Agrégateur de flux

By Ryan Joseph, final-year BBA LLB (Hons) student, Jindal Global Law School, India.

Introduction

The recent decision of the UK High Court (“Court”) in Tyson International Company Limited (“Tyson”) v. General Insurance Corporation of India (“GIC”) sets a critical precedent for cases that lie at the intersection of arbitration, contractual hierarchy, and judicial intervention through anti-suit injunctions. The principal issue in the case revolved around the harmonious application of two conflicting dispute resolution clauses contained in two separate agreements pertaining to the same transaction. While one provided for dispute settlement through arbitration seated in New York, the other was an exclusive jurisdiction clause that provided for dispute settlement by England and Wales courts. To resolve this apparent conflict between the two clauses, the Court relied on a confusion clause (also known as a hierarchy clause) in the parties’ agreement to rule that the exclusive jurisdiction clause, in favour of  England and Wales courts, prevails over the arbitration clause. Based on this conclusion, the Court issued an anti-suit injunction against GIC from arbitrating the dispute in New York.

Factual Background

Tyson entered into a reinsurance agreement with General Insurance Corporation of India (“GIC”), a state-owned-entity. The transaction involved two agreements; a Market Reforms Contract (“MRC”) and second Facultative Certificates (“Certificates”). The MRC contained an explicit choice of law and an exclusive jurisdiction clause, submitting disputes to English courts to be governed by the laws of England and Wales (“English DRC”). However, the subsequently issued Certificates introduced an arbitration clause referring disputes to arbitration in New York to be governed by the laws of New York (“Arbitration Clause”). A pivotal provision, termed the “Confusion Clause,” was embedded within the Certificates, stipulating that in the event of a confusion, the MRC would take precedence over the Certificates.

The dispute arose when GIC claimed that Tyson had undervalued certain commercial numbers on which the insurance premium was based. Therefore, GIC sought to initiate arbitration in New York pursuant to the arbitration clause in the Certificates. In response, Tyson approached the High Court for an anti-suit injunction against the arbitration, arguing that  pursuant  to the English DRC, English courts would have exclusive jurisdiction over any dispute emanating from the transaction.

The Court stressed on the importance of circumspect judicial intervention when interfering in arbitration. However, considering the existence of the “confusion clause”, Tyson argued that the arbitration agreement did not come into existence. Therefore, the principal  question before the Court was: what is the effect of the confusion clause when interpreting the two agreements? If the confusion clause had the effect of a hierarchy clause (as argued by Tyson) and hence gave precedence to the MRC, the arbitration agreement wouldn’t come into existence and the anti-suit injunction would be granted. On the other hand, if the confusion clause was merely to give meaning to confusing terms in the Certificates (as argued by GIC), the two agreements would be read harmoniously without giving preference to either. GIC argued this can be done in two ways. First, the conflicting clauses could be read as an agreement between parties to treat the arbitration as a condition precedent to raising any claims before the English Courts. Or in the alternative, the two agreements would be read together to mean that English Courts will have jurisdiction to supervise the New York arbitration. Either ways, the arbitration agreement would be valid and hence the anti-suit injunction should fail.

Submissions of Parties

The Court summarised the principles governing anti-suit injunctions in Times Trading Corp v National Bank of Fujairah[1] to hold that an anti-suit injunction can be granted in all cases where it is just and convenient to do so.[2] However, such power must be exercised with circumspection where the claimant can demonstrate a negative right to not be sued. Tyson can establish such a right if it can demonstrate that an arbitration agreement was not concluded between the parties. Crucial to this conclusion would be determining the effect of the confusion clause in the Certificates.

The judge cited various authorities; specifically Surrey County Council v Suez Recycling and Recovery Surrey Limited[3], to discuss principles of contractual construction and summarised the position in that the role of the court is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. GIC made the following submissions in this regard: First, the phrase “confusion” in the clause refers to obscurity or uncertainty in the meaning of provisions and does not refer to a conflict or a contradiction. They relied on the meaning of the word “confusion” in the Oxford dictionary to support this premise and submitted that the clause operates to address any uncertainty that may arise when reading the provisions of the Certificates. Such uncertainties must then be addressed by interpreting the provisions in light of the MRC. However, the clause does not operate to address a conflict between the MRC and the Certificates, for such an instance is a “conflict” and not a “confusion”. Lastly, they submitted that there is no confusion because the arbitration clause in the Certificates should be read as a Scott v. Avery[4] clause[5] or, a clause conferring English Courts with supervisory jurisdiction over the New York arbitration.

