INDEMNITY UNDER OLD AND NEW LABOUR LAW - BAHRAIN

1976 v/s 2012

 LABOUR LAW 23/1976

 Article 111

In respect of categories of workers to whom the provisions of the Social Insurance Law are not applicable –

Where Employer Terminates:

Leaving Indemnity will be calculated: fifteen days' wages for each year of the first three years of service and of one month's wages for each year of service thereafter. Such worker shall be entitled to payment of leaving indemnity upon a quantum meruit (what he has earned) in proportion to the period of his service completed within a year.

Where Worker Terminates:

Leaving Indemnity will be calculated: one third of the leaving indemnity if the period of his service is not less than three consecutive years and not more than five years. Full leaving indemnity if he resigns after the completion of five years of service, provided that such termination of a contract of service by the worker is not used by the worker as a means to avoid dismissal from employment in accordance with the provisions of Article 113 and provided also, that he shall notify the employer concerned of his intention of leave his employment in accordance with the provisions of Article 107 of this Law; the worker may, in lieu of such notice, pay to the employer an amount equivalent of the wages payable for the required period of notice.

(Article 113, allows termination without notice, compensation and indemnity where the employer dismisses the worker for: false identity or submitted false certificates or testimonials, caused serious material damage to the employer, despite a written warning fails to comply with written safety instructions, absents himself without reasonable cause for more than twenty days in one year or for more than ten consecutive days, fails to perform his essential duties, discloses the secrets of the establishment, sentenced for a crime or a misdemeanor involving dishonour, dishonesty or immorality, found during the hours of work to be under the influence of alcohol or drugs, assaults his employer or responsible representative or supervisors during the course of employment)

 

LABOUR LAW 36/2012

Article (116)

A worker who is not subject to the provisions of the Social Insurance Law shall be entitled upon the termination of his employment to a leaving indemnity at the rate of half month’s wage for each of the first three years of employment and one month’s wage for each of the following years in service. A worker shall be entitled to receive his leaving indemnity for fractions of the year in proportion to the period spent in the employer’s service.

The calculation of leaving indemnity under the New Labour Law would be the same irrespective of who terminated or why the employment relationship was terminated.

LIQUIDATION PROCEDURE - (Voluntary Liquidation) (Under Bahrain Commercial Law)

A company incorporated under the laws of the Kingdom of Bahrain shall be liquidated in accordance to the provisions of the Companies Commercial Law 21 of 2001 (the “Law”).

A company shall be dissolved / wound up for reasons stated under the Law thereafter the company shall be deemed to be in liquidation. Where the dissolution is voluntary, the liquidation of the company shall be in accordance to the liquidation procedure provided in the company’s memorandum of association; in absence of any such provisions the guidelines laid down in Law shall be followed.

During liquidation the company shall maintain its corporate entity to the extent required by the liquidation activities, however the phrase “under liquidation” shall be added to the name of the company till the completion of the liquidation procedure and the powers of the company shall thereafter vest with the appointed liquidator. Liquidation of the company shall require:

1. A resolution by an Extra-ordinary General Meeting approving the liquidation of the company. The resolution shall state:

(a) The reason for liquidation.

(b) The unanimous decision of all the members to liquidate the company.

 (c) The appointment of one or more liquidators (by simple majority), who can be director or a non-director of the company. Where there is more than one liquidator, the acts of the liquidators shall not be valid unless taken through a unanimous decision.

(d) The remuneration of the liquidator.

(e) The term of the liquidation process, within which the liquidation procedure shall be completed. This term may be extended upon submission of a report by the liquidator to the company’s management and the company through a resolution agrees to extend the same.

2. This resolution needs to be registered at the Company Registry, who shall thereon publish the same in a local newspaper. The Liquidator shall be responsible for following up with the Company Registry for the entry procedure. The appointment (or dismissal and reappointment) of the liquidator or the liquidation procedure shall not be effective against third parties unless published in a local newspaper.

3. Upon appointment the liquidator shall carry out an inventory of the assets and liabilities of the company, in agreement with the company’s directors. A detailed inventory and the balance sheet shall be prepared and signed by the liquidator, managers and the board of directors of the company.

4. The board of directors shall thereon submit the accounts of the company to the liquidator and shall also handover the books, properties and other documents of the company. The liquidator being the agent of the company shall be responsible for acting to safeguard the interest of the company.

5. The Liquidator will maintain a separate register to record the liquidation acts. Particularly the liquidator shall be responsible for:

(a) Representing the company against all third parties.

(b) Selling the companies movable and immovable properties (if required), but not without the prior consent of the company directors or the ordinary general assembly.

(c) Paying company’s dues and debts.

(d) The liquidator shall not initiate any new activities unless the same is necessary for completion of the previous activities.

6. All amounts received by the liquidator shall be deposited in the company’s accounts.

7. The liquidator shall notify (though registered latter or daily newspaper publication) all the creditors of the company of the commencement of the liquidation procedure and invite them to submit their claims.

8. Without prejudice to the rights of the privileged creditors the liquidator shall start paying company’s debts. Debts arising from the liquidation process shall have priority in payment from the company’s funds over the other debts.

