Takeover Code / "Control"

Subhkam Ventures India Private Limited v. SEBI, Appeal No. 8 of 2009 decided on 15.01.2010


The Securities Appellate Tribunal has recently passed an order in Subhkam Ventures India Private Limited v. SEBI clarifying that veto rights (right to veto certain actions proposed to be undertaken by the company) do not constitute ‘control’ under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. 

Forum Non Conveniens / Anti Suit Injunction

Horlicks v. Heinz, 
FAO (OS) No. 86 of 2009 (Delhi) decided on 23.10.2009  by SK Kaul, SK Mishra, 
Held: 
"The principle of forum non convenience emerged as a principle of admiralty law applicable primarily to foreign forums. It finds no place in a domestic forum in India. The plaintiff is always the dominus litis and so long as the court has jurisdiction to try a suit, a party cannot be non-suited. A suit has to be governed by the provisions of the said Code."
A good analysis of  forum non-conveniens and anti-suit injunction under Indian law

Company Law: Winding up / Ongoing Arbitration

Ongoing arbitration / suit may be a bar to winding up proceeding under Section 433 / 434
Kesar Enterprises, 2002 (112)  Comp Cas174 (Bom)

• K K Vasudeva Kurup, 2003 (113) Comp Cas 401 (Bom)
• ICDS v. AL and Alliend Industries 2003 (113/114) Comp Case 581 (Bom)
• Manipal Finance 2001 (107) Comp Case 288 (Bom)
• Maharashtra Apex Corporation, 2005 ( 57) SCL 467 (AP)
• Ishwar Industries v. LMW CP 16/2009 and CA 311/2009 decided on 12.10.2009  (Madras)
• Technology Development Board [2009] 152 Comp Cas 690 (Mad)

Contract : Limited Liability / Damages

Bharathi Knitting v. DHL Worldwide Couriers, AIR 1996 SC 2508

Held: Terms in contracts limiting liability to a certain amount are to be restricted and damages award (here in a consumer case) cannot exceed that specified amount.

Arbitration / Contract : Mutuality / Unilateral agreement to refer to arbitration

Jindal Exports v. Fuerst Day Lawson Ltd. (Delhi HC)

Manu/DE/3204/2009

Issue: Whether agreement to settle disputes by arbitration entitling only one party to refer the matter to arbitration is a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996?

The Clause in Dispute: The Buyer shall shall be entitled to nominate any of the above options at any time after the dispute or difference has arised, the Seller hereby acknowledging that they are familiar with the Arbitration Rules of the Association thereby nominated and agree to be bound by the decision of such arbitrators or of any appeal therefrom.

Held:

"I [the court] can see no reason, why, if an agreement between two persons confers on one of them alone the righht to refer the matter to arbitration, the reference should not constitute an arbitration. There is fully bilateral agreement which constitutes a contractt to refer. The fact that the option is exercisable by only one of the parties seems to me to be irrelevant. The arrangement suits both parties. "

"The words in Section 7 means an agreement by the parties to submit to arbitration, in my opinion, postulates an agreement which necessarily or rather mandatorily requires the appointment of an arbitrator(s). Section 7 does not cover a case where the parties agree that they may go to a suit or they may also go to arbitration"

There should not be an agreement to further obtain consent or to agree to settle disputes by arbitration.

See http://www.lw.com/upload/pubContent/_pdf/pub1762_1.pdf for position in other countries.

Contracts: 'Pre-contractual' Understandings and the Duty to Negotiate in Good Faith

