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St. Antony Incident/Enrica Lexie Incident before Permanent Court of Arbitration

Written By mediavigil on Wednesday, May 22, 2024 | 3:29 AM

The Arbitral Tribunal delivered the award on May 21, 2020. On 8 October 2021, India indicated that, in view of assuranes received from Italy with respect to the prosecution of the Marines in Italy, it concurred in Italy’s proposal to close the arbitral proceedings. The arbitral proceedings was closed by Judge Vladimir Golitsyn, President, Permanent Court of Arbitration on October 12, 2021. In the matter of arbitration before the Arbitral Tribunal was constituted under Annex VII of the 1982 UN Convention on the Law of the Sea (The Italian Republuc v. the  Republic of India) concerning 'Enrica Lexie' Incident'. The Tribunal comprised of Judge Golitsyn, Judge Jin-Hyun Paik, Judge Patrick Robinson, Professor Francesco Francioni andDr. Pemmaraju Sreenivasa Rao. Award - Extracts for Advance Publication (July 02, 2020). 

Professor Alain Pellet and Rodman Bundy were the counsels of India. Pellet was emeritus Professor, University Paris Nanterre, ex-ormer Chairman of the International Law Commission and Member of the Institut de Droit International. Bundy was a Member of the New York Bar; former avocat à la Cour d’appel de Paris; Partner, Eversheds Harry Elias LLP, Singapore. Sir Daniel Bethlehem and Dr. Ben Juratowitch were counsels of Italy. Bethlehem was a Member of the Bar of England and Wales; 20 Essex Street Chambers. Juratowitch was a Solicitor Advocate, England and Wales; Solicitor of the Supreme Court of Queensland; Partner, Freshfields Bruckhaus Deringer.

The case was regarding an incident of firing that occurred on February 15, 2012 between 4-4.30 IST in the maritime area off the coast of India (Kerala state) at a distance of 20.5 nautical miles. The firing was done by two marines of the Italian Navy, Chief Master Sergeant Massimiliano Latorre and Sergeant Salvatore Girone, positioned on the “Enrica Lexie”, an oil tanker flying the Italian flag, to protect the vessel from what they believed to be an impending piracy or armed robbery attack from a small Indian boat, the “St. Antony”, which they perceived to be on a steady collision course. At the time, the “Enrica Lexie” was transiting through a maritime area that was within the range of a “High Risk Area” for piracy designated by the International Maritime Organization (IMO). On the particular day of the incident, the seas were calm, and a lot of fishing activity was undertaken, with no reports or warnings about any piracy/armed attacks.

The Arbitration was instituted on 26 June 2015 when the Italian Republic served on the Republic of India  a “Notification under Article 287 and Annex VII, Article 1 of UNCLOS and Statement of Claim and Grounds on Which it is Based” (hereinafter the “Notification and Statement of Claim”) in respect of “the dispute concerning the Enrica Lexie Incident”.

Italy and India, the signatories to the UN Convention on the Law of the Sea (UNCLOS). Subsequent to its ratification of the Convention, on February 26, 1997, Italy made a declaration pursuant to Article 287 of the Convention accepting the jurisdiction of the International Tribunal for the Law of the Sea (ITLOS) and the International Court of Justice (ICJ). India has not made any such declaration. Therefore, as Italy and India have not accepted the same procedure for the settlement of disputes concerning the interpretation or application of the Convention, pursuant to Article 287, paragraphs 3 and 5, of the Convention, any dispute that may arise between the Parties in this regard may be submitted only to arbitration instituted in accordance with Annex VII to the Convention, unless the Parties agree otherwise. The Parties have not agreed on any other procedure. 

According to Italy, the Parties’ dispute concerns an incident that occurred on February 15, 2012 approximately 20.5 nautical miles off the coast of India involving the MV “Enrica Lexie”, an oil tanker flying the Italian flag, and India’s subsequent exercise of jurisdiction over the incident, and over two Italian Marines from the Italian Navy, Chief Master Sergeant Massimiliano Latorre and Sergeant Salvatore Girone, who were on official duty on board the “Enrica Lexie” at the time of the incident.

According to India, the “incident” in question concerns the killing of two Indian fishermen on board an Indian vessel named the “St. Antony”, allegedly by rifle fire from the two aforementioned Marines stationed on the “Enrica Lexie”. India contends in this regard that, while the present case has been labelled the “‘Enrica Lexie’ Incident”, it should more accurately be referred to as the “‘St. Antony’ Incident”. Italy ratified the Convention on 13 January 1995. India ratified the Convention on 29 June 1995.

The “St. Antony” was a fishing vessel owned by an Indian national1833 and registered under the Tamil Nadu Marine Fishing Regulation Act, 1983, 1834 and the Marine Products Export Development Authority Act, 1972. St. Antony”, as a small fishing vessel, was exempt from registration under the Indian Merchant Shipping Act, 1958, and that pursuant to Article 94, paragraph 2, subparagraph (a), of the UNCLOS , “it was not […] obligatory for the St Antony to be registered given its small size”.

The test under the UNCLOS for establishing a jurisdictional link between a vessel and a State is whether a vessel possesses the nationality of that State, as opposed to whether or not it is found in a public register or flies a flag. A flag may thus be regarded as “visual evidence” or “a symbol” of nationality, but is not determinative for that vessel’s nationality.

As the case, when it was instituted by Italy, was registered by the Registry of the Permanent Court of Arbitration (PCA) as the arbitration concerning “the ‘Enrica Lexie’ Incident” in the absence of any objections from the Parties at the first procedural meeting, and given that during the proceedings and in the Arbitral Tribunal’s Order on Provisional Measures the case was continuously referred to as the arbitration concerning the “Enrica Lexie” Incident, the Arbitral Tribunal, without prejudice to the nature of the incident, decided to  do likewise in the Award.

In its Notification and Statement of Claim, Italy requested the Arbitral Tribunal, once constituted, to adjudge and declare that:
(a) India has acted and is acting in breach of international law by asserting and exercising jurisdiction over the Enrica Lexie and the Italian Marines in connection with the Enrica Lexie incident.
(b) The assertion and exercise of criminal jurisdiction by India is in violation of India’s obligation to respect the immunity of the Italian Marines as State officials exercising official functions.
(c) It is Italy that has exclusive jurisdiction over the Enrica Lexie and over the Italian Marines in connection with the Enrica Lexie incident.
(d) India must cease to exercise any form of jurisdiction over the Enrica Lexie Incident and the Italian Marines, including any measure of restraint with respect to Sergeant Latorre and Sergeant Girone.
(e) India has violated its obligation under the Convention to cooperate in the repression of piracy. 

The Arbitral Tribunal recorded: "When the 'St. Antony' was at a distance of approximately 500 metres from the 'Enrica Lexie', Sergeant Latorre and Sergeant Girone each fired four rounds of a mix of tracer and ordinary bullets.1847 According to the testimony of Sergeant Latorre, the purpose of these shots was to 'deter the craft from continuing to keep its course heading toward the Enrica LEXIE'. Sergeant Latorre noted in his Action Report that this 'first burst of warning shots' did not succeed in 'persuading the craft to drift away'. When the “St. Antony” was at a distance of 300 metres from the 'Enrica Lexie', Sergeant Latorre fired four rounds of a mix of tracer and ordinary bullets.1850 Sergeant Latorre noted further in his testimony that 'the second burst of warning shots did not achieve the desired effect, the craft ignored the warning shots and kept its course, heading toward the MV at constant speed'. When it was at a distance of approximately 80-100 metres from the 'Enrica Lexie', Sergeant Latorre and Sergeant Girone, each fired four further rounds of a mix of tracer and ordinary bullets. Following this third burst of shots, the 'St. Antony', after being approximately 30 metres away from the 'Enrica Lexie', changed its course away from the 'Enrica Lexie'.' It further noted that "Captain Fredy testified that he took over the steering,1854 and “abruptly helmed the boat away”. He steered the “St. Antony” at high speed, and only when he “realized [the bullets] were not hitting the boat” but rather “falling into water” did he slow the boat to “find out what had happened to the two people who were shot”.1856 After the incident, the “St. Antony” headed “towards the seashore”.

