issues. It would be good for the 2018 Bill to consider this. Pursuant to the Sri Krishna Committee Report, the New Delhi International Arbitration Centre Bill, 2018 was introduced in Lok Sabha in January, 2018 for establishing an arbitration institution centre, a chamber of arbitration for empaneling arbitrators, a training academy for arbitration and a research centre.

B. Appointment of Arbitrators:

Section 11 will be amended so that instead of having to go through the court for appointment of an arbitrator, the Supreme / High Court may designate specic arbitral institutions that will make the relevant appointments. This obviates the need to le a formal application for appointment in court, thus speeding up and streamlining the process by taking away some part of the burden from the court.

The union Cabinet recently issued a in press releaserelation to the Arbitration and Conciliation (Amendment) Bill, 2018 (“2018 Bill”) which will be introduced into Parliament. The amendments which, when passed will apply to the Arbitration and Conciliation Act, 1996 (“Act”) are pursuant to the Justice Srikrishna Committee Report to Review the Institutionalization of Arbitration in India released in July, 2017, recommending further amendments on the back of the 2015 amendments, primarily to improve on or clarify various provisions. Key amendments approved by the Cabinet include the following:

A. Arbitration Council of India:

T h e S r i K r i s h n a C o m m i t t e e R e p o r t recommended that an independent body should be created to accredit arbitral institutions and arbitrators as a number of stakeholders interviewed were disenchanted with the existing arbitral facilities and institutions in India. The recommendation has been accepted and an independent body will be set up, namely, the Arbitration Council of India to enable a formal evaluation and accreditation. This Council will also frame norms for various forms of alternate dispute resolution, for instance, mediation, and evolve professional guidelines. This is a positive step to ensure the quality of arbitral institutions - though India has several arbitral institutions, few apart from the Mumbai Centre for International Arbitration, are recognized as having the expertise to administer multi-party international arbitrations.

The Council will also maintain an electronic depository of arbitral awards that can be used as precedents or to analyse how the jurisprudence

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The Sri Krishna Committee had also recommended that such appointments should be made without the requirement of the Supreme Court or High Courts determining the existence of an arbitration agreement. This is in line with the kompetence-kompetence principle of an arbitral tribunal itself being empowered to determine its own jurisdiction, including the validity of an arbitration agreement.

On a related note, the present Section 11 (6A) of the Act as amended in 2015 mandates that the Court in a Section 11 proceeding should conne its examination to the existence of the arbitration agreement. Prior to its amendment, the power under Section 11 was held to be wider in scope and included an examination of whether claims could be referred to arbitration

1etc. The Cabinet's press release does not deal with this aspect in its recommendation.

C. Length of the Arbitral Proceeding:

In attempting to redress the criticism of ad hoc Indian arbitration and its lengthy delays, Sect ion 29A, introduced in the 2015 amendments provides that an award must be made within 12 months from entering upon the reference by the tribunal, extendable to a period of 18 months by the consent of the parties, failing which the mandate of the arbitrators would terminate. Any extension over 18 months can only be obtained with the permission of the Court. The newly inserted provision though well-intentioned has been met with criticism internally and also internationally.

In practice, 18 months is an ambitious target for most complex, commercial disputes. The proposed amendments suggest that the timeline provided in Section 29A should exclude international arbitrations. The Sri Krishna Committee report noted that international arbitral institutions have criticized the timelines of Section 29A on the basis that the conduct of the proceeding is best left to the institutions and as such, the timelines proposed in Section 29A

should not apply to international commercial arbitrations, such timelines being impractical. However, while promoting (perhaps), institutional arbitration, applying a different set of timelines to international arbitrations suggests discrimination against a purely domestic arbitration.

A further amendment suggested by the 2018 Bill that the 12 month period should be calculated after completion of pleadings, is sensible.

D. Condentiality:

A welcome amendment suggested is a statutory recognition of condentiality in arbitration. (The Act mandates condentiality only with regard to conciliation proceedings). In line with the Committee's recommendation, the Cabine t ' s p ress re lease sugges ts the introduction of a new section 42A, requiring the arbitrators and concerned arbitral institution to keep the proceedings condential (except for the award). This provision will have to be carefully drafted to exclude any order or award that may be challenged in a court including Section 17 orders.

E. Arbitrator Immunity:

An additional suggestion is to introduce provisions for arbitrator immunity, to protect an arbitrator from any legal proceedings for acts and omissions during the course of the proceedings. This is to ensure that the arbitrator is able to exercise her function without any fear of proceedings ensuing therefrom. The provision for arbitrator immunity is present in many foreign statutes and international institutional rules, as also the MCIA Rules.

F. Application of the 2015 Amendments to Arbitral Proceedings / Court proceedings?

The Cabinet's amendments proposed the insertion of a new section 87 to clarify that unless otherwise agreed by parties, the

1 See SBP and Co. v. Patel Engineering Ltd., (2005) 8 SCC 618; and National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd., (2009) 1 SCC 267. The position of narrow scope of Section 11 (6A) has also been conrmed by the Supreme Court in the case of Arbitration Petition No 30 of 2016 with Arbitration Petition No 31 of 2016 & TC (C)Nos 25/2017, 26/2017 and 28/2017Duro Felgueria SA v Gangavaram Port Ltd.

