Tuesday, June 29, 2010

From the latest Frontline....

*My article on the making of the new mining law, the Draft Mines and Minerals (Development and Regulation) Bill, 2010, to replace the existing Act.

*Another article on the merits of the all India Bar Examination, draws from the posts on LAOT with due acknowledgments. One aspect of the controversy, which I wanted to discuss but didn't, is the correlation or the absence of correlation between an all India Bar Exam and the standards of legal practice. Most of us may assume that there is indeed a correlation, but I find the phrase 'standards of legal practice' too vague. Even the Law Commission has found it so in this Report with regard to the phrase "standards of legal education" and wanted it to be elaborated. Although the 2002 Law Commission report favoured both the all India examination and the training of advocates, I found the Commission's justification for the training much more convincing than the all India examination.

* Readers may find this article by S.Dorairaj on Justice K.Chandru of Madras High Court interesting.

Bhopal: Misguided Responses? - III

[Continued from Part II]

2. The 1996 Decision (contd.)

b) Varying Standards

If the Court's appreciation of facts is a matter of concern, its perception of its own role does not offer much relief. Clearly, proceedings under CrPC 227 and 482 do not entail an exhaustive appraisal of evidence. The question is, how deeply must the Court go into the substantive aspects of the case? CrPC 227 requires the court to consider "the record of the case and the documents submitted herewith" and hear either party, and then determine if "sufficient ground" exists for proceeding against the accused. Relying on Niranjan Singh Karam Singh v. Jitendra Bhimraj Bijja ((1990) 3 SCR 633), the Court (at Para 14) held that its role entails examining the material on record to see if the facts emerging therefrom, if taken at face value, disclose the existence of all the ingredients of the alleged offence (emphasis added). Even for this limited purpose the court may evaluate this material, as " . . . it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth . . .." Ultimately the Court did not sift the the evidence on record. However, in Para 20 it once again sought to characterise its mandate, which varied in terms from from what we saw earlier: "[T]he material on record must at least prima facie show that the accused is guilty of culpable homicide".

Thus we may discern within the judgment itself no less than three different resolutions to the question, deriving respectively from (a) CrPC 227 itself: "material (i.e. records and documents) and arguments disclosing sufficient ground"; (b) Niranjan Singh: "Facts prima facie disclosing all ingredients" ; and (c) Para 20 of Keshub Mahindra: "Material prima facie showing guilt". Niranjan Singh differs from the others in that it emphasises facts rather than material. Since at this stage the evidence has not been examined, "facts" must mean alleged facts, i.e. the facts stated in the prosecution's case, not established or substantiated facts. "Material" indicates indicate that which substantiates or establishes the facts. The question is, how does Niranjan Singh envisage the role played by material in S. 227.

The phrase "evaluate the material to find out if the facts emerging therefrom" (p. 642) is significant here. It seems to indicate that the judge must examine if the facts alleged in the prosecution's case do emerge from the material furnished. But would this not entail examining the substantive aspects of the material? Perhaps this can be avoided by contending the judge is required to ascertain only if the material relates prima facie to the facts. It must be mentioned that the judgment's inference itself derives from Union of India v. Prafulla Kumar Samal ((1979) 2 SCR 229). The four-part test proposed therein (at p. 234), which Niranjan Singh reproduces, is even more restrictive in its language. Its first aspect states, "[T]he Judge . . . has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. (emphasis added)" This reconciles easily with our conjecture: Prafulla Kumar effectively restricts the judge's perusal of the material to ascertaining if the material relates prima facie to the alleged facts. (Aside: the reasoning in Prafulla Kumar contains some further inferences with which I find myself unable to agree. However, as they play no role in the present matter, we may safely overlook them here.)

Let us now examine Keshub Mahindra in the light of the above. In Para 20, the Court states: "[T]he material on record must at least prima facie show that the accused is guilty of culpable homicide . . .." This begs the question what this concept of prima facie guilt means. For law students trained to construe guilt in terms of proven beyond reasonable doubt, it seems especially difficult to comprehend. Let use then use a classic philosophers' tactic here, and reverse the meanings of the terms involved. There exists a significant logical gap between "guilty" and "innocent". Scots law, for example, gives the option of a "not proven" verdict when the accused's guilt cannot be proved and yet suspicion upon her is too strong to merit an acquittal. Going by this logic, the inverse of "guilty" can only be "not proven" or "guilt not established", within which "innocent", "acquitted" and "not guilty" form specialised subsets. Hence the "material prima facie showing guilt" principle articulated in Para 20 of Keshub Mahindra inverts into "material not prima facie showing (or establishing) guilt".

