Para 3.10 — WORKS_MANUAL

b) Disqualification from appointment: A long and exhaustive list of specific circumstances which shall act as a bar against any person from being appointed as an arbitrator in a dispute, have been enumerated in the seventh schedule. However, the parties to the dispute have been given the opportunity, after the dispute has arisen, to waive the applicability of the seventh schedule, by mutual written agreement, if they so deem fit. Especially of interest in Public Procurement is disqualification of past or present employees, consultant, advisors or other related business relationship not only with the Procuring Entity but also with any affiliated entity thereof. Thus the earlier practice of appointing serving officers of procuring entity as arbitrator is no more legal.

c) Disclosures: An arbitrator who is approached for appointment is obligated to disclose as per Sixth Schedule of the Act. The declaration as per a set format removes any ambiguity and ensures uniformity.

d) conflict of Interest the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality as per fifth schedule to the Act for arbitrator.

e) Time constraints: An arbitrator shall disclose all circumstances which may affect his ability to deliver an award within 12 (twelve) months.

3.10 Changes introduced by the Arbitration and Conciliation (Amendment) Act, 2015 i) Independence, Disqualification and Obligations of arbitrators at the time of appointment a) Independence, Impartiality and Accountability of Arbitrators: A fixed fee structure ensures the independence of the arbitral tribunal and also provides a reasonable cost estimate to the parties entering into arbitration. The Amendment Act in the Fourth Schedule prescribes the model fees for arbitrators and the High Courts have been assigned the responsibility of framing the rules for determination of the fees and the manner of its payment. The model fee varies from Rs 45,000 to Rs 30 (thirty) lakh for various slabs of disputed value from Rs five lakh to above Rs 20 (twenty) crore - with a sole arbitrator entitles to 25 (twenty-five) percent extra above the model fee).However it is clarified that such fees shall not be applicable in International Commercial Arbitration and in cases where parties have agreed for determination of fees as per the rules of an arbitral institution.

ii) Fast-tracking Arbitration in India a) Award within 12 (twelve) months: The arbitral tribunal is statutorily obligated to deliver an award within 12 (twelve) months from the date when arbitral tribunal enters into reference. The arbitral tribunal is said to have entered upon the reference on the date on which the arbitrator

(s) have received notice of their appointment. The award can be delayed by a maximum period of six months only under the special circumstances where all parties give their consent to such extension of time. Where the award is not made out within the statutory period the mandate of arbitrators shall automatically terminate. It is open for the courts to extend the time period for making an award upon receipt of an application by any of the parties. Such extension is to be granted only for sufficient cause and the court in its discretion may impose the following penalties depending on the facts and circumstances of the case:

1. Reduce the fees of arbitrators by up to five percent for each month of delay. 2. Substitute one or all the arbitrators. 3. Impose actual or exemplary costs on any of the parties.

b) Oral arguments to be held on a day-to-day basis: Oral arguments as far as possible shall be heard by the arbitral tribunal on a day to day basis and no adjournments shall be granted without sufficient cause. Provision for imposition of exemplary cost on the party seeking adjournment without sufficient cause has also been made.

c) Fast Track Procedure: The parties to arbitration may choose to opt for a new fast track procedure either before or after the commencement of the arbitration. The award in fast track arbitration is to be made out within six months. Where the Arbitral Tribunal delivers the award within a period of six months the arbitral tribunal shall be entitled to additional fees. The quantum of such additional fees shall be determined by the parties. The salient features of the fast track arbitration are:

1. Dispute is to be decided based on written pleadings only. 2. Arbitral Tribunal shall have the power to call for clarifications in addition to the written pleadings where it deems necessary. 3. Oral hearing maybe held only if all the parties make a request or if the arbitral tribunal considers it necessary. 4. The parties are free to decide the fees of the arbitrator(s).

d) Appointment within 60 (sixty) days: Whenever an application for appointment of Arbitrator

(s) is moved before a court such application shall be disposed of as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party. The court while appointing arbitrators shall confine itself to the examination of the existence of an arbitration agreement.

ii) Powers of Interim Relief in Section 9 also to Arbitral Tribunal: The parties to arbitration can now directly approach the arbitral tribunal for seeking interim relief on the same grounds as were available to the parties under section 9 of the previous act. Further, the tribunal has now been granted the powers of a court while making interim awards in the proceedings before it.