16

provisions of the Act as amended in 2015, would not apply to (a) Arbitral proceedings that have commenced before the commencement of the Amendment Act of 2015 (b) Court proceedings arising out of or in relation to such arbitral proceedings and shall apply only to Arbitral proceedings commenced on or after the commencement of the Amendment Act of 2015 and to court proceedings arising out of or in relation to such Arbitral proceedings.

One of the most contentious issues in recent times has been the correct interpretation/intention of Section 26 of the amendment Act and whether the amendments apply to court proceedings that are: (i) led after the amendments came into force in 2015, but in respect of arbitrations commenced before the amendments; and (ii) court proceedings which were pending at the time the amendments came into effect but were decided thereafter. In this context there were conicting

2decisions of various courts.

The Supreme Court recently passed a judgment in a 3combined order for various matters, ruling that the

2015 amendments would apply to all court proceedings led after the amendments came into effect (October 23, 2015), regardless of when the arbitration was commenced. Additionally and crucially, it was also held that the amendments would also apply to pending proceedings that may have been led prior to the amendments but were pending at the time the 2015 amendments came into force and are decided thereafter.

The 2018 amendments however provide that the 2015 amendments will apply only to proceedings actually led after October 23, 2015. Being so, the Supreme Court has directed that its aforesaid judgment be transmitted to the Law Ministry and the Attorney General to take note of its interpretation and ruling.

The judgment itself raises several questions. Assuming a petition were led to challenge an award prior to the 2015 amendments but was pending on the date of the amendments (October 23, 2015), by virtue of the judgment, an automatic stay that was earlier effective over the award, would no longer apply. It would then be open to the award creditor to apply for enforcement and the award debtor would have to le a separate application for a stay thereof (in which case a deposit of the award amount would be probable), thus taking away a benet that a party had prior to the 2015 amendments.

It remains to be seen whether the Government takes note of the Supreme Court's interpretation and effects amendments in consonance therewith, or whether it will continue to proceed with the new Section 87, so that the amendments would apply only to arbitrations and consequent court proceedings commenced after October 23, 2015.

The amendments are a welcome development in the eld of arbitration and when implemented will assist further in India being seen as an arbitration friendly jurisdiction.

2 See Rendezvous Sports World v. Board of Control for Cricket in India 2017 (2) BomCR 113, Ardee Infrastructure Pvt. Ltd. v. Ms. Anuradha Bhatia 2017 (2) ArbLR 163 (Delhi), in Electrosteel Casting v. Reacon Engineers AIR 2016 (NOC 764) 349, New Tirpur Area Devp Corp v. Hindustan Construction O.S.A. Nos.21 & 22 of 2016 (30.08.2017 – Madras High Court), Enercon v. Yogesh Mehra, 2017 SCC OnLine Bom 1744 BCCI v. Kochi Cricket Pvt. Ltd. And Etc. Civil Appeal No. 2879-2880 of 2018: Supreme Court.

3 BCCI v. Kochi Cricket Pvt. Ltd. And Etc., Civil Appeal No. 2879-2880 of 2018: Supreme Court.

17

State Bank of India v. Mr. V. Ramakrishna and

M/s. Veesons Energy Systems Pvt. Ltd.

The Corporate Debtor invoked Section 10 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) which was admitted and an order of moratorium was passed and an interim professional was appointed. Even after the declaration of moratorium, SBI continued to take measure under the SARFAESI Act, 2002 and proceeded against the property of the Personal Guarantor and issued auction notice dated July 12, 2017 in order to sell the property of the Personal Guarantor.

The Personal Guarantor led an application before the National Company Law Tribunal, Chennai for halting of the proceedings under the SARFAESI Act initiated against him in his capacity of a personal guarantor.

NCLT, Chennai by order dated September 18, 2017, noted that should a nancial creditor during the declaration of the moratorium period and whilst the CIRP was underway be permitted to proceed against the personal guarantor of the corporate debtor for recovery of the outstanding debt to the extent of the personal guarantee given, then, security interest, if, any, of the nancial creditor shall get transferred to the personal guarantor which will be in violation of Section 14 (1) (b) of IBC, and accordingly allowed the Personal Guarantor's application and restrained SBI from proceeding. Aggrieved by the decision of NCLT, Chennai, the nancial creditor approached the NCLAT.

Issue:

The question which arose for NCLAT to decide was, whether a nancial creditor can proceed against the assets of a personal guarantor while the corporate debtor was undergoing CIRP.

In the case of State Bank of India v. Mr V. Ramakrishna and M/s. Veesons Energy Systems Pvt. Ltd., the National Company Law Appellate Tribunal, New Delhi (“NCLAT”) dealt with the issue of whether a nancial creditor can proceed against the assets of a personal guarantor while the corporate debtor is undergoing a corporate insolvency resolution process (“CIRP”). NCLAT while concurring with the decision of NCLT Chennai ruled that the ‘moratorium’ on sale of assets applies not only to those of the corporate debtor but also to the personal guarantors’ assets. Thus NCLAT ruled that no recovery proceedings can be initiated or continued against the personal guarantors during a CIRP. This decision has far reaching effects in terms of its application.

Facts:

M/s. Veesons Energy Systems Pvt. Ltd. (“Corporate Debtor”) had availed certain credit facilities from State Bank of India (“SBI”). Mr. V. Ramakrishnan, Managing Director and Promoter of M/s. Veesons Energy Systems Pvt. Ltd. (“Personal Guarantor”) had given a personal guarantee against the loans secured by the Corporate Debtor from SBI.