9. The liquidator shall provide a liquidation report to the company’s management in every six months. The directors of the company reserve the right to initiate court proceedings against the liquidator for his malafide acts or where the liquidator fails to provide explanation.

10. The liquidator shall enter the completion of the liquidation in the Commercial Registry, who shall thereon publish it in the local newspaper so as to be effective against all third parties.

11. On completion of the liquidation process the liquidator shall apply for striking of the company’s name from the Commercial Registry.

12. The company’s books and register shall be maintained for a period of 10 years from the date of striking off the name of the company from the Commercial Registry.

 

LEGAL STRUCTURE – BAHRAIN

INTRODUCTION

Bahrain gained full independence from Britain in 1971, adopted a constitution in 1973, and substantially revised it in 2002. The al-Khalifa family has ruled Bahrain since 1783. The system of governance is democratic.

Bahrain is a constitutional monarchy, ruled by a King. The constitution states that the succession of the office of King automatically passes from ruler to son, unless the King appoints before his death one of his other Heirs to exercise his powers. The current King is Hamad Ibn Isa Al Khalifa.

The King appoints a prime minister and a cabinet (the Council of Ministers). The constitution also provides for a bicameral legislature, the National Assembly. The two houses of the National Assembly are

a) the Consultative Council: whose 40 members are appointed by the King; and

 

b) the Chamber of Deputies: whose 40 members are elected by direct popular vote by citizens 20 years of age or older.

Both appointed and elected legislators serve four-year terms. All legislation approved by the National Assembly must be ratified by the King in order to become law. The King is the protector of the legality of the government and the supremacy of law. He can propose constitutional amendments and initiates laws.

 

A bill is considered to have been ratified and promulgated by the King if a period of six months from the date of its submission from the Advisory Council and the Parliament has elapsed without the King returning it to any of the those councils for reconsideration. If the Parliament or the Advisory Council reconfirms the bill by a majority vote of two thirds of its members, the King shall ratify and promulgate the bill within one month from the date of reconfirmation.

LEGAL SYSTEM

Bahrain’s legal system draws its existence from:

a) Islamic religious law (the Sharia),
b) tribal law,
c) Egyptian codes
d) English common law, and

e) other sources like customs and in absence of customs the tenets of natural justice and good conscious are applied.
 
The court system consists of:

a) Sharia Law Courts
b) Military Courts
c) Constitutional Courts
d) Civil Law Courts

The administration of justice judges shall not be subject to any authority. No interference whatsoever shall be allowed in the conduct of justice. The law shall guarantee the independence of the judiciary and shall state the guarantees and provisions relating to the judges.

SHARIA COURTS

The personal status law is still not codified. The Shari’a law courts are divided into Sunni and Shi’i sections, with jurisdiction over disputes relating to Muslim personal status (except disputes over estates that fall under the jurisdiction of the competent civil courts, though those courts are obliged to divide estates in accordance with Islamic law).

There are three degrees of the Shari’a Courts:

a) Junior Shari’a Courts that hear personal status cases in the first instance,
b) Senior Shari’a Courts and
c) High Shari’a Court of Appeal having ultimate appellate jurisdiction.

The Shari’a Courts apply classical Islamic personal status law to Muslims without reference to state law. Each High Shari’a Court consists of a president and a number of judges; sittings are validly held in the presence of two judges, one of whom must be the President of the Court or his deputy. The Court of Cassation also has exclusive jurisdiction to decide cases filed simultaneously in Shari’a Courts or to settle any dispute arising from conflicting judgments between such courts.

MILITARY COURTS

The Military Courts have jurisdiction restricted to military crimes committed by members of the armed and security forces and shall not extend to others except during the time of martial law and within the limits determined by the law.

CONSTITUTIONAL COURT

The Constitutional Court, established pursuant to the Constitution, examines the conformity of the laws with the constitutional provisions. This Court is composed of a President and six members appointed by the King according to the recommendation of the Supreme Council of Judiciary (SCJ).

The decision declaring a law unconstitutional shall be retrospective and have immediate effect unless the Court specifies a date starting from which such decision shall have effect.

 

CIVIL COURTS

The Civil Courts have the power to settle commercial, civil and criminal cases, as well as all other cases related to the personal status law (family law) of non-Muslims. The personal status law is still not codified. The Supreme Court of Appeal, or the Court of Cassation, was created in 1989 and is the final Court of Appeal for commercial, civil and criminal cases. Recourse to Appeal against decisions with regard to the personal status is allowed before this Court for non-Muslims.

They are made of three levels:

a) Court of First Instance
b) Court of Appeal
c) Court of Cassation (Mahqamat At Tameez)

The concept of binding precedents in Bahrain is limited to the judgments of the Court of Cassation and Constitutional Court.

The Court Structure:

The Junior Court

The Junior Court has jurisdiction to hear both civil and commercial cases of claims involving small sums, and cases involving certain real property rights. Junior Court cases may be appealed to the High Court.

