From arbitration to computing damages, here're the key court orders

Stern remarks on arbitration, GST working
 

The Delhi High Court, where most commercial litigation starts, has made notable observations in two judgments about the conduct of such suits. While dismissing the arbitration appeal, Gammon India vs NHAI, it remarked “arbitration has become complex owing to several reasons, such as long delays, challenges in enforcement, high costs, multiple invocations, references, tribunals, awards, and challenges between the same parties in respect of the same contract or series of contracts. Repeated steps have been taken in judgments and by amendments to the law, to make the system efficient, but more needs to be done”. The other judgment was on GST. “We have time and again made adverse remarks on the procedural working of the GST system. We do not derive any pleasure when we make such observations, as comments of the court affect the reputation of the administration in the country. Such remarks are made only when we are constrained to do so,” the court observed in its judgment in SKH Sheet Metals vs Union of India. This case is one where there is “complete lack of understanding and fairness on the part of the tax department.”

Appeals against interim orders
 

The Supreme Court does not generally interfere in an interim order, but if a high court passes an order, which affects the revenue of the state, it will interfere in the public interest. The court stated so in its judgement in Rajasthan Warehousing Corporation vs Star Warehousing. The state agency called tenders for storing food grains in 71 locations. One set of bidders contested the award of contract. The high court stayed the contracts without recording reasons. The state corporation appealed, and the SC vacated the stay. It said: “In matters of contract, the grant of interim order to restrain successful bidders from executing the contract is not in the public interest; more so when the tender is for storage of food articles.”

Wide swings in computing damages 

There are several “imponderables and uncertainties” in the calculation for compensation in road accidents. The courts dealing with them still appear to be unsure of the criteria. In a recent Supreme Court judgment, United India Insurance vs Satinder Kaur, the tribunal awarded Rs 1.90 lakh to a widow and three minor children for the death of their breadwinner. On appeal, the Punjab and Haryana High Court raised it to Rs 96.78 lakh. On the appeal of the insurer, the apex court reduced it to Rs 19.82 lakh. One tripping point is guessing the life expectancy of the deceased and his prospects. “In the wake of increased inflation, rising consumer prices, and general standards of living, future prospects have to be taken into consideration, not only with respect to the status or educational qualifications of the deceased but also other relevant factors such as higher salaries and perks which are being offered by private companies these days,” the judgment said. The courts also falter on deductions for personal expenses, determination of “multiplier” according to the earning years left and even on conventional heads: Loss of estate, loss of consortium and funeral expenses. The last word has not been said — appeals in road accident claims are a major part of litigation.