In 2021, the Directorate General of Trade Remedies (DGTR) also concluded the first-ever investigation conducted under India’s Safeguard Measures (Quantitative Restrictions) Rules 2012 on imports of Isopropyl Alcohol (IPA). The DGTR recommended that import quotas (subject to progressive relaxation) be issued on a country-wise basis for two years. The final decision to give effect to this recommendation has not been taken until now by the Directorate General of Foreign Trade.
2. Trends in Trade Remedial Enforcement
While trade remedial investigations continue to progress at a steady place, “[t]he Ministry of Finance [(MoF)] has . . . discretion” over whether to levy duties recommended by the DGTR.
Recently, there have been multiple instances where the MoF has chosen not to levy the duties recommended by the DGTR. Though no explicit reasoning was provided by the MoF, it was seemingly on account of public interest concerns. The appellate tribunal, CESTAT, in a recent order, has directed the MoF to issue a reasoned order, in case the recommendations of the DGTR for imposition of duties are not accepted. The Ministry of Finance has filed a writ petition before the High Court of Delhi, and the Court has issued notice, so it is pending a hearing on July 13, 2022.
3. Amendments to Existing Trade Remedial Law and Practice
Additionally, India has also recently introduced important amendments to align its trade remedial practices with leading WTO signatories.
The MoF, on October 27, 2021, notified of new provisions on anti-absorption in both anti-dumping and anti-subsidy rules. Similarly, taking a cue from the European Union’s Article 14 Anti-Dumping Regulation, India introduced provisions for the suspension of anti-dumping and anti-subsidy measures by introducing relevant amendments allowing suspension of duties for “one year at a time.” Pursuant to this amendment, the MoF suspended definitive anti-subsidy measures in one case and definitive anti-dumping measures in three cases.
Lastly, new questionnaire formats have also been issued pursuant to stakeholder consultations to simplify filling out the questionnaire formats and application proformas in trade remedial investigations and to reduce the burden of procedural compliance placed on the cooperating parties.
C. Non-Tariff Barriers
In addition to trade remedial measures, the Government of India has, in the past year, increased its use of non-tariff measures to regulate supply of goods in its domestic market, which is believed to be creating non-tariff barriers to promote import substitution. The government has imposed mandatory Bureau of Indian Standards (BIS) certification for a range of new products across sectors, including steel, chemicals, and petrochemicals. “This is imposed” through “Quality Control Orders” specifying the product and relevant “Indian Standard against which certification is to be obtained . . . .” Presently, 446 products have been notified for mandatory certification, with new products being announced routinely. Ordinarily, all producers are granted a period of six months to obtain such certification.
The process of obtaining BIS certification requires a physical inspection of the manufacturing premises. But due to the COVID-19 pandemic and associated travel restrictions, factory audits for international manufacturers were suspended for most of the year. As a result, the Government of India has been issuing periodic extensions to existing quality control orders to enable manufacturers to obtain certifications. It is important to note, however, that with certain strategic products, extensions were not granted to prevent imports (for example, toys). Furthermore, with the easing of travel restrictions, the conduct of inspections is expected to resume shortly for certain countries and, depending on ease of restrictions, the pending applications would be undertaken.
IV. Survey on Arbitration Law in India and Australia—2021
A. India
1. Emergency Arbitration
The issue of emergency arbitration (EA) was hotly contested in Indian courts in 2021. On October 25, 2020, a Singapore International Arbitration Centre (SIAC) arbitral tribunal had granted interim relief in an EA in favor of Amazon. Amazon filed an application before the Delhi High Court (DHC) to enforce the order. In March 2021, the DHC held that an emergency arbitrator is an arbitrator “for all intents and purposes” under Indian law, and the respondents in the case were directed not to take any further action in violation of the order.
On appeal, the Supreme Court of India (SC) held that the EA order was enforceable because parties had consciously selected SIAC Rules, under which an emergency arbitrator has all the powers of an arbitral tribunal. The SC described the EA order as an important step in decongesting civil courts and affording expeditious interim relief to the parties. But, even after a year, until the end of 2021, proceedings to enforce the EA order were still pending, in view of a stay order from SC.
