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The CAM Disputes team can be reached at cam.mumbai@cyrilshroff.com

‘FRANDLY’ RELATIONS - INDIAN COURTS CAN GRANT ANTI-ENFORCEMENT INJUNCTIONS WHEN FOREIGN COURTS ISSUE ANTI-SUIT INJUNCTIONS TO DENY ITS COMPETENT JURISDICTION

The Delhi High Court in the Interdigital Technology Corporation & Ors. v. Xiaomi Corporation & Ors. case granted an anti-enforcement injunction against an anti-suit injunction obtained in a foreign jurisdiction. Xiaomi on June 9, 2020, filed an SEP royalty rate-setting suit in the Wuhan Intermediate People’s Court (“Wuhan Court”) to determine global FRAND rates to obtain SEP licences across the world. Thereafter, on September 23, 2020, Xiaomi obtained an anti-suit injunction (“ASI”) from the Wuhan Court, restraining Interdigital from proceeding with their July 2020 suit before the Delhi High Court that sought the following reliefs: a) To injunct Xiaomi from infringing its 3G and 4G Standard Essential Patents (SEPs) and b) Declaration of FRAND (fair, reasonable and non-discriminatory) pricing terms for the six Indian patents in question, provided that Xiaomi should elect to execute a licence in lieu of the aforesaid injunction. Interdigital in this suit sought relief from the Court to not only indemnify it from the costs handed down by the Wuhan Court’s order, but also that it not be enforced.
Continue Reading ‘Frandly’ Relations: Indian Courts Can Grant Anti-Enforcement Injunctions when Foreign Courts Issue Anti-Suit Injunctions to Deny its Competent Jurisdiction (Xiaomi V. Interdigital)

Limitation Act is to be Made Applicable ‘As Far as May Be Possible’ to Insolvency Code

The Supreme Court’s pro-insolvency stance continues. With three recent rulings in a period of one month, the Supreme Court has clearly indicated that, so far as possible within the contours of the Limitation Act, a debt will continue to be alive and an action basis such debt will be maintainable under the Insolvency and Bankruptcy Code, 2016 (“Insolvency Code”) against a defaulting borrower.
Continue Reading Limitation Act is to be made applicable ‘as far as may be possible’ to Insolvency Code

Enforcement of Arbitration Awards via Insolvency Proceedings - A Contrary Perspective

As the Insolvency regime in India builds its new course under the Insolvency and Bankruptcy Code, 2016 (‘Insolvency Code’), numerous issues of application have arisen and will continue to grapple the corridors of the insolvency courts. One of the concerns is the interaction between debt enforcement/ execution procedures and the Insolvency Code. Insolvency Code allows operational creditors to initiate insolvency proceedings against a debtor, with a valid proof of undisputed claim. Form 5 of the IBBI (Application to Adjudication Authority) Rules, 2016, under which an Operational Creditor makes an application for initiation of insolvency process, considers a court decree or an arbitration award adjudicating on the default as a valid evidence of default to support insolvency commencement. The all-encompassing term ‘Arbitration Award’ includes both domestic awards and foreign awards. While the domestic awards are per se enforceable before the civil courts, unless stayed in a challenge before the court, and no distinct process for enforcement needs to be complied with under the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’), foreign awards must follow a procedure of recognition, prior to being considered as enforceable before Indian courts. The Rules, however, shed no light on issues such as, at what stage the arbitration awards are eligible to be presented before the insolvency courts for insolvency commencement.
Continue Reading Enforcement of Arbitration Awards via Insolvency Proceedings: A Contrary Perspective

All Orders terminating proceedings are not Awards - Delhi HC sets the record straight

The issue of whether simplicitor orders terminating an arbitral proceeding is an award under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), has been a question that has been plaguing various Courts in India for a while now. The issue is crucial in nature, as it determines the remedy of a party aggrieved by such an order. While some Courts have taken the view that such an order is an award appealable under Section 34 of the Arbitration Act, others have not. This ambiguity is a cause of concern for litigants since it delays the entire time bound arbitral process intended under the Arbitration Act and leaves the litigant in a lurch. However, the Hon’ble High Court of Delhi (“Delhi HC”) in PCL SUNCON v National Highway Authority of India[1] (“PCL SUNCON Case”) has addressed this issue and cleared the said ambiguity to a great extent.
Continue Reading All Orders terminating proceedings are not Awards: Delhi HC sets the record straight

Attachment Details Insolvency-and-Bankruptcy-Code-Re-affirming-its-primacy-over-the-Prevention-of-Money-Laundering-Act-2002

