Litigation Arbitration



Centre proposes to amend Consumer Protection (E-Commerce) Rules, 2020
Pursuant to recommendations by a Parliamentary panel led by Member of Parliament Pratap Singh Bajwa, certain amendments have been proposed to the said Rules, to achieve the following goals-

  1. Mandatory registration requirements for online retailers
  2. Greater scrutiny of flash sales
  3. Enhanced liability of e-commerce entities and
  4. Stronger grievance redressal mechanism.
  5. Prevention of abuse of dominant position

These proposed amendments aim to ensure more accountability for e-commerce entities that in recent times have been critisied for participating in anti-competitive practices.

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Delhi High Court refuses to stay CCI probe against Whatsapp’s Privacy Policy
The Delhi High Court has refused to stay the Competition Commission of India (CCI) notice asking Facebook and WhatsApp to furnish certain information in relation to a probe ordered by it into the instant messaging app’s new privacy policy.

A vacation bench of Justices Anup Jairam Bhambhani and Jasmeet Singh said an application seeking stay of further steps in the investigation already stands filed in which notice was issued to the Director General of CCI in which no interim relief was given by the division bench on May 6 and is listed for consideration on July 9. Considering “substantial overlap, in fact near identity,” between the prayers in both the applications, the court decided not to grant any stay on operation of the Jun 4 CCI notice, at this stage.

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Section 164 (2) and 167 (1) of the Companies Act, 2013- Not retrospective
The Kerala High Court, in the case of Zacharia Maramkandathil Mohan and Ors. v. Union of India on 16th June 2021, dismissed a batch of petitions the disqualification of around 250 directors of companies under Section 164 and 167 of the Companies Act, 2013 for failure of their respective companies to file Financial Statements/Annual Returns.

The Litigations were initiated contending that incidents leading to disqualifications under Section 164(2) of the Act are not directly attributable to Directors, and yet bore great consequences on them. Further, the petitioners argued that circumstances like Pandemic prolonged lockdowns and shutting down of internet facilities etc. could be reasons for failure Annual Returns/Financial Statements.

While upholding the Constitutionality of Sections 164 (2) and 167 (1) of the Companies Act, 2013, which deal with the disqualification of Directors from companies, the Kerala High Court recently made pertinent observations on the impact of these provisions.

“It is a settled proposition of law that no statute shall be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary implication. Directors of private Companies cannot be disqualified for appointment / re-appointment as mandated under Section 164(2) if any of such three consecutive defaults in filing Annual Returns/Financial Statements, is before the financial year 2014-’15. “

“The provisos inserted below Section 164(2) and Section 167(1)(a) of the Act, 2013 by the Companies (Amendment) Act, 2017 with effect from 07.05.2018 are constitutionally valid and the same being clarificatory in nature, would apply retrospectively. However, the words ‘in all the companies’ appearing in the proviso to Section 167(1)(a) will have only prospective operation.”

“the DIN of the petitioners allotted under Rule 10 of the Companies (Appointments and Qualifications of Directors) Rules, 2014 are not liable to be deactivated or cancelled solely for the reason that the petitioners stand disqualified for appointment / reappointment as Directors of Companies by operation of Section 164(2).”

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The problem of impersonation of sureties is rampant: Supreme Court issues notice to the Central Government and to the Unique Identification Authority of India (UIDAI) to find out mechanism for verification of the surety
The Supreme Court of India while deciding a Bail plea of an Advocate Rajesh Kumar Rathore in connection with the offence of instructing one to appear as fake surety in order to procure release of a vehicle by way of interim custody, expressed its concerns over the impersonation of sureties and issued a notice to the Unique Identification Authority of India (UIDAI) to find out the solution of verification by the judicial officers for its authentication as part of good governance.

The Supreme Court while directing the Petitioner Advocate to renew his request for bail after the framing of charges, noted that there is a surety module software prepared by National Informatics Center in the Case Information Module for the Sub-ordinate Courts in India. But there is still no mechanism with the courts to verify the genuineness of the surety.

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The Supreme Court ordered closure of all proceedings against two Italian Marines, who had killed two Indian fishermen off the coast of Kerala in 2012, mistaking them to be pirates.
The bench of Justices Indira Banerjee and M.R. Shah observed that the State of Kerala, the heirs of the deceased fishermen as well as the owner of the boat has agreed to accept the compensation amount offered by the Republic of Italy. Therefore, the bench directed that a compensation amount of Rs 10 crore (over and above the amount of ex-gratia amount already paid) which is lying in the Supreme Court registry to be transferred to the Kerala High Court. The bench also directed that Chief Justice of Kerala High Court should appoint a Judge for the proper disposal of money among the heirs of the deceased fishermen.

The order is passed to close over the controversy following the Union government’s stand accepting the award of Arbitration Tribunal under UNCLOS, which gave criminal jurisdiction over marines to Italy but made India entitled to compensation.

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Bombay High Court sets aside the arbitration award passed in favour of Deccan Chronicle Holdings Pvt. Ltd. 
In the year 2012, a franchise agreement was executed between the world’s richest cricket body Board of Cricket Control of India (“BCCI”) and the Deccan Chronicle Holdings Ltd. As a result of the contract, a team named as Deccan Chargers Hyderabad was added in the Indian Premier League.  Under the terms of the said contract, the owner of the Deccan Chargers was bound to release the salaries of their players in time. The owners were also barred to create any third-party charge over the franchise without the prior permission of the BCCI. The said contract also stipulated that in the event of filing of insolvency petition against the Deccan Chronicle Holdings Ltd., the BCCI would be entitled to terminate the contract.

BCCI discovered the contravention of abovementioned stipulations in the contract and issued a notice to Deccan Chronicle Holdings Ltd. for curing the defaults within 30 days of receipt of notice. As the Deccan Chronicle Holdings Ltd. failed to cure the same, therefore, BCCI terminated the contract with immediate effect.

Consequently, Deccan Chronicles Holding Ltd. initiated the arbitration proceedings allegedly wrongful termination of contract and damages. On the petition filed by the Deccan Chronicle Holdings Ltd., Bombay High Court appointed Justice (Retd.) C K Thakkar as the sole arbitrator. In July 2020, the sole arbitrator issued an award in favour of the Deccan Chronicle Holding Ltd. directing the BCCI to pay the Deccan Chronicle Holdings Ltd. a total compensation of INR 4,814.67 Crores plus 10% interest and legal fees. BCCI challenged the said award under the Arbitration and Conciliation Act, 1996.

The Bombay High Court exercising its jurisdiction set aside the award on the ground that the sole arbitrator proceeded without reason and ignored the vital evidence.

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