Source: Law and Legal developments

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'Pre-contractual' Understandings and the Duty to Negotiate in Good Faith A previous post highlighted an ICSID case on how negotiations between parties can unexpectedly result in a binding legal relationship being formed. For any contractual liability to arise, it is essential that the parties must have an intention to enter into a legal relationship. This test – whether such an intention was present – will often be useful in determining whether "agreements in principle" or "memorandums of understanding" or like documents can – without any further contract – be enforceable under principles of contract law. In seeing whether understandings reached by parties are binding, the remarks of Parker J in Von Hatzfeldt-Wildenburg v. Alexander [1912] 1 Ch. 284 appear to be relevant. According to him, the absence or presence of a binding contractual relationship depends on whether the preparation of a formal document was a condition of the contract; or whether the formal document was to be merely a record of the expressed will of the parties. In the former case, no binding contractual relationship exists; in the latter, it does. Under Parker J's test, if the preliminary understanding is sufficiently definite, it will be presumed that parties intended to enter into a binding legal relationship. The leading Indian textbook, Pollock and Mulla, summarised the position by saying that what needs to be determined is "… whether the formal document is of such a nature that it was the very condition of the contract or whether it was commemorative of the evidence on the point…" (12th edn., page 213) Insofar as the existence of a duty to negotiate in good faith is concerned; in an extreme form, the contents of this duty might be expressed thus: "A party who manifests a willingness to enter into a contract at given terms should not be able to freely retract from her manifestation. The opposing party, even if he did not manifest assent, and unless he rejected the terms, acquires an option to bind his counterpart to her representation or charge her with some liability in case she retracts…" (Omri Bin-Shahar, Contracts without Consent: Exploring a New Basis for Contractual Liability, 152 U. Penn. L. Rev 1829) Common law is unlikely to recognise such a broad formulation of the duty. Indeed, since Routledge v. Grant (1828), it is settled law that a party is free to withdraw its offer, unless there is a consideration for the offer being kept open. Further, in Watford v. Miles [1992] 1 All ER 453, specifically, the House of Lords held that there could be no duty to negotiate in good faith for an undefined amount of time. This position is distinct from the position in many civil law countries – under civilian systems, offers cannot easily be revoked, unless they are made expressly subject to revocation. Civilian systems are, then, more likely to impose an obligation to conduct negotiations in good faith (this is covered within the civilian doctrine of 'culpa in contrahendo'). The Convention on the International Sale of Goods (CISG) – born out of a compromise between common law and civil law systems – also recognizes such a 'good faith' obligation in Article 7. Nonetheless, it cannot be said that common law refuses to recognise any good faith obligation at all. For instance, an Australian case – Renard Constructions v. Minister for Public Works (1992) 26 NSWLR 234 – suggests that a duty to negotiate in good faith can be imposed on grounds of reasonableness. Claims may arise under quasi-contract principles too. [Note: On the role of good faith in international sales transactions under the CISG, see John Klein, Good Faith in International Transactions. India is not yet a party to the CISG. On the advantages and disadvantages of ratifying the CISG, see this article]

Civil Law: Lawyer's Collective / Right to Practice / Profession / Advocate

Lawyer's Collective Judgmenet

Copy of judgment available on: http://bombayhighcourt.nic.in/data/judgements/2009/OSWP8152695.pdf (last accessed on December 24, 2009 at 2100 IST)

The High Court held that:

·       Since Foreign Law Firms' parent provide legal advice to clients all over the world, their liaison office in India, even though functioning as coordination and communication channels, would also be conducting activities in relation to providing legal advice. In other words, the activity of liaison office are "inextricably linked" to the head office of Foreign Law Firms.

·       RBI's authority under S. 29 of FERA is limited to granting permission to foreign entities to set up a branch or liaison office in India for carrying any activity of trading, commercial or industrial nature. Based on judicial precedents, the High Court held that since the practice of law is a profession and not a business, trade or commerce, as covered under the scope of S. 29 of FERA. Therefore, the RBI has no authority to grant permission to foreign law firms to establish liaison office in India.

·       The objectsof the Advocates Act is inclusive and is meant to regulate persons practicing law in any part of India as well as persons practicing the profession of law in any court, including Supreme Court. If it were to be held that practice of law did not include non-litigious practice, the purpose of Advocates Act would fail since any professional misconduct of an advocate while conducting non-litigious practice would not be punishable

Jurisdiction: Banyan Tree / Website / Passive /

Single Judge Case sending the case to Division Bench for on refferral is: CLICK HERE and commentary here and Division Bench Judgement available here at Indian Kanoon

In summary, the court held that merely accessing a website in Delhi would not satisfy the exercise of jurisdiction by the Delhi court. Rather, it has to be shown that the defendant "purposefully availed" itself of such jurisdiction, by demonstrating that the use of the website was with intent to conclude a commercial transaction with the site user, and such use resulted in injury or harm to the plaintiff. (Image from here)

The matter has now been placed again before the Single Judge to decide if in view of the law laid down in this judgement, and on the facts of the suit at hand, the plaintiff has been able to show prima facie that this court has the jurisdiction to entertain the suit. For a brief discussion of teh facts of the case, I invite you to read Kruttika's original post on this issue.

