The Dispute Resolution Review: India
Introduction to the dispute resolution framework
As with most common law countries, Indian law may broadly be classified as substantive or procedural law. While substantive laws determine rights and liabilities of parties or confers legal status or imposes and defines the nature and extent of legal duties, procedural laws prescribe practice, procedure and machinery for the enforcement or recognition of rights and liabilities.2 To put it another way, substantive laws are those that are enforced while procedure deals with the rules through which the substantive laws are enforced.3
Dispute resolution in India may be through courts, specialised tribunals (such as those for recovery of debt by banks or company disputes, among others) or alternative dispute resolution (ADR) mechanisms that include arbitration, mediation and conciliation. The amendment to the Commercial Courts Act 2015 (Commercial Courts Act) provides for the constitution of commercial courts at a district level, except in areas where the High Court exercises ordinary civil jurisdiction and provides for commercial divisions (in all High Courts having ordinary civil jurisdiction) and commercial appellate divisions in each High Court for the adjudication and speedy disposal of commercial disputes4 of a specified value of not less than 10 million rupees or such other notified value within the limits of the relevant territorial jurisdiction.5 The amendment mandates pre-institution mediation in all cases except in suits or applications in which urgent relief is sought and further prescribes a maximum period of three months for the completion of the process of mediation.
The primary laws codifying court procedure in India are the Code of Civil Procedure 1908 (CPC) and the Code of Criminal Procedure 1973 (CrPC). Charter High Courts such as the High Courts of Bombay, Calcutta, Delhi and Madras may also apply Letters Patent Rules, which, when applicable, may override the provisions of the CPC. The procedure to be applied by tribunals is often governed by the statute that establishes the tribunal (and rules framed thereunder). Courts have held that the principles contained in the CPC would continue to apply to tribunals even if the tribunals are not bound to follow specific provisions of the CPC.6
While the legislative and executive branches of the government follow a federal structure, the Indian judicial system comprises a unified three-tier structure with the Supreme Court of India (Supreme Court) holding the position of the apex court. Below the Supreme Court are the High Courts, functioning (in most cases) in each state. Lower in the hierarchy are the subordinate courts, which include courts at the district level and other lower courts.
Law declared by the Supreme Court is binding on all other courts in India.7 By acceptance of the doctrine of stare decisis, law declared by High Courts binds subordinate courts8 and may have persuasive value over High Courts of other states.9 The Supreme Court and the High Courts are charged with original,10 appellate and writ jurisdiction. Under the writ jurisdiction, they have the power to review administrative actions including for the purposes of the enforcement of constitutional and fundamental rights granted under Part III of the Constitution of India.
The Arbitration and Conciliation Act, 1996 (Arbitration Act) governs the law related to domestic arbitration, foreign-seated arbitration and enforcement of foreign awards in India. The Arbitration Act is based on the UNCITRAL Model Law as adopted by the United Nations Commission on International Trade Law on 21 June 1985. Mediation and conciliation have also been given statutory recognition through the Arbitration Act.
As a recent trend, even courts often promote ADR. This was discussed in great detail in the case of Afcons Infrastructure Limited v. Cherian Varkey Construction,11 where the Supreme Court laid down guidelines for courts to follow for the effective implementation of Section 89 of the CPC, which encourages parties to settle their disputes by means of ADR. The Supreme Court in Perry Kansagra v. Smriti Madan Kansagra12 identified various kinds of disputes where ADR may be a better alternative than litigation, such as cases relating to trade, commerce and contracts including, inter alia, money claims arising out of contracts. Disputes relating to specific performance or disputes between insurer and insured, bankers and customers were also considered to be better resolved through an ADR mechanism rather than litigation.
The year in review
The year 2021 witnessed a series of amendments aimed at introducing greater ease of doing business in India, and at bringing the current law into line with the rapid economic growth in the country to aid, inter alia, foreign direct investments, public–private partnerships and public utilities infrastructure developments. A series of measures were taken by the legislature and judiciary to adapt to developments on account of the covid-19 pandemic.
The government has continued its effort to streamline the insolvency law. The Parliament enacted the Insolvency and Bankruptcy Code (Amendment) Act, 2021 introducing an alternate insolvency resolution process for micro, small and medium enterprises (MSMEs), termed the pre-packaged insolvency resolution process. The IBC, which came into effect on 1 December 2016, is a comprehensive piece of legislation that seeks to replace extant insolvency and restructuring laws in India and proposes to cover corporate persons (i.e., companies and limited liability partnerships), individuals and partnerships. The National Company Law Tribunal (NCLT) benches have been vested with jurisdiction in respect of insolvency and restructuring proceedings against corporate persons in India, while the Debt Recovery Tribunal will oversee proceedings against individuals and partnerships. In view of the increasing caseload, the central government has set up a new bench for the National Company Law Appellate Tribunal in Chennai in addition to the principal bench in New Delhi.
The Parliament enacted the Tribunal Reforms Act, 2021 to dissolve certain existing appellate bodies and transfer their functions (such as adjudication of appeals) to other existing judicial bodies with a view to rationalising the functioning of the tribunals.
The Parliament has also enacted the Taxation Laws (Amendment) Act, 2021 to, inter alia, amend the Income Tax Act, 1961 and Finance Act, 2012. The Finance Act, 2012 had amended the Income Tax Act, 2012 to impose tax liability on income earned from the sale of shares of a foreign company on a retrospective basis. The Taxation Laws (Amendment) Act, 2021 seeks to nullify the retrospective basis for taxation, provided such taxed persons fulfil the conditions prescribed therein.
Owing to the financial stress caused by the covid-19 crisis and with the object of avoiding corporates, especially in MSMEs, from being forced into insolvency or liquidation, the central government issued a notification on 24 March 2020 to increase the threshold of the minimum amount of default for the purpose of initiating the corporate insolvency resolution process (CIRP) under Section 4 of the IBC from a sum of 100,000 rupees to 10 million rupees.
Subsequently, on 5 June 2020, the central government introduced Section 10A into the IBC suspending the operation of Sections 7, 9 and 10 of the IBC, which deal with applications filed against corporate debtors by financial creditors, operational creditors and the corporate debtors themselves for a minimum period of six months starting from 25 March 2020, which period can be further extended up to a maximum of one year. As a result, no new application can be filed under Sections 7, 9 and 10 of the IBC for the initiation of the CIRP of a corporate debtor for a default that has occurred after 25 March 2020. The Supreme Court in Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt Ltd 13 considered the issue of whether Section 10A of the IBC will be applicable to an application under Section 9 filed prior to 5 June 2020 (i.e., the date on which the provision came into force) in respect of a default that has occurred after 25 March 2020. The Court held that Section 10A bars the filing of applications for the commencement of corporate insolvency resolution processes in respect of a default that has occurred on or after 25 March 2020 even if such application was filed prior to 5 June 2020.