2. Power to Decide Seat
In PASL Wind Solutions v. GE Power Conversion India, the SC held that two Indian parties can agree to arbitrate at a foreign seat. At the same time, they can seek interim relief under Indian law.
3. Non-Payment of Stamp Duty
A three-judge bench of the SC opined that non-payment of stamp duty on a contract does not invalidate an agreement regarding arbitration. This issue has now been referred to a larger bench because earlier decisions have held to the contrary.
4. Period of Limitation to Invoke Arbitration
The SC held that an application before a court for appointment of an arbitrator should be filed within three years from the date the right to apply accrues. But, where the claims are ex facie time-barred, the court may refuse to make a reference to arbitration.
5. Allegations of Fraud
In M/s. N.N. Global Mercantile vs. M/s. Indo Unique Flame Ltd., the SC held that the position that allegations of fraud are not arbitrable is an archaic view. Allegations of fraud regarding invocation of a bank guarantee can be arbitrated.
6. Enforcement of Foreign Arbitral Award Against Foreign State
The DHC stated that a foreign state cannot claim sovereign immunity against the enforcement of an arbitral award from a commercial transaction. The immunity is available only when it is acting in its sovereign capacity.
7. Enforcement of Foreign Award Against Non-Signatory
In Gemini Bay Transcription vs. Integrated Sales Service, it was held that Indian law does not allow a non-party to an agreement to allege that it is not bound by a foreign award. The award gave reasons to apply the alter ego doctrine, and the SC refused to re-appreciate the facts.
8. Power of the Court to Modify an Award
In Project Director, National Highways No. 45 E and 220, National Highways Authority of India v. M. Hakeem, the SC held that a supervisory court does not have the power to modify an award. It can, at best, set aside the award, but the SC refused to interfere with the lower court’s order, even though the award had been modified by the lower court. The SC was of the view that the arbitration award was perverse, and the lower court had rightly interfered with it. Further, great injustice would have been caused to the claimant if the awards, which were made seven to ten years ago, were set aside and sent back to a government-appointed arbitrator for de novo adjudication.
9. Extension of Time Period Due to Pandemic
In view of declining cases of COVID-19, on March 8, 2021, the SC directed that no time relaxation would be given for completing pleadings and passing an arbitration award with effect from March 14, 2021. But the order was recalled on April 27, 2021.
Later, on September 23, 2021, the SC directed that the entire period from March 15, 2020, until October 2, 2021, shall be excluded for calculating the time for completing pleadings and passing the award.
B. Australia
1. Broadly Defined Arbitration Clause
The Supreme Court of Queensland interpreted a broadly drafted arbitration clause by observing that even a claim which arose by operation of law, outside the contract, shall be regarded as arising out of or closely connected with the contract.
2. Enforcement of Foreign Arbitral Award
In Neptune Wellness Solutions v. Azpa Pharmaceuticals, the Federal Court held that a Canadian award was recognizable and enforceable under Australian law, even if the award debtor did not participate in the enforcement proceedings after being served validly.
3. Mandatory Domestic Law in Foreign-Seated Arbitration
The Federal Court was asked to determine the applicability of mandatory domestic law, where the license agreement was governed by Californian laws and disputes were to be decided by a single arbitrator in California. The Court held that claims under the Australian Consumer Law could be heard and determined in the Californian arbitration.
4. New Rules for Australian Centre for International Commercial Arbitration (ACICA)
A new set of rules for the ACICA came into force in 2021. These rules permit tribunals to hold conferences and hearings virtually or in a combined/hybrid form. The ACICA has also moved to default electronic filing by requiring both the Notice of Arbitration and Answer to be filed by email or through its dedicated online portal.
V. Australia Maintaining Its Permanent Seat on the ICJ After the Passing of James Crawford in May and the Election of Hilary Charlesworth
In 2021, South Asia and Oceania maintained its second International Court of Justice (ICJ) seat. Australian jurist James Crawford passed unexpectedly in May 2021 and, in November 2021, was replaced by Australian jurist Hilary Charlesworth, who made history as the fifth woman on the World Court bench. On November 5, 2021, Hilary Charlesworth was elected by secret ballot. With two nations abstaining, Charlesworth received 119 ballots to Greek Linos-Alexander Sicilians’ seventy-one votes. She will complete Judge Crawford’s term, scheduled to end February 5, 2024.