Upon default in repayment of the credit facilities by the Corporate Debtor, a corporate insolvency resolution process was initiated by SBI against the Corporate Debtor and accordingly a moratorium was declared. SBI invoked the personal guarantee. Thereafter, SBI issued a possession notice and took symbolic possession of the secured assets in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”).

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Arguments:

The Personal Guarantor contended that in case his personal property is sold to realise the portion of the debt outstanding against the Corporate Debtor, he will have rights of that of the creditors against the Corporate Debtor and in that way, a charge automatically gets created on the property of the Corporate Debtor, which is against the purpose and object of the moratorium declared and is violates Section 14(1) (b) of IBC.

On the other hand, SBI contended that order of ‘Moratorium’ will not affect the assets of the ‘Personal Guarantor’.

Decision:

NCLAT noted that in terms of Section 14 of the IBC, not only the institution of suits or continuation of pending suits or proceedings against the ‘Corporate Debtor’ are prohibited but the transfer, encumbrance, alienation or disposal of any of its assets of the ‘Corporate Debtor’ and/or any legal right or benecial interest therein are also prohibited.

NCLAT noted that if the creditor intends to initiate proceedings against the personal guarantor, separate bankruptcy proceedings can be led against the personal guarantor before the same adjudicating authority hearing the resolution process of the corporate debtor. Relying on the provisions of Section 30 read with Section 31 of the IBC Code related to the approval of the resolution plan, the NCLAT further held that “From the aforesaid provisions, it is clear that ‘Resolution Plan’ if approved by the ‘Committee of Creditors’ under sub-section (4) of Section 30 and if the same meets the requirements as referred to in sub-section (2) of Section 30 and once approved by

the ‘Adjudicating Authority’ is not only binding on the ‘Corporate Debtor’, but also on its employees, members, creditors, guarantors and other stakeholders involved in the ‘Resolution Plan’, including the ‘Personal Guarantor’”. Thus, since the resolution plan of the corporate debtor binds the personal guarantor, the moratorium would also apply to such personal guarantor and not be restricted to the properties of the corporate debtor only.

In view of the above, NCLAT dismissed SBI's appeal and ruled that the ‘moratorium’ will not only be applicable to the property of the ‘Corporate Debtor’ but also to that of the 'Personal Guarantor'. Thus a creditor cannot invoke personal guarantee while the borrower is undergoing CIRP.

Analysis:

The latest ruling of NCLAT is at a divergence from earlier judgements passed in Schweitzer Systemtek India Private Limited v. Phoenix ARC Private Limited and Alpha & Omega Diagnostics (India) Ltd. v. Asset Reconstruction Company of India & Ors., wherein NCLAT had ruled that the moratorium declared for prohibiting any action to recover or enforce any security interest created by the Corporate Debtor in respect of its property can be applied only to the assets of the corporate debtor and not on any assets, movable or immovable of a third party like a director or any other.

This ruling of NCLAT has huge ramications as it gives relief against proceeding against the personal assets of guarantors and also reduces the uncertainties and conicting outcomes due to multiplicity of proceedings by nancial creditors against the corporate debtors and the guarantors.

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Board of Control for Cricket in India v. Kochi Cricket Private Limited

the same manner as if it were a decree of the court. Under the Act, this meant that the award debtor obtained an ‘automatic stay’ on the enforcement of the arbitral award upon ling an application under Section 34, and till such time as the said application was refused by the court.

On the contrary, the amended Section 36 provides that the ling of such an application under Section 34 shall not by itself render the award unenforceable, unless the court granted a stay of operation of the arbitral award. Section 36 (3) provides that upon ling of an application for stay, the court may, subject to such conditions as it deemed t, grant stay of operation of the award for reasons to be recorded in writing. The proviso to Section 36 (3) stated that while considering the application for stay in a case of an arbitral award for payment of money, the court shall have due regard to the provisions for grant of stay of a money decree under Order XLI Rule 5 of the CPC. Order XLI Rule 5 provides that no order for stay of execution shall be made unless the court is satised that (a) substantial loss may result to the party applying for stay of execution unless the order is made; (b) the application has been made without unreasonable delay; and(c) security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him. To summarize, the amendments took away the ‘automatic stay’ enjoyed by award debtors, and provided that the court could grant stay of an arbitral award for payment of money, subject to the deposit of the awarded amounts by the award debtors in court.

In BCCI v. Kochi Cricket Private Limited, the Hon’ble Supreme Court considered the effect of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 (“Amendment Act” ) to pos t -award proceedings pending as on the date that the amendments came into force, i.e. October 23, 2015.

Facts:

The question of the prospective/ retrospective applicability of the 2015 amendments to the Arbitration and Conciliation Act, 1996 (“Act”) had been considered in 31 separate decisions by various high courts, with 19 decisions in favour of prospective applicability of the amendments and 12 decisions in favour of retrospective applicability of the amendments. It is in this backdrop that the Hon’ble Court considered the interpretation of Section 26 of the Amendment Act.

In four appeals before the Hon’ble Court, applications under Section 34 of the Act for setting aside the arbitral award were led prior to the date the amendments came into force, i.e. October 23, 2015, and in the remaining 4 appeals, the applications under Section 34 were led after October 23, 2015. The question confronting the Hon’ble Court was whether Section 36, which was substituted by the Amendment Act, would apply in its amended form or in its original form to the appeals in question.