The initial period of suspension of six months was extended by the government by a notification dated 24 September 2020 until 25 December 2020. On 22 December 2020, the government further extended the suspension of the said provisions for a period of three months until 25 March 2021. In view of the improvement in the economy, the central government decided against a further extension beyond 25 March 2021. The National Company Law Tribunal (NCLT), Kolkata bench, in Foseco India Limited v. Om Boseco Rail Products Limited, 14 has held that the increase in threshold for initiating the CIRP is prospective in nature, and therefore the increased threshold limit would not be applicable to applications that were pending admission on 24 March 2020. The NCLT held that it is a settled position in law that a statute shall have prospective and not retrospective effect unless specified (either expressly or by necessary implication). The aforesaid decision has been upheld by the National Company Law Appellate Tribunal, New Delhi, in Madhusudan Tantia v. Amit Choraria and Ors.15
In view of the hardships faced by lawyers and litigants due to the covid-19 pandemic, in March 2020, the Supreme Court in exercise of its powers under Article 142 read with Article 141 of the Constitution has extended the period of limitation for filing petitions, applications, suits, appeals and all other proceedings within the period of limitation prescribed under the general law of limitation or under special laws with effect from 15 March 2020 until further notice.
This order of extension also applies to:
- all periods of limitation prescribed under the Arbitration Act and under Section 138 of the Negotiable Instruments Act, 1881 (Dishonour of cheque for insufficiency etc. of funds);
- extension of the time limit for passing arbitral awards under Section 29A of the Arbitration Act, which provides for making an arbitral award within a prescribed time;
- extension of the time period for the completion of a statement of claim and defence under Section 23(4) of the Arbitration Act (which provides for six months); and
- the time period prescribed under Section 12A of the Commercial Courts Act, 2015 for completing the process of compulsory pre-litigation, mediation and settlement stands extended by 45 days after the lockdown is lifted. No further period will be excluded after the expiry of the period of lockdown plus 45 days.
However, parties are not allowed to claim the benefit of the 23 March 2020 order for extending the period up to which a delay can be condoned, as the scope of the 23 March order is restricted to extending only the period of limitation and not the period up to which delay can be condoned.16
In view of the resurgence of covid-19 cases in India, the Supreme Court by its order dated 10 January 2022 has restored the order of 23 March 2020 and issued the following directions:
- In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15 March 2020 until 28 February 2022 shall stand excluded. The balance period of limitation remaining as on 3 October 2021, if any, shall become available with effect from 1 March 2022.
- In cases where the limitation period would have expired between 15 March 2020 and 28 February 2022, all persons shall have a limitation period of 90 days from 1 March 2022, notwithstanding the actual balance period of limitation remaining. In such case, if the actual balance period of limitation with eﬀect from 1 March 2022 is greater than 90 days, that longer period of limitation shall apply.
- The period between 15 March 2020 and 28 February 2022 shall stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration Act, Section 12-A of the Commercial Courts Act, 2015, and Provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881. This is also applicable for any other laws that prescribe periods of limitation for instituting proceedings, outer limits (within which a court or tribunal can condone delay) and termination of proceedings.
There were also a number of significant judgments of the courts in 2021.
The Supreme Court in Amazon.com NV Investment Holdings LLC v. Future Retail Limited 17 held that an emergency arbitrator's award is an order of an arbitral tribunal under Section 17(1) and is enforceable under Section 17(2) of the Arbitration & Conciliation Act, 1996 (Arbitration Act). Further, the Court also held that no appeal shall lie against an order passed under Section 17(2) of the Arbitration Act for enforcement of an emergency arbitrator's award. The Court observed that Section 37 provides for appeals only from orders made by an arbitral tribunal granting or refusing interim measures under Section 17(1) but not against orders made by a court under Section 17(2) of the Arbitration Act for enforcement of a tribunal's interim order.
The Supreme Court in Gemini Bay Transcription Pvt Ltd. v. Integrated Sales Service Ltd 18 held that a foreign award can be binding on non-signatories to the arbitration agreement and thus can be enforced against them. The Court observed that Section 46 of the Arbitration Act refers to 'persons as between whom it was made' which is a wider term than parties and, therefore, can include non-signatories to the agreement. The Court held that enforcement of a foreign arbitral award cannot be resisted on the ground that it has been passed against a non-signatory under Section 48(1) of the Arbitration Act. Therefore, a foreign award can be enforced against non-signatories to an arbitration agreement.
The Supreme Court in Lalit Kumar Jain v. Union of India19 upheld the constitutional validity of the notification dated 15 November 2019 issued by the central government making personal guarantors liable to insolvency proceedings under the Insolvency and Bankruptcy Code, 2016. The Supreme Court also held that approval of a resolution plan for the corporate debtor does not ipso facto discharge a personal guarantor (of a corporate debtor) under the contract of guarantee. This is because the release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process – that is, by operation of law, or due to liquidation or insolvency proceedings – does not absolve the surety or guarantor of his or her liability, which arises out of an independent contract.
In PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited,20 the Supreme Court dealt with following issues; whether two companies incorporated in India can choose a forum for arbitration outside India, and whether the award passed at such forum can said to be a foreign award under Part II of the Arbitration Act.
The Supreme Court held that Section 28 of the Arbitration Act cannot be interpreted to interdict two Indian parties from resolving their disputes at a neutral forum in a country other than India. In agreeing to a neutral forum outside, the Court observed that the parties are provided with two options; first, the opportunity to challenge the award on the grounds available in that country where arbitral award is passed. Secondly, parties avail the option of resisting the enforcement of the foreign award between two Indian parties on the grounds mentioned under Section 48 of the Arbitration Act. The Supreme Court upheld party autonomy to be the 'brooding and guiding spirit of arbitration' and held that Indian parties can choose a foreign seat of arbitration.
The Supreme Court in Delhi Airport Metro Express (P) Ltd. v. DMRC,21 in determining the limits of the powers of courts under Section 34 of the Arbitration Act when adjudicating applications filed under the above provision, stated that mere contravention of a statute is no longer sufficient grounds for setting aside an arbitral award. The Supreme Court observed that the construction of a tribunal under the terms of the agreement in question could not be replaced by a court. A court may set aside an arbitral award only on grounds of public policy or public interest.
The Supreme Court in NN Global Mercantile Pvt Ltd v. Indo Unique Flame Ltd & Ors22 was of the opinion that non-payment of stamp duty under a substantive contract will not render the arbitration clause invalid, non-existent or unenforceable by law until the stamp duty is paid on the substantive commercial contract. Therefore, the bench has referred the matter to a Constitution Bench of five judges.
The Court observed that the arbitration agreement, being a separate and distinct agreement from the underlying commercial contract, would survive independent of the substantive contract. The Supreme Court also overruled its earlier judgment in SMS Tea Estates23 in respect of the following two issues: that an arbitration agreement in an unstamped commercial contract cannot be acted upon, or is rendered unenforceable in law; and that an arbitration agreement would be invalid where the contract or instrument is voidable at the option of a party, such as under Section 19 of the Indian Contract Act, 1872.
