Section 34 of the Arbitration and Conciliation Act 1996 sets out the conditions for setting aside an arbitral award. In this context, the term 'arbitral award' has always been understood as an award rendered by the majority members of an arbitral tribunal. However, recent decisions of the Bombay High Court and the Delhi High Court, while setting aside the award of the arbitral tribunal, have upheld the so-called 'minority award', in variance with the act and established precedent.
Multi-tiered dispute resolution clauses prescribing pre-arbitral steps are common in commercial contracts in order to allow parties to resolve their disputes in a non-adversarial set up, preserve commercial relationships and save costs. Almost all contracts require performance of such pre-arbitral steps as a condition precedent to arbitration, but are they specifically enforceable? In other words, are pre-arbitral steps mandatory or directory in nature?
The Supreme Court recently set out the legal position regarding challenges to a person's possible appointment as an arbitrator. It held that since ineligibility goes to the root of the appointment, the Arbitration and Conciliation Act 1996 clarifies that if the arbitrator falls under any of the categories specified in the Seventh Schedule, he or she becomes ineligible to act as an arbitrator. However, if the circumstances fall under the Fifth Schedule, the person would not be de jure ineligible.
By way of the Arbitration and Conciliation (Amendment) Act 2015, the government sought to reform the law in relation to international commercial arbitrations conducted in India and foreign-seated international commercial arbitrations. Following recent judgments from the Delhi High Court and the Bombay High Court, it is timely to analyse the amendment act with reference to the United Nations Commission on International Trade Law Model Law on international commercial arbitration.
The Supreme Court recently reaffirmed that Indian arbitration law does not specifically prohibit two-tier arbitration clauses which provide for appellate review of an arbitral award by a subsequent arbitration. This judgment is an important win for party autonomy in India and sends a pro-arbitration message.
The Reserve Bank of India and the Ministry of Electronics and Information Technology recently established a new regulatory framework for setting limits on and payments of merchant discount rates and encouraging digital payments. Rates will now be determined based not only on the basis of transaction value, but also on turnover. However, in its effort to curb transaction costs for merchants, the government risks imposing significant charges on other system participants.
The Reserve Bank of India (RBI) recently issued a press release stating that given the rapid changes to the payments solutions space, it was in the process of reviewing the regulatory framework governing pre-paid payment instruments. The RBI also stated that it will grant no new licences for the issue of pre-paid payment instruments until the end of February 2017. This temporary suspension will not apply to applications made by new small finance banks and payment banks.
The Supreme Court recently held that a dishonoured post-dated cheque for repayment of a loan instalment that was described as 'security' in the loan agreement was covered by the criminal liability set out in Section 138 of the Negotiable Instruments Act. While deciding whether dishonoured cheques issued to discharge existing liability fall under Section 138, the court explained that the question of whether a post-dated cheque is for "discharge of debt or liability" depends on the nature of the transaction.
The Reserve Bank of India recently issued guidelines for the at-will licensing of universal banks in the private sector which, for the first time, will allow applicants to apply for a banking licence at will. The at-will regime will lead to increased transparency, better innovation and more realistic valuations, and is a significant step towards a healthier licensing regime for new private banks.
The Supreme Court recently clarified that all bank employees (including those employed by private sector banks) will be treated as public servants for the purposes of anti-corruption law. This ruling has significant implications, as all employees, officers and key managerial personnel of banking companies (ie, private and public sector banks and branches of foreign banks) will now come under the purview of the Prevention of Corruption Act.
The Competition Commission of India (CCI) recently exposed a cartel of three top coal-liaisoning companies, holding that in respect of tenders floated for the award of coal-liaisoning contracts, the companies had violated the Competition Act. As the case fell within the category of hardcore cartels, the CCI imposed its highest recorded penalty based on the total profits earned by each company in respect of the tenders.
The Competition Commission of India recently imposed a penalty of approximately Rs1.4 billion (approximately $21 million) on Google for abusing its dominant position in the market for "online general web search and web search advertising services" in India. While the $21 million fine imposed may be small for the global technology giant, the ruling has raised hopes for Indian digital start-ups that are feeling the pressure of Google's dominance.
The Competition Commission of India recently imposed a penalty of almost Rs120 million on 10 transport companies for bid rigging in regard to coal and sand transportation tenders. It held that identical pricing despite different cost structures, last-minute filing of price bids and the existence of earlier financial dealings between the defendants constituted evidence of a clear understanding to fix prices, which should be treated ipso facto as having an adverse effect on competition.
The Competition Commission of India has dismissed claims against Uttar Pradesh State Road Transport Corporation for abuse of its dominant position in the market for the procurement of bus chassis in India on the grounds that it holds no dominant position. The court did not assess the claims of abuse after finding that the company has low shares in the market, which comprises numerous competing transport operators.
The Ministry of Corporate Affairs recently held that nationalised banks are exempt from the applicability of the merger control regime under the Competition Act. The ministry issued a notification which stipulates that the government – in the interest of the public – will exempt all cases of reconstitution, transfer (wholly or in part) and amalgamation of nationalised banks from the application of Sections 5 and 6 of the act for 10 years.
Parliament recently passed the Mines and Minerals (Development and Regulation) Amendment Act 2016. The act has not only addressed the concerns of stakeholders by introducing provisions to transfer captive user mines, but also addressed the concerns of banks and financial institutions with non-performing assets and bad debts by providing that the proceeds from the sale of assets may be used to discharge debts.
The government recently notified changes to the Foreign Direct Investment (FDI) Policy by issuing guidelines on FDI in Indian entities engaged in the e-commerce sector. The guidelines have specifically permitted 100% FDI under the automatic route in entities using the marketplace model and have also set out the conditions applicable to e-commerce entities with FDI using the marketplace model.
The Payment of Gratuity Act 1972 is a form of social security legislation which prescribes a scheme for the payment of gratuity. For the private sector, gratuity is capped at Rs1 million, whereas central government employees can receive gratuity of up to Rs2 million. There is a proposal to increase the cap for the private sector in order to align it with the central government. Although this is a step forward in ensuring better benefits to eligible employees, it will increase employers' financial burden.
The federal government recently enacted a new act in order to empower disabled individuals and ensure their inclusion in the education and employment spheres. Although the government is primarily responsible for ensuring that disabled individuals receive equal treatment under the act, private organisations have also been made accountable for various obligations.
With the growing landscape of global businesses, there is a constant need to deploy employees for international assignments not only for skill development, but also for the business needs of the organisation. In order to abate similar obligations in a host country, India has entered into social security agreements (SSAs) with many countries. SSAs offer various benefits, such as the totalisation of benefits and exemption from dual contributions of social security.
The Maternity Benefit (Amendment) Bill 2016 was recently passed by the upper house of Parliament. Key changes include enhanced maternity leave, the introduction of maternity leave for adopting and commissioning mothers and new remote working provisions. The amendments are undoubtedly a positive step towards promoting diversity and the increased participation of women in the workforce in the manufacturing and service industries.