I would like to highlight the blog ‘Indian Legal Space’. The blog deals with several aspects of law, including discussions on commercial law and taxation. The authors of the blog very kindly invited me to write a few guest posts for the blog, and I have written a couple of posts. One deals with a recent decision of the Mumbai Bench of the ITAT in Management Structure Systems v. ITO, on the issue of whether income from sale of shares is to be treated as capital gains or as business income. The other post deals with non-discrimination in DTAAs (part 2 of that post shall be put up shortly). There are also a couple of very interesting posts on taxation of FIIs by Mr. Ankit Mishra, student at Christ college. Those posts are accessible here and here.
A recent decision from Canada – provides a very interesting example of a strong application of form-over-substance rules in taxation. The decision of the Court of Appeal from British Columbia, Terasen Gas v. British Columbia, can be accessed here.
The relevant statutory background needs some description. Under the Social Service Tax Act, sales tax is imposed on a purchaser who acquires certain property for his own “use”. “Use” is defined as not including “storing, keeping, or retaining of tangible personal property for the sole purpose of resale.” There is also an exemption from sales tax if the purchase was made only for the purpose of leasing the property. In sum, sales tax cannot be levied if the purchase is for the sale purpose of resale (in which case the definitional requirement is not satisfied), or if the purchase is made for the sole purpose of leasing (in which case a specific exemption is available).
Terasen Gas was required to construct a gas pipeline in British Columbia. For this purpose, it purchased some equipment. Ordinarily, this would have been taxable as a purchase for use. Terasen, however, purchased the equipment and then sold it to a trust. Of course, the beneficiary of the trust was a Terasen subsidiary; but as a matter of law, Terasen could argue that it purchased the equipment solely for resale hence was not covered by the definitional requirement of the charge of tax. This would not help though – the sale would be taxable in the hands of the trust. So what does the trust do? It leases back the property to Terasen. Consequently, the trust takes the ground that it purchased the property solely for the purchase of leasing, and was thus exempt. The property is now back with Terasen for Terasen’s use – but Terasen cannot be taxed at this juncture as it is not a purchaser any more, it has only leased the property.
It was argued that this was in effect a self-cancelling transaction, and the final lease was in substance a sale. The Court of Appeal rejected this argument – it held that the final transfer corresponded with the legal requirements of a lease, and the legal structure employed cannot be discarded. The Court observed, citing Duke of Westminster, “I can see no reason Terasen should not have been entitled to structure the acquisition of the equipment to take advantage…”
In Mathai v. George, (2010) 4 SCC 358 the Supreme Court has referred the question of the interpretation of Article 136 to a Constitution Bench. The Court (Katju and Lodha, JJ.) observed, after referring to the leading cases on the scope of Article 136, “…we feel it incumbent on us to reiterate that Article 136 was never meant to be an ordinary forum of appeal at all like Section 96 or even Section 100 CPC. Under the constitutional scheme, ordinarily the last court in the country in ordinary cases was meant to be the High Court. The Supreme Court as the Apex Court in the country was meant to deal with important issues like constitutional questions, questions of law of general importance or where grave injustice had been done… After all, the Supreme Court has limited time at its disposal and it cannot be expected to hear every kind of dispute.” The Court also refers to the lack of uniformity in grant of leave to appeal under Article 136.
I remain doubtful whether another Constitution Bench decision on the point will serve any purpose. As far back as in 1950, a Constitution Bench had already observed in Pritam Singh v. State: “On a careful examination of article 136 along with the preceding article, it seems clear that the wide discretion- any power with which this Court is invested under it is to be exercised sparingly and in exceptional cases on13,, and as far as possible a more or less uniform standard should be adopted in granting special leave in the wide range of matters which can come up before it under this article. By virtue of this article, we can grant special leave in civil cases, in criminal cases, in income-tax cases, in cases which come up before different kinds of tribunals and in a variety of other cases. The only uniform standard which in our opinion can be laid down in the circumstances is that Court should grant special leave to appeal only in those cases where special circumstances are shown to exist…”
Evidently, this Constitution bench decision has done little or nothing to curb the widespread (ab)use of Article 136. Will another Constitution Bench decision really help, then? A more findamental change – for instance, such as the one recently proposed by Mr. K.K. Venugopal involving the creation of separate Regional Courts of Appeal – might perhaps be a better solution.