The pre-amended Section 36 of the Act provided that where a party has made an application to set aside the arbitral award under Section 34, and it has been refused by the court, the award shall be enforced under the Code of Civil Procedure, 1908 (“CPC”) in

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Issues:

Section 26 of the Amendment Act provides that “Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of Section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act”.

The issues before the Hon'ble Court may be summarized as follows:

l Whether Section 26 was purely prospective in operation?

l Whether the 2015 amendments are applicable to arbitration proceedings commenced under Section 21 of the Act, prior to October 23, 2015?

l Whether enforcement proceedings under Section 36 are purely procedural in nature?

l Whether the award debtor has a vested right to challenge the arbitral award under Section 34 before enforcement of the award could commence?

Arguments advanced on behalf of the Appellants:

l Section 26 of the Amendment Act is in two parts. The second part, which makes the Amendment Act applicable in relation to arbitral proceedings commenced on or after the date of commencement of this Act, is the principal part, whereas the rst part of Section 26 is in the nature of a proviso or exception. In so far as the rst part is concerned, Section 6 of the General Clauses Act, 1897 would be attracted, in which the vested right to challenge arbitral awards would continue under Section 34 and 36 of the Act. Given that the vested right is preserved, the amendment is only prospective in nature.

l The amended Section 36 is a substantive provision, in that, in place of an automatic stay of the award under the previous regime, a deposit of the entire or substantial amount of the award would now be made in the interim period

between the award and the decision of the court in the Section 34 application.

l The legislative intent may be ascertained from th

the 246 Law Commission Report on the Arbitration Act, which recommended that the amendments may apply to ‘fresh arbitrations’.

l The amendments have purely prospective effect, as per the views taken in the report dated July 30, 2017 by the High Level Committee headed by Justice B.N. Srikrishna and the Government of India's press release dated March 7, 2018 relating to a proposed Arbitration and Conciliation (Amendment) Bill, 2018.

l The expression ‘arbitral proceedings’ means the same in both parts of Section 26. It is clear that for arbitral proceedings on or after October 23, 2015, the amendments would apply. Parties could opt in to the amended provisions in respect of arbitral proceedings commenced prior to October 23, 2015, but not for court proceedings thereto. When the rst part of Section 26 is applied, Section 6 of the General Clauses Act (saving of vested rights) would be attracted in so far as court proceedings are concerned. However, if the arbitral proceedings have commenced under the prior regime, then those proceedings as well as all court proceedings in relation thereto would be governed only by the unamended Act.

l Party autonomy must be respected, and parties who have entered into agreements in the expectation that the old regime will apply cannot suddenly be foisted with a completely different regime under the Amendment Act.

l Retrospective operation of the amended Section 36 would result in a number of anomalies under the Act, which would cause hardship and inconvenience to parties.

l The right to be governed under a broad appellate/supervisory procedure found in Sections 34 and 37 of the Act would be a vested right.

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l There is a difference between enforceability and executability. Whereas the former dealt with substantive rights, the latter deals with procedural rights. In this case, the award did not become immediately executable, but was required to be tested by the Section 34 court.

A r g u m e n t s a d v a n c e d o n b e h a l f o f t h e Respondents:

l The original intent of the 1996 Act was to minimize court intervention and restrict the grounds of challenge of arbitral awards. Since various decisions of the Hon’ble Court had gone contrary to the original intention of the 1996 Act, the Amendment Act intended to restore the position under the 1996 Act. Since court proceedings in India take an inordinately long time, if Section 36 was construed as being applicable only to arbitrations commenced after October 23, 2015, it would stultify the whole object of the amendments.

l The Statement of Objects and Reasons of the Amendment Act referred to India’s poor record in contract enforcement. Section 26 would require to be construed in a manner as to further the object, and therefore must not be read as a savings clause but as a provision which destroys all rights, if any, vested in the Appellants under the unamended regime.

l The absence of reference to court proceedings in the rst part of Section 26 is of great signicance. On a correct construction of Section 26, the second part takes within its sweep both arbitral proceedings as well as court proceedings in relation thereto, which have commenced after the Amendment Act came into force.

l The judgment of the Supreme Court in Thyssen Stahlunion GmbH v. SAIL, (1999) 9 SCC 334 at paragraph 23, was relied upon to show that the correct interpretation was that Section 34 proceedings which have commenced before the Amendment Act would be governed by the Amendment Act, and arbitral proceedings which commenced after the Amendment Act

together with Section 34 proceedings in relation thereto would be governed by the Amendment Act.

l Alternatively, the rst part of Section 26 applies only to arbitral proceedings and the second part would apply only to court proceedings in relation thereto. This becomes clear from two things; one, the expression ‘to’ appearing in the rst part as contrasted with ‘in relation to’ appearing in the second part; and two, the presence of Section 21 of the 1996 Act in the rst part and its absence in the second part. This interpretation would result in no anomalies, as it is clear that the date of commencement of arbitral proceedings would be xed with reference to Section 21 and the date of commencement of a court proceeding would be xed with reference to the date on which the court proceedings is led. Therefore, only arbitral proceedings and court proceedings which are led after the commencement of the Amendment Act would be so covered.

l Section 34 proceedings are not appellate proceedings, and therefore no vested rights exist in respect of Section 34. In any case, Section 26 evinces a contrary intention and would take away any such vested right.