In the Arbitral Tribunal’s view, the evidence on the record is clear that it was the act of shooting at the “St. Antony” by the Marines stationed on the “Enrica Lexie” that caused the “St. Antony” to change direction and ultimately head back to shore. The “St. Antony” was, both during and after the incident, prevented from navigating its intended course. The shooting at the “St. Antony” amounted to physical interference with the navigation of the “St. Antony”. As observed by ITLOS in M/V “Norstar, “[i]t goes without saying that physical or material interference with navigation of foreign ships on the high seas violates the freedom of navigation”.  It referred to the Judgment dated 10 April 2019 in M/V “Norstar” case (Panama v. Italy).

The Arbitral Tribunal concluded that by interfering with the navigation of the “St. Antony”, Italy acted in breach of Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention.

India asserted that Italy infringed India’s right to have its exclusive economic zone reserved for peaceful purposes under Article 88.

India submit\ted that “the use of force by another State is inconsistent with India’s right to have its EEZ reserved for peaceful purposes”. India argued that Article 88 should be read together with Article 301 of the Convention, which prohibits the threat or use of force or any other action inconsistent with the Charter of the United Nations. 1861 According to India, the travaux préparatoires of Article 301 show that it was originally part of Article 88 and hence was intended to clarify “peaceful purposes”.1862 Moreover, India submits that “[c]ommentators generally agree that the peaceful purposes or uses clauses (Articles 88 and 301) should be interpreted as prohibiting activities which are inconsistent with the UN Charter”.1863 India notes that Italy does not seem to dispute this interpretation.

India submitted that Italy breached Article 88 by recklessly “caus[ing] the deaths of two Indian fishermen, endanger[ing] the safe navigation of the fishing boat, and compromis[ing] the lives of the other persons on board the St Antony”.1865 India argues that the “St. Antony” was a small fishing boat travelling at low speed no more than 10 knots, facing a large oil tanker riding high in the sea, “protected by barbed wire along its high-raised decks, and heavily guarded by six well-armed Marines”and having a top speed of 14 knots. 

India submitted that the “Enrica Lexie” “could easily (and it had ample time to) [have] alter[ed] course and out-run the St Antony”, and that it “could have taken further initiatives to warn the St Antony”.1049. India concludes that “the Italian Marines’ use of force was unwarranted and excessive, and their actions not only endangered human life, they took two lives”.

India submitted that there was no reasonable apprehension of any threat to justify the Marines’ acts. According to India, “[e]xcept for one of the accused Marines, who stated that he saw two armed men on the craft, none of the crew of the Enrica Lexie reported that they had seen any armed persons on the small boat, no shots were fired from the craft, no attempt was made by individuals on the boat to board the Enrica Lexie, and the shape and makeup of the St Antony was far from a typical pirate skiff which usually carries ladders and hooks”.

India cited the M/V “SAIGA” (No. 2) case as an example, where, according to India, Guinea had allegedly used excessive and unreasonable force in stopping and arresting the vessel in question. According to India, ITLOS found that “the use of force must be avoided as far as possible and, where force is unavoidable, it must not go beyond what is reasonable and necessary in the circumstances”.

In particular, India submitted that ITLOS referred to the normal practice used to stop a ship at sea, and highlighted that it was only after appropriate actions failed that force could be used “as a last resort”, and even then, “appropriate warning must be issued to the ship and all efforts should be made to ensure that life is not endangered”. While Italy, according to India, seeks to distinguish the present case from the M/V “SAIGA” (No. 2) case on the ground that it involved no risk of collision or hostile boarding, India argues that the Marines “were not under a reasonable apprehension of a security threat and possible collision and hostile pirate boarding”. 

India submits that the present case shares several similarities to the M/V “SAIGA” (No. 2) case: on India’s account, the Marines used “live ammunition”, no evidence shows use or threat of force by the crew of the “St. Antony”, and the Marines “attached little or no importance to the safety of the ship and the persons on board”.

India also relied on the Guyana v. Suriname arbitration (13 July 2019) where, according to India, the Annex VII arbitral tribunal found that “even a threat to a drilling vessel to leave the area or ‘the consequences will be yours’” amounted to “a breach of general international law and the 1982 Convention”.

In India’s view, the Marines’ actions were not only incompatible with the VPD Manual but also
“much more egregious than what happened in the Guyana-Suriname case”, and therefore must
constitute a violation of the Italy’s obligations under the Convention. 1052. India further claims that Italy is “miss[ing] the point” when it argues that the embarking and deployment of the VPDs was not inconsistent with the Charter of the United Nations because it was a measure implemented by the Italian government to protect its vessels from piracy at sea.

According to India, the issue is not the legality of the deployment of the VPDs, but their unjustified use of armed force, and the consequences for the “St. Antony”’s navigation. 

India disagreed with Italy’s claim that it did not breach Article 88 because the Marines’ actions were consistent with the Charter of the UN in the light of the UN Security Council Resolution 2077 (2012), adopted by the Security Council at its 6867th meeting, on November 21, 2012. To the contrary, India maintains that the Marines’ actions were not consistent with either Articles 88 and 301 of the Convention or Article 2, paragraph 4, of the Charter of the United Nations. India submitted that Resolution 2077 was adopted after the present incident and did not authorise the use of force in India’s exclusive economic zone. India argued that a “Security Council resolution must be explicit and sufficiently clear in its mandate in order to constitute an authorization to use force”. Further, Resolution 2077 does not include the phrases “all necessary means” or “all necessary measures”, which the Security Council uses where it authorises the use of force. India asserted that the Marines’ use of force was unnecessary as, in India’s view, the “Enrica Lexie” was under no reasonable apprehension of a security threat or piracy attack. India contended that Resolution 2077 applies only to “the situation in Somalia and shall not affect the rights or obligations or responsibilities of Member States under international law, including […] the Convention”.

Concerning Italy’s allegation that the actions of Marines should be adjudged by the State which has jurisdiction, India submitted that it is “not asking this Tribunal to decide on whether the Marines are guilty under domestic criminal law of either State”. Instead, India submitted that it “is  claiming that Italy bears international responsibility for its violation of UNCLOS under international law”. India dismissed Italy’s complaint that India had failed to adduce any evidence that Italy intended to pursue a breach of the peace as required to show a breach of Article 88 of the Convention.1887 In India’s view, under international law, a showing of purpose or intent is not necessary for establishing an internationally wrongful act as long as the act has occurred.

The Arbitral Tribunal observed that, as pointed out in the Virginia Commentary, Article 88 sets out the general principle that the high seas are to be reserved for peaceful purposes and that this principle is also confirmed in Article 301 concerning peaceful uses of the seas.1923 The latter calls on all States to:

refrain from any threat or use of force against the territorial integrity or political independence of any State, or in any other manner inconsistent with the principles of international law embodied in the Charter of the United Nations. It is noted that in the Virginia Commentary that there is nothing on the record to connect Article 301 with Article 88. At the same time, Article 301 can be used as an interpretive guide to Article 88. The Arbitral Tribunal observed that Article 301 of the Convention, which is drawn from Article 2, paragraph 4, of the Charter of the United Nations, is applicable to all activities dealt with by the Convention and would not seem to add anything to the obligations of States that existed prior to the conclusion of the Convention.

Article 2, paragraph 4, of the Charter of the UN provides: All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations. Thus, under the Charter of the United Nations, the use of force is not completely prohibited if it is consistent with the Charter and with other rules of international law. This means that pursuant to Article 301 of the Convention, the use of force is not completely excluded on the high seas. It clearly follows from the articles of the Convention related to the fight against piracy that all States can take the necessary measures, including enforcement measures consistent with the Convention and the Charter of the United Nations, to protect their vessels against pirate attacks. Such measures cannot be viewed as a violation of Article 88 of the Convention or as an infringement on the rights of the coastal State in its exclusive economic zone. This is confirmed by Resolution 2077, which is cited by both Parties.