This device assumes greater significance when we examine the issue of burden of proof. The wording of CrPC 227 expressly requires the judge to hear either side. Which means that the onus rests on neither side fully, but partially on both the prosecution and the defence. The question is, what is the extent to which the defence needs to establish its case? If we go by Keshub Mahindra, the manifest answer lies in the inversion we derived in the previous paragraph: the defence must establish that the material does not prima facie show or establish guilt. But this is difficult to reconcile with what we discussed earlier. Going by our discussion of CrPC 227, the defence has to prove the charges are groundless in the light of the material. Similarly, as per the rule emerging from Niranjan Singh and Prafulla Kumar, the burden on the defence is to establish that the alleged facts of the prosecution's case do not emerge from the material.

Clearly, proving the charges are groundless in the light of the material, or that the alleged facts do not emerge from the material, is much more difficult than establishing the material does not disclose prima facie guilt. It would appear, therefore, in construing CrPC 227 in the manner that it did, the Court in Keshub Mahindra served to relax somewhat the burden of proof on the defence. Given the extremely serious nature of the case (the judgment itself at Para 4 calls it "A grim tragedy of unprecedented nature"), I find myself unable to agree that this expedient was appropriate.

One may well argue that the consequences of all this is negligible - since the judgment based itself not on burden of proof but on what we saw was an incorrect appraisal of facts on record, the Court's lowering the defence's onus probandi amounts to obiter dicta. But obiter dicta means only that it will not be binding on lower courts in the future, something that does not concern us here. What we are trying to understand is how the Court responded to the "unprecedented nature" of the situation. It erred not once but twice - the first time in incorrectly construing the facts, and the second time in lowering the burden of proof when neither statutes nor precedents warranted it. And whatever be the reason behind it, the fact is that both errors tended to favour the accused, the perpetrators of the "grim tragedy". This is what makes Keshub Mahindra verdict both tragic and inexplicable.

The story does not end here, though. As yet we have looked at only one aspect of the issue, that is, the role of the judiciary. It transpires that the prosecution's handling of the case was not beyond reproach either. Both during the proceedings before the Court and subsequent to the verdict, it (the prosecution) had several options before it which it chose not to exercise. We shall examine these in the next part.

Saturday, June 26, 2010

Infusing Fairness into Bollywood

Some of you may be aware of a recent move by the Indian government to amend the copyright act to inter-alia redress a historical injustice and compensate Bollywood artists more justly for their creative endeavours. For some background on this issue, please see here.

Most artists (mainly music composers, lyricists and script writers) have been at the receiving end of unjust contracts from film producers and sound recording companies who've taken away all their rights for a lowly lumpsum.

The Indian Express carried an editorial of mine on this issue today. I reproduce it below:

Sold for a Song

“Bhagwaan teri duniyaa mein insaan nahin hai”

Shakeel Badayuni’s memorable words set to a melancholy tune by Ghulam Mohammed (the music director of Pakeezah) — holds a foreshadowing of Ghulamji’s fate.

He died in penury, despite his works minting lakhs (in those days) for the film producer who commercialised and marketed his art. He was not alone in this predicament; the wife of the legendary music director Khemchand Prakash was found begging on the streets of Mumbai soon after his unfortunate demise.

The word “inequity” could not have found a better situational fit than this — to this day, Bollywood artists (music composers, lyricists and scriptwriters, whose works are incorporated into films ) are forced to sign away entire copyrights to film producers for a measly lumpsum, even as their works reap crores at the box office.

Sample this clause, extracted from one of the Bollywood contracts:

“the Lyricist expressly acknowledges and agrees that the Producer shall be considered the first author and owner of the Lyrics... without condition.. of any kind, and free and clear of any and all claims for royalty... The Lyricist irrevocably and unconditionally waives all rights in respect of the Lyrics to which he is now or in the future entitled to under the Copyright Act.”

Not content with snatching away all economic rights to future returns, this legal parchment goes on to strip creative minds of their very right to claim authorship. Little wonder then that the government is now attempting to redress this injustice through a set of statutory amendments to the copyright act.