The Supreme Court in The Project Director, NHAI v. M. Hakeem24 held that Section 34 of the Arbitration Act does not empower the Court to modify an arbitral award. The limited remedy available under Section 34 is either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act. The Court may not correct the errors of the arbitrators, but rather quash the award, leaving the parties free to begin the arbitration again if it is so desired.
In Vidya Drolia and Ors. v. Durga Trading Corporation,25 a three judge bench of the Supreme Court held that landlord–tenant disputes under the Transfer of Property Act, 1882 (TP Act) are arbitrable. The Supreme Court held that:
- landlord–tenant issues are not actions in rem but pertain to subordinate rights in personam that arise from rights in rem;
- actions under the TP Act do not normally affect third-party rights;
- landlord–tenant disputes do not relate to inalienable and sovereign functions of the state; and
- an award passed deciding landlord–tenant disputes can be executed and enforced like a decree of the civil court.
Therefore, such issues are amenable to arbitration.
The Supreme Court overruled its decision in Himangni Enterprises v. Kamaljeet Singh Ahluwalia,26 in which the Supreme Court had held that a civil suit filed for adjudication of a dispute under the TP Act was maintainable and could not be resorted to arbitration. However, the Supreme Court went on to further clarify that landlord-tenant disputes which are covered and governed by rent control legislation would not be arbitrable when a specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations.
i Overview of court procedure
It can be seen in connection with the Indian legal system (as a criticism more than a compliment) that 'there is ample – sometimes excessive – due process; and one has to be patient and persevering'.27 Broadly, court procedure in India is governed by the CPC for civil matters and the CrPC for criminal matters. As discussed above, even where statutes create specialised tribunals and courts to deal with particular disputes, it is sometimes recognised that the principles contained in the CPC and CrPC would continue to apply. This is often so because provisions in the CPC and the CrPC are recognised as the embodiments of the principles of fair play, natural justice and due process.
ii Procedures and time frames
The primary statute governing limitation is the Limitation Act 1963. As a general rule, most suits, especially those relating to contracts and accounts, have a limitation period of three years for filing. Some suits relating to immovable property may fall within a longer limitation ranging from three to 30 years.28 The periods prescribed under the Limitation Act may not apply in the event a specific statute prescribes a period of limitation.29
Where a plaintiff approaches a court for injunctive relief, especially at an interlocutory stage, the court may require the plaintiff to demonstrate (quite aside from being within limitation) that the plaintiff has acted in a timely manner and has not acquiesced to the infringement of its rights.30
The Supreme Court in Wockhardt Limited v. Torrent Pharmaceuticals Ltd and Ors clarified this position by stating that acquiescence cannot be equated with delay. There should not be mere silence or inaction on the part of the plaintiff but a refusal or failure to act despite knowledge of invasion and opportunity to stop it.
A writ court may require a petitioner (although no limitation is prescribed for writs) to demonstrate that he or she has approached the court without delay, since a delay may disentitle a petitioner to relief.31
The CPC was amended by virtue of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act coming into force in 2015. According to the amended provisions of Order V Rule 1(1) and Order VIII Rules 1 and 10 of the CPC,32 a party is granted 30 days to file its written statement, and a grace period of 90 days is provided wherein a court can, after recording the reasons for delay in filing and after imposing costs, allow a written statement to be taken on record. It was further held by the Supreme Court in the case of M/s SCG Contracts India Pvt Ltd v. KS Chamankar Infrastructure Pvt Ltd & Ors33 that the failure to file written statements within the statutory time period of 120 days for filing written statements in a commercial suit will result in the forfeiture of the right of the defendant to file a written statement, and the court would not be able to use its inherent powers to avoid the consequences emanating from the aforesaid provision. The CPC also curtails the number of adjournments that may be sought and attempts to curtail practices that are often perceived as dilatory, such as belated amendments to pleadings34 and belated production of documents.35 The Constitution Bench of the Supreme Court in New India Assurance Co Ltd v. Hilli Multipurpose Cold Storage Pvt Ltd 36 has clarified that there was no scope for extending the time for filing of written statements beyond the period of 120 days in commercial suits, as the provision with regard to such suits is mandatory. The Supreme Court in Shoraj Singh v. Charan Singh37 held that the timeline prescribed under Order VIII Rule 1 of the Code of Civil Procedure, 1908 for filing the written statement is mandatory for the purposes of commercial cases filed before the commercial courts under the Commercial Courts Act, 2015.
It is pertinent to note that the Arbitration Act as amended by the 2019 Amendment Act mandates time-bound arbitrations. It now provides that the pleadings in a case be completed within six months from the appointment of the arbitrator. An arbitral award is now required to be made within 12 months from the completion of the pleadings in domestic arbitration. The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of 12 months from the date of completion of pleadings under Subsection (4) of Section 23.38 Parties may also agree in writing to have their dispute resolved by fast-track procedures, which would require the award to be made within six months from the date of entry of the arbitral tribunal upon reference.39 If the court passes any interim measure under Section 9 of the Arbitration Act, the arbitral proceedings must commence within 90 days of the court passing such an order.40
The Commercial Court Act has also set a time limit of 30 days for the submission of written arguments and 90 days from the date of conclusion of arguments for the pronouncement of a judgment. Appeals have to be disposed of by the appellate body within 60 days from the date of the appeal.
The IBC provides a period of 330 days from the insolvency commencement date as the period of the insolvency resolution process that culminates with the submission of a resolution plan to the NCLT.41 However, owing to the covid-19 pandemic, the Insolvency and Bankruptcy Board of India on 29 March 2020 issued a notification directing that the period of lockdown imposed by the central government shall not be counted for the purposes of the timeline for any activity in relation to a CIRP. In spite of these recent developments to reduce time frames, the time taken for the completion of a trial in civil and criminal proceedings may be several years.
iii Class actions
The CPC recognises that where there are numerous persons with the same interest in one suit, one or more of such persons may, with the permission of the court, sue or be sued, or may defend such suit on behalf of or for the benefit of all persons interested.42
The Companies Act 1956 and the Companies Act 2013 stipulate that a specified number of members or depositors may, if they are of the opinion that the management or control of the affairs of a company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the company law tribunal on behalf of the members or depositors.43
The Supreme Court has in the exercise of its writ jurisdiction long recognised the ability of an individual or a group of individuals to bring public interest litigations to espouse the cause of larger sections of society.44
The Consumer Protection Act, 2019 provides for the establishment of the Central Consumer Protection Authority, which is empowered to, inter alia, regulate matters relating to rights of consumers, and promote, protect and enforce the rights of consumers as a class.45
iv Representation in proceedings
The Constitution guarantees the right of a person accused of an offence to be represented by a legal practitioner of his or her choice.46
In other proceedings, while litigants are typically represented by advocates enrolled under the Advocates Act 1961, there may be exceptions to the rule. For instance, the Family Courts Act47 stipulates that a party may be represented by an advocate only if the court thinks that it is necessary for a fair trial. This provision of the Family Courts Act has now been challenged before the Rajasthan High Court.48 The Advocates Act49 empowers a court to permit any person who has not been enrolled as an advocate to appear before it in any particular case.
v Service out of the jurisdiction
Under the CPC, when a defendant resides outside India and no agent in India is empowered to accept service, summons or notice may be sent by courier or post service as approved by the appropriate High Court. This provision must, however, be read together with the procedure prescribed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965, to which India is a party.
