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In A.P. No. 833 of 2015-BOM HC- Bombay HC enforces foreign arbitral award after dismissing plea alleging bias on part of arbitrator, says party failed to raise doubts as contemplated under clause 3(c) of IBA’s guidelines on Conflicts of Interest in International Arbitration
Justice Manish Pitale [25-04-2023]

Read Order: HSBC PI Holdings (Mauritius) Limited v. Avitel Post Studioz Limited and others 


Tulip Kanth


Mumbai, April 26, 2023: The Bombay High Court has dismissed a challenge against the enforcement of a foreign arbitral award while observing that if the respondents would have been able to demonstrate duty to disclose on the part of the arbitrators, a likelihood of bias may have arisen and the award could have been set aside on the ground of it being contrary to the public policy of India. 


Enforcing the award in question, Justice Manish Pitale said, “The respondents in the present case, have also indulged in such speculative litigation with the hope that some of the mud they have flung on the foreign arbitral award, would stick. This Court is of the opinion that the position of law, in the backdrop of the IBA guidelines, is crystal clear and there is no question of any mud sticking to the foreign award in the present case.”


In this case, a share A Share Subscription Agreement was executed between the petitioner-HSBC PI Holdings (Mauritius) Limited and the first respondent- Avitel Post Studioz Limited, whereby the petitioner made an equity investment of about US$ 60 million in exchange of 7.8% shareholding in the first respondent. 


Later, the petitioner engaged its own independent investigation agency, which gave rise to serious concern with regard to the legitimacy of the Avitel Post Studioz FZ LLC and its management. It was found that the monies invested by the petitioner were siphoned out of the Avitel Group by the first respondent through payments made to fake suppliers and/or service suppliers, allegedly owned by the said respondent. In this backdrop,  disputes arose between the parties, which led to initiation of arbitration proceedings.


The arbitration agreement between the parties provided that the law governing the contract would be Indian law and that the jurisdiction would be that of Singapore. The arbitration proceedings were conducted at Singapore, wherein the respondents participated. The tribunal rendered its final award and directed the respondents to pay to the petitioner an amount of US$ 60 million as damages for fraudulent misrepresentations and other adverse findings against the respondents.


When the matter reached the Supreme Court, it was found that the respondents had deliberately and willfully disobeyed its order. Ultimately, respondents surrendered and despite tendering an unconditional apology, the respondents were sentenced to imprisonment. It was in this backdrop that the petition came up for consideration. 


Referring to the International Bar Association (IBA) on Conflicts of Interest in International Arbitration (IBA guidelines), the Bench held that from clause 3(c) of the guidelines,it was clear that if there is any doubt as to whether an arbitrator should disclose, it is to be resolved in favour of disclosure.


The Bench further made it clear that when a party alleges that the arbitrator was under a duty to disclose, on the basis of facts and circumstances put forth by such a party, it is necessary to first examine as to whether such facts and circumstances are covered under the red, orange or green list appended to the IBA guidelines. If the situation is covered under any of the lists, the answer would be readily available. But, if the individual case that comes up for consideration before the Court, throws up a situation, which may not fit into the said lists, it would be appropriate to apply the test of a reasonable third person, as contemplated under Article 12(2) of the UNCITRAL Model Law. 


It was alleged in this case that since one of the affiliates of the petitioner was holding large number of shares in the two companies and another affiliate was an underwriter, lead manager and book-runner for the companies when funds worth thousands of crores of rupees were raised for the two companies, the said Chairman of the arbitral tribunal was a director and a person having considerable influence in the companies.


It was alleged that there was an obvious likelihood of bias and that in any case, sufficient doubt was raised to the effect that he ought to have disclosed the said relationship before taking up the assignment of arbitration or continuing with the same. 


It was observed by the Bench that the respondents were not justified in invoking the specific clauses of the non-waivable red list, waivable red list and orange list. “A close scrutiny of the said lists and particularly, the specific entries referred to hereinabove, would show that a duty to disclose would arise and likelihood of bias could be alleged, if there was a relationship or identity between the arbitrator and a “party” or an “affiliate” of the party and this would extend to a “close family member”, the Bench said.


