Posts Tagged India

Swamdi Ramdev v Facebook, Google, Youtube et al at the Delhi High Court: Worldwide removal ordered without much hesitation.

Update 14 November 2019 the judgment is, unsuprisingly, being appealed.

‘The race between technology and the law could be termed as a hare and tortoise race – As technology gallops, the law tries to keep pace.’ (see further below).

Thank you Daphne Keller for flagging CS (OS) 27/2019 Swami Ramdev et al v Facebook et al at the Delhi High Court on 23 October. Defendants are Facebook Inc, Google Inc, YouTube LLC, Twitter etc. The allegation of Plaintiffs is that various defamatory remarks and information including videos, found earlier to have been defamatory (a judgment currently before the Supreme Court without having been stayed), are being disseminated over the Defendants’ platforms.

At 6 Prathiba M Singh J summarises the parties’ position: None of the Defendants have any objection to blocking the URLs and disabling the same, insofar as access in India is concerned. However, all the Defendant platforms have raised objections to removal/blocking/disabling the impugned content on a global basis. On the other hand, the Plaintiffs argued that blocking merely for the Indian territory alone is not sufficient as the content would be accessible through international websites, which can be accessed in India. Thus, according to the Plaintiffs, for the remedy to be effective, a global blocking order ought to be passed.

Particularly in the review of plaintiff’s submission at 8 ff, the parallel is clear with the discussions on the role of intermediaries in Eva Glawischnig-Piesczek v Facebook. Reference of course is also made to Equustek and, at 64, to the CJEU in Google v CNIL. Facebook refers to the material difference between defamation laws across the globe: at 10: ‘Defamation laws differs from jurisdiction to jurisdiction, and therefore, passing of a global disabling order would be contrary to the principle of comity of Courts and would result in conflict of laws.’

At 44 ff Prathiba M Singh J extensively reviews global precedent, and, at 69, to Eva Glawischnig-Piesczek v Facebook. At 88 ff this leads justice Singh

Firstly, to uphold fairly straightforwardly the court’s power to order global delisting given the origin in India of the original act of uploading: ‘The act of uploading vests jurisdiction in the Courts where the uploading takes place. If any information or data has been uploaded from India on to a computer resource which has resulted in residing of the data on the network and global dissemination of the said information or data, then the platforms are liable to remove or disable access to the said information and data from that very computer resource. The removal or disabling cannot be restricted to a part of that resource, serving a geographical location.’

>>>Clearly the authority of the finding (likely to be appealed) may therefore be limited to situations of content uploading from inside the jurisdiction.

Further, at 99, to make an effectiveness argument: ‘it is clear that any order passed by the Court has to be effective. The parties before this Court i.e. the platforms are sufficiently capable to enforce an order of global blocking. Further, it is not disputed that the platforms are subject to in personam jurisdiction of this Court.’

>>>The latter element, again, may limit the authority of the judgment. I am not au fait with the ground for jurisdiction in the case at issue.

Finally, at 91: ‘The race between technology and the law could be termed as a hare and tortoise race – As technology gallops, the law tries to keep pace’. This does not imply the law simply laying down to have its belly rubbed. Exactly my sentiment in my post on the UK AI case.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.8.2.5

 

 

 

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GMR Energy: The Delhi High Court on ‘international’ agreements, and privity of arbitration clauses.

I have reported before on the relevance of lex curia /curial law and other lex causae decisions to be made in the arbitration context. I have also reported on the qualification of ‘international‘ for conflict of law /private international law purposes. And finally of course privity of choice of court and -law is no stranger in my postings either. All these considerations apply in the arbitration context, too.

Thank you Herbert Smith for flagging CS(COMM) 447/2017 GMR Energy, in which all these issues featured in the arbitration context. The judgment would not seem to add anything new (mostly applying precedent) however it is a usual reminder of the principles. As reported by HS (and with further factual background there), GMR Energy argued

  • on the plain reading of the arbitration clauses, Singapore was not the seat of arbitration but only the chosen place or venue for hearings; Not so, the High Court found: reference to SIAC rules and to Singapore  points to Singapore as the curial seat;
  • the parties being Indian, choice of a foreign seat for arbitration would be in contravention of Section 28 of the Indian Contract Act 1872 which provides that agreements which restrain parties’ rights to commence legal proceedings are void (save for those which do so by way of an arbitration agreement) – GMR Energy contended that an agreement between Indian parties to arbitrate offshore would fall foul of this provision. This, too, the High Court rejected: per precedent, offshore arbitration is compatible with the Act. (It is also particularly useful for Indian subsidiaries of foreign companies); and
  • for two Indian parties to choose an overseas seat for their arbitration (thereby disapplying Part I of the Arbitration Act) would amount to a derogation from Indian substantive law, and therefore would not be permissible. This, the High Court ruled, is not a decision to make at the stage of jurisdictional disputes between the parties.

