Taking Inspiration From Around The Globe – The United Kingdom

As explicated earlier, it is difficult to place unbridled trust in an analogy with the CPC, not only because of the express bar of its application in arbitration matters but also because of the practicality and feasibility of the matter at hand, for there lie a plethora of differences between typical civil proceedings and arbitration proceedings. Therefore, in our quest for more definitively applicable answers, we must look up to other common law jurisdictions and their legal practices in the fields of arbitration and commercial litigation, and find solutions applicable in the Indian context.

Emulating the principles enshrined in the UNCITRAL Model Law,[1] arbitration proceedings in England, Wales and Northern Ireland are predominantly governed by the Arbitration Act, of 1996. While the aforementioned Act does not provide for incubation of a limitation period post-amendments for the rendering of the award, the authors would like to bring out the jurisprudential postulation in commercial litigation practices in the United Kingdom’s legal framework on amendments in civil and arbitration proceedings, and the limitation period incubation for filing them, in order to propose solutions and recommendations that can be implemented the Indian context. It is to be noted that in the Indian context, the limitation period referred to takes place after the completion of pleadings for the rendering and enforcement of the arbitral award.

There are two broad categories when it comes to amendment to pleadings. These include instances (i) where late amendments to the statement of case occur within the limitation period and (ii) late amendments to the statement of case where the limitation period has expired.

1. Late Amendments to Statement of Case Within the Limitation Period

The leading case of Rose and others v. Creativityetc and others(hereinafter ‘Rose’) systematically laid down the principles upon which a Court must rely before exercising its discretion and permitting proposed late amendments, specifically when the limitation period is not breached.

In instances where the amendment is proposed at an earlier phase, the Court must examine whether approving the amendment to pleadings at a nascent stage would lead to the determination of the real dispute between the parties. This falls in line with the reasoning applied in Cobbold v. London Borough of Greenwich, wherein the importance of the overriding objective was reiterated squarely. As tersely explicated in the Civil Procedure Rules, 1997 (hereinafter ‘CPR’), the overriding objective was implemented to ensure that parties to litigation are dealt with justly and at proportionate cost. Accordingly, amendments generally ought to be allowed if the real dispute between the parties can be ascertained, provided that any prejudice against the other party can be compensated monetarily and public interest in the efficient administration justice does not experience a detrimental effect. Yet, in Rose, it was acknowledged that the standard laid in Cobbold v. London Borough of Greenwich was lenient. Recent judgements indicate that a higher threshold for amendments to pleadings is required, recognising that payment of costs alone may not be adequate compensation for the delay caused as it would be tantamount to prejudice against the other party. Ultimately, the Court must exercise its discretion and pay utmost importance to the overriding objective, effectively striking a balance between injustice to the applicant if the amendment is refused and injustice to the opposing party if the amendment is permitted.

At a later stage, amendments are more likely to get denied since aspects such as waste of the Court’s time, prejudice to the other party and adverse effect on other litigants, come under consideration. Now, to ascertain whether or not an application to amend pleadings is ‘late’ per se, there are a few factors that Rose laid would have to be taken into account. Pertinently, it is crucial that all of these factors are to be considered in conjunction before allowing an amendment. Firstly, there exists a heavy burden on the party seeking a late amendment to adequately justify the principal reason for the delay. Secondly, the Court must examine whether the amendment could have been introduced earlier. Thirdly, it must be determined whether the other party must return and complete any significant stages of litigation that have already taken place. If the answer is in the affirmative, then the proposed amendment would most likely not be permitted as it infringes on the rights endowed on the other party. Lastly, whether the amendment would threaten the trial date. While not a part of the criteria, it is also to be noted that all amendments to the pleadings must be properly articulated and have a real prospect of success. Else, the Court would assume that the party seeking the proposed amendment is simply endeavouring to postpone the proceedings.

Applying the aforementioned standards, the High Court refused the claimant’s application to amend the claim as the new amendment was substantial enough to prejudice the trial date. Failing the first prong of the test, the judge reasoned that the proposed amendment was ‘weak’; thus, there was no satisfactory reason for the amendment to be sought. Myriad cases after Rose have interpreted and applied the principles laid in the case, while warranting that all amendments are in the interest of justice for both parties thus, in line with the overriding objective.

