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28th June 2019 Gaurav Rai: Today we have with us, Justice A.K. Patnaik, Former Judge of the Supreme Court of India and a very active and sought after arbitrator. I am extremely glad that he accepted my invitation for an interview on his experience with arbitrations in India and abroad. Before I begin, I would like to give our readers some background about him. Justice Patnaik did his schooling in Rajkumar College at Raipur and then studied B.A. Honours in Political Science from KM College, University of Delhi. He then returned to Cuttack and completed his Bachelor of Laws in Madhusudan Law College, Cuttack, Odisha. He joined the Bar in Orissa High Court in 1974. He practised as an advocate in all branches of law and his specialisation was in commercial law and constitutional law. He was the Standing Counsel of the State Road Transport Corporation and the Senior Standing Counsel of the Odisha Commercial Taxes Organisation. He was elevated as a Judge of High Court of Orissa in January 1994 and was immediately transferred to Gauhati High Court in February 1994. After a tenure of eight years as a Judge of the Gauhati High Court, he was transferred back to the High Court of Orissa in April 2002. After a stint of about three years as a Judge of High Court of Orissa, he was appointed as the Chief Justice of High Court at Chhatisgarh and thereafter was transferred as Chief Justice of Madhya Pradesh High Court in October 2005. In November 2009, he was appointed as Judge of the Supreme Court of India and he retired from the Supreme Court of India in June 2014 It is not known to many, but it was the Judgment given by him in the Division Bench as the Chief Justice of Chattisgarh High Court in BALCO v. Kaiser which was upheld by the Supreme Court. Today the BALCO Judgment of the Supreme Court is known as one of the leading cases of arbitration law in India. It was his judgment that laid the foundation for the Supreme Court to overrule its previous decision in Venture Global v. Satyam Computers and to make the arbitration regime of India in line with international practices and limited the scope of interference of Indian Courts in foreign seated arbitrations and arbitral awards. (Judgment of the Chattisgarh High Court in BALCO v. Kaiser - https://indiankanoon.org/doc/1623274) (Judgment of the Supreme Court in BALCO v. Kaiser https://indiankanoon.org/doc/173015163/ Gaurav Rai: Thank you so much sir for sparing your valuable time and giving us this interview. Gaurav Rai: You started working as an arbitrator after your retirement from the Supreme Court of India in 2014. What factors motivated you to start working as an arbitrator and how has your experience as a lawyer and a judge for more than 40 years helped you as an arbitrator? Justice Patnaik: I retired at the age of 65 on 3rd June 2014. After retirement from the Supreme Court, I did not want to take up any assignment as a member of a tribunal or as a Chairman of State Human Rights Commission because I thought after my retirement from the Supreme Court it will not be proper for me to take these assignments from the Government. But I had to do something so I thought I should take up arbitration cases. Gaurav Rai Sir, when you started doing arbitrations, did you have to approach anyone to get the nominations? Justice Patnaik Fortunately, that occasion never arose, nor do I think that would be the proper course for an arbitrator to approach any party or any court to get arbitration matters. Arbitrations came to me by appointment as an arbitrator by the Supreme Court of India, the Delhi High Court, by the parties and by the two arbitrators who were nominated by their respective parties to act as the Presiding Arbitrator. Gaurav Rai: Sir, you have seen arbitrations and you have seen court cases, What do you think are the major differences you see in proceedings of court cases and arbitrations? Justice Patnaik: The major difference is this that in arbitration when a date and time of hearing is fixed, only one matter is fixed before the arbitral Tribunal and that one matter may go on for 2 hours, 4 hours or 5 hours etc. In a court case there are several matters fixed in a day. So parties appearing before a court do not know whether their case will be taken up on that day. Whereas before an arbitrator once the matter is fixed, the parties know that the case will be taken up by the arbitrators. Gaurav Rai: I am guessing that is something very positive about arbitrations the fact that when a matter is taken up a lot of detailed hearing takes place? Justice Patnaik Yes yes, because the arbitral Tribunal exclusively devotes it time to the case. Therefore, the parties have to spend the entire time which has been allotted to them before the arbitral Tribunal. Gaurav Rai: What skills would lawyers practicing in courts bring into arbitrations and what additional skills do you believe have to be developed by such lawyers to be successful in arbitrations? Justice Patnaik: The most important skills of lawyers in arbitration are the skills of drafting the pleadings, compiling the documents in support of their case, deciding whether at all oral evidence is required and arguing on the point of dispute that has been formulated by the arbitral Tribunal in a particular case. So the focus of the lawyer should be that particular case, the point of law involved, the factual materials required and the ability to convince the arbitral Tribunal in as short a time as possible that he has a good case. Gaurav Rai: Sir, my follow up question to this would have been what kind of cross examination skills that lawyers would need, but you said that they might also have to decide whether to lead oral evidence or not? What is the reason behind this sir? Justice Patnaik: See, arbitration cases are civil cases, not criminal cases and they arise out of contracts and a number of communications are made between the parties, before the dispute starts. So, interpretation of contract is involved and documents have to be interpreted and appreciated by the arbitral Tribunal. The scope of oral evidence is very less. So in those matters only where a factual dispute arises and that can be established only through oral evidence, oral evidence is required, otherwise not. Gaurav Rai: Sir, in the last 5 years working as an arbitrator, how has your experience been in different arbitration setups, Ad hoc v. Institutional, Domestic v. International Commercial & Foreign Seated arbitrations? Do you feel more comfortable in an Ad hoc setup where you have more control of the proceedings or in an institutional setup which has pre-defined rules. Justice Patnaik: No, I feel comfortable in both kinds of cases. In institutional setups such