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Delhi High Court to plan opening of Courts from September 01, 2020

In a recent Office Order dated August 15, 2020, the Hon’ble Administrative and General Supervision Committee of Delhi High Court has notified the general public that a comprehensive plan may be evolved for gradual opening of Courts from September 01, 2020 onwards.

The Committee vide the aforesaid Order has further extended the functioning of Delhi High Court and its Subordinate Courts till August 31, 2020 in the wake of COVID-19 outbreak and subsequent spike witnessed of coronavirus cases in NCT of Delhi.[1] The suspension of High Court of Delhi is based on the terms as contained in its order dated July 30, 2020.[2]

The Office Order further notifies new dates of hearing for all the matters listed before the Court from 17.08.2020 to 31.08.2020 as under:

Date already fixedNew date of Hearing
17.08.2020 (Monday)09.10.2020 (Friday)
18.08.2020 (Tuesday)12.10.2020 (Monday)
19.08.2020 (Wednesday)13.10.2020 (Tuesday)
20.08.2020 (Thursday)14.10.2020 (Wednesday)
21.08.2020 (Friday)15.10.2020 (Thursday)
24.08.2020 (Monday)16.10.2020 (Friday)
25.08.2020 (Tuesday)19.10.2020 (Monday)
26.08.2020 (Wednesday)20.10.2020 (Tuesday)
27.08.2020 (Thursday)21.10.2020 (Wednesday)
28.08.2020 (Friday)22.10.2020 (Thursday)
31.08.2020 (Monday)23.10.2020 (Friday)

The Office Order inter alia notifies that:

  1. The Courts of Registrars and Joint Registrars of Delhi High Court will be hearing matters listed before them through video conferencing, where the files are already scanned.
  2. Evidence shall be recorded in ex-parte and uncontested matters where the same is required to be tendered by way of affidavit.
  3. The Courts of Registrars and Joint Registrars of Delhi High Court shall not pass any adverse order in non-urgent/routine matters where the concerned advocate is not able to join the proceedings through video conferencing, till the time the physical functioning of the Courts is resumed.
  4. The resuming of Courts will be subject to complete availability of public transport and situation in Delhi remaining stable and will be placed before the Committee for Preparation of Graded Action Plan and thereafter before the Full Court for consideration.
  5. On experimental basis, around one-fourth of the courts can resume physical functioning on a rotational basis while the rest can continue taking up matters through videoconferencing.

[1] http://delhihighcourt.nic.in/writereaddata/Upload/PublicNotices/PublicNotice_Y0WL4KB1Q95.PDF

[2] http://delhihighcourt.nic.in/writereaddata/Upload/PublicNotices/PublicNotice_1KTW5SWXGT5.PDF

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Ban on Old Vehicles in Delhi NCR- What does the future hold?

By Reetika Wadhwa and Vibhuti Vasisth

The National Green Tribunal (“NGT”) in 2015 imposed a ban on all diesel vehicles older than 10 years and all petrol vehicles older than 15 years, in Delhi NCR. Previously, only diesel vehicles that were over 15 years of age were banned in the region. Pursuant to the NGT’s afore-mentioned decision, the Delhi Road Transport Office (“RTO”) was directed to de-register all diesel vehicles which were older than 10 years in the Capital. In addition to this, the RTO has also been asked to share a list of all such vehicles with the Delhi Traffic Police so as to effectively regulate the ban.

For our detailed coverage on NGT’s order and on car scrapping rules, please read here.

What to do with Vehicles older than 10 years in Delhi NCR?

With the said ban in place, vehicles that are older than the prescribed year limit of 10 years, would only have the following two options. They may:

  1. Either have the said vehicle scrapped at an authorised scrapping unit; or
  2. Have the said vehicle re-registered in another State where no such ban is imposed.

The process of Re-registration of an old vehicle in another State:

In order to re-register your old vehicle in another State, one shall first have to obtain a No Objection Certificate (“NOC”) from the concerned RTO. Once an NOC is procured, the owner of the vehicle can have it re-registered at such other State where either no such ban is imposed, or where vehicles older than 10 years are permitted.  Different states have different set of governing norms, and you may want to contact the concerned RTO to gain more details in this regard.

The way ahead:

The imposition of impugned ban by the National Green Tribunal has raised numerous concerns amongst the public, most prominent one being as to what the future looks like for diesel vehicles older than 10 years and petrol vehicles older than 15 years in the Capital Region and how to deal with vehicles whose registration have either expired or is about to expire.

The most common reason for disapproval of the ban by the vehicle owners is that it is a blanket ban imposed mechanically over all vehicles that are above the prescribed year limit. It is further criticised that there are various factors that determine the End of Life of a vehicle (“ELV”), and not just the year of its purchase. Reports suggest that factors such as the engine of the vehicle, its maintenance and usage, etc., play a crucial role in categorising whether the vehicle should be banned for being hazardous or not. In fact, this is also one of the contentions raised by the Central Government in the appeal[1] filed against NGT order by them before the Supreme Court of India which is presently pending adjudication.

On the other hand, one must also not overlook the intent behind imposing the said ban which is/was only to curb the rapidly rising pollution levels in Delhi as well as the entire Country.  The ban must also be seen as an initiative to promote the replacement of old vehicles with modern ones. When vehicles reach the end of their useful lives, they contain different wastes that include glass, metal, plastic, fabric and rubber components. They also include fluids such as used oil, antifreeze, lubricants and gasoline or diesel, and increasingly contain electronic components with heavy and precious metals[2].Once vehicles reach the end of their useful life, they can become a liability on their owners as well as our Planet.

In an attempt to tackle the aforementioned, various countries across the globe already have properly regulated scrappage policies in place which primarily aim at:

  1. Stimulating the automobile industry;
  2. Generating and protecting employment in the sector; and
  3. Removing inefficient, more polluting vehicles from the road[3].

For instance, the scrappage scheme in Austria[4] allowed its customers a grant in cash of €1,500 if the old car was beyond the 13 years-age limit and if the new car would meet the Euro-4 emission criteria. The French scrappage scheme[5] which was introduced in 2009 offered grants worth €1,000, depending on the type of vehicle. It also offered a “Super-bonus” for scrapping old cars. Similarly, the German scrappage policy[6], which has been the largest in the world so far, offered a scrappage premium of €2,500 when buying a new car.

However, India is yet to introduce a distinct scrappage policy, which has thus, created uncertainty in the minds of vehicle owners. It is also surprising to note that despite being one of the top ten car-producing countries in the world, India still does not have a scrapping policy in place[7].  In the given circumstances, one can only wait for the Apex Court’s verdict in this regard which shall bring in more clarity in terms of what the future holds for diesel and petrol vehicles that are older than 10 and 15 years respectively.

We are keeping a track of the proceedings, and shall keep you updated with any further development in this regard.

