The Supreme Court recently refused enforcement of a foreign award on the basis that it was contrary to the fundamental public policy of India. Although a recent decision, the dispute arose almost 40 years ago and thus pertains to an era which preceded the amendment of the Arbitration and Conciliation Act. In its decision, the court analysed the concept of public policy and the difference between contingent contracts and frustration as a principle for voidability of contracts under the Contract Act.
If the parties to a contract fail to choose the applicable law, the task trickles down to the arbitral tribunal. This will be one of the first tasks required of an arbitral tribunal, as adjudication of a dispute is not possible until the applicable law has been determined. Further, the application of an incorrect law is a ground for setting aside an arbitral award. This article examines the role of an arbitral tribunal in determining the applicable law in arbitration proceedings.
The concepts of 'seat' and 'venue' in the context of arbitration law have been the subject of numerous landmark rulings in India. However, the test for distinguishing between these two concepts has yet to be settled under Indian law. In order to avoid confusion, inconvenience or conflicting decisions in the future, this issue must be referred to a larger bench of the Supreme Court as soon as possible for its final word on the matter.
The division bench of the Bombay High Court recently confirmed the legal position and the tests for determining whether a partial final award may be interpreted as an arbitral award under the Arbitration and Conciliation Act. In so doing, it also clarified the position on the limitation period for challenging such an award.
Following the passing of amendments in 2015, the Arbitration and Conciliation Act specifically provides that arbitral tribunal orders which are passed under Section 17 of the act will be enforceable under the Code of Civil Procedure as if they were a court order. However, a party can take advantage of Section 17 only when the arbitration is seated in India, which raises questions as to the enforceability of interim measures granted by arbitral tribunals which are situated outside India.
On the back of its new electoral mandate, the Modi Sarkar 2.0 government recently presented its first budget. The budget focuses primarily on infrastructure spending and boosting investment from private and foreign investors, with the government forecasting that the Indian economy will grow to $5 trillion by 2025. Following the budget announcement, a slew of reforms and policies are expected in the coming months. This article highlights some of the key capital market-related amendments.
The Competition Commission of India (CCI) recently imposed a Rs80,185 fine on the Jalgaon District Medicine Dealers Association for collecting product information service (PIS) charges from pharma product manufacturers, thereby restricting medicine supplies in the market. Although this order is one in a series imposed by the CCI on chemist and druggist associations, it is the first to impose fines solely for the collection of PIS charges.
In April 2019 the Delhi High Court disposed of 12 writ petitions filed by 10 car manufacturers and India's largest music label and movie studio. The writ petitions had challenged the main provisions of the Competition Act 2002 and were filed against a common order passed by the Competition Commission of India, which had found that 14 car manufacturers had been dominant in their respective markets and abused this dominance by preventing the establishment of an aftermarket in India.
On 15 January 2019 the Supreme Court allowed the Competition Commission of India's (CCI's) appeal against a Delhi High Court order which had prohibited the CCI director general from acting on the evidence seized during a dawn raid of 19 September 2014. The dawn raid in question was the first to be conducted by the director general and formed part of the investigation into JCB India Limited's alleged abuse of its dominant position.
The Competition Commission of India (CCI) has dismissed allegations of resale price maintenance against Kaff Appliances (India) Pvt Ltd under Section 26(6) of the Competition Act 2002. The CCI noted that it could not conclusively establish that the evidence (ie, an email, a caution notice and a legal notice) had been used as instruments to impose a resale price maintenance on the informant. Further, the presence of many competing dealers suggested a fair degree of intra-brand competition.
In January 2019 the Competition Commission of India imposed a penalty of Rs85,01,364 on Godrej & Boyce Manufacturing Co Ltd for its role in a bilateral ancillary cartel, which violated Section 3(3) read with Section 3(1) of the Competition Act. Godrej's role in the cartel had been revealed via a leniency application filed by Panasonic Corporation, Japan on behalf of itself and its Indian subsidiary.
Over the years, India has witnessed a number of notable tax reforms. Now – in yet another attempt to enhance the country's attractiveness as a business destination, boost investment and encourage manufacturing – the government has introduced the Taxation Laws (Amendment) Ordinance 2019, which has amended the Income Tax Act 1961 and the Finance (No 2) Act 2019. In so doing, India has tried to bring its tax rate in line with other countries and has given domestic companies a level playing field.
In an attempt to curb tax evasion and avoid tax leakage, the government introduced the General Anti-avoidance Rule (GAAR), which took effect from April 2017. Following the introduction of the GAAR, businesses have had to revisit and revalidate their transactions. Further, as there are a number of potential issues that may be faced by taxpayers, they must observe the types of transaction that are likely to be affected.
The Central Board of Direct Tax (CBDT) recently issued a circular clarifying the applicability of Section 56(2)(viib) of the Income Tax Act and the procedure that must be followed by tax officers in assessment proceedings. Although an attempt has been made to end the confusion created in the start-up community, uncertainty surrounding the legal basis for the Department for Promotion of Industry and Internal Trade and CBDT notifications regarding the applicability of Section 56(2)(viib) remains.
On the back of its new electoral mandate, the Modi Sarkar 2.0 government recently presented its first budget. The budget focuses primarily on infrastructure spending and boosting investment from private and foreign investors, with the government forecasting that the Indian economy will grow to $5 trillion by 2025. Following the budget announcement, a slew of reforms and policies are expected in the coming months, including a draft of the much-awaited Direct Tax Code.
The Bombay High Court recently considered whether a taxpayer, which was resident in India and the sole owner of a business that provided personnel on an as-needed basis to foreign companies, had been required to deduct tax under Section 195 of the Income Tax Act when paying an employee who it had loaned to a Kuwait-based company. Section 195 of the act requires taxpayers to deduct tax on any payment (other than salary payments) made to non-residents.
The Transgender Persons Act came into force with effect from 10 January 2020 and aims to protect transgender persons' rights and welfare, particularly with regard to employment. Among other things, employers must ensure that transgender employees face no discrimination in matters relating to employment, including recruitment, promotion and other related issues.
The Ministry of Labour and Employment recently published the draft Code on Social Security 2019 in an attempt to amalgamate, simplify and rationalise the laws on social security. Notably, the code has introduced the concept of gig and platform workers to Indian labour law. In its current form, the code does not specify the extent of employers' obligations but merely lays out a framework. The government is expected to formulate detailed rules and regulations once the code enters into force.
The Employees' Provident Fund Organisation recently directed the provident fund authorities not to initiate inquiries into employers' previous wage structures on the assumption that certain allowances might not have been treated by employers as basic wages for the purposes of provident fund contributions. Such inquiries had been prompted by the Supreme Court's decision in Vivekananda, which clarified the legal position regarding allowances that fall within the definition of 'basic wages'.
The Haryana state government recently issued a notification under the Standing Orders Act and introduced a new requirement for principal employers and contractors to file an undertaking of compliance with the act. While the 2019 notification aims to ensure the effective enforcement of the act, employers may perceive the move to require compliance a condition precedent to obtaining registration under other labour laws as a roadblock.
The employees' provident fund is a social security fund comprising contributions from employers and employees, which are paid to employees on their retirement. The entire process is administered by the Employees' Provident Fund Organisation (EPFO), which is a statutory body established by the Ministry of Labour and Employment. To keep up with digitisation, the EPFO recently updated the process under which subscribers can withdraw and transfer provident funds.