Sunday, 14 October 2018

When consortium of companies can not initiate international commercial arbitration?

 Since disputes arose between the parties to the agreement,
various interim claims had been made by the Consortium of M/s
Larsen and Toubro, an Indian company, together with Scomi
Engineering Bhd, a Company incorporated in Malaysia, for
which the Consortium has filed this petition under Section 11 of
the Act to this Court, since according to them, one of the parties
to the Arbitration agreement, being a body corporate,
incorporated in Malaysia, would be a body corporate, which is
incorporated in a country other than India, which would attract
Section 2(1)(f)(ii) of the Act.
 On the other hand, Mr. Shyam Diwan, learned senior
counsel appearing on behalf of MMRDA, the respondent, has
relied upon both the contract dated 09.01.2009 as well as the
actual Consortium Agreement dated 04.06.2008 between the
Indian company and the Malaysian company, which, when read
together, would show that they are really an un-incorporated
association and would, therefore, fall within Section 2(1)(f)(iii) as
being an association or a body of individuals, provided the
central management and control is exercised in any country
other than India. He has also gone on to rely heavily upon the

fact that in the Consortium, the lead partner is the Indian
company, and the Consortium’s office is at Wadala in Mumbai
making it clear, therefore, that sub-Clause (iii) of Section 2(1)(f)
of the Act would not apply as it is clear that the central
management and control, that is envisaged by the said sub-
Clause, would not be exercised in a country outside India but in
India itself.
This being the case, coupled with the fact, as correctly
argued by Shri Diwan, that the Indian company is the lead
partner, and that the Supervisory Board constituted under the
Consortium Agreement makes it clear that the lead partner
really has the determining voice in that it appoints the Chairman
of the said Board (undoubtedly, with the consent of other
members); and the fact that the Consortium’s office is in
Wadala, Mumbai as also that the lead member shall lead the
arbitration proceedings, would all point to the fact that the

central management and control of this Consortium appears to
be exercised in India and not in any foreign nation.
14) This being the case, we dismiss the petition filed under
Section 11 of the Act, as there is no “international commercial
arbitration” as defined under Section 2(1)(f) of the Act for the
petitioner to come to this Court. 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION (C) No. 28 OF 2017

M/S LARSEN AND TOUBRO LIMITED SCOMI
ENGINEERING BHD 
Vs
MUMBAI METROPOLITAN REGION
DEVELOPMENT AUTHORITY 

Dated:October 3, 2018.
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Whether court can direct litigant to furnish English translation of pleading if it is in Marathi language?

 We have heard the learned Counsel for petitioner. The
petitioners are aggrieved by a circular which is annexed at Exh.A
and B issued by the Civil Judge, Senior Division, Panvel. By the
said circular, the Civil Judge, Senior Division Panvel has directed all
litigants and Advocates that all pleadings which are to be filed in the
Panvel Court should be in Marathi language only. In our view, the
said circular is patently illegal, since English is also the language of
the Court. As such, we direct the Civil Judge, Senior Division, Panel
to accept all the pleadings which are in English language. However,
pleadings in Marathi language be also accepted with undertaking to

furnish English translation of the same if required.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.4102 OF 2017

Mrs. Neelam Abhijeet Kadam Vs The State of Maharashtra 

CORAM : V.M.KANADE &
C.V.BHADANG, JJ.
DATE : 2nd May 2017.

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Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, notified

The Central Government on 03-07-2018 has, in exercise of the powers conferred by sub-section (2) of Section 21A read with sub-section (1) of Section 12A of the Commercial Courts Act, 2015 (4 of 2016), notified the  Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018.

Key Highlights of the Rules are as follows :—
Initiation of mediation process —
(1) A party to a commercial dispute needs to make an application to the Authority as per Form-1 in Schedule-I, either online/by post/by hand, for initiating mediation process along with Rs 1000 as fees payable to the Authority by demand draft/ online;
(2) The Authority shall, having regard to territorial and pecuniary jurisdiction and nature of commercial dispute, issue notice, as per Form-2 in Schedule-I through registered/speed post and electronic means, i.e., e-mail and like to the opposite party for appearing and giving consent to participate in mediation process on a date not beyond ten days from issue of notice.
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Thursday, 11 October 2018

Golden rules for determining rate of interest in Arbitration proceeding

 The discretion of the arbitrator to award interest must
be exercised reasonably. An arbitral tribunal while
making an award for Interest must take into
consideration a host of factors, such as: (i) the ‘loss of
use’ of the principal sum; (ii) the types of sums to
which the Interest must apply; (iii) the time period over
which interest should be awarded; (iv) the
internationally prevailing rates of interest; (v) whether
simple or compound rate of interest is to be applied;

(vi) whether the rate of interest awarded is
commercially prudent from an economic standpoint;
(vii) the rates of inflation, (viii) proportionality of the
count awarded as Interest to the principal sums
awarded.
On the one hand, the rate of Interest must be
compensatory as it is a form of reparation granted to
the awardholder;
while on the other it must not be
punitive, unconscionable or usurious in nature.
Courts may reduce the Interest rate awarded by an
arbitral tribunal where such Interest rate does not
reflect the prevailing economic conditions2 or where it
is nor found reasonable3, or promotes the interests of
justice4.

2 IOC v. Lloyds Steel Industries Ltd 2007( 4) Arb LR 84 (Delhi)    @   Pg. 103
3 (2009) 17 SCC 296
4 FCI v. AM Ahmed AIR 2007 SC 829

REPORTABLE”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10394 OF 2018
(Arising out of SLP (Civil) No. 25819 of 2018)

Vedanta Ltd. Vs Shenzen Shandong Nuclear
Power Construction Co. Ltd. 

INDU MALHOTRA, J.
Dated:October 11, 2018
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