The High Court

The High Court has jurisdiction to hear all civil and commercial cases not falling within the jurisdiction of the Junior Court. The High Court is also authorized to hear cases concerning the personal status of non-Muslims and cases which are placed under its jurisdiction by law. The High Court also maintains jurisdiction over non-Bahraini citizens, including companies that are resident or domiciled in Bahrain except in cases involving real property situated outside Bahrain. The High Court has jurisdiction to hear appeals from the Junior Court and the Court of Execution. The High Court has exclusive jurisdiction over appeals of judgments from the Summary Actions Court. Judicial precedent followed by the High Court is set by decisions of the High Court of Appeal and the High Court of Justice sitting as a court of appeal.

The High Court of Appeal

The High Court of Appeal sits as a court of appeal regarding all appeals made from the High Court.

The Execution Court

The Execution Court has jurisdiction to execute all final judgments made by the Junior Court, the High Court and the High Court of Appeal.

The Summary Action Court

The Summary Action Court hears claims that may be adversely affected by the lapse of time. Hearings are usually set to take place not less than twenty-four hours after the filing of an application for a summary trial, although, in cases of extreme urgency, this period can be reduced.
 

THE SUPREME COUNCIL OF THE JUDICIARY

 

In September 2000, the Supreme Council of the Judiciary SCJ was created, and has a main mission of supervising the Judiciary. According to the Constitution of 2002, the King is the Chair of the SCJ. The President of the Court of Cassation as well as Judges from the Highest Courts of Appeal, applying the civil law and the Shari’a law, constitute the members of the SCJ.

 

BCDR – DISPUTE RESOLUTION

 

On June 2009 the Bahrain Chamber for Resolution of Economic, Financial and Investments Dispute (BCDR) in partnership with the American Arbitration Association (AAA) was established, to look into banking disputes above BHD500,000 (USD1,325,000). Furthermore, investors can bring a direct claim before the BCDR where the civil courts’ procedures will apply, or both parties can agree on arbitration whereby a panel within the BCDR will review the disputes.


Family of Savita Halappanavar blames Irish law, medical negligence for her death

Observing that the tragic death of Indian dentist illustrates a gap in Irish law, rights group Amnesty asked Ireland to ensure that its domestic policy on access to abortion is in line with international human rights law. It has written to Irish minister for health James Reilly over the issue expressing its concern. 

"International human rights law is clear about the right of a woman to access a safe and legal abortion where her life is at risk," said Colm O'Gorman, Executive Director of Amnesty International in Ireland. Noting this right has already been established as a Constitutional principle by the Irish Supreme Court, the body expressed concern about lack of clarity on the issue.

Savita Halappanavar, 31 an Indian dentist was admitted to University Hospital Galway in western Ireland last month, died of septicaemia a week after miscarrying 17 weeks into her pregnancy as the hospital authorities citing religious grounds refused abortion. The family of the deceased have accused the hospital staff of negligence.

Despite the repeated requests for termination, the same were rejected because of the presence of a foetal heartbeat. Halappanavar was reportedly told that Ireland being a Catholic country, her request for an abortion would not be entertained.

Father of the deceased, Andalappa Yalagi, blamed the archaic laws and the rigidity of the medical practitioners for his daugther's death. "There are two reasons: one, the ban on abortion (under) Ireland's law, and secondly, the negligence of the doctors. I can say these two factors have taken place," Yalagi said.

Her mother, A. Mahadevi, said the authorities should have been sensitive to the situation and should have considered saving her life above everything else. "It is a very important issue. The authorities there should have considered the fact that we follow the Hindu faith and they should have taken a decision after taking everything into perspective. Now it is time for our foreign ministry to take this matter up with the government of Ireland," Mahadevi said.

At least 2,000 people gathered outside Ireland's parliament for a candle-lit vigil to demand that the government legislate to close a legal loophole that leaves it unclear when the threat to the life of a pregnant woman provides legal justification for an abortion.

After several challenges, the European Court of Human Rights ruled in 2010 that Ireland Prime Minister Enda Kenny, whose party has been criticised for delays in introducing legislation to define in what circumstances abortion should be allowed, offered condolences to the woman's family, but said he could not comment further until an investigation into the death.

Abortion remains an extremely divisive issue in Ireland, an overwhelmingly Roman Catholic country which has some of the world's most restrictive laws on medical terminations. In the absence of legislation, Irish women are forced to go abroad to terminate their pregnancies, an option not open to seriously ill mothers.

The report of the UN's Review of Ireland's human rights record in October last year contains repeated calls from UN member states to bring Ireland's domestic law in line with international human rights obligations and at the very least regulate access to life-saving abortions.

In 2011 the UN Committee Against Torture urged Ireland to clarify the scope of legal abortion through statutory law.

Intellectual Property battle won after 15 years

After 15 years the Delhi High Court finally decided that the homoeopathic firm SBL Limited infringed the trademark by coming up with its own preparation named as Liv-T. SBL Ltd is now restrained from using the mark LIV as part of its trade mark LIV-T while dealing with the medicinal preparations.

The court while setting aside its single judge bench judgement granted six months to SBL Ltd to “liquidate” existing stock of Liv-T.

According to the court presence of mark ‘LIV’ which is an essential feature of the mark Liv.52 shall be considered for the purposes of comparison with that of LIV-T. During the hearing, SBL Limited had said the word ‘LIV’ is “generic and common to the trade as medicines in question manufactured and marketed by both parties are meant for treatment of liver.

