SEAT, PLACE AND VENUE

 In ICA – Seat and place are used interchangeably [juridical seat]

 Seat – key to determine law governing arbitration
 S’america Test – for determining governing law of arbitration agreement – three-part test
to assess the governing law
- Explicit choice of parties
- Implied choice of parties [construction of agreement as a whole]
- Closest connection to the arbitration process
 Venue – if parties haven’t decided, then let the tribunal decide
 Hardy Exploration – Contract had Kuala Lumpur as venue – when will venue be seat –
designation of city as a venue does not mean it is seat – there must be other concomitant
factors [contract interpretation]
 Brahmani Rivers – confusion of concepts of seat and venue

PROCEDURAL ASPECTS
 Amendments – No rationale for time limits fixed
 Can two Indian parties choose a foreign seat of arbitration?
 Can two Indian parties choose a foreign law to govern the contract?
 Fast track procedure

NULLIFICATION OF AN AWARD
 Compromise between party autonomy and securing sovereignty
 Award can be set aside on certain grounds – by the Courts of the seat
 Grounds – [maximum thresholds] – incapacity, agreement not valid under law, notice not
given, fair hearing not given, arbitrator’s bias – all due process grounds
 Set B grounds – in conformity with the Model Law – arbitrability + public policy
 Arbitrability – the issues which can/cannot be resolved by way of arbitration – Booz
Allen Hamilton – right in rem is not arbitrable – only right in personam is arbitrable
 Arbitrable issues – contract law, tort law
 Non-arbitrable issues – Grant of IP rights – statutory law [right in rem granted to an
individual], criminal law, bankruptcy, family law.
 However, in IP – contracts dealing with assignment of trademark, sharing of IP rights,
etc. are arbitrable as this constitutes a right in personam [contract law issues in essence].
 Pre-nuptial agreements – can they be arbitrated?
 Public policy – Initially introduced as a result of the UNCITRAL Model law
 Renusagar – what is the meaning of public policy? – dispute over interest accumulating –
whether the award rendered violated Indian Contract Act – violation of the Indian
legislation amounts to violation of public policy? – Court said that merely violation of
law cannot be held to be violative of public policy – the policy intent behind a legislation
if violated, would be against public policy – the thresholds are high and they are:
- Fundamental policy of Indian law
- Interests of India
- Justice and morality
Refer to the explanations under the provision
 ONGC – patent illegality added as an additional ground [prima facie error by arbitrator] –
this was criticized as being a way to appeal awards – parties simply contending that it was
patently illegal
 In Intl comm arb – and India was not seat – it is merely an enforcing court – whether
public policy under S. 34 is the same as the one under S. 48 – Phoolchand said it’s the
exact same thing – this was highly criticized – as enforcing court must not be given with
such a power of examination
 Shrilal Mahal – public policy does not mean the same thing in the two provisions – there
must be a difference between the seat court and enforcing court – patent illegality only to
S. 34
 ONGC v. Western Gecko – Explained “Fundamental policy” to include three things –
judicial approach, PoNJ to be upheld, award not so perverse or unreasonable
[Wednesbury in public policy]
 Associated Builders v. DDA – Confirmed Western gecko – and introduced stare decisis
in determining the reasonableness of Wednesbury – justice and morality [they gave
elements – check] – violation of pp constitutes five things [check] – PRO ARB [but still
giving room for a lot of litigation]
 Ntt Docomo Inc v. Tata Sons Limited [2017]

SETTING ASIDE v. ENFORCEMENT

 Setting aside – Seat Court
 Enforcement – Any executing court
  This happens parallelly sometimes – and herein, the enforcement proceedings are
stayed.
 This was used as an excuse to avoid enforcement of awards. By simply starting
setting aside proceedings, they would avoid the actual enforcement.
 In an amendment to the Act, this problem was dealt with – wherein they held that
enforcement would happen simultaneously – if award has been set aside, then
enforcement can be avoided [BCCI v. Kochi Cricket].
 Sundaram Finance v. Abdul Salam – any court in the country has power to enforce
the arbitral award – eased the enforcement of award [transfer decrees were no longer
necessary].
 Cheram Properties v. Kasthuri and Sons – Interpretation of the Act – award needs to
be treated as a “decree” – but it is not to be treated as the civil jurisdiction applicable
– even NCLT has jurisdiction to enforce the award.