Tyson submitted that by using the phrase “takes precedence” in the confusion clause, the clear objective intent of the parties is to create a hierarchy between the MRC and Certificates whereby in case of a confusion, the terms contained in the MRC will prevail over those in the Certificates. They further submitted that GIC is taking a very narrow interpretation of the word “confusion” and is reading it in isolation of the remainder of the clause to arrive at its conclusion. The word “confusion”, when read in the context of the provision, has a broader purport to cover circumstances of contradicting terms between the MRC and the Certificates that create confusion regarding which clause will prevail. Thus the clause operates as a hierarchy clause whereby it clears the confusion by giving precedence to clauses in the MRC.

 

The Judgement

The Judge agreed with the submissions of Tyson and found that GIC’s interpretation of “confusion” was too narrow to reflect an objective meaning of the language used by parties. He ruled that confusion can also arise where there are two clauses within a contract which are inconsistent such that there is confusion as to the intent of the parties as to their respective rights and obligations under the contract because of such inconsistency. Second, when the MRC grants exclusive jurisdiction to English Courts and the Certificates provide for disputes to be resolved through arbitration in New York, there is an obvious confusion as to which dispute resolution clause should apply. The judge noted that English courts must give generally give effect to an arbitration clause but this is a case of routine construction of contracts wherein courts cannot rewrite the parties’ agreement. Accordingly, when parties have explicitly agreed that the MRC must take precedence in case of a confusion, such intention must be given effect. The Court opined that any attempt to resolve the confusion through any other means such as viewing arbitration as a condition precedent to any right of action or allowing the arbitration to continue under the supervision of English Courts would amount to rewriting the contract. As a sequitur, the court ruled in favour of Tyson and granted an anti-suit injunction against GIC.

 

GIC’s Attempt to Appeal

In response to the judgment, GIC sought permission to appeal on two grounds (i) the court misconstrued the Confusion Clause in the Certificates and (ii) the court misconstrued the MRC and the Certificates in concluding that the English Court did not have jurisdiction over New York arbitration. When considering whether to grant an appeal, the test is whether GIC has a real prospect of success in relation to any of its grounds.

In order to discharge this burden, GIC made the following arguments: (1) the ‘confusion’ language is novel and has not been interpreted by courts in the past which gives it considerable scope to argue about its meaning; (2) the Certificates were contractual documents intended to supersede the MRC and not merely administrative documents; and (3) the Court has failed to consider the strong policy adopted by English courts in favour of giving effect to arbitration agreements whereby the conflict should be interpreted in a manner that upholds the agreement to arbitrate. Tyson in response argued that (1) the Court’s construction of the word “confusion” gives effect to the meaning of the word in light of the clause as a whole whereas GIC’s construction focuses only on the word ‘confusion’ in isolation of the entire clause. (2) GIC’s interpretation of the Confusion Clause runs against commercial common sense; for an overriding effect would essentially nullify many of the provisions contractually agreed to in the MRC. (3) judicial precedents[6] that have ruled in favour of arbitration by resolving potential conflicts between contractual provisions lacked a hierarchy clause necessitating the courts to engage in the endeavour of contractual interpretation. In this case, where a hierarchy clause exists, it is not a matter of resolving conflicts by applying judicial standards of interpreting contracts but one giving effect to the parties’ method of resolving confusion between conflicting provisions.

