The Bombay High Court recently held in a judgement dated 26th February 2024 that the provisions of the (Indian) Arbitration and Conciliation Act, 1996 (“Arbitration Act”) would supersede any institutional arbitration rules that parties to a contract choose by way of an arbitration agreement or clause.
In the present case, two parties to a sale contract had selected the Mumbai Centre for International Arbitration (“MCIA”) Rules as the governing rules for any arbitration proceedings under the contract. The petitioner in this case was aggrieved by the procedure of selecting the arbitrator by the MCIA, and its failure to appoint an unbiased arbitrator, and approached the courts by filing petitions under the provisions of the Arbitration Act after the MCIA’s council rejected the objections raised to it by the petitioner regarding the above.
The Bombay High Court, in its judgement, made reference to the provisions of the Arbitration Act and held that the court’s limited powers regarding the arbitration proceedings would continue to be applicable even if the parties have opted for institutional arbitration. Specifically, the Bombay High Court referred to the courts’ power to hear a petition regarding the termination of an arbitrator’s mandate. Additionally, the Bombay High Court held that there must be an express agreement between the parties to waive any of the ineligibility conditions imposed on arbitrators under the provisions of the Arbitration Act, which was not the case in this instance.
The Bombay High Court stated that the Arbitration Act does not differentiate between ad-hoc and institutional arbitration. Institutional arbitration provides parties with a specific procedure and administrative support to conduct the arbitration proceedings, but as per the judgement, such arbitration would still be governed by the provisions of the Arbitration Act. As such, any provisions of the Arbitration Act which allow for judicial intervention would necessarily be applicable even when the parties have agreed to an institutional arbitration.
The Bombay High Court then reviewed the documentation submitted by the petitioner in evidence of the potential bias and partiality of the arbitrator appointed by the MCIA and found that this appointment would fall foul of the provisions of the Arbitration Act. Hence, the Bombay High Court directed the MCIA to replace the arbitrator and continue the arbitration proceedings.
Leniency Plus regime under India’s antitrust law notified
Amendments to the Competition Act, 2002 (“Competition Act”), including a new provision regarding the introduction of a ‘leniency plus’ regime regarding anticompetitive cartels were passed in 2023, and the provisions relating to the ‘leniency plus’ regime were recently notified in February 2024 by the Indian Government, along with regulations for the same issued by the Competition Commission of India (“CCI”), the country’s antitrust regulator.
The new provision of the Competition Act provides for the imposition of a lesser penalty if a producer, seller, distributor, trader or service provider which is part of a cartel makes a full and true disclosure regarding contraventions of the Competition Act and if such disclosure is vital, subject to other conditions provided for in the Competition Act and any regulations made in this regard. The CCI also notified the CCI (Lesser Penalty) Regulations, 2024 (“Regulations”) in furtherance of the amendment to the Competition Act. The Regulations specify the procedural aspects of the regime, including conditions for the lesser penalty being imposed, the procedure of determining the lesser penalties to be imposed, and the procedure for application of grant of the lesser penalty. The Regulations also include provisions as to the confidentiality of the applicants.
Disha Mohanty, IDI Country Expert for distribution in India
Shivalik Chandan
