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The Amway Enterprises Dispute: The International Nature of Arbitration Cases.
The Arbitration and Conciliation Act of 2015 is a body of text that governs the principles and contains the procedures which are meant to be followed during an arbitral case. It makes provisions for various aspects of arbitration such as the appointment of arbitrators, arbitral awards, the process for international arbitration and so on. The case in question in this article deals with how disputes regarding nationality can put the national/global status of the case in a grey area, calling for further adjudication.
Relevant Provision- Section 2 (f) sub-clause 1- “an individual who is a national of, or habitually resident in, any country other than India” [concerning what would make an arbitration dispute fall under the ambit of international commercial arbitration]
Facts of the Case:
In the 2021 case of Amway India Enterprises (P) Ltd. v. Ravindranath Rao Sindhia & Anr., the respondents who were the distributors for the appellants’ products in India were residents of the United States, who were operating through their office, which was located in India. The dispute between the parties called for an arbitration settlement, and the High Court of Delhi was approached regarding the appointment of a sole arbitrator. The same was contested by the appellants due to the respondents' fulfilment of s.2 (f)(1).
The High Court citing a precedent case*, revoked this contested plea, following in the footsteps of the same judgement and appointed a sole arbitrator, holding that this case did not fall under the purview of an international issue, simply because the respondents operated through their Indian office.
Judgement Delivered:
The Supreme Court was then approached for the same case, and a bench consisting of Justice Justice R.F. Nariman and Justice B.R. Gavai looked into the matter and dismissed the decision made by the High Court on the principle of s.2 (f)(1) mentioned in the Arbitration and Conciliation Act, 2015. The Hon’ble judges upheld the provision and further opined that the Delhi High Court did not have jurisdiction to appoint a sole arbitrator because the case on its face was a case of International Commercial Arbitration, and in conclusion, impugned the judgement laid down by the HC.
Reliance upon the 2019 decision of the Larsen & Toubro Ltd - SCOMI Engineering Bhd v. MMRDA case by the Delhi HC did not depend on sub-clause 3 of s.2(f), simply because of the nature of the contract between those parties wherein the control was vested in the Indian based company. The same could not have been saying for this case as the responsibility was on a foreign residing individual who was merely operating out of his Indian office, qualifying the case as an International Commercial Arbitration under s. 2(f)(1) of the Arbitration and Conciliation Act, 2015.
This case was a multi-faceted one as the issues were arising from its international nature being in question and because there was a question of legality surrounding the proprietorship of the respondents, in addition to which the Supreme Court dismissed the treatment of this case as a domestic one.
Regarding the internationality of a dispute settlement, the main point is- The operation of a business through their business office in India does not diminish the internationality of the case if a party is a foreign national/habitually present in any country which is not India or is a company which was not incorporated in India, in totality making it a matter of international commercial arbitration.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- Highlighting the Relevant Legal Provision
- Facts and Judgement of the Case
- Brief Analysis of the Judgement and Conclusion
