Volume I Issue III (September, 2020 to December, 2020)
The increasing significance of international commercial transactions has brought arbitration to the forefront of alternate dispute resolution methods. With the emergence of this means of dispute settlement, the concept of “third-party funding in arbitration” has also generated interest among several countries. In the past few years, there has been an upsurge of cases with third-party funders around the globe. This begs for an important question — why is India silent on this issue?
Confidentiality is one of the hallmark considerations among parties when choosing arbitration as their preferred dispute resolution mechanism. There are various reasons for this. Primarily disclosure of information such as trade secrets, pricing policies, technical know-how, production methods or profit margins could harm a party’s standing among its competitors. It could also have an impact on the image of a company in front of the public at large. Additionally, it may expose the financial situation of a company, the existence of a defective product, situations or agreements that could compromise the image of a company in front of the public and competitors. While parties to an arbitral agreement are at liberty to enter into confidentiality agreements enforceable during the arbitral proceedings however often these agreements do not bind the agents, representatives, third parties, arbitrators or the administrative staff of the tribunal. However, the scope of the duty of confidentiality as well as who is confined within the contours of such duty are points of contention in both International Commercial Arbitration (“ICA”) and International Investment Arbitration.
Sovereign Immunity in International Commercial Arbitration: A Clampdown on Enforcement of Foreign Awards? by Ashik Shoukath & Pratyusha Ivaturi
The “Doctrine of Sovereign immunity/ State immunity” is a principle of international law which grants immunity to a State from the adjudication and enforcement of a claim in a foreign Court. This principle is founded on the concept that all states are equal and hence, the Courts of one State do not have the jurisdiction over another State. Regarding the extent of immunity enjoyed, the said doctrine has given way to two schools of thought namely — a) absolute immunity and b) restrictive immunity. The absolute immunity approach holds that all acts of a State are completely immune from the adjudication and enforcement in a foreign Court. This approach hinges on the rule that a state’s sovereignty cannot be violated by subjecting it to a foreign Court, unless it specifically consents to submit it to the latter’s jurisdiction.
Ethical Concerns Surrounding Third-Party Funding in Indian Arbitration: The Need for Legislation by Riya Narichania & Akshita Tiwari
The concept of third-party funding (“TPF”) is unchartered territory in the Indian legal system. It is the financing of arbitration expenses by “strangers to the arbitration” which enables the claimants to access justice in meritorious cases, in exchange for a monetary share in the final award. It proves to be an unconventional investment opportunity with almost concrete returns for the funder, Third-party funders act as enablers for cash-strapped parties to access justice, which would be unobtainable in other circumstances. TPF is not alien to common law jurisdictions; it has been legalised by several countries such as the United Kingdom, United States of America, Australia and Singapore.
Parties seldom choose the governing law of the arbitration agreement. This has frequently given rise to complexities. The simplest and most obvious solution, but one that is not yet established for some reason, is for arbitration clauses to make an explicit choice of the law applicable to that particular clause itself rather than to the matrix contract of which the clause is one small element. The recent decision of the United Kingdom Supreme Court in Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb has been successful in providing some much-needed clarity regarding this. It has addressed the principles for ascertaining the proper of an arbitration agreement.
One of the pertinent purposes of arbitration is to resolve disputes in a timely manner. However, due to various scenarios of arbitration proceedings not being completed quickly, the Indian legislature introduced the 2015 Amendment section 29A to the Arbitration and Conciliation Act, 1996. This new provision provided a time limit of 12 months for the completion of arbitration proceedings initiated under the Act from the date on which the tribunal enters reference. This provision underwent further amendment in 2019, by way of which the time period of 12 months has to be calculated from the date on which the pleadings are completed, as provided under section 23(4) of the Act. The issue arose as to whether this amendment is supposed to be applied retrospectively or prospectively. The Delhi High Court addressed this issue in the matter of ONGC Petro Additions Limited v. Ferns Construction Co. Inc.
This research paper intends to explore the complex and multidisciplinary approach towards decoding the status of granting AAIs in India against international arbitrations, both International Commercial Arbitration (ICA) and International Investment Arbitration (IIA). The analysis done in this paper focuses on the effect of AAI on the concerns about sources of the jurisdiction in an arbitration, the status of arbitration, the efficiency of dispute resolution in India internationally, and finally its tacit effect on the commercial market development of India in terms of its ease of doing business rank.