IT Act should not be used to throttle dissent: Facebook arrests in India

IT Act should not be used to throttle dissent: Facebook arrests in India

The two girls--were sent to 14-day judicial custody by a court later granted bail within hours after they furnished personal bonds. The arrests were made after one of the girls posted comments on social networking site opposing the shutdown in Mumbai, while the other supported by liking the comment on facebook.

She allegedly said that one should not observe bandh for Thackeray's funeral. "We should remember Bhagat Singh and Sukhdev," the post said.

Telecom and IT Minister Kapil Sibal said he was "deeply saddened" by the arrest and said the IT Act should not be used to "throttle dissent".

Flowing from this, a law student has filed a PIL in Supreme Court of India, asking for striking out Section 66 A of the act (under which these arrests were made). The Supreme Court has praised the student and said that it will take up the matter on priority.

COURT SUMMONS FOR DEFAMATION

Delhi court summoned to Senior Congress leader Digvijay Singh to face trial under ections 499 and 500 of the Indian Penal Code, in a criminal Defamation case  lodged against him by BJP President Nitin Gadkari after recording statements of Gadkari and BJP National Secretary Bhupinder Yadav, also a Rajya Sabha MP. Singh accused Gadkari of having business links with MP Ajay Sancheti who allegedly pocketed a huge sum in the coal block allocation.

Gadkari, in his statement recorded in the court, had denied having any business ties with Sancheti and had said Singh had levied “totally false and defamatory” allegations against him to “give the impression that I have been responsible for allocation of coal mines” to Sancheti.

In his complaint, Gadkari has said the Congress-led UPA government is facing a lot of heat on account of its irregularities as brought out by the Comptroller and Auditor General of India (CAG) in coal blocks allocation and accused Singh of making baseless allegations against him to divert attention from the issue.

Gadkari’s counsel contended that Singh’s statement had the “clear intention to malign the reputation of the complainant.”

The court had also recorded the statement of an authorised representative of a national English daily in which the alleged defamatory statement of Singh was published.

It might turn out to be an opportunity to measure public discourse and criticism against the defamatory law in India. Defamation is a legal wrong emerging from an act of injuring a person’s reputation and sullying their character without lawful justification or excuse.

Libel and slander, both are creatures of English common law, but they are not treated as distinct from each other in Indian jurisprudence. India offers remedy both under civil and criminal law. The civil law for defamation is not codified as legislation, however it is a criminal offence under section 499, Indian Penal Code. It is up to the accused to substantiate that they are protected by one of the 10 exceptions listed under Section 499, exceptions include stating a true fact against a person for public good; expressing an opinion in good faith about an act of a public servant; or even making imputations on the character of another provided it’s in good faith and for the public good. The Indian Constitution protects freedom of speech as a facet of fundamental rights under Article 19, subject to reasonable restrictions, including decency and defamation.

India to open gates for FDI

 As per the current regulatory regime, retail trading (except under single-brand product retailing — FDI up to 51 per cent, under the Government route). India being a signatory to World Trade Organisation’s General Agreement on Trade in Services, had to open up the retail trade sector to foreign investment.

In 1997, FDI in wholesale, with 100 per cent ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51 per cent investment in a single brand retail outlet was also permitted in 2006. FDI in Multi-Brand retailing is prohibited in India.

In 2004, The High Court of Delhi defined ‘retail’ as a sale for final consumption in contrast to a sale for wholesale. Thus, retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers.

“Single Brand” has not been categorically defined by the government anywhere, however, FDI in ‘Single brand’ retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship brand in India, those retail outlets could only sell products under the Adidas brand and not the Reebok brand, for which separate permission is required. If granted permission, Adidas could sell products under the Reebok brand in separate outlets.

“Multi Brand’ retail implies that a retail store with a foreign investment can sell multiple brands under one roof. In July 2010, DIPP, Ministry of Commerce circulated a discussion paper on allowing FDI in multi-brand retail. This paper, if implemented, would open the doors for global retail giants to enter and establish their footprints on the retail landscape of India. Opening up FDI in multi-brand retail will mean that global retailers including Wal-Mart, Carrefour and Tesco can open stores in India.

Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. The Reserve Bank of India (‘RBI’) in this regard had issued a notification, which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. This notification has been amended from time to time.

The Ministry of Commerce and Industry, Government of India is the nodal agency for proceeding and reviewing the FDI. This FDI policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion (DIPP). The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (‘FIPB’) would be required.

FDI Policy with Regard to Retailing in India

Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy issued in October 2010 provide the sector specific guidelines for FDI:

FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route
FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of ‘Single Brand’ products, subject to Press Note 3 (2006 Series)
FDI is not permitted in Multi Brand Retailing in India.

