corporate citizen

CORPORATE CITIZEN / DANIEL ALBUQUERQUE Dispute Board of International Chamber Of Commerce (ICC)

The author writes about the Dispute Board of ICC. He introduces another institution known as FIDIC which is closely connected with ICC that deals exclusively with engineering and construction disputes on international level. The case presentation, however, brings out the problems of aligning the company with multiple dispute resolution institutions. The Dispute Board can solve problems which other ADRs cannot

Dispute Boards are not arbitral tribunals and their conclusions are not enforceable like arbitral awards. Rather, the parties contractually agree to be bound by the conclusions under certain specific conditions set forth herein. In application of the Rules, the International Chamber of Commerce (the “ICC”)…(Article 2, ICC Dispute Board Rules) Context The context in which we are dealing here below is about the institutions of dispute resolution in international business environment. Increasingly businesses have become collaborative, crisscrossing the political and jurisdictional boundaries of justice delivery systems. In addition to the already in vogue International Chamber of Commerce (ICC) and its Dispute Arbitration Resolution (ADR) there is another Fédération Internationale Des Ingénieurs Counseils (French) - International Federation of Consulting Engineers (FIDIC). Both of these are related closely not only due to their French origin, but also because they work together.

While ICC deals with all kinds of business disputes, the FIDIC deals only with construction and real estate disputes, hence the name denoting federation of consulting engineers. However, there is no guarantee that multiplicity of dispute resolution institutions and organisations are going to solve problems. The very cures can become worse than the disease. The following is a case to prove such a point.

Case: Zillion Infra Projects Pvt. Ltd, the petitioner, contracted business with Alstom Systems India (P) Ltd. in three separate businesses. The dispute issue consisted of bank guarantees, running into several crores of rupees.

The petitioner’s prayer to restrain one of the respondents to remit money to another respondent met with failure. Hence the petitioner challenged the same in the Delhi High Court with the same prayer under Section 29 of the Arbitration Act, 1940 and Section 9 of the Arbitration and Conciliation Act 1996.

The said business contract had in its contract accepted the jurisdiction of the Delhi High Court, and in addition it also agreed for arbitration by both ICC as well as FIDIC.

The Court applied its mind to the suit. The judge at the lower court had concurred with the respondent: “Advance payment would be as an interest free loan for mobilisation and design to be secured by a guarantee and this advance payment shall be repaid through percentage deductions from the running bills certified for payment as and when the work is executed.”

The two-judge bench of the Delhi High Court reasoned in the following manner: “The contractual duty owed by an issuing or confirming bank to the buyer to honour the credit notified by him on presentation of apparently confirming documents by the seller was matched by a corresponding contractual liability on the part of the bank to the seller to pay him the amount of the credit on presentation of the documents.

The bank’s duty to the seller was only vitiated if there was fraud on the part of the seller. The fraud pleaded by the appellant is that notwithstanding respondent being in default, it has invoked the bank guarantees; and this would be fraud. The plea of fraud contemplated by law is fraud of an egregious nature i.e. outstandingly bad and shocking.” The appeal, therefore, was dismissed by the Court.

Lessons: The first lesson to be learnt is to draw the business contract with great care for facts and after due consideration of the viability of the business. Secondly, evaluate all the risks. Third and most the important is to settle financial matters truthfully, give guarantees which are deliverable. Finally, put all the management systems in place. Never forget that a contract is a covenant that cannot be broken or rescinded without damning consequences.

Dispute Board: To avoid the above situation, where the disputants go to extreme lengths and still far from addressing the situation the Dispute Board could be a fair solution. The ICC’s Dispute Board is known by several names such as Dispute Review Board (DRB), Dispute Adjudication Board (DAB) and Alternate Dispute Board (ADB). Unlike Arbitration Dispute Resolution (ADR) system, the structure of the Dispute Board is characterized by its participation in business contracts from the latter’s very initiation. In other words, when two businesses draw their contract, the Dispute Board becomes its part and parcel to resolve any disputes of the future.

The board, consisting of three members, guides and monitors the business activity, thus preventing any dispute, loss of time and resources. This mechanism has been the most successful one in the area of business disputes which believe in prevention than in cures. This is the reason why experts consider Dispute Board to be the future of business dispute resolution. When considered with the combined efforts of ICC-FIDIC, problems become easier to solve than when businesses seek adjudication from the courts.