By that Resolution, the Security Council of the United Nations reaffirmed that international law, as reflected in UNCLOS, sets out the legal framework applicable to combating piracy and armed robbery at sea as well as other ocean activities, and: commend[ed] the efforts of flag States for taking appropriate measures to permit vessels sailing under their flag transiting the High Risk Area to embark vessel protection detachments and privately contracted armed security personnel and encouraging States to regulate such activities in accordance with applicable international law and permit charters to favour arrangements that make use of such measures.

It is an established fact that the Italian Marines were on board the “Enrica Lexie” to protect it against potential pirate attacks. As has also been noted in the present Award, the Arbitral Tribunal is of the view, on the basis of information available, that during the incident of 15 February 2012, the Marines acted under the apprehension that the “Enrica Lexie” was under a pirate attack and therefore took actions, the domestic law aspects of which are to be determined by a competent criminal court, to protect the “Enrica Lexie” against a perceived pirate attack.

The Arbitral Tribunal concludes that Italy did not breach Article 88 of the Convention.

India requested the Arbitral Tribunal to adjudge and declare that its counter-claims are admissible and that, “[b]y firing at the St Antony and killing two Indian fishermen on board, Italy”:
(4) violated India’s sovereign rights under Article 56 of UNCLOS;
(5) breached its obligation to have due regard to India’s rights in its EEZ under Article 58(3) of UNCLOS;
(6) violated India’s freedom and right of navigation under Articles 87 and 90 of UNCLOS; and
(7) infringed India’s right to have its EEZ reserved for peaceful purposes under Article 88 of UNCLOS.

India requested that the Arbitral Tribunal order Italy to “make full reparation for its breaches of Article 56, 58(3), 87, 88 and 90 of UNCLOS”.

Having found that, by interfering with the navigation of the “St. Antony”, Italy acted in breach of Article 87, paragraph 1, subparagraph (a), and Article 90, of the Convention, the Arbitral Tribunal examined which consequences arise from Italy’s unlawful conduct. The Arbitral Tribunal recalls that, under customary international law as codified in the ILC Draft Articles on State Responsibility, “[t]he responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act”, which may include “any damage, whether material or moral, caused by the internationally wrongful act”. Specifically, full reparation shall take the form of restitution, compensation and satisfaction, either singly or in combination. 

The Parties, at the present stage, did not present detailed submissions to the Arbitral Tribunal as to the injury suffered by India. While India has requested the Arbitral Tribunal to order Italy to make full reparation, the Parties concur that the contents of any obligation on either Party to make reparation should be determined, if necessary, in a subsequent phase of these proceedings. Specifically, Italy has expressed the view that “all matters of quantum of compensation should be held over to be addressed in a subsequent phase”. India, on its part, has indicated that, if “the Tribunal were of the opinion that compensation [to Italy] is justified, it should in any case be held over in order to be addressed in a subsequent phase. India takes the same position with regard to its own counterclaims”.

Although the Arbitral Tribunal notes that the Parties have agreed that the question of reparations may be dealt with in a subsequent phase of the proceedings, the Arbitral Tribunal considers it appropriate to make the following observations. The injury suffered by India as a result of Italy’s breach, through the conduct of the Marines, of India’s freedom of navigation under the Convention is twofold.

First, India was subject to an infringement of its freedom of navigation. Such injury is a consequence of the breach of the Convention by Italy. While no specific material damage is associated with that injury, the Arbitral Tribunal recalls the principle expressed in the award of the arbitral tribunal in the “Rainbow Warrior” Affair that “[u]nlawful action against non-material interests, such as acts affecting the honor, dignity or prestige of a State, entitle the victim State to receive adequate reparation, even if those acts have not resulted in a pecuniary or material loss for the claimant State”.

The injury in question being of such a nature that it cannot be made good by restitution or compensation, reparation can only take the form of satisfaction. The Arbitral Tribunal considers that a finding in the present Award that Italy has breached Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention constitutes adequate satisfaction for India.1934 The Arbitral Tribunal recalls in this regard that, in the Corfu Channel case, the ICJ regarded a declaration by the Court “that the action of the British Navy constituted a violation of Albanian sovereignty” to be “in itself appropriate satisfaction”.

Second, the shooting at the “St. Antony” amounted to physical interference with the freedom of navigation of the “St. Antony” and constituted a breach of Article 87, paragraph 1, subparagraph (a), and Article 90. Based on the limited evidence available to the Arbitral Tribunal, as a consequence of such breach, crew members of the “St. Antony” suffered loss of life, physical harm, material damage to their property (including to the “St. Antony” itself), and moral harm. India is accordingly entitled to payment of compensation in respect of such damage, which by its nature cannot be made good through restitution.

Consistent with the Parties’ positions, the Parties are invited to consult with each other with a view to reaching agreement on the amount of compensation due to India. 

The Arbitral Tribunal shall retain jurisdiction, should either Party or both Parties wish to apply for a ruling from the Arbitral Tribunal in respect of the quantification of compensation due to India, in which event the Arbitral Tribunal would fix a timetable for further proceedings. Should no such application be received within one year after the date of the present Award, the proceedings shall be closed.

Based on Article 21 of the Rules of Procedure, Italy submitted that it is appropriate for the Arbitral Tribunal to “make an award of costs to Italy that reflects India’s breaches of UNCLOS and other relevant rules of international law as pleaded in this Memorial”. India contended that Italy’s costs claim, “which is not based on any justification or reproduced in Italy’s submissions, is not serious in the circumstances of the case and does not deserve any rebuttal”.

Annex VII, Article 7, to the Convention provides that, “[u]nless the arbitral tribunal decides otherwise because of the particular circumstances of the case, the expenses of the tribunal, including the remuneration of its members, shall be borne by the parties to the dispute in equal shares”. Article 21 of the Rules of Procedure applicable in this Arbitration states that “[u]nless decided otherwise by the Arbitral Tribunal, each Party shall bear its own costs”. In the view of the Arbitral Tribunal, there are no “particular circumstances” that would lead the Arbitral Tribunal to any other allocation of costs. Accordingly, no particular cost order from the Arbitral Tribunal is called for in this case.

The Arbitral Tribunal n relation to jurisdiction and admissibility found, by four votes to one, in respect of Italy’s Submission (1) and India’s Submission (1), that in the present Arbitration there is a dispute between the Parties as to which State is entitled to exercise jurisdiction over the incident of 15 February 2012 involving the “Enrica Lexie” and the “St. Antony”, and that the dispute concerns the interpretation or application of the Convention.

It found, by four votes to one, that the Arbitral Tribunal has jurisdiction over the dispute, subject to its decision on the specific objections to its jurisdiction raised by India in its Submission (1.a).

It found, unanimously, that India’s counter-claims are admissible. 

It found, by three votes to two, in respect of Italy’s Submission (2)(f), that Article 2, paragraph 3, Article 56, paragraph 2, and Article 58, paragraph 2, of the Convention are not pertinent and applicable in the present case.

It found, by three votes to two, in respect of Italy’s Submission (2)(f) and India’s Submission (1.a), that it has jurisdiction to deal with the question of the immunity of the Marines.

It found, unanimously, in respect of India’s submission (1.a), that there is no need to address the question of the compatibility with UNCLOS of India’s 1976 Maritime Zone Act and its 1981 Notification.

In relation to the merits of the dispute between the Parties, the Arbitral Tribunal found, unanimously, in respect of Italy’s Submission (2)(b)-(e) and (g), a. that India has not acted in breach of Article 87, paragraph 1, subparagraph (a), of the Convention; b. that India has not violated Article 92, paragraph 1, of the Convention; c. that Article 97, paragraphs 1 and 3, of the Convention are not applicable in the present case; d. that India has not violated Article 100 of the Convention and that therefore Article 300 cannot be invoked in the present case.