Entry Options prior to FDI Policy

Although prior to Jan 24, 2006, FDI was not authorised in retailing, most general players had been operating in the country. Some of entrance routes used were:-

Franchise Agreements - Easiest way to enter the Indian market, under this FDI (unless otherwise prohibited) is allowed with the approval of the Reserve Bank of India (RBI) under the Foreign Exchange Management Act. Apart from quick food bondage identical to Pizza Hut, players such as Lacoste, Mango, Nike as good as Marks & Spencer, have entered Indian marketplace through this route.
Cash And Carry Wholesale Trading - 100% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers. Metro AG of Germany was the first significant global player to enter India through this route.
Strategic Licensing Agreements - Some foreign brands give exclusive licences and distribution rights to Indian companies. Through these rights, Indian companies can either sell it through their own stores, or enter into shop-in-shop arrangements or distribute the brands to franchisees. Mango, the Spanish apparel brand has entered India through this route with an agreement with Piramyd, Mumbai, SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd.
Manufacturing and Wholly Owned Subsidiaries - The foreign brands such as Nike, Reebok, Adidas, etc. that have wholly-owned subsidiaries in manufacturing are treated as Indian companies and are, therefore, allowed to do retail.  

A Start Made

Walmart has a joint venture with Bharti Enterprises for cash-and-carry (wholesale) business, which runs the ‘Best Price’ stores. It plans to have 15 stores by March and enter new states like Andhra Pradesh , Rajasthan, Madhya Pradesh and Karnataka.

Duke, Wallmart’s CEO opined that FDI in retail would contain inflation by reducing wastage of farm output as 30% to 40% of the produce does not reach the end-consumer. “In India, there is an opportunity to work all the way up to farmers in the back-end chain. Part of inflation is due to the fact that produces do not reach the end-consumer,” Duke said, adding, that a similar trend was noticed when organized retail became popular in the US.

Many of the foreign brands would come to India if FDI in multi brand retail is permitted which can be a blessing in disguise for the economy.

News - World

Indian couple charged with 'gross repeated maltreatment'

Indian couple residing in Norway, have been accused of gross repeated maltreatment of their child/ children by threats, violence or other wrong under section 219 of the Penal Code. The prosecution has proposed a sentence of one year three months for the mother and one year six months for the father. The judgement in the case would be pronounced on Monday, December 3^rd.

The couple a software professional from Andhra Pradesh, and his wife have been remanded in custody. Their seven-year-old son was found wetting his pants in the school bus and in class room on different occasions; the same was reported to the father, who in turn threatened his son of sending him back to India, if he continued to wet his pants.

The Ministry of External Affairs, Delhi has been following the case for last eight months. Due to the efforts made earlier, the child, who was taken away by the local authorities because of the same reasons, was sent back to the family in May.

After a request from the couple’s lawyer, the Indian Mission in Oslo sought consular access and a Consular Officer met Chandrasekhar to ascertain his welfare and asked for any information that he may like to convey.

The officer also explained the situation to Chandrasekhar and assured that the Indian mission will continue to keep in touch with the lawyer and stands ready to assist.

The incident comes barely months after another row involving an Indian couple and their children. Children aged 3years and 4 years were taken away from their parents -- by Norway's Child Welfare Society in May last year on grounds of "emotional disconnect".

CHANGING HUMAN RIGHTS TREND IN INDIA

NHRC – Jharkhand Human Rights Conference President Manoj Mishra, filed a complaint in the National Human Rights Commission (NHRC); against the firing by security guards at the Tata Steel Works. Mishra has demanded stringent action against the security personnel responsible for the firing and Rs 10 lakh compensation to each injured person besides a job in the company in his complaint sent on January 4.

According to the new company circular all labourers should board company buses. The security guards, asked the labourers on December 24 to board company buses instead of riding bicycles to the site, which the labourers resisted. In the firing and clash that followed, nine persons including a journalist were injured and three security guards were also injured in stone pelting by labourers.

http://www.thehindubusinessline.com/news/human-rights-body-seeks-report-on-firing-by-tata-steel-guards/article4386236.ece

Tribal Rights – The Government of India (GOI) accepting the contention of the environment minister Jayanthi Natarajan has now decided that rights of tribal cannot be overlooked while clearing projects in forest areas, except in the case of rail tracks, roads and power lines and other linear projects.

This decision came following a meeting called by PM Manmohan Singh with Natarajan and tribal affairs minister V Kishore Chandra Deo after the two had voiced opposition to a report asking for severe dilution to the rules requiring consent from gram sabhas (village councils) for projects in forests where tribals dwell traditionally.

http://articles.timesofindia.indiatimes.com/2013-02-02/developmental-issues/36703204_1_tribal-rights-forest-clearances-environmental-clearances

Trafficking, Forced and Child Labour, Sexual Crimes – The Criminal Law (Amendment) Ordinance 2013 was promulgated by the President of India’s signature on 3 February 2013. The 2013 Ordinance sets out clear procedures to deter sexual crimes against women, and is India’s first step towards crimes associated with trafficking in persons, trafficking for forced labour and employment of trafficked children in the Indian Penal Code.

The amendment provides definition for ‘Trafficking in persons’.  India ratified the United Nation’s Palermo Protocol in May 2011 following a Supreme Court directive in the case of Bachpan Bachao Andolan vs Union of India, and the definition included in Indian Penal Code’s new Section 370 penalises such trafficking attracting imprisonment of at least seven years, up to life. Similarly, employing of a trafficked person in any form of labour and the employing of a trafficked child attracts rigorous imprisonment under the new law.

http://www.globalmarch.org/content/trafficking-person-forced-labour-and-child-labour-crimes-indian-penal-code

INTERNATIONAL ARBITRATION

 Often the disputes take place mainly because of vibrant nature if the business relations and transactions, geographical and cultural variations, increased complexities in technology and misinterpretation of regulations, responsibilities, terms and conditions in the contract, differences in revenue sharing and cost calculations, change in ownership or management control and regulatory changes enforced by the Government.