National Committees: I would like to bring to the notice of the Indian companies that if your company is a member of the State Chamber of Commerce which in turn is the member of the Federation of Indian Chambers of Commerce and Industry (FICCI) then your company belongs to this world-wide organization.

Given the correct approach by which your company adopts Dispute Board as part of your contract, your company would be considered as perpetually well prepared to deal efficiently and quickly with any dispute that may arise in the future.

Conclusion: The Dispute Board may be described as an agent of continuous mediation. you include it right at the inception of your business contract and it will be a vigilant helper lest you falter. Howard Raiffa (1924-2016), the celebrated author of The Art and Science of Negotiation who was professor of business management at Harvard University wrote: “The mediation of inner conflicts can be resolved by linkages with other problems.”

It is a strategy both for one’s own individual problems as well as of between the companies

AD-VENTURE / PRABHAKAR MUNDKUR The Sports Coach as Leader

The writer highlights the importance of a coach in a team; and the game being more important rather than winning or losing There might be one crucial difference between Kumble and Ravi Shastri when it comes to evaluating coaches. And that is the question of paul barron, goalkeeping coach at newcastle ‘who is the boss?’ Kumble united, is an thought he was the boss, but advocate of Shastri thinks it is the captain relationship of the team that is the boss. coaching and If press reports are to be believed Kumble’s pep talk after losing the Champions Trophy final against Pakistan also didn’t go down well with the team. Although Kumble once described his philosophy as: They forget what you say to them. They forget what was not rude, he is supposed you do with them. to have mentioned how wides but they never and no-balls cost India dear forget how you and how the bowlers were paul barron made them feel! not able to execute their game plan. While Kohli might have collective emotional energy what is not for all aspects of effectively speaking, is to stay agreed with Kumble on how says Bill Beswick in the book team membership. in the background and let the team could have done Focussed for Soccer. This very you’re NOT a good coach the onus be on the players. better, he is known to have often is the difference that when you call an athlete out The coach and support staff’s gone on to give a positive spin allows teams to survive the in front of the team and tell role is to get the players in with his Captain’s pep talk bad times and go on to great him that he is not performing the most brilliant frame of by mentioning how the team successes. well or say something that mind to execute things and played well to reach the final. Athlete-coach wars have is insulting. This leads to if done effectively, it brings

In many ways Kolhi acted been on as long as one can questions like: enjoyment to the player’s like many leaders. Point out remember. Andy Murray for Does it motivate an game.” the mistakes to the team, but example re-hired Ivan Lendl individual to want to work Ravi Shastri once again make sure that the team is after the pair decided to call it even harder to improve? proved himself as a great not de-motivated for future quits some time ago. Does it help that leader in India’s recent games and spur them on to If there are no codes of individual to feel good about win against Australia. His do better in the future. conduct formulated to protect themselves? speech to the team is worth

Paul Barron, goalkeeping coaches and athletes, then Shastri played it right remembering and suggests of coach at Newcastle United, there is risk of a breach in the when he patted the team on great leadership. is an advocate of relationship athlete-coach relationship. So the back for our win in Sri you may not be a good coaching and once described if some of the reports in the Lanka, irrespective of the fact coach if you are only focusing his philosophy as: press are to believed about that India was playing a weak on winning a game. If winning • They forget what you say Kumble and Kohli falling Sri Lanka team. A win is a win is the primary goal as a coach, to them. apart because of a discipline and needs to be celebrated you may actually wind up • They forget what you do issue or because Kumble and is a strong motivation to winning less! A perhaps more with them. wouldn’t let the players go out keep winning. important mission of a coach • But they never forget how shopping for example, this According to various is to teach the team and help you made them feel! is a fault of not laying down individuals from the BCCI them grow as individuals