l The word 'but' which appears in Section 26 segregates the rst part from the second part and also makes it clear that the two parts apply to two different situations.

l Section 36, in its original form, is only a clog on the right of the decree holder. There is no corresponding vested right in the award debtor to indenitely delay proceedings.

l Enforcement proceedings under Section 36 are nothing but execution of an award, as if it were a decree of the court. It is well settled that execution proceedings are procedural in nature and amendments thereto are retrospective.

l Sec t ion 36 p roceed ings a re en t i re ly independent of Section 34 proceedings and the moment Section 36 speaks of an award being

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enforceable under the CPC as if it were a decree, enforceability means only execution and nothing else. An award is not mere waste paper when it is delivered and before it becomes a decree, it decides the rights of the parties and therefore, being nal and binding on parties, is a judgment delivered between parties, which may become executable on certain conditions being met, but which do not detract from the validity of the award.

l The expression 'has been' contained in Section 36 (2) refers to Section 34 applications that have already been led before the amendments. T h e r e f o r e , t h e a m e n d e d S e c t i o n 3 6 contemplated within its sweep pending Section 34 applications.

Supreme Court's Decision:

The Hon'ble Court held as follows:

l That the expression 'arbitral proceedings' refers to proceedings before the arbitral tribunal is clear from the heading of Chapter V of the Act, which reads 'Conduct of Arbitral Proceedings'. The use of the expression 'to' as contrasted with the expression 'in relation to', makes this clear.

l The reference to Section 21 of the Act (commencement) in the rst part of Section 26, which speaks of the arbitral proceedings commencing on the date on which a request for a dispute to be referred to arbitration is received by the respondents, would also make it clear that it is arbitral proceedings, and no others, which are the subject matter of the rst part of Section 26.

l Also, since the conduct of arbitral proceedings is largely procedural in nature, parties may 'otherwise agree' and apply the Amendment Act to arbitral proceedings commenced before October 23, 2015.

l In contrast, the absence of reference to Section 21 and the use of the expression 'in relation to' arbitral proceedings in the second part is conspicuous.

l Therefore, one can infer that Section 26 bifurcates proceedings, into two sets of proceedings – arbitral proceedings themselves, and court proceedings in relation thereto. The rst part of Section 26 is couched in negative form for the reason that the Amendment Act will apply even to arbitral proceedings commenced before the amendment, if the parties so agree. Further, considering that one of the most contentious issues in recent times has been the correct interpretation/intention of Section 26 of the Amendment Act and whether the amendments apply to court proceedings that are: (i) led after the amendments act came into force in 2015, but in respect of arbitrations commenced before the amendments and(ii) court proceedings which were pending at the time the amendments came into effect but were decided thereafter. In this context, there

1were conicting decisions of various courts. The present judgment claries and rules that the 2015 amendments would apply to all court proceedings led after the amendments came

rdinto effect on 23 October, 2015, regardless of when the arbitration was commenced. Additionally and crucially, the Hon’ble Supreme Court has also held that the amendment would also apply to pending court proceedings that may have been led prior to the amendments but were pending at the time the 2015 amendments came into force and are to be decided thereafter.

l O b v i o u s l y, t h e e x p r e s s i o n ‘ a r b i t r a l proceedings’ having been subsumed in the rst part, cannot re-appear in the second part, and the expression ‘in relation to arbitral proceedings’ would therefore, apply only to court proceedings which relate to the arbitral proceedings.

l The scheme of Section 26 is thus clear. The Amendment Act is prospective in nature, and will apply to those arbitral proceedings that are commenced, as understood by Section 21 of the principal Act, on or after the Amendment Act,

1 See Rendezvous Sports World v. Board of Control for Cricket in India 2017 (2) BomCR 113, Ardee Infrastructure Pvt. Ltd. v. Ms. Anuradha Bhatia 2017 (2) ArbLR 163 (Delhi), in Electrosteel Casting v. Reacon Engineers AIR 2016 (NOC 764) 349, New Tirupur Area Devp Corp v. Hindustan Construction O.S.A. Nos.21 & 22 of 2016 (30.08.2017 – Madras High Court), Enercon v. Yogesh Mehra, 2017 SCC OnLine Bom 1744

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and to court proceedings which have commenced on or after the Amendment Act came into force.

l The interpretation of the expression 'in relation to' contained in Section 85 (2)(a) of the Act, as laid down in the judgment of Thyssen could not be relied on for the interpretation of Section 26 because the language of Section 85 (2)(a) contained two major differences in language with Section 26; one, that the expression ‘in relation to’ does not appear in the rst part of Section 26 and only the expression ‘to’ appears, and second, that Section 26 envisages ‘commencement’ as understood under Section 21 of the Act.

l Section 26 specically provides that court proceedings in relation to arbitral proceedings, being independent from arbitral proceedings, would not be viewed as a continuation of the arbitral proceedings, but would be viewed separately.

l As opposed to Section 17 of the 1940 Act, under Section 36 the court does not have to deliver judgment in terms of the award, which is then followed by a decree, which is the formal expression of the adjudication between the parties. Under Section 36, the award is deemed to be a decree and shall be enforced under the CPC as such. Since it is clear that the execution of a decree pertains to the realms of procedure, and there is no substantive vested right in a judgment debtor to resist execution, therefore, Section 36 as substituted, would apply even to pending Section 34 applications on the date of the commencement of the Amendment Act.