Should these amendments come into force, artists would be considered as authors/first owners of their works and would, notwithstanding any assignment, retain the right to receive royalties from the commercial exploitation of their works. Even someone with no knowledge of copyright basics is likely to agree that this sounds just and fair.

And yet, if the proceedings of a recent parliamentary committee tasked with examining the desirability of these amendments are anything to go by, one finds that film producers are up in arms. They have threatened to shut down Bollywood. More worryingly, it has been hinted that artists may not get credit for their works in future.

India’s proposal to amend the copyright act to ensure better returns to artists is not without international precedent. Not only do European countries such as Germany and Austria prohibit copyright assignments by authors, they also stipulate that, notwithstanding contractual arrangements to the contrary, authors are to be “equitably” remunerated for the commercial exploitation of their works by third parties.

However, laudable as the present set of Indian amendments is, they do not go far enough. First, the amendments provide for a right to royalty only when the underlying works (lyrics and music compositions) are exploited separately from the film or sound recording. In line with international practice, a right to remuneration ought to accrue on every exploitation of the underlying work, whether as part of the film or sound recording or separately.

This is best done by simply prohibiting any assignment or exclusive licensing by the authors of such works in favour of any third party, except to their legal heirs and collecting societies. Such a bar would ensure that the author continues to retain ownership of her works that have been incorporated into a movie and can claim continuing royalties for its exploitation.

Secondly, as it stands now, the right to royalty applies only to lyrics and musical compositions. It should extend to all underlying works that are incorporated into a film, including the script, which may be treated as literary/dramatic work.

Thirdly, the amendments aim to incentivise authors to join collecting societies by stipulating that authors can assign their “right to royalty” to a collecting society. Such societies are likely to strengthen the negotiating power of authors to ensure fair returns for the exploitation of their creative genius. However, there is no need for an author to assign away her rights to such a collecting society. A mere license to administer such rights in favour of the society would suffice.

In short, if the real mischief sought to be remedied by the government is the contractual exploitation of artists, it should simply prohibit them from assigning away any of their copyrights. The concept of a separate “right to royalty”, as crafted under the present set of amendments, is jurisprudentially and practically problematic and needs to be done away with.

Although such a bar on assignment is likely to impact the freedom of contract, it is imperative from the vantage point of social justice. An excellent parallel is the Minimum Wages Act, where even if a destitute labourer wishes, she cannot contract to perform the labour at rates below statutorily prescribed levels. In a similar manner, authors too should be divested of their right to sign away rights for a measly lump-sum amount. Only such a revolutionary change in our copyright regime can help infuse some “insaniyat” into an industry given to rampant exploitation.

Wednesday, June 23, 2010

Courage Craft and Contention: Human Rights and the Judicial Imagination (Transcript of public lectures by Justice A P Shah and Prof. Baxi

On the 12th of June, the Alternative Law Forum (ALF) celebrated its tenth anniversary with a public lecture by Justice A P Shah and Prof. Upendra Baxi on the topic Courage Craft and Contention: Human Rights and the Judicial Imagination.

We are happy to share the transcript of the lectures here.

Constitution-making in Nepal

Earlier on this blog, we covered Menaka Guruswamy's EPW article on the drafting of the Nepalese Constitution. In today's Hindu, Guruswamy's superb op-ed provides further insights into the constitution-making process in Nepal. The piece illuminates how law and politics interact in such processes, and indicates that much of the process is fundamentally about power-sharing and institutional design. The discussion on separation of powers is particularly interesting. Contemporary constitution-making processes have resolved the separation of powers dilemma in unexpected and innovative ways (See: Bruce Ackerman, New Separation of Powers, 113 Harvard Law Review 633 (2000); Cindy Skach, Newest Separation of Powers, 5 International Journal of Constitutional Law 93 (2007)). We will have to wait to know how Nepal contributes to that story.

