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- Khyati Maurya [1] & Saransh Sood [2]   Introduction The new Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID) that came into force in July 2022, is a comprehensive revision of the 2006 Arbitration Rules brought with a view to bringing efficiency and cost-effectiveness in the investor-state resolution process. Major changes like mandating disclosure of third-party funding, providing different timelines to the tribunal to give its decision at various stages and expressly providing the power to grant security for costs align with broader concern for increasing transparency and efficiency in the system of investor-state dispute resolution. But particularly it is the purported omission of the provision allowing the investment tribunals to draw adverse inferences in the 2022 rules which raises questions. Adverse inference refers to an indirect conclusion drawn by a tribunal as a sanction against a party that refuses to provide direct evidence. Essentially, it assumes that the withheld evidence would have been unfavourable to the party's case. For example, in Feldman v. Mexico , the claimant accused Mexico of discriminatory tax treatment against foreign taxpayers. The tribunal ordered Mexico to produce evidence against discrimination between foreign and domestic taxpayers. However, Mexico failed to provide this evidence citing confidentiality concerns. As a result, the tribunal inferred that the withheld evidence likely demonstrated unfair treatment of domestic taxpayers, which would have supported the claimant’s allegations. Adverse Inferences are essential in international arbitration to ensure fairness and effectiveness by compensating for the tribunal's lack of coercive power, to compel evidence from sovereign states. For instance, unlike courts, tribunals cannot enforce contempt charges or impose penalties for failing to comply with orders for document production. Adverse inferences help address this limitation by drawing conclusions unfavourable to the non-complying party. 2022 Arbitration Rules & the Ensuing Conundrum In the erstwhile 2006 rules, Rule 34(3) allowed the parties to request the tribunal to ‘take a formal note of the parties refusal’ to produce evidence as ordered by the tribunal. However, these words, i.e. ‘take formal note of the parties refusal’ contained in Rule 34(3) of the 2006 Rules have been omitted from the Rule 2022 Rules without any explicit explanation as to its deletion in the working papers. The only reference to adverse inferences is found in the comments given by China and Armenia . While it was proposed by China that the power to take adverse inferences should be formally omitted, Armenia argued in favour of the formal inclusion of this power. However, no discussion was recorded on these proposals. It becomes even more intriguing to see a similar omission from Note 13 on Document Production of UNCITRAL Notes on Arbitral Proceedings wherein an explicit reference to the power to draw adverse inference has been deleted in 2016 notes that was earlier contained in the erstwhile 1996 notes. Although, there has long been a debate surrounding the potential risk of ‘false positives’ associated with reliance on such a mechanism, the recent revision prompts the question of whether the Tribunals still have the power to draw adverse inferences under Arbitration Rules 2022. To begin with, the general principle regarding use of inferences in international dispute resolution has been explained by ICJ in the Corfu Channel Case . In the said case, the ICJ was to decide upon the liability of Albania in laying the underwater mines. However, there was no direct evidence establishing that the mines were laid by Albania. Despite this, while holding Albania liable for the loss caused due to the mines, based on inferences, the court reasoned that when a state exercises exclusive control, the victim of an international law breach often lacks access to direct evidence to establish state responsibility. Therefore, the reliance of the victim on inferences and circumstantial evidence should be construed liberally, and the tribunal should be allowed to draw inferences when the party to the dispute fails to provide the required direct evidence (Page 18). This practice is now accepted across legal systems and is acknowledged by international courts and tribunals. For example, in the case of William J Levitt v. Islamic Republic of Iran , the Iran-US Claims Tribunal noted that it is free to draw inferences from the parties' non-compliance with its order to produce documents (¶ 61). However, since the ICSID Arbitration Rules 2022 omits the reference to the power of an arbitral tribunal to take formal note of the failure to produce documents, which was earlier expressly contained in Rule 34(3) of the ICSID Arbitration Rules 2006, the question as to whether or not the ICSID tribunals continue to possess this power becomes relevant. Although, in most instances, the tribunals have assumed the power to draw adverse inferences without any justification, it has sometimes referred to power in Rule 34(3) as the source of the power to draw adverse inferences. Illustratively, in the case of Rompetrol v. Romania , the tribunal ruled that the power to take formal note under Rule 34(3) is the source of the tribunal’s discretionary power to draw adverse inferences. In RSM v. Saint Lucia , the tribunal ruled that the “ Rule 34(3) reflects the common principle that a fact-finder can draw inferences from a failure to produce evidence” (¶ 56). Similarly, in the case of Feldman v. Mexico , the arbitral tribunal ruled that it is empowered to draw appropriate inferences from any party's failure to comply with the document production order (¶ 8). At this juncture, it is important to look at the source of the words ‘take formal note of the refusal’ as contained in the ICSID Arbitration Rules 2006 . A similar use of these words can be seen in the Statute of the International Court of Justice (ICJ), which, under Article 49 deals with the Evidence taking the power of the ICJ. It also uses the words ‘Formal note shall be taken of any refusal’ (to comply with the evidence production order), and commentators have interpreted this as the source of the power of ICJ to attach such consequences as it deems necessary for the non-compliance with the document production order.  In such a scenario, it can be argued that the omission of the power to take formal note of the refusal to comply with the document production order, is tantamount to the omission of the power to attach negative consequences to non-compliance with the document production order, thereby excluding the power of arbitral tribunal to draw adverse inferences from the non-production of documents.  A similar case against adverse inferences is also reflected in the UNCITRAL Notes on Arbitral Proceedings, wherein the explicit reference to the power to draw an adverse inference in its Note 13 on Document Production contained in the erstwhile 1996 notes has been deleted in the 2016 notes.  To the contrary, it can be argued that a tribunal possesses an inherent authority to draw adverse inferences from the non-production of the documents that is embedded in its power to determine the admissibility, relevance, and weight of the evidence presented. This view is also supported by Nathen D. O’ Malley, in his treatise “ Rules of Evidence in International  Arbitration .” Accordingly, it can be concluded that the power to draw adverse inferences remains intact despite the change in arbitration rules (¶ 7.37). A similar approach was also followed by the tribunal in the case of Sevilla Basheer B.V. v. The Kingdom of Spain , where the tribunal, while relying on the power to admit and weigh evidence, contained in Rule 34(1) of the 2006 Rules, concluded that it did possess the power to draw adverse inferences from the non-compliance with the document production order (¶ 550).  Under the 2022 Arbitration Rules, the tribunal continues to possess the power to admit and assign weight to the evidence under Rule 36 . Here, the tribunal is empowered to admit direct and indirect evidence as the provision does not specifically omit the indirect evidence. It is important to note that this distinction, between the direct and indirect evidence, pertains to the weight of the evidence rather than its admissibility , thus, both the direct and the indirect evidence can be admitted. Since, adverse inferences, are, by their very nature, indirect evidence only, they should be admissible under Rule 36(1) of the ICSID Arbitration Rules 2022, and the only question for the tribunal to decide is regarding the weight to be attached to it. Further, it is well-established that tribunals possess the authority to resolve procedural matters . Article 44 of the ICSID Convention grants tribunals the power to address any procedural issues not expressly covered by the ICSID Convention, Rules, or Regulations. This principle was reaffirmed in the case of Libananco Holdings Co. v. Republic of Turkey , wherein it was reiterated that the tribunal ‘must be regarded as endowed with the inherent powers required to preserve the integrity of its process – even if the remedies open to it are necessarily different from those that might be available to a domestic court of law.’ Additionally, this position is in consonance with the procedural laws of most legal regimes where courts can assess the value of any evidence. Even in international arbitration, arbitration clauses rarely address the issue of weighing evidence directly.  It can hence be argued that the inherent and unquestionable authority to draw adverse inferences unless otherwise agreed by the parties, stems from the arbitrator’s wide discretion in admitting and evaluating the relevance of evidence, as well as their power to establish and manage arbitration procedures. Further it cannot be argued that the power to draw adverse inferences results in a shifting of the burden of proof ( onus probandi ) since the request to draw adverse inference is often made by the opposing party, thereby violating the general principle in international arbitration of actori incumbit probatio . If an opposing party fails to provide evidence that challenges claimant’s case, then it will be a matter of procedural non-compliance and will not affect the burden of proof.   As Jeremy K. Sharpe explains, referencing the arbitral award in Feldman v. Mexico , once the party bearing the ultimate burden of proof establishes a prima facie case, the burden of production ( onus proponendi ) shifts to the responding party to counter that evidence. In other words, if the party with the burden of proof presents evidence sufficient to create a presumption of truth, the burden shifts to the opposing party, which must then produce adequate evidence to rebut the presumption. This approach, adopted in other cases as well, as Sharpe rightly notes, does not shift the burden of proof itself but rather the burden of production or evidentiary burden. Moreover, it is essential to recognise that the authority to draw adverse inferences has historically been a discretionary prerogative rather than a default sanction. Even IBA Rules present adverse inference as a possible sanction and subject this power to certain requirements that must be met under Article 3.3 and Article 4.10. Due to the discretionary nature of this power, it is drenched in subjectivity but applying such clear conditions and criteria can introduce greater objectivity. For example the standard of reasonableness, consistency with the facts in the record, logical nexus of inference and the missing evidence, which has been inspired by the scholarship of Jeremy Sharpe and Bin Cheng [3] and presently contained in IBA rules as well laid down by various tribunals like in Frederica Lincoln Riahi v. Government of the Islamic Republic of Iran . Arbitrators should explicitly show in their award that these criteria were followed and provide reasons for assigning or withholding weight to the adverse inference. They must also ensure that the defence rights are upheld throughout the process. Moreover, adverse inference as a form of indirect evidence in itself carries very limited evidentiary value. The Arbitral jurisprudence has developed several cautions before an adverse inference is taken. Therefore, in the opinion of the author, instead of omitting the said power itself, which has continued to be a tool balancing the subjective role of the tribunal in weighing evidence and the need for objective fairness in the process, the focus must be on better institutionalizing these safeguards. Conclusion   In the light of the foregoing discussion, it can be concluded that the omission of the power to take ‘formal note’ of the parties' refusal to comply with the document production order does not conclusively take away the power of arbitral tribunals to draw adverse inferences in case of non-compliance with the document production order. Since no arbitral award based on the 2022 rules has discussed the power of arbitral tribunals to draw adverse inferences, it remains to be seen how the tribunals interpret this omission. However, in the opinion of the authors, the tribunals must rule in favour of power to draw adverse inferences because it is the most potent arrow in the quiver of the arbitral tribunal to enforce its document production orders, especially when it lacks the other sanctions available with the domestic courts to compel the production of evidence. This power with ICSID tribunals becomes even more important because investor-state disputes always involve a much more powerful sovereign state that possesses various key evidence for the fair adjudication of the disputes, and it is seldom possible to marshall the evidence against the sovereign.  [1] Khyati is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at khyati22bal037@gnlu.ac.in [2] Saransh is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at saransh22bal069@gnlu.ac.in [3] Bin Chen, General Principles of Law as applied by International Courts and Tribunals p. 333-335 (Cambridge University Press 2006).