Based on the submissions, the Judge concluded that GIC did not have a realistic prospect of success on either of its grounds. At the outset, although one could accept GIC’s construction of the Confusion Clause, it still lacks the realistic prospect of persuading the Court of Appeal to eschew the construction adopted by the Court and instead acceding to GIC’s construction. Finally, the Confusion Clause in this case is a relevant factor that distinguishes this case from  previous cases favouring arbitration because it operates as a hierarchy clause to mitigate any confusion when reading the Certificates and the MRC together. Since the parties have contractually agreed to the hierarchy clause when resolving any confusion, the court must give effect to the clause when resolving conflicts and cannot apply its own principles of interpreting conflicting terms of a contract; for any such attempt would amount to rewriting the parties’ agreement. Therefore, even the second ground lacks a realistic prospective of succeeding before the court of appeals. Since both the grounds for appeal lacked a realistic prospective of succeeding, the application for leave to appeal was refused.

 

Key Takeaways and Implications

The said ruling in underscores the Court’s role in upholding contractual intention of parties when resolving conflicts between competing dispute resolution clauses. By affirming the primacy of the Market Reform Contract through the Confusion Clause, the court reinforced the principle that hierarchy clauses serve as decisive mechanisms in contractual interpretation. Furthermore, the court’s refusal to grant leave to appeal solidifies the precedent that courts will not rewrite contracts but will instead give effect to unambiguous terms agreed upon by parties. This case sets as an important judicial precedent for interpreting confusion clauses and strengthens the predictability of contractual enforcement in commercial agreements. As a takeaway, when drafting multiple contracts for the same transaction, it is worth considering the harmonious impact of differing clauses in the various agreements. Parties, must discuss their commercial objectives and have a clearer communication of their intended outcomes before agreeing to multiple dispute resolution clauses that cover the same transaction.

 

[1] Times Trading Corp v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm)

[2] Girish Deepak, ‘ANALYSIS: UK HIGH COURT ISSUES ANTI-SUIT INJUNCTION AGAINST NEW YORK-BASED COURT ANDARBITRATION PROCEEDINGS IN DISPUTE INVOLVING INDIAN STATE-OWNED INSURANCE COMPANY’ (IA Reporter, 27 February 2025) <https://www.iareporter.com/articles/analysis-uk-high-court-issues-anti-suit-injunction-against-new-york-based-court-and-arbitration-proceedings-in-dispute-involving-indian-state-owned-insurance-company/> accessed 11 March 2025

[3] Surrey County Council v Suez Recycling and Recovery Surrey Limited [2021] EWHC 2015 (TCC)

[4] Scott v Avery (1856) 5 HL Cas 811

[5] Keren Tweeddale, Andrew Tweeddale, ‘Scott v Avery Clauses: O’er Judges’ Fingers, Who Straight Dream on Fees’ [2011] 77(4) Arbitration: The International Journal of Arbitration, Mediation and Dispute Management, pp. 423 – 427

[6]Sulamerica CIA Nacional de Seguros SA & Ors v Enesa Engenharia SA & Ors [2012] EWHC 42 (Comm), Surrey County Council v Suez Recycling and Recovery Surrey Limited. [2021] EWHC 2015 (TCC)

La Cour européenne des droits de l’homme sanctionne l’Italie, au visa de l’article 2 de la Convention européenne des droits de l’homme, en raison du caractère ineffectif de l’enquête sur les causes prétendument professionnelles du décès d’une personne eu égard à son exposition à des substances toxiques.

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Parquet européen (Contrôle juridictionnel des actes de procédure)
Espace de liberté, sécurité et justice
Les actes de procédure du Parquet européen susceptibles d’affecter la situation juridique des personnes les contestant doivent pouvoir faire l’objet d’un contrôle juridictionnel

The Centre for Private International Law and Transnational Governance of the University of Aberdeen is relaunching its Crossroads in Private International Law research seminar series. The programme will open on 23 April 2025, at 14:00 (UK time), with a seminar on Consumer Protection and Justice in Israeli Private International Law by Sharon Shakargy (The Hebrew […]

Députés et sénateurs ont trouvé un compromis sur le projet de loi portant diverses adaptations au droit de l’Union européenne et l’ont adopté le 2 avril pour les premiers, le 3, pour les seconds.

