Category Archives: Contract Law

Remote Lockouts in PAYGo-Solar – How to Approach the Regulatory Dilemma

Contract Law

Advances in financial and consumer technology have changed the way we consume goods and services. New, digital business models have not just pushed out existing ones (Spotify killed the CD), they have also created markets that had practically not existed before (Airbnb opened many doors that otherwise would have stayed shut). By creating new markets, such businesses have given consumers access to goods and services that may improve their lives significantly – but they have also exposed them to novel risks. From a regulatory perspective this raises a fundamental dilemma: risks call for regulation, yet regulation might kill the business model and thereby cut off consumers from the goods and services offered. In our chapter ‘When the Lights Go Out – Remote-Lockout-Technology in Sustainable Pay-As-You-Go-Products’ in Sustainable Digital Finance (edited by Ingrid-Gabriela Hoven, Soh Young In and Thomas Puschmann), Professor Sebastian Omlor and I analyse this dilemma, looking at a case where the digital and sustainable transformation of our economies intersect: remote lockouts in PAYGo-products, especially PAYGo-solar.

Section 67 Challenges to Arbitral Tribunal’s Substantive Jurisdiction under the English Arbitration Act 1996

Contract Law, Private Law

Challenging the substantive jurisdiction of an arbitral tribunal falls under the category of challenging an award. It involves discussions on the foundations of the competence-competence doctrine, which provides for an arbitral tribunal to rule on its own jurisdiction. Grounds of challenge to substantive jurisdiction emanate from the ‘consent principle’, which restrains the ‘tribunal’s authority and powers’. A tribunal’s ruling on its own jurisdiction, or making of an award in the absence of consent—in light of an arbitration agreement—would allow for raising such a challenge. Section 67 of the English Arbitration Act 1996 (hereinafter ‘AA 1996’) provides that a challenge to an arbitral award may pertain to its substantive jurisdiction. Alternatively, a declaration may be sought from the court to declare an award made by an arbitral tribunal on the merits to be of no effect—wholly or partially—owing to the tribunal’s lack of substantive jurisdiction. It is important to note that section 67 is a mandatory provision. The implication is that parties cannot contract out of the said provision.

Navigating Regulation of Online Gaming through Taxation in India

Contract Law, Taxation Law

This post seeks to introduce my co-authored article with Ms. Siya Jangir titled ‘Online Gaming in India: The Predicament of Regulation and Taxation’ published in the RGNUL Journal on Financial and Mercantile Law Review that sheds light on the complexities of regulating online gaming in India. It explores the intertwined issues of skill vs chance, real money involvement and the dynamic nature of the industry. It analyses the rationalisation behind considering negative externalities like socio-cultural underpinnings, psychological harm and mental health issues caused by addiction to online fantasy gaming as causal factors for higher taxation. A cross-jurisdictional review of selective regulatory models has been undertaken to understand the nuances of licencing and categorisation. Since the online gaming industry is rapidly growing without any borders, the authors have argued for better consociation amongst law and policy makers across the globe.

Force Majeure Clauses: Character, Scope and Protection

Contract Law

A consignor of goods enters into a multi-voyage carriage contract for carrying iron ore. It depends upon a parent company to supply it with cargoes. The parent has not contracted for cargoes for some voyages. A catastrophic flood now inundates the mine from which the cargoes would have been sourced. Does a force majeure clause in the carriage contract exclude the consignor’s liability because of the flood, even though the consignor was in no position to perform anyway? And if it does not, how extensive should the consignor’s liability in damages be if the flood would have prevented performance in any event?

A bank’s duty to question payment instructions, aka the Quincecare duty

Banking and Finance, Contract Law

Payment scams are rife. A particularly prevalent form is the authorized push payment (APP) scam. These payments are authorized by a bank customer after falling for a third party’s deceit, which may take many different forms, including fake investment opportunities, impersonation of figures such as bank officers and the police, and diverting an intended payment into the scammer’s account. Because these payments are authorized by the customer, the bank has a valid authority (mandate) to pay and must ordinarily make the payment. Authorized payment scams can be contrasted with unauthorized payments which do not originate from the customer and therefore involve forgery. In such cases, a bank has no authority to pay and at common law will bear the loss, although this is subject to contract terms allocating the loss to the customer. Most authorized payment scams are push payments which means that the payment instruction is sent by the payer to their bank. Examples are payments by mobile phone or home computer. By contrast, pull payment instructions are given by the payer to the payee who initiates the payment process through their own bank. Examples are cheques or direct debits. Pull payments are less prone to authorized payment scams, hence the focus on push payments.

Pre-judgment Interest on Liquidated and Unliquidated Sums

Contract Law, Private Law

A creditor bringing an action will want interest too. Interest compensates for late payment. For the last 200 years, relief came from statutes. The common law did not recognize a right to pre-judgment interest. That position was relaxed in Sempra Metals v IRC [2008] 1 AC 561. Interest on debts and other claims for breach of contract were legitimised. Plaintiffs can now present claims for compound interest at common law, whereas statutory interest is always simple. Where the interval between cause of action and judgment is long and the sum is large, this is a superior option. In a recent Privy Council decision (Sagicor Bank Jamaica v YP Seaton[2022] UKPC 48), interest calculated on a compound basis was roughly 52 times greater than simple, and roughly 368 times the principal sum.

Schrödinger’s Lawful Act Duress: Dead or Alive?

Contract Law

Can you set aside a contract if you were induced to enter it by my application of lawful pressure that may threaten your economic interests, reputation, or your concern to protect a loved one? This raises difficult policies since the only viable basis for discriminating between acceptable and unacceptable pressures is not positive law but social morality. On the other hand, if lawful pressures are always exempt, those who devise outrageous but technically lawful means of compulsion must always escape. The courts have accepted that the categories of duress are not closed and that an illegitimate threat can include one which is lawful, although it must ‘at least be immoral or unconscionable’. What then falls within this category of lawful act duress?