Further, on  the issue of privity, Doosan India ‘contended that GMR Energy should be party to the SIAC Arbitration proceedings by virtue of common family ownership and governance, lack of corporate formalities between the companies, common directorships, logos and letterheads, and GMR Energy’s past conduct in making payments towards GCEL’s debts’ (I am quoting HS’s briefing here). This is referred to as the alter ego doctrine and the High Court upheld it. Liability for affiliated undertakings’ actions is to be discussed on the merits (here: by the arbitral tribunal). But a the level of jurisdiction (including reference to arbitration), Doosan India’s arguments were upheld: the common ownership between the entities; the non-observance of separate corporate formalities and co-mingling of corporate funds; and GMR Energy’s undertaking to discharge liabilities of GCEL (and the fact that it had made part payments towards the same) all conspire to the conclusion that GMR Energy is bound by the arbitration agreement.

An interesting confirmation of precedent and ditto application of the alter ego doctrine.

Geert.

 

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Hooley: Modified universalism outside the EU’s Insolvency Regulation.

Update 25 January 2019 Rubin v  Eurofinance was incorporated as precedent by the Australian Federal Courts in King (Trustee), in the matter of Zetta Jet Pte Ltd v Linkage Access Limited [2018] FCA 1979, as explained by David Walter here.

Hooley [Hooley v The Victoria Jute Company Ltd and others [2016] CSOH 14] has been sitting in my in-box for a few months. It concerns the liquidation (particularly: selling of companies’ assets by liquidators under Scots law) of companies incorporated in Scotland but with COMI (centre of main interests) outside the EU. In particular, India.

Given the presence of COMI outside the EU, the Insolvency Regulation does not apply. Indeed the Court of Session (Lord Tyre) does not refer to it at all.Findings would have been very different were the Regulation to apply: place of incorporation has to give way to COMI, where these two do not coincide, in which circumstance the place of incorporation at best may open secondary proceedings.

At issue was among others (and for the first time in a Scots court, I understand) the consideration of ‘modified universalism’: ie what is the practical impact of there being a company incorporated in Scotland, given Scots courts and administrators jurisdiction over the insolvencies, when the companies’ business is mainly carried out abroad and when proceedings are also pending abroad.

Per Rubin v Eurofinance, Universalism” means the “administration of multinational insolvencies by a leading court applying a single bankruptcy law.”  The principle of modified universalism was stated by Lord Sumption in Singularis Holdings Ltd v Pricewaterhouse Coopers [2015] AC 1675 (PC) at para 15 as being that “the court has a common law power to assist foreign winding up proceedings so far as it properly can” (see also Lord Collins at paragraph 33 and Lord Clarke of Stone‑cum‑Ebony at paragraph 112).

Essentially Lord Tyre had to decide whether the Scottish administrators’ powers were only exercisable to the extent that their exercise was recognised as legally valid by the law of the relevant non-UK jurisdiction. He held (at 36) that the proceedings taking place in India were ancillary to the administration proceedings in Scotland. The powers of a validly appointed administrator to a Scottish company were therefore not limited by the Indian winding up.

As often of course this judgment is but one side of the coin. Indian courts are at liberty to disregard the Scots findings. Any purchasers of Hooley assets therefore will have a compromised title. One assumes this has an impact on price.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.1, Heading 5.5.

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Applicable law and arbitration clauses – lex arbitri, lex curia, lex contractus – The English view in Sulamerica

(Note see various 2017, 2016, 2015 and 2014 postscripts at the end of this posting)

Update 24 October 2019 Thank you Filbert Lam for alerting me to the Singapore Court of Appeal reversing the High Court Update- I have no access to the CA judgment yet – reasons and analysis to follow.

Update 7 July 2019 for review of a recent Austrian SC decision adopting a favor validitas approach see here. For a view from Singapore see BNA v BNB [2019] SGHC 142 reviewed here:  the High Court interpreted an express provision for “arbitration in Shanghai” to be an agreement to Singapore-seated arbitration with hearings in Shanghai, thereby upholding the validity of the arbitration clause and the jurisdiction of the tribunal.

