Académique Documents
Professionnel Documents
Culture Documents
Table of Content
1. Introduction..02 2. The effect of ILO on labor legislation in India03 3. Instruments of International Labour Law04 4. Arbitration as a means for settlement of dispute at international level05 5. United Nations Commission on International Trade Law...07 6. Foreign arbitration08 7. Enforcement of award to which the conventions do not apply09 a. Exceptions..10 8. Enforceability of civil suits decided in Foreign country..12 9. Conclusion....13 10.Bibliography.14
Page | 1
Introduction:
Since humans appeared on earth, we have had to work to secure what we needed to survive or to improve our standard of living. Needs are not satisfied without human effort that results in successful production. Our earliest ancestors had to gather, hunt, and farm successfully or die. The term labour in its most general use, refers to productive human work. Through much of history, it was not treated as a commodity that was paid for. Our nomadic ancestors laboured together in the gathering, the hunt, and other tasks and collectively shared the results according to the customs of the time. Farmers grew their crops or raised their livestock and traded them for other goods or services using a barter system of exchange. A slaves labour was forced, whereas that of many a peasant was exchanged for protection and the use of land. To the present day, much productive work is done without monetary payment. As time passed and societies grew larger and more complex, labour became more specialized. Each person became an expert at doing just a few things or even just one thing. This specialization meant that workers became more productive. It often proved a mixed blessing. Workers could improve their standard of living if they were able to gain a share of the additional wealth they had helped produce. In this research paper we will deal with international labor organization which through its constitution conventions and treaties has influence not only the domestic labour legislation of its member nations but also of countries which are not its member. This research paper will look into international labour laws, its beginning, and its impact on Indian legislations and the core conventions. After that this research paper will look into international system of industrial dispute resolution which is mainly done through arbitration, we will look into the working of foreign awards, the procedure of implementation in India. The question of jurisdiction, whether the Indian courts have power to enforce or set aside the foreign award, and its impact if the award can be set aside by Indian courts.
Page | 2
Page | 3
The Weekly Holidays Act of 1942 prescribes one paid holiday a week for persons employed in any shop, restaurant or theatre (excepting those employed in a confidential capacity or in a position of management). The government is empowered to grant additional half-day holiday with pay in a week The Industrial Disputes Act, 1947 came into being on the 1st day of April 1947. The Act provided for establishment of industrial tribunals by the appropriate government in British India. It established a full-fledged industrial tribunal for adjudication of industrial disputes for the first time The Industrial Employment (Standing Orders) Act, 1946 came into operation for the first time requiring employers in industrial establishments employing 100 or more workmen to define the terms of employment of workmen in the form of standing orders which should be in general conformity with the model standing orders incorporated in the Act. The Merchant Shipping Act, 1923 provided for an agreement between a seaman and the master of the ship regarding terms of service.
Page | 4
28 LJ Ch 186: (1858) 26 Beav 306. AIR 1918 Cal. 865. 3 Insustrial dispute Act, 1947 4 A.K.L.K Sangh v. Liberty Footwear Company. AIR 1990 SC 247.
Page | 5
advocacy of the Gandhi Ji of its application to settlements of dispute in the textile industry of Ahmadabad. Requirement to be fulfilled for invoking section 10 A: There should be an existing or apprehended industrial dispute. The reference of arbitration should be by a written agreement. The reference should be made before the dispute has been referred under section 10. The names of the persons chosen to act as arbitrator or arbitrators may be specified in the arbitration agreement. Such persons may be presiding officers of the labor court, industrial tribunal, or national tribunal. In Indian Iron and Steel Co. Ltd. v. Their Workmen5 The International Labour Organisation, in its recommendation, has recommended that a worker aggrieved by the termination of his employment should be entitled to appeal against the termination among, others to a neutral body such as an arbitrator, a court, an arbitration committee or a similar body. Workmen of Dharam Pal Prem Chand (Saugandhi) v. Dharam Pal Prem Chand (Saugandhi). In view of various decisions of the Supreme Court, cases of individual dismissals and discharges could be taken up for conciliation or arbitration or referred to adjudication under the Industrial Disputesmd Act, if they were sponsored by a Union or a number of workmen. And arbitration methods of dispute resolution facilitate parties to deal with the underlying issues in dispute in a more cost-effective manner and with increased efficacy. In addition, these processes have the advantage of providing parties with the opportunity to reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict in a peaceful manner, and achieve a greater sense of justice in each individual case.
(1958-I-LLJ- 260)
Page | 6
Sundaram Finance Ltd v NEPC India Ltd 1999 2 SCC 483, 497.
The Old Act provided for amongst other things: Court controlled arbitrations, Supersession of Arbitration by a Court etc. It thus severely limited arbitral autonomy. See also Sundaram Finance Ltd v NEPC India Ltd 1999 2 SCC 483, 497. 8 UNCITRAL Model Law, Article 1 (2).