l Section 36, prior to the Amendment Act, is only a clog on the right of the decree holder, who cannot execute the award in his favour, unless the conditions of the section are met. This does not mean that there is a corresponding right in the judgment debtor to stay the execution of such an award.

l The Hon’ble Court also looked at the practical aspect and nature of rights presently involved, and noted the sheer unfairness of the

unamended provision, which granted an automatic stay to execution of the award before the enforcement process of Section 34 was over (and which stay could last for a number of years), and held that it is clear that Section 36 as amended should apply to Sect ion 34 applications led before the commencement of the Amendment Act also.

l The Hon’ble Court also took note of the Government of India’s press release dated March 7, 2018, in relation to the Arbitration and Conciliation (Amendment) Bill, 2018 (“2018 Bill”). One of the substantial provisions is the proposed Section 87, which has the effect of clarifying that the Amendment Act would not apply to arbitral proceedings including court proceedings commenced prior to October 23, 2015 and would apply only to arbitral proceedings including court proceedings commenced on or after October 23, 2015. The Hon’ble Court noted that the immediate effect of the proposed Section 87 would be to put all the important amendments made by the Amendment Act on the back-burner. In respect of all matters which are in the pipeline, despite the fact that Section 34 proceedings have been initiated only after October 23, 2015, yet, the old law would continue to apply resulting in delay of disposal of arbitration proceedings by increased interference of courts, which ultimately defeats the object of the 1996 Act. The Hon’ble Court noted that the basic scheme of the 1996 Act was adhered to by Section 26 of the Amendment Act, which ought not to be displaced as the very object of the enactment of the Amendment Act would otherwise be defeated.

Analysis:

The decision in BCCI v. Kochi Cricket Private Limited has far reaching implications for parties. The Hon’ble Supreme Court has cleared the controversy by ruling that the 2015 amendments are prospective in nature i.e. will apply only to proceedings actually led after October 23, 2015, as also to court proceedings that are pending as on October 23, 2015.

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Of particular note is that the amended Section 36, which does away with the automatic stay and requires deposit of security up to the award amount, would now apply to every pending Section 34 application. Therefore, the following consequences would follow:

l The judgment would immediately allow all award holders to commence enforcement proceedings by ling an application for execution in respect of their arbitral awards.

l The judgment would also compel all award debtors to le separate applications for stay in their pending Section 34 applications, and satisfy the court for grant of stay by inter alia providing security of sums up to the award amount, thus taking away a benet of an automatic stay on the enforcement of the arbitration award that a party had prior to the 2015 amendments.

However, we understand that the Central Government plans to introduce the Arbitration and Conciliation (Amendment) Bill, 2018 in Parliament. The 2018 Bill proposes to omit Section 26 of Amendment Act and insert Section 87 in the Act, which provides that unless the parties otherwise agree, the Amendment Act shall not apply to (i) arbitral proceedings commenced before October 23, 2015 and (ii) court proceedings arising out of or

in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after October 23, 2015. The proposed amendments, when enacted, would have the effect of taking away the basis of the judgment of the Hon'ble Supreme Court in BCCI v. Kochi Cricket Private Limited. The proposed enactment would clarify that the 2015 amendments are purely prospective in nature and hopefully, put a rest to the controversy. It remains to be seen whether the Government takes note of the Hon’ble Supreme Court’s interpretation and effects amendments in consonance therewith, or whether it will continue to proceed with the new Section 87, so that the amendments would apply only to arbitrations and consequent court proceedings and consequent court proceedings commenced after October 23, 2015. The amendments are a welcome development in the arbitration sphere and will further assist India in being seen as an arbitrat ion fr iendly jurisdiction.

[Note: The CAM team comprising of Nikitha Shenoy, Arjun Sreenivas, Neha Sarna, George Varghese, Vineet Unnikrishnan, Kartik Yadav, Aditya Mehta, Indranil Deshmukh, Kirat Nagra and Gauri Rasgotra appeared in the Hon'ble Supreme Court on behalf of the petitioners in the lead matters in the batch of appeals.]

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Daiichi Sankyo Co. Ltd. v. Malvinder Mohan Singh And Ors

damages to the tune of INR 25 billion to the Petitioners under Section 19 of the Indian Contract Act, 1872 (“Contract Act”). The Respondents objected to the enforcement of this Award before the Delhi High Court under Section 48 of the Indian Arbitration and Conciliation Act, 1996 (“Act”), stating that the claim was barred by limitation and the Award ran afoul of damages awardable under Section 19 of the Contract Act as well as the SPSSA. More importantly, the counsel acting for the minor Respondents contended that the f raud byMr. Malvinder Singh could not be attributed to the minor Respondents in any case, as they were incapable of appointing and thereby, acting through an agent.

Issues:

1. Whether the award of damages against the minor Respondents was illegal, non est and void and could not be enforced being in conict with the public policy of India?

2. Whether the Petitioner's claim was barred by limitation?

3. Whether the award could not be enforced as the damages awarded were contrary to Section 19 of the Contract Act?

4. Whether the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal?

5. Whether the award of interest on the awarded damages amounted to award of multiple damages?

On January 31, 2018, the Delhi High Court in Daiichi Sankyo Co. Ltd. v. Malvinder Mohan Singh and Ors has held that the award passed in favour of Daiichi Sankyo Company Limited in an arbitration administered by the International Chamber of Commerce (“ICC”) would be enforceable as against all the Respondents, excepting those who were minors. The judgment is of particular importance since it upholds India's commitment to enforce foreign awards whilst recognising the protection of minors as a fundamental policy of Indian law being thus in conict with the public policy of India.

