Swiss Federal Tribunal refuses to set aside the Deutsche Telekom v India Award

We previously reported here that a Geneva-seated UNCITRAL tribunal (the “Tribunal“) constituted under the India-Germany Bilateral Investment Treaty dated 10 July 1995 (the “India-Germany BIT”) found India in breach of its treaty obligations in relation to its cancellation of a spectrum allocation contract[1] (the “Contract“) in an interim award dated 13 December 2017 (the “Award“).

The Contract was entered into in 2005 between Devas Multimedia Private Limited (“Devas“), an Indian company and Antrix Corporation Limited (“Antrix“), an Indian state-owned satellite company, wherein Devas agreed to pay a fee in return for the lease of the S-band electromagnetic spectrum provided by two orbiting Indian satellites. In the arbitration before the Tribunal, the Claimant, Deutsche Telekom AG (“DT“) (which indirectly held a 20% stake in Devas via a Singaporean subsidiary) alleged a breach of the fair and equitable treatment standard under the India-Germany BIT.

In the Award, the Tribunal dealt with issues of jurisdiction and liability (leaving aside issues of quantum for a later award), and held that it possessed jurisdiction to hear the dispute and that India had indeed violated the standard of fair and equitable treatment under the India-Germany BIT.

India sought to challenge the Award in the Swiss Federal Tribunal (“Federal Tribunal“), being the court of supervision of the arbitration. In a decision last month, the First Civil Law Court of the Federal Tribunal rejected India’s application for the annulment of the Award by a 3:2 majority in a judgment dated 11 December 2018 (available here (in French)).

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Indian Supreme Court rules that Indian courts have jurisdiction to hear an application to set aside an award issued in Malaysia

In its recent decision in Union of India v Hardy Exploration and Production (available here), the Supreme Court of India found that a contractual clause stipulating Kuala Lumpur as the ‘venue’ of arbitration did not amount to a choice of juridical seat. While the Indian courts’ jurisdiction to hear set-aside applications will be excluded if the seat of the arbitration is outside India, the Supreme Court found that in this case there was no chosen seat (and the tribunal had not determined a seat), notwithstanding the choice of Kuala Lumpur as the venue for the arbitral proceedings, and the fact that the award was signed in Kuala Lumpur. Since this was a case where the arbitration agreement pre-dated 6 September 2012 (the date of the key Supreme Court ruling in BALCO), it appears that the Court did not find it necessary to positively determine that the seat was in India; the fact that an overseas seat had not been established appears to have been sufficient for the Indian courts to have jurisdiction to hear the application.

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Recent Developments in India-related International Arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin.

In this issue we consider various court decisions, which cover issues such as the applicability of the Arbitration Amendment Act 2015, binding non-signatories to an award, enforcement of an award before the National Company Law Tribunal, and the continued pro-arbitration approach of the Indian courts. In other news, we consider the continued rise of institutional arbitration in India, a detailed analysis of the proposed amendments to the Arbitration Act, as well as India-related bilateral investment treaty news (and other developments).

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India’s lower house of Parliament approves further amendments to the Indian Arbitration Act

As previously reported here, a draft Bill to amend the Arbitration and Conciliation Act 1996 (the “Act“) was approved by the Indian Cabinet on 7 March 2018 (the “Bill“). The Bill was listed as a part of the agenda for the monsoon session of the Indian Parliament and was passed by the Lower House on 10 August 2018, without any amendments. The text of the Bill can be found here.

The Law Minister has described the Bill as “a momentous and important legislation” aimed at making India “a hub of domestic and international arbitration”. The key features of the Bill are:

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Delhi High Court agrees to enforce CIETAC arbitral award against Indian company despite CIETAC split

In its decision of 4 July 2018, the Delhi High Court (“Court“) has agreed to enforce a China International Economic and Trade Arbitration Commission (CIETAC) award against an Indian company, despite the award debtor’s arguments that the dispute should have been referred to and administrated by the now independent Shanghai International Arbitration Centre (SHIAC), which until mid-2012 was the Shanghai Sub-Commission of CIETAC (“Shanghai Sub-Commission“). The Court’s decision is interesting not only in discussing the 2012 split of CIETAC, but also because it may provide some guidance on how Indian courts may, in future, deal with structural changes to other arbitral institutions, such as the very recent termination of the joint venture between LCIA and Mauritius (the LCIA-MIAC Arbitration Centre), or the Shenzhen Court of International Arbitration (SCIETAC/SCIA) and the Shenzhen Arbitration Commission (SAC) merger at the beginning of 2018. Last but not least, this decision reinforces a pro-enforcement approach of Indian courts in relation to foreign arbitral awards.

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Delhi High Court reaffirms pro-arbitration approach in two recent judgments

In two recent judgments, the Delhi High Court (the “Court“) dismissed challenges to arbitral awards and emphasised its reluctance to interfere with decisions of arbitral tribunals, except in limited circumstances. In NHAI v M/S. Bsc-Rbm-Pati Joint Venture, the Court strongly criticised unnecessary challenges to awards, especially by public sector undertakings, noting that it wasted valuable judicial time. Carrying on with the sentiment to not interfere, in Delhi Metro Rail Corporation Limited v Delhi Airport Metro Express Private Limited, the Court stated that it would not interfere with an arbitral decision if the view taken by a tribunal was plausible, even where an alternative view was possible.

A brief summary of both cases can be found below.

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Recent Developments in India-Related International Arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin.

In this issue we consider various Indian court decisions, including the availability of interim relief in support of foreign arbitration, sanctions for non-compliance with arbitral orders and the pro-arbitration position adopted by the courts in upholding a foreign seat. In other news, we consider the rise of institutional arbitration in India and a detailed analysis of the Sri Krishna Committee report, developments in the Indian mediation landscape, proposed reforms for commercial courts, as well as India-related bilateral investment treaty news (and other developments). Continue reading

Delhi High Court confirms that two Indian parties can choose a foreign seat of arbitration and applies the alter ego doctrine to join non-parties to the arbitration agreement

In GMR Energy Limited v. Doosan Power Systems India Private Limited, the Delhi High Court confirmed that two Indian parties can contract to have a foreign seat of arbitration (in this case, Singapore), and also ruled that a non-party to the Arbitration Agreement could be made part of the arbitral proceedings on the grounds that it acted as an alter ego to the contracting party.

A brief summary of the case can be found below. Continue reading

Recent developments in India-related international arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin. In this issue we will consider Indian court decisions, including the arbitrability of allegations of fraud and non-arbitrability of trust disputes by the Supreme Court. We have also considered various decisions in which the Delhi High court shows restraint in relation to interfering with offshore arbitrations, while also making decisions that demonstrate the observance of formalities by the court which could be construed as not pro-arbitration, including refusing to enforce an arbitration clause in an unsigned agreement. In other news, we consider the rise of institutional arbitration in India and India-related bilateral investment treaty news. Further, we discuss the imminent launch of a new edition of our Guide on India-Related Contracts Dispute Resolution.

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Inside Arbitration: Issue #4 of the publication from Herbert Smith Freehills’ Global Arbitration Practice

We are delighted to share with you the latest issue of the publication from Herbert Smith Freehills’ Global Arbitration Practice, Inside Arbitration.

In addition to sharing knowledge and insights about the markets and industries in which our clients operate, the publication offers personal perspectives of our international arbitration partners from across the globe.

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