Page | 7
Foreign arbitration
Foreign arbitration is an award or arbitration conducted in a place outside India The resultant award is an award, if sought to be enforced in India, constitutes a foreign award, Section 2(7) of the 1996 act states that an arbitral award made under \Part [1] of the act shall be considered as a domestic award. Section 2(2) mandates that Part [1] shall apply where place of arbitration is in India. It follows a logical thing that where the place of arbitration is not in India, Part [1] shall not apply to such arbitration. Thus an award resulting from such arbitration shall not be considered a domestic award. In the case of dispute arousal, multinational companies go for Arbitration proceeding instead to knocking up courts door for redressal, as it is relatively cheaper expeditious method of dispute resolution.
The various high courts, including the Bombay and Calcutta, have made rules regarding the procedure and forms to be used for application for the enforcement of foreign awards.
ENFORCEMENT OF AWARD TO WHICH THE CONVENTINS DONOT APPLY The awards which are made in the countries that are not a party to either of the conventions cannot be enforced with the same facility as in the case of the foreign awards to which the conventions apply. Such foreign awards are however enforceable in India on the same ground as they are applicable in United Kingdom. That is to say that they can be enforced by an action before a court of law as held in BADAT & CO. BOMBAY vs. EAST INDIA TRADING CO. which said that such an award will be enforceable in India under the common law on the grounds of justice, equity and good conscience? The principles stated are as follows: That there was a contract between the parties where under disputes between them were referred to arbitration to an arbitral tribunal in a foreign country. That award is in accordance with the terms of the agreement.
9
Russell on Arbitration, 23rd ed., by Sutton, Gill and Gearing (London 2007), at para. 8-051 see also V.S. Deshpande, Jurisdiction Over Foreign and Domestic Awards in the New York Convention, (1991) 7 Arbitration International 123, 126. 10 Curial law refers to the law governing the procedure of arbitration. 11 An express choice of curial law different from the law of the country in which the arbitration is to be held is ... almost unknown. M. J. Mustill & Stewart C. Boyd, (2nd ed.)The Law and Practice of Commercial Arbitration in England (London 2002), p. 64 12 [2007] EWHC (QBD) 1541.
Page | 9
That the award is not invalid according to the law governing arbitration proceedings obtaining in the country where award was made. That it was a subsisting award at the time of filing of the suit. A foreign award will not be enforced by the courts in India if its enforcement would be contrary to public policy or the laws in India. A foreign award will be deemed to be against the laws of India if it violates, for instance, provisions relating to exchange, control, import-export control or similar mandatory provisions.
Exceptions The balance between arbitral autonomy and court intervention in India had, prior to the enactment of the Arbitration Act 1996, been maintained in accordance with internationally accepted norms. This position has been altered after the judgement of the Indian Supreme Court in Venture Global v. Satyam Computers, which has permitted the set aside of a foreign award by Indian courts even when India is not the seat of arbitration. In January 2008, the Indian Supreme Court permitted the set aside of a New York Convention13 arbitral award despite India being a third state for purposes of the arbitration (i.e. not the seat of arbitration).414 The principle that has been established with the decision in Venture Global Engineering v. Satyam Computer Services Ltd (Venture Global) is that if a foreign award requires performance in India, but is seen to have disregarded or breached Indian laws and regulations, an Indian court may not only refuse enforcement, but can also set aside the award.
The judgment in Bhatia International is important, since in this case the Indian Supreme Court prepared the groundwork for its decision in Venture Global. The Supreme Court held in Bhatia that the general provisions of Part one of the New Act are applicable to Part two.15 This concept was further expanded by the Supreme Court in Venture Global, where it stated that all provisions of Part one are applicable to Part two of the New Act. In Bhatia, the defendant had sought to escape from an order indicating interim measures by contending that, due to the of lack of any provision relating to interim relief in the Part of the Act that dealt with foreign awards (Part two)16, no court except for that of the seat of arbitration could grant interim relief. In an attempt to prevent a party from being left without any recourse to interim relief in a foreign arbitration, the Court took the view that the provisions of Part one was general provisions governing domestic as well as foreign arbitrations and would not need to be repeated in every Part of the Act. 17 The motivation behind the said decision was to preserve the power of the Court to grant interim relief in a
13 14
New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, 1959, 330 UNTS 38. Venture Global Engineering v. Satyam Computer Services Ltd Manupatra/SC/0333/2008 (1) Arbitration Law Reporter (SC) 137. 15 S.K. Dholika, Bhatia International v. Bulk Trading S.A., (2003) 5 SCC (Journal) 22. 16 Section nine dealing with interim relief by a court was contained in Part one 17 Bhatia International v. Bulk Trading S.A.,(2002) 4 SCC 105.