Thursday, June 17, 2010

Bhopal: Misguided Responses? - II

[Continued from Part I]

2. The 1996 Decision

a) Facts, Laws, Reasons

In order to construe in its proper perspective the Supreme Court's decision in Keshub Mahindra v. State of MP ((1996) 6 SCC 129), perhaps a brief backgrounder to the legal provisions involved is necessary. Section 227 of the Code of Criminal Procedure (CrPC) 1973 empowers the court to examine at a preliminary stage whether sufficient grounds exist for proceeding against the accused. Section 482 affirms the inherent powers of the High Court to make any orders to inter alia prevent abuse of the juridical process or otherwise secure the ends of justice. The Court examined in detail the two provisions and associated case law, and concluded that these powers must be exercised in the rarest of cases.

Though the Court examined several substantive questions, arguably the single most important among them concerned the issue of culpable homicide. The definition of the offence is found in S. 299 of the Penal Code, of which the aspect of interest to us is contained in the following phrase "[C]auses death by doing an act . . . with the knowledge that he is likely by such act to cause death . . .." After examining the prosecution evidence, it set out its conclusions in Para 20:

It cannot be disputed that mere act of running a plant as per the permission granted by the authorities would not be a criminal act. Even assuming that it was a defective plant and it was dealing with a very toxic and hazardous substance like MIC the mere act of storing such a material by the accused in that No. 610 could not even prima facie suggest that the concerned accused thereby had knowledge that they were likely to cause death of human beings . . .. Similarly on the aforesaid material placed on record it could not be even prima facie suggested by the prosecution that any of the accused had a knowledge that by operating the plant on that fateful night whereat such dangerous and highly volatile substance like MIC was stored they had the knowledge that by this very act itself they were likely to cause death of any human being.

This may be reduced to the following points:
  1. Merely operating a legally sanctioned plant cannot amount to an offence under S. 299;
  2. Storing hazardous material within the plant premises cannot constitute an offence under S. 299;
  3. Even assuming the plant was defective, it cannot be concluded that the "accused thereby had knowledge that they were likely to cause death of human beings";
  4. Merely because the accused were aware that the plant contained hazardous material, it cannot be concluded that they knew operating the plant was likely to cause deaths.
These conclusions are disturbing for several reasons. To begin with, the Court had not addressed S. 299 in as much depth as it had examined the CrPC provisions. It did not even refer to any case law on the interpretation of the provision in itself; the only precedents it discussed which related to S. 299, such as Adam Ali Talugdar v. King-Emperor (AIR 1927 Cal 324), concerns its relationship with Ss. 34 and 35.

More significantly, it is respectfully submitted that the Court erred in overlooking certain logical connections. It is indisputable that running a plant with the knowledge that it uses hazardous chemicals will not per se establish criminal liability. Neither will running a defective plant establish liability under S. 299 specifically. But when one puts the two together, it yields a scenario that entails accused running the plant knowing it contains hazardous chemicals and that it is defective. As Pratap Bhanu Mehta points out, "[T]he issue was not liability for an 'accident'; it was liability for knowingly not acting upon risks that were known to exist."

Indeed, nowhere in its discussion on S. 299 does the Court examine the significance of the accused's awareness of safety deficiencies. Para 17 discusses the prosecution evidence. The Varadarajan Committee Report compiled in the aftermath of the disaster (Document D-164) highlights several safety lapses that ought to have been known to the accused. The Operational Safety Survey Report compiled by UCC experts (Document D-205), which also highlights some safety lacunae, had been circulated among the UCIL top management. This establishes strong reasons for believing that the accused was aware of the lacunae. The prosecution had in fact raised this issue, namely that the accused had not only continued to run the plant knowing about the safety deficiencies, but also that they had not undertaken any measures to rectify them. Even the judgment acknowledges this in Para 18. In the light of all this, it is not clear just why the Court,while discussing liability under S. 299, declined to take into account the accused's awareness of safety deficiencies.

This begs the question, is knowledge of these deficiencies so germane to the issue of liability? Let us take an example and treat driving a car as analogous to running a factory. Under normal circumstances I may drive it through a crowded road in perfect safety, as long I take all reasonable precautions. Suppose I meticulously take it to an authorised service centre, and the mechanic there examines the brakes in a negligent manner. If subsequently the brakes fail and I do cause a fatal accident driving in a crowded area, it surely cannot be said that I knew such an accident was likely. In fact, because I had taken all reasonable care, I am justified in believing that brake failure was a most unlikely event. Even if I had taken the car not to an authorised service centre but a competent roadside mechanic, I can reasonably claim that since this mechanic has a reputation for competence and that many others have been satisfied with his repairing skills, I may still not be accused of knowing an accident was a likely possibility.

