SC confirms that former employees are not disqualified from acting as arbitrators
The Supreme Court (“SC”), in the case of The Government of Haryana PWD Haryana (B and R) Branch Vs. M/s. G.F. Toll Road Pvt. Ltd. & Ors has confirmed that a former employee can act as an arbitrator in a matter involving the former employee’s company. The SC reviewed both the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and the subsequent 2015 amendment while passing its order.
The SC reviewed Entry 1 of the Fifth Schedule and the Seventh Schedule of the Arbitration Act (“Entry 1”) which details the categories of people who may not be cannot act as arbitrators. The SC held that while Entry 1 prohibits employees from acting as arbitrators, it cannot be widened to include former employees also.
Quick Views:
- As former employees will have a better understanding of the business of the Company that is a party to the arbitration, appointing them as arbitrators may improve the quality of the arbitration order as the arbitrator will have a better understanding of the party’s business.
DIPP reiterates that e-commerce firms cannot own or control inventories and e-commerce entities plan to seek an extension for the deadline to implement the amended rules
In response to the queries raised with regard to the Department of Industrial Policy & Promotion’s (“DIPP”) amended rules for e-commerce (“Amended Rules”), the DIPP, on January 03, 2019 has reiterated its stance on e-commerce platforms owning or controlling inventories, where a vendor cannot have more than 25% (Twenty Five Percent) of its sales from one particular e-commerce platform.
Due to the increase in compliance requirements, several major e-commerce platforms are planning to approach the DIPP seeking for an extension in the deadline of February 01, 2019 (as mentioned in the Amended Rules itself) to comply with the Amended Rules.
Quick Views:
- The Amended Rules and the reiteration by the DIPP put a restriction on the manner in which e-commerce platforms with foreign investors operate in India. Until recently, several third party vendors purchase a majority of their inventory directly from e-commerce entities like Flipkart and Amazon. This will not be possible anymore, as vendors will not be allowed to have more than 25% of their sales from a single e-commerce platform (eg: not more than 25% of any vendor’s sales can come from Amazon).
- The Amended Rules will not have any impact on entities with no foreign investors (eg: Snapdeal), who can continue to control the inventory of its vendors.
Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.