In this post we consider the implications for India-related international arbitration of the Indian Supreme Court re-examining the controversial Bhatia decision. We also look at the successful investment treaty claim against India in White Industries, along with the expansion of the concept of public policy in the context of enforcing a foreign award in Phulchand v OOO Patriot. Finally, we comment on the impact of fraud allegations on arbitrations in India as discussed in Bharat Rasiklal v. Gautam Rasiklal.
Reconsideration of Bhatia International by Indian Supreme Court constitutional bench
The Indian Supreme Court is currently reconsidering the ratio of Bhatia International v. Bulk Trading S.A., a seminal case in Indian arbitration jurisprudence, in Bharat Aluminium v Kaiser Aluminium Technical Services. The court kick-started proceedings in January on a positive note. It was keen to help foreign investors avoid lengthy litigation in India-related commercial contracts where arbitration was chosen as a mode of dispute resolution. To this end, the court also noted that it was considering making a representation to Parliament for cases pertaining to the enforcement of foreign awards to be heard directly by the Supreme Court.
The case has since proceeded with seven weeks of submissions by various parties and interveners, including LCIA India and the SIAC. Oral arguments concluded at the end of February. A decision is expected no later than the Autumn, when the current Chief Justice is due to retire. Read more here.
India held liable under investment treaty claim for not providing “effective” means of dispute resolution
A claim filed against India by White Industries Australia Limited (White Industries), an Australian mining company, under the 1999 Bilateral Investment Treaty (BIT) between India and Australia, has been decided in favour of the Australian company. The claim related to delays in the enforcement by the Indian courts of an ICC arbitration award obtained in 2002 by White Industries against Coal India Limited (Coal India). Read more here.
Indian Supreme Court expands public policy definition for enforcement of foreign awards
An Indian export company, Phulchand Exports Limited (Phulchand), initiated arbitration in the International Court of Commercial Arbitration at the Chamber of Commerce and Industry of the Russian Federation against a Russian company, OOO Patriot, under a Russian law contract for the export of rice to Russia. The Tribunal found for OOO Patriot on some of the issues and awarded damages.
OOO Patriot sought to enforce the award in the High Court of Bombay. Phulchand challenged the enforceability of the award on the grounds that it was contrary to public policy. The Bombay High Court, and on appeal the Supreme Court, rejected Phulchand’s challenge and upheld enforcement. However, in doing so, the Supreme Court set a worrying precedent. Read more here.
Supreme Court upholds role of courts in appointing arbitrators where allegations of fraud are made
The Supreme Court recently reaffirmed its earlier decision in the case of SBP & Co. v. Patel Engineering Ltd, recognising the ability of courts to examine the validity of an arbitration agreement when appointing arbitrators. The court also made some very important observations on the role of courts in dealing with allegations of fraud in the context of arbitration. Read more here.