ICJ vacancies occurring outside the regular, triennial election cycle are filled through causal elections. There is a general expectation—though no formal rule—that a judge who dies or resigns is replaced by someone of the same nationality, or at least from the same region. Traditionally, the ICJ bench reflects relatively consistent representation of seats by region: two for the African Group, two for the Latin American and Caribbean Group, three for the Asia-Pacific Group, two for the Eastern European Group, and five for the Western European and Other Group.
The nomination of Sicilians as Judge Crawford’s replacement was notable, given his home state is outside the geographic bloc Judge Crawford represented. This practice divides the shared experience of the five states holding permanent seats on the United Nations Security Council, known as the P5, from the experience of all other states, including South Asia and Oceania. When an ICJ vacancy is created by the death or resignation of a P5 judge, the election is rarely contested, and, contest aside, the elected judge is always of the same nationality as the outgoing judge. When a vacancy arises through the death or resignation of a non-P5 judge, the replacement election is generally contested.
This development is significant for South Asia and Oceania’s voice on the World Court bench—maintaining two seats. Greece and the Western European group lost a seat to the Asia-Pacific Group in 2017, when Indian Judge Dalveer Bhandari was elected to a seat historically reserved for a member of the Western Europe and Other Groups bloc. That election left the United Kingdom without an ICJ judge for the first time.
Given the ICJ bench’s roster has been 3.7 percent female over time, Judge Charlesworth’s appointment is significant for Oceania representation and gender representation alike.
VI. Thailand
A. Amendment of the Criminal Act
On February 7, 2021, the Act on the Amendment of the Criminal Code (No. 28) B.E. 2564 (2021) came into effect. Under the amended code, abortion within the first twelve weeks of pregnancy is now legal under Section 301, and women seeking abortion and medical practitioners performing an abortion are exempted from the corresponding liabilities under Section 305. The new law also permits abortions beyond the first trimester but no later than the first twenty weeks of pregnancy, if the woman seeking an abortion has consulted with medical practitioners and other professionals in accordance with the rules to be prescribed by the Ministry of Public Health.
This amendment followed the Constitutional Court’s landmark decision in 2020 that the criminalization of abortion under the former Section 301 was unconstitutional. Specifically, the Court found that Section 301 violated the principles of equality and liberty enshrined in Sections 27 and 28 of Thailand’s Constitution. Prior to the ruling, abortion was a criminal offense in Thailand except in certain circumstances, such as medical necessities concerning the woman’s physical health or pregnancy resulting from sexual crimes. Absent such conditions and regardless of the pregnancy period, women seeking abortion faced imprisonment of up to three years or fines up to 60,000 baht, or both. Persons, including medical practitioners, who perform an abortion with the woman’s consent were also subject to liabilities of imprisonment and/or fines.
Under the new Section 301, abortion beyond the first trimester is permissible only in exceptional circumstances, and penalties for late-term abortion have now been reduced to imprisonment of up to six months and fines of up to 10,000 baht, or both.
B. Extension of the Effective Date of the Personal Data Protection Act
On May 8, 2021, the Government Gazette published the Royal Decree on the Organizations and Businesses of which Personal Data Controllers are Exempted from the Applicability of the Personal Data Protection Act, prescribing an additional postponement of the effective date of the operative provisions under the Personal Data Protection Act (PDPA) for another year. The Royal Decree cites the complexity of the law, the advanced technology required, and the critical impact of the COVID-19 pandemic on the country, which impairs the abilities of entities subject to the PDPA from effective implementation of the statute, among the rationale for the second postponement.
Being the first consolidated data protection statute in Thailand, the PDPA is highly influenced by the European Union’s General Data Protection Act. It stipulates several mandatory obligations upon public and private entities classified as “data controllers” and “data processors.” Under the statute, data controllers and data processors are required to, among other things, inform and obtain consent from the data subject for collection, usage, disclosure, and/or transfer of personal data, report a personal data breach to the authority without delay, and “maintain records of personal data processing activities.” The PDPA has an extraterritorial effect, and non-compliance entails risks of civil, criminal, and administrative liabilities.
With the postponement in effect, entities under the PDPA mandates can now enjoy an additional grace period until May 31, 2022, to build on their capacity to implement the act.