This post is more in the nature of an update, and will be followed by a lengthier analysis shortly.

1. Mere accessibility of the Defendants' website in Delhi would not enable a court to exercise jurisdiction. A passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. To such extent, the court has overruled the proposition in Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited 2003 (27) PTC 265 (Del).

2. ...[M]ere hosting of a website which can be accessible from anyone from within the jurisdiction of the court is not sufficient... Also a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state.

3. The Plaintiff would have to show that the Defendant "purposefully availed" itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.

This is what caught my eye at first read. Be assured you have not heard the end of the Banyan Tree!

Source: Spicy IP

Arbitration: Pathalogical Clauses / Vague Clauses

Held: Where intention to arbitrate exists, the clause is not vague.

INFERRING THE INTENTION TO ARBITRATE

Also see: Perma Container (UK) Line Ltd, Bombay High Court in ARBITRATION

PETITION NO. 490 OF 2009 decided on September 9, 2009.

In Nandan Biomatrix v. DI Oils, available on 2009 (5) Mh.L.J. 153, the Supreme Court decided an interesting issue pertaining to vagueness in arbitration agreements. The alleged arbitration clause in question in the agreement between the parties read:

15.1 Any dispute that arises between the parties shall be resolved by submitting the same to the institutional arbitration in India under the provisions of Arbitration and Conciliation Act, 1996.

The question before the Court was whether the clause was vague and uncertain (and therefore void) as it did not specify any particular institution.

Courts will usually uphold the validity of inaccurately worded or imprecise arbitration clauses if the intention of both parties can be ascertained from the text. It appears that the position of law is that an arbitration agreement, though required to be in writing, need not be in any specific

form. What matters is the substance of the agreement,. The question to be asked in such cases is – can an intention to arbitrate be demonstrated from an interpretation of the agreement?

On the facts of the case, the Supreme Court held that the clause in the agreement was sufficiently precise to indicate an intention to arbitrate; and accordingly the matter was referred to arbitration before the Singapore International Arbitration Centre (SIAC). The reasoning of the Court was that although no institution was specified, the intention to settle the dispute by arbitration was clear.

This reasoning is slightly problematic if it is extended to mean that the "intention to arbitrate" must be determined in the abstract. Often, an intention to arbitrate will be closely tied to an intention to arbitrate before a specific forum. Thus, it is entirely conceivable that parties want

their disputes to be arbitrated only before a particular institution. For instance, let us assume that an agreement says that disputes are to be arbitrated before an ICC panel. Additionally, let us assume that just before the agreement, the ICC has decided to discontinue its arbitration

activities. Can the Court now say that the parties had an intention to arbitrate, and therefore the dispute can be arbitrated before another arbitral institution, given that the ICC was no longer an option? The presumption must be that the parties intended to arbitrate only before the

specifically named institution; and failing that institution there is no intention to arbitrate at all.

The Court noted, "…the parties unequivocally agreed for resolution of the disputes through Institutional Arbitration and not through an ad hoc arbitration". It would appear, however, that the parties could at best be stated to have agreed for the resolution of the disputes between them through institutional arbitration in India in accordance with the Indian Arbitration Act in force. The factor that parties in an international commercial transaction have agreed to a specified forum must assume importance. Accordingly, the reference to the SIAC seems slightly

problematic – even assuming an intention to arbitrate is inferred, that intention must have meant an intention to arbitrate before an institutional body in India.

Arbitration: Umbrella Contract - Arbitration Agreement

M.R. Engineers and Contractors v. Som Datt Builders, (2009) 7 SCC 696, has

clearly and elaborately discussed the principles relating to incorporation of an arbitration clause into a contract from another document.