Related Posts

India: Supreme Court bans sale and registration of BS- III vehicles from April 1

India: RTO Rules for Car Scrapping in Delhi-NCR

[1] CA. No. 006686-006688

[2] https://www.epa.gov/sites/production/files/2018-09/documents/eol_vehicle_guide_final_english.pdf

[3] Department for Business and innovation skills, http://www.berr.gov.uk/

[4] https://circabc.europa.eu/sd/a/b34363fe-8903-4d9c-a2f1 aa38733f0500/report_scrapping_schemes_annex_en.pdf

[5] ibid

[6] ibid

[7] International Organization of Motor Vehicle Manufacturers. (n.d.). 2008 Production Statistics. Retrieved from http://oica.net/category/production-statistics


Developers cannot add Floors without Buyers’ Consent- MahaRERA

By Nihit Nagpal and Anuj Jhawar

In a recent development, as reported by the Hindustan Times, the Maharashtra Real Estate Regulatory Authority (MahaRERA) vide its order dated July 30, 2020 in the case of Mr. Deepesh S Singh and ors vs. M/s. Neelkanth Constructions, has directed the Respondent i.e., M/s Neelkanth Constructions to not carry out any construction of extra floors on the project titled ‘Neelkanth Vihar Phase I’, in the absence of prior approval from the existing buyers.[1]

Brief background

The Complainants are allottees in the present case. The sale agreement was executed between allottees and builder in the year 2017-2018. As per the agreement, possession of the flats had to be given by March 31, 2019 but due to absence of occupancy certificate, the same got delayed. Hence, the possession was granted in the December, 2019 to the Complainants. Thereby, Complainants invoked Section 18 of the Real Estate (Regulation and Development) Act, 2016 asking for interest payment due to delayed possession. Along with the above mentioned contention, space for car parking, formation of society [under Section 11(4)(e)], execution of conveyance deed were also prayed.

Further it was contended by the Complainants that, despite Clauses 24 and 25 of the sale agreement with respect to construction of extra floors (modifications to the sanctioned plan) to utilize the FSI of the whole project land, provisions (Section 14) of RERA would supersede as the project is registered with Maharashtra RERA.

MahaRERA Order

The MahaRERA vide its order dated July 30, 2020 directed the Respondent builder, under Section 18 of RERA (Real Estate Regulation and Development Act, 2016)[2] (“the Act”) to pay interest amount for the time period April 1, 2019 to November 27, 2019 i.e., till the date on which occupancy certificate was obtained with respect to the project, to the Complainants. Along with the directions to pay interest, adjudicating body also ordered the benefit of ‘moratorium period’ to the Respondents.

Keeping in view the application of Section 11(4)(e) of the Act, MahaRERA ordered the Respondent to form a society along with execution of conveyance deed with respect to the said society, within the stipulated time of 3 months from the date of order.

Can a builder add floors or make alterations in the sanctioned layout?

According to Section 14 of the Act, any building project shall adhere to the requirements, conditions and terms present in the sanctioned plan for the respective project. The project must be in consonance with the layout plan and other specifications. The statutory provision under Section 14 further states that irrespective of any agreement, contract or legislation, the builder/promoter shall not make any changes or modifications/alterations to the sanctioned plan, except:

  • when due to architectural or structural reasons, with due recommendation from an Engineer or Architect and intimation to the allottees, certain minor modifications can be made to the structural plan.
  • with written consent of 2/3rd of the allottees (buyers) agreeing to make alterations or additions to the layout plan under sanctioned project.

Moreover, Section 14 (3) of the Act says that, in case buyer finds any defect or issue in the quality, services provided by the builder/promoter, non- compliance of the agreement etc, within the time of 5 years from the date of delivery of possession of flat to the buyer, the aggrieved home buyer is entitled to proper redressal of his complaints within 30 days of making the complaint. Failing which, such aggrieved buyer shall be entitled to appropriate compensation.

On similar grounds, a judgment was pronounced in the case of Shri Vitthal Laxman Patil v. Kores (India) Ltd. Real Estate Division Mumbai & ors., observing that Section 7 of Maharashtra Ownership Flats Act (“MOFA”)[1] akin to Section 14 of RERA, restricts a promoter/builder from making any further alterations and modifications to the sanctioned project plan, after the scope and extent of modification over a project has been disclosed. Further, Section 7A of MOFA necessitates prior consent of buyers in case of  structural modifications to the respective building (it does not include every other building of the project, but the concerned structure).

In view of the aforesaid, it is abundantly clear that the statutory provisions mandate that the promoter shall disclose all the specifications of the project, area, amenities, scope of development, possible additions and modifications etc. to the buyers/purchasers in the sanctioned plan. Despite the plan, if modifications are required, express approval and written consent shall be taken from the buyers for the same.

Even in the present case, the MahaRERA while interpreting while interpreting Section 14 of the Act, restricted Respondent builder/ developer from commencing any construction activity or make any modifications in the sanctioned plan without the 2/3rd consent and approval of the existing (allottees) buyers i.e., those who already have bought the flat.

[1]https://www.indiacode.nic.in/bitstream/123456789/8802/1/the_maharashtra_ownership_flats_act%2C1963_%2845_of_1963%29pdfcompressor-2856906.pdf

[1] https://www.hindustantimes.com/mumbai-news/developer-can-t-add-extra-floor-without-nod-of-buyers-maharashtra-real-estate-regulator/story-UUiwdRUYGzpeUkIphqooVN.html

[2] https://www.up-rera.in/pdf/reraact.pdf

[3]https://www.indiacode.nic.in/bitstream/123456789/8802/1/the_maharashtra_ownership_flats_act%2C1963_%2845_of_1963%29pdfcompressor-2856906.pdf

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Deficiency of Services under Consumer Protection Act, 2019

By Priyanka Batra and Nishtha Das

When a service is found deficient by a consumer, they can lodge a complaint under the Consumer Protection Act, 2019. Thus, the prime requirement is that the matter must fall within the “definition of service”, and it must entail a deficiency as per the requirements provided under the Consumer Protection Act, 2019.

Also read Consumer Protection Act, 2019 comes into force

What is “deficiency of service”?

  • According to the definition under Section 2(11) of Consumer Protection Act 2019

Deficiency of service can be witnessed in any service sector where there is buyer-seller relationship, such as, railways, banks, legal aid, electricity, construction, education, transportation, aviation, hospitality, restaurants, entertainment etc. Deficiency of service can have minor to grave consequences, ranging from inconvenience or harassment to mental or physical injury to death, thereby leading to legal consequences.

The Consumer Protection Act (both old and new) is a legislation enacted in India with the sole purpose of protecting and safeguarding the interests of consumers. The Consumer Protection Act, 2019, which came into effect on July, 20 2020, not only covers within its ambit physical platforms for buyer-seller relationship but also recognizes services provided by E-commerce platforms.