In the case of the chairman of the arbitral tribunal, even if the circumstances alleged by the respondents were to be taken into consideration, the petitioner before this Court, being the party, or any of its affiliates including the holding company i.e. HSBC PLC (UK), couldnot be said to be having an identity with the arbitrator or demonstrating any situation of any conflict of interest, the High Court opined.


The Bench also observed that the circumstances alleged on behalf of the respondents did not even indicate that the arbitrator had any relationship with the petitioner or its affiliates. Therefore, the circumstances alleged by the respondents gave rise to a situation, at worst, covered under the green list, wherein there was no duty upon the arbitrator to disclose, the Bench added.


The High Court was of the opinion that by applying the said reasonable third person test, the respondents had failed to demonstrate that the arbitrator was under a duty of disclosure and having failed to do so, a likelihood of bias had arisen.


Noting that the the respondents had failed to raise any doubts as contemplated under clause 3(c) of the IBA guidelines for resolving the situation in favour of disclosure, the Bench remarked, “…the respondents have failed to demonstrate any such circumstance and therefore, they cannot claim that public policy of India has been violated, thereby rendering the award unenforceable.”


“The respondents in the present case, have also indulged in such speculative litigation with the hope that some of the mud they have flung on the foreign arbitral award, would stick”, the Bench said while holding that the arbitral award would be enforceable against the respondents. 




In COCP-1663-2020-PUNJ HC- P&H HC dismisses contempt petition as no willful disobedience on part of Judicial Officer was made out
Justice Arvind Singh Sangwan [29-03-2023]



Mansimran Kaur

Chandigarh, April 19, 2023: The Punjab and Haryana High Court has dismissed a petition preferred by the petitioner alleging  the violation of the order granting stay of execution of the impugned decree after considering the fact that no willful disobedience on the part of the Judicial Officer was made out.


A Single- Judge bench of Justice Arvind Singh Sangwan dismissed the present petition by observing that conduct of the petitioner in the case at hand, who was appellant in the RSA, was also self-speaking as after passing of the order, neither she made any request before the Benches where the appeal remain pending for a period of about 6 years nor till date she had  filed any application for extension of stay. 


Brief facts of the case were such  that a civil suit was filed by  the first respondent /Jai Parkesh-plaintiff on April 20, 2007 praying for decree of possession by way of specific performance of an agreement to sell for a total consideration of Rs.3,85,000/-. This suit was filed by respondent-plaintiff Jai Parkesh against Chatter Singh @ Kaptan/ the first defendant and petitioner Saroj Kanta/ the second defendant. 


 The first   Defendant in his written statement denied the execution of agreement to sell. The second defendant   accordingly set up a plea that she was a bona fide purchaser. The trial Court vide its judgment and decree dated March 23, 2010  partly decreed the suit regarding return of Rs.1,00,000/- earnest money along with interest @ 12% per annum till its realisation.


 In appeal filed by respondent Jai Parkesh, the same was accepted and the first defendant Chatter Singh @ Kaptan was directed to execute the sale deed of the disputed property within two months of the date of judgment, failing which the plaintiff-appellant-Jai Parkesh was held entitled to get the sale deed executed through trial Court.


The petitioner/defendant filed the present RSA of 2013, which was listed on May 16, 2013  and notice of motion was issued only to Jai Parkesh, the trial Court record was requisitioned  On March 10, 2014  the aforesaid order granting stay of execution of the impugned decree was passed and the case was adjourned .  On August 29, 2014  on request of the counsel for the appellant, it was adjourned to February 23, 2015  however, there was no extension of stay.


Thereafter, it appears that the case was not listed due to COVID-19 situation and now it was listed for May 2, 2023.  A perusal of all the orders, subsequent to order dated March 10, 2014 would show that till January 17, 2020  for a period of 6 years, when the case was actually listed before different Benches, the case was simply adjourned on the request of either of the parties and neither there was any prayer made by the petitioner-appellant for extension of stay nor it was ever extended.


 The present contempt petition was filed in 2020 with the allegation that in violation of the interim order, the first  respondent,  Jai Parkesh executed a sale deed in favour of the second respondent  Chatter Singh @ Kaptan on August 15, 2020. 


