Transfer of Arbitral Awards to Court of Execution is Unncessary: SCI Clarifies

Way back in 2011, we did a post providing a descriptive comment on the decision of the Madras High Court in Kotak Mahindra Bank Ltd. v Sivakama Sundari S Narayana S B Murthy where it was held that it was not really necessary to file the award in the court within whose jurisdiction the award was transferred for the purposes of executing it in another court. But some High Courts had held that it was so required as the Code of Civil Procedure, 1908 necessitated it in the context of decrees and that since the arbitral award was deemed to be a decree, the execution of the arbitral award had to also undergo the same rigour. 

In view of the divergence in views of different High Courts, the Supreme Court has clarified the legal position, correctly, in the case of Sundaram Finance Ltd.v. Abdul Samad. This presentation provides a descriptive comment of the judgement of the Supreme Court.

The presentation concludes by arguing that the vestigial requirement of filing the award in the court having jurisdiction over the arbitration for onward transfer to the executing court had the effect of only delaying the award holder from enjoying the fruits of the arbitral award and that the decision has paved way for an easier and more efficient execution of arbitral awards. 

This begs a larger question: Is filing a decree in the civil court which passed the judgement really necessary? 

Further Updates on the Nissan- Government of India Treaty Arbitration

Readers would recollect that we had done a post on the invocation of investor treaty arbitration by Nissan against the Government of India for the default committed by the State of Tamil Nadu. In the presentation uploaded in the post, we had noted that the State of Tamil Nadu had filed a petition in the Madras High Court seeking an anti-arbitration injunction against Nissan from proceeding with the arbitration. Nissan had filed a counter in the Madras High Court stating, among other things, that the Government had filed the suit belatedly after 10 months from the invocation of arbitration (February 2017)

Nissan had also moved an anti-suit injunction seeking to restrain the Government from proceeding further in the suit. 

Newspapers report that Nissan is now mulling withdrawal of the application for anti-suit injunction. It appears that the application it filed with the tribunal, whose seat is at Singapore, could not be taken up by the tribunal owing to the Chinese New Year. These submissions were made in the Madras High Court in the recent hearing held in the matter. The Judge has posted the matter on 27 February to enable Nissan's counsel to obtain instructions from his client on the anti-suit injunction it sought from the tribunal. 

The newsreport from the Hindu can be accessed from here.

It also appears that against the arbitration notice, the Government had raised jurisdictional issues and had appointed Justice JS Khehar (former Chief Justice of India) as its nominee arbitrator. It also appears that Nissan had no objections to the tribunal bifurcating the arbitration by deciding the jurisdictional issues first. (See this newsreport)

We'll keep the readers posted on further proceedings in the matter.

Lok Prahari and the Aesop's Fable

The Supreme Court of India resembled the council of rats in Aesop's fables while deciding Lok Prahari v. Union of India. Everyone knew the necessity to rein in the unscrupulous politicians who amass wealth merely by being a legislator or position of power in a political party. The petitioner presented a list of legislators who had 500% enhancement in assets within the span of a single term in legislature. The ultimate question is what the wise old mouse asked, who would bell the cat?

The chequered history of attempts to control ‘money power’ in elections exposes sporadic efforts by the judiciary, which were undercut systematically by the executive and legislature. The legislative inaction does not surprise anyone as our politicians aren't that dumb to kill the goose laying golden eggs.

The acrobatic manoeuvres our elected members of central government and legislature featured to avoid the impact of ADR judgment [(2002) 5 SCC 294] is alive for anybody who follows India’s electoral laws. (Read pages 14-19 of the Lok Prahari judgment for a summary). 

Had there been political will and resolve, the nudge in ADR would have been enough to gain ground in regulating unjust enrichment by our elected representatives. In para 48 (3) of ADR the court had mandated declaration of the following with nomination:

(3) The assets (immovable, movable, bank balance, etc.) of a candidate and of his/her spouse and that of dependants. 

If this was followed up guided by the spirit of democracy, Jay Shah, Amit Shah’s son would not have had golden touch at his finger tips. Binoy Vinodhini Balakrishnan, son of a veteran Marxist politician would not have been in a position to get sizable amount of loan from an entity in Dubai and land up in a scandal. Interestingly his dues have been recently paid off by undisclosed business person/s. Bineesh Kodiyeri another son just happened to be the Vice President of Mr. Ravi Pillai’s firm. Questioning his qualification for the post wont fetch any tenable answers other than being the son of Mr. Kodiyeri Balakrishnan.

Lok Prahari asked the court to address such problems and the judiciary prescribed some solutions, which needs legislative and executive backing. Ironically, the same group of people who benefit out of inaction. One has to be extremely wishful to expect the legislature to act.

The cat of the folklore will continue to maraud the rats as yet another indicator of a dying democracy. 

Citizens United - Guns – Electoral Bonds in India

An aspect where both the majority and minority opinions in Citizens United v. FEC 558 U.S. 310 (2010) united was on the value of section 203 of Bipartisan Campaign Reform Act, 2002 to democracy. The majority sustained the disclosure norm in section 203 about political contribution, though restriction on political funding was taken down citing first amendment. 

In the wake of yesterday’s Florida School shooting, the President of United States addressed the nation, carefully avoiding the word gun being mentioned even once. The Guardian reports that seven weeks into 2018 there has been already eight shootings in US Schools. Too many too soon to ignore about the issue of guns but only to focus on the mental health of the alleged shooter, especially since shooter is a white American which leaves out other possible narratives. Incidentally one of the first Bills this President signed was to ease conditions for procuring guns by people with mental illness. 

This raises two questions, why should a President do something like enabling mentally ill persons to legally possess guns and what prevents the President from calling the spade what it is. To develop the question further, why does the congress consistently failing to legislate on guns within permissible limits, which any sensible legislature would do? Why are the State legislatures relatively silent on the issue?

Answer to all questions is writ large on the power gun lobby wields in US politics, through electoral funding. The dynamics of lobbying is such that the National Rifle Association and allied actors can sway representatives through contributions.

Citizens United facilitated flow of funds to political parties aiding purchase of policies and laws but did not obliterate the trail of money. Justice Stevens in his dissent had mentioned that ‘a democracy cannot function effectively when its constituent members believe laws are being bought and sold.’ in US at the least there still exist a posibility to link the actions of politicians to their donors as there is disclosure of fund flow. 

India has recently introduced a new form of election funding through ‘electoral bonds.’ These bonds of specified values are issued by designated Banks, which can be bought and presented to preferred political party/ies. The political party need to declare the receipt of encashment of bonds in its Income Tax returns. 

The electoral bonds will keep public completely out of loop and will not reveal who contributed to whom. 'We the people' will have no idea who has bought and sold the law and policies governing ‘us,’ the most dispensable commodity in Indian democray. Government through bank and IT returns will have clear idea who has contributed to whom helping them to profile contributors to rival political parties. Politcal parties will know their benefactors and therefore whose interst to cater. Paradox is that Mr. Arun Jaitly tout this as a step towards transparancy in political funding.

In US, when they are hit by a bullet at least they know who paid for it.