The CrPC recognises bilateral arrangements and makes compliance with such an arrangement mandatory. It is prescribed that summons or warrants issued by a court in India should be served and executed in accordance with the bilateral arrangement, if any. In addition, the Ministry of Home Affairs in India has, by a circular dated 11 February 2009, clarified the procedure to be followed for the issuance of summons to a foreign resident (MHA Circular). Under the MHA Circular, all requests for service of summons, notices or judicial processes on persons residing abroad shall be addressed to the Under Secretary (Legal) of the Ministry of Home Affairs. Thereafter, the Ministry, after scrutinising the request, can forward it to the relevant foreign officer.
vi Enforcement of foreign judgments
A money decree obtained from a court of a jurisdiction notified by the Indian Union Government as a reciprocating territory under the CPC can be enforced in India directly by filing an execution petition in a court of competent jurisdiction.52 As a result, judgments of courts not notified as reciprocating territories or decrees other than money decrees cannot be executed directly in India. A decree holder in such a case may file a fresh lawsuit in the Indian courts on the basis of the foreign judgment. In either execution proceedings or fresh suits filed on the basis of foreign judgments, parties may rely on Sections 1353 and 1454 of the CPC. In 2020, the central government issued an official gazette declaring the United Arab Emirates (UAE) a reciprocating territory for the purpose of Section 44-A of the CPC. The notification allows civil decrees and judgments passed by the specified courts of the UAE to be directly executed in India in a manner similar to a decree passed by a district court in India.
Section 44 of the Arbitration Act prescribes that a foreign award that arises out of an agreement to which the New York Convention on the Recognition and Enforcement of Foreign Awards (New York Convention) applies, and is made in one of the territories in respect of which the central government declares that the New York Convention applies on satisfaction that reciprocal provisions are being made, may be enforced in India. In this regard, the Arbitration Amendment Act has clarified that a foreign arbitration award may be set aside if it violates the public policy of India on the same grounds as described for domestic awards above. However, unlike domestic awards, foreign awards cannot be set aside on the ground of patent illegality.
vii Assistance to foreign courts
Assistance may be given to foreign courts55 on the basis of bilateral agreements with the reciprocating territories. In civil matters, the CPC provides for the service of foreign summons issued by certain specified courts only. In such cases, assistance is given when a defendant resides or works for gain or carries on trade or business within India and the summons itself may be a summons for the appearance of the defendant, production of documents or furnishing of information.56
Again, as discussed above, India is a signatory to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965, whose key objective is to improve the organisation of mutual judicial assistance by simplifying and expediting procedures.
viii Access to court files
Rules relating to access to court files may vary depending on the nature of the proceeding, who is seeking access and whether the proceeding is ongoing or concluded. In most cases, a person who is a party to the proceeding is allowed to search, inspect or have copies of all pleadings and other documents or records of the case. A third party seeking the information or record may need to apply to the court and show cause as to why they seek such information or record.
ix Litigation funding
Disinterested third-party funding is not common. While some courts have found that third-party funding may be permissible,57 other courts have often declined to uphold such agreements on the grounds of public policy or professional ethics.58 It has been held in a recent Supreme Court judgment that there appear to be no restrictions on a third party funding a litigation and getting repaid after the outcome of the litigation as long as they are not lawyers.59
i Conflicts of interest and Chinese walls
The Bar Council of India Rules (BCI Rules), notified by the Bar Council of India under the Advocates Act 1961, impose standards on advocates to ensure that conflicts of interest are avoided. These include:
- a prohibition on appearing for opposite parties in the same matter, and from taking instructions from anyone other than the client and the client's authorised agent;
- a prohibition on lending to a client, or converting funds in the advocate's hands to a loan, or adjusting fees against personal liability owed by an advocate to the client;
- a prohibition on bidding for, or acquiring an interest in, property of actionable claim involved in litigation;
- a prohibition on appearing in matters where the advocate has a pecuniary interest;
- a prohibition on becoming a party to stir up or instigate litigation;
- a prohibition on representing establishments of which the advocate is a member;
- a prohibition to stand as a surety to the client or certify the soundness of a surety that his or her client requires for the purpose of any legal proceedings;
- a prohibition on appearing in matters where he or she is a witness;
- a prohibition to trade or agree to receive any share or interest in any actionable claim;
- a prohibition to bid in court auction or acquire by way of sale, gift, exchange or any other mode of transfer any property that is the subject matter of proceedings in which he or she is professionally engaged;
- a prohibition on appearing in matters in which he or she has reason to believe that he or she will be a witness;
- a prohibition on appearing before relatives who are judges;
- the obligation to make a full and frank disclosure to a client relating to his or her connection with the parties and any interest in or about the controversy likely to affect his or her client's judgement in either engaging him or her, or continuing the engagement;
- the obligation not to disclose information or instructions provided by the client; and
- the obligation to fearlessly uphold the interests of his or her client by all fair and honourable means.
ii Money laundering, proceeds of crime and funds related to terrorism
While there are no specific obligations on lawyers with respect to money laundering, India has a strong legislative framework, including the Prevention of Money Laundering Act 2002, the Income Tax Act 1961, the Foreign Exchange Management Act 1999, the Foreign Contribution Regulation Act 2010, the Companies Act 2013, directions of the RBI and Securities and Exchange Board of India guidelines on Anti-Money laundering (AML) Standards and Combating Financing of Terrorism (CFT), which serves to detect and prevent money laundering and the proliferation of the proceeds of crime. The challenge to the provisions of the Prevention of Money Laundering Act, 2002 is pending before the Supreme Court.60
iii Data protection
Data protection in India is primarily governed by the Information Technology Act 2000 and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011 (IT Rules). These rules define sensitive personal data and information (SPDI)61 and prescribe the manner in which SPDI may be collected, processed, transferred, disclosed or stored. The IT Act provides for damages in the event that SPDI is not protected and wrongful loss is caused as a result.
The introduction of the IT Rules has affected how lawyers may collect and use SPDI. To the extent that SPDI is collected directly from a data subject, the consent of the data subject is required for the purpose of using the SPDI or the transfer of the SPDI.
