This e-bulletin discusses the arbitration-friendly decisions of the Calcutta and Delhi High Courts in Coal India Ltd v Canadian Commercial Corporation and Indiabulls Financial Services Ltd v Amaprop Ltd. We also consider the recent spate of investment treaty arbitration claims being made or threatened against the Indian government by foreign investors, as well as other recent developments.
Calcutta and Delhi High Courts work around Bhatia International
Whilst we await the Indian Supreme Court decision in Bharat Aluminium v Kaiser Aluminium Technical Services (expected later this year), which is expected to re-visit the ratio of Bhatia International v Bulk Trading S.A., two recent attempts to invoke the Bhatia principle to set aside arbitral awards have been unsuccessful.
First, in Coal India Ltd v Canadian Commercial Corporation, the Calcutta High Court declined to set aside an award that had been rendered by a tribunal seated in Geneva. Despite the fact that the proper law of the contract was Indian law, the court held that the proper place to challenge the award was the place where the tribunal was seated.
Similarly, in Indiabulls Financial Services Ltd v Amaprop Ltd., a single judge of the Delhi High Court refused to set aside an award rendered by a tribunal with its seat in New York, holding that the parties must have intended that any challenge to an arbitral award be heard in New York. Read more here.
Spate of investment treaty claims following White Industries outcome
Since the successful investment treaty claim brought by White Industries Australia Limited against India (as reported in our last e-bulletin), a number of other investment treaty claims have been asserted or threatened by foreign investors.
In particular, Vodafone International Holdings BV has invoked the Netherlands-India bilateral investment treaty in connection with a provision in recent legislation allowing retrospective changes to income tax rules, and a UK-based hedge fund, the Children's Investment Fund, is also reported to have asserted claims in relation to Coal India's pricing policies.
It also appears that the Indian Supreme Court's decision to annul a number of telecom licences issued on or after 10 January 2008 has led to investment treaty claims being asserted by at least three overseas investors.
On a related note, the Indian Government is said to be reconsidering whether to include arbitration clauses in future bilateral investment treaties, including potentially those being negotiated with the EU and the US.
Arbitral awards from China and Hong Kong now recognised in India
As reported in April, the Indian Government has now added China (including Hong Kong and Macau) to its list of notified countries and territories for the purposes of recognition of arbitral awards under the New York Convention. Parties to India-related transactions wishing to name Hong Kong as the seat of any arbitration can now do so in the knowledge that such a choice will not prejudice the enforceability of any awards in India.