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If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.] SD Rebel v Elise Tankschiffahrt [2025] EWHC 376 (Admlty) is a classic case to consider the impact of anti-suit injunctions issued post Brexit by the English courts, upon ongoing proceedings in a court in the EU. Defendant did not enter an appearance, having withdrawn legal representation in light of the ongoing Dutch proceedings. The history of the case is summarised [3]: On 14 November 2023 salvage services were provided by the VB REBEL to the STELA at Scheurhaven, which is part of the Port of Rotterdam complex in the Netherlands. At the conclusion of the services, the Master of the STELA signed a “Certificate of Safe Delivery” which stipulated that any dispute arising out of the provision of salvage services would “be settled in London, in accordance with English law”. Notwithstanding that stipulation, on 24 January 2024, Elise Tankschiffahrt KG as owner of the STELA commenced proceedings in the Rotterdam District Court seeking a declaration that the services provided did not amount to salvage and, in the alternative, for the Dutch Court to determine the salvage award. To commence proceedings in Rotterdam was an apparent breach of the jurisdiction agreement in the Certificate of Safe Delivery. The claimants therefore issued these proceedings in England and, on 20 February 2024, applied for an anti-suit injunction. On 21 March 2024, Andrew Baker J granted the application and made an anti-suit injunction against Elise Tankschiffahrt KG. Because neither the charterer of the STELA, Beresina UG, nor the operator of the VB Rebel, Boluda Towage Rotterdam BV, were parties to the jurisdiction agreement, he set aside service of the Claim Form in respect of the claims made by Boluda and in respect of the claims made against Beresina UG. He gave a fully reasoned judgment, reported under the neutral citation number [2024] EWHC 1329 (Admlty). [4]

The remaining defendant has defied the anti-suit injunction. It has continued its claim in the Netherlands. On 23 October 2024, the Rotterdam District Court gave an interim judgment in which it declared its competence to adjudicate upon the claim. I have not been supplied with the judgment itself. But in a witness statement of 4 February 2025 from Mr John Strange of Penningtons Manches Cooper, the claimants’ solicitors, I have been informed that the reasoning was that the jurisdiction agreement was not enforceable on the ground that it was “too vague as it specified the jurisdiction as ‘London’ rather than the English courts”.

Relevant Dutch judgment is Elise Tankshiffahrt AG and Beresina UG v SD Rebel BV and Boluda Towage Rotterdam BV ECLI:NL:RBROT:2024:10435. In that judgment, the Rotterdam court held it has jurisdiction on the basis of Article 4 Brussels Ia despite aforementioned clause in the certificate of safe delivery: “Any dispute arising out of the services performed by the tug, will be settled in London, in accordance with English law.” The Rotterdam court held that this clause is neither valid choice of court in accordance with A8(2) of the Dutch CPR, nor a valid arbitration clause in accordance with A1074 of the Dutch CPR. [4.6] it argued that for both, the clause needs to be ‘sufficiently clear and specific’ and that [4.5] the clause at issue simply refers to a place, not a medium: whether in courts in ordinary or indeed arbitration. I am not privy to submissions in the case and I do not know how extensively the issue was argued. Of note is all lack of reference to either the Hague Choice of Court Convention, Brussels Ia (with A25 arguably not covering choice of court away from the EU) or the 1958 New York Convention. [4.7] The Dutch court holds that the requirement of clarity and specificity is a procedural requirement covered by Dutch CPR as the lex fori, and not a substantive requirement in which English law as the putative lex causae can have a say (the court oddly refers to A3 and 10 Rome I, despite A1(2)e excluding choice of court and arbitration agreement from its scope of application). The court also [4.9] rejects a lis pendens stay on the basis of Dutch residual rules, and, summarily, an A33 Brussels Ia stay, with reference to the English claim form having been issued after the Dutch courts had been seized. At the time of posting the Dutch finding on the merits had not yet been published. Back then to the English judgment: [53] Davison AR like his Dutch colleague seems to have overlooked A1 Rome I’s exclusion of choice of court and applies English law as the putative law to the (alleged) choice of court agreement. [54] he holds Masters of vessels must, in the ordinary course, sign many documents of a commercial nature such as bills of lading, statements of fact, certificates of compliance etc. Mr Soukup would be no exception. The working languages of VTS Rotterdam and VTS Antwerp are English and Dutch. I find it hard to accept (especially without hearing from him and having his evidence tested in cross-examination) that Mr Soukup did not, in fact, understand what he was signing. But if that was the case, he should have made a proper enquiry, not a casual one. And having failed to do so, he and his principal are bound by the content of the document he signed. [55] deals with the alleged lack of certainty in the clause The document is clear (as Andrew Baker J has already found [this is in 2024] EWHC 1329 (Admlty): the interim ASI, GAVC]). It provides for English law and jurisdiction in London. On any reasonable interpretation that means the courts in London, including this court. A final anti-suit injunction is made, as is an award for the salvage services. Clearly the judgment will clash with the eventual Dutch judgment and how that in turn will be resolved, will be one to watch. Geert. https://bsky.app/profile/gavclaw.bsky.social/post/3ljz5hc2xss2j https://x.com/GAVClaw/status/1899016175897510296

