"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Wednesday, March 21, 2012

Arbitrability of Criminal Matters

The Supreme Court has reiterated a generally well-established principle that criminal matters cannot be arbitrated. In the case of State of Orissa v. Ujjal kumar Burdhan, a Two Judge Bench of the Supreme Court consisting of DK Jain & Anil R . Dave has held that "the existence of an arbitration agreement cannot take the criminal acts out of the jurisdiction of the Courts of law." The case related to the quashing of investigation by the State Government's Vigilance Department in respect of allegations of irregularities by a Rice Mill owned by ujjal Kumar Burdhan. The High Court of Orissa had quashed the investigation in exercise of its powers under Section 482 of the Code of Criminal Procedure, 1973 (CrPC). Section 482 reads:
"Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice."
The Supreme Court disagreed with the High Court that the circumstances considered by the High Court warranted the exercise of its jurisdiction under Section 482 of the CrPC. One of the reasons for the High Court to quash the investigation was the existence of an arbitration agreement with the Government. The Supreme Court disagreed with the High Court and held that the existence of an arbitration clause would not prevent prosection if a prima facie case of an act constituting a criminal offence is made out. The court relied on a decision of a two judge Bench of the Supreme Court in S.W. Palanitkar and Ors. v. State of Bihar and Anr. MANU/SC/0672/2001 : (2002) 1 SCC 241.

1 comment:

Karel Osiris Dogué said...

Criminal issue such as bribery and/or money laundering of public officials can be arbitrate and there are numerous cases about that. Bribery, fraud and money laundering involving public officials are matter of international public policy as those illegal actions have been recognized in many international treaties, conventions and also national legislations as violation of public policy.
The issue is more complex relating to private to lrivate compNies where in general there is no legal ground to ualify thos immoral actions. However do check the following ICC and investment cases where jurisdiction has been recognized over those issues:
World duty free case
Soleman soleman case
Hilmarton case
Westinghouse case
Westacre case etc