as Singapore International Arbitration Centre (SIAC) or the Court of Arbitration of the International Chamber of Commerce (ICC), as an arbitrator I got to learn a lot. Because after I made the awards or after the arbitral Tribunal made the awards, they have to be approved by their respective administrative bodies called Court or Secretariat of SIAC and ICC and they insist that every aspect of the case is examined, every contention of the parties is considered. As a result the arbitrator in the arbitral award covers every aspect of the case and the ground for challenge of the award gets reduced and the award is therefore sustained by the Courts, if it is challenged in Court. Gaurav Rai: As you know the Arbitration and Conciliation Act, 1996 is based on the UNCITRAL Model law of 1996 but the Arbitration and Conciliation (Amendment) Act, 2015, which only operated prospectively, brought in significant changes to the arbitration regime. You have had the opportunity to deal with cases on both sides of the amendment as an arbitrator. Do you feel the changes which have been brought in have had a positive impact on the arbitration scene in India and how has it affected your work as an arbitrator? Especially Section 29A and the strict timeline. Justice Patnaik: Initially, most of the arbitrators felt that these timelines were not proper. But experience has shown that these timelines have worked very well. The new arbitrations which were initiated after the commencement of the amendment, are being completed by the arbitrators fast because of the timelines and the timelines are not absolute as the Courts can extend the time. The Courts also have had a very reasonable approach in extending time in appropriate cases. Therefore the arbitrator and the parties now work in the background of the time limits which are laid down in Section 29A of the Act and they don’t want to go to the Court a number of times for extension and if they want to go to the court for an extension there must be a good ground for the extension. All this has helped in expediting the arbitration proceedings. Gaurav Rai: Do you feel that due to the changes made by the Amendment Act and the general change of regime where the Supreme Court through the judgments has made the law more arbitration friendly. Further, do you feel that because of these regime changes people are preferring to arbitrate in New Delhi, Mumbai and other metropolitan cities in India whereas initially they would have preferred going for arbitration to a neutral country like Singapore.? Justice Patnaik: See we have had some cases coming up before us where the parties had initially agreed to have the arbitration in a country like Singapore and other places abroad. They subsequently agreed to have the arbitration in India. This shows that the parties who are from abroad are now appreciating that arbitration in India is getting faster and they have no reason to go out of the Country for arbitration. Gaurav Rai: We have heard from you about what skills would be required in lawyers practicing in arbitration. What do you feel are the skills required in an arbitrator.? Justice Patnaik: They must know the law of contracts, must be very fair in their approach, not partisan, must be very quick in applying their mind and solving the various problems coming before them and at the same time meticulous in observing a fair procedure and the provisions of law. Gaurav Rai: Sir, you had said that the arbitrations in India are becoming faster and efficient. That may be true about the major metropolitan cities like Mumbai, New Delhi, Bangalore and Hyderabad. Do you see arbitrations moving out to other tier 2 cities also. Justice Patnaik: Very difficult. Because in the smaller cities, the lawyers are not that trained in arbitration. Secondly the arbitrators those are available in the cities might not have the skill yet to effectively work on arbitrations. So, until the skills of arbitration both in the arbitrators and the lawyers improve I don’t think the arbitration will pick up in those cities. Gaurav Rai: But do you feel, that the arbitrations will continue to pickup speed and momentum in the major cities so much so that the parties prefer to come back to India and arbitrate rather than …. Justice Patnaik: Yes, I feel, Delhi, Mumbai, Bangalore, Hyderabad, Chennai to some extent and Kolkata are picking up a lot of arbitration work and gradually if the efficiency of the whole arbitration system improves, people will prefer to arbitrate in India particularly where the contracts refer to projects in India. Gaurav Rai: Finally, sir what would be your advice for young lawyers wanting to pursue arbitration as a career? Justice Patnaik They should focus themselves to the work in arbitration, in preparing pleadings, in the art of adducing evidence, relevant evidence, the art of cross examination where oral evidence is led, arguing in a pin point manner, studying and updating themselves of changes in arbitration law and I am sure they will get to acquire a lot of briefs and they will go up in arbitration work. Gaurav Rai Thank you so much for sharing your valuable time with us today. I am sure our subscribers and readers will learn a lot from what we have heard from you today, thank you so much.

Tia Majumdar[1] ABSTRACT At the outset, the paper discusses the merits of arbitration as a mode of dispute resolution after which it focuses on provisional measures in international commercial arbitration. The author also discusses the need for the procedure of emergency arbitration and the substantive requirements of the same. Additionally, the paper expounds on the state of interim arbitral relief in the Indian context. The author has relied on purely doctrinal sources for the purpose of this paper. These sources include, but are not limited to research papers, articles, essays, books and other textual evidence. Introduction Arbitration as a mode of dispute resolution has gained immense currency over the last few decades. Admittedly, such dramatic growth was facilitated by developments in international trade and commerce. However, as far as the identification of reasons for such advancement is concerned, it would perhaps be prejudicial to withhold credit from the merits of international commercial arbitration as a mechanism for dispute resolution. The most perceptible hallmark of arbitration is perhaps the degree of confidentiality[2] that is maintained, in addition to the entire process being less protracted than court proceedings.[3] International arbitration has often been referred to as “the oil, which lubricates the machinery of world trade”.[4] An efficient means of dispute resolution – international commercial arbitration facilitates the development of trans-national trade and commerce appreciably.