In India we now prefer arbitration over the traditional litigation as arbitration is seen as a more advance, faster and cost effective method of dispute resolution. According to newspaper report, in 2011 around 3.2 crore cases were pending in high courts and subordinate courts across the country while 56,383 cases were pending in the Supreme Court. With the Government of India (GOI) opening the gates for foreign investments and finally allowing Foreign Direct Investment (FDI) in various sectors the number of commercial disputes are ordained to increase. There is also pressure from international companies and various Governments as they are making it mandatory to enforce arbitration clauses in the contract.

According to Arpinder Singh, Partner and National Director – FIDS, Ernst & Young India “Key factors such as entry of global Institutions & law firms, strengthening of regulatory environment and building up of expertise in technical aspects would be essential for the future of arbitration. In spite of several challenges, consolidated efforts by all stakeholders in this direction can result in a robust arbitration mechanism in India that will attract faith of global companies as well.”

Eminent lawyers at law firms like Zia Mody Partner at AZB & Partners feel that “Arbitration is a much desired Alternative Dispute Resolution mechanism in India, and would do much good to Indian companies. The improvement in certain issues such as weaknesses of delay, high cost, ad hoc nature and a robust enforcement by court, would ensure the growth of arbitration.”

Arbitration – Past:

The arbitration picked up pace in the country, with the inception of the Bengal Resolution Act, 1772 and 1781, which provided parties an option to submit the dispute to an arbitrator, appointed after mutual agreement and whose verdict would be binding on both the parties. Alternative Dispute Resolution (ADR) gained further importance in India post the implementation of the Arbitration Act, 1940, and the Arbitration and Conciliation Act, 1996, which was passed in consonance with the UNCITRAL Model Law of Arbitration. An important International Convention on Arbitration, which enhanced the Indian mechanism, was the New York Convention of 1958 on the Recognition and Enforcement of the Foreign Arbitral Award.

Traditionally, the arbitration clause is one of the most neglected clauses, and while drafting an agreement, often referred as the ‘midnight clause’ or ‘last minute clause’.

During 2004–2007, the Supreme Court decided 349 arbitration cases and the Delhi High Court’s mediation and conciliation centre decided 668 out of 868 cases, indicating the growing importance of arbitration as an alternate dispute resolution mechanism in India.

                                                                                                                                                                                                                                         

Considering the varying trend around Indian dispute resolution, Ernst & Young conducted a survey, where 68 respondents including general counsels in large companies, attorneys of various organizations in India and senior partners of domestic and international law firms participated. Some key lawyers and eminent personalities in this field were also interviewed to gain their perspective on arbitration in India.

Significant findings of the survey:

1.                74% of the survey respondents accentuated that the arbitration clause is an essential part of their legal contract.

2.                      The survey highlighted the mixed usage of the arbitration mechanism. Out of the total respondents, 24% of the respondents undertook Indian ad hoc arbitration, 20% of the respondents undertook international commercial arbitration and 27% of the respondents undertook both Indian ad hoc arbitration and international commercial arbitration.

3.       During the selection of institutes outside India, 60% of the respondents preferred Singapore International Arbitration Centre (SIAC), and while selecting institutes within India, 34% of the respondents preferred London Court of International Arbitration (LCIA), India.

4.                     The survey also highlighted the importance given by the GOI to the improvement of the arbitration mechanism. More than 50% of the respondents felt that the ministry's recent steps to develop dispute resolution mechanism are in the right direction.

           78% of the respondents revealed that they were satisfied with the arbitral award. However, about 50% of the respondents said that arbitration in India is expensive and does not provide timely resolutions, which highlights the need for radical changes in procedural aspects.

6.                 68% respondents believed that subject matter experts should be appointed as arbitrators, as opposed to the 22% who believed that retired judges should play this role.

        

                      

1.                       The survey highlighted the growing importance of experts such as forensic accountants in the arbitration process, more than 50% of the respondents said that they have used expert services and they believe that expert advice made a difference in their arbitration process.

Arbitration – Present:

The experiences with delays in the Indian Litigation system and with increasing awareness of benefits of ADRs have been key motivating factors for the companies to focus on drafting a comprehensive arbitration clause.

In a 2011 judgement of M/s Dozco India P. Ltd. (the petitioner) v. M/s Doosan Infracore Co. Ltd.¹, the Supreme Court while rejecting the application for the appointment of an arbitrator by the Court under Section 11(6), Part 1 of the Arbitration Act held that where parties have chosen a foreign law and seat of arbitration outside India, application of Part I of the Act (i.e., appointment of the arbitrator by the Court on account of failure to appoint an arbitrator by one of the disputing party after the arbitration clause has been invoked by the other party)  was deemed to be excluded even in absence of express exclusion.

Thus, this judgment comes as a welcome change, limiting the scope of judicial interference in line with the objective and policy behind the Act and the UNCTRAL Model law.