So perhaps it is not just an athlete-coach code. The and CAC as well as the so that they become better about what Kumble said, but code in this case would have committee of administrators people in the world, both it is about how he made them determined who was wrong one big point of difference on and off the field. Good feel. And obviously he didn’t and who was right. between Kohli and Kumble coaches take a holistic view of make them feel good after Most coaches desire strong was who was the boss. their athletes and teach them the defeat in the Champions team discipline but then so do Shastri is more than happy to be better people in the Trophy. Relationship athletes. Athletes crave for to let the captain take charge. world, rather than using their coaching is about coaches rules too. Typically, a proper “It’s always the captain’s team sport as a vehicle for their connecting with their players, structure and a set of team and it is the leader who calls teaching. Winning and losing getting to the real pulse of the rules, lets both sides know the shots. That’s how it has is less important. It’s about the team, and releasing a powerful exactly what is acceptable and always worked. A coach’s role, game in the end

LEGAL EAGLE / AMEyA A. NAyAK The Concept of Commercial Courts

The author, through this article, aims to elaborate on the concept of commercial courts with reference to the Commercial Courts Act, 2015 while throwing light on the hierarchy and pecuniary jurisdiction of commercial disputes and enlightening readers on its current position in Goa

It is well known that the judicial system in any nation plays a pivotal role when it comes to legal dispute resolution and enhancing social, and more importantly the economic development of the nation. The competence with which this system works and the rate at which disputes, especially ‘commercial’ disputes are decided would be fundamental in deciding how expeditiously our Government is working towards prompt delivery of justice.

In this regard, the prime legislation that operates in India is ‘The Commercial Courts Act, 2015.’

This is an Act that provides for the constitution of Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division in the High Courts by State Governments to adjudicate upon commercial disputes of specified values and matters connected therewith and incidental thereto. The Act consists of 7 chapters spread over 23 sections followed by a Schedule.

This Act under Section 2(c) defines “commercial dispute” to be disputes arising out of –• Ordinary transaction of merchants, bankers, financiers and traders relating to mercantile documents. • Export and import of merchandise or services • Admiralty and maritime law issues • Transactions pertaining to aircrafts, its engines, equipment, helicopters, including its sales, leasing and financing • Carriage of goods • Construction of infrastructure contracts • Agreements pertaining to immovable properties exclusively used to trade and commerce • Franchising agreements • Intellectual property rights • Insurance and re-insurance and so on.

Forums and Valuation under the 2015 Act v/s 2018 Amendment Act:

Under Chapter 2 of the 2015 Act, there was a requirement of having a Commercial Court at the district level where the High Courts do not exercise Original Civil Jurisdiction. It also called for creation of a Commercial Division where High Courts had Original Civil Jurisdiction.

However, after the 2018 amendment to the Act, appeals under Section 13 stand amended. Previously, all appeals from the Commercial Courts at district levels or Commercial Divisions of High Courts would lie before the Commercial Appellate Division set up in each High Court. Nonetheless, under the amended section 13, appeals against Commercial Courts’ orders will now lie before the Commercial Appellate Court, unless such Commercial Courts of the first instance are below the level of a district judge. Further, as per section 13 (1A), any appeals from Commercial Courts of the first instance at the district judge level will lie before the Commercial Appellate Division.

The Commercial Courts Act, 2015 prescribes a minimum value of the subject matter of a commercial suit and the specified value under the 2015 Act was set to a minimum of Rs. 1 Crore. This means that any commercial litigation failing the abovementioned valuation would not be tried under this Act as a commercial suit but would be tried instead, as an ordinary civil suit. After the 2018 amendment, this specified value clause was reduced from `1 Crore to `3 Lakhs.

Vital amendments to the Code of Civil Procedure (CPC), 1908 under the Act:

The Law Commission of India in its 253rd Report has introduced several procedural amendments to existing provisions of the CPC, 1908 in order to achieve timebound and rationalized adjudication of commercial disputes. Few of them are enlisted below:

1. Case Management Hearings (CMH):

Under the Act, a court must mandatorily hold a CMH between parties that cannot be adjourned and schedule timeline for different stages during the litigation. Once such a CMH is conducted, all arguments must conclude within 6 months, thereby indicating that such CMH is vital in ensuring expedited disposal of commercial cases.

2. Summary Judgment: This process requires either parties to apply for summary disposal of the commercial suit. In case where the facts are clearly favouring a particular party, the judge may rule in favour of that party without actually evaluating elaborate evidence.