[5] Parties often resort to this mode of dispute resolution for the neutrality it offers as regards disputes between multi-national parties – thereby enabling the parties to evade unfavourable provisions of the national laws of their co-contractors.[6] However, procedural safeguards and due process result in inevitable delay in the process of arriving at the resolution of the concerned dispute.[7] Due to the considerable time lapse between the commencement of the arbitral proceedings and the constitution of Arbitral Tribunal, the subject matter of the arbitration may be prejudicially affected causing irreparable and non-compensable harm thereby rendering a final award frustrated.[8] There is thus a dire need for provisional measures in order to indemnify the concerned party against such irreparable harm. In the context of arbitration, provisional or interim measures are granted by arbitral tribunals or national courts. It is into this area of research that the author seeks to delve in the course of this paper. The present paper is divided into two chief sections - the first section of which expounds on the field of emergency arbitration with a special focus on interim measures granted therein. The author, in the second section seeks to comment on provisional measures granted by tribunals in the context of India. Provisional Measures in International Commercial Arbitration The 2012 amendment to the new International Chamber of Commerce Rules of Arbitration (hereinafter “ICC Rules”) brought with it the possibility of parties obtaining interim conservatory relief in urgent matters that “cannot await the constitution of the tribunal”.[9] The procedure of obtaining an emergency arbitrator is a spin-off on the ICC Pre-Arbitral Referee[10], which was a standard clause found in the ICC Rules of 1990.[11] The need for provisions relating to urgent relief is fast coming to the fore. The ICC is not alone in introducing such a procedure as the Stockholm Chamber of Commerce (SCC), the International Center for Dispute Resolution (ICDR) and the American Arbitration Association (AAA) have followed suit.[12] In order to avoid the potentially time-consuming and unpredictable court proceedings, the parties may choose to seek recourse to the Emergency Arbitrator to secure interim reliefs before the constitution of an Arbitral Tribunal. However, the Emergency Arbitrator provisions are not intended to be the only means of seeking urgent relief and they are only an alternative to seeking relief from state courts.[13] Art. 29(7) of the Rules recognises the parties’ right to seek urgent interim or conservatory measures from a competent judicial authority at any time during the course of arbitral proceedings without infringing the arbitration agreement, thereby recognising the concurrent jurisdiction of both the Emergency Arbitrator and a competent judicial authority.[14] An interesting aspect of this procedure is that the parties can opt out of the applicability of Emergency Arbitrator Provisions[15] and unless the parties so opt out, the provisions are applicable automatically.[16] Substantive Requirements for Granting Interim Measures The determination of the substantive conditions that need to be satisfied for the grant of emergency measures is usually left to the discretion of the Emergency Arbitrator.[17] These grounds are usually similar to those of provisional measures before an Arbitral Tribunal.[18] The ICC Rules do not lay down any substantive pre-requisites for granting emergency measures except urgency and recourse to Emergency Arbitrator is available only for truly urgent matters.[19] Urgency is to be broadly interpreted and is deemed to be established when it is proven that a party’s potential losses increase with the mere passage of time.[20] The pre-requisites laid down by the ICC Rules are often read in conjunction with those laid down in the UNCITRAL Model Law (hereinafter “Model Law”). The substantive requirements provided under Article 17A of the Model Law require that without the grant of the measures requested, the party requesting relief is likely to face irreparable harm substantially outweighing the likely harm to the opposing party if the measure is granted.[21] That is to say that the Emergency Arbitrator is obligated to ensure that the potential advantage to the requesting party with the granting of the requested measures does not outweigh the potential harm to the opposing party.[22] Irreperable harm in this context ought to be construed in an economic sense as opposed to a literal interpretation.[23] An additional requirement lays down that there ought to be a reasonable possibility that the requesting party succeeds on the merits of the dispute under arbitration.[24]. However, it is only a prima facie examination on the merits that is in order, as it has been widely held that the arbitrator ought not to prejudge on the merits of the case.[25] Emergency Arbitration under Indian Arbitration Law The Arbitration and Conciliation Act, 1996 (hereinafter “The Act”) is primarily modeled after the UNCITRAL Model Law. Section 17 of the Act pertains to the grant of interim relief.[26] By virtue of this provision, unless there is an agreement indicating otherwise, the arbitral tribunal is empowered with the implied authority to direct any party to the dispute to undertake such conservatory measures as it deems fit in order to protect the subject matter of the dispute – the fundamental aim being to prevent frustration of the award so made.[27] Emergency Arbitration as a procedure is still in its nascent stages as regards the Indian context as is evidenced in the fact that until extremely recently, there had been only one Indian decision pertaining to the usage and application of emergency arbitrators which was passed by the Bombay High Court in HSBC Pl. Holdings (Mauritius) Ltd. v. Avitel Post Studioz Ltd wherein the Court acknowledged that an emergency arbitrator did indeed fall under the purview of Section 17.[28] This decision was further buttressed by the 246th Law Commission Report, which suggested amendments to the Act in order to bring emergency arbitrators under the ambit of Clause 2(1)(d).[29] The recommendation by the Law Commission is a significant step forward for India in the scheme of international arbitration, as in the event that the suggestion is accepted and incorporated within the Act, India would be the sole country to have extended the scope of the definition of “Arbitral Tribunals” to include emergency arbitrators.