But what happens if (a) I have not maintained the car properly, and (b) I am aware that the brakes need repairs urgently? If I still drive the car through a crowded road, the brakes fail, and I kill a pedestrian? As mentioned earlier, had I taken reasonable precautions I can justifiably claim I believed an accident was unlikely. It stands to reason, then, that if I had not taken such precautions I knew an accident was not unlikely. So does 'not unlikely' amount to 'likely'? Do two negatives make a positive here?

A simple answer: the question is irrelevant. At that point in the proceedings the Court was required to adjudicate on the merits of the case. Its jurisdiction was limited to ascertaining the existence of a prima facie case. Therefore all it needed to examine was whether 'not unlikely' establishes a prima facie case for 'likely'. We may qualify it still further: The question before the Court was whether 'not unlikely' so comprehensively fails to establish a prima facie case for 'likely' as to fall within the ambit of those 'rarest of the rare' cases that call for quashing prosecution. Unfortunately that is effectively what the Court did conclude, it is respectfully submitted.

[Continued in Part III]

Sujit Choudhry to speak on Naz at CPR

Sujit Choudhry, one of the leading experts on comparative constitutional law, will be presenting a paper on the Naz decision ("How To Do Comparative Constitutional Law in India: Naz Foundation, Same Sex Rights, and Dialogical Interpretation") at the Centre for Policy Research, New Delhi. The event will take place on Monday, 28 June 2010 from 11.30 to 1.00 P.M.

This is a wonderful occasion to understand Naz within the larger debates in comparative constitutional law. Sujit Choudhry holds the Scholl Chair and is Associate Dean (First Year Program). He is cross-appointed to the Department of Political Science, the School of Public Policy and Governance, and the Department of Health Management, Policy and Evaluation. He is a Senior Fellow of Massey College, and a Member of the University of Toronto Centre for Ethics and Joint Centre for Bioethics. Professor Choudhry holds law degrees from Oxford, Toronto, and Harvard, was a Rhodes Scholar, held the William E. Taylor Memorial Fellowship from the Social Sciences and Humanities Research Council of Canada (SSHRC), and a Frank Knox Memorial Fellowship from Harvard. He served as law clerk to Chief Justice Antonio Lamer of the Supreme Court of Canada, and was a Graduate Fellow at the Harvard University Center for Ethics and the Professions. In Fall 2008, he was a Global Visiting Professor of Law at the NYU School of Law.

Professor Choudhry's principal research and teaching interests are Constitutional Law and Theory, with a particular emphasis on comparative constitutional law. His articles have appeared in a variety of journals, including the International Journal of Constitutional Law, the Journal of Political Philosophy, the New England Journal of Medicine, Health Affairs, Social Science and Medicine, and the Canadian Journal of Law and Jurisprudence. Professor Choudhry is currently working on a book, Rethinking Comparative Constitutional Law, is the editor of Constitutional Design for Divided Societies: Integration or Accommodation (Oxford University Press), The Migration of Constitutional Ideas (Cambridge University Press) and Dilemmas of Solidarity: Rethinking Redistribution in the Canadian Federation (University of Toronto Press), sits on the Board of Editors of the International Journal of Constitutional Law, and is a member of the Editorial Board of the Constitutional Court Review (South Africa), and is on the Board of Advisers for the Cambridge Studies in Constitutional Law. Professor Choudhry's op-eds have appeared in the Globe and Mail, the Toronto Star, the Montreal Gazette, the Ottawa Citizen, and the Calgary Herald.

Wednesday, June 16, 2010

Prevention of Torture Bill

Readers who have been following the debate on the Prevention of Torture Bill with us will be interested in Arun Ferreira's recent article in the EPW, which, reflecting the concerns already highlighted on this blog, suggests that the Bill 'is nothing but a mere eyewash. The proposed legislation is not only a climbdown from the standards set by the UN Convention against Torture, but, in many ways, is in direct opposition to the basic norm of adherence to at least the minimum standards set down with respect to the right to freedom from torture.'

Tuesday, June 15, 2010

Frontline's cover on Bhopal verdict

Frontline has covered the verdict convicting & sentencing the 8 accused in the 1984 Bhopal disaster case comprehensively. Apart from my articles and interview with Himanshu Rajan Sharma, readers may be interested in the rare article by Upendra Baxi, who calls it Fourth Catastrophe. The entire cover story can be downloaded and read here.

