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Swagata Ghosh

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Associate in the Dispute Resolution Team at the Mumbai office of Cyril Amarchand Mangaldas. Swagata focuses on arbitration matters as well as litigation emanating from contractual / corporate commercial disputes. She can be reached at swagata.g@cyrilshroff.com.

The Final Word on the Limitation Period for Enforcement of Foreign Awards

The Supreme Court has, in its recent judgment of Government of India v. Vedanta Limited & Ors.[1], settled the law relating to limitation for filing petitions for enforcement and execution of foreign awards in India. The Court held that petitions seeking enforcement/execution of foreign awards are required to be filed within three years from the date when the right to apply accrues and in the event there is any delay in filing such petitions, the same can be condoned under Section 5 of the Limitation Act, 1963 (“Limitation Act”).
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Section 65B of the Indian Evidence Act, 1872: Requirements for admissibility of electronic evidence revisited by the Supreme Court

Background

A three-judge bench of the Supreme Court recently held that the requirement of a certificate under Section 65B(4) of the Indian Evidence Act, 1872 (“Evidence Act”), is a condition  precedent to the admissibility of electronic record in evidence.[1] This judgment arose from a reference by a Division Bench of the Supreme Court, which found that the Division Bench judgment in Shafhi Mohammad v. State of Himachal Pradesh[2] required reconsideration in view of the three-judge bench judgment in Anvar P.V. v. P.K. Basheer.[3]
Continue Reading Section 65B of the Indian Evidence Act, 1872: Requirements for admissibility of electronic evidence revisited by the Supreme Court

 

Competition or unlawful contractual interference

In a recent decision, the Delhi High Court dealt with the tort of unlawful interference in contractual relationships and inter alia held that the said tort has no place in India in view of Section 27 of the Indian Contract Act, 1872 (“Contract Act”).[1]

Background

The developer of a certain property at Amritsar agreed to lease the said property to the Plaintiff for fifteen years, by way of a term sheet. The Plaintiff paid a security deposit to the developer as per the term sheet and proceeded to draw up the main transaction document.

Upon learning that the Defendant (a competitor of the Plaintiff) had been pursuing the developer for the purpose of entering into an agreement with respect to the same property, the Plaintiff informed the Defendant about the term sheet executed by the developer with the Plaintiff and requested the Defendant to desist from pursuing the developer. However, the Plaintiff learnt that the developer had entered into an agreement with the Defendant with respect to the said property. Soon thereafter, the Plaintiff was informed by the developer that the term sheet stood terminated on account of the Plaintiff’s failure to execute the main transaction document within the stipulated time. The developer refunded the security deposit, which was accepted by the Plaintiff without protest. The Plaintiff alleged that (a) the Defendant induced the developer to terminate the term sheet with the Plaintiff; and (b) the Defendant had similarly attempted to interfere with transactions between the Plaintiff and developers of other properties in different cities.

The Plaintiff filed a suit against the Defendant inter alia seeking a permanent injunction to restrain the Defendant from inducing a breach of any agreement between the Plaintiff and third parties in respect of non-functional properties of the Plaintiff across India.
Continue Reading Competition or unlawful contractual interference: The line continues to remain blurred

To Pay Rent or Not To Pay Rent - The Delhi High Court rejects plea for suspension of rent during lockdown

The COVID-19 outbreak and the resultant nationwide lockdown have severely impacted performance of obligations, whether contractual or otherwise, across the country. Most entities/individuals are exploring the option of pleading frustration of contract[1] or invoking force majeure[2] clauses to suspend or obtain a relaxation on their contractual obligations. In this post, we examine the recent decision in Ramanand & Ors. v. Dr. Girish Soni & Anr.,[3] where the Delhi High Court rejected an application for waiver or suspension of rent on account of the lockdown.
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Determinable contracts under the Specific Relief Act,1963 – Part II

In  Part I of this post, we discussed the concept of determinable contracts under the Specific Relief Act, 1963 (the “Act”) and analysed two decisions of the Supreme Court in this regard. In this post, we will examine the decisions of various High Courts which caused some confusion as to what would qualify as a determinable contract under the Act.

Delhi

As far back as 1999, the Delhi High Court found a joint venture agreement which provided for termination by either party in the event that certain government approvals were not obtained by a specified date, to be determinable in nature.[1] Conspicuously, the court did not refer to the decision of the Supreme Court in Indian Oil Corporation Ltd. v. Amritsar Gas Service & Ors.[2]

The most notable result of the lack of clarity in Amritsar Gas (supra) came by way of a decision of the Delhi High Court (Division Bench) in Rajasthan Breweries Ltd. v. The Stroh Brewery Company.[3] The agreements in this case specified certain events which would entitle each party to terminate. Observing that the facts of the case before it were identical to those in Amritsar Gas (supra), the court held that the agreements in this case were determinable and, therefore, not capable of specific performance. The court went so far as to hold that even in the absence of a specific clause enabling either party to terminate the agreement on the happening of specified events, the very nature of the agreement (being a private commercial transaction) made it liable to termination without assigning any reason by serving a reasonable notice. In the event such termination is held to be wrongful or bad in law, the only remedy available to the aggrieved party is to seek compensation for wrongful termination and not specific performance. The decision in Rajasthan Breweries (supra) was applied by the Delhi High Court in subsequent decisions.[4]
Continue Reading Determinable Contracts Under the Specific Relief Act, 1963 – Part II

Determinable contracts under the Specific Relief Act, 1963 – Part I

Introduction

The remedies most resorted to for breach of contract are damages, specific performance, and injunctions. The remedy of damages is governed by the Indian Contract Act, 1872, whilst specific performance and injunctions are governed by the Specific Relief Act, 1963 (the “Act”).