It decided, by three votes to two, in respect of Italy’s Submission (2)(f), that the Marines are entitled to immunity in relation to the acts that they committed during the incident of 15 February 2012, and that India is precluded from exercising its jurisdiction over the Marines. 

It decided, by three votes to two, in respect of Italy’s Submission (3)(a) and (c), taking note of the commitment expressed by Italy during the proceedings to resume its criminal investigation into the events of 15 February 2012, that India must take the necessary steps to cease to exercise its criminal jurisdiction over the Marines, and that no other remedies are required.

It found, in respect of India’s Submissions (4), (5), and (7), a. by three votes to two, that Italy has not violated India’s sovereign rights under Article 56 of the Convention; b. by three votes to two, that Italy has not violated Article 58, paragraph 3, of the Convention; c. unanimously, that Italy has not infringed on India’s rights under Article 88 of the Convention.

It found, unanimously, in respect of India’s Submission (6), that by interfering with the navigation of the “St. Antony” Italy has acted in breach of Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention.

It decided, unanimously, in respect of India’s Submission (8), a. that a finding in the present Award that Italy has breached Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention constitutes adequate satisfaction for the injury to India’s non-material interests; b. that as a result of the breach by Italy of Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention, India is entitled to payment of compensation in connection with loss of life, physical harm, material damage to property (including to the “St. Antony”) and moral harm suffered by the captain and other crew members of the “St. Antony”, which by its nature cannot be made good through restitution; c. that the Parties are invited to consult with each other with a view to reaching agreement on the amount of compensation due to India referred to in paragraph 6(b) above; d. that the Arbitral Tribunal shall retain jurisdiction should either Party or both Parties wish to apply for a ruling from the Arbitral Tribunal in respect of the quantification of compensation due to India, in which event the Arbitral Tribunal would fix a timetable for further proceedings, and that, should no such application be received within one year after the date of the present Award, the proceedings shall be closed. 

In relation to the costs of these proceedings, it decided that each Party shall bear its own costs.  

Joint Dissenting Opinion of Dr. Sreenivasa Rao Pemmaraju (Dr. P.S. Rao) and Judge Patrick Robinson

Concurring and Dissenting Opinion of Dr. Sreenivasa Rao Pemmaraju (Dr. P.S. Rao) 

Dissenting Opinion of Judge Patrick Robinson 

Digital Capabilities vs. Claims of Incapability by SBI in the unconstitutional, illegitimate, immoral Electoral Bond case

Written By mediavigil on Tuesday, March 05, 2024 | 11:12 PM

After making claims about robust India's digital public infrastructure (DPI), comprising distinctive digital identification, a payments system, and a data exchange layer, the submission of State Bank of India (SBI) in the Supreme Court of India about its digital incapability cannot be deemed trustworthy. What happened to the claim made as part of G20 Digital Economy Working Group about India's Unified Payments Interface (UPI) having revolutionized digital payments.

A data scientist and a former student of the National Forensic Sciences University, a public international university located in Gandhinagar, Gujarat and recognized as an Institution of National Importance by the Ministry of Home Affairs has decoded the indefensible claims made by State Bank of India (SBI). He states the following:

1. Digital Capabilities vs. Claims of Incapability: From a data viewpoint, the contradiction between SBI's existing digital infrastructure and its claims of incapability is striking. SBI's centralized banking system, likely built on a combination of modern relational database management systems (RDBMS) and legacy systems (possibly including COBOL-based applications), is capable of tracking and managing millions of transactions daily. These systems are designed with unique identifiers for transactions (e.g., transaction IDs) and robust query capabilities, facilitating rapid data retrieval and reporting. The assertion of difficulty in providing specific transactional information thus raises questions about procedural rather than technical limitations. This discrepancy raises questions about transparency and accountability, especially ahead of parliamentary elections.
2. Technical Feasibility of Meeting the Court's Demands: The statement by an anonymous COBOL programmer that generating the required reports is a "one-day job" underscores the simplicity of the task from a technical standpoint. Accessing transactional databases and running SQL queries to extract and format the necessary data should be straightforward for a bank's IT department. The use of automated scripts for data extraction and report generation is a common practice, highlighting that the delay is likely not due to technical constraints.
4. Misrepresentation to the Supreme Court: The request for an extension, in light of the bank's technical capabilities, may suggest a strategic maneuver rather than a technological hurdle. In the daily practice of data science, the ethics of data handling and reporting are crucial. This scenario emphasizes the need for transparent data governance practices and the ethical responsibility of institutions to accurately report data, especially when it impacts public interest and governance.
The most prominent public sector bank (PSB) in India has recently announced that it needs a 120-day time frame to collate 44,434 sets of data related to electoral bonds. It amounts to collation of 370 sets of data per day!
Unbelievably, given the state-of-the-art technology and operational capacities of institutions such as the SBI, this task can be completed within a single day. 
It is worth noting that there are many Python libraries available and machine learning tools that are well-suited for large-scale data collection. 
However, the fact that the largest PSB in India is unwilling to utilize these technological tools raises questions as to the efficiency and reason behind its stated timeline. 
In view of the clear capabilities of the data science domain in India, the Supreme Court should consider collaborating with the data science community. 
The extraction and collation of the required data can be expedited with the help of the community on a voluntary basis. 


All the perfumes of Arabia will not remove the taint of Bhopal disaster

Written By mediavigil on Friday, February 23, 2024 | 5:34 AM

One is saddened by the departure of Fali S. Nariman, a noted nonagenarian jurist without donating to the Bhopal disaster victims the legal fees which Union Carbide Corporation/Dow Chemicals Company, a US multinational company paid him, to erase the taint of Bhopal disaster. Prof. Upendra Baxi's advice in this regard is recorded in Nariman’s autobiography-Before Memory Fades. Notably, Nariman also represented asbestos companies. Carcinogenic Asbestos is banned in 70 nations. Its safe and controlled use is impossible. Dow Chemicals Company set up $ 2.2 billion compensation fund to pay victims of asbestos diseases, a liability of Union Carbide in US but not in India. Nariman departed without repenting for having represented corporate criminals. Human life is not confined to one's professional compulsions. One's inner life is guieded by moral compulsions, not professional ones alone.   

Nariman served as Additional Solicitor General of India from 1972 to 1975 but stepped down to protest the Internal Emergency imposed by the then Indira Gandhi led government. Nariman was right to conclude that "One of the lessons of the Internal Emergency (of June 1975) was not to rely on constitutional functionaries. These functionaries failed us-ministers of government, members of Parliament, judges of the Supreme Court, even the president of India". It revealed that even the president of India who signed the Proclamation of Emergency in compliance with the oral instructions prior to its intimation to the council of ministers on the night of June 25, 1975, cannot be trusted. As a consequence Constitution (44th Amendment) Act, 1978 had to be enacted insert Article 352 (3) to ensure that in future president must sign Proclamation of Emergency only after the decision of council of ministers is communicated to him/her in writing. This provision became effective from June 20, 1979. But Nariman forgot to recollect that it was during the Emergency that Union Carbide Corporation (UCC) was granted industrial license to set up its hazardous insecticide factory and research and development centre which was reportedly testing and manufacturing war chemicals in Bhopal.           

In the aftermath of world's worst industrial disaster in the factory of UCC, Nariman appeared for UCC as the lead advocate with Bomi Zariwala, his junior to defend it against the victims of UCC's industrial disaster. UCC engaged him late 1985 in the civil litigation arising out of the disaster. Nariman will have us believe that it all started on September 5, 1986 when Union of India filed a suit on behalf the claimants, the disaster victims under the provisions of Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 in the District Court of Bhopal demanding $ 3.3 billion as compensation from the UCC. The 1985 law was enacted on March 29, 1985 to make Union of India the sole plaintiff in a suit against the UCC and other defendants for compensation arising out of the disaster.  