After hearing the submissions from both the sides and after going through the facts and circumstances of the case as well as the affidavit of the Judicial Officer, it was  apparent that after the order dated March 10, 2014  was passed by this Court in RSA staying execution of the impugned decree in the meantime, while adjourning the case to August 29, 2014 , at no point of time, the stay order was extended and the case remain listed before different Benches for more than 5 years.


 It was also on the record that JD - Chatter Singh was proceeded ex parte in executing proceedings. A perusal of the zimni orders in the RSA as well as of the zimni orders passed by the executing Court, awaiting the further orders to be passed in the RSA, would show that a considerable long period was passed when in the execution proceedings, a Local Commissioner was appointed to execute the sale deed in order to finally decide the execution petition. Even subsequent to the execution of the sale deed in the year 2013, no further application was moved before the Court in RSA for extension of the stay order till date, the Court noted. 


 It was worth noticing that even the conduct of the petitioner, who was  appellant in the RSA, was also self-speaking as after passing of the order,  neither she made any request before the Benches where the appeal remain pending for a period of about 6 years nor till date she has filed any application for extension of stay, the Court noted


No willful disobedience on the part of the Judicial Officer was  made out, who due to non-cooperation by the petitioner in the execution proceedings proceeded further, the Court observed. Accordingly, the contempt petition was dismissed.


In CRM-M-21115-2022-PUNJ HC- P&H HC quashes FIR arising out of matrimonial dispute after contesting parties amicably resolve their issues
Justice Jagmohan Bansal [17-02-2023] 



LE Correspondent

Chandigarh, March 18, 2023: The Punjab and Haryana High Court has allowed a petition under Section 482 CrPC whereby the parties were seeking quashing of FIR registered under Sections 498A, 406 and 120B of IPC  on the basis of compromise. 

A Single-Judge Bench of Justice Jagmohan Bansal opined that the continuance of the proceedings  in the instant matter would just waste valuable judicial time and it is a well-known fact that courts are already overburdened. 

The Counsel for the petitioners contended  that marriage between the contesting parties vide judgment and decree dated November 11, 2022 passed by Principal Judge, Family Court, stood  dissolved.


As per terms and conditions of compromise arrived at between the parties, the fourth respondent was supposed to withdraw her all cases, including the impugned FIR. In the compromise, she had specifically stated that she will make a statement before the concerned Court relating to quashing of FIR. 


From the perusal of decree of divorce and statements recorded, it was quite evident that complainant had agreed to withdraw all cases against the petitioners including impugned FIR. 


From the perusal of decree of divorce and statements recorded, it is quite evident that complainant had agreed to withdraw all cases against the petitioners including impugned FIR. She had stated that she will make a statement before the concerned Court for quashing the FIR, the Court stated. 


The Bench referred to the judgments in 'Gian Singh Vs. State of Punjab and others and The State of Madhya Pradesh Vs. Laxmi Narayan and others. Further, the Bench noted that the Supreme Court in Ramgopal and another Vs. State of Madhya Pradesh, had held that the limited jurisdiction to compound an offence within the framework of Section 320 Cr.P.C. is not an embargo against invoking inherent powers by the High Court vested in it under Section 482 Cr.P.C.


In furtherance of the same, the Court noted that from perusal of the enclosed FIR, Decree of Divorce and statements of parties, it transpired that contesting parties had amicably resolved their issue; thus, no useful purpose would be served by continuing the proceedings. 


The alleged offences were of predominantly private nature and no moral turpitude or interest of public at large was involved, the Court noted. 


There appears to be no chance of conviction, the continuance of the proceedings would just waste valuable judicial time and it is a well-known fact that courts are already overburdened, the Court further remarked.


In view of such facts and circumstances, the present petition was accordingly allowed. 


In WRIT TAX No.1511 of 2022-ALL HC-Proper Officer has to issue notice in Form GST REG-17 when he has reasons to believe that registration of person is liable to be cancelled u/s 29 of UPGST Act: Allahabad HC on Rule 22(1) of UPGST Rules
Justices Manoj Kumar Gupta & Jayant Banerji [22-12-2022]

Read Order: M/S Jaiprakash Thekedar v. Commissioner, Commercial Taxes And Another 

LE Correspondent


Prayagraj, March 13, 2023: The Allahabad High Court has quashed an Order cancelling registration of a firm under the provisions of the Uttar Pradesh Goods and Services Tax Act, 2017 after noting that the Show Cause Notice did  not mention the date and time appointed for personal hearing and the proceedings held in pursuance thereof were illegal.


