Ship Leasing in IFSC

India has a vast coastline and easy access to shipping routes, yet India contributes only 1% in global trade.[1] Many major shipowners and operators have chosen key international maritime centres such as Singapore, Hong Kong, and Dubai as their base for operations.

To create a stimulating ecosystem that can help Indian entities compete with global marine hubs by accelerating and boosting their presence internationally, IFSCA has constituted a Committee on Development of Avenues for Ship Acquisition, Financing and Leasing Activities (“SAFAL Committee”) to obtain a complete overview and assessment of the existing legal and regulatory regime in IFSC in India for ship acquisition, financing and leasing.

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Reinstating Party Autonomy in Ad Hoc Arbitrations

The Supreme Court in Oil and Natural Gas Corporation Limited (“ONGC”) Afcons Gunanusa JV (“Afcons”),[1] while deciding on four cases, inter alia held that:

(i) arbitrators cannot unilaterally decide their own fees but can exercise discretion to apportion the costs, demand deposit, and exercise lien over the delivery of the arbitral award if payments to it remain outstanding;

(ii) the fees of the arbitrator must be fixed at the inception to avoid unnecessary litigation and conflicts between parties at a later stage;

(iii) the term ‘sum in dispute’, which is the header of the first column of the Fourth Schedule to the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”), refers to the sum in dispute in a claim and counter-claim separately and not cumulatively. Consequently, arbitrators are entitled to charge separate fees for the claim and the counter-claim in an ad hoc arbitration proceeding;

(iv) the highest fee payable in an arbitration proceeding governed by the Fourth Schedule is INR 30,00,000, which is a ceiling applicable on a per-arbitrator basis and subject to a sole arbitrator’s entitlement of an additional amount of 25% on the fee payable as per the Fourth Schedule;

(v) the Fourth Schedule is to have a mandatory effect on the stipulation of fees by arbitrators appointed by arbitral institutions designated for such purpose in terms of Section 11 of the Arbitration Act in the absence of an arbitration agreement governing the fee structure; and

(vi) as regards court-appointed arbitrators, the Supreme Court held that the Fourth Schedule is by itself not mandatory in the absence of rules framed by the High Court concerned, and issued directives for fixing of fees in ad hoc arbitrations where arbitrators are appointed by courts.

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The Concept of Predicate Offence The Supreme Court Clarifies

Introduction

The offence of money laundering, as per the definition in Black’s Law Dictionary is “the act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced”. Further to this definition, it is only but natural to assume that the money, if illegally obtained, must be obtained in relation to the commission of an underlying criminal offence. The commission and requirement of this underlying offence, commonly known as a predicate offence, has been a point of debate since the introduction of the Prevention and Money Laundering Act, 2002 (“the Act”), which provides a list of offences in the Schedule appended thereto as ‘scheduled offences’.

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Admission of application Section 7(5)(a) not mandatory even when default established: Supreme Court clarifies

Introduction

The Supreme Court, in a recent judgment passed in Vidarbha Industries Power Limited v. Axis Bank Limited1, adjudicated upon whether Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016 (“IBC“) is a mandatory or discretionary provision i.e. on an application for initiating Corporate Insolvency Resolution Process (“CIRP“) by a financial creditor.

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Arbitration and Conciliation Act

Background

Interim measures act as significant procedural safeguards in ensuring the efficacy of the arbitration process. They serve to protect the rights of parties from the inception of the dispute till the execution of the final award. In India, interim measures may be granted in three stages i.e. before the commencement of arbitration proceedings, during the pendency of arbitration proceedings and after the passing of the arbitral award, but before its enforcement.[1]

Continue Reading Section 9(2) of The Arbitration and Conciliation Act, 1996: A Ticking Clock on Invocation of Arbitrations in India

Tracing the Grey Lines Interim Relief in Case of Disparagement Claims in Comparative Advertising

With increased incidences of trade wars between business rivals through commercial advertising in print and electronic media, there is an apparent need to identify the threshold at which the publication of a certain advertisement becomes defamatory or disparaging to another’s product. The Apex Court has declared that the publication of commercial advertisements forms a part of ‘commercial speech’ protected under Article 19(1)(a) of the Constitution.[1]

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Arbitration and Conciliation Act 1996

In Part I[1] and II[2] of this post, we have analysed the contours of Section 34(4) of the Arbitration and Conciliation Act, 1996 (“the Act”), and the questions and ambiguities that may arise in its applicability. The purpose of this blog is to further analyse the limited scope of Section 34(4) of the Act, in light of the Hon’ble Supreme Court’s judgement in I-Pay Clearing Services Pvt. Ltd. v. ICICI Bank Limited[3] case, wherein it is observed that failure on the part of the arbitral tribunal in providing findings on contentious issues in the award is not a “curable defect” under Section 34(4) of the Act, and is an acceptable ground for setting the award aside (instead).

Continue Reading Section 34(4) of the Arbitration and Conciliation Act, 1996: A Fly in The Ointment? (Part III)

Awarding Interest on Interest A three Judge Bench of the Supreme Court Upholds the Law

Introduction

The Supreme Court of India upheld the power of an arbitrator to grant ‘interest on interest’ or compound interest in its recent judgement in UHL Power Company Limited v State of Himachal Pradesh[1]. Placing reliance on its earlier decision in Hyder Consulting (UK) Limited v. Governor, State of Orissa[2], the Court has held that the terms of Section 31(7)[3] of the Arbitration and Conciliation Act, 1996 (“Act”), are explicit in granting an arbitral tribunal the power to award interest on the “sum” directed to be paid under an arbitral award, which is inclusive of the interest awarded thereunder.

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NOIDA stands in the shoes of an operational creditor

Introduction

The resolution process for real estate companies is anything but simple, given the complexities involved and the plethora of parties with varied and conflicting interests. One such issue was whether local industrial development authorities, in particular the New Okhla Industrial Development Authority (“NOIDA”), should be classified as financial creditors or operational creditors, by virtue of the lease deeds they enter into with various corporate debtors.

The question has now finally been answered. The Hon’ble Supreme Court of India vide its judgment dated May 17, 2022, in the case of New Okhla Industrial Development Authority v. Anand Sonbhadra[1], has now declared that NOIDA is not a financial creditor and would be classified as an operational creditor under the Insolvency and Bankruptcy Code, 2016 (the “Code”). The issue involved in the Anand Sonbhadra (supra.) judgment was whether 90 year leases entered into between NOIDA and real estate companies give rise to a financial or operational debt in the event that corporate insolvency resolution proceedings are initiated against such real estate companies.

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Interpreting Limitation Provisions

Introduction

The Supreme Court of India, in a recent judgment, reiterated that the limitation period for filing of an appeal against the order of the National Company Law Tribunal (“NCLT”) as laid down under Section 61 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has to be interpreted strictly.

Continue Reading Interpreting Limitation Provisions – Supreme Court Rejects the ‘Date of Knowledge’ Argument