Nariman's memory seems to have faded in this regard because the fact is that it all started with the filing of suit of Union of India on behalf of all the victims in the Southern District Court, New York presided over by judge John Keenan on April 8, 1985 after some 145 cases which were filed on December 7, 1984 on behalf of victims in various US courts were consolidated and placed before the judge. Union of India had demanded $ 3.3 billion as compensation from the UCC. The suit was filed in the District Court of Bhopal after judge Keenan dismissed the claim on May 12, 1986 subject to the condition that UCC will submit to the jurisdiction of Indian courts.   

On December 17, 1987, Judge Deo, District Judge, Bhopal ordered an interim compensation of Rs. 350 crores. This was challenged before the High Court at Jabalpur, Justice S.K. Sheth reduced the interim compensation to Rs.250 crores. Union of India and UCC challenged this on September 8, 1988 before the Supreme Court. On February 14/15, 1989, Supreme Court approved an abrupt settlement arrived at in the appeal by UCC whereby $ 470 million (its equivalent then was Rs 615 crores) was to be paid by it and its Indian subsidiary to the Union of India in full and final settlement without admitting liability. The role of R. S. Pathak, the 18th Chief Justice of India who relinquished office midway post 1984 disaster unjust settlement on "casual election" to join as a Judge, International Court of Justice and that of Nariman has remained under scrutiny since then. One has learnt that Pathak was all ready to leave but was forced to wait because he had many many judgments pending. If one looks at his judgments between February 1989 and May 1989, one can find the urgency embedded in it. Notably, some of his judgements did not get delivered but were released.  

Pathak was an elected judge of the International Court of Justice following the death of M. Nagendra Singh, an Indian judge who was then serving his second term. He served in this position from 1989 to 1991. In 1991 India decided not to renominate Pathak but he entered the fray with the backing of Ireland. After the Irish government came under attack from legislators who blamed Pathak for approving, as Chief Justice of India, the $470-million Bhopal disaster settlement with UCC, Pathak withdrew from the race. Both Pathak and Nariman were disliked because of this settlement. 

Nariman's autobiography reveals how he quoted Pathak copiously to defend himself in his writings on Bhopal disaster case. Taking note of this Prof. Upendra Baxi wrote, " Mr Nariman's invocation of Chief Justice Pathak's sonorous invocation is the ultimate perfidy."    

Recollecting Nariman's respect for Pathak, A.J. Philip, a senior journalist writes, "It is jokingly said that if you have a few millions of rupees to hire the services of Nariman, you can murder anyone and get away with it. No, money is not the only determinant for him. As my memory goes, he did not charge a single penny, though he pored over my case and suggested many changes in the affidavit I and the reporter concerned had to file in the High Court. What mattered to him was that The Tribune Trust was headed by Justice R.S. Pathak, a former Chief Justice of the Supreme Court of India".    

In his autobiography, he has recorded that he faced national and international criticism. Laurie S. Wiseberg, the editor of Human Rights Tribune, a prestigious foreign publication criticing him in 1992 in an article titled " Fallen Angels?" for appearing on behalf of UCC even as he served as a member of the executive committee of International Commission of Jurists (ICJ), Geneva. Nariman had responded to this criticism. Prof. Upendra Baxi had resolved not share any public platform with Nariman ever since he assumed the UCC advocacy. Both exchanged arguments in this read in an 2004-5 issue of Seminar, a reputed Indian journal.     

Several years later, in an interview with Karan Thapar on CNN-IBN, Nariman regretted the decision to take the UCC's case. He said, "I mean, one is always ambitious at that age. But I found later, but then it's too late. One can't walk out of the case one has already taken up... it was not a case; it was a tragedy." He told Thapar on CNN-IBN’s “Devil’s Advocate program that "he would not have accepted, “If I had to live my life all over again, as a lawyer, and the brief came to me, and I had foreknowledge of everything that later came in, I would certainly not have accepted the civil liability case which I did.” 

Given the fact that he continued to be UCC's lawyer, he must have known about an order of the Madhya Pradesh High Court's Divsion Bench of Justices Sheel Nagu and Devnarayan Mishra dated November 28, 2023 has initiated contempt proceedings against officials of the state and Union governments. But the order was recalled on February 19, 2024. Initially, the order had found these officials guilty and served notice for their failure to comply with the Supreme Court's direction dated August 9, 2012 seeking maintainance of consolidated medical records through computerisation and networking of medical records of all hospitals and clinics where gas victims have been undergoing treatment and for the failure of these officials to provide quality medical care through specialists and with the best of facilities. Now, the order of High Court's Division Bench of Justices Sheel Nagu and Vinay Saraf dated February 19, 2024 states that "it would be appropriate that assistance of Monitoring Committee is sought. It is thus directed that each contemnor or his/her representative, who should not be below the rank of Class-1 Gazetted Officer should appear on the next date of meeting of Monitoring Committee to enable the Monitoring Committee to assess present state and extent of compliance of order of Apex Court dated 09.08.2012 passed in Writ Petition (C) No.50/1998 and various directions passed by this Court and thereafter prepare report under various heads showing compliance/non compliance. The Monitoring Committee is requested to assist this Court by submitting report as enumerated above as expeditiously as possible. List in the third week of April, 2024." The unending wait for justice for the victims of the disaster is unlikely to come to an end in near future.  

Before his departure Nariman witnessed how on March 14, 2023, the Supreme Court's Constitution Bench led by Justuce S. K. Kaul dismissed the Union government’s curative petition against the unjust settlement of February 1989 on ground that it was the government which had categorised the huge majority of gas victims as suffering from only “minor” injuries. In its curative plea, the Union of India prayed for another $8.1 billion (Rs 7,844 crore) over and above the $470 million already paid in a settlement in 1989 by UCC (now owned by Dow Chemicals Company). The order of Justice is S. K. Kaul is ridden with factual errors, which is yet to be rectified.  

One checked for use of the phrase "blood money" in Merriam-Webster Dictionary. It says, "The blood money earned by people who profited from the tragedy." The corporate criminals survive on blood money.
Shakespeare has immoralised the fate of unjust people nin his Macbeth. Lady Macbeth notices, "Hell is murky," and observes, "Yet who would have thought the old man to have had so much blood in him? Here's the smell of blood still. All the perfumes of Arabia will not sweeten this little hand". Judges and lawyers are judged even after the delivery of judgements. The cry of the victims of preventable disasters resonates even after the departure of judges like Pathak and lawyers like Nariman after performing their professional roles and having earned their share laurels.            

The author is a law and philosophy researcher and a lawyer. He is an ex-Fellow of Berlin based International Research on Authoritarianism and Counter Strategies (IRGAC).

Constitution Bench to pronounce judgement in Electoral Bonds Scheme (EBS) case, submissions in the Supreme Court

Written By mediavigil on Wednesday, February 14, 2024 | 9:50 AM

The Constitution Bench of Supreme Court comprising the Chief Justice, and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala and Manoj Misra will pronounce the judgment in Writ Petition (Civil) No. 880 of 2017 etc. in Chief Justice’s Court at 10.30 a.m. on February 15, 2024. Besides Association for Democratic Reforms (ADR), CPI (M), Spanadan Biswal and Dr. Jaya Thakur are petitioners in the Electoral Bond Scheme (EBS) case. All the petitions are tagged together. Originally, Writ Petition (Civil) No. 333/2015 of ADR and Indian National Congress- SLP (Civil) No.18190/2014 was tagged with the ADR's new petition on October 3, 2017 by Supreme Court's 3-judge bench of Chief Justice and Justices Hima Kohli and J.B. Pardiwala. Jaya Thakur's petition was tagged with it on November 22, 2022. 