Facts:

Mr. Malvinder Singh and his family, including 5 minors, (“Respondents”) held 34.82% stake in Ranbaxy Laboratories Limited (“Ranbaxy”). The Respondents' entire stake was purchased by Daiichi Sankyo (“Petitioner”) by way of a Share Purchase and Share Subscription Agreement (“SPSSA”) for a transaction valued at INR 198 billion. The Petitioner subsequently discovered that the Respondents had made fraudulent representations, by concealing a document called the Self Assessment Report which detailed widespread fraudulent practices at Ranbaxy, as well as genesis, nature and severity of pending inves t iga t ions by the US Food and Drug Administration and Department of Justice.

Pursuant to this, the Petitioners invoked the arbitration clause in the SPSSA and the Majority Arbitral Tribunal (“Tribunal”) duly constituted under the aegis of the ICC passed a foreign award (the “Award”) against all the Respondents (including the minors that were party to the SPSSA) awarding

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Arguments by the Respondents:

1. i. No guardian was ever appointed to defend the minors before the Tribunal. Though lawyers did appear on behalf of the minors, the Tribunal chose not to appoint any guardian which vitiated the Award.

ii. The Respondents argued that the misrepresentation, if any, was committed

stby Mr. Malvinder Singh (1 Respondent) and two other Respondents were acting on behalf of all the Respondents, including the minors, as their agents. Under Section 183 of the Contract Act, only a person who has attained the age of majority could employ an agent. Therefore, the acts of Mr. Malvinder Singh and others could not be attributable to the minors. Moreover, the minors in all had received a sum of INR 14,37,150 and were in turn saddled with a liability of INR 3500 crores.

2. Limitation under the Indian law was a jurisdictional issue and went to the root of the matter, and the same could be revisited by the Court under Section 48 of the Act.

3. The damages awarded by the Tribunal were beyond Section 19 of the Contract Act and the innocent party could only be put in the position tha t s /he would have been in i f the representations made were true. Rejection of this principle by the Tribunal amounted to violation of the fundamental policy of Indian law and was therefore, against public policy of India.

4. The damages awarded by the Tribunal were in the nature of consequential damages. Such damages could not be awarded by the Tribunal since ‘punitive, exemplary, multiple or consequential damages’ were prohibited under the SPSSA.

5. Award of pre-award interest on damages amounted to grant of damages on damages. This resulted in award of multiple damages which

was beyond the jurisdiction of the Tribunal and against the public policy of India.

Arguments Advanced By the Petitioner:

1. Under the Hindu Minority & Guardianship Act 1956, the natural guardian of the Hindu minor had the power to do all acts necessary and proper for the benet of the minor and therefore, the sale of shares by the natural guardian through the SPSSA was legal and valid. Moreover, all the Respondents, including the minors, were represented by lawyers who had specically acted as representatives of all the parties including the minors in all the proceedings.

2. The plea of limitation cannot be a bar to the enforcement of a foreign award, and determination of an issue of limitation is a mixed question of law and fact which is not reviewable under Section 48 of the Act.

3. The Petitioners argued inter alia, that the manner of computation of damages was within the scope of the Tribunal and the damages awarded were within its jurisdiction. The submission of the Respondents in relation to the computation of damages were beyond the scope of review under Section 48 of the Act.

4. T h e d a m a g e s a w a r d e d w e r e n e i t h e r consequential nor exemplary nor punitive nor multiple damages.

5. The Award of interest was within the scope of the Tribunal and it was rightly held to be a matter of Singapore Law (law of the seat). It also urged that the SPSSA provides for award of interest from the date of loss as well.

Delhi High Court's Decision

After an extensive discussion of the clauses of the SPSSA, the ndings of the Tribunal and the case law relied upon by the parties, the Court arrived at the following conclusions:

a. The Court upheld the Award against 15 Respondents while vacating the Award against the 5 minors. In doing so the Court rejected

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a rgumen t s in r e l a t ion to l imi t a t ion , quantication of damages, consequential damages, pre-award interest.

b. Limitation was a mixed question of law and fact. It was a settled position that the Tribunal is a master of the quality and quantity of evidence placed before it and a nding of facts by the Tribunal could not be challenged before a Court. The Court concluded that it could not go into the ndings of fact in this context and that the ndings of the Tribunal were not contrary to the fundamental policy of India.

c. Different formulas or methods could be applied in different circumstances to quantify damages under the Contract Act and the question as to which formula to be applied in the particular instance would fall within the domain of the arbitrator which cannot be faulted in a proceeding under Section 48 of the Act.

d. The Court held that the ndings of the Tribunal in relation to the damages awarded being not 'punitive, exemplary, multiple or consequential damages' would not bind the court and that the court would have to go into the issue of whether the damages awarded by the Tribunal were consequential damages and beyond the jurisdiction of the Tribunal. However, the Court nally ruled that the grant of damages by the Tribunal did not amount to award of consequential damages. This was a nding based on the (i) understanding of consequential damages in law and (ii) the interpretation of the term in the context of the other phrases used in the clause under the SPSSA namely ‘punitive’, ‘exemplary’ and ‘multiple’.