The Division Bench of Justice Manoj Kumar Gupta and Justice Jayant Banerji was approached by the assessee against the cancellation of the registration of the firm and the coercive action sought to be taken against the petitioner as a result of cancellation of the registration.


The petitioner was given a show cause notice requiring the petitioner to submit a reply within seven working days from the date of service of the notice. The notice further mentioned that if the petitioner failed to furnish reply within the stipulated date or failed to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records on merits. It was followed by an impugned cancellation order.


As per UPGST Act, under first proviso to Section 29(2), the person concerned has to be given an opportunity of being heard. Rule 22(1) of the U.P. Goods and Service Tax Rules, 2017 provides that where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29 of the Act, he shall issue a notice to such persons in Form GST REG-17 requiring him to show cause within a period of seven working days from the date of service of such notice as to why such registration be not cancelled. 


Referring to Form GST REG-17 and the Show Cause Notice, the Bench said, “ The show cause notice which has been given to the petitioner is not in prescribed format as it is conspicuous by absence of the date and time on which the noticee was to appear for personal hearing. It is also clear from the prescribed format that the noticee has to be afforded opportunity of personal hearing and for that purpose he has to be informed in advance, the date and time on which hearing will take place.”


Thus, observing that the show cause notice did not mention the date and time appointed for personal hearing, the Bench came to the conclusion that the proceedings held in pursuance thereof were rendered illegal, void and a nullity in the eyes of law. 


Quashing the impugned Order, the Bench allowed the Appeal.


In W.P.(C) No.32342 of 2022-ORI HC- Orissa HC comes to aid of contractor facing difficulty due to change in regime under GST, directs Authorities to refer to State’s 2018 Notification mentioning that works contractor has to raise Tax Invoice showing taxable work value as well as GST (CGST & SGST) separately
Justices S. Muralidhar & M. S. Raman [18-01-2023]

Read Order: Sabita Choudhury Vs. State Of Odisha And Others


LE Correspondent


Bhubaneshwar, February 2, 2023: While considering the difficulty faced by the contractors due to change in the regime regarding works contract under GST, the Orissa High Court has directed the Authorities to refer to the State’s revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department dated December 10, 2018 while considering petitioner’s plea.


By way of this writ petition, before the Division Bench of Justice S. Muralidhar and Justice M. S. Raman, the Petitioner has challenged the action of the Opposite Parties in not reimbursing the differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from July 1, 2017.


The grievance of the Petitioner is that in view of the introduction of the GST, Petitioner is required to pay tax which was not envisaged while entering into the agreement.


The Bench noticed that the Government had come out with revised guidelines in this respect in supersession of the guidelines issued by a Finance Department letter dated December 7, 2017. 


The revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTI-TAX-0045- 2017/38535/F Dated December 10, 2018, wherein it was stated that in order to comply the provisions of GST relating to works contract the State Government had revised the Schedule of Rates – 2014 (SoR-2014). 


While the item rates in the SOR-2014 were inclusive of all taxes i.e. Excise Duty, VAT, Entry Tax, Service Tax etc., the same has been excluded in the Revised SoR-2014. Therefore, while preparing estimates for a work after July 1, 2017, the GST exclusive work value is to be arrived at as per the revised SoR-2014 and then GST will be added at the appropriate rate.


“2. In GST regime, the works contractor is required to raise Tax Invoice clearly showing the taxable work value and GST (CGST+SGST) separately,” the Guidelines further enumerated while also putting forth the procedure to be followed to determine payments made for balance work or full work after implementation of GST, in case of work, where the tender was invited before July 1,2017 on the basis of SoR-2014.


Keeping such aspects into consideration, the Bench held that the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from ventilating the grievance. 


“If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated December 10, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably within a period of three months from the date of receipt of the certified copy of this order”, the Bench held while disposing of the petition while also directing no coercive action to be taken against the Petitioner till a decision by the authority is taken.