Reciprocal Arrangement Countries under Section 44 of the 1996 Act

In one of the conferences on International Arbitration held in May this year, a partner of a Delhi-based law firm remarked that nobody knew the complete list of territories with which India had a reciprocal arrangement as per Section 44(b) of the Arbitration and Conciliation Act, 1996. The remark prompted this blawgger to attempt to find out such a list. This short post deals with this the list of such territories.

"Section 44: Definition.- In this Chapter, unless the context otherwise requires, "foreign award" means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960-

(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and

(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies."

Section 44 defines the term "foreign award" for the purposes of Chapter I, Part II of 1996 Act. According to it, a foreign award must satisfy the following conditions:

• It must be an arbitral award on the differences between persons.
• Such differences must have arisen out of legal relationships, whether contractual or otherwise.
• The award was in pursuance of an arbitration agreement to which the New York Convention applied.
• The award was made in one of the territories to which the Convention applied and the Central Government had notified that such a country had made reciprocal provisions for enforcement of such awards made in India.

Justice Bachawat's Law of Arbitration & Conciliation (5th ed. 2010), P.2264 ff. has an excellent discussion on the subject and one may refer to the same for detailed analysis. The said commentary (at p. 2296) provides a list of countries that were notified under Section 2 of the Foreign Awards (Recognition and Enforcement) Act, 1961 as having reciprocal provisions for enforcement of Indian awards.  The countries are Austria, Botswana, Bulgaria, Central African Republic, Chile, Cuba, Czechslovak Socialist Republic, Denmark, Ecuador, Arab Republic of Egypt, Finland, France, German Democratic Republic, Federal Republic of Germany, Ghana, Greece, Hungary, Italy, Japan, Kuwait, Republic of Korea, Malagasy Republic, Mexico, Morocco, Nigeria, The Netherlands, Norway, Philippines, Poland, Romania, San Marino, Spain, Sweden, Switzerland, Syrian Arab Republic, Thailand, Trinidad and Tobago, Tunisia, USSR, UK, United Republic of Tanzania, and USA.

It may be noted that the Notifications declaring these countries to have provided reciprocal arrangements is valid even under the 1996 Act, in view of Section 82(2)(b) of the 1996 Act which provides: "(2) Notwithstanding such repeal-...(b) all rules made and notifications published, under the said enactments [Arbitration (Protocol and Convention) Act, 1937, Arbitration Act, 1940, and Foreign Awards (Recognition and Enforcement) Act, 1961] shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." [fn. 45, p. 2296, Justice Bachawat's Law of Arbitration & Conciliation (5th ed. 2010)]

Considering the availability of the notified territories in the public domain, ambiguities, if at all, should have arisen in respect of territories notified subsequent to the enactment of the 1996 Act. Consequently, an application under the Right to Information Act, 2005 dt. 22.05.2013 was given to the Ministry of External Affairs seeking reply on the list of territories notified under Section 44(b) of the 1996 Act. The Ministry forwarded the said application to the Department of Legal Affairs, Ministry of Law and Justice on 08.07.2013. It took more than two months for the Department to find out the territories under Section 44(b) of the 1996 Act. As per the Reply dt. 16.09.2013, the Notified countries are Singapore, Malaysia, Canada and Australia.

The CPIO could not find the notification number for the Notification of Australia. The Reply can be accessed from here.

It may be noted that on 19.03.2012, the Department of Legal Affairs had notified China, Hong Kong SAR and Macao SAR as territories under Section 44(b) (See, MANU/LAFF/2012) . However, the CPIO has not disclosed the same. 

Recent Developments in Indian Arbitration

In this short post, we give an overview of two recent developments in Indian Arbitration.

 

The first one pertains to the doctrine of separability and its application in the context of Section 45 (Power of Judicial Authority to Refer Parties to Arbitration) of the Arbitration and Conciliation Act, 1996 (1996 Act). Mr. Mihir Naniwadekar of the Indian Corporate Law Blog has written a post on the seeming conflict in approaches between the Supreme Court and the Bombay High Court on applying the separability doctrine in relation to the question as to whether the arbitration clause in the agreement that was novated stood extinguished. The issue is not only that of separability but also, and perhaps more importantly, of competenz-competenz- What types of jurisdictional questions pertaining to novation would the Judicial Authority/Designate decide? See the post in Indian Corporate Law blog for further details.

 

The next development is the case of Embassy Property Developments Limited v. Jumbo World Holdings Limited decided by the Madras High Court on 20 June 2013. The case is interesting because it deals in detail with the availability of interim measures under Section 9 against third parties. The availability of interim measures against third parties is a topic of great interest with there emerging a bit of clarity on the law. Read the posts that appeared in the Lex Arbitri Blog and this blog (series of posts) and also read this paper on the topic.

 

Now, coming back to the Embassy Property case, the Division Bench of the Madras High Court  held that interim measures could be ordered even against third parties to the arbitration agreement under Section 9 of the 1996 Act. On the contours of such power, the court held: 

"We are of the view that the power of this court, under Section 9 of the Arbitration and Conciliation Act, 1996, is wide in scope and it would extend even to third parties in whom the properties or goods are vested, even though such parties may not be a party to the arbitration clause in an agreement. Even though section 9 of the Arbitration and Conciliation Act, 1996, could be invoked only by a party to the arbitration agreement, the interim relief could be granted by this court even against the third parties. Unless such a power is available, under section 9 of the Arbitration and Conciliation act, 1996, the parties to the arbitral agreement could be frustrated even if they succeed in the arbitral proceedings before the Arbitration Tribunal concerned."

 

As the emphasised words clearly suggest, the High Court held that where the goods/ properties that pertain to the arbitration, interim measures would be available against third parties who claim/ enjoy rights relating to such goods/ properties. 

 

The court also observed that since Section 9 aims at preserving and protecting the subject matter of the arbitration, relief would be available even if the subject matter is in the hands of third parties. As long as a nexus is available between the subject matter and the parties to the arbitration agreement, the court could order interim measures even against third parties.

Texter beware, you could be 'electronically present' and liable if an accident occurs

Sending a text message to a person whom you have reason to believe or know that is driving and who cause an accident in the near proximity of receiving the message would make the sender liable. So held New Jersey Appeals Court. Though the claim of a couple who lost limb in a tragic accident, where a pick up truck collided with their motorbike was lost, the judge held that if it could be proved that the remote texter knew that the person is driving, the person could be liable by creating a new legal responsibility which make the texter electronically present. The liability is explained as “When the sender knows that the text will reach the driver while operating a vehicle, the sender has a relationship to the public who use the roadways similar to that of a passenger physically present in the vehicle. As we have stated, a passenger must avoid distracting the driver. The remote sender of a text who knows the recipient is then driving must do the same." Read more here.