Indian Judiciary on “Deficiency of Services” under Consumer Protection Laws

Unfair Trade Practices

A trade practice is touted as unfair when in order to promote its services or sale of its goods, supply and distribution of its products, an entity uses illicit and illegal means to mislead the general public into opting for in-genuine and deceptive goods and services. Some examples are: portraying the goods to be of good quality when they are actually of inferior/poor quality, misleading public with fake components and ingredients, misrepresentation of services, claiming used goods and products to be brand new, fake advertising, selling goods not complying with safety and other industry standards while claiming otherwise etc.

According to the newly enacted Consumer Protection Act 2019, E-commerce Rules on unfair trade practices have been laid down under the Consumer Protection (E-commerce) Rules, 2020[5].

Also read Consumer Protection (E-commerce) Rules, 2020 comes into force

  • These rules are applicable to all e-commerce portals, inventories, marketplaces and other entities (including foreign entities, which are situated outside India but supply goods and services to India as well) involved in providing services to customers. Activities which take place on personal level and non- professionally, are exempted from the applicability of these Rules.
  • As per the rules, E-commerce entities are mandatorily required to dispense information such as refund policy, warranty, exchange rules, payment options, tracking information, shipment details etc. If the goods or products sold are not up to the mark/quality as portrayed, then sellers are liable to take them back or exchange them accordingly.
  • Such platforms are mandated to answer any query or complaint filed by a consumer within 48 hours and shall provide proper redressal to such consumer complaint within the period of 1 months, from the date of receipt of complaint. Moreover, appointment of grievance officer is compulsory.

CONSUMER PROTECTION REDRESSAL MECHANISM

In case of any deficiency in services, the consumer can approach Consumer Courts constituted under the Act. After the commencement of new Consumer Protection Act, 2019, consumer complaints can now be registered electronically. The whole adjudicating procedure has been simplified by not just permitting electronic filing but, empowering and authorizing District and State Consumer Forums to address to review applications and also advise mediation (whenever feasible).

Consumer Courts is a 3-tier system of courts (National level, State level and District level) where aggrieved consumers can approach as per the valuation of matter in concern, for redressal and adjudication of disputes. Once the issues of the matter in dispute are recognized, the further step is to understand the pecuniary limit/jurisdiction of the case.

Pecuniary Jurisdiction in Consumer Cases

ForumValue of Claim
District Consumer Disputes Redressal Forum[6]:Rs. 1 Crore or less 
State Consumer Disputes Redressal Commission[7]Between Rs. 1 Crore to Rs. 10 Crore.
National Consumer Disputes Redressal Commission[8]More than Rs. 10 Crore

Procedure for filing Consumer Complaint

  1. Send legal noticeThe first and foremost step after the discovery of cause of action/deficiency of service, is to send legal notice to the service provider (seller). It is imperative to mention the type of deficiency of service, its potential, loss incurred, relief sought, time period to comply with the conditions. Legal notice acts as a warning letter or a proposition for settlement to the service provider, failing which leads to legal consequences.
  2. File Consumer complaint before appropriate Forum- Now, if the service provider fails to comply with the terms and conditions mentioned in the legal notice or disagrees to compensate for the loss caused, the complainant has the right to file a legal complaint in the Consumer forum.
  3. Particulars of Compliant- The complaint must contain all the necessary details of the complainant and service provider such as: name and address, relevant facts of the matter, remedy sought, affidavit (signed and verified), all other relevant documents (bill details, mode of payment, guarantee cards etc).
  4. Limitation period to file Consumer Complaint- As per Section 35 of the Act, a consumer complaint must be filed to respective District Forum within a span of two years from the date on which the cause of action or deficiency in service or defect in goods arises. Nevertheless, the law permits the Consumer or aggrieved to file a complaint even after the statutory period of two years if the District Forum is satisfied that the complainant has genuine and valid reasons for not filing the complaint within the specified time period.
  5. Admissibility of Complaint by forum- Section 36 of the Act prescribes that, after the filing of consumer complaint, District Forum shall revert on admissibility of the complaint within the span of 21 days from the date of filing. Failing which shall be deemed to be admitted and approved.
  6. Mediation- According to Section 37 of the Act, if the respective Forum considers mediation as a viable option for settlement, it may, with the consent of parties, advise them to opt for mediation. In that case, contesting parties are required to provide written consent within five days from such proposal, to the Forum. If mediation fails, case shall fall back to the Forum. It is pertinent to mention that, according to Section 81(1), no appeal can be filed and entertained by respective forum against the order passed by Mediation.
  7. Review application- If the complainant is not satisfied with the verdict passed by District consumer forum, then he/she can file a review application in the same forum within 30 days from the date of pronouncement of order.[9] In case the complainant is not satisfied by the order on review application, the aggrieved can appeal to the next higher judicial authority i.e., State Commission within 45 days from the date of passage of order.[10]
  8. Filing appeal with National Commission- Similarly, if the complainant is not satisfied with the order passed by State Commission, aggrieved can file review application in the same forum within a period of 30 days from the date of passage of order.[11] Otherwise, if aggrieved by the order passed by State Forum, the contesting party has the right to appeal to National Forum within 30 days from the date of order given by previous forum.[12]

[1] http://egazette.nic.in/WriteReadData/2019/210422.pdf ; https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf

[2] 1996 AIR 550

[3] MANU/SC/0083/2020

[4] MANU/SC/1259/2017

[5] https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf

[6] Section 34 of Consumer Protection Act, 2019

[7] Section 47 of Consumer Protection Act, 2019

[8] Section 58 of Consumer Protection Act, 2019

[9] Section 40 of Consumer Protection Act, 2019

[10] Section 41 of Consumer Protection Act, 2019

[11] Section 50 of Consumer Protection Act, 2019

[12] Section 51 of Consumer Protection Act, 2019

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DISPLAY OF  ‘COUNTRY OF ORIGIN’- REGULATIONS IN DIFFERENT JURISDICTIONS: A COMPARATIVE ANALYSIS

By Vikrant Rana and Vibhuti Vasisth

‘Make in India’ and ‘Made in India’ have become popular issues in the recent times. It is a common belief that ‘Make in India’ and ‘Made in India’ are the same and are often used interchangeably in the public and media domain. However, they are two different economic programs. These economic programs have gained more attention ever since the Government has clamped down on imports from China, and banned nearly 59 Chinese apps on the grounds of data security and privacy, while also appealing to consumers to purchase locally made products[1]. Consequent to this, the DPIIT (Department for Promotion of Industry and Internal Trade) had also instructed all e-commerce websites to disclose the ‘Country of Origin’ of all their product listings by August 1, 2020, for non-legacy products and by October 1, 2020, for legacy products.

What is ‘Make in India’?