The Supreme Court in Ishikawajima-Harima had held that for income to be taxed in India u/s 9(1)(vii) of the Income Tax Act, 1961, services had to be both rendered and utilised in India. The correctness of the proposition a a matter of principle had been doubted by the AAR (which nevertheless followed the Supreme Court); and the Finance Act, 2009 sought to legislatively nullify the decision. However, as the Bombay High Court held in Clifford Chance, Ishikawajima continued to be good law despite the 2009 Amendment. However, the Finance Act, 2010 finally laid rest to the questions over the applicability of Ishikawajima. Earlier posts on this issue have been discussed here, here, here, here, here.
In what appears to be the first decision on the 2010 amendment, the Mumbai Bench of the Income Tax Appellate Tribunal in Ashapur Minichem v. ADIT has confirmed that Ishikawajima and Clifford Chance are no longer good law. As a pure matter of interpretation of the 2010 Amendment, this is undoubtedly the correct position to take. As long as the retrospective amendment to the Explanation to Section 9 is unchallenged, judicial authorities will be bound to consider and apply the explanation. That explanation makes it abundantly clear that the render + utilise formula is no longer good law. The Tribunal decision (in paragraph 9) reaches this conclusion with clear reasoning. However, the Tribunal then goes ahead and makes some observations which appear to go beyond the basic interpretation of Section 9. In paragraph 10, for instance, the Tribunal held that “the concept of territorial nexus, for the purpose of determining tax liability, is relevant only for a territorial tax system in which taxability in a tax jurisdiction is confined to the income earner within its borders…”
The Tribunal’s observations can be read as meaning that requirements for nexus are not necessary in every case; that nexus requirements are irrelevant in the case of source-based taxation. It is submitted that such a reading ought not to be preferred. Nexus stems as a matter of constitutional requirement – this can be confirmed by reference to Electronics Corporation. Of course, it cannot be denied that source rules can be used to fasten tax liability – however, even these source rules do have nexus requirements. For instance, income arising through the transfer of a capital asset situate in India is taxable u/s 9 – this is a source rule; the nexus is the situs of the capital asset. Every source rule under Section 9 can be traced to show some territorial nexus. While the Tribunal reached the correct conclusion on Section 9 that Ishikawajima is no longer good law (paragraph 9), its subsequent observations (paragraph 10) should not be taken to imply that there is no nexus requirement at all.
In anearlier post, I had noted that a Constitution Bench of the Supreme Court has upheld the establishment of the National Company Law Tribunal and the National Company Law Appellate Tribunal, in an appeal filed by the Union of India against a judgment of the Madras High Court. The judgment of the Constitution Bench (Union of India v. R. Gandhi / Madras Bar Association) is nowavailable on JUDIS (Civil Appeal No. 3067 of 2004 with Civil Appeal No. 3717 of 2005, unanimous, judgment datedMay 11, 2010, per Justice Raveendran)
What the Court held:
While it is true that the competence of Parliament to establish the NCLT and the NCLAT has been upheld, the judgment effectively approves of the principles laid down in the impugned judgment of the Madras High Court. What the Constitution Bench has held is that “the creation of National Company Law Tribunal and National Company Law Appellate Tribunal and vesting in them, the powers and jurisdiction exercised by the High Court in regard to company law matters, are not unconstitutional…” However, “We declare thatParts 1B and 1C of the Act as presently structured, are unconstitutional(and) may be made operational by making suitable amendments, as indicated above, in addition to what the Union Government has already agreed in pursuance of the impugned order of the High Court…” In sum, the legislative competence of Parliament to create the NCLT and the NCLAT has been upheld, but the particular structure of the NCLT and NCLAT presently being proposed has been held unconstitutional. Thus, in order for the NCLT and the NCLAT to come into existence, the Union of India will have to carry out several amendments beyond what was mandated in Chapters 1A and 1B of the Companies Act, 1956 inserted by the Companies (Second Amendment) Act, 2002. The decision does not decide on the constitutionality of the National Tax Tribunal (although the matter as heard together, it appears to have been de-linked).