Earlier, Indian National Congress was "instructed to withdraw these petitions" on November 29, 2016 by Justices Jagdish Singh Khehar, Arun Mishra A.M. Khanwilkar. It was "Dismissed as withdrawn". Prior to this the petitioner had sought "an adjournment, so as to enable him to obtain instructions about the effect of the amendment to the provisions of the Foreign Contribution (Regulation) Act, 1976" on November 22, 2016. 

Notably, ADR had pursued a similar case [Writ Petition (Civil) 131 of 2013] in Delhi High Court from 2013 till October 9, 2017. ADR and E.A.S. Sarma, ex-Finance Secretary had filed this case. The court had pronounced its judgement on February 28, 2014 directing the Home Ministry to take appropriate action within 6 months, against the political parties for violating the Foreign Contributions (Regulation) Act (FCRA), 1976 and FCRA, 2010. The Court found that BJP and Congress had accepted donations from foreign sources year after year, in violation of provisions of FCRA, 1976 and FCRA, 2010. Both BJP and Congress chose to contest the judgement before Supreme Court (SLP No 18190/2014) and during the proceedings before the Supreme Court, following detailed arguments on our behalf, the two political parties withdrew their SLPs. In this backdrop, they withdrew their petitions. It is recorded in the Court’s order dated November 29, 2016. 

In his letter to Rajiv Gauba, Cabinet Secretary wrote, “In the normal course, if the government had any respect for maintaining the integrity of the electoral process, it would have immediately proceeded to take action against the political parties including BJP, for violating the FCRA, especially in view of the fact that foreign donations to political parties can hurt the sanctity of our democracy, much more than in the case of anyone else receiving such donations." But “Instead of this, the present NDA government quickly took the extraordinary step of retrospectively altering the laws that stood in the way of foreign donations flowing into the bank accounts of the political parties.” These amendments enabled changes to the Finance Acts of 2016 and 2017 and the Companies Act, 2013 to enable private companies to make unlimited donation to political parties. He wrote,  “It is bizarre that an ordinary citizen has to comply with all kinds of cumbersome Know-Your-Customer (KYC) requirements for a meagre account opened in a bank but the political parties should go scot-free when they blissfully receive thousands of crores of rupees without having to answer anyone!” He added, “While we have separately contested the propriety of the government retrospectively amending the two FCRA legislations, prima facie, there is no ethical justification for legalising an offence already committed by a political party under the FCRA and for condoning foreign donations to be received in the future, as by whatever name one may call it, foreign funding of elections is unacceptable." He asked, "“Why should companies, especially, foreign companies, give donations to political parties? Certainly not for promoting democracy, but more for quid pro quos from a willing political executive to enable them to profiteer, at the cost of the public.” He concluded that “Foreign donations to political parties are a threat to India’s democracy.”

It is in this backdrop, that the petitions of ADR  and others were mentioned in the Supreme Court on October 16, 2023. A 3-judge bench of Chief Justice and Justices J.B. Pardiwala and Manoj Misra passed an order saying "In view of the importance of the issue which is raised and having due regard to the provisions of Article 145(3) of the Constitution, we are of the considered view that the batch of petitions be listed before a Bench of at least five-Judges." 

A 5-judge bench partly heard the matter on October 31, 2023 and on November 1, 2023. On November 2, 2023, arguments were concluded and judgment was reserved. 

The Court's order dated Novemver 2 reads: "We have heard Mr Prashant Bhushan, learned counsel, Mr Kapil Sibal, learned senior counsel, Mr Shadan Farasat and Mr Nizam Pasha, learned counsel, appearing on behalf of the petitioners. Mr Vijay Hansaria, Mr Sanjay R Hegde, learned senior counsel, and Mr P B Suresh, learned counsel, appearing on behalf of the intervenors, supported the petitioners. On behalf of the Union of India, we have heard Mr R Venkataramani, learned Attorney General for India and Mr Tushar Mehta, learned Solicitor General with Mr Kanu Agrawal, learned counsel. Submissions have been advanced on behalf of the Election Commission of India by Mr Amit Sharma, learned counsel. On 12 April 2019, an interim direction was issued by this Court to the Election Commission of India. The Election Commission of India has produced in a sealed packet data in terms of the interim order as of April 2019. The order of this Court was not restricted to the date on which it was pronounced. If there was any ambiguity, it was necessary for the Election Commission to seek a clarification from this Court. In any event, we now direct that the Election Commission shall produce up-to-date data until 30 September 2023 in terms of the interim directions which were issued on 12 April 2019. This exercise shall be carried out on or before 19 November 2023. Data in a sealed packet shall be handed over to the Registrar (Judicial) of this Court." The 19-page long interim order in the ADR case [Writ Petition (Civil) No.333/2015] was delivered by Chief of India headed bench comprising of Justices Deepak Gupta and Sanjiv Khanna.

Prior to this, a 3-judge bench of CJI S. A. Bobde, Justices A. S. Bopanna and V. Ramasubramanian had reiterated the interim order in a 20-page long order dated March 26, 2021. Originally, the petitioners had prayed for declaration of "(i) Section 135 of the Finance Act 2017 and the corresponding amendment carried out in Section 31 of the Reserve Bank of India Act, 1934, (ii) Section 137 of the Finance Act, 2017, and the corresponding amendment carried out in Section 29C of the Representation of the People Act, 1951 (iii) Section 11 of the Finance Act, 2017 and the corresponding amendment carried out in Section 13A, the Income Tax Act, 1961 (iv) Section 154 of the Finance Act, 2017 and the corresponding amendment carried out in Section 182 of the Companies Act, 2013 and (v) Section 236 of Finance Act, 2016 and the corresponding amendment carried out in Section 2(1)(j)(vi) of the Foreign Regulations Contribution Act, 2010 as being unconstitutional, illegal and void." The 3-judge bench did "not see any justification for the grant of stay" on Electoral Bond Scheme. Hence, two applications of ADR and Common Cause-Interlocutory Application No. 183625 of 2019 and Interlocutory Application No. 36653 of 2021 in ADR case [Writ Petition (Civil) No. 880 of 2027)] seeking stay Electoral Bond Scheme were dismissed. 

In compliance with the Court's order dated November 2, 2023, the  Election Commission of India wrote a letter dated November 3, 2023 to all Chief Electoral Officers of all States and Union Territories on the Subject of "Submission of details in respect of Electoral Bonds".

Excerpts from submissions in Supreme Court in Electoral Bonds Scheme (EBS) case in Dr. Jaya Thakur v. Union of India. 

This petition was filed on October 18, 2022 and registered as Writ Petition (Civil) No. 975 of 2022 on November 5, 2022. It was verified on November 17, 2022.  The 45-page long written submission on behalf of Kapil Sibal, Senior Advocate for Dr, Jaya Thakur, the petitioner challenges the Electoral Bonds Scheme of 2018 (as amended in 2022), issued by the Department of Economic Affairs, Ministry of Finance, by way of Notification No. S.O. (E) 29/2018 dated January 2, 2018, in purported exercise of power under the Finance Acts of 2016 and 2017.

The petition concludes that regulation of spending in elections is a delicate process that necessarily must take into account the following factors:
a. Elections need funding.
b. Individuals ought to have the freedom to contribute to political candidates or issues of their choice.

However, excessive funding corrupts the political process in at least two ways.
a. It gives rise to a “pay for play” political culture where wealthy corporations or persons pay high amounts in order to influence the political process in a way so as to ensure that they obtain the “gratitude” of the powerful which is often expressed in the form of policies and laws that favour these donors over others. A political system where the rich have unhindered access to power leads to cynicism among the other persons and a corresponding lack of faith in the fairness of the democratic process. Public faith in democracy is what is ultimately the final line of defence for a democratic system. The perception of a “quid pro quo” often spells the death knell for public faith in the system.
b. Public policy is dictated by the desires of a few over the needs of the many. This leads to laws that serve private or public interests, and which favour the priorities of a few over everyone else.