"A general reference to another contract will not be sufficient to incorporate the arbitration clause from the referred contract into the contract under consideration. There should be a special reference indicating a mutual intention to incorporate the arbitration clause from another

document into the contract. The exception to the requirement of special reference is where the referred document is not another contract, but a standard form of terms and conditions of trade associations or regulatory institutions which publish or circulate such standard terms and conditions for the benefit of the members or others who want to adopt the same…"

The distinction drawn by the Court between contracts and standard form terms is particularly important; and this distinction enabled to Court to distinguish its earlier judgments Atlas Export Industries v. Kotak & Co., (1999) 7 SCC 61 and Groupe Chimique Tunisien SA v. Southern Petrochemicals Industries Corporation Ltd., (2006) 5 SCC 275 on a principled basis

Company Law: Derivative Action

(Source: Law and Legal Developments)

 

A recent Calcutta High Court decision, Jaideep Halwasiya v. Rasoi Ltd., (2009) 150 Comp Cas 1 (Cal), explains the distinction thus:

17. A company and its functioning have been compared to the parliamentary system of democracy with the company's general body as the Legislature and the board of directors as the executive. A company functions under its constitution consisting of its memorandum and articles of association and the applicable provisions of the Companies Act. The individual rights of a member stem from the implied contract between the member and the company. A shareholder may bring an action against a company for a wrong done to him personally or he may invoke his corporate rights. If a shareholder alleges that a wrong has been done to the company by persons in control thereof, he may bring a derivative action where he derives the authority from his corporate right to sue on behalf of the company. The company is impleaded as a defendant in such action and the premise on which the court entertains this extraordinary form of action is upon the complaining shareholder's assertion that the company cannot sue as persons at its helm would not bring an action on its behalf or for its benefit for these are the wrongdoers.

18. Though at one point of time derivative and representative actions were used as interchangeable expressions, there is yet another form of action other than personal and derivative action that a shareholder may bring against the company. A shareholder (or even a debenture-holder) may sue the company (and its directors or persons in control) for a perceived wrong done to a particular class to which the plaintiff belongs. Such form of action is now regarded as a representative action in corporate jurisprudence.

19. The distinction between personal and representative action on the one hand and derivative action on the other appears to be that for a derivative action to be brought or to succeed the wrongdoing complained of and ultimately to be established has to be a wrong done to the company. In the purest form of derivative action no personal benefit would accrue to the plaintiff shareholder upon a decree being passed save as a member of the company. It is the company, notwithstanding it being shown as a defendant, that gets a voice through the plaintiff shareholder and the action is solely for the company's benefit. A personal cause of action, or even a representative action, may be combined with a derivative action, with or without leave of court, but subject to the distinct causes of action pertaining to the same transaction or series of transactions.

20. A decree in a derivative action is binding on all members of the company. A decree in a representative action binds all whom the plaintiff seeks to represent, unless fraud or collusion is urged against the plaintiff. In both the derivative action and the representative action the plaintiff will invariably sue upon obtaining leave under Order 1, Rule 8 of the Code of Civil Procedure. But while in the classical form of derivative action the plaintiff will sue on behalf of all the shareholders of the company except the recalcitrant shareholders who are impleaded as defendants, in the representative action the plaintiff has to identify the class that he seeks to represent.

Now, the question which was before the Hong Kong Court was whether a multiple derivative action could be maintained. In other words, can a shareholder of a holding company bring a derivative action complaining of wrings done to the subsidiary company? The Hong Kong Court held that such an action would be possible. Shantanu comments on this decision in detail here.

Interestingly, Indian law appears to have considered the question earlier in at least one case, and seems to have answered it differently – BSN UK v. Janardan Pillai, (1996) 86 Comp Cas 371 (Bom). The shareholding pattern in the facts of that case was as follows:

'Plaintiff' – holds 50% shares of ABIH ltd. – holds 100% of ABIL ltd. – holds 38.15% of 'Company'.

'Plaintiff' tried to bring derivative action on behalf of 'Company'. An application was filed for striking out the particular plaintiff (there were other plaintiffs; hence the suit itself was maintainable – the question arose as to whether this particular plaintiff should be struck out). The Court allowed the application. In doing so, it was observed:

14. .... Neither the courts in India nor in UK have allowed a non-member to maintain a derivative action. 