It has been an active month for the Insolvency and Bankruptcy Code, 2016 (“Code”/ “IBC”). On one hand, the legislature has inserted a new chapter into the Code providing for pre-packed insolvency resolution process for micro, small or medium enterprises (“MSMEs”) to ease and fast track the resolution for the stressed MSMEs, while on the other hand, Courts through various landmark decisions have upheld the primacy of the Code which will play a significant role in boosting the confidence of the stakeholders, particularly the creditors and the resolution applicants, in the sanctity of the corporate insolvency resolution process (“CIR Process”). …
Continue Reading Insolvency and Bankruptcy Code: Re-affirming its primacy over the Prevention of Money Laundering Act, 2002

Does NCLT has power to refer parties to Arbitration in an in rem insolvency proceeding

The conflict between Insolvency and Arbitration is almost of near polar extremes. The difference in focus of the two was well illustrated in Re United States Lines Inc[1] as a:

“… conflict of near polar extremes: bankruptcy policy exerts an inexorable pull towards centralization while arbitration policy advocates a decentralized approach towards dispute resolution”.

Thus, while insolvency/ bankruptcy aims to centralise all the proceedings against a debtor to one jurisdiction and give rise to a proceeding in rem (against the world at large) thereby creating third party rights for all creditors of the debtor, arbitration on the other hand advocates a decentralised approach and promotes party autonomy in dispute resolution resulting in a proceeding in personam (against a particular person).
Continue Reading Does NCLT has power to refer parties to Arbitration in an in rem insolvency proceeding?

Lenders as Promoters under RERA regime - Analysing Haryana Real Estate Regulation Authority’s recent Order in Supertech Hues case

Introduction

The Haryana Real Estate Regulation Authority (“HRERA”) has recently delivered an unprecedented order in the matter of Deepak Chowdhary Vs PNB Housing Finance Ltd. & Ors. (“Supertech Hues case/ Order”)[1]. This Order will have implications on banks and other financial institutions, which provide credit to real estate companies, while also bringing into focus, the conflict between the rights of such banks and financial institutions vis-à-vis the rights of allottees of such projects. Despite the Real Estate (Regulation and Development) Act, 2016 (“RERA/Act”), contemplating mortgage loans to be the “first funders” of a real estate project[2], the HRERA has passed an order, which may have implications on secured lenders when it comes to exercising their rights to enforce their security.
Continue Reading Lenders as Promoters under RERA regime: Analysing Haryana Real Estate Regulation Authority’s recent Order in Supertech Hues case

Bureaucratic delay - No more a ground for seeking condonation of delay by State and public bodies

“… if the Government machinery is so inefficient and incapable of filing appeals/ petitions in time, the solution may lie in requesting the Legislature to expand the time period for filing limitation for Government authorities because of their gross incompetence. That is not so. Till the Statute subsists, the appeals/petitions have to be filed as per the Statues prescribed.”[1]

The recent pronouncement of the Supreme Court, a bench comprising of Hon’ble Mr. Justice Sanjay Kishan Kaul and Hon’ble Mr. Justice Dinesh Maheshwari, in State of Madhya Pradesh v. Bherulal, [2] has come straight from the shoulder. The Court has unequivocally reiterated that the government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condoning delay is an exception and should not be used as an anticipated benefit for government departments. The Supreme Court has emphasised that the law shelters everyone under the same light and should not be swirled for the benefit of a few.
Continue Reading Bureaucratic delay: No more a ground for seeking condonation of delay by State and public bodies?

Automatic Vacation of Stay Orders in Six Months - A Positive Affirmation

Cases in India can take years to be disposed of. Stay of proceedings on account of interim orders has been greatly responsible for causing inordinate delay in disposal of cases. These orders typically stay effective unless expressly vacated, or until a final order is passed, which then subsumes the interim order. Interim orders that stay proceedings before a subordinate court are often misused by litigants as a dilatory tactic to maintain status quo in their favor. The subordinate courts account for 87% of India’s pending cases.[1] A greater challenge faced by the judiciary and litigants alike is the delay in determination of cases at the appellate level, which in turn leads to endless wait for determination of matters even at the trial stage. The Law Ministry estimates that on an average, a trial is delayed by about 6.5 years due to stay of proceedings by higher courts.[2]…
Continue Reading Automatic Vacation of Stay Orders in Six Months: A Positive Affirmation

Ethical Practices to be followed by a Mediator

“My joy was boundless. I had learnt the true practice of law. I had learnt to find out the better side of human nature and to enter men’s hearts. I realised the true function of a lawyer was to unite parties riven asunder. The lesson was so indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromises of hundreds of cases. I lost nothing thereby – not even money, certainly not my soul.”

–Mahatma Gandhi

Alternate dispute resolution (“ADR”) mechanisms have become the front runner in the dispute resolution space, with mediation gaining a great deal of traction in the last couple of decades. This is so not only with respect to disputes amongst individuals, but companies as well. It is seen that a myriad range of civil disputes such as disputes arising out of contractual relationships, family or matrimonial relationships, employment, partnerships, tortious disputes and consumer disputes can be resolved through mediation.
Continue Reading Ethical Practices to be followed by a Mediator