The Prime Minister of India launched the Make in India initiative in 2014, with the primary motive of making India a global manufacturing hub, while encouraging both, multinational as well as domestic companies to manufacture their products within India[2]. Headed by the Department of Industrial Policy and Promotion Ministry of Commerce & Industry, the initiative targets to raise the contribution of the Country’s manufacturing sector to up to 25% of the Gross Domestic Product (GDP) by the year 2025 from the existing 16%. Make in India has introduced numerous initiatives, from promoting Foreign Direct Investment (FDI), to implementing Intellectual Property Rights (IPR). It has also helped in the development of the manufacturing sector[3]. It marks 25 sectors of the economy which include but are not limited to the Automobile sector, Information Technology (IT) and Business Process Management (BPM). Furthermore, it also seeks to facilitate job creation, foster innovation, enhance skill development and protect IPR.

While explaining the vision behind the scheme, the PM added “Come make in India. Sell anywhere, [but] make in India.”

What is ‘Made in India’?

‘Made in India’ initiative gives an identity to the products being manufactured in India. A product needs to be borne out of Indian factors of production such as land, labour, capital, entrepreneurship or technology, for it to be termed as a product that is ‘Made in India’. This implies that there would be utilization of India’s natural talent and resources as well as generation of employment opportunities for the Indian masses at large. A Made in India product could eventually promote Indian home grown local brands, similar to the Swiss cheese or the German cars. There can also be a potential brand recognition for products arising from the Indian origin. [4] Generally speaking, Made In India would also provide the domestic manufacturers with a platform to compete with foreign products and raise the standards of their products.[5]

When is a product termed as/can be termed as ‘Made in India’?

As mentioned in the preceding paragraphs, for a product to be termed as Made in India, it needs to be borne out of Indian factors of production such as land, labor, capital, entrepreneurship or technology. However, unlike other countries, India is yet to come up with a definite legislation in this regard. Various countries around the globe have particular statutes defining the different parameters and composition percentages required for a product to be called as one originating from a certain jurisdiction, which will be discussed briefly hereunder.

“Country of Origin” Regulations in different jurisdictions: A Comparative analysis

Switzerland

In Switzerland, for a watch to qualify as Swiss Made and carry its trademark, it must have a movement produced and encashed in Switzerland, though only 50% of the value of the components in that movement are required to be of Swiss origin. The laws additionally require the product’s final inspection to be conducted in Switzerland. In 2018, certain luxury watch brands had been outsourcing the manufacturing of components, and in some instances even the complete watches, were being outsourced from China. Some have been open about it, however, the remaining brands were furtive, and their “Swiss Made” label lacked precision. Sources suggested that the practice of producing watch components in China wasn’t strictly new, however, outsourcing complete watches from a different country and selling them under the name ‘Swiss Made’ definitely raised concerns. The Federation of the Swiss Watch Industry (FH), being the trade organisation that protects the use of the ‘Swiss Made’ Label stated that “The use of any Swiss name or symbol on the display can mislead the consumer to believe the watch has been produced in Switzerland. It is a sensitive area, and the Federation seeks to actively protect it and has asked the members to look after the use of Swiss Made.”[6] Subsequently a task force was set up by the Federation to make sure that the rules relating to Country of Origin were respected by all the brands.

Australia

In Australia, under the Australian Consumer Law (“ACL”) certain food products offered or suitable for retail sale will be required to display country of origin information. The ACL doesn’t require non-food products to carry country of origin labelling, although other laws may do so. All businesses, whether they are legally required or choose to display country of origin labelling, are prohibited from making false or misleading representations or engaging in misleading or deceptive conduct about the origin of goods (both food and non-food). In general, for non-food products, the ACL sets out the following classifications to be mentioned on the products: were ‘grown in’ a particular country; are the ‘product of’ a particular country; and were ‘made (or manufactured) in’, or otherwise originated in, a particular country[7].

Canada

In Canada, new Enforcement Guidelines on “Product of Canada” and “Made in Canada” Claims have introduced a distinction between “Product of Canada” and “Made in Canada” claims. Product of Canada claims will be subject to a higher threshold of Canadian content (98%), while Made in Canada claims will remain subject to a 51% threshold of Canadian content. Made in Canada claims should be accompanied by a qualifying statement indicating that the product contains imported content. In both cases, the last substantial transformation of the product must have occurred in Canada[8]. These guidelines provide industry with useful information that would help in ensuring that they are in compliance with the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act, when making claims about the Canadian origins of their products.

New Zealand

Similarly, in New Zealand, whether a product is New Zealand made will vary depending on the nature of the product and what consumers may understand about it. It is not possible to set out a precise formula as to exactly which products can be called ‘New Zealand made’. However, legitimate considerations include:

  1. for a clothing item, where is it actually changed from fabric into a garment
  2. for a food item, where were the ingredients grown? Were they transformed elsewhere into another food item?
  3. or a manufactured product, is it substantially manufactured in New Zealand? Where were the critical parts manufactured? Are any significant stages of manufacture carried out overseas?

If the product is produced in New Zealand from virtually all New Zealand components then there is little risk in claiming that such a product is ‘New Zealand made’[9]. However, if important components are imported or if part of the manufacturing process is undertaken off shore, then a ‘New Zealand made’ claim risks breaching the Fair Trading Act. Furthermore, breaching the rules as prescribed under the said Act shall also entail monetary damages. In May 2017, a health supplement company and its owner were fined more than $500,000 for claiming that bee pollen of the product was New Zealand-made when the bee pollen was sourced from China. Similarly, a company promoted an office chair as being ‘New Zealand made’. The chairs were assembled in New Zealand using components manufactured in Taiwan, China and Italy to the company’s specifications. The imported components included the base, castors, gas lift, chair adjustment levers and seat and back assemblies. The only parts of the chair manufactured in New Zealand were some incidental parts and the foam and upholstery for the seat and back support. The court held that the representation ‘New Zealand made’ was misleading in this case because the New Zealand input into the chairs was not sufficient to justify describing the chairs as ‘New Zealand Made’[10].

Conclusion

There are a number of Laws and Regulations in India that prohibit false and misleading claims as part of their advertising strategies. These have been enacted to protect the consumers from various forms of exploitation. However, one of the major problem relates with the effective implementation of these Acts, as a result of which, very little or no action is taken[11]. Furthermore, as mentioned herein above, the vagueness in the parameters that are required, which aid in the identification of a product as a “Made in India” product are also presently missing. Considering the given scenario, wherein locally produced goods and products are being actively promoted, and it further seems that the Indian consumers may also prefer locally grown products over the ones imported from other countries, the Government ought to/must come up with definite regulations in this regard.