Readers may also be interested in reading my article (pages 34-36)on the Central Information Commission's decision to appeal against a Delhi High Court's judgment questioning its powers, and my review of Prof.M.P.Jain's Indian Constitutional Law (6th revised edition)and Mithi Mukherjee's India in the Shadows of Empire.

Sunday, June 13, 2010

The Enigma of Foreign Commercial Arbitration and India

We bring you a guest post from two dynamic legal academics, Prabhash Ranjan and Daniel Mathew. Both are assistant professors at NUJS Kolkata, with Prabhash being on temporary leave to finish his PhD at King's College, London.

Ranjan and Mathew argue that moves to amend the Indian Arbitration Act to facilitate enforcement of foreign commercial arbitral awards fail to take into account the dynamics of one species of international commercial arbitration (ICA), namely investment related disputes. Without much ado, I give you their cogently argued piece below:

The Enigma of Foreign Commercial Arbitration and India

By Prabhash Ranjan and Daniel Mathew


Mr Veraapa Moily, after taking charge as law minister in UPA –II, has inarguably raised the otherwise ‘unexciting’ profile of law ministry to a ministry that has an enormous role to play in India’s development. His zeal to change the face of legal system is commendable – whether it is checking corruption in judiciary or reforming legal education. One of the high priority items on Mr Moily’s industrious reform-list is to amend the Indian arbitration act of 1996. Recently, the law ministry issued a consultation paper that talked about the changes that should be made in the Arbitration and Conciliation Act of 1996 (Indian arbitration law) in order to make arbitration an effective alternative dispute resolution system.

One of the key changes proposed is related to international commercial arbitration (ICA) aimed at making enforcement of foreign arbitral awards in India easier. This proposed change has been extolled by corporate law firms and business, alike, because it will allow foreign investors to easily enforce ICA awards in India. Arguably, this will play a role in making India an attractive destination for foreign capital. However, the exhilaration over India becoming an ICA-friendly country, due to this amendment, has missed a key point related to investment treaty arbitration. ICA, according to the current Indian arbitration law is, understood as a system of dispute resolution where at least one party is foreign and where commercial legal disputes are resolved through arbitration.

While it is true that investment treaty arbitration is also a type of ICA under Indian arbitration law since it involves a foreign party aiming to settle a commercial dispute; there is a fundamental difference. Generally ICA involves pure commercial contractual disputes between two private parties or between a private party and state whereas investment treaty arbitration involves commercial disputes between a foreign investor (private party) and a sovereign state where the foreign investor challenges state’s sovereign function as breaching the bilateral investment treaty (BIT) - international treaties signed bilaterally by countries to protect investments of each other. Thus, these disputes are not just commercial in nature – they involve adjudication over country’s sovereign functions by an international arbitral tribunal.

There are numerous cases where such foreign arbitrations have found country’s sovereign functions breaching the BIT, consequently resulting in countries being ordered to pay millions of dollars as damages to foreign investors. For example, in a dispute between a US investor and Argentina, Argentina was ordered to pay US $133.2 million in compensation by an international arbitration tribunal that found Argentina’s sovereign monetary policy violating the US-Argentina BIT. India has already signed more than 70 BITs and has plans to sign many more. Thus, the possibility of such investor-state disputes arising, in the future, is real. In this light, arguably, the euphoria that proposed amendment to the arbitration act will make enforcement of foreign arbitral awards easier, in India, is partly misplaced.

In order to understand, why we argue that this jubilation is partly misplaced, it is important for the reader to first understand what the problem is in the arbitration law of India on foreign arbitral awards that Mr Moily wishes to correct. Indian arbitration law allows challenge to an arbitral award (both domestic and foreign) on grounds of ‘public policy’. Challenge could be construed either as setting aside an arbitral award or refusing its enforcement on grounds that doing so would be contrary to ‘public policy’. Though rather difficult to define precisely, usage of public policy as a ground to challenge an arbitral award remains ubiquitous.

