(In the following post, Mr Vijay Kumar, Advocate, Madras High Court and Associate, Iyer & Thomas, discusses the law on implied exclusion) This post analyses few of the significant decisions of the Supreme Court (SC) with reference to the essential difference between the law governing the contract (substantive law) and the law governing the arbitration proceedings between the parties to the...
The 3/4 Formula to Determine Implied Exclusion
(In the following post, Mr Adithya Reddy, Advocate, Madras High Court, considers the law on implied exclusion of Part I of the Arbitration Act) “…we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsory apply and parties are free to deviate only to the extent...
The Supreme Court Declines an Invitation to Extend Bhatia International
The cases we have discussed on implied exclusion of Part I of the Indian Arbitration Act are composed of three variants – first, the contract designates a foreign proper law but no seat of arbitration (for example Indtel Technical Services v WS Atkins and Citation Infowares v Equinox Corporation), secondly, the contract designates a foreign seat of arbitration but no proper law, and thirdly the...
UDF at Mumbai and Delhi airports
A Division Bench of the Supreme Court today declared that the User Development Fee [“UDF”] charged by the private operators of the Mumbai and Delhi airports is ultra vires. The judgment, reported as Consumer Online Foundation v Union of India, contains several observations that are crucial in ascertaining the proper scope of the public-private model [“PP”] in the aviation sector. This post set...
A Level Playing Field and Public Interest
One of the striking features of the Indian economy post-1991 is the conception it has of a level playing field as between Government and private enterprises. It should be noted that this cuts both ways, for while there are commercial advantages for certain Government entities, others are required as part of Government policy to bear losses that a private enterprise in that position would choose...
Dosco India v Doosan: The Sequel to Citation Infowares
One of the more important recent controversies over the Indian Arbitration Act has been the interpretation of the “express or implied exclusion” to the rule in Bhatia International. As is well known, the Supreme Court held in Bhatia International that Part I of the Indian Arbitration Act applies to international commercial arbitrations held outside India, unless it is “expressly or impliedly”...
The Rangaraj-Madhusoodhanan Conflict and the “Reformulation” of Rangaraj in Para 55 of Messer Holdings
Section 111A of the Companies Act, 1956, is perhaps the most significant unresolved controversy in contemporary Indian corporate law. The blog noted today that a Division Bench of the Bombay High Court (Messer Holdings) has held that a private arrangement between shareholders conferring a right of first refusal is not contrary to s. 111A of the Companies Act. In this post, I offer some thoughts...
A twist in the tale: Share transfer restrictions in a public limited company legal?
A Division Bench of the Bombay High Court has ruled in Messer Holdings Limited v. Shyam Madanmohan Ruia that a private arrangement between shareholders of a public limited company on a voluntary basis relating to share transfer restrictions (right of first refusal) is not violative of Section 111A of the Companies Act, 1956. The judgement also goes on to suggest that it is not mandatory for the...
Service Tax on Software Upheld
In 2005, the Supreme Court held that the transfer of branded software constitutes a sale and is exigible to sales tax, levied by State Governments under Entry 54, Schedule VII of the Constitution (Tata Consultancy Services v. State of AP). I have argued elsewhere that this decision may, with respect, require reconsideration on the question of whether the typical software transfer accompanied by a...
“Professional Services”
It is often said that the importance of careful analysis of statutory language cannot be overstated, especially in fiscal matters. One will not be surprised to find, therefore, that the term “professional services” has recently engendered an interesting controversy as to its true scope. It arose before the Bombay High Court in Dedicated Health Care Services TPA v. ACIT, where it was argued that...
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