Shirin Sarkar * Introduction: Setting Sail The maritime industry, much like the vast oceans it sails upon, is no stranger to turbulent waters, especially when financial disputes surface. Such disputes can leave ships stranded in a storm of legal complexities, with no clear direction in sight. However, in India, the convergence of two powerful legal forces – the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, and the Arbitration and Conciliation Act, 1996 – offers a navigational chart to guide the way through these rough seas. This blog embarks on a voyage through the intersection of these two vital laws, uncovering how they work in tandem to resolve maritime claims and facilitate arbitration. The Admiralty Act serves as a beacon, providing a specialized legal framework for addressing disputes related to ships, freight, ownership, and damages. Meanwhile, the Arbitration Act acts as a lifeboat, offering parties an alternative, quicker, and often more cost-effective route to resolution, away from the heavy anchor of traditional court proceedings. The Admiralty Act - Enforcing Maritime Claims The  Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017  serves as a crucial legal framework for addressing maritime disputes in India. This Act consolidates various existing laws and empowers admiralty courts to protect the rights and interests of claimants, akin to a crew navigating through turbulent waters in search of justice. Notably, these courts possess the authority to arrest vessels, a significant legal mechanism that enables claimants to secure their claims by immobilizing a ship's operations. This tool is particularly vital in cases involving unpaid wages or damages, where prompt intervention is essential to prevent further losses. Under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 , admiralty jurisdiction is vested in several High Courts across India, extending to their respective territorial waters. This expansion allows for comprehensive oversight and enforcement of maritime claims. For instance, if a shipping company defaults on cargo payments or fails to address damages during transit, the aggrieved party can petition an admiralty court for an arrest order. Such action not only provides a strategic negotiating advantage but also ensures that the vessel remains under the court’s jurisdiction until the dispute is resolved. The Act clarifies the conditions under which courts can exercise this authority, encompassing claims related to vessel ownership, mortgages, and other maritime liabilities, thereby streamlining the legal process for addressing maritime disputes effectively. The Arbitration Act - Alternative Resolution at Sea In contrast, the Arbitration and Conciliation Act, 1996 offers an efficient and confidential alternative dispute resolution mechanism favoured by businesses, particularly in shipping contracts. These contracts often include arbitration clauses, allowing parties to resolve disputes outside of traditional litigation. The Act promotes finality and expedience, essential for the fast-paced nature of international trade. It governs both domestic and international arbitration, enabling Indian businesses to engage confidently in global markets. However, the interaction between arbitration and admiralty law raises important questions, especially when disputes occur simultaneously with arbitration proceedings. The Maritime Arbitration Rules further clarify the framework for resolving maritime disputes under the Arbitration Act. While Indian courts increasingly support arbitration agreements and foreign arbitral awards, challenges remain in enforcing these agreements amid ongoing admiralty proceedings. Striking a balance between judicial independence and a pro-arbitration environment is crucial for fostering confidence among international stakeholders. The Collision Course: When Admiralty Meets Arbitration The intersection of ship arrests and arbitration clauses creates a complex legal landscape. A key scenario arises when parties seek to freeze a vessel while engaging in arbitration negotiations. Although it is permissible to arrest a ship even during ongoing arbitration, this can lead to jurisdictional conflicts and procedural challenges. Claimants often view ship arrests as a form of legal insurance, ensuring that assets remain available should they prevail in arbitration or litigation. The International Convention on Arrest of Ships allows for such arrests specifically for maritime claims, reinforcing the notion that a ship may be arrested to obtain security even if the merits of the claim are to be adjudicated elsewhere due to an arbitration clause. This mechanism becomes particularly critical in international contexts where vessels are often registered under different flags, complicating enforcement. However, the arrest can complicate arbitration proceedings , as courts must balance the interests of both parties while navigating overlapping jurisdictions. Judicial decisions play a pivotal role in this dynamic; courts act as mediators, striving to ensure that neither party is left adrift amid conflicting legal obligations. Recent rulings have clarified that while courts can uphold arbitration agreements, they also retain the authority to grant arrest orders when justified by maritime claims. This duality emphasizes the necessity for careful consideration of both admiralty principles and arbitration agreements, ensuring that the rights of claimants are protected without undermining the arbitration process. Case Studies: Tales from the Courtroom Seas Two notable cases illustrate the complexities at the intersection of admiralty law and arbitration: 1. In Raj Shipping Agencies v. Barge Madhwa [ Raj Shipping Agencies v. Barge Madhwa, 2020 SCC OnLine Bom 651 ], the Bombay High Court addressed the interplay between the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and arbitration principles within the context of insolvency proceedings. The court ruled that an Action-in-rem could be initiated even during a winding-up order or moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC) , clarifying that no leave under Section 446(1) of the Companies Act, 1956 , is required to commence or continue admiralty actions. The court emphasized that actions in rem target the vessel itself, allowing claimants to secure their rights independently of a corporate debtor's insolvency status. This ruling affirms that the Admiralty Act operates as a special law governing maritime claims, coexisting with the IBC. Ultimately, the judgment safeguards maritime claimants' interests while ensuring that admiralty courts retain exclusive jurisdiction over maritime matters, even amid insolvency proceedings. 2.     The Bombay High Court's judgment in Altus Uber v. Siem Offshore Rederi AS [Altus Uber v. Siem Offshore Rederi AS, 2019 SCC OnLine Bom 1327] sheds light on the compatibility of admiralty jurisdiction with arbitration proceedings under Indian law. The court clarified that the presence of an arbitration agreement does not preclude the institution of an admiralty suit for securing claims through mechanisms like ship arrests. It emphasized that any security obtained in an admiralty action could be retained, even if the suit is stayed in favor of arbitration. Furthermore, the court highlighted the broader scope of Section 5(2) of the Admiralty Act, 2017, which permits the arrest of a ship owned or demise-chartered by the liable party, diverging from the 1999 Arrest Convention's limitations. This decision underscores a pragmatic approach that balances the needs of maritime commerce with the principles of arbitration, ensuring claimants can effectively safeguard their interests while resolving disputes through arbitration. These two cases emphasize the nuanced relationship between admiralty law and arbitration, demonstrating that both legal frameworks can coexist while serving distinct yet complementary purposes. Raj Shipping Agencies v. Barge Madhwa underscores the autonomy of admiralty courts to address maritime claims as actions in rem, even amidst insolvency proceedings, safeguarding claimants’ rights to secure their interests irrespective of the debtor's financial status. Meanwhile, Altus Uber v. Siem Offshore Rederi AS highlights the flexibility of admiralty jurisdiction to coexist with arbitration, enabling the arrest of ships to secure claims without undermining the arbitration process. Together, these cases showcase the adaptability of Indian maritime law in balancing the interests of claimants, creditors, and international commerce, while fostering confidence in India’s legal system as a reliable forum for resolving maritime disputes. Challenges: Stormy Waters Ahead Despite advancements in maritime law, several challenges persist, particularly regarding jurisdictional ambiguity, which often leads to confusion in maritime arbitration. This ambiguity complicates efforts to resolve disputes efficiently, as different jurisdictions may interpret laws and arbitration agreements differently. Additionally, legal bottlenecks can arise when ship arrests delay arbitration proceedings, further complicating the resolution process for all parties involved. As global trade continues to evolve, it is imperative for India’s maritime laws to adapt to international standards. Aligning Indian practices with UNCLOS will effectively clarify most jurisdictional ambiguities in maritime disputes. UNCLOS can potentially clarify maritime boundaries in a significant way, as in the case of the arbitral award over the maritime boundary in the Bay of Bengal between Bangladesh and India . Under Annex VII of UNCLOS, the award for and against the two war parties established simple legal frameworks that assign specific entitlements for each country for about 406,833 square kms of maritime territory. Based on the tribunal's decision, Bangladesh received about 106,613 square kms and India around 300,220 square kms, which is a good case in proving how effective UNCLOS can be in delimiting boundaries and reducing conflicts. By allowing for the structured disposition of any maritime claims, UNCLOS also enables India to exercise its sovereign right over the control of its resources and work with cooperating neighbouring states. Such an alignment would reaffirm India's sovereignty regarding its territorial waters and EEZ and regain its credibility among the other nations, thereby promoting regional goodwill and default stability in maritime governance. The interaction between admiralty courts and arbitration forums must be streamlined to ensure that legal proceedings do not become protracted due to jurisdictional disputes. Legislative reforms are urgently needed to harmonize domestic regulations with global benchmarks. This alignment will not only enhance the efficiency of dispute resolution but also ensure that India maintains its position as a competitive and attractive hub for maritime commerce. By addressing these challenges, India can better facilitate international trade and protect the interests of stakeholders in the maritime industry. Charting a New Course: Recommendations To address the challenges and improve the interplay between admiralty law and arbitration in India, several recommendations emerge: ·  Clearer Maps: Legislative amendments should be made to align the Admiralty Act and Arbitration Act more closely. Amendments could clarify admiralty court jurisdiction with arbitration clauses, streamline ship arrest procedures to align with arbitral outcomes, enhance foreign award enforcement, and adopt international best practices for maritime arbitration, ensuring efficiency and consistency. This alignment would provide clearer guidelines on how these laws interact in practice, reducing jurisdictional ambiguity that currently complicates dispute resolution. · Smoother Sailing: Implementing comprehensive training programs for maritime lawyers and arbitrators would enhance their understanding of both areas of law. Such education could lead to improved dispute resolution outcomes and foster a more cohesive legal environment for maritime arbitration. · Learning from Lighthouses: Insights from jurisdictions like Singapore and the UK can inform best practices in navigating maritime disputes effectively. Singapore’s SCMA offers a specialized, flexible framework for maritime disputes, supported by courts that enforce arbitration awards with minimal interference. Similarly, the UK’s LMAA emphasizes procedural efficiency, confidentiality, and enforcement under the New York Convention, showcasing arbitration-friendly environments that integrate seamlessly with maritime laws. By studying these models, India can adopt strategies that streamline arbitration processes, enhance enforcement of awards, and ensure that maritime claims are handled efficiently. This proactive approach will not only strengthen India's legal framework but also bolster its position as a competitive hub for international maritime commerce.  By implementing these recommendations, India can better navigate the complexities of maritime law and arbitration, ensuring a more robust framework for resolving disputes in the shipping industry. Conclusion: Anchoring Clarity In conclusion, the successful harmonization of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, with the Arbitration and Conciliation Act, 1996 is crucial for bolstering India's legal framework in resolving maritime disputes. The interplay between these two laws plays a pivotal role in facilitating timely, efficient, and equitable dispute resolution in the maritime sector. However, jurisdictional ambiguity and procedural challenges continue to pose significant obstacles. To address these issues and improve the current system, legislative amendments are essential. By aligning the Admiralty Act more clearly with the Arbitration Act and establishing uniform guidelines for handling ship arrests during arbitration proceedings, India can eliminate jurisdictional conflicts and streamline the legal process. Furthermore, enhancing the training of maritime lawyers and arbitrators will ensure a deeper understanding of both legal systems, promoting more effective dispute resolution. Drawing lessons from global jurisdictions such as Singapore and the UK will enable India to adopt best practices, enhancing both the enforcement of arbitration awards and the overall efficiency of maritime dispute resolution. These steps will not only safeguard the interests of maritime claimants but will also strengthen India's position as a reliable and competitive hub for global trade. Ultimately, implementing these reforms will ensure that India’s maritime legal system remains dynamic, responsive, and in harmony with international standards, paving the way for smoother sailing in resolving maritime disputes. *Shirin Sarkar is a 2nd Year student at Maharashtra National Law University, Aurangabad.

Ishant S. Joshi and Vatsala Tyagi* Introduction The inclusion of Appellate Arbitral Tribunals (hereinafter: “ AAT ”) under Section 34A of the Draft Arbitration and Conciliation Amendment Bill, 2024 (hereinafter: “ Draft Bill ”) marks a transformative step in India’s arbitration regime. By allowing arbitral institutions to establish AATs to entertain applications for setting aside arbitral awards under Section 34 of the Arbitration and Conciliation Act , 1996 (hereinafter: “ Act ”), the draft bill introduces a two-tiered arbitration mechanism. While this possible insertion has the potential to enhance arbitration practices and reduce judicial intervention, it also brings significant challenges and ambiguities that require careful examination before the draft bill is brought before the parliament. The AAT, as envisioned in the draft bill, will derive its authority from the parties' consent. If parties opt for this mechanism, they effectively transfer the power of setting aside awards from the courts to the AAT. Furthermore, the provision retains the right to appeal under Section 37 of the Act. Codifying Two-Tier Arbitration Section 34A of the draft bill (hereinafter: “ Section 34A ”) has in essence, codified the judgment in M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd . . The Supreme Court, in this case, upheld the validity of two-tier arbitration clauses, affirming the parties’ right to an appellate mechanism. By codifying this right through Section 34A, the draft bill can eliminate ambiguity regarding two-tier arbitration. By offering an appellate platform, the draft bill enhances India’s attractiveness as an arbitration-friendly jurisdiction, particularly for international commercial disputes. Impartiality and Composition of AAT A question may arise as to what is going to be the composition of the AAT? Some might be sceptical of the AAT because the same institution will decide on the award when it goes to appeal. For example, when an award is decided by DIAC, then if the parties opt for Section 34A, that same institution will decide on the validity of the award. These concerns can be mitigated by introducing a clause outlining the AAT's composition, which shall include both domain experts (e.g., specialists in fields like cement or medicine, depending on the case) and legal professionals like retired judges and lawyers. This dual composition ensures balanced decision-making, addressing both legal and technical conflicts effectively. In lieu of this, there are two approaches for the constitution of the appellate tribunal: (i) either the parties participate in choosing the arbitrators for the AAT, or (ii) the arbitral institutions alone are given this power. The latter ensures impartiality and independence, as the tribunal is constituted purely for review purposes. Although this may raise eyebrows in a party-oriented arbitration process, it aligns with the need for objectivity in appellate adjudication. Further, this approach will also preserve the institutions independence, reducing scope for conflict of interests. Moreover, Section 34(1B) of the draft bill further supports this approach by mandating the AAT to formulate specific grounds for appeals based on the award passed by the original tribunal, enabling skilled and focused adjudication. This seemingly limits party autonomy in so far as their right to challenge awards on other grounds. However, it is essential to sustain the valued traits of finality and time efficiency of arbitration. Addressing Limitation Periods Another challenge is posed by absence of a clear limitation period for invoking the AAT. The absence of a defined timeline for invoking the AAT could lead to procedural abuse and unnecessary delays. This shall undermine the paramount objective of streamlining the appellate process. The draft bill must also clarify the interplay of this limitation period with the enforcement of the original award. Inspiration can be drawn from international models such as the JAMS Optional Arbitration Appeal Procedure (hereinafter: “ JAMS ”)  and the AAA Optional Appellate Rules (hereinafter: “ AAA ”), which suspend enforcement of the initial award until the appellate process is concluded. The limitation period for the initiating enforcement shall only commence after the appellate award. The Bill must delineate such intricacies to prevent procedural inefficiencies. Applicability to Ad-Hoc Arbitrations Section 34A is not applicable to ad hoc arbitrations but only to institutional arbitrations. This exclusion risks fragmenting the arbitration landscape and undermining the uniformity of arbitration jurisprudence. Section 34A should be made applicable to ad hoc arbitrations, provided that parties adopt agreed-upon institutional rules or engage an arbitral institution, ensuring consistency with institutional arbitration practices. It could be mandated that parties engaging in ad hoc arbitration utilize the same arbitral institution or adopt identical arbitral rules if they wish to include an AAT clause under Section 34A. Extending Section 34A to ad hoc arbitrations, with appropriate safeguards, would ensure that all parties, irrespective of the arbitration’s nature, can benefit from the AAT framework. In light of this, it appears unnecessary for the AAT to be inapplicable to ad hoc arbitration proceedings. There appears no practical reason for this exclusion. Cross-Appeals: An Overlooked Necessity A critical oversight in the draft bill is its failure to address the need for a cross-appeal mechanism. A cross-appeal occurs when one party triggers the appellate arbitration clause (AAT), but the opposing party believes that the appeal is unlikely to yield meaningful results or that the issue at hand is too trivial compared to the cost and time involved in constituting an AAT and undergoing the appellate process, which is typically expensive. In such cases, as the draft bill currently stands, the opposing party would have no recourse but to be drawn into a lengthy and costly appellate process, with limited impact. To ensure fairness, the Draft Bill could incorporate a cross-appeal provision, allowing the opposing party a fixed period from the date an appeal is filed under Section 34A to submit a cross-appeal, thereby mitigating the risks of unnecessary escalation and ensuring a more balanced appellate process. Inspiration can be drawn from procedures such as the JAMS and AAA appeal procedures, both of which provide a seven-day window for filing a cross-appeal after an application for appeal is submitted to the appellate tribunal. Interaction with Time Limits for Awards The interaction between Section 34A and Section 29A of the Act, which governs time limits for arbitral awards, also warrants reconsideration. Under the current provision, in cases of domestic arbitration, the tribunal is required to deliver its award within 12 months from the date of completion of pleadings, with the possibility of an extension if both parties consent. Further extensions may be granted by the court. However, the inclusion of a two-tier arbitration process necessitates a revaluation of these timelines. A significant legal gap exists here as there is a lack of clarity on how the timelines for the arbitral award and the appellate process will interact. An appellate arbitration system is an additional procedural layer to the existing regime, which must be provided its exclusive time outlines. Drawing from international practices, the Draft Bill might better outline how the timelines should be adjusted in the context of a two-tier system. Without such provisions, the Draft Bill risks introducing more uncertainty and procedural delays, contrary to its intent of streamlining arbitration. The draft bill must account for the extended procedural framework that a two-tier arbitration system entails, ensuring that the prescribed time limits are both realistic and conducive to an efficient resolution of disputes. Enforcement Challenges Another significant issue pertains to the validity of enforcing the initial award while it is under challenge before the AAT. Leaving the matter of enforcement to the discretion of the AAT would unnecessarily prolong the arbitration process. Therefore, the statute must explicitly clarify the status of the initial award—rendered by the arbitral tribunal in the first instance—when a second-tier arbitration clause under Section 34A is invoked. Guidance can be drawn from international arbitral frameworks, such as JAMS and AAA appeal procedures both of which stipulate that the initial award cannot be enforced while an appeal is pending. This principle could be further expanded to include a provision stating that the initial award cannot be enforced until the expiration of the limitation period for filing an appeal before the AAT, a limitation period that should also be clearly defined in the bill. Financial Implications and Accessibility The financial implications of AAT proceedings also merit attention as the Draft Bill misses a crucial legal gap—how cost regulation mechanisms should be integrated into the Draft Bill. The resource intensive nature of such proceedings limits its accessibility for smaller parties or less complex disputes. Without such regulation, the Draft Bill risks skewing arbitration in favour of well-resourced parties, undermining the principle of equal access to justice. The current version does not offer any substantial protections for smaller or less-resourced parties in terms of capping the fees associated with the AAT process. Legal systems like the ICC have addressed this issue by capping costs for arbitration proceedings, ensuring broader accessibility and the Draft Bill can incorporate a legal framework similar to it to mitigate financial barriers.   Ensuring Exclusivity of the Appellate Arbitral Tribunal AATs can significantly ease the burden on the courts. However, the draft bill must explicitly state that under Section 34A, appeals must be made to the AAT rather than the court. The Draft Bill should include provisions that ensure exclusivity of the AAT as the first point of appeal, with judicial intervention allowed only in exceptional circumstances. Drawing from international arbitration practices where appeals are exclusively handled by specialized appellate bodies (e.g., ICC), the Draft Bill could propose incorporating a similar exclusivity clause to prevent redundant judicial oversight and ensure the AAT's intended role. Providing parties with an option to choose authority of appeal would be redundant and will make Section 34A superfluous. Impact of the Appellate Arbitral Tribunal on Grading of Arbitral Institutions Another concern is how the AAT interacts with the grading of arbitral institutions. The Arbitration Council of India (ACI) is tasked with grading arbitral institutions according to quality and overall performance. Additionally, arbitrators will need to familiarize themselves with this new statutory right available to parties. The impact of AAT on the grading process and overall quality of arbitration is yet to be observed. Moreover, the grading criteria must devise consistent and specific standards for appellate proceedings requiring arbitral institutions to meet specific standards for appellate processes, which would impact their grading. This will ensure India to become an arbitration friendly place for International Commercial Arbitration. . Ensuring Consistency in Interpretations Another critical shortcoming is the scope for varied  interpretations of Section 34(2) of the Act by different arbitral institutions. For instance, ground for public policy under Section 34 of the Act, could be construed differently by AATs of different arbitral institutions. Hence, it is essential to ensure that various AATs do not end up creating their own interpretations of established law.  This divergence affects the predictability of arbitration outcomes as parties may not know what to expect when their dispute reaches an AAT. The said dilemma can be addressed by including clear guidelines on the standardization of grounds for setting aside awards across different arbitral institutions. The said grounds can be developed by following legal precedents, such as M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. , to suggest how a uniform approach could be implemented. Without such clarity, the Draft Bill risks creating a fragmented arbitration system, where parties face uncertainty about how different AATs may apply the law. Conclusion In conclusion, the AAT as envisioned under Section 34A of the draft bill is an innovative step in India’s arbitration journey. By addressing the challenges of judicial overreach and promoting institutional arbitration, the draft bill paves way to position India as a global arbitration hub. The draft bill can reduce the burden on courts and prevent judicializing of arbitration. However, its success hinges on resolving key ambiguities, such as limitation periods, enforcement mechanisms, and interpretative consistency. By incorporating clear guidelines and stakeholder feedback, the draft bill can create a robust and efficient appellate mechanism. *The authors Ishant S. Joshi and Vatsala Tyagi are 4th year and 3rd year B.B.A L .L.B (Hons.) students at National Law University, Odisha.