In a judgment of 2 April 2025, the French supreme court for private and criminal matters (Cour de cassation) ruled that there is no exception in Article 25 of the Brussels I bis Regulation to the enforcement of jurisdiction clauses to ensure the application of the overriding mandatory provisions of the forum. As a consequence, […]

Par un arrêt de grande chambre, la Cour européenne des droits de l’homme juge compatible avec la Convention européenne le transfert au profit de l’Autorité de la concurrence néerlandaise et l’utilisation de données « accidentellement interceptées » lors d’écoutes téléphoniques légalement diligentées dans le cadre d’une enquête pénale.

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Par une circulaire en date du 21 mars 2025, le ministre de la Justice incite les procureurs de la République à veiller à l’exécution des mesures d’éloignement du territoire français prononcées par les autorités judiciaires ou administratives à l’encontre de personnes définitivement condamnées. Pour ce faire, le garde des Sceaux insiste sur le renforcement de la collaboration entre les acteurs pénitentiaires, judiciaires et administratifs et sur la mobilisation de l’ensemble des instruments déjà existants. 

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The multiple-award-winning book by Augustin Gridel (Université de Lorraine), Marchés et instruments financiers en droit international privé (Bruylant 2023), has just been published in English under the title Financial Markets and Instruments in Private International Law. A European and French Perspective. It features a preface by Louis D’Avout and a foreword by Christine Lagarde.

The blurb reads as follows:

The aim of this book is to describe, from a European and French perspective, the relationship between the law of financial markets and instruments and private international law. Where there is a foreign element, the rules of financial law are most often presented as overriding mandatory rules or administrative rules. The establishment of a national supervisory authority with administrative, normative and repressive powers is likely to amplify this perception, as is the appearance of financial law rules in litigation where they seem to derogate from the normally applicable solution rather than coherently form a new category. However, this presentation by means of the lois de police methodology does not provide an overall view of the body of legislation put in place by financial law, nor does it provide a key to the application of these rules.

In addition to taking place in a renewed legislative and institutional environment, this research does not limit its scope to one or other aspect of the internationalisation of the law of financial markets and instruments. The book covers both institutional aspects (organisation and administrative supervision of market managers and infrastructures, investment firms, including aspects relating to insolvency) and operational aspects (issuance of financial securities, marketing, liability for inaccurate prospectuses, crossing thresholds, takeover bids, market abuse), as well as the study of financial instruments themselves (ownership of financial securities and securities transactions; formation and execution of financial contracts). By taking a systemic look at the rules studied, this book aims to renew the presentation of financial law rules by placing them within rules of conflict whose unity derives not only from the links between the rules, but also from the common objective they pursue. The connecting factors proposed are based, where appropriate, on those of the market infrastructures themselves. The book concludes with a list of forward-looking proposals to ensure more consistent international application of financial law.

Lawyers, in-house counsel, regulators, students and academics interested in international financial law issues will find in this book a systematic account of the substantive rules applicable and their positive or desirable international scope.

The book can be ordered from the publisher Intersentia here.

Within the framework of the Jean Monnet Module CoME CircLE, the University of Udine, in cooperation with a consortium of European universities, now including University of Essex , De Montfort University of Leicester, University of West Timisoara, East Anglia University, University of Belgrade, University of Rijeka and University of Szeged, organizes the 18th edition of […]

La Cour de justice rappelle la nécessité de retenir une approche autonome et unitaire de la résidence habituelle, et apporte des précisions sur la manière d’apprécier les critères permettant de caractériser la notion. 