Keeping in mind these dangers, India, before the EBS scheme, carefully regulated political donations in the following manner:
a. An elaborate system of disclosure was prescribed. First, Political parties were to give the data of the donations received to both the EC and the Income Tax authorities. Second, Companies that made political donations were required to disclose political contributions in their profit and loss statements. Thus, the public had the opportunity to find out how candidates were raising funds and could exercise their vote keeping this in mind.
b. In order to ensure that shell companies are not set up to fund political parties, companies could donate only up to 7.5% of their profits.
c. Political parties were forbidden from obtaining foreign funds under the FCRA.

It is the wanton destruction of this carefully calibrated structure by the EBS scheme that is under challenge in the present petitions.

The removal of restrictions on corporate funding- i.e. the 7.5% of profit cap that was imposed under the Companies Act, violates Article 19(1)(a) insofar as it permits deep pocketed companies to flood out the voice of citizens who do not have access to such funds. It also violates the “equal treatment” clause as it permits some people more political access than others based on money power.

The removal of the transparency and disclosure requirements violates the rights of citizens to know the candidates, their antecedents and their big money associations which are valuable to those seeking to exercise their ballots. This is in violation of rights under Article 19(1)(a), and 19(1)(c). Further, it utterly destroys the ability of shareholders to influence the political activities of companies. The Boards decide on donations and the profit and loss statement only records political donations and not to whom they were made. As such, shareholders have been denied complete agencies on how companies owned by them act politically. This is in violation of Article 300A of the Constitution.

The 23-page long rejoinder submissions in response to the respondent’s written submission which was tendered on October 31,2023 was filed on behalf of Kapil Sibal in Writ Petition (Civil) No. 975 of 2022. It was drafted by Gautam Bhatia, Rupali Samuel, Aparajita Jamwal, Rishabh Parikh and  Prasanna S. The respondent, the union government does not deny that the EBS infringes upon the voters’ right to information. It argues that the EBS strikes a “balance” between free and fair elections (powered by clean money), and the right to information. 

The rejoinder submits that the EBS is an executive instrument that deals with political party funding, and, therefore, indisputably, with entities that participate in the electoral process. It submitted that this Court ought to subject legislation that affects or alters the rules relating  to the electoral process (including election funding) to heightened and  anxious scrutiny. The impugned amendments brought in
through the Finance Act, 2017 and the Electoral Bonds scheme ought not to be accorded a presumption of constitutionality. The EBS bears no rational nexus to either election funding or clean money. This lack of
nexus was conceded by the Solicitor General in his arguments, who stated that the bonds are not related to elections and can be used for any activities by the party. Thus, the EBS only enables the enrichment
of political parties, without any transparency and accountability.

The term “electoral bond” is a complete misnomer. Payments made to political parties through these bonds are not at all related to election funding. The window for purchase of the bonds opens four times a year regardless of any election. he operation of the Current Account in which the electoral bonds are encashed by political parties is not restricted or regulated or monitored in any way. Spending from these accounts is not legally required to be linked to the conduct of elections. 

It is unfounded and disingenuous to suggest that confidentiality of donors is the only incentive for resorting to black  money in politics. Corruption is well documented as an endemic problem in politics in India, with politicians obtaining kickbacks in exchange for government favours. Thus, when analysed from the perspective of moral and societal harm, the problem of black money in politics arises from the use to which money is put (such as, for example, a quid pro quo between a donor and a politician). Under the EBS, at best, the aspect of transfer of money could be said to be brought into the banking stream (and that too, only in those cases of direct donation by the original purchaser of the bond), but even so, the use of money for an immoral and societally harmful purpose is not prevented or deterred. Indeed, the legitimising of the means of transfer of such money through an anonymous bearer bond only makes it more difficult to discover that the illegitimate use of money has occurred, even when it is done in plain sight. In other words, the harm from corruption is not eliminated by offering legitimate channels for funnelling such money towards such illegitimate uses. For example, corruption in the form of a quid pro quo which was undertaken through cash payments remains harmful to society even when such payment for an undue favour is made through a bond, since the use of the money is for a harmful purpose.

As a matter of law, if those engaging in criminal activities and hence operating through cash enter the EBS system, then the EBS is abetting crimes by offering a non-transparent, legitimate channel for transfer of bribe money. The confidentiality granted by the EBS makes it impossible for regulators, investigators, opposition parties and the public to identify the existence of any quid pro quo since no correlations
between receipt of funds and government benefits can ever be discerned or red flagged in the first instance for further detailed examination. Conversely, if the EBS does not shield criminals, and the bribe masked as donations would render the donor/donee liable for criminal prosecution, then all such criminal actors continue to be incentivised to resort to black money. Thus, the EBS is no answer to preventing use of black money for criminal activity. The only deterrent to criminality is a robust and fair investigation agency coupled with a speedy and just criminal justice system.

The expenditure of a candidate in an election is capped by Section 77(3) of the Representation of the Peoples Act 1951 read with Rule 90 of the Conduct of Election Rules 1961. The present cap is either Rs 95 lakhs or Rs 75 lakhs per candidate for Parliamentary constituencies and Rs 40 lakhs or Rs 28 lakhs per candidate for state legislative assembly constituencies. Any spending above this limit is illegal and amounts to a corrupt practice under Section 123(6) of the Representation of the Peoples Act 1951. Therefore, such illegitimate and illegal utilisation of funds over and above the expenditure cap can never be done through open and lawful means. Those resorting to expenditure in excess of the cap would continue to use black money. 

The claim that the total cash circulating in the economy has fallen after the EBS is not factually correct. The RBI’s Annual Report for 2022-23 states that as of March 2023, the total currency circulating
in cash is worth Rs.33,48,228 crores. The RBI’s own official data shows that this number has been steadily increasing over the last six years. Source: RBI Annual Reports dated 2019-20 and 2022-23 at https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/8CURRENCYMANAGEMENT31110531A057411F9EADC90842596B4B.PDF and https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0RBIAR201920DA64F97C6E7B48848E6DEA06D531BADF.PDF 

The EBS does not tackle the problem of black money. Consequently, the issue of “confidentiality” in order to ensure clean money in election funding does not arise. 

The confidentiality under the EBS remains an asymmetric, or partial confidentiality and cannot protect against reprisals. This is because, first, it is always possible for the ruling political party to discern broad
patterns of donation via electoral bonds: for example, the ruling party will know how much it has received from a particular corporate donor; it will also know the “total” of how much that donor has donated via
electoral bonds under the disclosure in its books of accounts required by Section 182 of the Companies Act, 2013. Thus, if the total donations disclosed by the corporate donor exceeds the amount the party in
power has received, it will immediately know that the said corporate donor has patronised its political opponents. Consequently, the EBS does not solve the problem of “victimisation” and “reprisals” that the
Respondent expresses concern about; rather, it exacerbates it since corporates cannot resist demands made by ruling parties for donations under the EBS on the ground that these payments would expose them
to criminal liability. Secondly, the trigger for full disclosure under the EBS is the existence of a First Information Report (FIR), which is an extremely low threshold for the political Executive which has the
instruments of law and order at its disposal. Once again, information about donations - upon this trigger being met - will be to agencies or instrumentalities under control of the incumbent. During the course of
oral argument, the Learned Solicitor General invited this Court to “read down” this clause to add in the requirement of a court order; it is respectfully submitted that the impugned Scheme must stand or fall
on its own terms; it cannot be altered on the basis of concessions made across the bar.

Ever since the 1970s, it is well accepted that the test for a violation of fundamental rights - including
Article 14 - is the test of effect. The effect of the EBS - both structurally and empirically - is an undue pro-incumbent benefit; this, it is submitted, should attract this Court’s anxious scrutiny, as one of the surest signs of democratic decay is when legal regimes are designed in a manner so as to concentrate greater economic or political power within incumbents, and thus impede the periodic transfer of power that marks all healthy democracies.

