Page 23 - Banking Finance April 2020

LEGAL UPDATE

the amounts rightfully payable to it on products to avoid the distributor chan- 12 years for getting stuck
an appreciation of the evidence placed nel from being tracked. The division
on record”. The court also pointed out Bench asserted that there was no in legal knots
that its role in appeals against awards prima facie case against the opposite An arbitration which was caught in le-
was limited. A court reviewing an ar- parties. gal knots for 12 years will start now
bitral award under the Arbitration Act after the Division Bench of the Bombay
does not sit in appeal over the award, Calcutta HC declares for- high court set aside the order of the
it quoted the Supreme Court. If the single judge bench. In this case,
view taken by the arbitrator is possible, feiture should not be ‘pu- Antikeros Shipping corporation vs
no interference is called for. nitive or extortionist’ Adani Enterprises, the Liberian ship-
ping company alleged fuel supplied by
The Calcutta High Court declared that
Delhi HC lifts the injunc- though an employer of a work con- the Indian firm did not meet the quan-
tity and quality promised.
tion passed against one tract can impose a condition of forfei-
set of direct sellers against ture, it should be reasonable, not “pu- It invoked arbitration but there were
nitive or extortionist”. A government several questions involved like whether
another company that calls for tender has an it was domestic or international arbi-
A division Bench of the Delhi High additional duty to strike a balance tration and whether the high court
Court has lifted the injunction passed while forfeiting the earnest deposit, could name an arbitrator when one
against one set of direct sellers against the judgment stated in the case RBL party does not appoint its nominee.
another, all top companies. Earlier, a Infrastructure vs Rites. The disputes lasted seven years, but
single judge Bench had imposed the the single judge condoned the delay
restriction on one group, which In this case, Damodar Valley Corpora- and passed an order favourable to
claimed to be direct selling entitles in tion engaged Rites for a road project. Adani.
terms of the Model Framework for The latter called tenders and RBL bid
Guidelines on Direct Selling on e-com- for it. However, it had concealed some The shipping company appealed to the
merce platforms. division Bench, which made certain in-
factors in the acceptance document,
teresting remarks about Adani’s ap-
which was a breach of the terms of the
Three appeals were by Amazon seller peals, comparing them to “arrows”
offer. Rites, therefore, attempted to
Services against Amway India, and “torpedoes”. While imposing Rs. 5
forfeit the entire Rs. 50 lakh deposit,
Oriflame India, and Modicare. Two of lakh as legal costs on it, the judgment
which led to the writ petition.
the appeals were by Cloudtail India remarked: “The torpedo fired by the
against Amway and Oriflame, respec- respondent is declared to be a dud and
The court stated that there indeed
tively. The sixth appeal was Snapdeal’s it sinks without hitting its target.”
was an enforceable agreement and
against Amway. An illustration of the
cause of the internecine legal battle the breach is “established and unques- SC denounces govt and its
tionable” but Rites did not suffer any
was that Amways’ products were be- companies for fighting le-
ing sold on various online portals or substantial loss on account of that
mobile apps and wholesale and retail fault. Forfeiture should not lead to a gal battles
shops illegally at unwarranted dis- “windfall” for the government entity. Though the Supreme Court has de-
counts, resulting in a decline in the It should not unjustly enrich itself, es- nounced the practice of government
sales of the Amway’s direct sellers. pecially because “contractors have, and its companies fighting legal battles
per force, to apply for obtaining work in courts, there is yet another judg-
The further allegation was that such from government employers”. ment from the Gujarat High Court de-
unauthorized sellers were removing ciding a customs dispute between
the unique code imprinted on Amway Arbitration to start after ONGC and the Central Government.

BANKING FINANCE | APRIL | 2020 | 21