• Late Amendments to Statement of Case when the Limitation Period Has Expired

In such instances, the ‘doctrine of relation back’ enters the scene wherein, the re-amended claim would be deemed to have been commenced on the date of issue of the original claim form (and within the applicable limitation period). As expounded under S. 35 of the Limitation Act, 1980 and Rule 17.4 of the CPR, there are two essential conditions for late amendments that are – firstly, it must not introduce a new cause of action, and secondly, even if it does, the new cause of action arises out of the same or substantially the same facts as the original claim.

In Blue Tropic Ltd and another v Chkhartishvili, there existed a late amendment of a claim post the expiry of the foreign limitation period. Applying the abovementioned test, the Court of Appeal dismissed the action as the proposed amendment introduced a new allegation of intentional wrongdoing, which constituted the introduction of a new cause of action that did not arise from the same or substantially the same facts as those already in issue. Further developing the abovementioned test in Morley v Royal Bank of Scotland Plc, the Court categorically held that if the opposite party goes beyond the scope of matters which it had already investigated on the existing pleading, they did not arise out of the same, or substantially the same, facts.

In Hyde v. Nygate the four-stage test derived from principles expounded in prior cases, was enumerated to apply when determining whether a disputed amendment ought to be permitted or not. The first prong (or Stage 1) of the test examines whether the opposed amendments are outside the applicable limitation period. If yes, proceed to Stage 2 and if not, the amendment falls within the ambit of CPR 17.1(2)(b). Stage 2 seeks to understand whether the proposed amendments add or substitute a new cause of action. If yes, proceed to Stage 3 and if not, then again the amendment falls under CPR 17.1(2)(b). In the final stages, if the new cause of action arises out of the same or substantially the same facts as are already in issue in the existing claim, then the Court has the discretion to allow the amendment. If not, the Court cannot permit the amendment.

Suggestions to Fill the Lacuna – The Way Forward

The overriding objective seeks to ensure that cases are dealt with in a just manner while keeping costs proportionate so as to not burden either party to the dispute. One of the aspects of this principle is ensuring the timely resolution of disputes without unnecessary delay. In furtherance of the objective of curbing frivolous amendments that may be undertaken with the sole aim of delaying the award by exceeding its limitation period, the authors propose that changes ought to be made in the Indian jurisprudence to define precise limitation periods for amendments to ensure that disputes are dealt with expeditiously.

However, while doing so, it must be guaranteed that there exists some flexibility vis-à-vis the late amendments when the limitation period has expired, as seen in the United Kingdom. Quah Su Ling put forth that ‘lateness is not an absolute, but a relative concept.’ As was illustrated in Rose, if an amendment entirely changes the progression of a case a few months before a trial, this would be ‘late’ but if an amendment simply interprets the facts instead of introducing new evidence even closer to the trial date, this would not be late. Thus, there exists a requirement to conduct case-to-case breakdowns to ascertain whether amendments ought to be permitted or denied. India can take aicue from the United Kingdom as similar factors as enumerated in the Rose judgement vis-à-vis the amendment to pleadings can be used for conducting such case-to-case analysis. The caveat for this, however, is the additional load tribunals to conduct exhaustive investigations which in turn, lead to delays in pronouncements.  The authors recommend that while modifying the current legal provisions to contain a limitation period for late amendments, all of the abovementioned issues are addressed adequately by the lawmakers to ensure the timely resolution of disputes.

Conclusion

In the Indian context, the limitation period referred to takes place after the completion of pleadings for the rendering and enforcement of the arbitral award. Due to the discernible void of such parallel provisions in prominent foreign jurisprudence, the authors explored the United Kingdom’s legal system on late amendments in civil proceedings, and the limitation period incubation for filing them, in order to propose solutions. As explicated earlier, two main categories exist with respect to late amendments – those that fall within the limitation period and those amendments that are proposed subsequent to the expiration limitation period. Regardless of the scenario, the overriding objective is the recurrent principle that the Courts must take into consideration, i.e., the timely resolution of disputes in a just manner and at a proportionate cost. Similarly, in India, the authors recommend that when making efforts to define precise, inclusive limitation periods, there must exist some flexibility vis-à-vis the late amendments when the limitation period has expired.

[1] See, Bantekas, I., Ortolani, P., Ali, S., Gomez, M., & Polkinghorne, M. (2020) UNCITRAL Model Law on International Commercial Arbitration: A Commentary (Cambridge University Press 2020)

The blog post has been written by Richa Maria and Jahnvi Thanvi, who are undergraduate students at the Rajiv Gandhi National University of Law, Punjab (RGNUL).