The contentions and the controversy:
The contentions against the creation of the NCLT and NCLAT were as follows:
1. Parliament does not have any legislative competence whatsoever to vest intrinsic judicial functions, particularly those which have been traditionally performed by the High Courts for a long time, in any Tribunal outside of the Judiciary.
2. The constitution of the NCLT and transferring the entire company jurisdiction of the High Courts to the Tribunal was violative of the doctrine of separation of powers and independence of the Judiciary, particularly having regard to the proposed qualifications of membership of the NCLT.
The real controversy was with respect to the second of these contentions. At issue were Sections 10(FD)(3) and 10(FX). Section 10(FD)(3) deals with the appointment of technical members (as opposed to judicial members), while Section 10(FX) deals with the selection process for the Chairperson of the Tribunal.
Competence of Parliament:
The Union of India contended that Parliament had legislative competence under the Constitution, and that being the case, the manner of exercise of its legislative power was not subject to challenge. On the other hand, it was contended by the respondents that legislative competence to create Tribunals existed only under Articles 323-A and 323-B of the Constitution. Those two Articles deal with the creation of tribunals in respect of some specific matters and it was contended that the NCLT was not limited to those matters listed in the two Articles. This contention was rejected – it was held that legislative competence can be exercised in respect of all matters in List I of the Seventh Schedule; and Article 323-A and 323-B is not a limiting provision. The subject-matters specifically listed in those articles are not exhaustive.
Concerns over membership:
The stronger challenge, and also the ground which was pressed more strongly, was on the membership of the Tribunal. On this, the Court takes a severe view of theUnion’s argument that once competence was established, there could be no further test. The Court observes:
“… when we say that Legislature has the competence to make laws providing which disputes will be decided by courts and which disputes will be decided by Tribunals, it is subject to constitutional limitations, without encroaching upon the independence of judiciary and keeping in view the principles of Rule of Law and separation of powers. If Tribunals are to be vested with judicial power hitherto vested in or exercised by courts, such Tribunals should possess the independence, security and capacity associated with courts. If the Tribunals are intended to serve an area which requires specialized knowledge or expertise, no doubt there can be Technical Members in addition to Judicial Members. Where however jurisdiction to try certain category of cases are transferred from Courts to Tribunals only to expedite the hearing and disposal or relieve from the rigours of the Evidence Act and procedural laws, there is obviously no need to have any non-judicial Technical Member. In respect of such Tribunals, only members of the Judiciary should be the Presiding Officers/members of such Tribunals… Therefore, when transferring the jurisdiction exercised by Courts to Tribunals, which does not involve any specialized knowledge or expertise in any field and expediting the disposal and relaxing the procedure is the only object, a provision for technical members in addition to or in substitution of judicial members would clearly be a case of dilution of and encroachment upon the independence of the Judiciary and Rule of Law and would be unconstitutional…”
The present model does NOT pass the constitutional threshold:
In applying these principles to the NCLT/NCLAT, the Court states, capturing most of the concerns against the NCLT/NCLAT, “The issue is not whether judicial functions can be transferred from courts to Tribunals. The issue is whether judicial functions can be transferred to Tribunals manned by persons who are not suitable or qualified or competent to discharge such judicial powers or whose independence is suspect…” Further, the Court holds that when Parliament proposes to substitute a Tribunal for the High Court to exercise jurisdiction on company matters which the High Court is currently exercising, the standards expected from Judicial Members and the standards for appointing Judicial members should be as nearly as possible the same as those applicable for appointment of High Court judges. The Court recognizes that Technical members may be necessary for proper functioning of the NCLT/NCLAT. In appointing Technical members, the Government should keep in mind that “A lifetime of experience in administration may make a member of the civil services a good and able administrator, but not a necessarily good, able and impartial adjudicator…” It prescribes that only an officer of Secretary level in the appropriate civil service with specialized skills can be appointed as a Technical member of the tribunal. Again, the mere fact of being a civil servant is not enough – the person appointed must have expertise in company law and allied subjects. Furthermore, no such member can be allowed to “retain a lien over his retain his lien over his post with the parent cadre or ministry or department in the civil service for his entire period of service as member of the Tribunal…”
The conclusions of the Court are as follows:
1. Who can be appointed as a Judicial member?
Only Judges and Advocates can be considered for appointment as Judicial Members. Furthermore, only High Court Judges, or Judges who have served in the rank of a District Judge for at least five years, or a lawyer who has practiced for ten years, can be considered for appointment as a Judicial Member.
2. Who cannot be appointed as a Judicial member?
Persons who have held a Group A or equivalent post under Central or State Governments with experience in the services such as the Indian Company Law Service (Legal Branch) and Indian Legal Service (Grade-1) cannot be considered for appointment as judicial members. Their expertise in these services can at best mean that they can be considered for appointment as technical members. In sum, a judicial member must closely approximate a High Court Judge.
3. Who can be appointed as a Technical member?
Only officers holding the ranks of Secretary/Additional Secretary can be considered for appointment as Technical members.
4. Who cannot be appointed as a Technical member?
A `Technical Member' presupposes experience in the specific field to which the Tribunal relates. A member of Indian Company Law Service who has worked with Accounts Branch of that service, or officers in other departments who might have incidentally dealt with some aspect of Company Law, cannot be considered as ‘experts’ and cannot be considered as being qualified for appointment as Technical members.
5. What is the Selection Committee for appointment?
The Selection Committee must be headed by the Chief Justice of India or his nominee, who shall also have the casting vote. Besides this, there is to be a senior Judge of the High Court or the Supreme Court. The other two members can be the secretaries of some government department (such as finance & company affairs, and law & justice).
6. What is the term of office of the members?
The term of office must be seven years, or at the very least, five years. This is because the presently proposed three-year term was too short to result in development of additional expertise, and because the “said term of three years with the retirement age of 65 years is perceived as having been tailor-made for persons who have retired or shortly to retire and encourages these Tribunals to be treated as post-retirement havens. If these Tribunals are to function effectively and efficiently they should be able to attract younger members who will have a reasonable period of service…” Members cannot retain a lien over there parent cadre for a period of more than one year from joining the Tribunal. Members can be removed/suspended prior to ending of their term only with the concurrence of the Chief Justice of India.
7. How shall Benches be constituted?
Two-Member Benches must have a Judicial member. Whenever any larger bench or any special bench is constituted, the number of Technical Members cannot exceed the Judicial Members.
Conclusion:
Now, of course, some of these conclusions are rather broad – the Court is only laying down the shortcomings in the presently proposed model, and it is for the Government to take note of these principles and pass an appropriate law establishing the NCLT. Thus, the judgment has upheld the competence of the Parliament to set up the NCLT, but it has not upheld the actual establishment of the NCLT itself. Only after the Parliament modifies the present law will an actually existing and functional Tribunal be possible. It is perhaps in everyone’s interest that Parliament sticks to the Court’s views as closely as possible in enacting the new law, else another constitutional challenge would be in the offing. The ball is now back in the Parliament’s court.