The basis of the decision was that it was not alleged in the plaint that the wrongdoers were in control of the company. So no derivative action was possible at all; and the issue of by whom a derivative action could be brought was arguably irrelevant. Nonetheless, the Court considered the issue of multiple derivative actions in detail, and stated:

On behalf of the plaintiffs, Mr. Chinoy has fairly contended that there is no Indian or English authority which allows a non-shareholder/member to maintain a derivative action. However, efforts were made to justify the action of plaintiffs Nos. 1 and 2 by relying on the judgments of American courts where in some American States "double" or "triple" derivative actions have been permitted. Reliance has been placed on HFG Company v. Pioneer Pub. Co. 162 Fd 536 (State of Illinois); Goldstein v. Groesbreck 142 Fd 422 (State of New York); U. S. Lines Inc. 96 Fd 148 (State of New York) and Kaufman v. Wolfson 151 NYS 530 (State of New York) which are all State decisions where State substantive law does not prohibit a non-member from maintaining such an action. Under Indian Law, it is settled that only a member on the register of members can sue and, therefore, the American cases relied upon by the plaintiffs can have no application… Under section 153B of the said Act, it is provided that where shares are held in trust by any person, a declaration shall be made in the manner prescribed and a copy thereof sent by the trustee to the company concerned. Under section 187C(1) of the said Act, a person whose name is entered on the register of members but who does not hold the beneficial interest in those shares shall make a declaration to the company specifying the name and particulars of the person who holds the beneficial interest in such shares. Also a person holding a beneficial interest in the shares of a company shall make a declaration to the company under sub-section 187C(2) of the said Act within 30 days after becoming such beneficial owner. In the instant case, the first plaintiff which claims to be the beneficial owner of the shares in the seventh defendant company, has not made any declaration either under section 153B or under section 187C(2) of the said Act nor has ABIL which is registered as the holder of 38.15% shares of the seventh defendant company…

Given this reasoning, the only way to allow the derivative action was by lifting the veil over the parent. On principles of lifting of the veil, the Court refused to do so. Thus, following this decision, the position seems to be that multiple derivative actions are not allowed under Indian law. Shantanu will be analysing the issues which arise in this connection in subsequent posts on Indian Corporate Law.

Civil Law: Lease and License / Interpretation of contracts

Distinguishing between a Lease and a Licence

In an earlier post, I had considered some of the principles regarding the interpretation of documents. I had discussed the leading case ofSundaram Finance v. State of Kerala, AIR 1966 SC 1178. In that case, the majority held that the Court has the power to go behind the documents and determine the true effect of a transaction. At the same time, the words cannot be ignored altogether. Drawing the line between substance and form can often be a difficult task. A recent judgment of the Supreme Court illustrates some of the complexities; and also discusses the law on the distinction between a licence and a lease.

In New Bus-Stand Shop Owners Association v. Corporation of Kozhikode, (2009) 10 SCC 455, certain traders were in possession of various shops and offices owned by the respondent Corporation. Licences had been issued to the traders, and they were paying certain 'fees' in accordance with the relevant provisions of the Kerala Municipalities Act, 1994. At the time of renewal of the licences, the Corporation insisted that the agreements were in substance

leases, and accordingly, stamp duty should be paid thereon.

The Supreme Court approvingly cited a passage by Vaughan CJ inThomas v. Sorell, [1558-1774] All ER Rep 107, which was approved by Lord Denning in Errington v. Errington & Woods, [1952] 1 All ER 149:

"… 'A dispensation or licence properly passeth no interest nor alters or transfers property in anything, but only makes an action lawful which without it would have been unlawful.' The difference between a tenancy and a licence is, therefore, that, in a tenancy, an interest passes in the land, whereas, in a license, it does not."

The Supreme Court went on to hold that the absence of exclusive possession is one of the indications to show that the agreement is one of licence and not of lease. The Court then held that on its substance, the agreement was a license. The fact that the agreement was termed as a 'licence' is of much lesser significance than the substance of the agreement. Interestingly, from the point of view of the law on interpretation of documents, the Supreme Court approvingly cited the dissenting judgment of Subba Rao J. in Associated Hotels of India v. R.N. Kapoor (the dissent being one on a different issue – as far as the present issue is considered, Justice Subba Rao concurred with the majority). In his dissent, Justice Subba Rao prefers a substance-over-form approach; contrary to his dissent in Sundaram Finance.

Of course, in Sundaram Finance, the dissent was motivated by the fact that the agreements were between two commercial persons in respect of commercial dealings, when the presumption that form conveys substance correctly is stronger. In Kapoor, Justice Subba Rao laid down the following propositions:

"The following propositions may therefore be taken as well established: (1) to ascertain whether a document creates a licence or a lease, the substance of the document must be preferred over the form; (2) the real test is the intention of the parties – whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make us of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease."

These propositions have now been reaffirmed by the Supreme Court.

