In 2013 the Supreme Court held that the enforcement of a foreign arbitral award can be refused only if it is contrary to, among other things, the 'fundamental policy of Indian law'. This article focuses on the Indian courts' interpretation of this term and looks at a common question that arises in relation to this area of law – namely, whether a foreign arbitral award which is a mere violation of an Indian legal provision qualifies as a contravention of the fundamental policy of Indian law.
The Supreme Court recently ruled that consumer disputes are incapable of being submitted to arbitration, placing them in the infamous category of 'non-arbitrable' subjects in India. However, the court also stated that where an elected consumer fails to file a consumer complaint, the parties are not barred from submitting the dispute to arbitration. This article analyses whether such a statement could have far-reaching implications for arbitrability as a ground for challenging an award.
The focus of India's rapidly evolving arbitration regime appears to be concentrated on factors such as ensuring that arbitrations are completed in a timely manner and appointed arbitrators are impartial. While these factors are significant, the importance of substantive and procedural clarity in terms of what happens after an award is passed is also crucial.
Two-tier arbitration clauses or appellate arbitration mechanisms were upheld by a three-judge bench of the Supreme Court in Centrotrade Minerals and Metal Inc v Hindustan Copper Limited. This article discusses the evolution of the jurisprudence surrounding two-tier arbitration in India and analyses both the utility of such a mechanism for the parties and its usefulness in certain situations.
The Supreme Court recently held that the only prerequisite for an arbitration agreement is that it be in writing. Through this decision, the court has adopted a pro-arbitration approach and, as such, may contribute positively to the existing jurisprudence on the Indian arbitration regime. By relying on the unsigned bill of lading, the court focused on the parties' conduct and intent, both of which indicated that there was an arbitration agreement between them.
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.
In its third-ever leniency decision, the Competition Commission of India (CCI) granted a penalty reduction to four of the six leniency applicants. The allegations in the case concerned bid rigging in five tenders floated by the Pune Municipal Corporation in 2014 for the establishment of solid waste processing plants. The CCI found that all six of the opposing parties had participated in bid rigging or collusive bidding in contravention of the Competition Act.
The Supreme Court recently clarified that the determination of the relevant market is not a mandatory pre-condition for assessing an alleged violation of Section 3 of the Competition Act. In its application, the Competition Commission of India argued that the Supreme Court had previously given the impression that the relevant market must be determined in all cases concerning Section 3 of the act.
The Supreme Court recently set aside a National Company Law Tribunal order and restored the appeal which had been dismissed thereby. The appeal concerned a stay order which the Competition Commission of India had granted subject to the appellant paying a sum equal to 10% of the total penalty. In its landmark ruling, the court confirmed that the right to appeal envisioned by the Competition Act cannot be restricted by the requirement that a pre-deposit be paid.
The Competition Commission of India (CCI) recently closed its investigation into the Kerala Cement Dealers' Association (KCDA) and Ramco Cements Ltd. The director general had initiated an investigation based on allegations that Ramco had been prevented from supplying cement after refusing to follow the KCDA's instructions to do so at an unfair price. However, the CCI held that the evidence collected by the director general was insufficient to prove a contravention of the Competition Act.
The Division Bench of the Delhi High Court has upheld the right of a person summoned by the director general to be accompanied and represented by counsel. However, the Competition Commission of India has raised concerns that permitting the active participation of counsel during depositions may not be conducive to the public interest at large.
In a recent case before the tax tribunal, a taxpayer gave an unsecured loan to its associated enterprises for which it had charged interest equal to LIBOR plus 250 basis points based on the rate at which it had borrowed funds from a foreign bank. The tax tribunal upheld the taxpayer's benchmarking and rejected the lower tax authority's contention that had the taxpayer advanced the loan to a third party, it would have charged a mark-up for its administrative expenses and the risk borne therein.
The tax tribunal recently found that the lower tax authority had erred in making a transfer pricing adjustment at the entity level, rather than the transactional level. According to the tribunal, the lower tax authority had failed to understand that third-party transactions are in fact at arm's length and cannot be considered when calculating a transfer pricing adjustment.
In a bid to generate investment in start-ups and provide certainty regarding the so-called 'angel tax', the Ministry of Commerce and Industry recently issued another notification easing the criteria to avail of the exemption under the Income Tax Act. The notification will provide start-ups with a much-needed reprieve in terms of the increased threshold limits for paid-up share capital, allowing them to avail of the exemption more easily.
The Authority for Advance Rulings recently considered the applicability of goods and services tax (GST) on expense reimbursements in the case of 'pure agents' – a key concept when evaluating taxable services, particularly for tax exemption claims in respect of expense reimbursements and applicable GST. While rulings are binding only on the taxpayer that raises the question, they carry persuasive value in identical situations.
While the classification of gains arising from a sale of shares has previously been litigated, the Bombay High Court recently dealt with the issue of whether gains arising from such a sale by a private trust would be taxable as capital gains or business income. The ruling examines not only the treatment of shares, but also the use of sales proceeds to conclusively adjudicate on the intentions behind the sale.
The Supreme Court recently examined whether certain components of an employee's overall salary are subject to provident fund (PF) contributions. As the Supreme Court has clarified that special allowances paid to employees must be included in the calculation of PF contributions, employers should review and analyse their current salary structures to determine any increase in PF liabilities.
The Central Board of Trustees of the Employees' Provident Fund Organisation recently approved a proposal to permit provident fund members to withdraw 75% of their accumulations after a period of one month of continuous unemployment instead of two months. The proposal would come into effect when the Employees' Provident Funds and Miscellaneous Provisions Act and the Employees' Provident Funds Scheme are amended.
The new Code on Wages 2017 was recently introduced in Lok Sabha and is currently pending approval. The code seeks to integrate, amend and simplify the four central labour laws in order to reduce the multiplicity of definitions given under various labour legislation and foster a conducive labour environment by facilitating ease of compliance, thereby promoting the establishment of more organisations and creating more employment opportunities.
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.