INVESTMENT ARBITRATION [IA]

[Last chapter of Redfern and Hunter]
 WW II – liberalization of markets – FCNs [predecessors to BITs] – Commerce
treaties to induce investment – granting certain rights or favourable situations for
investors.
 IA related to PIL – because it deals with the breach of international treaty obligations.
 NAFTA, Energy Charter Treaty, GAFTA – Multi-Lateral Treaties [MLTs].
 Investment standards – different kinds of protection granted under these treaties –
substantive standards – different clauses in treaties.
 Rights are accorded to states to provide certain rights to investors.
 Diplomatic protection under PIL – State would represent the investor who had
suffered losses – State had choice to decide which claim it wanted to espouse – led to
politics – what the State govt prefers and what it does not.
 BITs started a concept called ISDS – Investor State Dispute Settlement – States gave
a standing consent for arbitration to a national – conditional right to begin
proceedings on his own.
 There was no Centre to deal with investment disputes – they signed the ICSID
Convention – set up the Centre to settle disputes arising out of investment treaties.
  ICSID Convention – jurisdiction, standing, admissibility, investor-investment
definitions, arbitrators, their qualifications, etc.
 Sources of law – PIL – interpretation of law – VCLT
 Principles of State Responsibility – Breach + Attribution
 Reading a BIT – Protections – Fair and Equitable Treatment Standard
 FET Standard – protects from arbitrariness from host State
 FET is violated when the legitimate expectations of an investor have been violated
[the conducive environment ensured by the BIT has been breached].
 National Treatment Clause – no difference between local and foreign investors
 Most Favored Nation Clause – no difference must be afforded between two different
foreign investors.
 Two issues out of MFN Clauses – does it apply to both substantive and procedural
aspects [arbitration, for instance]?
 Other problem – Treaty shopping
 Denial of benefits clause – sham company can be denied justice
 Dispute resolution clause – Fork in the road clause, fetters on arbitration
 Umbrella Clause – deal with situations where contracts are with govt – a commercial
contract of govt with an investor, if breached, such a contractual breach is elevated to
a treaty breach [refer to dissenting opinions of certain authors].

INDIA MODEL BIT

 Refer to NDA Document
 As a result of the White Industries Case [Knee jerk reaction] – restricting the right of
not only foreign investors, but also Indian investors who are going abroad.

INVESTMENT ARBITRATION IN INDIA

 Vodafone case – Denial of justice as the Parliament nullified the favourable SC
judgement – India-Netherlands BIT proceedings were started and simultaneously,
India-UK BIT proceedings – India contended that there is violation of due process –
approached Delhi HC for an anti-BIT or anti-arbitration injunction – Delhi HC said it
has inherent jurisdiction over investment arb – this does not arise from the AC Act –
ACA is restricted only to commercial arbitration.
 Union of India v. Khaitan Holdings – Vodafone case was upheld.
EXTRA STUFF
 Withdrawals from ICSID
 Changes in Model BITs – Regressive
 ISDS restrictions – Limited pool of arbitrators [leading to bias], no concept of bias
[on the same BIT and issue, different interpretations, leading to uncertainty], and
States’ delay in enforcing awards.
 States have said that instead of ISDS – Standing investment courts will be established
to deal with such matters
 UNCITRAL Working Group III – Read summary
 Jan Paulsson – Parties appointing their own arbitrators in IA is incorrect – limited
pool – there must be another authority to appoint such arbitrators [hinting at what
would become the investment courts] – recently, Netherlands amended its Model BIT
to prohibit parties appointing arbitrators.