Dispute Resolution and Labor Relations
This newsletter aims to provide information on topics that are important to in-house counsel or fellow lawyers but time consuming to follow without access to an international network covering Asia-Pacific and South Asia.
Two themes will be prioritised: business litigation and labor relations litigation. The latter is frequently overlooked due to a lack of readily available information, yet it is part of the legal environment in Asia-Pacific and South Asia, from both the employer's and employee's perspective.
Newsletter No. 1 - May/June 2019
Dispute Resolution
Arbitration / India / Malaysia
- Decision of the Delhi High Court of May 10, 2019 – Dwarika Projects Ltd. v. Superintending Engineer
The New Delhi High Court established criteria for determining the seat when neither the arbitration clause nor the arbitral tribunal provides a ruling on this choice.
In this decision, the Court examined the parties' intention, explicitly ruling out their consent to the arbitration being held first in Chandigarh and then in New Delhi, where the award was signed. To reaffirm the principle that a "physical" connection to various locations does not constitute the designation of a seat, it relied on the Indian law (Arbitration and Conciliation Act 1996), which authorises an arbitral tribunal to convene in locations other than the seat for various practical reasons, such as the inspection of property, including real estate, or the testimony of witnesses, experts, or representatives of the parties themselves.
The Court's reasoning led it to assert that isolating some of the connecting factors would amount to imposing a seat on the parties against their intention, even if not expressed at the time the arbitration clause was adopted. In support of its decision, the Court cited three decisions of the courts of the Republic of India, each providing a different and complementary perspective on the understanding of this rule.
According to HLL Lifecare, the determination of the physical location of the arbitration ("venue") by the arbitral tribunal does not constitute its determination of the seat. In Government of India v. Enercon (India) Limited, where the arbitration clause specified the physical location of the arbitration (London) but not the seat, the Court considered the parties' choice of the Arbitration and Conciliation Act to infer that their choice was India as the seat of arbitration.
As for Union of India v. Hardy Exploration and Production (India) Inc. , also a recent decision (September 25, 2018), this decision of the Indian Supreme Court deserves all the more attention given that the choice was between Kuala Lumpur and the Indian courts generally. In accordance with the parties' agreement, the arbitration took place in Kuala Lumpur, and the award ("Award") was rendered and signed in Kuala Lumpur. Faced with a challenge to the Award, the Delhi High Court declared itself competent, but was overruled by the Supreme Court. Noting that the arbitration clause did not specify the seat, only the physical location as the parties' first choice, but left them the choice of another venue, the Court ruled that the possibility of a choice prevented the seat from being deduced from it. This demonstrates once again the importance of "details" in drafting an arbitration clause.
International Commercial Courts / China
- Proceedings before the Shenzhen and Xi'an Courts in May 2019
The two International Commercial Courts established by the Supreme Court of China on June 29, 2018, have begun examining two cases brought before them.
In the Red Bull case, a procedural hearing was held on May 15, 2019, and the hearing on May 27, 2019, in the same case before the Xi'an Court (one of the two International Commercial Courts along with the Shenzhen Court) examined issues related to the recognition of shareholder status in the Chinese company Red Bull Vitamin Drink Co., Ltd by an entity from Thailand and one from the BVI.
For its part, the Shenzhen Court examined the merits of the product liability dispute between the Italian pharmaceutical company Bruschettini Srl and its Chinese distributor, Guangdong Bencao Medicine Group Co., Ltd, on May 31, 2019.
These first two cases do not concern the Belt and Road Initiative, for which the Specialised Courts were in principle created, but their development will require careful consideration as they will provide valuable insight into the future operation of these Courts.
Employment Relations Litigation
Employer's Duty of Care
- Rinquet v. State of Queensland
On June 6, 2019, the Queensland District Court considered a claim for compensation for injuries brought by a nurse who was jostled by a patient in a care unit for patients with advanced mental illness.
While acknowledging that the employer had not failed to establish procedures appropriate to this risky situation, and was not required to arrange for the supervision of one nurse by another, the Court held that a pre-established system should have allowed for the immediate intervention of a colleague and ordered the employer to compensate the nurse for her physical and emotional injuries and to cover the nurse's medical treatment costs in the amount of AUD 326,000, equivalent to approximately €200,000.
The judgment's detailed description of the liabilities arising from the parties' respective conduct provides a useful reference framework for employers and employees in a common law environment, which extends to the relevant countries and territories of Southeast Asia (Malaysia, Singapore, Hong Kong) and South Asia (India).
Sexual Harassment
- Hill v Hughes
On May 24, 2019, the Federal Circuit Court of Australia delivered a landmark decision defining conduct that could constitute sexual harassment.
The employer was a solicitor in charge of a small rural practice. The employee acted as a paralegal. The judgment analyses the employer's conduct in detail and establishes the principle that each element, primarily email communications, should not be assessed in isolation but rather as a whole.
It provides a useful guide to what constitutes sexual harassment in a context of persistently suggesting a so-called "romantic" relationship without even minimal physical action.
Labor Relations
Characterisation of the Employer/Employee Relationship/Australia
- Legal Relationship between Uber and its Drivers
On June 7, 2019, the Fair Work Ombudsman issued her conclusion after a two-year investigation into the relationship between Uber Australia and its drivers. Somewhat surprisingly, she found that the relationships in question did not meet the requirements of an employer/employee relationship. This is worth analysing because it highlights the unique characteristics of the employer/employee relationship in a common law environment.
The decision lies at the cusp of this difficult characterisation, being in line with case law in the United States but not that of Great Britain (although the decision is under appeal) and in contradiction with the Australian tax authorities' position regarding the food delivery company Foodora.
The basis of the decision is the finding that Uber does not have the right to demand a minimum service from its drivers, who retain complete freedom to decide whether, when, and for how long they wish to work.
The concept of "control" is fundamental to understand for French companies operating in common law jurisdictions, as it is distinct from the "subordination relationship" criterion under French law.
In addition to the texts (Fair Work Act 2009, etc.) and abundant case law, it is highly recommended to study the detailed criteria provided by the Australian Taxation Office: the right to delegate or subcontract, remuneration rules, ownership of tools and equipment, commercial risk, control, and independence.
Again, it should be emphasised that principles developed in one common law jurisdiction can be used, and are indeed used, as a reference in one or more other common law jurisdictions.
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The content above is purely for informational purposes, relating to a selected overview of legislative, regulatory and case law developments in the relevant geographical area, which is not and does not claim to be exhaustive.
It does not constitute legal advice in relation to any particular case and should not be regarded as such. A more detailed doctrinal study on any of the topics mentioned may be requested.
Philippe Girard-Foley is a Registered Foreign Lawyer accredited by the Supreme Court of Singapore before the Singapore International Commercial Court – Certificate of Full Registration under Section 36P Legal Profession Act (Chapter 61).