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by Shantanu Kanade, Assistant Professor, Dispute Resolution, Jindal Global Law School, India 

The Federal Court of Australia (“Federal Court”), in its recent judgement in the Republic of India v. CCDM Holdings, LLC[1] (“Judgement”), held that the Republic of India (“India”) was entitled to jurisdictional immunity from Australian Courts in proceedings seeking recognition and enforcement of foreign arbitral awards dealing with disputes arising from ‘non-commercial’ legal relationships. The Court’s judgment was rendered with respect to an appeal filed by India against an interlocutory judgement of a primary judge of the same court, rejecting India’s sovereign immunity claim.

Background of the Dispute

Three Mauritian entities of the Devas group (“Original Applicants”) had commenced arbitration proceedings in 2012 under the 1998 India-Mauritius BIT, impugning India’s actions with respect to an agreement for leasing of space spectrum capacity entered between Devas Multimedia Private Limited (an Indian company in which the Original Applicants held shares) and Antrix Corporation Limited (an Indian state-owned entity). In 2011, India’s Cabinet Committee on Security decided to annul the said agreement, citing an increased demand for allocation of spectrum towards meeting various military and public utility needs (“Annulment”). The arbitration proceedings that followed culminated in a jurisdiction and merits award in 2016[2] and a quantum award in 2020 (“Quantum Award”)[3]. The Original Applicants have since sought to enforce the Quantum Award against India in different jurisdictions, discussed here.[4]

 

Proceedings Before the Primary Judge

The Original Applicants commenced proceedings before a primary judge of the Federal Court (“Primary Judge”) in April 2021 for recognition and enforcement of the Quantum Award. In May 2023, the Original Applicants were substituted with three US entities of the Devas Group which were respectively assignees of each of the Original Applicants (collectively the “Applicants”).

India asserted that it was immune to the jurisdiction of the Federal Court under section 9 of the Foreign State Immunity Act, 1985 (“Act”), which states: “Except as provided by or under this Act, a foreign State is immune from the jurisdiction of the courts of Australia in a proceeding.” An exception to this general rule of immunity is provided in section 10(1), which states: “A foreign State is not immune in a proceeding in which it has submitted to the jurisdiction in accordance with this section.” Section 10(2) further provides that a State may submit to jurisdiction “by agreement or otherwise”. The Applicants argued that by ratifying the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (“Convention”), India has submitted to the jurisdiction of Australian courts by agreement within the meaning of Section 10(1) and (2) of the Act in relation to proceedings for recognition and enforcement of foreign arbitral awards.

In deciding whether India has waived its immunity, the Primary judge invoked the judgement of the High Court of Australia (“High Court) in Kingdom of Spain v Infrastructure Services (“Spain v. Infrastructure Services”)[5], which dealt with a similar claim of jurisdictional immunity by Spain with respect to enforcement of an ICSID Convention award. Observing that that the “standard of conduct for submission by agreement under Section 10(2) requires either express words or an implication arising clearly and unmistakably by necessity from the express words used”, the Primary Judge held that ratification of the Convention by India amounts to a “clear and unmistakable necessary implication” that it has agreed to submit to the jurisdiction of Australian courts as per Section 10(2).[6] The Primary Judge opined that permitting India to take a sovereign immunity defence would be inconsistent with Article III of the Convention, which requires all Contracting States to “recognize arbitral awards as binding and enforce them”.[7]

The Primary Judge noted that India had made a commercial reservation to the Convention, per which it would “apply the Convention only to differences arising out of legal relationships [. . . ] which are considered as commercial under the Law of India.” (“Commercial Reservation”). However, he did not consider this to be relevant to the instant case as enforcement of the Quantum Award was sought in Australia, which had made no such reservation.[8]

The Primary Judge thus rejected India’s claim to jurisdictional immunity, while granting leave to appeal to the Full Court of the Federal Court (“Full Court”).