-  Vighnesh Kumar Sharma [1]   Introduction Consent has been the cornerstone of arbitral proceedings, and any deviation from the practiced norm is likely to create a challenge in the proceedings as well as the dispute resolution process. As Arbitral proceedings are consensual, the parties to the dispute provide their consent to resolve the matter through arbitration rather than taking it to the courts. The core principle of mutual consensus is said to be undermined by one of the operating doctrines in the field of Arbitration law that is the ‘Group of Companies Doctrine’, which states that a non-signatory may be bound by the agreement if it is a member of the same group of companies, as that of the signatory and all the parties to the agreement must mutually agree to make the non-signatory a party to the agreement . The basis of arbitration proceedings is that there shall be consensus-ad-idem between the parties , and the doctrine has been criticized on this issue, as it blurs the line between consenting and non-consenting parties, thus changing the method in which arbitration is conducted. However, the Apex Court has accepted this doctrine in the Cox and King Judgement with open arms, as it held that the doctrine is a means of recognizing the common intention of parties to bind a non-signatory by analysing the corporate affiliation. The court emphasized the fact that in some situations the signatory does not perform the contractual obligations, and following the strict rule of making signatories liable would lead to the exclusion of non-signatories, which would be unjust to the signatory as well as the party that suffered. The Hon’ble court concluded that the definition of parties under Arbitration Act includes both signatory as well as non-signatories. The requirement of written arbitration agreement has been excluded and the actions of the non-signatory will be analysed to apply the doctrine. Party autonomy or party independence is required for a party to provide its consent to submit the dispute through arbitration. Phrase claiming through or under has neither been defined under the act nor been used. A person claiming through or under a party to agreement is merely standing at the spot of the original party.      Evolution of Group of Companies Doctrine The doctrine was first used in France in the case of Dow Chemicals vs. Isover Saint Gobian , in this case, the non-signatories did not raise an issue of being held accountable under the arbitration agreement. Hence, the group of companies’ doctrine was formed. In India, the Apex court in Chloro Controls Case recognized that the non-signatory can be made party to the arbitration clause if it can be recognized from the circumstances that the intent of the parties was to make the non-signatory a party to the agreement. The court summarized that the underlying basis for application of this doctrine rests on maintaining corporate separateness while determining the intention of parties to bind themselves. Before this, the judiciary followed a strict approach by ensuring that any claim that falls beyond the scope of the agreement and in which there are parties, who are not signatories to the agreement cannot be referred to arbitration. The Apex Court in Chloro Controls, recognized the need  to make the party subject to arbitration even without prior consent. This was based on different factors to examine the situations in composite transactions where multi-party agreements are involved; the nature and obligation of the task performed by the non-signatory needs to be considered. The courts can follow this approach if they feel that, ends of justice will be served, or if the courts by examining came to the conclusion that the work couldn’t have been completed without the aid and execution of the non-signatory party. Striking the Balance By acknowledging and applying this doctrine in arbitration cases, the defence of the corporate veil has been pulled off. Economic entities will be held liable for their actions even if they were not a part of the arbitration agreement between the parties. The doctrine ensures that a party that has played a role in the contract should not go unrecognized in case a dispute arises. The doctrine interprets the action and role played by the parties in order to make them liable. The courts apply this doctrine to check the interconnectedness of the work done between the parties, this helps in avoiding parallel proceedings in court. Doctrine plays an important role in international transactions, or cross-border contracts, as it helps in identifying the responsibility and due diligence between the parties. Critics have argued that by applying this doctrine, the intent behind the contract and arbitration agreement between the parties gets destroyed, as they explicitly choose to keep the third parties out of the agreement. However, this doctrine is being applied to widen the scope of arbitration agreements, by prioritizing the substantive commercial reality over formal structure of agreements, by not following the strict approach of excluding parties who are not a signatory. The doctrine recognizes the realistic approach of the corporate world, where the subsidiaries of a company can play an active role in the transaction as a whole. Doctrine in Foreign Jurisdictions In France, the courts have followed a liberal approach in applying this doctrine. The doctrine can be applied under certain conditions. Firstly, if the third party has played an active involvement in the transactions. Secondly, if the parties to the arbitration agreement have a mutual consent/interest in bringing in the third party in proceedings. An Arbitration agreement can be extended to a non-signatory if it can be established that all parties had common intention to be bound by the agreement. The US and UK are skeptical about the use of the doctrine, by following the age-old privity rule, believing that the old contract theory ensures consent between the parties. The English courts have laid down the rule that the non-signatories can be a party if they are claiming under the original party. As the privity principle is followed strictly, the arbitration agreement is extended to non parties on the basis of agency, assignment, novation etc. The US courts have recognized this doctrine. The US courts have also used non-consensual doctrines to extend arbitration agreement to a non-signatory, for example the courts have pierced corporate veil where the parent company exercised control over the subsidiary company. In India, the Supreme Court has held that piercing of the corporate veil or doctrine of alter ego cannot be the  foundation for applying Group of Company Doctrine. Piercing of corporate veil  is invoked on basis of two theories- Instrumentality theory which state that when a company is merely an instrument when the director or owner uses its corporate personality for benefit of owner and the theory of Alter ego which states that there exists a unity of interest between the company and its owner, and thus the separate legal existence feature of the company has ceased. The distinction between the two entities will be blurred and the company acts as a puppet to carry out illegal activities. Conclusion The acceptance of the doctrine marks a change from a strict rule-based approach to a more flexible and analytical approach. While the doctrine challenges the core principles of arbitral proceedings, it ensures that corporate entities cannot avoid the liabilities by exploiting their corporate structure in multiparty agreements/transactions. The adoption of the doctrine highlights the recognition of interconnected economic units in the society by the Indian Judiciary. However, there is still some grey area, regarding its applicability where the seat of the arbitral proceedings is India, and the law governing the proceeding is foreign law. Such clarity will be helpful in ensuring consistency and uniformity in cross-border disputes. The judgment has provided clarity on the validity and the requirements for the application of the doctrine. Parties can now be aware of the manner in which they want to proceed with the proceedings. Though the doctrine diverts from the traditional view of arbitration proceedings, it ensures that no party can escape the liability by being non-signatory. By emphasizing substantive intent, it underscores the intent of the judiciary to adapt frameworks according to the complexities of modern commerce. [1] Vighnesh Kumar Sharma is a third-year student at National Law University Odisha. He is interested in dispute resolution and is also actively exploring other others of law.

Ayushi Yelimineti [1] Introduction   The practice of selecting an arbitrator from a given pool of arbitrators gained much discourse after the judgement given in Voestalpine Schienen GmbH v. Delhi Metro Rail Corporation Ltd.   (“Voestalpine”) . This practice essentially looks like one party providing the other with a pool of arbitrators, followed by the other party nominating arbitrators to be appointed from this given pool. While there can be many variations and nuances to this practice, the guiding principles remain what was laid down in Voestalpine . The Court in Voestalpine upheld the practice but highlighted that the arbitrator panel should be broad so that the party choosing from this panel has enough flexibility to exercise its right to appoint an arbitrator. However, this left a lot of ambiguity, and since then, courts have expressed concerns regarding the possible ill effects of such a practice and taken conflicting stances. While such a practice does give some say to the party selecting the arbitrators from the pool chosen, it could still be unfair as this pool could be entirely comprised of arbitrators who would be inclined to rule in one party’s favour. In Perkins Eastman Architects DPC v. HSCC (India) Ltd .  The Apex Court exercised its powers under S. 11 of the Arbitration and Conciliation Act, 1996 (“ the Act”)  by appointing an independent arbitrator when the procedure laid down raised doubts on the independence and impartiality of the arbitrator to be nominated. Thus, the Apex Court reiterated the principles of equality and fairness and reiterated the invalidity of unilateral appointment of arbitrators. Equality and fairness are important principles to be kept in mind when appointing an arbitrator, but at the same time, party autonomy remains the brooding spirit of arbitration. In this article, we will first trace the Court’s different approaches to this practice, analyse it from the contours of arbitration and highlight the lingering grey area.   The Conflicting Approaches   In Voestalpine, the arbitration clause was such that it was laid down that the Respondent would choose a panel of five persons, and then both the parties would have to choose their nominee arbitrator from the said panel. The appointed arbitrators would then appoint the presiding arbitrator of the tribunal. The Apex Court reflected that a panel of five arbitrators is limited, and there should be a broader list. A fresh list, which contained thirty-one names, was then forwarded, and the Court observed that this gave the Petitioner a broader choice and a fair say in the appointment process. Thus, this point emerged to be crucial to keep in mind when dealing with similar situations. This was followed by another development in the judgement laid down in Central Organisation for Railway Electrification v ECI-SPIC-SMO-MCML (JV)  (“CORE”). In this case, the arbitration clause mandated that the Respondent nominate two arbitrators from a pool of four individuals. The general manager of CORE would choose one arbitrator from the two nominees and would also appoint the other two arbitrators. The Apex Court upheld this clause, noting that the Respondent’s power to choose two nominees from the given pool counter-balances the powers rested upon the petitioner, further highlighting that the choice of the parties must be given importance.   Following this, Courts echoed the ambiguity in the stance to be taken with regard to the selection of arbitrators from a select panel given. The Delhi High Court, in   Margo Networks Pvt. Ltd. and Another v Railtel Corporation of India Ltd . (“Margo”), faced a similar clause where the Railway Authority was to form a panel of ten persons comprising its former employees. The Court found the clause to be unliteral and ordered the formation of an independent panel. It noted that the factual conspectus involved in CORE was quite different from the one in the given case and is thus not applicable. Further, the Court noted that “counterbalancing" could not be said to have been achieved when one party is entitled to appoint 2/3rd of the arbitral tribunal unilaterally. The Delhi High Court in Taleda Square Pvt Ltd Vs. Rail Land Development Authority   again raised questions on the correctness of the judgement laid down in CORE and observed that the Petitioner should not be compelled to select its nominee arbitrator from a limited panel maintained by the Respondent. Finally, in Union of India v M/s. Tantia Constructions Limited  and JSW Steel Ltd. v. South Western Railway , the Apex Court referred CORE to a larger bench. It was announced that a new five-judge bench would hear this reference.   Analysis through the Contours of Arbitration   Section 11 (2) of the Act states that subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators, which means that parties are free to insert a clause that involves the selection of an arbitrator from a given pool of individuals. However, when the Court in Voestalpine upheld this practice, it reiterated strongly that there was a need for the panel to be broad to ensure equality in the process of appointment of arbitrators. It can then be argued that it is the duty of the Court to constitute an independent and impartial panel when the panel given is limited and restrictive. There arises a need to balance party autonomy and equality in such proceedings and Courts have made different interpretations of this balancing point. While party autonomy is said to be the backbone of arbitration, and minimal judicial interference is one of the most important principles of arbitration, the purpose of this efficient dispute resolution remains defeated if there is no fairness or equality in proceedings. Having an equal say in the appointment of arbitrators has a substantial impact on the fairness of proceedings, and a breach of this fairness warrants the protection given by Courts. Further, there is a possibility that such clauses would create apprehensions in the minds of parties and discourage them from pursuing arbitration.   The Grey Area remains   Discourse over the unilateral appointment of arbitrators has been ongoing for years, and it has been well-established that the unilateral appointment of arbitrators is invalid. However, can it be said that the appointment of an arbitrator from a given pool is a loophole in the above-mentioned saga? In CORE,  not only did the Respondent have the power to appoint 2/3rd of the panel but also to choose a restrictive list of four individuals from which the petitioner had to nominate one. The tribunal formed would consist solely of arbitrators suggested or chosen by the Respondent. Even the one arbitrator that is to be chosen based on the Petitioner’s nomination is to be selected from a limited pool of four individuals listed by the Respondent. It is hard to argue that such a clause provides for any counterbalancing or follows the guideline laid in Voestalpine, which provides for having a “broad panel”. There is no clarity as to what exactly can be construed to be counterbalancing and what number of individuals make a panel broad. These vague terms have not been coupled with any objective directions, and subsequently, there has been a cloud of ambiguity when dealing with such clauses. A dominant party could greatly benefit from such a clause and constitute an arbitral tribunal largely based on its selection, which could still be upheld. Thus, it can be argued that judicial protection given to parties in an arbitration proceeding against the unilateral appointment of arbitrators is flimsy, and the practice of unilateral appointment of arbitrators still remains, albeit with some scrutiny. Moreover, this ambiguity has prevailed for years, which has led to an unclear idea as to what such a clause should provide for. Two parties that mutually find it best to include the clause would still lack clarity as to what is valid, which could prevent them from including it altogether. Party autonomy then would also suffer in the midst of this grey area.   International Standards   Equality in appointment of arbitrators is a well-recognised principle internationally and different jurisdictions have set their own standards and norms. The French Cour de cassation’s ruling on appointment of arbitrators in Siemens AG and BKMIIndustrienlagen GmbH v. Dutco Consortium Construction Co.  ( “Ducto” )  served an important precedent for appointment of arbitrators. It held that parties cannot choose to waive their right of equality in appointment of arbitrators before a dispute arises and that the principle of equality in designation of arbitrators is a matter of public policy. Thus, according to the ruling any agreed method for appointing an arbitral tribunal that does not guarantee strict equality of all parties may not be applied against a party until all parties affirm their pre-agreed designation method after the dispute has arisen.   Moreover, Article 18 of the UNICTRAL Model Law on International Commercial Arbitration states that parties shall be treated with equality and each party shall be given a full opportunity of presenting his case. Article 34(2)(a)(iv) also provides that an arbitral award can be set aside if the arbitral tribunal is not in accordance with the agreement of the parties, unless such agreement was barred by law, and in the absence of such agreement, the tribunal constituted was not in accordance with this Law. Under the amended International Chamber of Commerce Arbitration Rules (“ ICA” ), 2021, Article 12(9) provides that notwithstanding any agreement between the parties on the method of the constitution of the arbitral tribunal, in exceptional circumstances the International Court of Arbitration ( “ICA” ) can appoint each member of the tribunal to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award.   It is undisputed that internationally, there has been a stern protection given to the principle of equality in the appointment of arbitrators. While different forums have also made allowance for the principle of party autonomy, it often comes secondary to the principle of equality in the appointment procedures. For example, as mentioned, Article 12(9) ICC Rules gives the ICA the discretion to appoint members of the tribunal no matter what the parties have agreed to if it grossly threatens the equality of the parties. Although, in Ducto , party autonomy was allowed to undermine the principle of equality if consented to after the dispute has arisen. Thus, if parties are allowed to waive their right, they must know what is it entirely that they are consenting to keeping the dispute in mind.   Way Forward   While finding a balance between fairness and upholding party autonomy can be tricky, it is the much-needed call of the hour. With increasing uncertainty about arbitration clauses mandating selection from a pool of arbitrators, there is a greater tendency to approach the courts, which hampers the efficiency and smooth functioning of arbitration proceedings. Such a situation also leaves scope for parties to abuse the proceedings and have an unfair advantage by means of a clause resting them with disproportionate power. An equal say in the appointment of arbitrators is an important part of fair arbitration proceedings, and a potentially biased arbitral panel goes against the fundamentals of justice. While arbitration is to be more flexible than the traditional proceedings in Courts, these fundamentals must not be bargained with. The author argues that by aligning with the global standards as discussed, the Judiciary can offer firm protection to the principle of equality. and if it is allowed to be waived completely, there must be the consent of the parties after the dispute has arisen as held in the Ducto case, so they have a holistic idea of the proceedings with context to the dispute at hand. There is much anticipation that CORE  being referred to a five-judge bench would provide answers to some crucial questions raised and clear the prevailing ambiguity. Meanwhile, the grey area in the practice of appointing arbitrators from a given pool continues to linger. [1]   Ayushi is a fourth-year student at Dr. Ram Manohar Lohiya National Law University, Lucknow. She is interested in dispute resolution and is also actively exploring other others of law.