Also read:

COUNTRY OF ORIGIN TO BE SPECIFIED ON E-COMMERCE WEBSITES FOR PRODUCT LISTINGS

Country of Origin Tag on all Imports

Consumer Protection (E- Commerce) Rules, 2020 comes into force

[1] https://economictimes.indiatimes.com/industry/services/retail/dpiit-to-discuss-country-of-origin-tag-with-etailers/articleshow/76780041.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppstThe


Inadequately Stamped Arbitral Awards- Validity and Legal Consequences

By Priya Adlakha and Nihit Nagpal

ARBITRATION AND DOMESTIC ARBITRAL AWARD

Arbitration is a legal procedure to solve disputes, precisely commercial matters, outside court of law. Its functioning is analogous to judicial courts and arbitral awards are equally binding on contesting parties. Arbitration is gaining recognition and emerging businesses, companies are opting arbitration as a mode to resolve disputes. An arbitral award can be described as a formal and legal declaration and recognition of the merits of matter in dispute, by an arbitration tribunal which is equivalent to the judgment of judicial courts.

Is stamping of domestic arbitral award obligatory for enforcement?

For an arbitral award to be enforceable, there are a number of obligatory and non-obligatory requirements that ought to be fulfilled, for proper execution or setting aside of arbitral award. One of those requirements is stamping and registration of domestic arbitral awards. Insufficiency or any inadequacy in stamping of documents have certain consequences over its validity and enforceability. Some of the major legislations and provisions governing such issues are, Section 34 and Section 36 (setting aside of arbitral award and enforcement/execution of arbitral award respectively) of Arbitration and Conciliation Act 1996[1], Section 17 and Section 3 of Indian Stamps Act, 1899[2].

ISSUES PERTAINING TO UNSTAMPED DOMESTIC ARBITRAL AWARDS

After completion of the process of arbitration, finality to the merits is given by pronouncing an arbitral award. Consequent to the passage of award, there are two possible outcomes namely, setting aside of arbitral award and enforcement of such award by execution under Sections 34 and 36 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) respectively. Some case laws are briefed below, about unstamped or inadequately stamped arbitral awards, their validity and status with regard to Sections 34 and 36 of the Act.

According to Section 33 of the Stamps Act, a public officer is obligated to impound any document which is inadequately stamped or unstamped. It is a mandatory clause and not merely directory. The Supreme Court in the case of N. Bhargavan Pillai v. State of Kerala[4] while referring to the said provision opined that such public officer while exercising his/her power under Section 33 of the Stamps Act, 1899 cannot force the parties to produce documents and also, has the power to impound only original instruments and not copy of it. As per Section 31(5) of the Act, after pronouncement of arbitral award each party is to be delivered copy of the award, in case of contesting such award under Section 34 of the Act, i.e. challenging the award passed on the grounds as enumerated under Section 34. Therefore, to rectify the conflict between Section 33 of Stamps Act, 1899 and Section 34 of the Arbitration Act of 1996, the Delhi High Court practice directions are to be followed, according to which, on notice from Registry of High Court, Arbitrator is mandated to forward the original arbitral award along with the respective arbitral record to the Registry of High Court.

In the case of Eider PW1 Paging Limited and Eider PW1 Communications Ltd. vs. Union of India (2010)[5] the issue in question was the validity of judgment passed in the case of M Anasuya Devi vs. M Manik Reddy[6] i.e.  whether an unstamped arbitral award challenged under Section 34 of Arbitration and Conciliation Act can be impounded on the basis of Section 33 of Stamps Act, 1899. The Delhi High Court in this case considered the judgment given in Anasuya’s case by the Apex court to be per incuriam and further pronounced that the provision under Section 33 of Stamps Act, 1899 is mandatory and thereby, an unstamped arbitral award under Section 34 for setting aside arbitral award is liable to be impounded as per Section 33 of the Stamps Act, 1899.

Meanwhile, the Delhi High Court in the case of M. Sons Enterprises Pvt. Ltd. and Anr vs. Suresh Jagasia and Anr[7].took another path while considering the interplay between Section 34 of Arbitration Act and Section 33 of Stamps Act. It held in contrast to the judgment given in Eider’s case, stating that, the verdict passed by Supreme Court in Anasuya’s case cannot be invalidated as per incuriam as it was  silent over the provisions under Stamps Act.

CONCLUSION

Considering the contentions and contradictory judgments delivered by the Supreme Court and High Courts, the question of the interplay between Section 33 of the Stamps Act, 1899 and Section 34 of the Arbitration and Conciliation is still vague and ambiguous. Keeping in view the verdict passed in the M. Sons’s case, the question of enforceability over non-stamping of award can be questioned under Section 36 of the Act (execution of award).

[1] https://www.indiacode.nic.in/bitstream/123456789/1978/1/A1996-26.pdf

[2] http://legislative.gov.in/sites/default/files/A1899-2.pdf

[3] (2003) 8 SCC 565

[4] (2004)13 SCC 217

[5] 2010 SCC Del 422

[6] (2003) 8 SCC 565

[7] (2011) SCC Del 82

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National Education Policy, 2020 aims at Fostering Innovation and Creativity

The National Education Policy, 2020[1] was released by the Union Cabinet on July 29, 2020. The fundamental principles of the National Education Policy are to identify and foster the unique capabilities of each student by promoting creativity and critical thinking to encourage logical decision-making and innovation. It also facilitates extensive use of technology in teaching and learning, removing language barriers and educational planning and management. It encourages innovation and out-of-the-box ideas through autonomy, good governance, and empowerment. It promotes outstanding research as a requisite for outstanding education and deployment.

The vision of the policy is to improve the quality of education by giving an equal space to creativity and innovation and transform India into a vibrant knowledge society.