 

The Full Court Judgement

 India appealed the judgement of the Primary Judge to the Full Court, contending that he erred in rejecting India’s plea on jurisdictional immunity. The Full Court framed two issues for consideration: (1) by ratifying the Convention, did India waive foreign state immunity in respect of enforcement of an award that is generally within the scope of the Convention but excluded by its Commercial Reservation (“Issue 1”), and (2) is the Quantum Award outside the scope of India’s Commercial Reservation? (“Issue 2”).[9]

On Issue 1, India asserted that it had not submitted to the jurisdiction of Australian courts with respect to proceedings for recognition and enforcement of awards that fell outside the scope of its Commercial Reservation. The Applicants submitted that the Commercial Reservation is a unilateral reservation that does not oblige other contracting States to the Convention (“Contracting States”) to limit recognition and enforcement of such awards in the same manner.

In considering these submissions, the Full Court undertook a detailed analysis of the rules set out in the Vienna Convention on the Law of Treaties (“VCLT”) that deal with the legal effects of reservations made by a State while expressing its consent to bound by a treaty. The Court observed that as the Commercial Reservation is a reservation “expressly authorised” by Article I (3) of the Convention, it falls within the terms of Article 20(1) of the VCLT and does not require any subsequent acceptance by other Contracting States. To determine the legal effects of the Commercial Reservation, the Court turned to Article 21 of the VCLT, read with the Guide to Practice on Reservations to Treaties published by the International Law Commission. Based on the foregoing analysis, the Court concluded that “the effect of a reservation is that between the reserving and accepting state (which in the case of the New York Convention is all other states), the reservation modifies the provision of the treaty to the extent of the reservation for each party reciprocally (. . .).”[10] Applying the said understanding, the Full Court opined that obligations under the Convention undertaken towards or by a Contracting State that has made a commercial reservation are limited by such reservation. Both India and Australia thus had no obligation towards each other to enforce awards that do no not pertain to “commercial” relationships under Indian law.[11]

The Full Court then considered whether India’s ratification of the Convention, qualified by its Commercial Reservation, entails a “clear and unmistakable necessary implication” that it has waived its immunity from Australian courts (as per the standard articulated in Spain v. Infrastructure Services). The Court found that no such implication arises as India’s ratification of the Convention subject to the Commercial Reservation is “a sufficiently (un)equivocal expression of India’s intention not to waive foreign State immunity in proceedings enforcing the Convention in respect of non-commercial disputes (. . . ).” [12]

Despite the parties not contesting Issue 2, the Full Court determined the issue for the sake of completeness of legal analysis. Interestingly, given the absence of evidence on what constitutes “commercial” relationships under Indian law, the Full Court approached the question of whether the Quantum Award fell within the scope of the Commercial Reservation from the perspective of Australian law (following case law from the High Court[13]). In doing so, the Court considered Section 11 of the Act, which provides for a “commercial transaction” exception to foreign State immunity. While acknowledging that considerations under Section 11 and those concerning India’s Commercial Reservation are different, the Full Court opined that there is a significant overlap between the two and proceeded to analyse the Quantum Award under Section 11. The Applicants had invoked the exception under Section 11 as a separate ground before the Primary Judge, which he rejected on the ground that the Annulment “was made by the body vested with the highest form of executive policy-making in India, and was stated to be for reasons of public policy” and was not thus not a “commercial transaction”. Reiterating the Primary Judge’s reasoning, the Full Court concluded that the Quantum Award is not an award dealing with differences arising from a “commercial” relationship.[14]

It is interesting to consider if the court’s approach would have been any different if it were answering this question from an Indian law perspective. The position under Indian law on whether awards rendered in investor-State arbitrations (“Investment Awards”) can be considered as pertaining to “commercial” relationships is ambiguous. Of particular relevance are two Delhi High Court judgements, in which the court opined that Investment Awards cannot be considered “commercial”  for the purposes of enforcement under Part II of the Arbitration and Conciliation Act (which implements the Convention in India).[15] Critics of these judgements, on the other hand, have emphasised that there is enough basis in Indian law and policy to suggest that Investment Awards are commercial in nature. Perhaps the strongest argument in this regard is that India’s 2016 Model BIT expressly states that Investment Awards “shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention.”[16]

 

Reflections on the Judgement

The Applicants have filed a special leave to appeal the Full Court judgement (“Judgement”) to the High Court. The reflections shared below are thus subject to a potential reconsideration of the Judgement by the High Court.