Page | 10
foreign arbitration and thus to overcome the fact that the New Act had not made any explicit provision for providing interim relief in Part two. There was strong criticism of the Bhatia judgment from various quarters.18 It was feared that by extending certain sections of Part one to foreign awards, the judgment had impliedly permitted an Indian Court to set aside a foreign award, even if the seat of the arbitration was not India. However, notwithstanding this strong criticism of the courts reasoning, the judgment was largely viewed as a decision necessary to enable court support (interim relief) to arbitration proceedings. By and large the Indian legal fraternity did not subscribe to the view that the judgment in Bhatia International enabled a non seat state to set aside a foreign award. 19 This interpretation of Bhatia International was developed by the Bombay High Court which clarified that as only the general provisions of Part
one were applicable to Part two, foreign awards could not be set aside as they were governed by specific provisions in Part two.20
18
N. Gracias and S. Kotak, The Saw Pipes Judgment, (2005) 4 Government Law College Law Review 106, 131; D. Krishnan 19 Force Shipping v. Ashapura Minechem 2003 (3) BOM. L.R 948, Bombay Gas Company Limited v. Mark Victor Mascarenhas 20 Force Shipping v. Ashapura Minechem 21 Venture Global Engineering v. Satyam Computer Services Ltd Manupatra/SC/0333/2008 (1) Arbitration Law Reporter (SC) 137.
Page | 11
In all these cases, courts applied foreign law out of courteous regard to foreign sovereigns. Since the turn of the twentieth century, comity has come to inform a broader class of cases in which courts have applied foreign law or refrained from the exercise of domestic prescriptive, adjudicatory, or enforcement jurisdiction. In this regard, comity functions both as a conflicts rule and as a justification for deferring to the foreign law. Since the turn of the twentieth century, comity has come to inform a broader class of cases in which courts have applied foreign law or refrained from the exercise of domestic prescriptive, adjudicatory, or enforcement jurisdiction. In this regard, comity functions both as a conflicts rule and as a justification for deferring to the foreign law.
22
Page | 12
Conclusion
Labor class is indeed one of the classes most vulnerable to exploitation if not the most. Most of the labor legislations in India are pre constitutional. The concept of Fundamental Rights was introduced the Constitution. Although most of the pre constitutional legislations have been repealed or curtailed following the Doctrine of Eclipse and Doctrine of Severability, not a lot of changes have had to be made to the labor laws that were well passed before the Constitution. The success of these labor legislations must be attributed to the ILO, as the guidelines issued by the ILO were formed the principles on which these legislations were drawn. By observing the passage of Labor Legislations in India, through the various amendments and enactments, it is evident that the ILO did have a great impact on the Labor Laws in India. Many new laws were enacted to incorporate the guidelines of the conventions of the ILO that were ratified by India. Referring to the pre-1996 position of arbitration in India, the noted jurist Fali Nariman called the prospect of finality in India an impossible dream.23 It may be an understatement to say that it is very irritating to anyone who has gone through the hard slog of winning an arbitration to then discover that: (a) the loser refuses to pay the award, and (b) the loser then begins to challenge the award in its local courts. In India, an Indian company can attack a foreign arbitration on two levels: It can seek to have the award overturned; and It can seek to have enforcement in India barred. The recent decision of the Supreme Court of India in Venture Global Engineering vs. Satyam Computer Services Ltd. & Anr. has sparked debate as to the current position regarding the enforcement of foreign arbitration awards in India and how enforcement interacts with the ability of the losing party to challenge the very basis of the award. For example, some commentators have advocated that anyone who deals with an Indian counterparty should make sure that the contract excludes Indias Arbitration and Conciliation Act 1996. It can be observed that the judgment was motivated as much by conservative judicial attitudes towards arbitration in India as by faulty drafting of the Arbitration Act. Therefore, essential to reclaiming the dream of arbitral autonomy and finality in India will be a softening of judicial attitudes towards arbitration. Though we have implemented UNCITRAL model, we have on a way forgotten the very basis for which UNCITRAL was introduced. It was introduced to bring global harmony in the dispute settlement proceedings. We must revaluate our understanding and must restore the lost confidence of multinationals in our dispute resolution system. We must take the example of the case Bombay Gas Company Limited v. Mark Mascarenhas24, in which the Bombay High Court most rightly said that enforcement can be resisted but country having secondary jurisdiction have no power to set aside a settled award.
23 24
Fali Nariman, Finality in India: The Impossible Dream, (1984) 10 Arbitration International, 373 1998 1 LJ 977
Page | 13
Bibliography
Statutes Industrial Dispute Act, 1947 Arbitration Act, 1996 Indian Constitution, 1950
Books Referred Labour and Industrial Laws, 9th Edition, Allahbad Law Agency, K.M.Pillai Arbitration and Conciliation,8th Edition, Central Law Agency, N.V.Paranjape Labour and Industrial Laws,Dr. S.K. Puri Labour Law, S.K. Malik Labour and Industrial Laws Meenu Paul Labour and Industrial Laws S.K. Mishra Other Sources The UNCITRAL (United Nations Commission on International Trade Law) Guide. The Enforcement of Foreign Arbitral Awards in India, Richard Butler Cambridge Student Law Review: Impossible Dreams and Recurring Nightmares: The Set Aside of Foreign Awards in India. Impact of ILO on Labor Laws in India, Apurv Karmakar. International Labour Law, Internatonal labor Organisation, Bureau for
Workers' Activities.
Enforcing Foreign Judgments in India, Madaan & Co. Conflict of Laws: An Overview of Enforcement of Foreign Judgments and Foreign Awards in India, Halsburys Law.
Page | 15