The asymmetric confidentiality incorporated by design into the scheme of the EBS has a spin-off harm, in that it keeps the political opposition as well as the voter in the dark about donations to the ruling party, and whether those donations have (or have not) reflected in policy outcomes. This prevents open debate, since the lack for information precludes lawful critique or questions about potential crony capitalism, and further undermines the democratic public sphere.

Even if the Respondent’s arguments about confidentiality are to be accepted, the EBS fails to pass the test of proportionality. The threats of victimisation or harassment can be dealt with on a case-by-case basis, rather than through a blanket denial of the voter’s right to know. Respondent has failed to engage with this argument.

The EBS clearly fails the final prong of the proportionality standard. While denying any possibility of favour as a result of donations, it presumes the fact of disfavour and invokes the possibility of victimisation (which, it may be stated, assumes the failure or partisanship of the State, the investigative
agencies, and the courts), which may be suffered by an indeterminate set of big-money political donors, as a justification for denying every voter the right to know who funds political parties. This is not, under
any circumstances, a constitutionally compliant “balancing of interests” under the proportionality standard.

The EBS grants a privilege to corporations to make unlimited and anonymised contributions to political parties without any oversight whether externally by regulators or internally by the requirement for shareholder approval. By way of the EBS, a corporate entity is permitted to (i) be equated with a citizen of India; (ii) interfere and influence with the electoral process; (iii) give unlimited funding, irrespective of its profitability, thereby permitting the Board of Directors to forego their fiduciary duty towards its shareholders and (iv) hide from the shareholders as to which political party the Company has given
funding to. The Solicitor General has already conceded in his oral arguments that to the extent that the present scheme allows a company that does not even make profits to make donations, it may be struck
down. This all-encompassing privilege cannot be justified on the single plank of “donor privacy.”

The union government has argued that the amendment to the Reserve Bank of India Act, 1934 was to only facilitate the issuance of bearer bonds by the State Bank of India. However, the amendment made to sub-section 3 of Section 31 of the Reserve Bank of India Act, 1934 grants power to the Central Government to
“authorise any scheduled bank to issue an electoral bond” without requiring any RBI approval. Further, this amended provision does not set out any legislative policy for the exercise of this power and amounts
to excessive delegation which is unconstitutional. The contours of the scheme are thus not legislatively set out, but are within the domain of the Executive to frame. The EBS was notified on 02.01.2018 in
purported pursuance of power under sub-section 3 of Section 31 of the Act by the mere issuance of a notification by the Ministry of Finance. Similarly, the EBS was amended on 07.11.2022 to allow a 15 day window of purchase to be notified before elections to state legislative assemblies by the mere issuance of a notification by the Ministry of Finance, without RBI needing to give any approval.

It concluded that the EBS, and the legislative amendments that enable it, are violative of the Constitution and this Court may be pleased to strike them down as unconstitutional. 

Oral Arguments 

Introduction of the Scheme of Electoral Bond

European and Indian farmer protests, common issues: Soma Marla

Farm distress experienced by small farmers in India and was genuinely mirrored in the year-long Kisan struggle against the pro-corporate three farm laws brought by Indian government. Both small farmers and working class in India identified big corporate bourgeoisie as common class enemy and are waging relentless struggles untimely for the last three years. They are demanding legal guarantee for purchase of crop produce, regulation of soaring prices and increase government (public) expenditure in agriculture. The proposed Bharat Bandh on February 16th, 2024 is called by United Farmers group (SKMU) and Central Trade unions. An expected participation of nearly 20 crore (200 million) toilers and likely to bring the nation to a standstill. (Photo:Soma Marla)

In 2020, while introducing three farm bills, Indian Prime Minister had declared that free markets (replacing state market yards) with participation of major corporate houses would promote competition and there by benefit farmers with profitable prices If de-regulating agricultural markets and bringing corporate control over agriculture were a viable alternative, there is no reason why European farmers today are agitating against big agri corporations. 

Farmers are protesting all across the Europe. Their major demand being is primarily against denial of an assured and rightful price for their produce. Farmers virtually blocked all seven motorways leading to Paris with thousands of tractors and are camped outside the city. Beginning in France, the protests soon spread over to Germany, where enraged farmers paralysed half of Berlin. The farm stir has also spread to Romania, the Netherlands, Poland, Lithuania, Romania, Bulgaria and Belgium. Farmers in Spain, Italy and Greece are preparing to organize huge rallies. Some young farmers were seen spraying farm manure and cow dung on government buildings and at some busy thoroughfares old tyres and agricultural waste set to fire, besides stopping vehicles carrying imported foodstuff and dumping it on the streets. While Paris supermarket shelves are getting empty of fresh farm produce, shopping mothers find it hard to answer to the questions rised by accompanying children. These European protests remind the protesting Indian farmers camping in the outskirts and blocking the highways leading to Delhi a few years back. I find similarities between the two agitations.

In Europe farmers are being burdened by huge debts, squeezed by powerful retailers and agrochemical companies, battered by extreme weather, and undercut by cheap foreign imports. In Poland cheap imports of grain has brought the grain prices down by 30 percent. Adding fuel to farmers stir is decision by governments of France and Germany to withdraw diesel subsidies and increase insurance charges to farm machinery. The unwise sanctions on oil and gas imports from Russia also contributed to high levels of inflation and energy crisis. The root of farm crisis lies in low prices of farm produce in markets and left to the mercy of big agribusiness cartels and corporate houses. Ironically, European Unionshielded by Green box, masks the WTO guidelines and subsidizes up to nearly 60 to 70 percent of production costs to their farmers. European Union provides huge support of $107 billion per year ( EU, 20-22 ) and European farmers, are among the highest recipient of subsidies and direct income support. However, 80 percent of this goes to mere 20 percent of rich farmers and seed, agrochemical firms leaving bulk of the small farmers to content with penury.

The protests are primarily against denial of an assured and rightful price to farmers. In European Union a small farmer receives mere 27 percent of what a consumer pays for farm products in a supermarket (Nature Food, 2021). In India too a farmer gets just 27 to 31 paisa on every rupee of purchase by a consumer in a supermarket or a local Kirana store. A lions share being pocketed by the value chain starting from local grain merchant to super market or big agribusiness corporate house.

In beginning of XIXth century, Karl Kautsky opined that farm products are kept low valued in markets against industrial goods artificially in markets so as to drain the surplus in favour of metropolitan industry. It is estimated that of the total agricultural GDP of 22 Lakh crore rupees, an Indian farmer is loosing nearly 15 Lakh crore rupees to intermediate grain retailers and big corporate agribusiness and supermarket chains.

The grip of global agribusiness corporations is so strong that nearly 40 percent of seed market is controlled by BASF SE, BAYER, Corteva Agro, Syngenta and others, while a mere three agribusiness giants viz.. Cargill, ADM and ZenNoh control nearly 50 percent of global grain supplies. Similarly a handful of companies like John Deer, New Holland control 90 percent sale of global tractors, harvest combines and other machinery. It is suspected that the gory food crisis witnessed in Egypt, Burkina Faso, Tunisia, Indonesia and other countries was nothing but created by these global grain cartels for big profits.

It is crystal clear by now that liberalised markets have failed to enhance farm incomes. It shows that the tailored economic reforms are being implemented to benefit big agribusiness on the expense of small farmers. Hence, Indian farmers (SKMU) and major Trade unions are waging for the last three years a relentless struggle against corporate control of agriculture, markets and denial to cheap food to a vast majority of toiling masses. 

On February 16th  these two bodies have called for Gramin Bandh, a nation wide village strike demanding a law for guaranteed purchase of agricultural produce at higher price and regulate rising food prices.

European and Indian farmers alike are agitating against low prices and big agribusiness corporate controls. This mirrors ongoing global struggle by toilers against finance imperialism.

(Author: Dr. Soma Marla, Principal Scientist (Genomics), retd, Indian Council for Agricultural Research, New Delhi)

Courtesy: Mainstream

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