In the context of due diligence and onward sharing of data with other law firms and legal process outsourcing companies, the levels of compliance appear higher inasmuch as data sharing agreements usually incorporate the requirements of the IT Rules. Further, if dealing with information of EU citizens, law firms are required to comply with the General Data Protection Regulation of the EU.
However, compliance with the procedures specified in the IT Rules by lawyers generally appear to be relatively lax when it comes to collection and use of data in the course of or for the purposes of litigation, especially as damages may be claimed only if wrongful loss can be proved.
In 2019, the central government presented the Personal Data Protection Bill, 2019 in the Parliament based on the recommendations of a committee headed by Ret'd Justice B N Srikrishna. The Bill is currently under the consideration of a joint parliamentary committee. The Bill provides for protection of personal data of individuals and envisages the constitution of the Data Protection Authority of India for the enforcement of its provisions. The Bill governs the processing of personal data by government, companies incorporated in India and foreign companies dealing with the personal data of individuals in India.
In Karthick Theodre v. Registrar General, Madras High Court,62 the Madras High Court held that the right to privacy and, particularly, the right to be forgotten cannot be invoked to seek redaction of names of accused persons who are acquitted from criminal proceedings, as judgments of courts constitute public records. The Court observed that it would be appropriate to await the enactment of the Data Protection Act and Rules thereunder to lay down an objective standard to enforce a 'right to erasure' as provided under Article 17 of the European General Data Protection Regulation.
iv Other areas of interest
As discussed above, most provisions of the Companies Act 2013 have been notified. There are certain significant changes with respect to the liability of actors such as directors63 and auditors64 under the Companies Act 2013. Further, the central government, with a view to incentivising compliance, de-clogging the criminal justice system and promoting a congenial business climate, has decriminalised certain offences under the Limited Liability Partnership Act, 2008.
For instance, directors of companies facing civil and criminal proceedings are now required to demonstrate that they acted diligently in connection with the subject matter of the dispute in order for them to be excused from personal liability.65 Under the previous jurisprudence, it was acceptable in some circumstances for non-executive and independent directors to take the defence that they were not involved in the day-to-day operations or management of the company.66 It is likely that this defence will no longer be available.
Recently, the Supreme Court reiterated the principle that a chairperson or managing director of a company cannot be made vicariously liable in criminal proceedings against the company without specifically attributing the role played by them in the offences alleged against the company. The Court held that the role played by key managerial personnel in their capacity is sine qua non for initiating criminal proceedings against them, and that merely because an individual is a chair, managing director or executive director of a company, without any specific role attributed to them and role played by them in their capacity, cannot cause them to be arrayed as an accused party, and that they cannot be held vicariously liable for offences committed by the company.67
Documents and the protection of privilege
Subject to specified exceptions,68 Section 126 of the Indian Evidence Act, 1872 (Evidence Act) prohibits an attorney69 from disclosing without his or her client's express consent any communication made to him or her in the course of and for the purpose of his or her employment as an attorney. Recognising the role of interpreters, clerks and other support staff employed by attorneys, the privilege is extended by Section 127 of the Evidence Act to facts coming into their knowledge in the course of their employment. Section 129 protects a client from being compelled to disclose any confidential communication that has taken place with his or her legal professional adviser.
As discussed above, an advocate is also prohibited by the BCI Rules from disclosing client communications or advice given by him or her to the client.
A contemporary area of interest around this question is whether the protection of attorney–client communication extends to in-house counsel. The area is not free from doubt. While the Bombay High Court in its judgment in Municipal Corporation of Greater Bombay v. Vijay Metal Works70 took the view that in-house counsel would be covered by privilege, this view was doubted by the same court in Larsen & Toubro Limited v. Prime Displays Private Limited 71 in light of the observations of the Supreme Court in Satish Kumar Sharma v. Bar Council of Himachal Pradesh72 and Shiv Kumar Pankha and Ors v. Honourable High Court of Judicature at Allahabad and Ors.73
ii Production of documents
Under the CPC, the court can, at any time during the pendency of any suit, order the production (under oath) of such documents relating to any matter in question in such suit. Further, the Evidence Act provides that a witness summoned to produce a document must, if it is in his or her possession, bring it to court regardless of any objection to its production or admissibility.74
If a party asserts privilege over a document that it is asked to produce and this assertion is disputed by the opposite party or not accepted by the court, it is likely that the court would review the claim for privilege and possibly the documents under seal and decide on whether the protection of privilege applies.75
Alternatives to litigation
i Overview of alternatives to litigation
Since India has permitted foreign investments in various industries and sectors through its new liberal policies, there has been a considerable increase in the number of commercial disputes. As a mechanism to deal with its heavy caseload, India has striven to encourage ADR mechanisms. In several areas, and even at the level of the High Courts and the Supreme Court, the law has allowed for parties to be directed towards ADR.76
Apart from the Arbitration Act, the Supreme Court of India in Salem Bar Association v. Union of India77 recommended the adoption of arbitral rules that were formulated by the Jagannadha Rao Committee. The draft rules made by the Committee were circulated to all the High Courts and have been relied on and cited as recently as in 2019.78 The rules provide for the procedure according to which referral to ADR mechanisms under Section 89 of the CPC can take place, including the stage at which the referral can take place. Guidelines to be observed by the court before making such referral have also been set out.
The arbitration framework, however, has been outlined in the central Arbitration Act, which provides for various matters such as the interpretation of the arbitration agreement, interim measures that can be taken, appointment and termination of arbitrators, place and procedure for the arbitration and grounds for challenges and, the setup of an Arbitration Council in 2019.79 India is also party to the three main international conventions that govern international arbitrations in different territories and that have been consolidated under the Arbitration Act:
- the Geneva Protocol on Arbitration Clauses of 1923;
- the Convention on the Execution of Foreign Awards 1923; and
- the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).
The Arbitration Act is applicable both to domestic and foreign-seated arbitrations. Part I covers the scope of domestic arbitrations, whereas Part II covers foreign-seated arbitrations and the enforcement of foreign awards. Part I defines the scope of what constitutes arbitration,80 the essentials of an arbitration agreement81 and the procedure for determining the validity of such an agreement.82 It is important to note in this regard that there are limited instances and time-bound procedures for challenging the validity of such an agreement and the arbitral tribunal has the power to determine its jurisdiction. Section 5 of the Arbitration Act specifically provides, with respect to Part I, that no judicial authority may intervene in arbitration except in a case where a stipulation to this effect has been made.
The initial years of the implementation of the Arbitration Act saw a regressive interpretation that allowed frequent and wide-sweeping judicial intervention from Indian courts. The judgments of the Supreme Court and High Courts have, however, broken the trend and are serving to restore confidence in India as a potential arbitration destination. The Arbitration and Conciliation (Amendment) Act 2015 has also introduced various provisions that promote arbitration by reducing the timelines and costs involved.
