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TWO TIER ARBITRATION
TWO TIER ARBITRATION
“Whether it is permissible under the laws of India to settle disputes or differences by a two-tiered arbitration procedure as provided for in clause 14 of the contract between the parties.”
“Assuming that, under the laws of India, a two-tier arbitration process is appropriate if the award granted in the appeal arbitration being a 'international award' is liable to be implemented under the provisions of Section 48 of the Arbitration and Conciliation Act, 1996, in the case of Centrotrade[1]. If so, what relief is eligible for Centrotrade?”
The tri-judge ISC bench decided to discuss only the first question and suggested that the appeal "would be scheduled for hearing on the remaining matter" later, depending on the answer to the first question.
The first question hearing was intermittent and had taken several months. In the end, the ISC unanimously decided that a two-tier arbitration was indeed permitted under Indian Law, as provided for in the agreement in question. The ISC thus reaffirmed, among other things, the principle of party autonomy for such purposes — the power of contracting parties to shape a process of private dispute resolution- And that such a privately-forged process is generally not hindered by Indian laws on judicial proceedings (such as the right of appeal). The ISC also maintained that a two-tier arbitration process is not against public policy in India. Finally, the ISC decided that the second-instance arbitral award in London was a "foreign award."
Furthermore, that first ISC tri-judge bench instructed the second question to be promptly put for hearing. Thus, "just" three years later, in early March 2020, a entirely different ISC tri-judge bench heard the second question. On June 2, 2020, its judgment followed.
HCL 's stance on the second issue was also flavored with concerns regarding Indian public policy and 'natural law' In turn, it argued, among other items, that the opportunity to present its case in the ICC tribunal had been refused. But during the entire progress of the ICC proceeding HCL had been fully aware. The ISC found that HCL had at first deliberately and intentionally declined to participate in the ICC arbitration; then changed its tactics as the timetable for the arbitrator 's party submissions (repeatedly extended) was running out; then requested additional time extensions, which were also granted; and finally submitted its submissions shortly after the arbitrator 's final closing, And that the arbitrator, in reaching his conclusions and arbitral award, nevertheless expressly considered those belated submissions. (HCL alleged that its written submissions, received at the London arbitrator on 13 September 2001, were delayed by 9-11 events, although HCL did not provide evidence that its New Delhi counsel had transmitted telecopies or transported couriers.
The ISC has noted inter alia that
"Jeremy Cooke QC gave HCL as many as six opportunities to present its case and bent backwards by extending several times the time for filing submissions and documents, and even considered documents found by HCL after the last deadline had been extended, and then passed the award." In the end, the ISC bench unanimously cited the idea that a party disregarding procedural decisions and schedules issued by a properly appointed arbitrator should do so at its own risk.
Therefore, Centrotrade has its final judgment from the Indian Supreme Court, after more than 20 years and three big ISC excursions. The arbitration award is now reaching a total of US$ 1.7 million, including interest. The Indian Supreme Court ruled that "the foreign award, dated 29.09.2001, will now be enforced." So, for this purpose, it is back to a Calcutta High Court. Hope is plentiful.
[1] Centrotrade Minerals & Metal Inc vs Hindustan Copper Ltd on 9 May, 2006
- ISSUES
- COMMENT
- Conclusion