In the Ernst & Young study it was noted that while 20% respondents had undertaken an international arbitration 24% respondents had undertaken the Indian ad hoc arbitration and 27% respondents preferred both the options, thus meaning that in India while Institutional arbitration hasn’t really been able to set its roots, Indian ad hoc arbitration was a preferred route.

An ad hoc arbitration is one which is not controlled by an institution and therefore, the parties are required to determine all aspects of the arbitration like the number of arbitrators, manner of their appointment, procedure for conducting the arbitration, designation of rules, applicable law, procedures and administrative support, etc.

On questioning the respondents on their preferred seat for institutional arbitration 60% preferred Singapore International Arbitration Centre while 50% showed interest in London International Arbitration Centre.

In the case of Penn Racquet Sports v. Major International Ltd. [2011], the court on the question of the award passes by a sole arbitrator in international arbitration being misinterpreted and against the public policy the court held relied on Smita Conductors Ltd. v. Euro Alloys Ltd.,² where it was held that ‘…a foreign award cannot be recognised or enforced if it is contrary to (1) fundamental policy of Indian law; or (2) the interests of India; or (3) justice or morality.’

In the Penn case the Court held that “…even in case of domestic awards, courts would not interfere with the interpretation by the arbitrator of the contract unless such interpretation is contrary to the terms of the contract.”

“…An award cannot be denied enforcement merely for the reason that it contravenes Indian law. The award should be contrary to the fundamental policy of India or because the award is contrary to interests of India or is contrary to justice or morality.”

The courts in India offer full support and encouragement for arbitration. At the request of a party they:

(i)     stop a court case from being carried on in breach of an arbitration agreement

(ii)   enforce foreign arbitral awards made in New York Convention countries

(iii) enforce awards made in international arbitrations taking place in India

(iv)  compel witnesses to attend arbitral proceedings

(v)    issue a wide range of interim measures of protection, including: preservation and interim custody of the subject matter of the dispute, interim injunctions to preserve the status quo, appointment of receiver, securing the amount in dispute, securing costs of the arbitration

Indian courts do not review the merits of an award in arbitration, unless it is at the request of a party and only under restricted grounds of challenge laid down in the Arbitration Act. A foreign award may also only be reviewed according to a similarly limited set of criteria.

Singapore as a Seat for Arbitration

Traditionally London and Paris were preferred seats for International seat, however now Singapore is the most preferred seat for international arbitration cases in Asia. Experts feel Singapore is preferred because of very favourable local laws, responsive Singaporean government and almost no interference by the Singapore judiciary once the award is passed. India seems to be following the same path.

According to a Bloomberg report⁴ almost 36 UK cases were referred to SIAC and 33 cases from India. From 2000 to 2011 the number of cases being referred to SIAC has increased phenomenally, in 2010 198 cases were referred to SIAC while in 2011 188 cases were referred. These cases involved 1.4 billion SD in 2010 and 1.2 billion SD in 2011.

Singapore is one of the most preferred seat for international arbitration. According to Singapore's Law Minister, K Shanmugam, there has been an increase in the number of Indian companies using Singapore as an arbitration destination. About 21 per cent of the 114 international cases Singapore International Arbitration Centre (SIAC) saw in 2009 involved at least one Indian party. The number of cases also doubled in 2008.

Other Reasons for preferring Singapore:

1.        Singapore is one of the most convenient for Indian parties, in relative terms, as regards both distance and time zones.

2.       Focus of the Singapore Government on delivering efficient public services.

3.       Use of English language

4.       Perception of reduced cost

5.       The Singapore courts are “arbitration-friendly”

Bibliography

1.        http://articles.timesofindia.indiatimes.com/2011-12-20/india/30537308_1_subordinate-courts-pendency-crore-cases

2.   http://www.ey.com/Publication/vwLUAssets/Changing_face_of_arbitration_in_India/$FILE/Changing_face_of_arbitration_in_India.pdf

3.       (2011) 6 SCC 179

4.       (2001) 7 SCC 728

5.       http://www.siac.org.sg/index.php?option=com_content&view=article&id=407:bloomberg-looks-at-india-related-cases-at-siac&catid=1:latest-news&Itemid=50

THE ENGLISH ANTI-BRIBERY LEGISLATION

Bribery is the act of offering, promising or giving a financial or other benefits to another directly or indirectly, with the aim of inducing or motivating a person to perform improperly a relevant activity. It covers actions undertaken on the knowledge and belief that the acceptance of the benefit will by itself constitute the improper discharge of a relevant function.

The Bribery Act 2010 (the Act) came into force on 1 July 2011. Prior to this Act - the Public Body Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and Prevention of Corruption Act 1916 (collectively "The Prevention of Corruption Acts") were in force, which although now have been repealed but will still apply to offences committed prior to 1 July 2011.

There are four prime offences under the Act; pertaining to the offering, promising or giving of an advantage (the ‘active offence’), and requesting, agreeing to receive or accepting of an advantage (the ‘passive offence’); a discrete public offence of bribery of a foreign public official and a corporate offence for failure to prevent bribery.

The Bribery Act 2010 intends to reverse a corporate culture that in some areas, may have become tolerant of corruption. However the companies prosecuted or in order to escape prosecution the companies can defend themselves by proving that they had "adequate procedures" to prevent corruption, in place.