Further, although statistically there are more ad hoc arbitrations conducted in India, the use of institutional arbitration is growing gradually. This has to do in part with reputed arbitration institutions such as the Singapore International Arbitration Centre setting up establishments in India. India's first international arbitration centre, the Mumbai Centre for International Arbitration, was set up in Mumbai in 2016. The High Courts at Delhi, Karnataka, Punjab and Haryana, Madhya Pradesh, Madras, Odisha, inter alia, have set up arbitration centres with the objective of providing recourse to credible yet affordable arbitration. With a view to promote institutional arbitration, the Parliament enacted the New Delhi International Arbitration Centre Act, 2019 to provide for the establishment and incorporation of the New Delhi International Arbitration Centre for the purpose of creating an independent and autonomous regime for institutionalised arbitration and to make India a hub for institutional arbitration.
On 4 November 2020, the President promulgated the Arbitration and Conciliation (Amendment) Ordinance, 2020. Under the amended Section 36 (Enforcement) of the Arbitration Act, the court is empowered to grant an unconditional stay on the enforcement of an arbitral award if it is prima facie satisfied that the arbitration agreement or the contract that is the basis of the award or the making of the award was induced or effected by fraud or corruption. The stay granted by the court may also operate during the pendency of the challenge to the award under Section 34 of the Arbitration Act (i.e., to set aside the award).
The Ordinance also omits the Eighth Schedule and stipulates that the qualifications, experience and norms for accreditation of arbitrators shall be prescribed by regulations. Subsequently, the Arbitration and Conciliation (Amendment) Ordinance, 2020 was substituted by the Arbitration and Conciliation (Amendment) Act, 2021.
The recent Code on Industrial Relations, 2020 permits employers and workers to agree to refer a dispute to arbitration by a written agreement.
Application of the Arbitration and Conciliation (Amendment) Act, 2015
It has been clarified that unless the parties otherwise agree, the amendments made to the Act by the Arbitration and Conciliation (Amendment) Act, 2015 shall not apply to arbitral proceedings that began before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (i.e., 23 October 2015). As this provision overruled the position laid down by the Supreme Court in BCCI v. Kochi Cricket Pvt Ltd,83 the Supreme Court of India struck it down on the ground of manifest arbitrariness, and it was held to be in violation of Article 14 of the Constitution.84 As a result, Section 26 of the 2015 Amendment stands revived, and the decision rendered in the matter of BCCI v. Kochi Cricket Pvt Ltd will continue to apply as a guiding principle for determining the applicability of the 2015 Amendment.
The most important component of mediation is that it is the parties to a dispute who decide the terms of settlement. In conciliation, on the other hand, the conciliator makes proposals, and formulates and reformulates the terms of settlement. Mediation was first given statutory recognition in the Industrial Disputes Act 1947, where officers appointed under Section 4 of the Act are 'charged with the duty of mediating in and promoting the settlement of industrial disputes'. Mediation, as a form of dispute resolution has not obtained independent force in India but is mostly institutionally annexed to the courts through Section 89 of the Code of Civil Procedure Code 1809. To that extent, this might compromise the independence of mediations from court-related procedures and interference. Nevertheless, it gives mediations greater legitimacy and compatibility with the formal dispute resolution processes in society.
Another point to be noted is the growing importance of mediation clauses in commercial agreements. Both mediation and consultation form a mandatory aspect of the pre-arbitration procedure. It has also been held by courts that mediation and consultation are a substantial part of the agreement and are to be followed prior to any arbitration being initiated.85 In the event that a dispute is referred first to arbitration, the tribunal has the power to render the petition inadmissible on the grounds of the pre-arbitration procedure prescribed by the agreement being violated by the parties.
Akin to the Arbitration Rules 2006, the judges of the Salem bench also recommended the adoption of the Civil Procedure Mediation Rules 2006. These Rules govern almost the whole of the mediation process starting from the procedure for appointment of the mediator by both the parties from a panel of mediators that has already been formed for this purpose by the district courts. The qualifications and disqualifications for the panel, the venue of the mediation, the removal of a mediator from the panel, mediators' impartiality and independence, the procedures during the mediation itself, confidentiality, privacy, the settlement agreement and many other aspects are governed by these Rules.
It is pertinent to note also the popularity of court-annexed mediation whereby mediation centres have been set up by various High Courts including in Delhi, Madras, Gujarat, Calcutta, Kerala, Allahabad and Karnataka.
In July 2019, India signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, by which India has formally recognised enforceable settlement agreements arising out of mediation in international commercial disputes.86 The Supreme Court has constituted a special committee comprising of subject-matter experts to draft legislation to give legal sanctity to disputes settled through mediation. Recently, the Department of Legal Affairs has released the draft Mediation Bill, 2021 and invited comments from stakeholders.
Under the Consumer Protection Act, 2019, the District Commission, at the first hearing or at any later stage, if satisfied that there exists an element of a settlement, may direct the parties to have their dispute settled by mediation. The Act prescribes a time limit of 30 days for the completion of mediation.
The recent amendment to the Commercial Courts Act mandates pre-institution mediation in all cases except in suits or applications in which urgent relief is sought, and further prescribes a maximum period of three months for the completion of the process of mediation.
iv Other forms of alternative dispute resolution
Conciliation has been inserted in Part III of the Arbitration Act and is less formal than arbitration, but more formal than mediation. To the extent that it requires only mutually consenting parties and not a formal written document executed to be able to conciliate,87 it proves an easier form of dispute resolution. The parties can appoint up to three conciliators.88 An important requirement of conciliation proceedings is the independence and impartiality of the conciliator and the attempt to ensure the appointment of a conciliator not having the nationality of either of the parties.89 The conciliators form a medium of communication between the parties inviting them for proceedings and helping them exchange documents and evidence. When the conciliators are of the opinion that elements of a settlement exist, they can draw up the terms of conciliation and, after being signed by the two parties, it shall be final and binding on both to the same extent as an arbitral award.90
An interesting mechanism that is an example of this is found in the Micro, Small and Medium Enterprises Act (MSME Act), which stipulates that in the event a company falling within the category of MSMEs has not received payment or is a victim of default of contract, the aggrieved company may, by making a reference to the MSME Council established under the MSME Rules, go for mandatory conciliation proceedings that, if they fail, would then go for arbitration. In fact, during this process, the civil courts do not entertain such matters and refer them to the Council for adjudication. An appeal of the award of the arbitral tribunal requires a deposit of 75 per cent of the amount value in the civil court of appropriate jurisdiction.91 The Code on Industrial Relations, 2020 provides for the appointment of conciliation officers as one of the measures for the resolution of industrial disputes.
