India – Litigation Snapshots.

11 May, 2018

 

Applicability of the Arbitration and Conciliation Act (Amendment) Act, 2015 to pending arbitration/ court proceedings

 

The Supreme Court (‘SC’) in Board of Control for Cricket in India v. Kochi Cricket Private Limited5 has decided on whether the amendments introduced to the Arbitration and Conciliation Act, 1996 on October 23, 2015 (‘Commencement Date’), would be applicable to pending arbitration/court proceedings, which came into force.

 

AZB & Partners successfully represented Kochi Cricket Private Limited in defending the decision of the Bombay High Court (‘Bombay HC’) on the applicability of the amended Section 36 to a pending challenge to an arbitral award filed under Section 34 of the Act. Under the amended Section 36, a party cannot obtain an automatic stay of an arbitral award (and may be required to deposit security for the amount in dispute), whilst the challenge to the award was pending in Court. The issue before the SC was whether amended Section 36 would apply to a Section 34 challenge proceeding, which was filed before the Commencement Date.

 

The SC held that the amendment is prospective in nature, and will apply to those arbitral proceedings commencing, on or after the Commencement Date. However, only the amended Section 36 will be applicable to Section 34 applications filed both before and after the Commencement Date even if the arbitral proceedings were initiated prior to such date.

 

The SC has interestingly also opined on the proposed Section 87 of the Arbitration and Conciliation (Amendment) Bill, 2018 (‘Bill’), approved by the Cabinet of Ministers on March 7, 2018, which stipulates that the amendment introduced in 2015 does not apply to Court proceedings arising out of or in relation to arbitral proceedings which commenced prior to the Commencement Date, irrespective of whether such Court proceedings commenced prior to or after the Commencement Date. In fact, the SC has observed that the proposed Section 87 would defeat the specific purpose of the amendment.

 

Whether foreign law firms / foreign lawyers are permitted to practice in India?

 

The SC in Bar Council of India v. A.K. Balaji and Ors.6 was called upon to decide the question of whether foreign law firms / foreign lawyers are permitted to practice in India and held that foreign law firms/companies and foreign lawyers cannot practice Indian law in India either in relation to litigation or non litigation matters. However, there is no bar on foreign law firms or foreign lawyers visiting India for temporary periods, on a ‘fly in and fly out’ basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues. The expression ‘fly in and fly out’ will only cover a casual visit, not amounting to ‘practice’. Whether a foreign lawyer is limiting itself to ‘fly in and fly out’ would be determined by the Bar Council of India. However, the Bar Council of India or the Union of India will be at liberty to make appropriate rules in this regard, including extending the Code of Ethics to such cases.

 

With regard to the conduct of arbitration proceedings by foreign lawyers in India, the SC held that there is no absolute right of a foreign lawyer to conduct arbitration proceedings in respect of disputes arising out of a contract relating to the international commercial arbitration. In some cases, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act, 1961 (‘Advocates Act’). However, they will be governed by code of conduct applicable to the legal profession in India.

 

Business process outsourcing companies do not come within the purview of the Advocates Act or the Bar Council of India Rules. However, if in pith and substance the services amount to practice of law, then the provisions of the Advocates Act will apply and foreign lawyers/law firms will not be allowed to do so.

 

Supreme Court grants Recognition to “Living Wills”

 

The SC, in its judgment dated March 9, 2018 in the case of Common Cause (A Regd. Society) v. Union of India and Another,7 gave recognition to “living wills” by terminally ill patients, and held that the right to life and liberty as envisaged under Article 21 of the Constitution of India includes the right to live with dignity.

 

The SC further observed that the right to live with dignity also includes the smoothening of the process of dying in case of a terminally ill patient or a person in a persistent vegetative state with no hope of recovery.

 

The SC drew a distinction between active euthanasia and passive euthanasia as the former entails a positive affirmative act, while the latter relates to withdrawal of life support measures or withholding of medical treatment meant for artificially prolonging life. Further, the SC provided that directions and guidelines laid down by it to give effect to passive euthanasia will remain in force till a legislation is passed by the Parliament on this subject. 

 

5 2018 SCC Online SC 232. 

6 2018 SCC Online SC 214. 

7 Writ Petition (Civil) No. 215 of 2005.