Act also does not distinguish between bribes that are offered directly or indirectly or bribes offered in private or public sphere. It does not matter whether a bribe is offered to the same person who is to perform the function nor does it matter if the advantage is offered or given through a third party, as such payments will still fall within the scope of the Act. It also does not matter whether the person has knowledge or reasons to believe that the performance of the function or activity is improper.

The Serious Fraud Offence (SFO) in UK is the prosecuting body for the bribery offences. The SFO has a twofold approach on prosecution:

  1.  They want to be able to help and support the very many ethical corporations who are determined to have an anti-corruption culture in their organisations. The SFO can advise them on their approach to an anti-corruption culture and their internal procedures. They also recognise the ethical business difficulties and find satisfactory, sensible and commercial solutions to such problems and enable the ethical corporate to put the past behind it and to move on.

  2.   They also come down very vigorously on those corporations who want to continue to behave corruptly, and indeed see such behaviour as enabling them to gain a business benefit.

UK is committed to abide by Article 5 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions:

"Investigation and prosecution of the bribery of a foreign public official ... shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved."

Bribery is a serious offence. There is an inherent public interest in bribery being prosecuted.  Prosecutors will make their decisions in accordance with the Full Code Test as set out in the Code for Crown Prosecutors. 

It has two stages: 

(i) the evidence stage; and 

(ii) the public interest stage. 

The evidence stage must be considered before the public interest stage. A case which does not pass the evidence stage will not proceed, no matter how serious or sensitive it may be. Where there is sufficient evidence to justify a prosecution, prosecutors must always go on to consider whether a prosecution is required in the public interest. Assessing the public interest is the most important and perhaps the toughest task. Each case is rigorously considered on its own facts and merits in accordance with the Code.

The SFO encourages corporate self-reporting, but does not offer any guarantee that a prosecution will not follow any such report.

The 2010 Act is a great improvement on previous legislation. However, areas of uncertainty and therefore concern exist over the exercise of prosecutorial discretion, as applied in each individual case. This is particularly in relation to corporate hospitality and facilitation payments where the words of the statute appear draconian but where guidance issued by the Ministry of Justice and prosecuting agencies suggests that there is scope for latitude.

A Facilitation Payment is a type of bribe and should be seen as such. A common example is where a government official is given money or goods to perform (or speed up the performance of) an existing duty. Facilitation payments under the Bribery Act are illegal, regardless of their size or frequency, unless payments are permitted or required by the written law of the relevant country, they are prohibited.

However, they have caused controversy for two reasons. First, they are lawful under the Foreign Corrupt Practices Act 1977, the American counterpart to the 2010 Act. Secondly, many companies have argued that such payments are so ingrained in some cultures that without them, business in those countries will become virtually impossible. Thus the 2010 Act will serve to constrain British businesses at a time of economic difficulty. However, in recognition of these difficulties, the Guidance suggests that only more serious cases of facilitation payments will be prosecuted.

It is difficult to see what weight this guidance can have. The joint guidance issued by the Director of Public Prosecutions and the Director of the SFO (‘the Directors' Guidance’) sets out the factors that may influence whether or not a prosecution is brought. Those in favour include:

(i)            Large or repeated payments;

(ii)  payments made as a standard way of conducting business (evidence of premeditation);

(iii)       active corruption of the official;

(iv)       the fact an individual has failed to follow the anti-bribery procedures which apply to him/her.

Bona-fide hospitality or promotional or other legitimate business expenditure is recognised as an established and important part of doing business. It is also the case, however, that bribes are sometimes disguised as legitimate business expenditure.

The position regarding corporate hospitality is even less clear. Again, the ambiguity comes not from the wording of the statute, but rather an apparent attempt by the Government to read down its provisions. According to the words of the 2010 Act, any advantage, financial or otherwise, conferred upon another individual with the intention of inducing improper performance of a function or activity (or where a foreign public official is involved, simply influencing that person in the course of their employment or official role) can fall foul of the 2010 Act.

There is the well-documented problem of doing business in parts of the world where corruption is endemic, and where the choice is between risking prosecution and doing no business at all. At a time when business opportunities are limited, this is an extra inhibition to creating successful companies. When is a facilitation payment a bribe, and when is it a necessary and proper step on the road towards obtaining a contract? This is not in any way to decry the work of Transparency International and other similar organisations, or of the Serious Fraud Office, in seeking to clean up the operations of developed countries in their relations with emerging economies.

Lastly, despite the Guidance, whether or not corporate hospitality has gone beyond that which is reasonable or proportionate in the circumstances is ultimately a matter which has been left to prosecutorial discretion and companies will have to cope with a level of uncertainty as a result. What is clear, however, is that all commercial organisations, as part of their assessment of their 'adequate procedures', should consider reviewing their policies on hospitality and establishing and disseminating appropriate standards of hospitality and other promotional expenditure as this is likely to be one of the first items requested in the event of an investigation.

Caselaws

ë R. v Patel (Munir Yakub) [2012] EWCA Crim 1243

ë R. v Innospec Ltd [2010] Crim. L.R. 665 Crown Ct (Southwark)

ë R. v Dougall [2010] EWCA Crim 1048