iii) Arbitral tribunal not bound to rule in accordance with terms of the contract: The arbitral tribunal was previously bound to deliver an award in accordance with the terms of the agreement and was required to take into consideration the ‘usages of the trade applicable to the transaction’. Vide the Amendment the arbitral tribunal has been freed of the obligation to only rule in accordance with the terms of the agreement. The arbitral tribunal is only required to take the agreement into account while delivering its award and is free to deviate from the terms of the agreement if the circumstances so warrant.

iv) Act made applicable on International Commercial Arbitration with even seat outside India: Part I of the act has been made applicable for limited purpose (listed below) on International Commercial Arbitrations even in instances where the seat of the arbitration is outside India, however giving freedom to exclude the applicability the Act by entering into an agreement to this effect.

4.0 Salient Features of Competition Act, 2002 relating to Anti-competitive Practices i) The Preamble of the Competition Act, 2002, provides for the establishment of a Commission keeping in view of the economic development of the country to promote and sustain competition in markets; prevent practices having adverse effect on competition; protect consumer interest; and ensure freedom of trade carried on by participants in Indian markets. ii) The Act was amended by Competition (Amendment) Act, 2007 and again by Competition (Amendment Act), 2009. iii) In India, Competition Commission of India (“CCI”), formulated under the Competition Act is a quasi-judicial and regulatory body entrusted with the task enforcement of the Competition Act, 2002. Apart from specific functions under the Competition Act, 2002 the CCI also has extra-territorial jurisdiction, inquiry into anticompetitive conduct, sector-specific regulatory work, competition advocacy, power of appointment of professional and experts, and procedure for investigation (in terms of regulating its own procedure).

iii) Procedural and Jurisprudence simplified i) Arbitration to commence within 90 (ninety) days of interim relief: Where the court grants interim relief before the commencement of arbitration, the arbitration must commence within 90 (ninety) days from such order of interim relief. The court however has been given the authority to extend the period within which the arbitration must commence, if it deems such extension necessary. The Act prohibits courts from entertaining any application for interim relief once the arbitration has entered into reference, unless the court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.

iv) Seeking interim relief from courts [section 9] i) Seeking the assistance of the court in taking evidence [section 27] ii) Appealing against the order of a court where the court refuses to refer the parties to arbitration. [section 37(1) (a)] iii) Restricting the right to second appeal and preserving the right of parties to approach the Supreme Court in appeal. [section 37 (3)]

iv) Section 8 dealing with composition of Commission provides for a chairperson and not less than two and not more than six members which are to be appointed by Central Government. The CCI is vested with inquisitorial, investigative, regulatory, adjudicatory and also advisory jurisdiction. Vast powers have been given to the Commission and under Section 64, the Commission can frame regulations. v) The Competition Appellate Tribunal (COMPAT) is another body entrusted with the responsibility of hearing and disposing of appeals against any direction or decision or order of the CCI. It also adjudicates on compensation claims arising from the findings of the CCI or its own findings on appeals against the CCI orders and passes orders on the recovery of compensation. vi) Any person aggrieved by the order or decision of the CCI may prefer an appeal to the Competition Appellate Tribunal (‘COMPAT’) within 60 (sixty) days from the date of communication of such order or decision. The second and final appeal under Section 53T lies before the Supreme Court of India from the orders of the COMPAT within a period of 60 (sixty) days from the date of communication of the order by the COMPAT. vii) CCI may initiate an inquiry: i) On its own motion on the basis of information and knowledge in its possession, or ii) On receipt of any information, in such manner and accompanied by such fee as may be determined by regulations, from any person, consumer or their association or trade association, or iii) On receipt of a reference from the Central Government or a State Government or a statutory authority viii) The Act provides for Director General office as a separate investigative wing to assist the CCI. The DG looks into the complaints received from the CCI and submits all findings to it. DG is solely responsible for making enquiries, for examining documents and for making investigations into complaints. The DG is vested under the Act with powers of summoning of witnesses, examining them on oath, requiring the discovery and production of documents, receiving evidence on affidavits, issuing commissions for the examination of witnesses etc. ix) The Act in Section 49 (3) lays down the advocacy function of CCI and lays down that the CCI shall take suitable measures for the promotion of competition advocacy, creating awareness and imparting training about competition issues. Section 32 of the Act grants the CCI extra-territorial jurisdiction over anticompetitive conduct which has an appreciable adverse effect on competition within India. Any anticompetitive activity taking place outside India but having an appreciable adverse effect on competition within India shall be subject to the application of the Competition Act. x) Under s. 21 of the Act, any statutory authority can suo motto or on request of a party in the course of a proceeding before it can make a reference to CCI. CCI shall give its opinion within sixty days of receipt of such reference by such statutory authority. Under the provisions of the Act, the authority which made reference shall consider the opinion of the Commission and thereafter, give its findings recording reasons on the issues referred to in the said opinion by CCI. Section 21A in the same language provides for such reference by CCI to any statutory authority. xi) The key provisions of the Competition Act include:

i) Section 3 of the Competition Act, 2002 dealing with anti-competitive agreements; ii) Section 4 of the Competition Act, 2002 which discusses abuse of dominance;

iii) Section 5 and 6 of the Competition Act, 2002 dealing with the regulation of combinations. iv) The term ‘agreement’, has been defined broadly in the Competition Act. It extends to a mere ‘arrangement’, ‘understanding’ or ‘action in concert’, none of which need be in writing or enforceable by law.

v) Section 3(1) of the Competition Act lays down that no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. The Act prohibits an anti-competitive agreement and declares that such an agreement shall be void.

vi) Section 3(3) of the Competition Act deals with the horizontal agreements as it covers the agreements between entities engaged in identical or similar trade of goods or provision of services. It also includes cartels. The section covers:

vii) Agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise viii) Practice carried on by any association of enterprises or association of persons ix) Decision taken by any association of enterprises or association of persons x) Section 3(3) of the Competition Act enlists four broad classifications of horizontal agreements which are presumed to cause an appreciable adverse effect on competition (AAEC) in India.

1. Agreements regarding Prices 2. Agreements regarding Quantity/ Quality 3. Market Allocation 4. Bid Rigging These four horizontal agreements are not presumed to have appreciable adverse effect on competition and excluded from the provisions of Section 3(3) of the Competition Act, 2002 provided they are entered into by way of joint ventures and increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.

Cartels, by their very nature are secretive and thus it is difficult to find the direct evidence of their presence. The orders of the CCI clearly point that CCI relies on circumstantial evidence, both economic and conduct-based, to reach its decision on the existence of a cartel agreement.

The Act provides a definition for bid rigging and it covers agreements having effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding:

4.1 Collusive bidding: Agreement between firms to divide the market, set prices or limit production – involves, kickbacks and misrepresentation of independence i) Bid Rotation ii) Bid Suppression iii) Complementary Bidding iv) Subcontracting arrangements v) Market Allocation 4.2 The Act gives wide discretion to CCI to frame the remedies to overcome the anticompetitive situation:

i) Declare Anticompetitive Agreements Void ii) Impose Heavy Penalties 1. Penalty can be up to 10 (ten) percent of the average turnover for the last three preceding financial years upon each of such persons or enterprises which are parties to bid-rigging 2. Cartel, a penalty of up to three times of its profit for each year of the continuance of such agreement or 10 (ten) percent of its turnover for each year of the continuance of such agreement, whichever is higher 3. Order the parties to Cease & Desist 4. Modification of agreements 5. Remedy Damage to reputation 6. Fix Individual Liability 7. Grant Interim orders 8. Any other order as CCI deems fit

4.3 Who can file the information: Raising issues regarding anti-competitive behaviour for action by CCI under the act is called filing the information:

1. Any person, consumer or their association or trade association can file information before the Commission. 2. Central Govt. or a State Govt. or a statutory authority can also make a reference to the Commission for making an inquiry. 3. “Person” includes an individual, HUF, firm, company, local authority, cooperative or any artificial juridical person.

4.4 What are the issues on which information can be filed? 1. The information can be filed on the issues like anti-competitive agreements and abuse of dominant position or a combination. 2. Class of consumers.

1. Rupees 5000/ - (Five thousand only) in case of individual, or Hindu undivided family (HUF), or Non-Government Organisation (NGO), or Consumer Association, or Cooperative Society, or Trust, duly registered under the respective Acts,

2. Rupees 20,000/ -(twenty thousand only) in case of firms, companies having turnover in the preceding year upto Rupees one crore, and 3. Rupees 50,000/ - (fifty thousand only) in case not covered under clause

(a) or

(b) above.