Update 15 May 2019 Whether Fiona Trust is good authority in Australia might have been, but ultimately was not considered in [2019] HCA 13 Rinehart v Hancock Prospecting Pty Ltd. For review see here update 12 November 2019 and Michael Douglas case-note here. The High Court found it unnecessary to consider whether Fiona Trust is good law in Australia. According to the plurality (Kiefel CJ, Gageler, Nettle and Gordon JJ), the appeals could be resolved by application of orthodox principles of contract interpretation, without reference to Fiona Trust: para 18.

Preferring to settle issues by arbitration (often preceded by mediation) continues to be a preferred method of dispute settlement in commercial transactions. It is most probable that the best results in arbitration are reached for contracts of a sizeable value, between companies with pedigree, with a certain amount of contractual history between them. However even then, lack of attention to detail may land parties in a pickle. In Sulamerica, the claimant insurers seek the continuation of an interim anti-suit injunction against the defendant insureds. Parties are at loggerheads over the validity of an arbitration agreement between them, which may be found in the policy. Express choice of law for the policy has been made for Brazil. Express and exclusive choice of court has also been made for Brasil. Parties are all Brazilian (incidentally, the re-insurers were not). The subject matter of the insurance is located in Brazil (Jirau, one of the world’s largest hydro-electric facilities). However the arbitration agreement in the contract concludes with appointing London as the seat of the arbitration. Arbitration was agreed to be held under ARIAS rules.

(Not just) under English law [see the House of Lords in Fiona Trust], an arbitration agreement is treated distinct from the substantive agreement in which it is included, for the purpose of assessment of its validity, existence, and effectiveness. This leads one to have to ascertain

lex arbitri (the law of the arbitration agreement, per the preceding sentence);

the curial law or the ‘law of the seat’ (the procedural law which will guide the arbitration proceedings; despite the latin curia not commonly referred to as lex curia);

the ‘proper law’, the law that governs the actual contract (lex contractus); and

the locus arbitri and the lex loci arbitri: the venue of the arbitration and its laws, which may or may not interact with the proceedings. Update 8 January 2018 see for an example of such impact the new Chinese approach to optional arbitration proceedings, applicable as of 1 January 2018).

In the EU, the issue is not covered by the Rome I Regulation, for arbitration is excluded from that Regulation. Whence the courts apply their national conflict of laws rules. In England, this implies identifying the law with which the arbitration agreement has its ‘closest and most real connection’. In Sulamerica, Cooke J held that this was, in this case, England, given London having been assigned as the seat of arbitration.  Indeed in Abuja International Hotels, Hamblen J came to the same conclusion with respect to an underlying agreement that was governed by Nigerian law.

The lesson here is clear. With three sets of applicable law having to be identified, one had better consider them specifically, in writing, in the agreement.

Geert.

Postscript: Cooke J held in January 2012. In May 2012, the Court of Appeal confirmed the decision.

Postscript 2, 3 July 2014: In First Link Investments, the Singapore High Court took a radically different approach in May 2014, noting that “it cannot always be assumed that commercial parties want the same system of law to govern their relationship of performing the substantive obligations under the contract, and the quite separate (and often unhappy) relationship of resolving disputes” and that “the natural inference would instead be to the contrary”. (Case come to my attention thanks to Alistair Henderson and Daniel Waldek). Postscript 4, 2 December 2016. In BCY v BCZ the High Court would seem to have entirely altered that position, reverting back to Sulamerica.

Postscript 3, 2 June 2015:In Trust Risk Group SpA v AmTrust Europe Limited, the Court of Appeal further considered the House of Lords’ presumption of the one shop principle and decided it did not apply to the case at issue. The CA, upon detailed analysis of the agreements at stake, decided in effect that the later agreement was lex specialis vis-a-vis the overall business agreement between parties and hence that choice of law and choice of court of the later agreement prevailed. (Davina Given and Ed Holmes posted on the RPC blog with full review of the case). The Court’s analysis highlights among others the often less than clear language used in commercial agreements, whether or not caused by the fog of closing. In particular, the agreements under consideration used often confusing and not clearly defined concepts to denote the various agreements at stake.

Postscript 5, 25 October 2017: in Roger Shashoua v Mukesh Sharma CIVIL APPEAL NOS. 2841-2843 of 2017 the Indian Supreme Court once again had to emphasise the difference between venue (lex loci arbitri if you like; potentially only the place where hearings are held) and the seat of arbitration (which determines procedural issues; the lex curia). See review by Herbert Smith here.

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