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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The Singapore High Court reiterates its reluctance to set aside arbitral awards except in “egregious cases”

In the case of Coal & Oil Co. LLC v GHCL Ltd [2015] SGHC 65, the Singapore High Court took the opportunity to reinforce that a party seeking to set aside an arbitral award on the grounds of breach of natural justice is a serious matter requiring a high evidential threshold, and will be limited to only “egregious cases where the error is clear on the face of the record.”

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India liable under BIT for extensive judicial delays

An UNCITRAL tribunal in Singapore has held that the Republic of India breached its obligation under the India-Kuwait bilateral investment treaty (BIT) to provide investors with an “effective means of asserting claims and enforcing rights” through undue delay in the Indian court system.  White Industries Australia Limited (White) had spent nine years attempting to enforce an ICC Award in India, but was subjected to prolonged delays.  It therefore brought a claim under the Australian–Indian BIT but successfully relied on the BIT’s “most-favoured nation” clause to take advantage of the more favourable investor protections in the India-Kuwait BIT.

The UNCITRAL award adds to the developing jurisprudence suggesting that an arbitral award may be treated as a continuation of an investment and, as such, may be subject to such protections afforded to investments by a BIT.  The jurisdictional aspect of this case is also particularly topical given the consolidated appeal in Bhatia International v. Bulk Trading that began in the Supreme Court of India on 10 January 2012, which is considered likely to limit the ability of Indian courts to intervene in arbitrations seated outside India.

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