Arbitration: Governing Law, foreign award, exclusion of Indian law

TDM Infrastructure Pvt. Ltd. v. UE Development Pvt. Ltd.

Citation: MANU/SC/2263/2008, (2008) 14 SCC 271 Alternative Citation: Arbitration Application no 2 of 2008

The Supreme Court held that an arbitration in a dispute between two companies incorporated in India even if wholly owned or controlled by a foreign entity, shall be a “Domestic Arbitration” and not an “International Commercial Arbitration”.

Arbitration: Section 19 - Nationality of Arbitrators - derogable or non-derogable

INDTEL Technical Services Ltd. v. WS Atkins Rails Ltd.

Citation: (2008) 10 SCC 308
Alternative Citation: Arbitration Application no. 11 of 2006

The Supreme Court based on Bhatia Decision held that the Indian Courts may appoint arbitrators in an off-shore arbitration unless part I has been specifically excluded.

Arbitration: Section 9 / Section 34 ; Applicability of Part I , exclusion by contract

Bhatia Internationals v Bulk Trading SA

Citation: (2002) 4 SCC 105 Alternative Citation: Civil
Appeal No. 6527 of 2001

The Supreme Court held that Indian Courts may grant interim measures for protecting individuals or property situated in India even if the Place of Arbitration is outside India. However, the parties, in case the place of arbitration is situated outside India, may exclude the application of Part I and Section 9 and exclude the jurisdiction the Indian Courts.

Venture Global Engineering v. Satyam Computer Services Ltd.

Citation: (2008)4 SCC 190 Alternative Citation: Civil Appeal No. 309 of 2008

This was a case concerned an application to Indian Courts to set aside an award rendered in London. The Supreme Court held that foreign awards may be challenged under S. 34 of the Arbitration and Conciliation Act, 1996 except expressly agreed otherwise. In considering any such challenge, the court should apply the expanded definition of public policy, which is, that an
award can be set aside if it contravenes any substantive provision of Indian Law or is "Patently illegal".

Arbitration: Effect of allegation of 'fraud' on arbitration / arbitrability

N. Radhkrishnan v. M/s. Maestro Engineers Citation

Civil Appeal No. 7019 of 2009 arising out of SLP (c) No. 5994 of 2007
The court held that, notwithstanding the existence of an arbitration agreement, where a case inter alia relates to allegations of fraud and serious malpractices on the part of the respondents, such a case "must be tried in court and the Arbitrator could not be competent to deal with such
matters which involved an elaborate production of evidence to establish the claims relating to fraud and criminal misappropriation".
Caveat: [Criticized for being a regressive judgement by a number of commentators]

Civil Law: Legal Professional Privilege (LPP)

Prudential PLC v. Special Commissioner of Income Tax Citation

[2009] EWHC 2494 (Admin)

The High Court of Justice (Queen's Bench Division refused to extend the professional confidentiality privilege to accountants and held that it applies only to the lawyers. The court further concluded that accountants did not come within the clients' purview of privileged communications based on past precedents. The court however drew a distinction between legal

advice privilege and litigation privilege which are the sub-headings of the overall privilege. The court observed that while legal advisory privilege extends only to advice given by lawyers, litigation privilege, in the court's assumption, could extend to clients represented by persons other than lawyers.

S. R. Batliboi v. Department of Income Tax (Investigation) Citation: [2009]

315 ITR 137 (Delhi) Alternative Citation: W.P. (c) 9479/2007

The tax department had seized the laptops of the auditors and accountants while the latter were conducting an audit for their client. As observed in the case, the auditors agreed to provide the department all relevant data relating to the concerned client who was under department's investigation. The department's insistence on securing total and unrestricted access to the laptops was however rejected by the court on constitutional grounds and that allowing such access would tantamount to professional misconduct on the part of the auditors. Interestingly, no reference to the Evidence Act was made in the judgment.

Arbitration: Arbitration and Contract

1. Shakti Bhog Foods Ltd. v. Kola Shipping Ltd. [(2009) 2 Supreme Court Cases 134] where the Indian Supreme Court has held that even when the existence of the main contract was in question, the intention to contract, and the intention to arbitrate, may also be ascertained from the conduct of the parties, and the correspondence between them.