[30] Conclusion The Indian scenario in relation to interim measures ordered by emergency arbitrators has thus far not been objectively favourable. This has been sought to be reformed by the amendments recommended by the 246th Law Commission Report, which while being a leap in the correct direction, has several flaws, which have to be corrected in order to become completely effective. Emergency arbitration is an ingeniously useful pre-arbitral mechanism, which could be imported into the Indian arbitral regime with the inclusion of an emergency arbitrator within the definition of an arbitrator under Section 2(d) of the Act. In the opinion of the author, emergency arbitrators ensure that the purpose of the final arbitral award is not frustrated and to this end, should be adopted as the preferred form of pre-arbitral interim measures, over Section 9 of the Act. The Law Commission’s recommendations, in the opinion of the author, should be adopted, after considering the changes proposed by various jurists, given that the Commission’s proposals make for a strong argument in favour of imbuing the arbitration climate in India with a welcoming flavour. [1] Tia Majumdar is a graduate from National Law University, Delhi with a specific interest in commercial dispute resolution. She has assisted various Arbitral Tribunals in several high stake disputes under the guidance of Justice Deepak Verma (Retd.), Former Judge, Supreme Court of India. [2] Hanotiau, International Arbitration in A Global Economy: The Challenges of the Future, 28 J. Int’l Arb. 89, 90 (2011); Knahr & Reinisch, Transparency Versus Confidentiality in International Investment Arbitration – The Biwater Gauff Compromise, 6 L. & Prac. Int’l Cts. & Tribs. 97, 109 (2007); La Spada, in T. Zuberbühler, C. Müller & P. Habegger (eds.), Swiss Rules of International Arbitration: Commentary Art. 43, ¶2 (2005); Neill, Confidentiality in Arbitration, 12 Arb. Int’l 287, 315-16 (1995); Trakman, Confidentiality in International Commercial Arbitration, 18 Arb. Int’l 1 (2002). [3] Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration, Kluwer Law International (1999) at p. 1; David L. Threlkeld & Co. v. Metallgesellschaft Ltd, 923 F.2d 245, 248 (2d Cir. 1991). [4] Veeder, The Lawyer’s Duty to Arbitrate in Good Faith, in L. Lévy & V. Veeder (eds.), Arbitration and Oral Evidence 115, 118 (2004); Paulsson, International Arbitration Is Not Arbitration, 2008:2 Stockholm Int’l Arb. Rev. 1. [5] D. Caron & L. Caplan, The UNCITRAL Arbitration Rules: A Commentary 2 (2d ed. 2013) [6] Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration, Kluwer Law International (1999) at p. 1. [7] Gary B. Born , International Commercial Arbitration (Second Edition), 2nd edition, Kluwer Law International 2014 at p. 2425. [8] Ibid at p. 2426; Baruch Baigel, The Emergency Arbitrator Procedure under the 2012 ICC Rules: A Juridical Analysis, Journal of International Arbitration, Kluwer Law International 2014, Volume 31 Issue 1) at p. 2. [9] Article 29, ICC Rules of Arbitration 2012. [10] Article 2, ICC Rules of Arbitration 1990. [11] Baruch Baigel, The Emergency Arbitrator Procedure under the 2012 ICC Rules: A Juridical Analysis, Journal of International Arbitration, Kluwer Law International 2014, Volume 31 Issue 1) at p. 1. [12] Ibid. [13] Fry, Jason; Greenberg, Simon; Mazza, Francesca, Commentary on the 2012 Rules, The Secretariat's Guide to ICC Arbitration, 2012 at ¶3-1105. [14] Gary B. Born , International Commercial Arbitration (Second Edition), 2nd edition, Kluwer Law International 2014 at p. 2457. [15] Article 29(6), ICC Rules of Arbitration 2012; Webster, Thomas H; Bühler, Michael W,Handbook of ICC Arbitration, Sweet and Maxwell, 2008 ed. (2014) at ¶29-141. [16] Fry, Jason; Greenberg, Simon; Mazza, Francesca, Commentary on the 2012 Rules, The Secretariat's Guide to ICC Arbitration, 2012 at ¶3-1055. [17] Yesilirmak, Ali, Provisional Measures in International Commercial Arbitration, Kluwer Law International 2005 at ¶4-58. [18] Ibid at ¶4-59. [19] Bühler, Michael, ICC Pre-Arbitral Referee and Emergency Arbitrator Proceedings Compared, Special Supplement 2011: Interim, Conservatory and Emergency Measures in ICC Arbitration, at p. 95. [20] ICC Interlocutory Award 10596 of 2000 (Unpublished), discussed in page 177 & 179 of Provisional Measures in International Commercial Arbitration by Ali Yesilirmak (refer to Note 17). [21] Article 17A(1), UNCITRAL Model Law. [22] Berger, Klaus Peter, International Economic Arbitration, Kluwer Law and Taxation Publishers (1993) at p. 336. [23] Lew, Julian D. M.; Mistelis, Loukas A.; Kröll, Stefan Michael, Comparative International Commercial Arbitration, Kluwer Law International (2003) at ¶23-65. [24] Ibid; Yesilirmak, Ali, Provisional Measures in International Commercial Arbitration, Kluwer Law International 2005 at ¶5-28. [25] ICC Second Partial Award 8113 of 1995, Extracts published in 11(1) ICC International Court Arbitration Bull 65‐69 (2000). [26] Arbitration and Conciliation Act, 1996. [27] Justice R.S. Bachawat, Justice R.S. Bachawat’s Law of Arbitration and Conciliation, LexiNexis Butterworths Wadhwa Nagpur, 5th edn. (2010), at p. 1127. [28] 2014 Indlaw MUM 29. [29] 246th Report, Law Commission of India, at p. 37. [30] Nikhil J. Variyar, Tribunal Ordered Interim Measures and Emergency Arbitrators: Recent Developments Across The World and in India, Indian Journal of Arbitration Law, Volume IV, Issue I (2015) at p. 39

Edita Marić (Edita Marić is a Legal Research Associate at Alchemy Capital and is based in Sarajevo, Bosnia and Herzegovina. She holds an LL.M degree from University College London, University of London and an LLB degree in International and Comparative Law from American University in Bosnia and Herzegovina. She can be contacted at edita.maric@gmail.com) At times of heightened criticism and in the light of recent reform proposals, it is reasonable to question to what extent has the investment arbitration regime cured its legitimacy crisis. Namely, extensive rule revisions have been proposed at the International Centre for Settlement of Investment Disputes ("ICSID"), or leading institution for the resolution of international investment disputes. It is significant to observe that on August 3, 2018, ICSID has announced a very challenging task – amending its Regulations and Rules. For the purpose of this article, the focus will be on the rules aimed towards enhancing the impartiality and independence of arbitrators, as the main actors in the system. In specific, it was announced that the process for arbitrators’ challenges will be revised, with an additional option of expedited challenge filling. Independence and impartiality of arbitrators as well as other decision-makers are of paramount significance for the rule of law. Specifically, ICSID Convention contains rules and procedures on the independence and impartiality of arbitrators, such as arbitrators’ obligation of disclosure and the right of the disputing parties to remove arbitrators.