Month: May 2015

PART I – PART II

 

By Samiron Borkataky (I. G. & Associates, New Delhi)

 

In a recent case before the High Court of Delhi (India), the Court hearing an application for an interim injunction to restrain an ICC arbitration on grounds of alleged fraud, had to consider the following issues:

 

1. Whether Section 5 of the Indian Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) read in conjunction with Section 16 of the said Act, “confers an absolute bar on the judicial authority to entertain a suit in a case where there is an arbitration clause between the parties”?[1]

 

2. In a case where “fraud, forgery, manipulation, and collusion are alleged by one party, would the disputes be arbitrable; and whether the facts of the present case warrant entertaining the present suit for declaration and permanent injunction; and grant of temporary injunction during the pendency of the main suit”?[2]

 

Continue reading FRAUD: The Demon of Arbitration in India – Part II of a II Part Series.

by Nicholas Querée, Peters & Peters Solicitors LLP

 

Multilateral development banks and the fight against bribery, corruption and fraud

In order to safeguard billions of US dollars invested in projects in developing and transitional economies each year, international multilateral development banks (“MDBs”) are increasingly using internal procedures to debar or blacklist firms and individuals suspected of having participated in “sanctionable practices”, such as bribery, corruption, and fraud, from obtaining development bank-financed contracts. In doing so, MDBs have increasingly adopted roles akin to more familiar transnational bribery and corruption regulators such as the US Department of Justice and the UK Serious Fraud Office.

The World Bank (the “Bank”) in particular has expressed its stated aim to facilitate a “global conversation against corruption”, in which it debarred over 250 entities and individuals in 2013 and over 100 in 2014. Most recently, in February 2015, the Bank sanctioned four companies on the basis of suspected fraud and corruption in relation to projects in Bolivia, Bangladesh and Cambodia. Debarment can result in serious financial consequences for entities and individuals, particularly given that from 2010 the five largest MDBs have agreed to mutual recognition of debarment decisions.

 

Continue reading Challenging supranational regulators through an independent arbitral mechanism: the World Bank Sanctions Board

by Louis A. Russo & Donald Houser, Alston & Bird[1]
In Matter of Belzberg v. Verus Invs. Holdings Inc., 2013 NY Slip. Op. 06729 (No. 149, October 17, 2013), the New York State Court of Appeals (the highest court in New York State) reversed a decision of the Appellate Division, holding that a non-signatory could be compelled to arbitrate under the direct benefits estoppel doctrine (i.e. an exception to the general rule that only signatories to an arbitration agreement are bound to that agreement). In considering the law developed under the Federal Arbitration Act for guidance, the Court relied on previous precedent set by the Second, Fourth, Fifth and Eighth Circuit Court of Appeals of the United States. In doing so, the Court concluded that the benefit received by the non-signatory was indirect, rather than direct, because it could not be traced directly to the agreement containing the arbitration clause.
Continue reading New York’s Highest Court Rejects Attempt to Compel Nonsignatory to Arbitrate Under the Direct Benefits Estoppel Doctrine

PART I – PART II

 

By Samiron Borkataky (I. G. & Associates, New Delhi)

 

Generally speaking, in India the word “Fraud” has long been a source of anxiety to both Arbitration Practitioners and Arbitral Tribunals. The frequent commencement of civil suits seeking to divest the Arbitral Tribunal of jurisdiction on the grounds of alleged fraud have raised concerns for parties invoking arbitration agreements. The fact that this apprehension is not unfounded is also obvious from the 246^th Report of the Law Commission of India, recommending that issues of fraud be made arbitrable. However, such recommendations are yet to be enacted. In a situation such as the above, is the purpose of having an agreement to resolve a dispute by arbitration, at all attainable or can the parties’ intent be rendered otiose by a mere allegation of fraud? The Delhi High Court recently found itself in such a position when hearing an application for an interim stay of an ICC Arbitration, in a suit, seeking a declaration regarding the validity of a document; and a permanent injunction.[1]

Continue reading FRAUD: The Demon of Arbitration in India – Part I of a II Part Series

by Ms. Harshitha Ram[1] (Managing Partner, Lex Apotheke, India)

 

Some people consider the Indian judiciary eerie, due to its complex court procedures and inordinate delays.   The optimistic news reports promote the idea of developing arbitration in India but, in reality, there needs to be an acceptable and appropriate degree of thorough improvement with the basic structuring of the Indian legal system. The Law Commission of India has prepared a report on proposed amendments to the Indian Arbitration and Conciliation Act, 1996 (“Act”). This ordinance of the 246^th report by the Law Commission of India has been pending approval by the Indian Parliament since last December after the winter session of the Parliament. According to latest news reports, the Cabinet is focusing on the correction of two key provisions of Section 10A and Section 29A of the proposed amendments. Section 10A deals with arbitrator’s fees and Section 29A concerns the time limit of nine months for rendering an arbitral award and debarring the arbitrators for three years if found to have delayed adjudication.

This post discusses some pertinent points that deserve a closer look to perceive the significance of the proposed amendments in consonance with the international arbitration scenario with which India is expected to compete.

Continue reading Arbitration in India – A connecting Comet!