The Supreme Court gave a clear enunciation of what was meant by ‘public policy’ of India in 1994 in a case called Renusagar Power Co v. General Electric Co. The court concluded that when resisting enforcement of foreign arbitral awards in India ‘public policy’ of India had to be accorded a restricted view. The court restricted ‘public policy’ to the following three components - a) fundamental policy of Indian law; or b) interests of India, or c) justice or morality.

In 2003, almost a decade later, the apex court, once again dealing with ‘public policy’ in ONGC v. Saw Pipes, added to the ambit of this list another ground, that of patent illegality. Patent illegality was defined as an illegality that went to the root of the matter and was not of trivial nature. An award was also patently illegal if it was so unfair and unjust so as to shock the conscious of the court. Since the context in this case was challenge to a domestic arbitral award, one could draw a critical distinction. Patent illegality as a ground was to apply only in cases of domestic award and not to foreign arbitral awards.

These two views, Renusagar and Saw Pipes, came to be known as ‘narrow’ and ‘broad’ view of ‘public policy’. Thus for setting aside of domestic arbitral award there was one understanding of public policy (broad meaning), and a different one (narrow meaning) for resisting enforcement of foreign arbitral award. An extremely interesting twist to the whole scenario was given in a decision of the apex court in Venture Global Engineering v. Satyam Computers in 2008. Drawing inspiration from another landmark case (Bhatia International v. Bulk Trading decided in 2002), the court, in Venture Global, concluded that the broad view of ‘public policy’ could be restored to for setting aside even a foreign arbitral award.

Thus, now even a foreign arbitral award has to meet the challenge of compliance with substantive provisions of Indian law (patent illegality) apart from the other three grounds given in Renusagar. Since Venture Global, it has been argued that enforcement of foreign arbitral awards will become very difficult in India. To remedy the situation, the new consultation paper of the law ministry has discussed an amendment to the Indian Arbitration Act whereby ‘public policy’ would be statutorily limited to the ‘narrow view’ mentioned above.

This however does not really solve the problem with regard to foreign arbitral awards issued under investment treaty arbitration, since within the ‘narrow meaning’ of public policy remains the requirement of ‘interests of India’. In cases where an investment treaty arbitral award rules against India’s sovereign function requiring the payment of millions of dollars as damages to the foreign investor, the Indian government can challenge such awards as being against ‘interests of India’ and thus against ‘public policy’. Since this term has unfortunately not been defined yet and worse not qualified, it will result in probable situations where courts will read India’s sovereign, economic and financial interests into ‘public policy’. Thus, the enigma on enforcement of those foreign commercial arbitral awards that arise out of investment treaty arbitration continues, even with the proposed amendment.

This can be sorted only if Indian lawyers and policy makers start recognising that investment treaty arbitration is a different type of ICA requiring different type of legislative and institutional response. It is important to find a statutory solution to enforcement of investment treaty arbitration awards before such arbitral disputes arise rather than putting the cart before the horse.

Friday, June 11, 2010

Bhopal: Misguided Responses? - I

1. Introduction

Most controversies involving the law have shown some broad conformance to certain broad parameters. Take for instance the Binayak Sen issue. Here the stance of civil society was clear, even in strictly legal terms - the law of the land manifestly did not justify Sen's prolonged incarceration. Whereas the state's stance was as legally flimsy as it was morally reprehensible.

The recent Bhopal judgment, however, reveals a startling reversal of this pattern. On the one hand, a dispassionate scrutiny indicates that the trial court did all that it could given its limited options. And on the other hand, the response of civil society is confusing to say the least. Thus far, the grievances articulated include punishments not being stringent enough, Warren Anderson getting away free and easy, in general the Bhopal trial court delivering an unduly lenient verdict. To all this, I have three questions: Are we clear about what we want? Is this the right way of going about it? And lastly, are we sure that the victims will benefit from it?