Outlook and conclusions
In India, the judge-to-population ratio is not adequate to meet the huge volume of litigation, effectively adding to the delay in redressal. This phenomenon is often referred to as the 'docket explosion'. Considering the extensive legal framework and significant backlog of litigation, Indian arbitration has made strong attempts to bring about a dynamic change. However, the recent amendments are expected to reduce many difficulties with regard to timing, cost, finality of awards and interim reliefs faced by both foreign and Indian parties wishing to arbitrate in India.
i Arbitration in India
In a practical scenario, a foreign investor will have the ability to approach a court for protective relief with respect to Indian shares and Indian assets and for other support, such as the recording of evidence in India. On the other hand, the ability to apply to an Indian court for annulment of an award may not be beneficial in all cases. Indian courts in exercise of jurisdiction under Section 34 of the Arbitration Act have previously taken an expansive interpretation of the grounds for challenge of an award. While the Arbitration Amendment Act has attempted to narrow the scope of interpretation around the term public policy, this remains untested in Indian courts. Therefore, it is possible that an Indian arbitral award may be re-litigated in an Indian court. The Supreme Court in a recent decision held that the Court does not sit as an appellate court over the decision of an arbitrator and cannot substitute its views for that of the arbitrator as long as the arbitrator has taken a possible view of a matter. Another reasonable interpretation or possible view is insufficient to allow for the interference of the Court.92 The courts have consistently held that mere erroneous application of law or appreciation of evidence does not call for the interference with an arbitration award.93
Confidentiality, a cornerstone of arbitration proceedings, has been formally recognised by the 2019 Amendment by which the arbitrator, the arbitral institution and the parties to the arbitration agreement must maintain confidentiality of all arbitral proceedings except the award where its disclosure is necessary for the purpose of implementation and enforcement of award.94
ii Arbitration outside India
Unlike the previous regime, where parties to arbitrations seated outside India did not have recourse to Indian courts under Part I of the Arbitration Act, the Arbitration Amendment Act extends certain provisions of Part I (discussed above) to foreign-seated arbitrations, subject to an agreement to the contrary. This amendment may therefore enable a foreign investor who thinks an Indian party may dissipate its assets or transfer or devalue Indian shares to approach an Indian court for interim relief. Therefore, even if the Indian party does not have a presence or assets at the foreign location where the arbitration is seated, given the extension of certain provisions of Part I of the Arbitration Act by the Arbitration Amendment Act, foreign investors may be able to obtain protective orders in India. This reduces the risks attached to waiting until an award is finally pronounced by the tribunal.
In this regard, an award of a foreign tribunal, if required to be enforced in India, would need to be presented for enforcement under Section 47 of the Arbitration Act. An Indian court can review the foreign award to the limited extent provided under Section 48 of the Arbitration Act to examine whether it may be enforced. In recent years, Indian courts have adopted a pro-enforcement approach in dealing with foreign awards.
1 Zia Mody is the founder and managing partner, Aditya Vikram Bhat is a senior partner and Priyanka Shetty is a counsel at AZB & Partners. The authors would like to acknowledge Ayush Chaddha, who is an associate at AZB & Partners, for his assistance in the preparation of this chapter.
2 Glanville Williams, Learning the Law (Sweet & Maxwell, 1982) p. 19; Law Commission of India, 54th Report, p. 8.
3 Bharat Barrel and Drum Manufacturing Company Private Limited v. Employees State Insurance Corporation AIR 1972 SC 1935.
4 Section 2(c) of the Commercial Courts Act.
5 Sections 3, 4 and 2(i) of the Commercial Courts Act.
6 See, e.g., Groz Beckert Sabool Ltd v. Jupiter General Insurance Co Ltd and Ors AIR 1965 P&H 477 and Sri Ramdas Motor Transport Limited v. Karedla Suryanarayana 110 ComCas 193 (Andhra Pradesh).
7 Article 141 of the Constitution of India.
8 Baradakanta Misra v. Bhimsen Dixit (1973) 1 SCC 446.
9 Pradip J Mehta v. CIT (2008) 14 SCC 283.
10 The Supreme Court of India, High Courts of Delhi, Bombay, Calcutta, Madras and Himachal Pradesh.
11 Afcons Infrastructure Limited v. Cherian Varkey Construction, (2010) 8 SCC 24.
12 Perry Kansagra v. Smriti Madan Kansagra, I (2019) DMC 568 SC.
13 Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt Ltd, 2021 SCC OnLine SC 72.
14 Foseco India Limited v. Om Boseco Rail Products Limited, CP (IB) No.1735/KB/2019.
15 Madhusudan Tantia v. Amit Choraria and Ors, Company Appeal (AT) (Insolvency) No. 557 of 2020.
16 Sagufa Ahmed & Ors v. Upper Assam Plywood Products Pvt Ltd & Ors, (2021) 2 SCC 317.
17 Amazon.com NV Investment Holdings LLC v. Future Retail Limited, 2021 SCC OnLine SC 557.
18 Gemini Bay Transcription Pvt Ltd. v. Integrated Sales Service Ltd, 2021 SCC OnLine SC 572.
19 Lalit Kumar Jain v. Union of India, 2021 SCC Online SC 396.
20 PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited, (2021) 7 SCC 1.
21 Delhi Airport Metro Express (P) Ltd v. DMRC, 2021 SCC OnLine SC 695.
22 NN Global Mercantile Pvt Ltd v. Indo Unique Flame Ltd & Ors, (2021) 4 SCC 379.
23 SMS Tea Estates Pvt Ltd v. M/s Chandmari Tea Co Pvt Ltd, (2011) 14 SCC 66.
24 The Project Director, NHAI v. M Hakeem, 2021 SCC OnLine SC 473.
25 Vidya Drolia and Ors v. Durga Trading Corporation, 2020 SCC OnLine SC 1018.
26 Himangni Enterprises v. Kamaljeet Singh Ahluwalia, (2017) 10 SCC 706.
27 Fali S Nariman, 'India and International Arbitration', 41 Geo Wash Intl L Rev 367.
28 Schedule I to the Limitation Act 1963.
29 For instance, the Consumer Protection Act 1986 sets out a period of limitation of two years from the date when the cause of action arose for filing a complaint. Or, for instance, under the Arbitration Act an application for setting aside a final award can be made within three months from the date of an award. A court at its discretion taking on record reasons for delay can grant an extension of 30 days.
30 Power Control Appliances v. Sumeet Machines Limited (1994) 2 SCC 448.
31 AP Steel RE Rolling Mill v. State of Kerala (2007) 2 SCC 725.
32 Order V, Second Proviso to Rule 1 of the CPC; Order VIII, Proviso to Rule 1 of the CPC; Order VIII, Second Proviso to Rule 10 of the CPC.