- Neha Bhambhani* INTRODUCTION: UNVEILING THIRD PARTY FUNDING Third-party funding (hereinafter referred as “TPF”), also known as “Litigation Financing”, is the creation of an agreement between parties involved in legal proceedings and a stranger party funder. It is an arrangement where the third party not involved in the proceedings funds the whole or part of the litigation process on the pretext of financial benefit if the funded party wins the dispute. Generally, third-party funders are profit-driven entities, such as banks, investment firms, insurance companies, hedge funds, or individuals. These entities carefully engaged in assessing the case merits and likelihood of victory before granting the funds because, if the funded party loses, the funder cannot retrieve their investment, thus bearing the funding risk themselves. Although TPF has been a major consideration globally among countries including the United States, the United Kingdom, and Canada, there lies no specific legislation for India to regulate it. Only two nations, Hong Kong and Singapore have recently taken the initiative to regulate TPF through enacted legislation and amendments. In order to set the qualifications and ensuring compliance with public policy, Singapore amended its Civil Law Act and formed Civil Law (TPF) Regulations. Similarly, the Hong Kong Legislative Council passed the Arbitration and Mediation Legislation (TPF) (Amendment) Ordinance 2017 ( hereinafter referred as “Ordinance”) and Code of Practice for TPF of Arbitration 2018 (hereinafter referred as the “HK Code”)  allowing TPF in Hong Kong.   THIRD-PARTY FUNDING IN INDIA: CURRENT STATUS AND JUDICIAL PERSPECTIVE In India, TPF remains valid even though there is no statutory recognition to regulate it. The Indian Judiciary has demonstrated, through its prevailing judgments, the need to regulate and facilitate the smooth functioning of TPF. In the case of Ram Coomar Coondoo v. Chunder Canto Mookerjee , the Privy Council held that the old concept of Maintenance and Champerty is not considered an offence as long as the TPF agreement is not against public policy. Maintenance is a condition where a third party often persuades a person to initiate litigation proceedings and may or may not have an interest in those proceedings. Champerty becomes a more specific arrangement, as the third party funder provides financial support to the party in arbitration proceedings with an intent for profit. In the recent intra-court appeal case of Tomorrow Sales v SBS Holdings , the Division bench of Delhi High Court ruled that third party funder Tomorrow Sales Agency (TSA) cannot be held financially liable for the cost incurred by funded party SBS Transpole Logistics Pvt. Ltd. as funder is not a party to the arbitration agreement or arbitral proceedings. Therefore, the arbitral award cannot be enforced against Tomorrow Sales Agency. Additionally, the TPF is recognised under Order XXV rule 3 of the Code of Civil Procedure 1908 for civil suits in states like Maharashtra, Gujarat, Uttar Pradesh, and Madhya Pradesh acknowledging the possibility of TPF applicable to their states. The court exercises discretion to add the third party funder as a party in the proceedings who is bearing the litigation cost of the plaintiff. In Maharashtra, the court may direct a third-party funder along with the plaintiff to furnish security for the costs of the proceedings to avoid frivolous litigation. Moreover, the Indian landscape has evolved where some of the funders such as Legal Pay had already announced plans for launching the first third-party litigation funding platform with an estimated return of 20-25%.   HONG KONG TPF FRAMEWORK: A MODEL FOR INDIA? In order to legalize TPF in Arbitration proceedings, Hong Kong has passed an Ordinance and HK Code for third-party funders to follow during arbitration proceedings. These provisions ensure consistency and protection for the funder and the funded party in the proceedings. It establishes a comprehensive and mandatory legal framework to safeguard funded party interests and emphasises the disclosure requirement by the funder to ensure transparency in the proceedings. India could consider adopting similar ideas from the Hong Kong ordinance and code for implementing its legislation by incorporating a clear definition of a third-party funder. (Section 98J Ordinance). It is crucial to establish the meaning of the third party by identifying their rights and liabilities and excluding individuals and entities with no other special interest beyond funding the proceedings. The Content Code of Practice outlines terms, features, and risks that should be set out in the funding agreement. This includes reasons for terminating the agreement or for third-party funders to withhold funding (Section 98Q Ordinance). The agreement must also specify the degree of control the third-party funder will have in arbitration proceedings. (Section 98Q(1)(b)(i) Ordinance). The ordinance of Hong Kong requires disclosure of third-party funding in arbitration proceedings. (Section 98U Ordinance). It includes a written notice of the funding agreement and the name of the third party funder provided to each party involved in the arbitration and to the arbitration body. This is significant to ensure the neutrality of the arbitrator and for parties to assess the involvement of a third party funder in the proceedings. Additionally, the ordinance authorizes the Hong Kong Secretary for Justice to appoint an advisory body and an authorized body to observe and implement the operation of the ordinance and the code. (Section 98X Arbitration Ordinance).   THE DEGREE OF CONTROL The Ordinance obligated parties to set out the degree of control of the funders in relation to arbitration. This is essential to safeguard the autonomy of the funded party as the funding process involves inherent risk for the investor, with no guarantee of regaining their invested capital . In such situations, the funder gets the leverage in controlling and influencing the decision-making rights of the funded party. If a funder is not content with the outcome of the proceedings, he can force the funded party to renegotiate the award for their benefit. In this way, the entire TPF process has the potential to become a power game where the funded party, being financially unstable relies on the funder to provide financial resources and legal expertise. India could benefit by incorporating such provisions to ensure the independence of the funded party in decision-making, especially in cases where the party is unable to make informed decisions.   TERMINATION OF FUNDING AGREEMENT The TPF agreement should be formed to balance the rights of both the funded party and the funder. It should unambiguously stipulate circumstances and reasons for third party funders to withhold funding in the arbitration proceedings (Section 98Q(1)(b)(iii) Ordinance). The HK Code specifies certain conditions under which funders are allowed to terminate a funding agreement during the proceedings to prevent funders from arbitrarily terminating the agreement. (Paragraph 2.13 HK Code). This becomes important because arbitration proceedings are unpredictable which may prompt funders to terminate funding for their benefit. For example, a funder decides to invest elsewhere to maximize their profits or to avoid any potential risk arising from a conflict of interest. Therefore, it is imperative to include clear reasons in the agreement to eliminate the burden on the funded party to search for substitute sources for funding to withstand proceedings. India can adopt similar provisions in its legislation to protect funded parties from the consequences of withholding funding. The agreement should contain specific situations and reasons where the funder is unable to continue funding or decides to withdraw a percentage of their investment. In these cases, the funder must obtain the consent of the appropriate authority to ensure that the funded party remains informed and prepared for such situations.  However, specifying the conditions of withdrawal in the termination clause does not exempt the third party funder from honouring the rights of the funded party. They must secure the latter’s position which could be compromised due to such termination or withdrawal of funding agreement.   ENSURING ACCOUNTABILITY:  ENFORCEMENT MECHANISMS The Hong Kong ordinance has adopted a soft law approach as there is no imposition of civil or criminal proceedings for non-compliance with the HK Code (Section 98S(1) Ordinance).  Whereas, in the Indian context, it is vital to incorporate regulatory measures by implementing TPF legislation that include the imposition of compensation, proportionate fines for non-compliance, and constraining the funder from participating in future TPF agreements. These measures can prevent funders from participating in corrupt practices, such as exerting financial means to influence the decision of the Arbitrator or concealing illicit gain from unlawful activities by funding arbitration proceedings. In addition, this ensures that funders adhere to the terms of the agreement and avoid superfluous reasons to withhold funding. The legislation should consider the exercise of jurisdiction of the arbitral tribunal in situations like imposing orders in cases of conflicting of substantial interest of the funders in the outcome of proceedings, and preventing interference with decision making right of the funded party that impacts the outcome of the proceedings. This ensures the balance between the autonomy and fairness in the proceedings. Similar to Hong Kong, the Indian legislature can establish an oversight body responsible for the implementation and suggesting changes in the legislation. This preserves the authority of the legislature to modify, alter, or improve any procedure based on changing circumstances thereby guaranteeing continuous scrutiny.   CONCLUSION The use of the TPF in India in arbitration proceedings reflects the necessity for establishing a clear and strong statutory framework drawing from Hong Kong legislation. India requires a nuanced approach for forming legislation to ensure smooth functioning and fairness between the parties involved. The judicial decisions also show willingness to accept TPF, but the absence of clear guidelines leaves room for different interpretations that lead to uncertainty. While Hong Kong provides flexibility to third party funders by implementing a soft law approach, India can include penalties for non-compliance and also establish authorities to monitor the whole process. By tailoring international practices, India can pave the way for a just and transparent TPF process. *Fourth-year Student, B.A. LLB. (Hons.), Institute of Law, Nirma University.