3. No appeals against interim orders:

The Act mandates that there would be no civil revision petition against any interim or interlocutory order of a Commercial Court and any grievance against such orders may only be raised in appeal against the final decree. 4. Pre-institution mediation: The 2018 amendment to the 2015 Act mandates pre-institution mediation. This requires parties to the commercial suit to attempt an out of court settlement before approaching the Commercial Court for full fledged litigation. The objective here is once again, to expedite dispute resolution through out of court settlement techniques.

The Goa State Scenario:

Notification dated 03/11/2016: The State of Goa in the year 2016 released a notification constituting the court of District Judge- I at Panaji and Margao as Commercial Courts for the district of North and South Goa respectively and appointed judges of the said courts as Judges of the said Commercial Courts, respectively. Notification dated 05/05/2020: In 2020, the State Government released another notification designating the Courts of District Judge – I at Panaji and Mapusa to be Commercial Appellate Courts for North Goa district while designating the Courts of District Judge – I and II at Margao to be Commercial Appellate Courts in the South Goa district. The notification further empowered these Courts to exercise jurisdiction and powers conferred on Commercial Appellate Courts.

Further, via the same notification, the State Government constituted the Courts of Senior Civil Judge ‘A’ Court at Panaji, Mapusa, Bicholim and Ponda to be Commercial Courts for the North Goa district, while the Courts of Senior Civil Judge at Margao, 1st Additional Senior Civil Judge at Margao, Senior Civil Judge at Vasco da Gama and Ad Hoc Senior

Civil Judge at Quepem to be Commercial Courts for the South Goa district. The said Judges of the said Courts were appointed as Judges of the said Commercial Courts, respectively.

The Commercial Courts Act interpreted by High Court of Bombay at Goa via Order dated 20/07/2020:

In this case, the High Court has interpreted the relevant provisions of the Commercial Courts Act wherein it has been held that the establishment of Commercial Courts under this Act depends on whether the High Court in a State has “ordinary original civil jurisdiction”. The Court also placed emphasis on the 2018 amendment to the Act though the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018.

Paragraph 50 of the Order reads: “Section 2 (1) (b) defines “Commercial Court” to mean the Commercial Court constituted under sub-section (1) of Section 3. Let us see Section 3, which deals with the constitution of Commercial Courts. As per subsection (1), the “State Government may, after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary.” Earlier, there were no Commercial Courts at the district level if the High Court had “ordinary original civil jurisdiction” as, for example, in Bombay. Now, in the districts under the High Courts with original jurisdiction, too, the 2018 Amendment permits the State Government to constitute Commercial Courts at the District Judge level, too. Here, in Goa, the District Courts were the Commercial Courts until the Amendment was enforced, for the High Court at Goa has no original jurisdiction.”

Finally, the High Court made few key conclusions pertaining to the hierarchy of Commercial Courts in the State of Goa. 1. The notification dated 05/05/2020 issued by the Goa Government was held to be in tune with the legislative mandate under relevant sections of the Commercial Courts Act, 2015. 2. In Goa, District Courts were held to be Appellate Commercial Courts, while the Senior Civil Judges’ Courts were held to be Commercial Courts. In conclusion, one can say that there are certain positive changes that are implemented with Commercial Courts by way of the 2018 Amendment Act.

However, certain aspects such as jurisdiction of commercial divisions alongside Commercial Courts could be a possible grey area

in 2020, the State Government released another notification designating the Courts of district Judge – I at Panaji and Mapusa to be Commercial Appellate Courts for north Goa district while designating the courts of district Judge – I and II at Margao to be Commercial Appellate Courts in the South Goa district

subscribe to the voice of business in goa

personal details

name _________________________________________________ organistion name __________________ designation _____________ address _______________________________________________ Pincode __________ Phone ___________ email _________________

payment details

Cheque/dd. no ________________ amount _________ bank _____________ branch _________ date ____________

subscription Period 1 - year 2 - year 3 - year number of Cover offer issues Price price 12 `1200 `1000 24 `2400 `2000 36 `3600 `3000

Mail this form along with payment to business goa 409, Citicentre, edC Patto Plaza, Panaji 403001 Goa india tel.: 91-832-2437822 email: businessgoa.media@gmail.com