33 M/s SCG Contracts India Pvt Ltd v. KS Chamankar Infrastructure Pvt Ltd & Ors, AIR 2019 SC 2691.
34 Order VI, Rule 17 of the CPC.
35 Order VII, Rule 14 of the CPC; Order XII Rule 2 of the CPC.
36 New India Assurance Co Ltd v. Hilli Multipurpose Cold Storage Pvt Ltd, (2020) 5 SCC 757.
37 Shoraj Singh v. Charan Singh, Civil Appeal No. 6304 of 2021.
38 Section 29A of the 2019 Amendment Act.
39 Section 15 of the 2019 Amendment Act..
40 Section 5 of the 2019 Amendment Act.
41 Section 12 of the IBC.
42 Order I, Rule 8 of the CPC.
43 Section 241 read with Section 244 and Section 245 of the Companies Act 2013. Sections 397, 398 and 399 of the Companies Act 1956.
44 People's Union for Democratic Rights v. Union of India 1983 SCR (1) 456.
45 Section 10 of the Consumer Protection Act, 2019.
46 Article 22 of the Constitution of India.
47 Section 13 of the Family Courts Act 1984.
48 Ashish Davassar v. Union of India & Ors, civil writ petition No. 7216/2019.
49 Section 32 of the Advocates Act 1961.
50 Order V, Rule 25 of the CPC.
51 Section 105 of the CrPC.
52 Section 44A of the CPC.
53 Section 13 of the CPC states:
A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except (a) where it has not been pronounced by a Court of competent jurisdiction; (b) where it has not been given on the merits of the case; (c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable; (d) where the proceedings in which the judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in India.
54 Section 14 of the CPC states:
The Court shall presume upon the production of any document purporting to be a certified copy of a foreign judgment that such judgment was pronounced by a Court of competent jurisdiction, unless the contrary appears on the record; but such presumption may be displaced by proving want of jurisdiction.
55 Section 2(5) of the CPC defines a foreign court as a court situated outside India and not established or continued by the authority of the central government.
56 Section 29 of the CPC.
57 Intertoll Ics Cecons O & M Co Private Limited v. National Highways Authority of India 129 (2006) DLT 146.
58 Re KL Gauba AIR 1954 Bom 478; In Re: Mr 'G', A Senior Advocate of The Supreme Court AIR 1954 SC 557.
59 Bar Council of India v. AK Balaji, AIR 2018 SC 1382.
60 Vijay Madanlal Choudhary v. Union of India, Special Leave Petition (Criminal) No. 4634/2014.
61 Sensitive personal data and information are defined in the IT Rules as personal information that consists of (1) passwords; (2) financial information such as bank accounts, debit or credit cards; (3) physical, psychological and mental health conditions; (4) sexual orientation; (5) medical records and history; (6) biometric information; (7) any detail relating to the above as provided to the body corporate for providing a service; or (8) any of the information received under each of the heads by the body corporate for processing, or to be stored or processed under a lawful contract.
62 Karthick Theodre v. Registrar General, Madras High Court, 2021 SCC Online Mad 2755.
63 See, for instance, Section 2(60), which includes directors within the definition of officers in default. Section 166 also lays down duties of directors that, if contravened, would result in penal consequences in the form of fines. Section 42(10) stipulates that contravention of the procedure of private placement would impose liability on the directors of a company for a penalty up to 20 million rupees or the amount involved in the offer, whichever is higher. In general, the penal provisions are Sections 447 to 457 of the Companies Act 2013.
64 See, for instance, Section 140, which empowers the NCLT to suo moto or on an application, if it is satisfied that an auditor has acted in a fraudulent manner, direct a company to change its auditor. Such auditor will also be liable to penal action under Section 447. Section 147 also penalises auditors for contravention of duties of auditors and auditing standards as set out under the Companies Act 2013. Separately, Section 247 of the Companies Act 2013 imposes penalties on a valuer who has not exercised adequate due diligence.
65 Section 166(3) imposes a specific duty on a director to exercise his or her duties, inter alia, with due and reasonable care. Separately, however, Section 463(1) empowers the court to grant relief if a director has acted honestly and reasonably.
66 Section 149 read with Schedule IV provides for a code of conduct to be followed by independent directors. Specifically, Section 149(12) imposes a liability of independent directors in respect of actions or omissions that have occurred through their knowledge or where they have not acted diligently.
67 Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd, 2021 SCC OnLine SC 806.
68 There are two statutory exceptions to the rule of client–attorney privilege. First, any communication made in furtherance of any illegal purpose is not protected and second, facts observed by the attorney in the course of his or her employment, showing that any crime or fraud has been committed since the commencement of his or her employment, are not protected.
69 The Evidence Act predates the Advocates Act 1961. The expressions barrister, attorney, pleader and vakil refer to various categories of legal practitioners recognised when the Evidence Act was enacted. The Advocates Act 1961 now recognises a single category of legal practitioner qualified to practise law, and defines them as advocates.
70 Municipal Corporation of Greater Bombay v. Vijay Metal Works, AIR 1982 Bom 6.
71 Larsen & Toubro Limited v. Prime Displays Private Limited, (2003) 114 CompCas 141 (Bom).
72 Satish Kumar Sharma v. Bar Council of Himachal Pradesh, (2001) 2 SCC 365.
73 Shiv Kumar Pankha and Ors v. Honourable High Court of Judicature at Allahabad and Ors, (2001) 2 SCC 365.
74 Section 162 of the Indian Evidence Act 1872.
75 See, for instance, the judgment of the Bombay High Court in Larsen & Toubro Limited v. Prime Displays Private Limited (2003) 114 CompCas 141 (Bom).
76 Afcons Infrastructure Limited v. Cherian Varkey Construction (2010) 8 SCC 24, most recently relied on in Perry Kansagra v. Madan Kansagra, 2019 SCC OnLine SC 211.
77 Salem Bar Association v. Union of India, AIR 2005 SC 3353.
78 Rojer Mathew v. South Indian Bank, (2020) 6 SCC 1.
79 Part 1A, the Arbitration and Conciliation (Amendment) Act, 2019.
80 Section 2(1)(f) of the Arbitration Act.
81 Section 7 of the Arbitration Act.
82 Section 16 of the Arbitration Act.
83 BCCI v. Kochi Cricket Pvt Ltd, (2018) 6 SCC 287.
84 Hindustan Construction Company Limited v. Union of India, 2019 SCC OnLine SC 1520.
85 Thermax Limited v. Arasmeta 2008 (1) ALT 788.
86 United Nations Convention on International Settlement Agreements Resulting from Mediation.
87 Section 62 of the Arbitration Act.
88 Section 63 of the Arbitration Act.
89 Section 64(2) of the Arbitration Act.
90 Sections 73 and 74 of the Arbitration Act.
91 Section 18, Section 19 and Section 21 of the MSME Act, Rules 3 and 4 of MSME Rules, Karnataka.
92 NTPC Ltd. v. Deconar Services Pvt Ltd, AIR 2021 SC 2588.
93 Delhi Airport Metro Express (P) Ltd. v. DMRC, 2021 SCC OnLine SC 695; Oriental Insurance Co Ltd v. Diamond Product Ltd, 2021 SCC OnLine Del 4319.
94 Section 42A of Arbitration Act.