The Education Policy focuses on innovation and creativity in the following ways-

  • A national repository of high-quality resources on foundational literacy and numeracy will be made available on the Digital Infrastructure for Knowledge Sharing (DIKSHA). Technological interventions to serve as aids to teachers and to help bridge any language barriers that may exist between teachers and students, will be piloted and implemented.
  • Enjoyable and inspirational books for students at all levels will be developed, by using high-quality translation (technology assisted as needed) in all local and Indian languages, and will be made available extensively in both school and local public libraries in order to improve the quality of education.
  • With the help of technology and innovation, Open and Distance Learning (ODL) Programmes offered by the National Institute of Open Schooling (NIOS) and State Open Schools will be expanded and strengthened for meeting the learning needs of young people in India who are not able to attend a physical school.
  • To close the gap in achievement of learning outcomes, classroom transactions will shift, towards competency-based learning and education.
  • To promote multilingualism, the teaching of all languages will be enhanced through innovative and experiential methods, including through gamification and apps, by weaving in the cultural aspects of the languages – such as films, theatre, storytelling, poetry, and music
  • High performing Indian universities will be encouraged to set up campuses in other countries, and similarly, selected universities e.g., those from among the top 100 universities in the world will be facilitated to operate in India. Efforts will also be made to incentivize the merit of students belonging to SC, ST, OBC, and other SEDGs. The objective behind this is to improve innovation and increase the number and types of courses.
  • For the professions involving Artificial Intelligence, it will be very important to be well-versed with mathematics and mathematical thinking therefore, mathematics and computational thinking will be given increased emphasis throughout the school years, starting with the foundational stage, through a variety of innovative methods.
  • The policy places emphasis on the fact that higher education must form the basis for knowledge creation and innovation thereby contributing to a growing national economy. This will result in a more productive, innovative, progressive, and prosperous nation.
  • Higher Education Institutions will focus on research and innovation by setting up start-up incubation centres; technology development centres; centres in frontier areas of research. HEIs will develop specific hand holding mechanisms and competitions for promoting innovation among student communities.
  • It will enable strong and innovative government initiatives for adult education to expedite the all-important aim of achieving 100% literacy.
  • The policy empowers the faculty of HEIs to conduct innovative teaching, research, and service as they see best. This will be a key motivator and enabler for them to do truly outstanding, creative work.
  • In order to promote creativity, institutions and faculty will have the autonomy to innovate on matters of curriculum, pedagogy, and assessment within a broad framework of higher education qualifications.
  • The research and innovation investment in India is, at the current time, only 0.69% of GDP as compared to 2.8% in the United States of America, 4.3% in Israel and 4.2% in South Korea. To deal with the major challenges which India faces in today’s time such as healthcare, quality education, sanitation etc, a top notch science along with innovation and technology is required.
  • Any country’s identity, upliftment, spiritual/intellectual satisfaction and creativity is also attained in a major way through its history, art, language, and culture. Research in the arts and humanities, along with innovations in the sciences and social sciences, are, therefore, extremely important for the progress and enlightened nature of a nation.
  • To truly grow and catalyze quality research in India, this policy envisions the establishment of a National Research Foundation (NRF) which will recognise and support outstanding research at at academic institutions, particularly at universities and colleges where research is currently in a nascent stage, through mentoring of such institutions. The NRF will competitively fund research in all disciplines.
  • Professional Technical education and innovation in fields like engineering, technology, management, architecture, town planning, pharmacy, hotel management, catering technology etc., will be promoted
  • An autonomous body, the National Educational Technology Forum (NETF) will be created to provide a platform for the free exchange of ideas on the use of technology to enhance learning, assessment, planning, administration, and so on, both for school and higher education.
  • The recent pandemic has highlighted the need for alternative modes of quality education. NEP recognizes both the advantages and disadvantages of technology. For online or digital education, it is very important to eliminate the digital divide. The policy also recommends certain key initiatives such as Content creation, digital repository, and dissemination; Pilot studies for online education; Digital infrastructure etc.

Such a comprehensive policy which aims at promoting innovation and creativity and encourages students to showcase their unique and creative skills and gives them a chance to pursue the same is need of the hour and lays foundation for a better and brighter tomorrow. The Indian Education System should now move towards critical and innovative thinking and problem solving and should lay particular emphasis on the development of the creative potential of each individual. Proper implementation of these reforms will transform India into a global knowledge superpower in the future.

[1] https://www.mhrd.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf

Getting a patent on your innovation (LegalEra)

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Online Arbitration Practices in India

By Nihit Nagpal and Anuj Jhawar

A technology revolution in the legal industry has been underway for some time now but only recently owing to the Covid-19 pandemic, the same has come to forefront of the legal professionals as well as general public’s consciousness.

To put a stop to the possibility of spread of Covid-19, various restrictions have been put in place, which have made holding in-person hearings difficult. The same has resulted in rise of virtual hearings and there is an emerging consensus to better integrate the use of technology in dispute resolution, particularly in alternative dispute resolution methods or online arbitration practices. The focus should be on the adoption of new methods so that businesses should not be burdened by unresolved disputes due to the inability of parties to meet physically to resolve disputes. Unlike courts, the ADR mechanism are not required to clear bureaucratic hurdles to implement changes, thus the arbitral bodies are flexible and are able to adapt to the need of the hour.

Although in both the physical as well as virtual hearing, the core principles of Arbitration i.e., autonomy, consent, fair treatment, confidentiality etc. would have to remain intact. The goal should be to hold substantive hearings remotely and as efficiently and securely as possible. Though the switch to the virtual technology will definitely raise significant technical, procedural, legal and existential challenges.

Thus, the Arbitral bodies such ICC, SIAC, LCIA since the abrupt halt have been issuing press releases and seeking suggestions on online arbitration practices, electronic filings, virtual evidentiary hearings, and online case management. Based on these suggestions, certain guidelines for virtual arbitrations proceedings have been issued and the mechanism laid out therein is now being employed at pace in international arbitrations. This Articles seeks to put light on what can be considered as some essential practices for conducting virtual arbitration with the later part focusing on the mechanism introduced for effective transition to virtual hearings by various arbitral bodies around the world.

KEY PRACTICES FOR AN EFFECTIVE ONLINE ARBITRATION

A number of major arbitration institutions on account of COVID-19 have postponed hearings, and no postponement request has been denied by the registry / secretariat of these institutions. Though, the institutions have maintained that they wish to avoid delays and conduct proceedings in order to maintain the sanctimony of Arbitral proceedings. Thus, virtual hearings are indispensable, and a properly held virtual hearings can save considerable time and costs, and so by adopting certain good practices in conducting them, one can ensure a smooth experience, which are as under –

  • Logistical and technological specifications such as the number of participants, access to technology, time-zone difference, guiding protocols, any data privacy concerns, the online platform i.e., Face Time, Skype, VidyoCloud, Microsoft Teams, Zoom, or Bluejeans, and the online document management system should be agreed prior to the hearing.
  • The conduct of the online arbitration proceeding must be fair to both parties, so the length of arguments and time allocation to each party has to be agreed, and arbitral tribunal should ensure that parties stick to them and do not speak over each other.
  • A practice round between the arbitral participants should be organized to ensure that all participants, including the tribunal, have adequate hardware and sufficient training to work the technology so that no one is left at a disadvantage, and that the hearing runs efficiently.
  • The audio-video quality and the tribunal’s clarity of line of sight of the witness should be properly ensured.
  • The functionality of the break-out rooms, common and private chat features, and understanding how and when these will be engaged should be in place and be available when required
  • Access of the parties and the tribunal to e-documents must be ensured, and presentation of evidence by witnesses must be closely monitored and efficiently displayed via computers at all venues to ensure security of the documents and efficiency of the proceedings.
  • There should be a back-up plan in place, in case of any unanticipated circumstances, such as moving to teleconference.
  • The participants at their end should also ensure of quiet location with adequate lighting with proper access to internet, with quality mic and a plan in place for any troubleshooting equipment.

MECHANISM EMPLOYED BY ARBITRAL BODIES

INTERNATIONAL CHAMBER OF COMMERCE (ICC)

This ICC has issued a guidance note[1] to parties, counsel and tribunals on possible measures that may be considered to mitigate the adverse effects of the COVID-19 pandemic on ICC arbitrations. The guidance note implores the parties, counsel and tribunals to minimize disruption and avoid difficulty by thoughtful use of case management tools that are either already available through the ICC Arbitration Rules or by the additional steps the ICC International Court of Arbitration is taking to streamline its internal processes. The Annex I provides a checklist for a protocol on virtual hearings and Annex II includes suggested clauses for the cyber-protocol. These clauses serve as a “how to” guide for conducting virtual hearings.

