Australian firm says Indian judiciary under govt thumb in corporate row

Australian firm says Indian judiciary under govt thumb in corporate row

India rushes representatives; if Coal India loses,will look again at bilateral pacts

It is a minor case between an Indian and Australian company being heard by an arbitration panel in London. However,senior officials here are among those involved,as the Australian firm,White Industries,has argued before the panel that the Indian judiciary works under the influence of the government of India and that the latter has stalled hearing of its appeal against Coal India Ltd.

This may be the first case where a foreign corporate has involved the entire Indian Republic,down from Prime Minister Manmohan Singh to the coal minister and law minister,in a case.

If the panel decides against Coal India — the decision is expected in the next two months — it could result in a comprehensive review of all future international bilateral treaties by the government of India,say officials.

Former Supreme Court Judge B N Srikrishna travelled to London late September as an expert witness for the government,where he defended Indian courts against the charge of acting in league with the State. Additional Solicitor General (ASG) Vivek Tankha has also been asked to represent the country before the arbitration panel.


Says Justice Srikrishna: “Their (Australian firm’s) argument is wrong. Those who know the Indian judiciary are fully aware that it is not the judiciary that is cowed down by the government. In fact,if I may say so,it is the other way round. As for the issue of delay in (the Supreme Court settling its matter),it was a procedural delay.”

It was on September 28,1989,that White Industries and Coal India Ltd entered into a contract for the supply of equipment to and development of a coal mine at Piparwar,Jharkhand. Later,both companies had a stand-off over whether White Industries was entitled to bonuses.

In May 2002,the arbitration tribunal ruled in favour of the Australian firm,ordering Coal India to pay an amount of Australian $4.85 million plus interest and expenses to it. Since 2003,White Industries’ attempt to enforce the award has been pending in the Supreme Court. Last year in May,the company commenced arbitration proceedings under the India-Australia Bilateral Treaty.

Now comes the interesting part. In a letter dated May 27,2010,White Industries’ legal representatives named Prime Minister Manmohan Singh,Coal Minister Sriprakash Jaiswal and then law minister M Veerappa Moily in the arbitration matter.

“It is a very serious and draconian trend. Since India has filed similar treaties with 137 countries,corporations of all these countries may start invoking the treaty to drag the Sovereign in matters that are purely financial in nature,” said advocate Varun Chopra,who assisted ASG Tankha in the case.

The lengthy opinion given by Justice Srikrishna on June 6,2011,dwelt on the separation of powers under the Indian Constitution,under which judiciary is independent of the executive. In a second opinion dated August 12,2011,he cited two politically significant judgments of the apex cout in which the Government of India was on the losing side.

“We hope to win the case,” ASG Vivek Tankha said. “The contentions raised by White Industries are without any basis.”