Akul Mishra [1] I.  Introduction Arbitration is fundamentally designed to provide an alternative to court proceedings, focusing on resolving disputes outside the judicial system.  However, in India, there remains a significant reliance across various areas of law, to preserve the essence of arbitration, such interventions must be minimised wherever possible. Yet, the amendment that brought Section 36(3)6 of the Arbitration and Conciliation Act, 1996 (“A&C Act, 1996”) brings a new open-ended question, which affects the overall enforcement and finality of arbitral awards. Furthermore, the concern persists over how much this may undermine the benefits of arbitration as a non-judicial dispute resolution mechanism. The potential harm appears magnified in light , of the recent Supreme Court case of Delhi Metro Rail Corporation Ltd. v. Delhi Airport Metro Express Ltd. ,  where an arbitral award was set aside on grounds of blatant illegality. This case was finally settled by a curative petition. While the extended timeline in this instance may be an exception, Section 36 interventions raise fears that prolonged timelines for , setting aside arbitral awards could become more common in India, eroding the core purpose of Arbitration. In this blog post, the author would like to propose a solution that avoids any apparent delay in Indian domestic arbitration through Section 36(3). First, the contradiction that Section 36(3) with Section 34 is analysed, alongside the precariously confusing situation it stipulates. Second, the author aims to introduce a positivist solution to the contradiction, with an intention to maintain the true nature of why Arbitration remains a quick dispute resolution mechanism.   II. Issues regarding contradictory legal interplays with Sections 34 and 36(3) Section 36(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: [Provided further that where the Court is satisfied that a Prima facie case is made out that,-- (a) the arbitration agreement or contract which is the basis of the award; or (b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award. As seen above, Section 36(3) provides for an unconditional stay on the arbitral award. These conditions include a prima facie fraud assesment or corruption regarding the arbitral award framing and/or the arbitration agreement/ parent contract. To assess whether this amendment is a step in the right direction, we must first examine the language of the interconnected Section 34 . While Section 34 allows Indian courts to set aside awards, it raises the question of whether Section 34 is equivalent to an appellate jurisdiction of the High Court and the Supreme Court. Section 34 already accounts for fraud allegations and corruption in petitions to set aside arbitral awards. But, Section 36(3) has now introduced a wider, more overarching jurisdiction of Indian courts, which directly goes against the strict approach of the Supreme Court, emphasising Section 5. The Supreme Court’s minority opinion has stated that Section 34 is not an appellate jurisdiction . The narrow sine-qua-non considerations were emphasised over subjective interpretation . The considerations it should note are narrow in light of the unequivocal importance in Section 5 of the Arbitration Act. The Supreme Court’s analysis is strict, it has stated that an arbitral award cannot be set aside on merits . Thus, from all the aforementioned cases, we see a clear, consistent approach to Indian courts’ jurisdiction in setting aside arbitral awards. This narrow approach is a clear paradox against the amendment of Section 36(3), which is wider, allows courts to intervene regardless of party autonomy, and finally, breaks the res integra approach that courts had envisaged concerning the reading of Section 34 and Section 5. The proviso of Section 36 does not survive without Section 34, and an unconditional stay will continue until a Section 34 application has been heard and decided upon. But, suppose an unconditional stay has been granted, the court deciding on the Section 34 application will reference the stay granted under Section 36. Thus, this increases the court’s jurisdiction by a very wide margin and places a contradiction to the narrow interpretation often taken behind Section 34. This proves to be the biggest issue regarding the proviso from the amendment. The only material qualifier is that the courts must find prima facie evidence of what constitutes fraud/corruption to grant an unconditional stay. However, this qualifier itself is an over-dependence on courts over arbitral tribunals. If there is a high evidentiary value of fraud/corruption, which one may assume is the intention behind the use of ' prima facie ,' then the courts will acknowledge and use the same to set aside the award through its narrow powers under Section 34. Thus, it does not seem necessary to have additional power of the court when the power of the court is, ideally, enough under Section 34. Additionally, a Delhi High Court judgement of Italian Thai Development vs Ntpc Ltd did take a very narrow approach in adjudicating through Section 36(3) , where it ascertained that only a prima facie case of fraud would allow an unconditional stay of the award. Yet, this does not answer the question of why this process was necessary when any application under Section 34 would have also successfully answered this question by an application of judicial mind, in consistency with jurisprudence, which guarantees minimum interference with Arbitral awards and the process as a whole. In the factual matrix of Italian Thai Development the petitioner had made an application under Section 34. Thus, the rationale defending two different outcomes, one under Section 36, which is pending disposal of one under Section 34, seems to show a massive waste of resources and case pendency, which affects why out-of-court proceedings like arbitration, must be considered in the first place. This hurts the overall image and use of arbitration. III. A Proposed Objective Solution The solution that the author proposes may be considered radical. There is some belief in the lack of defence behind the logic of why we need two separate court-related findings, one under Section 36(3) and one under Section 34. Thus, the entire intention behind the amendment was, from what the author believes, extremely unnecessary unless there has been a pattern of unfair arbitral awards being upheld by Indian courts. The cost-benefit analysis is that the intention behind arbitration must be upheld, and when there was a recourse available under Section 34, there may not be any requirement under Section 36(3). An unconditional stay depends upon the questions that will be acknowledged and adjudicated under an application under Section 34. Thus, the first and most radical solution is to stop and repeal the amendment to prevent any new jurisprudence that could severely affect the scope of arbitration in the country and hurt the entire process of arbitration while simultaneously overwhelming courts with increasing yet unnecessary jurisdiction under the A&C Act, 1996. Repealing amendments itself is a big task . So if the solution is to repeal the amendment, it is too exceptional. Thus, the solution needs to be less extreme. A new less extreme solution could be to make the considerations under Section 36(3) as objective as possible. This also comes out of the fact that the definition of what ‘ prima facie ’ means in Indian law is unclear, vague, inconsistent and highly contested. Prima facie has very high evidentiary value and must be, on a more accurate definition, on the face of it, present a case of fraud or corruption, to ensure that an unconditional stay is granted under Section 36(3). Interestingly, the Delhi High Court, in the case of MTNL V Canara Bank , had to answer the question of what prima facie is and how much the court can investigate/assert that there is fraud or corruption in any or all conditions under Section 36(3). There was a distinction on what prima facie means, as envisaged by the court, the court did not go into the nuances of what part of the transaction in question came off as fraud. This was adjudicated upon by the arbitrator and formed the reason why the Delhi High Court asserted that there is no prima facie case of fraud. Fraud does not mean that the court will delve into Reserve Bank of India/ Securities and Exchange Board of India’s guidelines, then assert that the transaction was fraudulent, then assert the award was fraudulent and finally grant an unconditional stay. The narrow approach was also defended by stating that the parties can resubmit such allegations under a Section 34 petition. This reasserts my argument that if the same allegations considered under Section 34, the necessity of a Section 36(3) process will fail. However, it brings in the reason why the author believes that there should be guidelines under Section 36(3), which can include some proposals that may be delved into by the legislative or as guidelines by the apex court themselves. These can be included in a very non-exhaustive manner, A)  The court shall only acknowledge, use and adjudicate the evidence presented at hand to determine if there is, prima facie , a case of fraud/corruption to grant an unconditional stay. B) The court shall abstain from going into the depth of the transaction or the arbitral award itself but only stick to the allegations submitted by both parties to assert a prima facie case. C) The court shall not question the judicial mind, conduct, credentials, decision, application/implementation of law by the esteemed arbitrator, and shall not question the decision taken by the arbitrator even if there is a prima facie case of fraud and corruption.   IV.  Conclusion A reader may notice that the solution is quite objective, meant to be followed step by step. In Part III for example, there is a clear-cut distinction between finding a prima facie corruption or fraud case and questioning the arbitrator’s decision and application of mind. Thus, this distinction is objective, and the proposed solution suggests that the courts should delve into what prima facie is, but follow objective criteria and decide on the unconditional stay. Even if new evidence is suddenly revealed, it can be used in a Section 34 application, but Section 36(3) should be extremely narrow and restrictive to ensure that it meets jurisprudence. It is in line with the courts’ logic, notwithstanding the strict jurisprudence in Section 34. Current jurisprudence has seen that The Calcutta High Court has dismissed Section 36(3) petitions if no strict prima facie case is made out for an unconditional stay in the cases of WBSIDC Vs. Kaushalya Infrastructure Development Corporation and RMB Srijan Limited v. Great Eastern Energy Corporation Limited . The threshold is considered to be very high and Questions of fact do not meet this threshold. Thus, the objective criteria will not clash with jurisprudence but rather support the strict perspective and logic taken up by Indian courts. It makes their job easier and removes the burden of defining the term prima facie. The Courts have taken a high standard of proof for defining prima facie , with evidence at hand and a clear distinction of cases. Thus, it will be imperative if the evidence considerations are included in the objective criteria, meeting the high standard of proof asked out of Section 36(3) petitions. [1] Akul Mishra is a fourth year law student at Jindal Global Law School, interested in corporate and commercial laws.

Aparna Tiwari [1] Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act, 1996") empowers courts to grant interim relief in arbitration matters, providing a crucial mechanism for parties to secure their interests during the arbitration process. The 2015 amendments to the Act, 1996 significantly curtailed judicial intervention, particularly after the constitution of an arbitral tribunal, while still allowing courts to intervene if the tribunal's remedy would be ineffective. This evolving nature of judicial scrutiny under Section 9 raises critical questions about the boundaries of court intervention and its implications for the efficiency and effectiveness of arbitration as a dispute resolution mechanism. Before the amendments, courts exercised extensive powers under Section 9, allowing for significant judicial intervention in arbitration matters. This included a more thorough examination of the merits of claims and the validity of arbitration agreements. The 2015 amendments introduced Section 9(3), limiting court intervention once an arbitral tribunal is constituted unless the tribunal's remedy is found to be ineffective. However, how the term ineffective has to be interpreted has not been defined. The recent judgments by the Supreme Court and High Courts in India mark a significant evolution in arbitration jurisprudence. By clarifying the scope of judicial intervention under Sections 9 and 11 of the Act, 1996, these decisions reinforce the importance of arbitration as a preferred mechanism for resolving commercial disputes. Its scope is progressively expanding, reinforcing the notion that courts possess wide discretionary powers to grant interim measures in aid of arbitration. Prior to the recent judgment, Indian courts adopted a relatively cautious approach to granting interim measures under Section 9. The prevailing view was that the court's powers were akin to those under Order 38 Rule 5 of the Code of Civil Procedure ("CPC"), which governs attachment before judgment. This restrictive interpretation often led to the denial of interim relief on technical grounds, hindering the effective conduct of arbitration proceedings. A NEW DAWN: THE SUPREME COURT’S EXPANSIVE INTERPRETATION The Supreme Court, in the case of Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, articulated the essential criteria for granting interim relief under Section 9. The Court established that: Prima Facie Case : The applicant must demonstrate a good prima facie case for the relief sought. This standard requires the applicant to present sufficient evidence to support their claims, although it does not necessitate a conclusive determination of the merits. Balance of Convenience : The Court must assess whether the balance of convenience favours granting the interim relief. This involves evaluating the potential harm to the parties if the relief is granted or denied. Reasonable Expedition : The applicant should approach the Court with reasonable expedition, indicating that the request for interim measures is urgent and requires prompt attention. These criteria collectively underscore a shift towards a more pragmatic approach in granting interim relief, allowing for a broader interpretation of what constitutes sufficient grounds for intervention. Departure from Technicalities The Supreme Court has significantly expanded the contours of Section 9 of the Act, 1996, granting courts wider latitude in granting interim measures. The Court has decisively rejected the rigid application of procedural technicalities akin to those under Order 38 Rule 5 of the CPC. This liberal interpretation is rooted in the principle that procedural safeguards should not impede justice. By aligning with decisions from various High Courts, the Supreme Court has affirmed that the powers under Section 9 transcend those available under the CPC. Cases such as Saiyad Mohd. Bakar El-Edroos v. Abdulhabib Hasan Arab and Sardar Amarjit Singh Kalra v. Pramod Gupta underscore this judicial inclination to prioritise substantive justice over procedural formalities. Moreover, the Court has relaxed the evidentiary threshold for granting interim relief. A mere possibility of asset diminution, rather than an actual attempt to dissipate assets, is sufficient to warrant judicial intervention. This approach is in harmony with the overarching objective of the Act, 1996, to ensure the efficient and effective conduct of arbitral proceedings. The Supreme Court's decision marks a pivotal shift in the judicial approach to interim reliefs under Section 9. By dispensing with technical impediments and adopting a more flexible stance, the Court has empowered courts to play a proactive role in preserving the integrity of the arbitral process. Intervention by The Court Recent landmark judgments have explored the limitations imposed on courts at the pre-referral stage and their continued authority to grant interim relief during arbitration proceedings. Section 11(6) and the Limits of Pre-Referral Jurisdiction The Supreme Court's decision in NTPC Ltd. v. SPML Infra Ltd . circumscribed the scope of judicial intervention at the pre-referral stage. The Court has unequivocally stated that the role of a court is limited to determining the existence of a valid arbitration agreement and the arbitrability of the dispute. Any in-depth inquiry into the case's merits is premature at this stage and should be avoided. This ruling underscores the principle of party autonomy and the intent to expedite dispute resolution through arbitration. Section 9 and the Continuing Power of Courts In contrast, the Calcutta High Court's decision in   Jaya Industries v Mother Diary Calcutta and another has affirmed the ongoing power of courts to grant interim measures even after the commencement of arbitral proceedings. The Court has recognised the need for judicial oversight to safeguard the interests of parties involved in arbitration. This decision strikes a balance between the arbitral process's autonomy and the judiciary's protective role. Courts are now more active in safeguarding parties' rights through the liberal grant of interim relief. This shift and a streamlined pre-arbitration process have accelerated dispute resolution. These developments have positioned India as a more attractive destination for arbitration, fostering a business-friendly environment. However, this newfound efficiency must be balanced with caution. While the expanded powers of the courts are beneficial, there is a need for clear guidelines to prevent potential misuse. Striking the right balance between judicial intervention and arbitral autonomy is crucial to maintaining the integrity of the arbitration process. BALANCING JUDICIAL INTERVENTION AND ARBITRAL AUTONOMY IN INDIA The principle of  kompetenz-kompetenz , which allows arbitral tribunals to determine their own jurisdiction, is a cornerstone of arbitration law. In India, this principle is enshrined in Section 16 of the Act, 1996, empowering tribunals to rule on their jurisdiction, including objections regarding the validity of the arbitration agreement. However, the judiciary also plays a critical role in ensuring that arbitration proceedings are effective and not rendered futile. The Indian courts have navigated the delicate balance between respecting arbitral authority and exercising judicial oversight, particularly in the context of inefficacious arbitration proceedings. Understanding Inefficacious Arbitration Proceedings The term "inefficacious" in the context of arbitration refers to proceedings that are ineffective, unproductive, or incapable of achieving a resolution due to jurisdictional disputes or other procedural impediments. Courts have a responsibility to prevent such inefficacious proceedings, which can arise when parties challenge the validity of an arbitration agreement on grounds such as fraud, coercion, or lack of consent. In these scenarios, the courts must intervene to ensure that resources are not wasted on arbitration that may ultimately be deemed void. Judicial Intervention in Landmark Cases In  N.N. Global Mercantile Pvt. Ltd. v. M/S Indo Unique Flame Ltd. , the Supreme Court reaffirmed the  kompetenz-kompetenz  principle, emphasising that arbitral tribunals should be the first to address jurisdictional issues. This ruling reduces unnecessary court intervention and promotes efficiency in arbitration. However, the court also recognised its duty to prevent inefficacious proceedings. In  SBP & Co. v. Patel Engineering Ltd. , the Supreme Court held that courts could intervene when the arbitration agreement itself is in dispute. This ruling illustrates the judiciary's role in safeguarding the arbitration process from being initiated under flawed premises, thereby preventing inefficacious proceedings. The court's intervention in such cases ensures that parties do not expend time and resources on arbitration, which may not yield a valid resolution. The Role of Interim Relief under Section 9 The Supreme Court's ruling in  Jaya Industries v. Dalmia Cement (Bharat) Ltd.   further illustrates the balance between arbitral authority and judicial oversight. The court clarified that it could grant interim measures even when the arbitral tribunal has not yet been constituted, provided the applicant demonstrates a prima facie case, balance of convenience, and urgency. This ruling underscores that while the tribunal has the authority to rule on its jurisdiction, courts retain the power to intervene when necessary to prevent injustice or inefficacy in the arbitration process. The court's role is not to undermine the tribunal's authority but to complement it by ensuring that interim relief is available when parties face imminent harm. This approach fosters a cooperative relationship between the judiciary and arbitral tribunals, enhancing the overall effectiveness of the arbitration process. Defining Inefficacious Proceedings To further clarify what constitutes inefficacious proceedings, courts may consider several factors: Existence of a Valid Arbitration Agreement : Courts must assess whether the arbitration agreement is valid and enforceable. If the agreement is challenged on grounds such as fraud or coercion, the court's intervention is warranted to prevent initiating arbitration proceedings that may ultimately be deemed void. Potential for Resource Wastage : Courts should evaluate whether proceeding with arbitration would lead to the unnecessary expenditure of time and resources. Judicial intervention is justified if there is a significant likelihood that the arbitration will be rendered ineffective due to jurisdictional challenges. Urgency and Imminent Harm : In cases where parties face imminent harm, courts must act swiftly to provide interim relief, ensuring that the arbitration process does not exacerbate the situation. The reconciliation of  kompetenz-kompetenz  and judicial intervention in arbitration is a complex but essential aspect of the arbitration framework in India. The courts have demonstrated a commitment to respecting the authority of arbitral tribunals while also fulfilling their duty to prevent inefficacious proceedings. As the arbitration landscape in India continues to evolve, it is crucial to strike the right balance between judicial intervention and arbitral autonomy to maintain the integrity of the arbitration process. While the expanded powers of the courts are beneficial, clear guidelines are needed to prevent potential misuse. To prevent the misuse of judicial intervention, it is essential to establish clear guidelines that define the scope and limits of court involvement in the arbitration process. These guidelines should ensure that courts intervene only when necessary to protect the parties' rights or ensure the proceedings' fairness and efficiency. One key guideline should be that courts should not interfere with the arbitral tribunal's jurisdiction or decision-making powers unless there is a clear violation of the parties' rights or a serious procedural irregularity. Courts should also refrain from re-examining the merits of the dispute, as this undermines the finality and binding nature of arbitral awards. Some key recommendations could be as follows:- 1.  Limiting Judicial Intervention : - To expedite arbitration proceedings and respect the principle of party autonomy, judicial intervention should be restricted to a prima facie assessment of jurisdiction. This approach aligns with the competence-competence doctrine enshrined in Article 16 of the UNCITRAL Model Law , which grants arbitral tribunals the power to determine their jurisdiction. The English Arbitration Act of 1996 provides a similar framework by limiting court involvement to jurisdictional matters. 2. Clear Standards for Interim Relief : - Clear and objective standards must be established to prevent the misuse of interim relief and ensure its effective application. While arbitration rules like the International Chamber of Commerce (ICC)  and the London Court of International Arbitration (LCIA) offer general guidelines, more specific criteria are necessary. Courts can prevent delays by granting interim relief only in cases of demonstrable and irreparable harm and ensure that such measures are used judiciously. Courts should only grant interim measures when the arbitral tribunal cannot mitigate a demonstrable risk of harm. This principle is also reflected in the  Singapore International Arbitration Centre (SIAC) Rules , which require that any interim measures are proportionate and necessary. 3. Encouraging Comprehensive Disclosure and Case Presentation The Henderson doctrine , which prevents parties from raising claims that could have been previously asserted, is applicable in many common law jurisdictions. By mandating comprehensive disclosure, arbitrators can ensure that all relevant issues are addressed upfront, minimising the risk of subsequent claims that could disrupt the arbitration process. This approach aligns with the American Arbitration Association (AAA) rules , which emphasise the importance of presenting a complete case early in the proceedings. 4. Establishing Mechanisms to Prevent Abuse of Process The English Arbitration Act 1996 empowers courts to dismiss claims that are deemed to be an abuse of process. Similarly, the ICC Rules provide that the tribunal may dismiss claims that are manifestly inadmissible or abusive. Implementing mechanisms to prevent abuse of process can protect the integrity of arbitration. Courts should be vigilant in identifying and dismissing applications that lack merit or are intended to harass the opposing party. This proactive approach is crucial for maintaining the efficiency of arbitration as a dispute resolution mechanism. 5. Promoting Institutional Arbitration Institutional arbitration rules, such as those from the Hong Kong International Arbitration Centre (HKIAC) and Singapore International Arbitration Centre (SIAC), offer structured frameworks that guide the arbitration process. These rules often include provisions for the appointment of arbitrators, conduct of proceedings, and enforcement of awards. Promoting institutional arbitration can significantly reduce the need for judicial intervention. Institutional frameworks provide clear guidelines that help parties navigate the arbitration process effectively. For example, the Dubai International Arbitration Centre (DIAC) Rules explicitly outline the procedures for interim measures and the conduct of arbitrators, thereby minimising ambiguities that could lead to court involvement. 6. Training and Awareness for Judges and Arbitrators Many jurisdictions require ongoing training for judges and arbitrators to enhance their understanding of arbitration law and practice. For instance, the International Bar Association (IBA) provides resources and training programs on arbitration. Ensuring that judges and arbitrators are well-trained in arbitration principles reduces the likelihood of unnecessary court intervention. This training fosters a deeper understanding of arbitration and the importance of respecting arbitral autonomy. A delicate balance between judicial oversight and arbitral autonomy is crucial to optimise India's arbitration landscape. Clear guidelines, limiting judicial interference, establishing clear standards for interim relief, and promoting institutional arbitration are essential. This will enhance efficiency, predictability, and international appeal for India's arbitration regime. CONCLUSION The evolution of Section 9 of the Act, 1996 reflects India's journey towards establishing a robust and efficient arbitration regime. The judiciary's expansive interpretation of the section, coupled with the emphasis on judicial oversight, has significantly enhanced the efficacy of arbitration as a dispute resolution mechanism. By striking a balance between arbitral autonomy and judicial intervention, Indian courts have created a framework that promotes efficiency and fairness. However, the challenge lies in maintaining this delicate equilibrium. Clear guidelines and standardised procedures are essential to prevent the misuse of judicial intervention. By establishing clear standards for interim relief, encouraging comprehensive disclosure, and promoting institutional arbitration, India can solidify its position as a preferred arbitration hub. Ultimately, the success of arbitration depends on a collaborative approach involving the judiciary, arbitral institutions, and the legal community. By working together to refine the arbitration process, India can create a legal landscape that fosters trust, efficiency, and international recognition. The road ahead requires continuous refinement and adaptation. As the legal landscape evolves, the judiciary, legislature, and arbitration practitioners must remain vigilant in their pursuit of an arbitration regime that is both efficient and just. By embracing these principles, India can position itself as a global leader in arbitration, attracting domestic and international businesses to resolve their disputes through this effective and expeditious mechanism. [1] Aparna Tiwari is a 4th year student at Dr. Ram Manohar Lohiya National Law University, Lucknow.