[1] Article 57 of the ICSID Convention in conjunction with Article 14 provide grounds for challenging an arbitrator, on the basis of “of any fact indicating a manifest lack of the qualities required by paragraph (1) of Article 14”.[2] Regarding the disclosure, as per the Rule 6(2) of the ICSID Arbitration Rules, arbitrators shall disclose any previous circumstances or relationships that ‘‘might cause the arbitrator's reliability for independent judgment to be questioned by a party’’.[3] By the analysis of these provisions, it can be concluded that the bar for disqualification of arbitrators is too high, in comparison to other rules governing arbitration procedure such as UNCITRAL Arbitration rules. For instance, the ground for disqualification or disclosure under UNCITRAL Arbitration Rules are any circumstances or relationship that would raise ‘’justifiable doubts as to arbitrator’s impartiality and independence‘’.[4] Significantly, the same standards are applicable and replicated in other national arbitration legislations as well as in other institutional arbitration rules and regulations. Also, the timing for these reforms is interesting due to concerns raised by the arbitration community on the matter as well as increasing interest in the concept of multilateral investment court. Since the multilateral investment court is aimed at strengthening public confidence and predictability by abolishing some of the existing arbitration features, ICSID has to safeguard its legitimacy and its decision-makers’ accountability. Namely, as rightly pointed out by Walter in terms of ensuring greater independence and impartiality, numerous issues arise from the method of appointment of arbitrators.[5] It is still striking that double hatting (arbitrator-counsel) as well as repeat appointments are tolerated in the international investment arbitration, while the future adjudicators at multilateral investment court are seen as non-renewable and fully independent with no options of changing their ‘hats’ easily.[6] In order to grasp on current system’s inefficiencies, it is important to make a reference to the party – appointments of arbitrators. As Paulsson[7] argues, the party - appointments should be abolished as they inherently contradict the very notions of impartiality and independence. Moreover, as correctly pointed out by Horvatz and Berzero[8], double hatting in terms of serving as an arbitrator and counsel is also problematic as it is incompatible with duty of impartiality and independence. Ultimately, Cleis suggests alternatives such as: arbitrators’ appointment by a neutral body as well as party-appointment by roster.[9] However, there might be potential flaws in these recommendations. For instance, ICSID Secretariat/Secretary General, can be perceived as political and autocratic appointing body due to potential lack of arbitrators’ independence or neutrality. Also, with regards to the party-appointment from a roster, size of the roster can be problematic as it may limit the parties’ freedom of choice or even arbitrators’ selection in case the roster is too large.[10] Quite contrary than promoting transparency, the core issues such as repeat appointments, double hatting as well as ruling on similar subject matter would be common. Apparently, the overlap and the tension exist between the party - appointment and the party autonomy in selecting arbitrator for a given dispute as one of the greatest advantages of the international arbitration.[11] Still, party autonomy is the essential element in the international arbitration and as such shall not be prejudiced, but rather alternatives other than suggested shall be delivered. In terms of innovating ICSID, by means of amending Rules and Procedures, clear rules on arbitrators’ impartiality and independence and their effective enforcement can cure deficiencies and the overall perceptions on legitimacy and transparency. As emphasized by Sands, bias apprehension is particularly raised in ‘’a situation where the appearance of an individual as an arbitrator in one ICSID case who acts as counsel as expert in another ICSID case may give rise to a perception of bias, in the sense that his or her role might be perceived to inform actions in the other”.[12] Although ‘role confusion’ or double hatting is highly controversial, yet it is debatable whether its total or partial ban as suggested by proponents of future multilateral investment court would be beneficial. In terms of already small pool of investment arbitrators, it may be counterproductive and resulting in inevitable repeat appointments, loss of diversity and to an extent reducing the number of arbitrators as they might opt for counsel’s positions. Hence, provisions on double – hatting on determining the correlation between the two roles ie. arbitrator – counsel shall have to be well-drafted, detailed and clear. Finally, due to high and ambiguous threshold of the arbitrator challenges and thus excessive burden of proof on the side of challenging party (Amco Asia[13], OPIC[14]), one of the recommendations has been to include explicit provision in the ICSID Arbitration Rules that would allow parties to jointly modify current ICSID’s test for disqualification.[15] In particular, there is an apparent gap in interpretation of Article 57 and the disqualification test, so the parties but the community too are deprived of predictability and consistency of the arbitral decisions. Accordingly, inconsistent challenge threshold implies no standard whatsoever, so the clarification and interpretation of the standard, i.e. whether it refers to the standard to be established or to the seriousness of the lack of qualities prescribed, is urgent.[16] One of the additional recommendations would be to apply justifiable doubts standard as a threshold in order to avoid issue conflict and even enlarge the pool of investment arbitrators and encourage new appointments of qualified practitioners. This seems as a rather solid reform proposal, particularly due to the application of a more lenient threshold in some of the previously rendered decisions. (Vivendi[17]) If the above-mentioned issues are not adequately addressed, the multilateral investment court may become an alternative to investor-state arbitral tribunals. No case demonstrates it better than recent Slovak Republic v. Achmea BV (Case C‑284/16)[18], where it was ruled that arbitrations under bilateral investment treaties between European Union Member States are incompatible with European Union (EU) law. Finally, attractiveness of the international investment arbitration as means of settling disputes shall not be taken for granted. Without exaggeration, ICSID Rule Amendment project and proposed