2. Magma Leasing and Finance Ltd. v. Polturi Madhavilata (unreported judgment of September 18, 2009) where the Indian Supreme Court has observed that an arbitration clause contained in an agreement, the very existence and validity is under question, cannot be enforced independently of the agreement itself. This, obviously, seems to be contrary to the severability
provisions contained in the [Indian] Arbitration and Conciliation Act, 1996.

3. Shashoua v. Sharma, [2009] 2 Lloyd's Rep 376, where the Queen's Bench Division draws a distinction between the 'seat' of the arbitration, and the 'venue'. The observation here appears to be that when there is an express designation of the arbitration venue as (e.g. London) and no designation of any alternative place as seat, combined with a supranational body of rules (e.g. ICC) governing the arbitration and no other significant contrary indicia, then the venue would also be the juridical seat and the law of such juridical seat the curial law.

4. Braes of Doune Wind Farm (Scotland) Ltd. v. McAlpine Business Services
Ltd. [2008] 1 Lloyd's Rep 608, where an English Court has held that the legal seat of the arbitration may not necessarily be the seat provided for in the agreement (Glasgow, Scotland), and that selection of procedural law (English law) may be determinative of the legal seat of the arbitration.

Arbitration: List of Countries Notified by the Government of India for the purposes for enforcement of awards under the 1996 Act (NY Convention)

List of Countries Notified by the Government of India for New York
Convention
Sl Name Date of Notification No. of Notification
1. Austria 24-1-1972 11(4)/72-P&P
2. Belgium 28-4-1980 12(10)/75-E. Pol.
3. Botswana 7-1-1978 12(10)/75-E. Pol.
4. Bulgaria 14-6-1972 11(4)72-P&P
5. Cuba 7-1-1978 12(10)75-E.Pol
6. Central African Republic 3-2-1983 9(18)80-E.Pol.
7. Czechoslovak Socialist Republic 10-3-1967 40(8)-Com.(Genl.) 66
8. Chile/1-3-1980 12(10)/75-E.Pol.
9. Denmark/7-1-1978 12(10)/75-E.Pol.
10. Ecuador/14-6-1972 11(4)72-P&P
11. The Arab Republic of Egypt 7-1-1978 12(10)75-E.Pol.
12. Finland 7-2-1978 18(7)/70-P&P
13. France 3-8-1970 18(6)70-P&P
14. German Democratic Republic 7-1-1978 12(10)75-E.Pol.
15. Federal Republic of Germany 19-12-1966 11(2)-Com.(General)
16. Ghana 16th May, 1973 11(4)72-P&P
17. Greece 15-6-1972 11(4)72-P&P
18. Hungary 14-6-1967 31(8)167-BoT&FT(Coord.)
19. Italy 1-3-1980 12(10)/75-E.Pol.
20. Japan 24-11-1973 11(4)72-P&P
21. Kuwait 3-2-1983 9(18)/80-E.Pol.
22. Republic of Korea 9th Jan.,1979 12(10)75-E.Pol.
23. Malagasy Republic 7-1-1978 12(10)75-E-Pol.
24. Mexico 7-1-1978 12(10)75-E.Pol.
25. Morocco 16th May, 1973 11(4)72-P&P
26. Nigeria 16th May, 1973 11(4)72-P&P
27. The Netherlands 11(4)72-P&P
28. Norway 14-6-1972 11(4)72-P&P
29. Philippines 24-11-1972 11(4)72-P&P
30. Poland 29-2-1968 31(21)/67-Bot
31. Romania 14-6-1972 11(4)/72-P&P
32. San Marino 3-2-1983 9(18)/80-E.Pol.
33. Singapore 6-7-1999 10/5/99-Leg III
33. Spain 1-3-1980 12(10)/75-E.Pol.
34. Sweden 24-11-1972 11(4)/72-P&P
35. Switzerland 2-2-1967 40(5)-Com.(Gen.)66
36. Syrian Arab Republic 25-9-1978 12(10)/75-E.Pol.
37. Thailand 24-11-1972 11(4)72P&P
38. Trinidad and Tobago 7-1-1978 12(10)75-E.Pol.
39. Tunisia 16th May, 1973 11(4)72-P&P
40. U.S.S.R. 7-2-1972 18(6)/70-P&P
41. U.K. 25-10-1976 12(10)/75-E.Pol.
42. United Republic of Tanzania 24-11-1972 11(4)/72-P&P
43. United States of America 24-11-1972 11(4)/72-P&P