Vrinda Gaur [1] Introduction Special Economic Zones (‘ SEZs ’) play a crucial role in facilitating the flow of investment in the country and propels overall economic growth in a country. All around the globe, there is a massive flux in the establishment of such special economic zones to reap their economic benefits. A major attraction for players is the lucrative exemptions granted to parties under various financial and commercial statutes, whose obligations are otherwise quite burdensome to comply with. There are approximately 378 SEZs operational in India, amongst which the first of its kind was established in Gujarat, t, the Gujarat International Financial Tech City (‘ GIFT City ’). With multiple players entering such zones to accumulate the economic incentives that come along, disputes and conflicts are inevitable. To address such disputes, it is necessary to provide participants with a robust and speedy resolution mechanism to uphold their confidence during their operations within these zones. This article seeks to articulate the prospects of promoting arbitration as a dominant mode of dispute resolution mechanism in SEZs in juxtaposition with relevant provisions of the Special Economic Zones Act, 2005 (‘ SEZ Act ’).   Decoding the Relevant Provisions of the SEZ Act The SEZ Act promotes the establishment of areas with special privileges to attract foreign investments in the country and facilitate trade and economic development. It aims to set up Financial Service Centres in SEZs, which are often governed by distinct laws and rules from those ordinarily applicable in a recognized state or jurisdiction.    A salient feature of the SEZ Act is that it provides numerous lucrative incentives and concessions to investors in terms of legal exemption under numerous statutes. For instance, Section 26 enumerates certain exemptions from the Customs Act, 1962, Customs Tariff Act, 1975, Finance Act, 1994, and Central Sales Tax Act, 1956. Further, Section 27 provides for the applicability of the Income Tax Act, 1961 with certain modifications to facilitate investments within the region. Moreover, Section 56 of the Act, makes the applicability of the Banking Regulation Act, 1949, and the Insurance Act, 1938 subject to certain amendments and restrictions. The SEZ Act entails certain provisions for the adjudication of disputes by the designated courts and via arbitration. For instance, Section 23 empowers to State Government, to designate one or more courts to try all suits of a civil nature and notify offences committed with the SEZs.  Section 42 provides that if no court has been designated to refer the disputes that arise within the zone, then such disputes shall be referred to arbitration. Additionally, Section 42(2) and  Section 42(3) provide for the appointment of an arbitrator by the Central Government and the applicability of the Arbitration and Conciliation Act, 1996 (‘ 1996 Act ’) to all arbitration disputes within the zones respectively. However, extensive intervention by the central government in the appointment of arbitrators and the excessive reliance on procedural formalities and court dependency of the 1996 Act, has rendered arbitration proceedings inefficacious within SEZs. This concern was further aggravated by Ranganath Properties Private Limited v. Phoenix Tech Zone Private Limited, wherein the Telangana High Court held that the SEZ Act, being a special legislation, Section 42 of the SEZ Act would prevail over an arbitration agreement entered between the parties, thereby undermining the prerequisite of mutual consent to arbitrate. In light of this, it becomes imperative to explore the prospective avenues of growth of arbitration within SEZs and vouch for a comprehensive special regime.   Prospective Framework and Suggestions One must bear in mind that the SEZ Act, which is the dominant statute regulating SEZs is an inherently economic legislation facilitating the inflow of foreign direct investments. Unlike the 1996 Act, it does not provide for comprehensive rules for resolving disputes and little calibre was invested in framing provisions for dispute resolution via arbitration.   One major factor jeopardizing the growth of arbitration in SEZs is Section 42(1) of the SEZ Act. It restricts the reference of a dispute to arbitration on the designation of a court by the State Government under Section 23(1) and empowers these courts to try all civil disputes arising within the SEZs  The express use of the term “shall” in Section 42(1) , makes it incumbent upon the parties to seek adjudication by designated courts, even in cases where parties have an agreement that specifically conveys their intention to resolve disputes through arbitration.       Additionally, the aggravated intervention of the Central Government in appointing arbitrators when a dispute is referred to arbitration adds to the plight. Ideally, as the general principles of the 1996 Act, extend to the SEZ Act, the appointment of an arbitrator would be the discretion of the parties, mainly the developers and entrepreneurs. However,  the absolute power bestowed on the Central Government for designating an arbitrator goes against the \ arbitral principles of party autonomy and mutual consent.        In light of the above concerns, there are two possible ways out. First, we need to explore the avenues for fast-tracking the process of establishing arbitration institutions within such zones. Though in 2017, a representative office of the Singapore International Arbitration Centre was inaugurated in GIFT City, Gujarat, to promote International Commercial Arbitration within the zone, it still lacks a case management office of the SIAC that would facilitate the resolution of disputes via arbitration under defined SIAC rules. All flourishing jurisdictions such as Dubai and Singapore prefer to settle disputes within SEZs through an institutional mechanism having distinct rules with limited applicability to domestic law.   Though the Union Finance Minister in the 2022-23 budget speech announced the establishment of an International Arbitration Centre in GIFT City in line with the Singapore International Arbitration Centre, and the London Commercial Arbitration Centre, progress seems stagnant on this front.   Additionally, the government’s efforts seem sparse in facilitating the establishment of similar centres in multiple other SEZs spread across the country. Promoting arbitration through arbitral institutions, governed by its distinct rules especially when one party to the dispute is a foreign party, would ameliorate the burden of meddling within the intricacies of the 1996 Act. t.   While the government continues to scuffle to make state-of-the-arbitral institutions functional within the SEZs in India, exploring alternative avenues could bring much relief to the aggrieved investors for the time being.  For instance, Parties may resort to a framework prescribed within a Bilateral Investment Treaty(BIT) to which the Government and the country of which the investor is a national are parties.  Most BITs entail either resolution through consultation or give investors a prerogative to submit an investment dispute directly for International Arbitration under an Institution as agreed between the parties, guaranteeing a neutral and time-efficient resolution. Next, though the promotion of institutional arbitration is likely to accord speedier resolutions and evade the intricacies of the court-facilitated process, one issue that is likely to arise is the enforcement of an award. This can be addressed by establishing a special arbitration division, within the jurisdictions of the High Courts where the SEZ is operational. Their functions would entail assisting in the enforcement of awards and playing a supervisory role to the arbitral institutions established within the SEZs. Another aspect worth incorporating is a dual model of dispute resolution, i.e. mandatory mediation followed by arbitration. The present Indian regime has made mediation optional irrespective of express declaration regarding the same in the contract between the parties . A mandatory approach is beneficial, especially within SEZs for two common reasons. One, SEZs often involve multinational enterprises with diverse cultural backgrounds. Mediation allows for a more culturally sensitive approach than Arbitration, fostering better understanding between parties via adopting different negotiation tactics. Two, mediation offers a more collaborative and less adversarial outcome as compared to arbitration. In SEZs, where businesses often operate in close proximity and may have multiple ongoing dealings either within or outside the SEZs, maintaining cordial relationships is crucial to maintaining the flow of investments within such regions and beyond.   Key Takeaways from the Expert Committee Report The Expert Committee Report suggesting reforms to the 1996 Act, entails certain recommendations for promoting arbitration within SEZs. The report suggests that with the promotion of institutional arbitration and adopting investor-friendly tactics for settlement show great prospects of emerging as neutral seats for International commercial arbitration. This would not only benefit the Indian lawyers in expanding professional opportunities but also encourage foreign lawyers/firms to arbitrate and expand their firm offices in the special zones, and subsequently in other parts of India.       An unfortunate aspect owing to which foreign lawyers are hesitant to practice in India is the painstaking practice of visa issuance as also expressed in the  Justice B.N. Krishna Report . On the other hand, jurisdictions such as Singapore, allow foreign lawyers involved in arbitration and mediation activities to get short-term visa passes at immigration checkpoints which are valid for a maximum duration of 60 days in addition to tax exceptions for non-resident arbitrators.   Conclusively, the report suggests that non-desirability of India as a seat for International commercial arbitration owing to its entangled arbitration regime. However, a special regime that enfeebles the applicability of the 1996 Act to some extent in addition to the proposed incentives of tax exemptions and visa relaxations to lawyers and arbitrators, SEZs will most likely act as icebreakers in attracting parties to India as desirable seats for international commercial arbitration in the future.   Looking Forward While the prospects discussed above are promising, they necessitate a certain degree of legal recognition. Currently, India lacks distinct guidelines and rules both within the SEZ Act and separately for efficiently conducting arbitration proceedings within SEZs. Recognising the need for a distinct arbitration regime within SEZs, as highlighted by the recently released arbitration report, it would be prudent for India to adopt a balanced approach similar to that of Dubai. Dubai ’s approach to framing such rules does not completely oust the applicability of general arbitration principles, such as the doctrine of party autonomy, fairness, and non-intervention by the courts. Further, it has recognized the intervention of DIFC courts in exceptional instances. Similar power could be bestowed upon the special arbitration divisions formed for facilitating arbitration within SEZs. Implementing similar reforms in GIFT City, to start with, would significantly enhance its appeal as an arbitration hub and reinforce the primary aim of attracting foreign investments by promoting confidence in the dispute settlement process. [1] Vrinda Gaur is a 4th Year law student from National Law University Lucknow.