amendments can have a historical impact on the future of Investor-State arbitration. [1] Stefanie Schacherer, Independence and Impartiality of Arbitrators A Rule of Law Analysis, 2018, 7. [2] ICSID Convention, art. 14. [3] ICSID Rules of Procedure for Arbitration Proceedings (‘ICSID Arbitration Rules’) (April 2006). [4] UN Doc. A/RES/31/98; 15 ILM 701 (1976) (‘UNCITRAL Rules’) art.12. [5] Munia El Harti Alonso, Kluwer Arbitration Blog, Topical Issues in ISDS: Review of Recent Developments in the European Union, 2019. [6] ibid. [7] Jan Paulsson, Moral Hazard in International Dispute Resolution, ICSID Review - Foreign Investment Law Journal, Volume 25, Issue 2, Fall 2010, Pages 339–355, [8] Horvath G.J and Berzero R, ‘Arbitrator and Counsel: the Double-Hat Dilemma’ (TDM 2013),< https://www.transnational-dispute-management.com/article.asp?key=1985> [9] Maria Nicole Cleis, The Independence and Impartiality of ICSID Arbitrators: Current Case Law, Alternative Approaches, and Improvement Suggestions, (Brill 2017), 198. [10] ibid. [11] UNCTAD, ‘Investor-State Dispute Settlement’, UNCTAD Series on Issues in International Investment Agreements II, (United Nations, Geneva, 2014) 93. [12] Stefanie Schacherer, Independence and Impartiality of Arbitrators A Rule of Law Analysis, 2018, 7,12 [13] Amco Asia Corporation and others v. Republic of Indonesia, ICSID Case No. ARB/81/1, < https://www.italaw.com/cases/3475> [14] OPIC Karimum Corporation v. The Bolivarian Republic of Venezuela, ICSID Case No. ARB/10/14, [15] Yarik Kryvoi, ICSID Arbitration Reform: Mapping Concerns of Users and How to Address Them, Kluwer Arbitration Blog 2018. [16] James Crawford, Confronting Global Challenges: From Gunboat Diplomacy to Investor- State Arbitration, PCA Peace Palace Centenary Seminar, 11 October 2013. [17] Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/97/3 (formerly Compañía de Aguas del Aconquija, S.A. and Compagnie Générale des Eaux v. Argentine Republic) , [18]Achmea B.V. v. The Slovak Republic, UNCITRAL, PCA Case No. 2008-13 (formerly Eureko B.V. v. The Slovak Republic),

Gautam Mohanty[1] The applicability of the principle of without prejudice in litigation arena is fairly well-settled. However, from my perspective as a Tribunal Secretary, its practical manifestation in the context of arbitration is not well-elaborated. Through this post, I aim to elaborate upon two things primarily; (i) A real proposition regarding the applicability of the without prejudice principle raised as a contention by one of the Parties in a high stake construction arbitration and (ii) The law regarding the same. In the Arbitration Proceedings, one of the Parties sought to argue that in absence of the words “without prejudice” marked in the correspondences exchanged between the Parties the correspondences constituted a binding agreement between the Parties. 1. The law pertaining to the “without prejudice” has been elaborately enunciated in the judgements of Hon’ble Supreme Court in the case of MD, NTPC Ltd v. Reshmi Constructions, Builders & Contractors[2], Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd.[3]. Phipson on Evidence[4] as has been relied upon by the Hon’ble Supreme Court in the case, while relying on Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd., in the context of “without prejudice” Court has observed that: “… (C)… If it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of these negotiations will, as a general rule, not be admissible… It has been said that if one is seeking to change the basis of the correspondence from without prejudice to open it is incumbent on that person to make the change clear, although that may be more a pointer than a rule. There is no reason why every letter for which without prejudice is claimed should contain an offer or consideration of an offer, so long as the without prejudice correspondence is part of a body of negotiation correspondence.” 2. Similarly, Wharton’s Law Lexicon[5], as relied upon by the Apex Court in the case of MD, NTPC Ltd v. Reshmi Constructions, Builders & Contractors[6], states as below: “The words import an understanding that if the negotiation fails, nothing that has passed shall be taken advantage of thereafter; so, if a defendant offers, ‘without prejudice’, to pay half the claim, the plaintiff must not only rely on the offer as an admission of his having a right to some payment. The rule is that nothing written or said 'without prejudice' can be considered at the trial without the consent of both parties - not even by a Judge in determining whether or not there is good cause for depriving a successful litigant of costs … The word is also frequently used without the foregoing implications in statutes and inter parties to exclude or save transactions, acts and rights from the consequences of a stated proposition and so as to mean 'not affecting', 'saving' or 'excepting'.” 3. P Ramanatha Aiyar’s, Advanced Law Lexicon,[7] replying upon the judgement of Tata Oil Mills Co. Ltd. v. Lokanatha Chemical Works[8] has elaborated upon the term “without prejudice” and has stated: ““ Without prejudice” means that the proposed terms are not to be used against the writer, if there is not settlement. If the proposed terms are acceptable, the parties will be bound by the terms and if the terms become infructuous, they cannot be used against the writer.” 4. The term "without prejudice" has been defined in Black's Law Dictionary[9] as follows: “Where an offer or admission is made 'without prejudice', or a motion is defined or a bill in equity dismissed 'without prejudice', it is meant as a declaration that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided. See, also Dismissal Without Prejudice.” 5. After having perused the aforesaid judgement of the Hon’ble Supreme Court, I am of the opinion that in a nutshell, the Apex Court has held that the implication of the term 'without prejudice' means (1) that the cause or the matter has not been decided on merits, (2) that “fresh proceedings according to law were not barred." 