Korean firm's plea dismissed

LEGAL DIGEST

The Supreme Court has dismissed the arbitration petition of the company registered in Korea, You One Engineering and Construction Ltd, against the National Highway Authority of India (NHAI) and ruled that the appointment of the third arbitrator by the Indian Road Congress (IRC) was correct.

The foreign company entered into three contracts with the NHAI to build roads in Delhi, Hyderabad and Vishakhapatnam. Disputes arose between them. Each party appointed its arbitrator.

According to the arbitration agreement, the two arbitrators were supposed to choose the presiding arbitrator. Since they could not agree on a name, the matter was referred to the IRC according to the agreement.

The IRC chose a person who was not agreeable to the Korean company. It moved the Supreme Court. The Chief Justice appointed Justice BN Srikrishna to decide the question. The judge dismissed the Korean petition stating that the appointment of the arbitrator by the IRC was valid.

Zaheer Khan gets reprieve

The Supreme Court last week dismissed the appeal of Percept D'Mark (India) Pvt Ltd against the order of the Bombay High Court in its dispute with cricketer Zaheer Khan.

The company does business in model and celebrity endorsement and management. Khan had entered into a three-year agreement with the firm for modelling.

According to the company, he was under an obligation to inform it if he entered into any pact with another company in the same business. Khan wanted to discontinue the contract after the three-year period. He allegedly entered into an agreement with another party after that period, without giving an opportunity to the original firm to match the offer.

The company maintained that this was breach of contract. The cricketer argued that it amounted to restraint on trade, which was prohibited by Section 27 of the Contract Act. The Supreme Court said Khan could not be compelled to appoint the company as his agent in perpetuity when he had no faith or trust in it.

'Jewel appraisers for loans not employees'

The Supreme Court ruled in the Indian Overseas Bank vs Workmen All-India Overseas Bank Employees Union case that jewel appraisers for loans appointed by the bank were not employees of the bank.

The industrial tribunal in Tamil Nadu had ruled that they were entitled to wages and other conditions of service applicable to regular clerical staff as part-time employees of the bank. This view was upheld by the Madras High Court.

The Supreme Court overruled both of them and allowed the appeal of the bank, comparing the working contracts and conditions of the appraisers and regular employees.

It ruled that where the contractors were substantially responsible for the main and sole business, they would be treated as workers. Where the contract was in the nature of supply of goods or services, they should be treated as supplier-contractors and not as workers, it said.

Tea firm case goes to Company Law Board

After trying to bring about a settlement between the two family groups in a tea estate firm, and after failing to do so, the Supreme Court has referred the dispute to the Company Law Board.

The board had also abortively tried earlier to settle the issue in the Manish Mohan Sharma vs Ram Bahadur Thakur Ltd case.

In view of the disagreement, the Supreme Court remanded the matter for implementation of the settlement brought about by the board five years ago.