Ishan Aryan and Gunjan Choudhary [1] INTRODUCTION The development of reputable and efficient alternate dispute resolution mechanisms is essential to the growth of global trade and commerce. This is directly responsible for the growing acceptance of international commercial arbitration. Given this, it should come as no surprise that arbitral rulings made in one nation are subject to enforcement by courts in another. Perhaps the foundation of the international arbitration structure is the simplicity of its enforcement. A jurisdiction’s appeal as a business destination is also greatly influenced by how simple it is to enforce arbitral rulings there. In the end, no company would want to do business with a party who owns property in a place where awards are difficult to enforce. In the dynamic world of commerce, disputes are inevitable. Efficient and reliable mechanisms for resolving such disputes are crucial for fostering the ease of doing business. In this context, arbitration emerges as a compelling alternative to traditional court systems. India, with its aspirations to become a global economic leader, has a strong incentive to be pro-arbitration and ensure minimal judicial intervention. Without a doubt, India has developed into a country that supports arbitration. This reputation has been enhanced by numerous court rulings and amendments to the Arbitration and Conciliation Act, 1996 (‘ The Act ’). However, the recent ruling in the case DMRC v. DAMEPL ( ‘DMRC case’ ) draws our attention to the dilemma of drawing a line between upholding valid arbitral awards ensuring minimum judicial intervention and disallowing enforceability of awards which blatantly the grounds set under the law. THE FIVE STAGES OF APPEAL The facts, briefly are that DMRC and DAMEPL were locked in a legal battle concerning the construction of an Airport Express line. DAMEPL blamed faulty construction by DMRC for operational issues and sought termination of the agreement. An arbitral tribunal ruled in favour of DAMEPL, awarding compensation. The arbitral award was eventually challenged at multiple stages mentioned below: First , the Single Judge Bench of the Delhi High Court ordered DMRC to deposit 75% of the award sum in an escrow account within a given time frame after they unsuccessfully contested the Award under Section 34 of the Act. Second , DMRC brought forth new, never-before-raised facts in an appeal filed under Section 37 of the Act at the Delhi High Court Division Bench. In 2019, twenty months after it was passed, the bench overturned the award on the basis that it violated Section 34(2A) of the Act due to patent illegality. In arriving at this decision, the Court interfered with the settled legal dispute, addressing novel facts and re-evaluating evidence and interpreting the contractual terms, which is contrary to the directive of Section 5 of the Act, which expressly prohibits such judicial interference. Third, DAMEPL filed a Special Leave Petition ( ‘SLP’ ) with the Supreme Court of India on behalf of the aggrieved party. Thirty-one months after the SLP petition was filed, the Supreme Court upheld the arbitral verdict in 2021. The Court cited Section 34 , coupled with Section 37 of the Act, which required a narrow scope for judicial action, in holding that arbitral decisions could not be interfered with and advocating for judicial caution when reviewing their legitimacy. Fourthly, this was followed by a review petition filed by DMRC which was dismissed and later at the Fifth stage, a curative petition filed under Article 142 of the Constitution of India wherein the court set aside the arbitral award on the ground of gross miscarriage of justice and perversity. THE BLATANT MISUSE OF THE CURATIVE JURISDICTION The Supreme Court’s use of curative jurisdiction is a major point of contention. This power is meant for exceptional cases involving fundamental flaws in the legal process. The curative jurisdiction of the Hon’ble Supreme Court is meant to be exercised only in the rarest of rare circumstances. The DMRC case, did not meet this high threshold. The court intervened and interpreted the provisions of the contract and this undermines the expertise entrusted to arbitrators chosen for their specialized knowledge in the relevant field. It runs afoul of the very basic tenets of arbitration by involving greater court intervention and prolonging dispute resolution while increasing the cost. The primary goal of the Act is to reduce the function of courts as supervisors in the arbitral procedure. Except in cases specifically authorized, Section 5 of the Act prohibits judicial involvement with regard to Part I, regardless of any current laws that may be in effect. Only in compliance with the provisions outlined in Section 34 of the Act may an application be filed to set aside an arbitral ruling. The curative jurisdiction was recognised for the first time in ‘ Rupa Ashok Hurra v. Ashok Hurra ’ case (‘ Rupa Hurra case ’) and was further solidified in later cases including ‘ Vineet Narayan & Others v. Union of India ’ and ‘ Union of India v. Union Carbide ’. It is important to note that amongst the cases where the curative jurisdiction was upheld or solidified, none of them were a commercial matter. The curative jurisdiction is certainly a bliss for civil and criminal cases, but the same principles should not apply directly in commercial matters especially in arbitration matters where the finality of award and minimum court intervention are the fundamental principles. ERRONEOUS APPLICATION OF TWO-LAYER TEST Regretfully, in spite of 2023 being a year of promise that solidified India’s standing as a globally arbitration-friendly jurisdiction, the Supreme Court swiftly rejected its own directive about minimum judicial intervention in the DMRC case. This was made clear by the Supreme Court’s alleged use of an infrequently exercised power to overturn a final ruling in which it appeared to have distinguished itself from the Tribunal and from its own earlier rulings by considering merits. Even more unexpected is the fact that the Supreme Court denied the review motion and exercised its jurisdiction three years after issuing the prior ruling. In the DMRC case, the Supreme Court thoroughly reviewed an arbitral award that had been made in DAMEPL’s favour on the basis of merits. The Supreme Court exercised its extraordinary power to revoke the award on the grounds of a “grave miscarriage of justice” after conducting a thorough review. However, the court disregarded its own guidelines, which were established in the Rupa Hurra case. Even though the decisions of the Supreme Court are not infallible, they are nonetheless final and should not be easily overturned. The Supreme Court ignored the two-layer test as laid down in Rupa Hurra case that supported the use of such authority. Initially, there has to be a a)     gross miscarriage of justice or b)    an abuse of process Secondly, the first test’s selected basis should be interpreted through the narrow prism of whether a)     natural justice principles have been broken or b)    if the bench was prejudiced The two-layer test immunized the decision-making process from consistently and mechanically exercising an extremely rare jurisdiction. The Supreme Court solely utilized the initial standard and subsequently exercised its curative authority, citing a severe injustice in light of ‘the extraordinary circumstances of this case where the arbitral tribunal has perverted the process of arbitration to provide an undeserved windfall to DAMEPL.’ By adopting this stance, the court neglected to conduct the second and equally crucial test, which asked if the previous ruling was prejudiced or violated natural justice principles. It is important to note that unless the conditions laid down in Rupa Hurra case was fulfilled, the court had no role in interfering with the award.  The execution proceedings of the award already were in place and as a result of the judgment, not only was the award set aside and the Supreme Court’s own judgment set aside, but DAMEPL was also ordered to reimburse the amount that had been paid to it during the execution of the award, including after the Supreme Court’s previous ruling. PATENT ILLEGALITY OR LATENT ILLEGALITY? A comprehensive interpretation of the UNCITRAL Model Law and Rules, the legislative intention behind the 1996 Act, Section 5 , and Section 34 of the 1996 Act would demonstrate that the grounds in Section 34 are the only ones that warrant judicial intervention in arbitral awards. It is settled principle of law that courts must rigorously adhere to and stay within the parameters of Section 34 of the Act when addressing petitions submitted under that section, abstaining from the appreciation or re-appreciation of factual or legal issues. There are various meanings for “patently illegal,” “blatant illegality,” or “error on the face of the record,” including: fundamental legal error; breach of a statute or the constitution; or inconsistency with common law. Patent illegality means - testing if there has been an abuse of the process of law or not. If the illegality is such that it requires scrutiny into the evidence, it is no more patent and it becomes latent. When a court sits for review of the award under Section 34 , this review is not an appeal . All the subsequent review stages under Section 37 , Articles 136 , 137 and 142 of the Constitution, are all limited to the grounds as laid down under Section 34 . This implies that even in subsequent review stages, re-appreciation of evidence or facts is not allowed. Unfortunately, in the DMRC case, the apex court has delved extensively into the facts and reconsidered evidence. The court relied on the case of Associate Builders v. Delhi Development Authority and held that the arbitral tribunal has ignored vital evidence and interpreted certain clauses of the contract in a manner that no fair minded or reasonable persons would arrive at. It is important to note that when the parties agree to submit their disputes to arbitration, they consciously make a decision not to avail the rights as provided for under court litigation. Party autonomy is a fundamental principle in arbitration and the parties voluntarily appoint arbitrators to adjudicate upon their dispute. The award shows that the arbitrators did consider the CMRS certificate but did not find it to be of much relevance in deciding the dispute. It is within the domain of the arbitrators to give more weightage to one piece of evidence over the other. Further, it is difficult to accept that a tribunal comprising of three technical members was not fair minded at all in their interpretation of the contract. The award delivered by the tribunal is final and binding and cannot be challenged just because the parties are not satisfied with the award. The grounds for challenge are very limited. In foreign jurisdictions including countries like France , Spain and Switzerland , the courts do not look at the merits of the award at all. The grounds in these countries relate to procedural review. The courts only look at the process by which the award was made, if it is erroneous then award may be set aside or referred back to the arbitrator. DISPUTE IN A PUBLIC-PRIVATE PARTNERSHIP: A NIGHTMARE The most compelling example of how the arbitration regime in India has fallen short of its primary goal of expeditiously resolving disputes is the torturous journey taken by a private party seeking enforcement of the arbitral ruling in a public-private partnership agreement. The delays can deter foreign private investors and paint India as a business-unfriendly state. In fact, the case would still proceed since the judgment passed by the Supreme Court would have to be executed. The arbitration proceeding has not attained finality almost ten years after the arbitration was called and more than six years after the award was made. Third parties perceive that when the government is a party, the system’s delays—both judicial and arbitral—seem to be made worse. Across the board, when the government is a party to a dispute, the project is usually very valuable and requires funds from taxpayers in the form of interest, time, or, frequently, investment. Interest accrued from public-private partnership delays entails tax payer funds and weakens and disincentives private investors from participating in significant Public Private Partnerships that can support the development of the country. Therefore, it is heavily on the system to make sure that disagreements between government parties—especially in public-private partnerships—are settled amicably and without appearing to indicate that the government is abusing its power. Courts should be aware that investors around the world are keeping a careful eye on high-value disputes. The effectiveness and legitimacy of the court procedures in India may be called into question if one ventures into unfamiliar legal territory while ignoring issues of res judicata or engages in factual inquiries on appeal.  The dilatory tactics being played by the government is also apparent from the amendment to Section 89 of the Metro Railways (Operation and Maintenance) Act, 2002, that was proposed by the Ministry of Housing. It is unacceptable for DMRC to have treated DAMEPL unfairly, as the company has been paying interest costs on a constant basis. Losses have also been incurred, and this has caused annoyance for vendors, lenders, and any subcontractors who may be involved in the project. The taxpayers, whom DMRC claims to serve, are, of course, the worst affected party. In the middle of all of this, the Government’s decision to modify the Metro Act is remarkable for the Indian democracy. In any case, the dispute settlement mechanism by itself gives the G-20 leaders a disincentive to consider rethinking their investment in India. The fact that international suppliers successfully sued DAMEPL for payment delays, fed up with the delays, shows how the issue can discourage foreign investments. For example, Siemens Aktiengesellschaft of Germany, a vendor of power supply, signalling, and train control systems, and Construcciones Y Auxiliar De Ferrocarriles , S.A. of Spain, a supplier of rolling stock to DAMEPL, both sued DAMEPL to recover amounts owed to them under the respective sub-contracts. They were awarded sums totalling INR 62 crores and INR 44 crores, respectively.  For temporary relief prior to execution, both vendors filed a case with the Delhi High Court. Following the SLP ruling, the High Court in both cases ordered DAMEPL to deduct the award amount owed to its international suppliers from the termination payment collected from DMRC. Unfortunately, despite repeated orders from the Delhi High Court, DMRC’s delay tactics—using dubious and repetitive petitions—have prevented DAMEPL from fulfilling its obligations in both cases. While discussing the government’s anti-arbitration moves, it is also relevant to mention the recent Guidelines issued by the Ministry of Finance. It is upsetting and confusing that the Ministry of Finance has directed government organizations, PSUs, and the like to forgo arbitration clauses in favour of mediation for disputes exceeding Rs.10 Cr. The arguments made in favour of the guidelines include lack of finality regarding delivery of the award and the long-time taken to resolve the dispute. It is interesting to observe such contradictory arguments made in favour of introducing the guidelines while in almost every case, it is the government that carelessly contests every award up to the Supreme Court due to their fear of ‘vigilance.’ HARMONIZING ARBITRAL AUTONOMY AND JUDICIAL OVERSIGHT The recent ruling by the Supreme Court in the DMRC case emphasizes the necessity of a formal framework controlling judicial intervention in arbitral verdicts. Therefore, a framework should be established to distinguish between situations that call for this kind of intervention and those that protect the integrity of the arbitration process. The framework needs to emphasize on the idea of “patent illegality” and should reaffirm that the only situations in which an arbitral award may be challenged are those in which there has been a breach of contract, the Act, or substantive Indian law. Guidelines should emphasize on the significance of respecting arbitral rulings unless they manifest blatant legal mistakes or transgress public policy. Guidelines should support the idea of minimal judicial intervention in arbitral awards, honoring the independence of arbitrators in construing the terms of contracts and the restricted role of courts in supervising arbitral rulings. Through various judgments, Courts have reiterated that there are only limited grounds which are available to challenge an arbitral award under Section 34 of the Act, and as far as the power of the subordinate courts are concerned, the Act does not allow them to ‘correct errors of the arbitrators’, but only to quash and set them aside leaving it to the parties to get the dispute resolved again by the arbitration tribunal or any other means. The same uniformity needs to be maintained in all the judgments and the intervention should only be done in the rarest of the rare cases. CONCLUSION The DMRC case sets a dangerous precedent. If courts can readily intervene based on their interpretation of contracts, parties unhappy with arbitral awards might increasingly seek judicial review. This could lead to protracted litigation, negating one of the key benefits of arbitration – swift resolution. It is noteworthy that in the DMRC case, the Supreme Court did issue a warning against routinely taking the curative path. Its re-appreciation of the reward based on merit, however, lessens the significance of its own caution. Even though a lot of the work gained in 2023 has been undone by this ruling, it will be interesting to observe how the Supreme Court handles its fallout. India aspires to be a global hub for commercial arbitration. This judgment, if not addressed, could damage that reputation. International businesses might become wary of entering into contracts with Indian entities if the finality of arbitral awards is uncertain. This dispute also highlights the need to stop government parties from abusing the system for expediting the due execution of arbitral awards in public-private partnerships, since DMRC is a joint venture between the State Government of Delhi and the Government of India, two of its principal shareholders. Indeed, excessive delays from judicial appeals possibilities give a perverse incentive for government parties to postpone implementation at the expense of public monies and infrastructure projects. Clear guidelines must be set to limit the extent of judicial interventions in order to prevent abusive appeals and ensure the timely execution of arbitral rulings. [1] Ishan Aryan and Gunjan Choudhary, both the authors are 4th year law students pursuing B.A.LL.B. from National Law University Odisha.

