Litigation and Arbitration Archives

Addressing Legal Challenges on AI Development and Use

Insights | December 23, 2024 | Practice Area: Data, Intellectual Property, Litigation and Arbitration, Regulatory, Technology; Media and Telecommunications

The recent lawsuit by Asian News International against OpenAI in the Delhi High Court mirrors global trends involving allegations that large language models (“LLMs”) are being trained on copyrighted material without authorization or licenses, leading to copyright infringement. For the purpose of balancing innovation with compliance, artificial intelligence (“AI”) developers in India must take proactive measures to navigate the complex interplay of copyright, data protection and liability issues. By securing licensing agreements, clarifying the scope of ‘fair use’ under copyright law, offering indemnities to users, and preparing for court-directed compliance actions, AI developers can mitigate risks and build legally compliant AI systems.

Levelling the Playing Field: Supreme Court Decides on Unilateral Appointment of Arbitrators

Insights | November 26, 2024 | Practice Area: Litigation and Arbitration

State-owned enterprises (“SOEs”) in India have historically stipulated in their commercial contracts that arbitrators must be chosen from a panel pre-determined by the SOEs. These clauses have been challenged as being unfair, but Indian courts have taken differing views in the matter. A five-judge bench of the Supreme Court of India has, however, attempted to put these issues to rest in the case of Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV). The Supreme Court has ruled that unilateral appointments of arbitrators, including in the public-private contracts, are invalid. The Supreme Court has further held that while SOEs are not prohibited from curating a panel of arbitrators, an arbitration clause cannot mandate that the other party selects its arbitrator from such curated panel. In this note, we discuss the key findings of the decision and analyze the challenges which may arise.

From Rescue to Ruin: The Supreme Court’s Judgment in Jet Airways and the Future of Airline Insolvencies

Insights | November 21, 2024 | Practice Area: Banking and Finance, Litigation and Arbitration, Restructuring and Insolvency

In a recent judgment, the Supreme Court of India ordered the liquidation of Jet Airways (India) Limited, bringing an end to the five-year-long saga of efforts to revive the distressed airline. Two years after the airline entered the corporate insolvency resolution process, the National Company Law Tribunal, in June 2021, approved the resolution plan submitted by the Jalan Fritsch Consortium, the successful resolution applicant. However, various challenges arose with implementation of the resolution plan, which led the successful resolution applicant to seek multiple extensions and concessions from the adjudicating authority. Finally, the Supreme Court set aside the March 2024 order of the National Company Law Appellate Tribunal and used its inherent powers under Article 142 of the Constitution to order the airline’s liquidation.

The Supreme Court’s judgment is significant as it underscores the importance of implementing resolution plans within agreed upon timelines and identifies certain gaps and shortcomings in the Insolvency and Bankruptcy Code, 2016 as far as implementation of resolution plans are concerned. This note analyzes the judgment to discuss its implications for the implementation of resolution plans as well as specific challenges in the context of insolvencies in the aviation industry.

The New India-UAE BIT: Changing the Model BIT by BIT

Insights | November 5, 2024 | Practice Area: Litigation and Arbitration, Mergers and Acquisitions, Private Equity, Regulatory

The new bilateral investment treaty (“BIT”) signed by India and the United Arab Emirates (“UAE”) earlier this year replaces the 2013 India-UAE BIT and entered into force on August 31, 2024. The 2024 India-UAE BIT seeks to stimulate investment across a broad range of sectors and marks a key policy shift in India’s foreign investment protection regime. Importantly, the new treaty departs from India’s Model BIT in several significant aspects. These include extension of investment protection to portfolio investments, reduction in the timeline for exhaustion of local remedies before commencing arbitration, and a blanket prohibition of third-party funding.
In this note, we analyze some of the key features of the 2024 India-UAE BIT, including the indications, if any, regarding India’s position on its Model BIT and what this may signify for ongoing negotiations on other BITs.

Namaste Korea: October 2024 Edition

Namaste Korea | October 30, 2024 | Practice Area: General Corporate, Litigation and Arbitration

Welcome to the second edition of the “Namaste Korea” newsletter. This newsletter provides an overview of the latest business/trade news and developments in Indian law and practice which are relevant to Korean businesses and other organizations with India-related interests. The newsletter also includes sector-specific updates, including in telecom, electronics, semiconductors, automotive, financial services, gaming, and healthcare.

Karnataka High Court’s Recent Judgement: Are OLA Drivers Employees or Contractors?

Insights | October 25, 2024 | Practice Area: Employment, General Corporate, Litigation and Arbitration

The Karnataka High Court (“Court”), in its judgement dated September 30, 2024 in Ms. X v. Internal Complaints Committee, ANI Technologies Private Limited and Ors., held that the relationship between ANI Technologies Private Limited (“OLA”) and its driver subscribers was an employer-employee relationship for purposes of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) and such driver subscribers could not be considered as independent contractors.
The judgement, which closely scrutinizes OLA’s subscription agreements with its driver subscribers and customers, states that OLA cannot, on one hand, exercise complete control over the activities performed by the driver subscribers, while, on the other hand, onboard them as independent contractors to evade its responsibilities under relevant statutes. The judgment also analyzes the intent and objectives of the POSH Act and the wide ambit of the definitions of employer, employee and workplace under the POSH Act in furtherance of these objectives.
OLA has filed an appeal against the judgment before the Division Bench of the Court, which has issued an interim order staying its operation, stating that the issues raised in the judgement require further consideration. While the outcome of the appeal is awaited, the Court’s judgment of September 30, 2024, through its detailed reasoning, assumes significance in contributing to the discourse on the status of gig workers in the current labor economy and the responsibilities and liabilities of companies who engage such workers on a contract basis.