6. Subsequently, I am also of the opinion that two judgements of the Hon’ble Bombay High Court also require to be taken into consideration with relation to the discussion about “without prejudice” i.e. Sanjay Kumar Agarwal v. Central Bank of India[10] and Oberai Construction v. Worli Shivshahi Co-op Housing Society[11]. In the case of Sanjay Kumar Agarwal v. Central Bank of India (Supra) the Hon’ble Bombay High Court has opined as below: “15. Moreover, the correspondence written by the plaintiff to the defendant are all on without prejudice basis. Therefore, in my view, we cannot even place reliance on such documents to conclude that there was a concluded understanding. The meaning of without prejudice has been stated in Oberoi Constructions Pvt. Ltd. v. Worli Shivshahi Co-op. Hsg. Society Ltd. Paragraph-9 reads as under:- “The next legal contention advanced is as to what will be the effect of the words “without prejudice”. On behalf of the appellants, the learned Counsel has drawn our attention to the judgment of the Supreme Court in the case of Chairman and MD, NTPC Ltd. v. Reshmi Constructions, Builders and Contractors reported in AIR 2004 SC 1330. The Apex Court noted that even correspondence marked as “without prejudice” may have to be interpreted differently in different situations. The interpretation would be based amongst others according to usage in the profession and that no issue of public policy is involved. The Supreme Court quoted with approval the judgment in Rush & Tompkins Ltd. v. Greater London Council (1988) 1 All ER 549 at pp. 551g-552b. It was held that the rule which gives the protection of privilege to “without prejudice” correspondence depends partly on public policy, namely the need to facilitate compromise and partly an implied agreement. In the same judgment the exposition of definition of “without prejudice” contained in the judgment of Lindley, LJ in Walker v. Wilsher (1889) 23 QBD 335 was set out, which reads as under: ‘What is the meaning of the words “without prejudice”? I think they mean without prejudice to the position of the writer of the letter if the terms he proposes are not accepted. If the terms proposed in the letter are accepted a complete contract is established and the letter, although written without prejudice, operates to alter the old stage of things and to establish a new one. The court then noted that the term had come up for consideration in Superintendent (Tech.I), Central Excise v. Pratap Rai reported in 1978 CriLJ 1266, wherein it was observed “without prejudice” would indicate that the order was not final and irrevocable. The definition in Black's law Dictionary was then quoted which reads as under: Where an offer or admission is made “without prejudice” or a motion is denied or a bill in equity dismissed “without prejudice”, it is meant as a declaration that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except insofar as may be expressly conceded or decided. See also ‘Dismissal without prejudice’. It would thus, be clear that the expression “without prejudice” is to be understood on the fact situation. When parties agree to a set of things then merely marking on the document “without prejudice” would be of no consequence. However, if the material indicates that the negotiations are still in progress and there is no finality on what was contained in the document marked “without prejudice”, then the document marked “without prejudice” cannot be considered without the consent of both the parties.” 7. Likewise, in the case of Oberai Construction v. Worli Shivshahi Co-op Housing Society (Supra) the Hon’ble Bombay High Court has observed that: “15. The next legal contention was advanced is as to what will be the effect of the words “without prejudice”. On behalf of the appellants the learned Counsel has drawn our attention to the judgment of the Supreme Court in the case of (Chairman and MD, NTPC Ltd. v. Reshmi Constructions, Builders and Contractors)3, reported in 2004 DGLS 339 (soft) : (2004) 2 S.C.C. 663 : A.I.R. 2004 S.C. 1330. The Apex Court noted that even correspondence marked as “without prejudice” may have to be interpreted differently in different situations. The interpretation would be based amongst others according to usage in the profession and that no issue of public policy is involved. The Supreme Court quoted with approval the judgment in (Rush & Tompkins Ltd. v. Greater London Council)4, All. E.R. PP. 551g-552b. It was held that “the rule which gives the protection of privilege to “without prejudice” correspondence depends partly on public policy, namely the need to facilitate compromise and partly an implied agreement. In the same judgment the exposition of definition of “without prejudice” contained in the judgment of Lindley, L.J., in (Walker v. Wilsher), 12 Q.B.D. 337 was set out, which reads as under: “What is the meaning of the words “without prejudice”? I think they mean without prejudice to the position of the writer of the letter if the terms he proposes are not accepted. If the terms proposed in letter are accepted a complete contract is established and the letter although written without prejudice, operates to alter the old stage of things and to establish a new one.” 16. The Court then noted that the term had come up for consideration in (Superintendent (Tech. 1), Central Excise v. Pratap Rai), reported in 1978 DGLS 136 (soft) : (1978) 3 S.C.C. 113 : A.I.R. 1978 S.C. 1244, wherein it was observed “without prejudice” would indicate that the order was not final and irrevocable. The definition in Black's Law Dictionary was then quoted which reads as under: “Where an offer or admissions made “without prejudice” or a motion is denied or a bill is equity dismissed “without prejudice”. It is meant as a declaration that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided. See, also, Dismissal without prejudice.” 8. Pursuant to the above mentioned judicial dicta and opinion postulated in various treatises, it appears that the expression “without prejudice” is to be understood as per the factual situation in hand. When Parties agree to a set of things then merely marking on the document, emails or any correspondence “without prejudice” would be of no consequence. However, if the material indicates that the negotiations are still in progress and there is no finality on what was contained in the document marked ‘without prejudice’ then the document marked ‘without prejudice’ cannot be considered without consent of both the Parties. [1] The author is currently working as an Arbitration Associate with Justice Deepak Verma, Former Judge of Supreme Court of India and can be reached at gautam.mohanty1414@gmail.com. [2] MD, NTPC Ltd v. Reshmi Constructions, Builders & Contractors, (2004) 2 SCC 663. [3] Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd., (2006) 12 SCC 673. [4] Phipson on Evidence 19th ed Mainwork by Hodge M. Malek, Jonathan Auburn, Roderick Bagshaw. [5] Wharton's Law Lexicon, J J S (John Jane Smith) 181 Wharton, 2010. [6] MD, NTPC Ltd v. Reshmi Constructions, Builders & Contractors, (2004) 2 SCC 663. [7] Shakil Ahmad Khan, P Ramanatha Aiyar’s, Advanced Law Lexicon, 5th Edition. Pg.5520. [8] Tata Oil Mills Co. Ltd. v. Lokanatha Chemical Works, AIR 1987 Cal 13. [9] Bryan A Garner, Black’s Law Dictionary, 10th Edition. [10] Sanjay Kumar Agarwal v. Central Bank of India, 2016 SCC OnLine Bom 10368. [11] Oberai Construction v. Worli Shivshahi Co-op Housing Society, 2008 SCC OnLine Bom 102.