Riddhi Agarwal [1]   Introduction   Arbitration agreements in contemporary times incorporate pre-arbitral procedures to refer the said dispute to Conciliation, negotiation, and mediation . The latter has a flexible structure as compared to arbitration and allow parties to deliberate more freely and amicably in an informal setting. Arbitration clauses are also known as  “ mandatory arbitration ” since these are contractual provisions that guide parties to settle disputes through other methods before taking up arbitration. The position of MDR in India is ambiguous since High courts all over the country have different interpretations of the same. From an international perspective, the position of India is similar to that of English law as has been depicted in the case of Halsey , which opined that mediation or other dispute redressal methods should be encouraged but not forced. On the other hand, Australia , Hong Kong , and Singapore have a rigid stand that encourages strict adherence to Multi-tiered dispute resolution clauses before proceeding to arbitration or Litigation. Through this article, the author will explore the scope of Escalation clause in India by taking into consideration of judicial developments and changes brought in through the Mediation Act, of 2023. The author also suggests the Med-Arb approach as a legitimate and more efficient Alternate Dispute Resolution approach.   Legal stand on Multi-tiered dispute resolution clauses: Scope of good faith negotiations and mediations.   The position of escalation clause or MDR Clause has been ambiguous in India which gives great flexibility for its application but also creates confusion. In plenty of cases, courts nationwide have upheld the mandatory nature of multi-tiered dispute resolution clauses.   In the case of Nirman Sindia v. Indal Electromelts Ltd. , the Kerala High Court held that pre-conditions to arbitration are mandatory and parties cannot skip the prescribed mode of dispute resolution and jump to the second step without exhausting the first step. The Delhi High Court upheld this position in the case of Sushil Kumar Bhardwaj v. UOI .   It was held in Simpark Infrastructure (P) Ltd. v. Jaipur Municipal Corporation , that if an agreement prescribes a pre-condition or a multi-tiered dispute resolution clause, the requirements need to be fulfilled before approaching arbitration since if the steps are not being followed, the action will classify as pre-mature action, in a significant precedent set by the Bombay High Court in Tulip Hotels (P) Ltd. v. Trade Wings Ltd , the court acknowledged that pre-conditions to arbitration are mandatory. Parties must adhere to the procedure agreed on before approaching arbitration. Still, this condition depends upon the parties' intention and nature of such conditions.   However, in many recent judgments, the courts have taken a different stand and interpreted the escalation clause as discretionary. In the case of Demerara Distilleries Private Limited v. Demerara Distillers Limited , the agreement required a ‘mutual discussion’ before arbitration but this requirement was flouted by the other party and the application for arbitration was made without following pre-conditions to arbitration. The court in this case thought that the contention was not pre-mature and that mutual discussion or mediation before arbitration is discretionary. Therefore, based on facts the requirement was held to be discretionary. The courts have often interpreted escalation clauses as discretionary or empty formality. In the case of Quick Heal Technologies Limited v. NCS Computech Private Limited and M/S IMZ Corporate Private Limited v. MSD Telematics Private Limited ,  the court after looking into the circumstances and facts of the case held that the condition to arbitration is just an empty formality or unnecessary.   This position is being upheld by the Delhi High Court in the recent case of M/s Oasis Projects Ltd. v. the Managing Director, National Highway, and Infrastructure Development Corporation Ltd . In this case, Oasis Projects entered into a contract with NHIDCL and when disputes arose between both parties, Oasis Projects chose to invoke arbitration proceedings without adhering to pre-conditions to resolve the dispute. The counsel on behalf of NHIDCL relied upon the case of Sushil Kumar Bhardwaj v. UOI and Iron & Steel Co. Ltd v. Tiwari Road Lines , it was held in these cases that fulfillment of pre-conditions to arbitral proceedings is necessary, and if the procedure is not followed, a petition for arbitration would not be sustained.   According to the principle of ‘ The parallel consultation exception ’ established in Rajiv Vyas v. Johnwin , if the pre-arbitral consultation is not completed, it should not stop the parties from starting arbitration. Instead, they should be directed to continue negotiating at the same time as the arbitration procedure, even after it has started. This is because it would be irrational for a court to decline a referral to arbitration in the event of unsuccessful discussions, only to have the parties start the arbitration procedure anew. Another exception recognized by Indian courts is the Interim Relief Exception in which Indian courts have ruled that failing to conduct pre-arbitration consultation cannot be used to hinder a party from exercising their substantive rights by denying them access to urgent interim relief or thwart a party’s claim and make any future arbitration futile.   On the other hand, Oasis Projects relied upon section 77 of the Arbitration and Conciliation Act, 1996 (hereinafter, the Act of 1996), and stated that the conciliation process is not mandatory and does not bar petitioners from invoking an arbitration agreement. The court held that a conciliation clause cannot bind the parties since it is a voluntary process and hence indirectly escalation clause was declared as discretionary. It was also decided that any party could end the mediation process at any time. So, the Court agreed to hear the petition under Section 11 of the Act and chose a single arbitrator to settle the disagreement between the two sides.   Mandatory pre-litigation Mediation in light of The Mediation Act, 2023   One of the major features of the Mediation Bill, 2023 (hereinafter, the Act of 2023) was that it mandated ‘pre-litigation mediation’ under section 6 of the draft. However, this mandate as per the wording of section 5 (1) was done away with and introduced as a voluntary process under the Act of 2023. The purpose of mandated 'pre-litigation mediation' is for parties to acquire knowledge about the mediation process through sessions before initiating a lawsuit. Following the compulsory 'information sessions', either party is allowed to terminate and exit the procedure. Alternatively, if they like, individuals can choose to participate 'voluntarily'. If the intention is to provide required mediation, it may be more appropriate to refer to it as a mandatory pre-litigation information session on mediation.   Indian Courts have observed that mandating parties to engage in mediation will not impact the inherently voluntary nature of the process. In Afcons Infrastructure Ltd v. Cherian Varkey Constructions Co. (P) Ltd , the Supreme Court of India decided that if a judge finds there is a possibility of settling a lawsuit, except in certain cases, the parties involved may be required to engage in mediation. By virtue of Section 89 and Order 10 Rule 1A of the Civil Procedure Code.   Italy has been using required pre-litigation mediation as an experimental approach since 2011. Only the 'information sessions' are mandatory. Statistics show that since its establishment, the number of lawsuits filed has decreased, the rate of settlements has increased, and the usage of mediation has increased when compared to other European countries. India is currently confronting a crisis similar to the one that Italy encountered in 2013. Italy utilized a technique known as 'opt-out' mandatory mediation to handle its high number of pending cases. In 2010 and 2013, a law was enacted that compelled mandatory pre-litigation mediation for particular problems, such as those involving property partition and joint ownership, before filing a lawsuit. According to their opt-out approach, plaintiffs are not entitled to appear in Italian courts unless they can demonstrate that they participated in an initial mediation session that was unsuccessful. This Italian law has shown to be quite effective over time. But the same is not the case in India since s.24(c) of the Act of 2023 provides for termination of mediation by written consent of both the parties or even one party and there is no model that compels pre-litigation mediation in certain categories of cases, rendering MDR clause ineffective. Legal Framework for Med-Arb in India: A possible way out   Med-Arb is an amalgamation of the best features of both arbitration and mediation. In this, the parties first try to overcome their issues through mediation with the help of a third party who is neutral to both parties known as a mediator. If the mediation achieves desirable results then a settlement is being signed but if mediation fails in whole or relating to any particular issue then parties can further resolve it through arbitration wherein the arbitrator can same person who mediated the parties or any other person.   There is yet no legal framework that governs Med-Arb but many existing legislations such as the Act of 1996, the Act of 2023, and the Commercial Courts Act, of 2015 encourage Med-Arb in India.   There is yet no legal framework that governs Med-Arb but many existing legislations such as the Act of 1996, the Act of 2023, and the Commercial Courts Act, of 2015 encourage Med-Arb in India. In the case of Haresh Dayaram v. State of Maharashtra , it was observed by the Supreme Court that Med-Arb is a novel ADR technique that can be utilized to resolve complex commercial disputes. The Court further stated that Med-Arb can be conducted by retired judges who are experienced and knowledgeable in both mediation and arbitration. Recently Gujrat High Court on the occasion of 78thIndependence day inaugurated Med-Arb centre which would comprise of specially trained official trained by Gujrat State Legal  Services Authority (GSLSA). In the case of DMRC v. DAMPEl , the importance of shifting from traditional approach towards Med-arb was encourage since the Indian government's most current recommendations for arbitration and mediation in domestic public procurement contracts, announced in June 2024, reflect the country's changing dispute resolution landscape. These rules address the specific issues that government organisations encounter while emphasising the value of arbitration's speed, convenience, and finality. They also indirectly discourage the government from using arbitration to resolve public procurement disputes. Med-Arb is a potentially effective and increasingly popular ADR method in India. Its suitability depends on the parties' consent and the dispute's specific characteristics.    Conclusion The position of pre-arbitral procedures in India is open to wide judicial interpretation with pros and cons on a case-to-case basis. Making mediation and conciliation has benefits since parties would have more flexibility and can retain their relationship with each other. A legal framework to regulate matters related to the mandatory or directory nature of escalation clauses would be a step to de-clog the judiciary and facilitate a smooth process. [1] Riddhi Agarwal is a third-year student currently pursuing B.A LL.B (Hons.) programme at Rajiv Gandhi National University of Law, Patiala.

Pratishtha Agarwal and Vidhi Chhabra [1] Introduction Arbitration hinges on party autonomy and flexibility, which enable parties to adjust the dispute settlement procedure to their requirements. The Group of Companies Doctrine ("GoCD") embodies these ideas by allowing arbitration terms approved by one party to bind all other parties engaged in the contract's life cycle. The recent case of Cox and Kings Ltd. v. SAP India Pvt. Ltd. broadened the scope of this theory, including more liberal interpretations of implicit consent in arbitration agreements. This article investigates the developing interpretation of the Group of Companies Doctrine (GoCD) in arbitration, focusing on its applicability in binding non-signatory persons authorised to act as representatives on behalf of the Company. It examines the ramifications of incorporating corporate representatives in arbitration processes, citing recent cases such as Cox & Kings Ltd. v. SAP India Pvt. Ltd . The article compares Indian arbitration methods to international norms from the ICC, SIAC, and LCIA, emphasising the differing conditions for joinder. It highlights the importance of a balanced approach that protects arbitration's integrity while maintaining accountability, fairness, and efficiency. Background As non-signatories can be bound to an existing arbitration agreement by their role and common intention, the scope of the GoCD can be further widened to interpret whether or not the company's directors can be made a party to the arbitration . The contention is based on the fact that the arbitration agreements containing the clause are signed by the directors acting as authorised representatives who also make decisions on behalf of the company. In Vingro Developers Pvt. Ltd. v. Nitya Shree Developers Pvt. Ltd ., one of the directors had also signed the Builder Buyer Agreement, which was contended to be construed as an express intention to be added as a party to the Arbitration Agreement. The term ‘parties’ under Section 2(1) , read with Section 7 of the Arbitration and Conciliation Act , includes both signatories and non-signatories. The Court observed that the relationship between the Company and its Directors is that of a Principal and Agent under Section 182 of the Indian Contract Act (“ICA”) . The company's Director signed the Arbitration Agreement on behalf of the respondent company, thereby establishing an Agency . A simple reading of Section 230 of the ICA clarifies that an agent cannot be personally bound by contracts entered into on behalf of its principal. Carving out an exception from the Principal-Agent Relationship The Group of Companies Doctrine can be applied to add different non-signatories as part ies to a contract. The principle of the corporate veil seeks to disregard the company's separate personality and attribute the company's acts to those in direct control of the operations of the company. In Lanuza, Jr. et al. v. BF Corporation , in the Philippines, it was laid down by the Arbitral Tribunal that if the requirements for ' piercing ' are present, the court may proceed to take jurisdiction over the directors and officers . In Amravati Peoples’ Co-operative Bank Ltd. v. Giltedege Management Services Ltd ., the Bombay High Court reiterated the same and held that the directors of a company would be liable for misappropriation of the company’s funds and other misfeasance but not for the ordinary contractual liability of the company . The Group of Companies Doctrine can be invoked to add other unconnected parties to the arbitration agreement. A fair inference to that effect would be to carve out an exception to the immunity under Section 230 of the ICA on account of negligence, misrepresentation, malice, or bad faith. Therefore, safeguards must be in place to restrict the creative use of the judgment in Cox and Kings and only bind parties, with the addition of which effective adjudication of disputes could be possible. Consequences of Impleading Corporative Representatives in Arbitration Proceedings Impleading corporate representatives such as directors, board members, general counsel or legal head, HR executives etc. can complicate arbitration by introducing new parties with conflicting interests. This may result in more complex legal arguments and procedural concerns. Claimants may sue directors or corporate representatives to hold them personally accountable for activities conducted on the corporation's behalf. This may broaden the possible scope of liability for those persons beyond the corporation itself and result in abuse of doctrines already set in place, such as the ‘doctrine of alter ego’ which is an equitable device used by the courts to prevent abuses by those improperly using the legal shield provided to a corporate entity. Directors and business officials involved in arbitration procedures would suffer personal financial liability or reputational harm, which may also have a bearing on the cost and efficiency of the arbitration proceedings. Impleading directors or corporate representatives may pose issues of conflict of interest, especially if the parties involved have fiduciary obligations to the company. This may limit their capacity to fully engage in the arbitration process without jeopardising their responsibilities to the business. Th e arbitration procedures involving directors or corporate representatives may influence settlement discussions. Impleading directors or corporate representatives in arbitration is a ‘necessary evil’. While their involvement may complicate proceedings, it also serves critical functions that justify the potential drawbacks. Arbitration has the potential to deter wrongdoing and promote improved governance practices by holding corporate representatives accountable. This process ensures that accountability is not unjustly shifted to the corporation alone, protecting shareholders and other stakeholders as well. Involving important decision-makers in arbitration also clarifies their legal responsibilities, promoting more open and moral business practices. The advantages of enhanced accountability and governance outweigh the difficulties, making this strategy crucial. Holding directors or corporate representatives accountable for their activities can encourage responsible decision-making inside the organisation . Impleading people can guarantee that accountability is properly dispersed, preventing the company from carrying the entire responsibility for improper conduct. The arbitration procedure can explain their duties and responsibilities by including directors or corporate representatives, allowing for better future governance. It may safeguard shareholders' interests by holding individuals accountable for company decisions.   Comparative View on Impleading Corporate Representatives as a Party in Arbitration Proceedings The contemporaneous stance in the Indian context on impleading corporate representatives is not attuned to the international standards of multifarious arbitral institutions. Article 7 of the ICC Arbitration Rules, 2021 (hereinafter referred to as: “ICC Rules” ) permits for the joinder of the additional parties subject to the provisions contained within Articles 6(3) - 6(7) and 9. An important caveat that shall be highlighted herein is that the ICC Rules for impleading ‘corporate representatives’ as ‘third parties’ shall only be applicable in case “ all parties , including the additional party , otherwise agree” and further provide that “no additional party may be joined after the confirmation or appointment of any arbitrator” .  It shall also be highlighted that even if a party at the commencement of the arbitration objects to the joinder of an additional party, the arbitral tribunal now has the power and discretion to permit the joinder where the conditions are met pursuant to the ICC Rules. Furthermore, Rule 7 of the Singapore International Arbitration Centre Arbitration Rules, 2016 (hereinafter referred to as: “SIAC Rules” ) provides that for an additional party to be impleaded in the arbitration party , the party shall either be ‘prima facie bound by the arbitration agreement’ or “all parties, including the additional party to be joined, shall have consented to the joinder of the additional party”.  Interestingly, the SIAC Rules do not lay impetus on the ‘express consent to joinder’. Article 22.1(x) of the London Court of International Rules, 2020 (hereinafter referred to as: “LCIA Rules” ) goes on a step further to stipulate that the consent of the applicant party and the additional party to joinder shall be ‘ expresslywritten in the arbitral agreement’.   Rather interestingly, Article 6(3) of the Swiss Rules, 2021 (hereinafter referred to as: “Swiss Rules”) states that , “a request for joinder shall be decided by the arbitral tribunal after consulting with all of the parties considering all relevant circumstances”.  The Swiss Rules pertinently only require ‘consultation with all the parties’ . In the absence of the requirement for express consent, the arbitral tribunal has the power to decide whether to allow a joinder based on its considerations after consulting all parties. While the ICC, SIAC, and LCIA Rules mandate the consent of the parties, after paying due consideration to the structuring of their provisions, it shall be highlighted that they reflect different standards for impleading corporate representatives as a ‘third-party’. The consent requirement of ‘ all the parties’ may seem sacrosanct considering the consent-driven nature of the arbitration proceedings . However, from a practical standpoint, the consent threshold is too high to trigger a joinder in practice. In contrast, Swiss Rules are more in line with the advent of impleading third parties since they only require consultation based on all relevant circumstances , which prevents arbitrariness in decision-making, and they have a lower threshold for the parties' consent .   Conclusion Impleading parties' changing criteria reflects a compromise between consent-driven processes and pragmatism in complicated arbitration cases involving corporate representatives. While international arbitration procedures such as the ICC, SIAC, and LCIA require explicit approval from all parties, which may impede such joinder , Swiss procedures take a more flexible approach by mandating consultation with parties, limiting arbitrariness. However, a significant concern among these variants is preserving the integrity of arbitration while guaranteeing justice and efficiency. Achieving this balance requires a sophisticated awareness of the repercussions of impleading business leaders while also realising the possible complications and the need to hold individuals accountable. There shall be an emphasis on continuously improving arbitration rules to strike a delicate balance between consent-based principles and practical application, thereby increasing the efficacy and legitimacy of the arbitration process. [1] Pratishtha Agarwal and Vidhi Chhabra are 4th Year Students pursuing B.A. LL.B (Hons.) and B.Com LL.B. (Hons.) at the Institute of  Law, Nirma University.