This Guidance Note recalls the procedural tools available to parties, counsel and tribunals to mitigate the delays generated by the pandemic through greater efficiency, and provides guidance concerning the organisation of conferences and hearings in light of COVID-19 considerations, including conducting such conferences and hearings by audio conference, video conference, or other similar means of communication as envisaged in Article 24(4) of the ICC rules of Arbitration[2]. ICC through the guidance note has insisted that disputes still must proceed expeditiously, as required by Article 22(1) of the ICC Rules of Arbitration. The Proposed techniques include bifurcating the proceedings, identifying issues that can be resolved on the basis of documents, determine un-meritorious claims/defenses, and proceed where live testimony of a witness or an expert is not that requisite for deciding the dispute.

SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC)

The SIAC has proposed that it shall be designating and training a number of counsel in the Secretariat as Remote Technology Specialists and introduce a Live Help Desk feature on the SIAC website for ease of contacting the SIAC Secretariat during the period of workplace closure in accordance with applicable COVID-19 measures[3]. Also, SIAC has been actively hosting a series of monthly webinars entitled “A Dialogue on COVID-19 with the Secretariat” to address questions about the impact of COVID-19 on any aspect of SIAC arbitrations.

As per Rule 19.1 of the SIAC Rules 2016[4], the tribunal shall conduct the arbitration in such manner as it considers appropriate, after consulting with the parties, to ensure the fair, expeditious, economical and final resolution of the dispute. Parties may therefore wish to discuss with tribunals the use of virtual hearings solutions, if appropriate for the case at hand. Also, the Schedule 1 – Emergency Arbitrator of the SIAC Rules, 2016, under Rule 7 and Rule 8 empowers the Arbitrator to utilize the video conferencing facility for hearing the disputing parties as an alternative to an in-person hearing and even to pass any order or award any interim relief.

SIAC on its website has stated that where in-person hearings are impossible or impracticable, parties should discuss with the tribunal other options to an in-person hearing, such as proceeding with the hearing virtually or via teleconferencing. The SIAC depending on the suitability of parties and on discussion with the tribunal is referring them to use of Maxwell Chambers for virtual ADR services and for less complex cases, adopting a documents-only procedure in lieu of a hearing[5]. The SIAC has left the discretion of deciding the protocol and procedure of holding virtual hearing upon the tribunal, however the same should be decided in consultation with the parties.

WORLD INTELLECTUAL PROPERTY ORGANIZATION (“WIPO”)

The World Intellectual Property Organization (“WIPO”) is one of the UDRP dispute resolution service providers administering the UDRP Administrative Procedure for domain name disputes and is responsible for appointing panelists to determine the dispute. The emergence of new technologies and applications has begun to influence significantly the way companies do business. Bearing this in mind, the WIPO Arbitration and Mediation Center has developed an online, Internet-based system for administering disputes. This online dispute resolution facility and all related information are accessible through these Online Dispute Resolution pages of the WIPO’s web site[6]. The Digital communication tools allows the parties to file requests by completing electronic forms and to submit documents and exchange correspondence online through secure channels. Thereby alleviating, the need of in-person meetings and hearings.

Even through the pandemic, the WIPO Arbitration and Mediation Center is administering cases submitted under the WIPO Mediation, Arbitration, Expedited Arbitration and Expert Determination Rules. Under the Article 37 of the WIPO Arbitration Rules[7], the parties are provided with considerable procedural flexibility, thus allowing the parties for a range of procedural adjustments as may be necessary. The WIPO Center also offers a no cost online case administration option, including an online docket and videoconferencing facility.

LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA)

The LCIA rules explicitly reference the use of video conference during arbitral proceedings. Article 19.2 of the LCIA Arbitration Rules[8] grants the arbitral tribunal the fullest authority to establish the conduct of an arbitral hearing, and permits hearings at any appropriate stage of the arbitration to “take place by video or telephone conference or in person (or a combination of all three).”[3] The London court thus envisages any type of hearing to proceed by video conference.

The LCIA is yet to frame any guidelines for hearing the matters virtually, however the online filing service available at their website does allow hearing of urgent matters via video conferencing, apart from the same, LCIA proposes to host webinars, few of which have already been held on evaluative and diagnostic investigation of the “new normal” by going beyond pure technicalities in matters.[9]

INDIAN PERSPECTIVE

In 2014, the Law Commission of India encouraged the use of technology such as videoconferencing and teleconferencing to aid the efficiency of online arbitral proceedings, but these recommendations have not found much popularity in India due to a resistance from arbitrators and counsel, for a lack of technological exposure. Though, the arbitration community in India has been working proactively for the development of India as an arbitration-friendly jurisdiction, and the acceptance of virtual arbitration could play a prominent role in this movement.

INDIAN COUNCIL OF ARBITRATION (ICA)

The Indian Council of Arbitration (ICA) is currently using video conferencing tools to conduct online arbitration proceeding. The ICA Secretariat upon receiving emails of the interest parties, are making arrangement for conducting hearing via video conferencing. Also, ICA is accepting registration of fresh arbitration cases. The letter issued by ICA provides for the list of scanned documents required for initiation of a fresh case along with requisite fees, and the details of account where the same is to be deposited. ICA is yet to frame any guidelines on virtual hearing.[10]

CONCLUSION

The acceptance of virtual dispute resolution is not unanimous, though the use of video conference and virtual hearings provides a viable alternative to international travel and in-person attendance at an arbitral hearing. But the use of virtual technology to conduct remote proceedings raises some legal concerns, such as challenges to the legal enforcement of an arbitral award passed in an arbitration held via video conferencing. Currently, due to pandemic, the virtual hearings have been used as an interim tool for avoiding disruptions, but sooner or later the Virtual hearings are bound to become a new normal for cross-border disputes. Though still certain cases may require in-person hearing.

The lessons learned during these challenging times may be the push needed to help arbitration better fulfill its purpose of providing an expeditious and cost-effective means for the final resolution of disputes. Virtual procedures or online arbitration practices adopted even partially, if not for the entire arbitration, could significantly reduce the costs of travel, and of organising physical hearings. Institutions in India may use this opportunity to become more attractive to parties by promptly preparing themselves with the infrastructure to administer online arbitrations. Also, the government should enact the necessary changes for adopting virtual hearings via video conferencing in the Arbitration Act, and issue model guidelines on virtual hearing for all the arbitral institution in India.