Gaurav Rai[1] In India, retired judges of the Supreme Court are barred by the Constitution to plead or act in any court or authority within the territory in India.[2] Retired High Court judges are however allowed to practice in the Supreme Court and High Courts other than in those where they presided as judges but they need to get their licence renewed. In my limited experience working as an Assistant to a retired Supreme Court Judge, who regularly acts as an arbitrator, I have witnessed that retired High Court Judges acting as arbitrators do not take up the role of advocacy in the Supreme Court of India or other High Courts. However, one practice which has become quite prominent in Indian scenario is the seeking of an opinion from such retired Supreme Court and High Court judges on legal issues. These retired judges are approached as consultants for legal dilemmas which the parties or the lawyers themselves may not be able to figure out. The parties and lawyers seeking such legal opinion rely on the vast experience of such judges to provide a way of solving such issues. A situation may therefore arise where a party who has sought such an opinion from a retired Supreme Court or High Court judge may also nominate such Retired Supreme Court or High Court Judge as an arbitrator in another unrelated matter. This may attract item 1, 8 and 14 of the Seventh Schedule of the Arbitration and Conciliation Act, 1996 as amended in 2015. The same is extracted hereunder: “1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. 8. The arbitrator regularly advises the appointing party or an affiliate of the appointing party even though neither the arbitrator nor his or her firm derives a significant financial income therefrom. 14. The arbitrator regularly advises the appointing party or an affiliate of the appointing party, and the arbitrator or his or her firm derives a significant financial income therefrom.” In such cases the opposite party may be able to raise the issue of ineligibility as the arbitrator so appointed by the party has provided an opinion to such party in the past and the person so appointed is ineligible to continue as an arbitrator as they may not be independent and impartial. Indian Courts have dealt with only a few issues regarding a party appointing its own employee as an arbitrator in a skewed arbitration agreement and notably, the observations of the Indian Courts are limited to the interpretation of upholding such clauses rather than appointment of a balanced and impartial arbitrator.[3] There were hence no clear guidelines for applicability of the justifiable doubts standard which existed in the Indian Arbitration and Conciliation Act,1996 which is premised on the Model Law. Hence the 246th Report had proposed incorporation of schedules which borrowed from the Red and Orange list of the IBA guidelines to the Arbitration Act to act as guide for the applicability of the justifiable doubts’ standard.[4] The only literature on the IBA lists are the guidelines postulated in the 2004 and 2014 notes of the IBA and the Law Commissions 246th Report on Arbitration. The Supreme Court of India, however got the opportunity to delve into the applicability of these Schedule 5 and 7 to the Arbitration and Conciliation Act, 1996 in two cases namely Voelstapine v. DMRC[5] and the case of HMD Corporation v. GAIL India.[6] This working paper series might deal with Voelstapine Case in another context when dealing with pool of arbitrators and appointing authority. I will limit my focus to one paragraph from the HRD Corporation case which will deal with the issue I have outlined above regarding legal opinions being provided by retired Supreme Court Judges and they being nominated by such opinion seekers in an arbitration in an unrelated matter. Other aspects of HRD Corporation might be relevant in further parts of this working series. Para 22 is relevant for our discussion and is extracted hereunder. I have inserted the items of the 7th Schedule wherever discussed in this extract accordingly. "22. Shri Divan has pressed before us that since on a legal issue between GAIL and another public sector undertaking an opinion had been given by Justice Lahoti to GAIL in the year 2014, which had no concern with respect to the present matter, he would stand disqualified under Item 1[7] of the Seventh Schedule. Items 8[8] and 15[9] were also faintly argued as interdicting Justice Lahoti’s appointment. Item 8 would have no application as it is nobody’s case that Justice Lahoti “regularly” advises the respondent and Item 15 cannot apply as no legal opinion qua the dispute at hand was ever given. On reading Item 1 of the Seventh Schedule, it is clear that the item deals with “business relationships”. The words “any other” show that the first part of Item 1 also confines “advisor” to a “business relationship”. The arbitrator must, therefore, be an “advisor” insofar as it concerns the business of a party. Howsoever widely construed, it is very difficult to state that a professional relationship is equal to a business relationship, as, in its widest sense, it would include commercial relationships of all kinds, but would not include legal advice given. This becomes clear if it is read along with Items 2[10], 8, 14 and 15, the last item specifically dealing with “legal advice”. Under Items 2, 8 and 14, advice given need not be advice relating to business but can be advice of any kind. The importance of contrasting Item 1 with Items 2, 8 and 14 is that the arbitrator should be a regular advisor under items 2, 8 and 14 to one of the parties or the appointing party or an affiliate thereof, as the case may be. Though the word “regularly” is missing from Items 1 and 2, it is clear that the arbitrator, if he is an “advisor”, in the sense of being a person who has a business relationship in Item 1, or is a person who “currently” advises a party or his affiliates in Item 2, connotes some degree of regularity in both items. The advice given under any of these items cannot possibly be one opinion given by a retired Judge on a professional basis at arm’s length. Something more is required, which is the element of being connected in an advisory capacity with a party. Since Justice Lahoti has only given a professional opinion to GAIL, which has no concern with the present dispute, he is clearly not disqualified under Item 1." Hence this passage from the judgment makes it abundantly clear that Retired Supreme Court Judges or even Retired High Court Judges who provide legal opinions to parties as discussed in the paper, occasionally and on an arm’s length basis, are not ineligible under Item 1 or other items as discussed in the HRD Corporation case, to be appointed as an arbitrator, in an unrelated matter, by the same party, which sought such a legal opinion from them. [1] Gaurav Rai - The author is Advocate registered in State Bar Council of Delhi and is currently working as a legal assistant to Justice A.K. Patnaik, Former Judge Supreme Court of India and assists Justice Patnaik in his work as an arbitrator. He can be reached at raigaurav.legal@gmail.com [2] Article 124(7), Constitution of India 1950. [3] ‘Law Commission of India Report No. 246’ para 56 . [4] ‘Law Commission of India Report No. 246’ (n 2) para 59. [5] Voestalpine Schienen GmbH v Delhi Metro Rail Corporation Ltd (2017) 4 SCC 665. [6] HRD Corporation v GAIL (India) Ltd (2017) 12 SCC 471 (Supreme Court of India). [7] 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. [8] 8. The arbitrator regularly advises the appointing party or an affiliate of the appointing party even though neither the arbitrator nor his or her firm derives a significant financial income therefrom. [9] 15. The arbitrator has given legal advice or provided an expert opinion on the dispute to a party or an affiliate of one of the parties. [10] The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.