The Supreme Court has overruled Bhatia International, and has once and for all held that the supposed omission of the word “only” from section 2(2) has no significance (see below). Importantly, it has also held that a party cannot file a civil suit in relation to the subject matter of the arbitration agreement in order to obtain interim relief. The Court has overruled these decisions...
The AAR’s ruling in Schellenberg Wittmer: Partnerships and Tax Treaties
The entitlement of partnerships to the benefits of a double taxation avoidance agreement [“DTAA”] is a contentious issue. The main reason is asymmetry in the manner in which partnership income is taxed in the two Contracting States – India, for example, in certain circumstances taxes the income of a partnership in the partnership’s hands, but the Contracting State with which it has a DTAA (for...
The interpretation of time limit clauses in contracts
A claimant approaches a court one day after the limitation* period expires, in the mistaken impression that the limitation period had in fact not expired. This limitation period is set by a clause in a contract that is by no means a model of certainty or clarity. The question is whether the suit is time-barred. In ENER-G Holdings plc v Hormell, the Court of Appeal (Longmore, LJ dissenting) held...
Announcement: NLSIR Call for Submissions
(I have received the following announcement from the NLSIR, which may be of interest to our readers) The National Law School of India Review is now accepting submissions for its upcoming issue – Volume 25(1). The National Law School of India Review (NLSIR) is the flagship law journal of the National Law School of India University, Bangalore, India. The NLSIR is a bi-annual...
The Constitution Bench elides repugnance and occupied field
That the title of this post is a part of Indian constitutional law is explained by the fact that the validity of tax and commercial legislation is often challenged on the ground that it conflicts with a similar legislation enacted by another legislature. Often the challenge is on the basis of legislative competence, and this requires a careful analysis of not only the words of Schedule VII, but...
The Supreme Court of India and the law of unjust enrichment
These are troubled times for the law of unjust enrichment in India, so much so that one is forced to ask whether such an area of law at all exists in this country. That is regrettable especially because the High Courts (especially those in Bombay, Madras and Calcutta) gave many powerful and important judgments on this area of the law, particularly between 1900 and perhaps the late 1960s. We began...
The Delhi High Court on Foreign Awards and Implied Exclusion of Section 34
We have discussed on several occasions the scope of the proposition in paragraph 32 of Bhatia International that the parties may “expressly or impliedly” exclude the applicability of Part I of the Arbitration Act in cases in which it would be otherwise applicable. The Court has previously held that Part I is not impliedly excluded merely by choosing a foreign substantive law (Indtel Technical...
Wrotham Park and the scope of the “hypothetical negotiation” measure of damages
Perhaps the most obvious instance of the sophistication of English commercial law is the range of remedies it has, depending on the precise nature of and tailored to each cause of action. The most common remedy is, of course, compensation for loss, which attempts to place the claimant in the position in which he would have been had the term (in the case of contract) not been breached; an award of...
The Implied Authority of a Managing Director
Does a managing director have implied authority to suspend the Chairman of the board of directors? This is a question the Court of Appeal considered in its recent judgment in James Butler v John Smith. The leading judgment was given by Arden LJ. The case is significant because it dealt not with the ostensible authority of an MD in relation to a third party (on which there is a plethora of...
The Direct Tax Proposals in Budget 2012
Unsurprisingly, the retrospective amendment proposed to be made to sections 2 and 9 of the Income Tax Act has dominated analysis of the direct tax proposals in the budget. There is no doubt that these amendments, and particularly the validation clause in cl 113 of the Finance Bill, may be vulnerable to a constitutional challenge, and this is a subject we will discuss in more detail. Budget 2012...
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