e. The Cour t he ld tha t con t ra ry to the Respondents’ contention, the awarding of pre-award interest could not constitute multiple damages. The interest awarded on the damages was in consonance with the clauses of the SPSSA and Singapore law and was not contrary to public policy of India.

f. The conclusions of the Tribunal in relation to the liability of the minors through their agents were awed and contrary to statutory position in India under which a minor was incapable of carrying out fraud through an agent. Moreover, the powers of a guardian to take all acts necessary or proper for the benet of the minor could not extend to the power to carry out fraud for and on behalf of the minor so as to jeopardize the estate of a minor. The acts of fraud committed in the present case could therefore, not bind the minors and no award of damages could be passed against them. The Court did not pay any heed to the argument that a guardian was not appointed for the purposes of the arbitration proceedings since the minor respondents were specically represented by counsels at the hearings. The Court did however make a note of the disproportionate nature of the award as against the minors.

Analysis:

While the Delhi High Court laid down certain important principles in relation to award of damages by the arbitral tribunal, this decision holds signicance due to its enforcement of a foreign award and the consideration of the liability of minors arising from fraud in large scale transactions. The court upheld the award against all the other Respondents, whilst rejecting arguments in relation to limitation, interest on interest, consequential damages etc. However the Court held that the award was not enforceable as against the minor respondents being contrary to the fundamental policy of Indian law. While the decision is another example of thejudiciary practicing restraint in interfering with the enforcement of foreign awards, it indicates that the policy of non-interference is not without exception especially in light of issues relating to Indian public policy.

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Legal Updates

l The Arbitration and Conciliation (Amendment) Bill, 2018

The Government has approved the introduction o f t h e A r b i t r a t i o n a n d C o n c i l i a t i o n (Amendment) Bill, 2018 (“Bill”) in the Parliament. The Bill primarily seeks to further bolster institutional arbitration in Indiaand has also introduced changes to remedy certain deciencies in the Arbitration andConciliation Act, 1996. The Bill follows the recommendations of the report dated July 30, 2017 issued by the High Level Committee under the chairmanship of Justice (retired) B.N. Srikrishna. The salient features of the Bill have already been set out in this issue.

l The Specic Relief (Amendment) Bill, 2018

The Specic Relief (Amendment) Bill, 2018 (“Bill”) was passed by the Lok Sabha on March 15, 2018.

The Bill aims to reduce the discretion of the cour t in mat ters of grant ing specic performance. To this end, the Bill has amended Section 11 of the Act to provide that the Court shall (instead of may) enforce specic performance when the act is in the performance, wholly or partly, of a trust.

Substituted performance of contract is a new category of contract that has been brought within the fold of this section, and has been introduced in the Bill by way of Section 20. Section 20 provides that where a contract is broken, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, will be entitled to recover the expenses and

other costs actually incurred, spent or suffered by him, from the party committing such breach. If such a contract is substituted in this manner, such a party will not have the option of seeking specic relief of the contract.

Section 14 which provides for contracts that cannot be specically enforced by the Court has been substantially amended. Under the amended provision Section 14 the following contracts cannot be specically enforced(a) contracts where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualications of the parties that the court cannot enforce specic performance of its material terms; and (d) a contract which is in its nature determinable.

The Bill also entitles parties the right to seek specic relief against limited liability partnership. The Bill provides in Sections 15 and 19 that in the case of a contract executed with an LLP, when such LLP subsequently amalgamates with another limited liability partnership, specic relief can be sought against such an amalgamated LLP.

Section 20A is proposed to be introduced for infrastructure project contracts which provides that the court shall not grant injunction in any suit, where it appears to it that granting injunction would cause hindrance or delay in the continuance or completion of the infrastructure project. The various categories of

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projects and infrastructure sub-sectors has been provided as a Schedule to the Bill.

Special courts are proposed to be designated to try suits in respect of contracts relating to infrastructure projects and to dispose of such suits within a period of twelve months from the date of service of summons to the defendant and also to extend the said period for another six months in aggregate, after recordings reasons therefor.

l Appointment of Judges to the Bombay High Court

Justice Prakash Deu Naik, Justice Makarand Subhash Karnik, Justice Swapna Sanjiv Joshi, Justice Kishor Kalesh Sonawane and Justice Kumari Nutan D. Sardessai, the Additional Judges of the Bombay High Court have been appointed as Judges of the Bombay High Court.

DISCLAIMER:

This newsletter has been sent to you for information purposes only and is intended merely to highlight issues. The information and/or observations contained in this newsletter do not constitute legal advice and should not be acted upon in any specific situation without appropriate legal advice.

The views expressed in this newsletter do not necessarily constitute the final opinion of Cyril Amarchand Mangaldas and should you have any queries in relation to any of the issues set out herein or on other areas of law, please feel free to contact us on caseinpoint@cyrilshroff.com or write to following coordinates:

Cyril Shroff Managing Partner

cyril.shroff@cyrilshroff.com

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Shaneen Parikh Partner

shaneen.parikh@cyrilshroff.com

CONTRIBUTORS TO THIS ISSUE:

1. Shaneen Parikh

2. Gauri Rasgotra

3. Shalaka Patil

4. Namita Shetty

5. George Varghese

6. Varun Shankar

7. Shruti Raina

8. Nimitt Dixit

9. Anand Mohan

10. Pranjal Mehta

11. Abhilasha Malpani

12. Purav Shah

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