Take the second question. The key to this lies in distinguishing between answers and solutions. People tend to conflate the two; more significantly, in doing so they locate both in the present. This oversimplifies the matter. Indeed, the solutions, or the means to provide to victims whatever succour is possible, lie in the present. But in order to frame appropriate solutions, we must first seek the answers to questions still unresolved. And to my mind, these solutions lie in the past. Questions about why Anderson has not been extradited need to be balanced with questions how he left the country in the first place. The truth be told, some attention is now being paid to this question. Former Chief Minister of MP Arjun Singh is reportedly under fire for arranging Anderson's departure to Delhi in the official state aircraft. But the bigger question seems to have evaded much attention. How is that that Anderson, who had been arrested at Bhopal and released on bail, was able to fly out of India with impunity? The possibility exists that his departure from Bhopal was due to concerns for his own safety. It is on record that Moti Singh, who was then Collector of Bhopal, told Anderson he was not welcome in Bhopal and that permitting him to visit the affected areas was simply out of the question. But regardless of whether this is actually true or not, the question remains why the immigration officials at Delhi airport were not alerted Anderson might try and jump bail, to put it crudely. Indeed it is this fact more than his departure from Bhopal that smacks of collusion in high places.

A bigger instance concerns the role of the judiciary. After the trial court's judgment came out, both victims and the media were quick to blame the prosecution, investigative agencies, and even the court for failing to adequately punish the accused. But as former Supreme Court Chief Justice A M Ahmadi pointed out, this criticism is misplaced. The court had awarded the accused the maximum sentence for the crimes they had been charged with; it simply did not have the option of imposing punishment of greater magnitude. As is well known, the state had sought to prosecute the accused under S. 304 of the Indian Penal Code, which carries a maximum sentence of ten years for culpable homicide committed without intention but with sufficient knowledge. In Keshub Mahindra v. State of Madhya Pradesh (((1996) 6 SCC 129), the Supreme Court used its powers under Ss. 227 and 482 of the Code of Criminal Procedure 1973, to quash prosecution under S. 304 and other penal provisions. It permitted prosecution under only S. 304A (Causing Death by Negligence), which carries a maximum punishment of only two years' imprisonment with or without fine.

Justice Ahmadi was himself a member of the bench (though the judgment was delivered by Majmudar, J). In the rediff.com article mentioned earlier, he justified the decision. On the other hand, former Solicitor General Altaf Ahmed, who had represented CBI in that case, disagrees with this. He expressed his disappointment with the 1996 judgment, claiming there was "ample material" presented before the Court was ample to justify a charge of homicide. Clearly then, a deeper analysis of the judgment becomes essential at this point.

[Continued in Part II]

Wednesday, June 09, 2010

Raajneeti: cartoon or mirror?

For those of you who endured the three-hour-plus gore fest that is 'Raajneeti', there are deeper insights than the film's hackneyed ending allows for. In this opinion piece in today's The Indian Express I argue that the film holds a mirror to our political culture today. Besides, its portrayal of an explicitely Dalit anti-hero is rare for Bollywood. The piece ran as a counter to this one by Express film writer Shubhra Gupta, who argues that the film caricatures politics, and doesn't compare to the really good political films that have come out of Bollywood. The piece is also the last one I have written as an employee of The Express. I hope to be able to now devote a lot more time to this blog.

Tuesday, June 08, 2010

PRS MP Legislative Assistant Program

I think this would be a great opportunity for a recent law graduate, and perhaps a nice alternative to clerking for the more politically minded:

PRS Legislative Research is seeking exceptional, highly-motivated young Indian citizens for its Legislative Assistants for MPs Programme. The Legislative Assistants will be assisting MPs with research to help them fulfill their legislative and parliamentary duties for the duration of the 10-month programme.

For details of the programme description, compensation and application process, please see the PRS website . Application deadline is June 16, 2010.

Saturday, June 05, 2010

ALF Public discussion between Professor Baxi and Justice A.P. Shah

The Alternative Law Forum is marking the tenth anniversary of its founding by organising a public discussion between Professor Upendra Baxi and Justice A.P. Shah, former Chief Justice of the Delhi High Court. The event will be held on June 12th at the United Theological College, Bangalore. The title of the discussion, which pays homage to Professor Baxi's classic work on the Indian Supreme Court, is "Courage, Craft and Contention: Human Rights and the Judicial Imagination". Further details about the event are available here.

For those of us who will be unable to attend the discussion physically, we hope to work with the organisers to post a transcript of the discussion. If you happen to be in Bangalore, this is a not-to-be-missed event.

Thursday, June 03, 2010

From the latest Frontline....

*Bringing clarity on reservations: Why I think the recent judgments in the cases of Union of India v. Ramesh Ram and Dr.Krishnamurthy v. Union of India bring clarity to the affirmative action debate.
* Examining the new CJI's views on PIL admission in the context of the recent cases.