Navigating Legal Waters: Rights and Remedies for Indian Ports and Terminals

Insights | October 7, 2024 | Practice Area: Litigation and Arbitration, Projects; Infrastructure and Energy

Indian trade and shipping are pivotal to the country’s economic growth, with ports serving as essential gateways for the movement of goods and resources. With a vast coastline of 7,517 kilometers, India has numerous major and non-major ports that facilitate both domestic and international trade. These ports play a crucial role in handling cargo, ensuring efficient supply chains, and supporting various industries, making them vital to the nation’s overall economic infrastructure and global trade connectivity. The Indian government has increasingly recognized that the privatization of ports can introduce best practices and modern technology, significantly enhancing operational efficiency and competitiveness.
Indian ports and terminals often face legal challenges in enforcing claims for unpaid dues and damages. A recent ruling by the Orissa High Court regarding the vessel M.V. Debi highlights these issues, allowing the vessel’s arrest to enforce a maritime lien held by Paradip International Cargo Terminal Pvt. Ltd. (“PICTPL”) for unpaid berth hire charges. This decision underscores the enforceability of maritime liens and clarifies that port concessionaires can pursue claims even without a direct contractual relationship with the vessel or its owner.
This note examines common disputes faced by ports, such as tariff non-payment and damage to port property, which often arise from ambiguous contractual terms and regulatory changes. It emphasizes the importance of understanding the available legal avenues, including admiralty suits and civil litigation, to navigate these challenges effectively.
As the sector increasingly shifts towards privatization, a supportive policy framework has emerged to attract investments and enhance operational efficiency. However, this transition necessitates robust dispute resolution mechanisms to address grievances effectively. The need for streamlined processes is critical to manage the complexities of long-term contracts while ensuring timely redressal of claims. Ultimately, these legal frameworks will play a crucial role in maintaining competitiveness and facilitating growth within India’s maritime industry.

Forfeiture of Advance Payments by Developers

Insights | October 4, 2024 | Practice Area: Litigation and Arbitration, Real Estate

Section 19(6) of The Real Estate (Regulation and Development) Act 2016 (“Act/RERA”) casts an obligation on an allottee to make timely payment of instalments as per the payment schedule mentioned in the registered agreement for sale. What happens when an allottee fails to comply with this obligation?
This note scrutinizes the order passed by Maharashtra Real Estate Appellate Tribunal and talks about the remedies available to a developer in case an allottee defaults in making timely payment of the sale consideration. It also analyzes the position pre and post RERA regime and dives into the concept of earnest money and liquidated damages in terms of the agreement for sale.

Summons to an Accused in a Criminal Case not to be Issued in a Mechanical Manner

Insights | September 30, 2024 | Practice Area: Anti-corruption; Fraud and Investigations, Litigation and Arbitration

The Supreme Court of India in its recent decision in Delhi Race Club (1940) Ltd. and Others v. State of Uttar Pradesh and Another has acknowledged that calling a person to appear in a criminal court as an accused is a matter affecting one’s dignity, self-respect and image in society and should not be used as a weapon of harassment. Summoning an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. A magistrate is not required to act on a complaint simply because such complaint is filed before him. Before summons are issued to any accused, a magistrate is required to scrutinize carefully the evidence placed by the complainant, and if required question the complainant and the witness(es) to find out the truthfulness of the allegations and examine if any offence is prima facie committed.
The judgment in Delhi Race Club also covers the following key issues of law: (a) difference between ‘breach of trust’ and ‘criminal breach of trust’, (b) difference between ‘cheating’ and ‘criminal breach of trust’, (c) vicarious liability of office bearers of a company in criminal matters; and (d) maintainability of a petition for quashing of summons.
In this note, we analyze the aforesaid Supreme Court’s judgment in Delhi Race Club.

How to Correctly Incorporate an Arbitration Clause by Reference: NBCC v. Zillion Infra

Insights | July 19, 2024 | Practice Area: General Corporate, Litigation and Arbitration

A robust arbitration clause is necessary to ensure an enforceable framework for dispute resolution in any contract. The recent decision of the Hon’ble Supreme Court of India in NBCC (India) Limited v. Zillion Infra Projects Pvt. Ltd. has clarified the critical difference between ‘reference to an arbitration clause’ and ‘incorporation of an arbitration clause’. The Supreme Court held that a mere reference to an arbitration clause does not bind the parties to arbitrate in case of a dispute. To bind the parties to arbitration, the reference should be such that the arbitration clause is incorporated in the agreement. Thus, it is crucial to understand how to correctly incorporate an arbitration clause by reference.
In this note, we analyze the aforesaid Supreme Court’s decision and set forth principles that emerge as best practices for incorporating an arbitration clause by reference.