Prior to the amendment of the Act in 2018, the grant of specific performance was not available as a matter of course but was based on the discretion of the court. Section 10 of the un-amended Act laid down cases in which the court could exercise this discretion viz. when no standard exists for ascertaining the actual damage caused by non-performance of the act agreed to be done or when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief. The Specific Relief (Amendment) Act, 2018 substituted Section 10 of the Act, which now provides that specific performance of a contract shall be enforced by the court, subject to Sections 11(2), 14 and 16 of the Act.[1] Section 20 of the un-amended Act, which set out the contours of the court’s discretion and enumerated cases under which the court may exercise discretion not to grant specific performance, was substituted in its entirety with a provision relating to substituted performance. The grant of specific performance of a contract is, therefore, no longer a matter of discretion and must be granted subject to the exceptions set out in the Act.
Continue Reading Determinable contracts under the Specific Relief Act, 1963 – Part I

Section 34 4 of the Arbitration and Conciliation Act 1996 – A fly in the ointment Part II

In Part I of this post, we examined the contours of Section 34(4) of the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”), pre-conditions for its invocation and the scope of the powers conferred upon the court thereunder. In this post, we analyse some of the questions and ambiguities that may arise in the applicability of Section 34(4) of the Arbitration Act.

Can Section 34(4) of the Arbitration Act be invoked to eliminate any ground under Section 34(2) of the Arbitration Act?

Section 34(2) of the Arbitration Act provides two sets of grounds on which an award may be set aside. Section 34(2)(a) sets out grounds of challenge such as incapacity of a party, invalidity of the arbitration agreement, lack of proper notice of appointment of the arbitrator or of the arbitral proceedings or inability of a party to present his case, an award which deals with disputes not submitted to arbitration, improper composition of the arbitral tribunal or arbitral procedure contrary to the agreement between the parties, etc. These grounds must be established by the party challenging the award, on the basis of the record of the arbitral tribunal.
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Section 34 - 4 of the Arbitration and Conciliation Act, 1996 – A fly in the ointment - Part I

Introduction

The recourse available to a party seeking to challenge an arbitral award is provided for in Section 34 of the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”). Section 34(2) of the Arbitration Act has undergone a few statutory amendments, and has been the subject of innumerable judgments, which highlight the contours within which a challenge to an arbitral award is available. Given that party autonomy and finality of awards are hallmarks of the arbitral process, both the Parliament as well as the judiciary have strived for minimal judicial interference with arbitral awards and arbitration proceedings. This has been done by tightening and limiting the scope and interpretation of the grounds available under Section 34(2) of the Arbitration Act.
Continue Reading Section 34(4) of the Arbitration and Conciliation Act, 1996 – A Fly in the Ointment? (Part I)

Public Interest versus Promissory Estoppel – Chalk another one up on the board for Public Interest

In its recent decision in Union of India & Anr. v. M/s. V.V.F. Limited & Anr.,[1] the Hon’ble Supreme Court held that government notifications which are issued in public interest are not hit by the doctrine of promissory estoppel.

Facts

The Gujarat Notifications

Post the devastating earthquake that struck the District of Kutch (in the State of Gujarat) in 2001, the Government of India issued a notification (“2001 Notification”) inter alia exempting those goods from excise duty which were manufactured in a new industrial unit (set up in the District of Kutch) for the purpose of sale. These new industrial units could claim a refund (in the manner stipulated in the 2001 Notification) of the excise duty paid on the goods manufactured by them. Further, July 31, 2003 was decided as the cut-off date for setting up of new industrial units in the District of Kutch with manufacturers allowed to claim excise refunds for a period of five years from the date of commencement of the commercial production of goods. The 2001 Notification was amended from time to time to inter alia extend the cut-off date for setting up new industrial units, from July 31, 2003 to December 31, 2005

Pursuant to two subsequent amendments to the 2001 Notification in 2008 (“2008 Notifications”), the benefit of refund granted under the 2001 Notification was restricted/ limited to the ‘value addition’ to the goods made by the new industrial units. Consequently, the new industrial units could now only claim a refund of 34% of the total duty paid by them, as opposed to the entire amount under the earlier notifications. The 2008 Notifications were challenged by way of several writ petitions before the Hon’ble Gujarat High Court and were quashed and set aside inter alia on the ground that the bar of promissory estoppel would operate.
Continue Reading Public Interest versus Promissory Estoppel – Chalk another one up on the board for Public Interest

Conditional or unconditional stay, that is the question – The fate of arbitral awards in India, pending challenge

Background

Ever since the enactment of the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”), arbitral awards have been statutorily granted the same status as a decree of a civil court by way of a deeming fiction under Section 36 of the Arbitration Act. Up until the amendment of the Arbitration Act in 2015, the filing of an application challenging an arbitral award had the effect of an automatic stay on the enforcement of the award. The Arbitration and Conciliation (Amendment) Act, 2015 (the “2015 Amendment Act”) changed this, by mandating a separate application to be filed seeking stay of the award, which may (or may not) be granted by the court, subject to such conditions as it may deem fit.
Continue Reading Conditional or Unconditional Stay, That is the Question – The Fate of Arbitral Awards in India, Pending Challenge