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[1] Guidance note available at https://iccwbo.org/publication/icc-guidance-note-on-possible-measures-aimed-at-mitigating-the-effects-of-the-covid-19-pandemic/

[2] https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/

[4] Rules available at https://www.siac.org.sg/our-rules/rules/siac-rules-2016

[5] https://www.siac.org.sg/faqs/siac-covid-19-faqs

[6] https://www.wipo.int/amc/en/center/wipoupdate.html

[7] Available at https://www.wipo.int/amc/en/arbitration/rules/

[8] Available at https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2014.aspx

[9] https://www.lcia.org/News/covid-19-update-recalibrating-and-resilience-lcia-continues-to.aspx

[10] http://www.icaindia.co.in/Notice-for-ICA.pdf


Australia releases News Media Bargaining Code for Stakeholders’ comments

By Bijit Das and Meril Mathew Joy

Digital Platform Inquiry conducted by Australia in 2018-19 concluded that Google and Facebook have distorted local media and advertising markets in ways that makes it hard for publishers to monetise their content and therefore it was recommended that a code can be drafted wherein some consideration flow can be allowed from social media giants like Google, Facebook etc. to publishers of the content.[1] Thereafter the Australian Competition and Consumer Commission (ACCC) issued a statement through its Treasurer, Joshua Anthony Frydenberg, that the ACCC would be releasing draft rules around July 2020. A detailed post on Australia relying on Competition law to make tech giants like Google and Facebook to pay for content can be found here.

Now the Australian Competition and Consumer Commission has released the News Media Bargaining Code on July 31, 2020 and have asked the interested parties to provide their written submissions on the draft code due on August 28, 2020 by 5pm to the email id bargainingcode@accc.gov.au.

Draft Bill News Media Bargaining Code can be found here.

Explanatory Material on the Draft News Media Bargaining Code can be found here.

A detailed note can also be found on the official website of ACCC at https://www.accc.gov.au/focus-areas/digital-platforms/news-media-bargaining-code/draft-legislation.

A brief on the intention and approach of ACCC  on the News Media Bargaining Code can be understood under the below headings:

How will the Code help in facilitating the Negotiation and Payment related issues?[2]

The Code aims to facilitate the negotiation between the Australian news businesses and the digital platforms (initially focusing on Google and Facebook) for a fair payment scheme for the content of the media. Some key focus of the Code are as under:

  1. The Code will help the Australian media to bargain with tech giants like Google and Facebook to secure fair payment for news content. The Code allows media business like regional and community master-heads to collectively negotiate with the digital platforms.
  2. The Code addresses acute bargaining power imbalances between the digital platforms and the Australian news business.
  3. The Code provides if Australian news businesses and digital platforms does not settle a deal within 3 months of negotiation, then an arbitrator will choose the offer which is most reasonable within 45 days of its appointment. This selection of offer by the Arbitrator is “Final Offer” arbitration process.
  4. Final offer arbitration process in incorporated as a procedure to ensure settlement of any conflict or disagreement between the parties.
  5. The Code will initially be applicable on Google and Facebook, but the Code is drafted in a manner to include other digital platforms as well eventually.

The Australian Communications and Media Authority (ACMA) is required to use set criteria to determine which Australian news media business are eligible to be governed and benefited under the draft code. The notification issued by the ACCC provides:

Media businesses would be eligible if the online news content they produce investigates and explains issues of public significance for Australians; issues that engage Australians in public debate and inform democratic decision-making; or issues relating to community and local events. In addition, they must adhere to minimum levels of professional editorial standards, and maintain a suitable degree of editorial independence; operate in Australia for the main purpose of serving Australian audiences; and generate revenue of more than $150,000 per year.[3]

Some important provisions of the code can be briefed as under:

  • The Treasurer upon considering the significant bargaining imbalances between the Australian News provider and the digital platform can determine designated digital platform corporation.
  • Under the Code the news media businesses are required to notify Google or Facebook their wish to bargain and thereafter 3 months are provided to negotiate the terms including payment. However, if no negotiation is reached within the 3 months period then provision of compulsory arbitration is also provided, i.e. Final Offer Arbitration. Once the arbitration is initiated, it is compulsory for the digital platform to participate in the arbitration and the outcome of the arbitration will be considered binding on both the parties.
  • The Code requires the news media organisations to prepare an arrangement over the payment of content and/or other terms, and then notify the same to Google or Facebook. As the code allows formation of collective groups therefore the media organisations can come together and negotiate with the digital platforms.
  • The Code also encompasses the provisions of minimum standards to govern non-payment related issues which cannot be negotiated away by the digital platforms. The Code under these standards requires the digital platforms to provide a notice of 28 days to the Australian media businesses, of any algorithm changes which is likely to material affect the traffic to news, ranking of news behind paywall and substantially affects or modifies the presentation, display and/ or advertising with respect to the news.
  • The Code also required the digital platforms to maintain transparency in terms of information which is derived out of the user engagement with the digital platforms. Further, digital platforms are also required to share the proposal on recognizing the original news content on their platform, provide flexible user comment moderation tools for news media businesses and the media businesses are empowered to prevent the sharing of their content on any digital platform.
  • Enforcement action may be taken by ACCC against non-compliance with the Code including not bargaining in good faith during negotiations, including aspects like refusing to participate in negotiation, mediation or arbitration; breach of non-discrimination provisions and minimum standard commitments.
  • The Code provides that where ACCC has reasonable grounds to believe that any party has contravened the provisions of the code , in such case the ACCC can issue notices of 600 penalty units ($133200). If the ACCC considers initiating Court proceedings then the maximum penalties would be greater of either:[4]
  1. $10,000,000;
  2. Three times the benefit obtained from the conduct (if calculable); or
  3. 10% of digital platform’s annual turnover in Australia in the last 12 months.

Enforcement action can be taken against either parties, i.e. the Australian News Businesses or the Digital Platforms.

Can such Code be utilized in the Indian System?

The effort of bringing in a Code for regulating the payment of news content used by digital platforms appears to be a proactive and motivating move in favour of journalism. Incentivising of original content, royalty/ payment sharing based on traffic reached on the article and/ or other factors, will motivate and encourage news businesses in India to create original content. If India decides to enact a similar code, then the news media agencies in India will be more motivated for original content rather than borrowing original content under fair dealing for providing information to public.

Even though the Code appears to be a very unique move by the Australian Government however in order to identify the effectiveness of any similar code in India, it is vital to await the final notification of the Code post discussion with stakeholders. With the written submissions pending, it is crucial to await the views of the tech-giants like Google and Facebook and their proposal in implementing such one of its kind Code on bargaining of news content. Once such code is passed by the Australian Government then the possibilities of other countries implementing similar codes also appears as probable and therefore the comments by digital platform is very crucial in determining how such code can prevail in different jurisdiction.

[1] Available at https://www.ssrana.in/articles/australia-competition-law-google-facebook-pay-for-content/

[2] Available at https://www.accc.gov.au/media-release/australian-news-media-to-negotiate-payment-with-major-digital-platforms

[3] Available at https://www.accc.gov.au/media-release/australian-news-media-to-negotiate-payment-with-major-digital-platforms

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