Firstly, prevailing uncertainty regarding enforceability of Investment Awards in India (as discussed above) is what has prompted investors such as Devas to seek enforcement of such awards in other jurisdictions. In this regard, the Judgement could render Australia an unfavourable enforcement jurisdiction for Investment awards to which India is a party. This is because India could invoke jurisdictional immunity in all future enforcement proceedings until the ambiguity concerning the commercial nature of Investment Awards under Indian law is resolved (either through legislative action or a Supreme Court ruling).

Secondly, this Judgement may have significant implications for enforcement in Australia of all Investment Awards not rendered under the ICSID Convention and thus subject to enforcement under the Convention (“Convention Awards”). Spain v. Infrastructure Services has settled the position that jurisdictional immunity is not available to a foreign State under Australian law with respect to enforcement of ICSID Convention awards. This Judgement, however, casts a shadow of doubt on the enforceability of Convention Awards in Australia by leaving the door open for other Contracting States that have made a commercial reservation to the Convention to invoke jurisdictional immunity in enforcement proceedings for such awards.

Given its likely implications, it is no surprise that the Judgement has come in for criticism by some commentators[17] who have highlighted the following issues: (1) the Full Court’s approach to commerciality of Investment Awards is inconsistent with that of courts in comparable jurisdictions such as the US and Canada, which have enforced Convention Awards despite these States having made a commercial reservation to the Convention, and (2) the characterisation of the Quantum Award as ‘non-commercial’  is contrary to the wide interpretation of term “commercial” envisaged in the UNCITRAL Model Law[18], which has the force of law in Australia.[19]

All stakeholders will now have to wait and watch how the High Court, if and when it takes up the appeal, deals with the Full Court’s findings.

 

[1] Republic of India v CCDM Holdings, LLC [2025] FCAFC 2 (“Judgement”).

[2] CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited, and Telcom Devas Mauritius Limited v. the Republic of India, PCA Case No. 2013-09, UNCITRAL (“CC/Devas Arbitration”), Award on Jurisdiction and Merits (25 July 2016).

[3] CC/Devas Arbitration, Award on Quantum (13 October 2020).

[4] Jeanne Huang, The Indian Satellite Saga and Retaliation: Recognizing the Supreme Court of India’s Judgment Abroad?, Coonflictoflaws.net, https://conflictoflaws.net/2024/the-indian-satellite-saga-and-retaliation-recognizing-the-supreme-court-of-indias-judgment-abroad/#_edn1.

[5] Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l. [2023] HCA 11.

[6] CCDM Holdings, LLC v Republic of India (No 3) [2023] FCA 1266, ¶ 51 (“Primary Judgement”).

[7] Primary Judgement, ¶43.

[8] Primary Judgement, ¶58.

[9]  Judgement, ¶54.

[10] Judgement, ¶67.

[11] Judgement, ¶68.

[12] Judgement, ¶72.

[13] Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54.

[14] Judgement,¶82.

[15] Union of India v. Vodafone Group, 2018 SCC OnLine Del 8842, ¶¶ 90-91; Union of India v. Khaitan Holdings (Mauritius) Limited & Ors, SCC OnLine Del 6755, ¶¶ 29-30.

[16]Model Text for the Indian Bilateral Investment Treaty (2016), Article 27.5, https://dea.gov.in/sites/default/files/ModelBIT_Annex_0.pdf.

[17] Micheal Lee, Check for NYC Reservations: Federal Court of Australia Affirms India’s Sovereign Immunity Against Recognition and Enforcement of Non-ICSID Arbitral Award, Steptoe Clients Alerts (26 March 2025), https://www.steptoe.com/en/news-publications/check-for-nyc-reservations-federal-court-of-australia-affirms-indias-sovereign-immunity-against-recognition-and-enforcement-of-non-icsid-arbitral-award.html?tab=overview.

[18] UNCITRAL Model Law on International Commercial Arbitration (1985),  Article I(1), footnote 2 states as follows: “The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. [. . . ].”

[19] International Arbitration Act 1974, Section 16(1).

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