The Bombay High Court in Harsha Nitin Kokate v. The Saraswat Co-operative Bank has held that the position of a nominee under Section 109A of the Companies Act, 1956 is not merely that of a trustee for the estate of the deceased, but “on the death of the share holder, the nominee would become entitled to all rights in the shares to the exclusion of all other persons…” Until now, the law in relation to nomination was controlled by the decision of the Supreme Court delivered in the context of Section 39 of the Insurance Act, Sarabati Devi v. Usha Devi. This judgment had then been cited by various High Courts in a non-insurance context. Kokate appears to restrict Sarbati Devi to insurance law only; and holds that Section 109A of the Companies Act lays down a different principle. The decision has been further discussed here; and Mr. Somashekhar Sundaresan has examined it in the Business Standard here.
“The principal challenge to the constitutionality of the NCLT is based on the wholesale transfer of jurisdiction of the High Court in company matters to a quasi-judicial tribunal. It was argued by the petitioners that this transfer resulted in the vesting of intrinsic judicial functions in a quasi-judicial/executive body. Jaisimha Babu J. of the Madras High Court had accepted this contention, holding that the power of the Parliament to create Tribunals does not ‘extend to rendering such new forums an extension of the legislative or executive branches of the Government, or as forums controlled, or designed to be dominated, or potentially dominated, by the legislative or executive wing of the state…’ It was held that the proposed model of the NCLT violated the constitutional principles of separation of powers and independence of the judiciary by vesting essential judicial functions in a non-judicial body.”
The Supreme Court judgment comes at the end of Justice K.G. Balakrishnan’s tenure as Chief Justice of India. Besides the Chief Justice, the other judges on the Bench were Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal. Of course, the conditions imposed by the Court (if any) on the functioning of the NCLT will have to be scrutinized; and I will post a detailed note on the decision shortly.
InEconomic Transport Organization v. Charan Spinning Mills, (2010) 4SCC114, the Supreme Court clarified several aspects surrounding the principle of subrogation in the law of insurance. In the facts of the case, the 1stRespondent – the assured – was a manufacturer and consignor of cotton yarn. The 2ndRespondent was the insurer. The insurance policy covered transit risks in respect of cotton yarn sent by R1 to various consignees. The goods vehicle for one covered consignment met with an accident. On basis of surveyor’s certificate, the insurer settled the claim of the assured. On receiving the payment, the assured executed a letter of subrogation-cum-special Power of Attorney in favour of the insurer. The insurer and the assured filed a complaint against the Appellant carrier before the district forum under the Consumer Protection Act, 1986 (COPRA) claiming compensation for deficiency in service, as the loss was caused due to negligence of carrier. The District Forum upheld the claim, applying the statutory presumption of negligence under the Carriers Act, 1865 and the order of the District Forum was upheld throughout in appeal until the Supreme Court. The following contentions were raised by the Appellant in appeal:
1. The insurer had settled claim of the assured, so the assured had no surviving claim against the Appellant. Furthermore, in any event, the assured had transferred all its interest in the claim to the assured and had no subsisting enforceable right.
2. There was no privity of contract between the insurer and the Appellant; and the insurer could not be treated as a ‘consumer’ under the COPRA. Consequently the complaint was liable to be dismissed.
3. The letter of subrogation in this case was executedafterthe goods were damaged. This amounted to a transfer of a mere right to sue which was unenforceable as a claim under the COPRA.
4. In complaints under the COPRA, the statutory presumption of negligence under Section 9 of the Carriers Act, 1965 could not be made use of.
The decision of the Supreme Court inOberai Forwarding Agency v. New India Assurance Co. Ltd., (2000) 2SCC407 made distinction between ‘assignment’ and ‘subrogation’. It was held that where there is subrogation simpliciter, an insurer can maintain action under the COPRA in the name of the assured. Where there is an assignment, however, the insurer cannot file a complaint under the COPRA. The Appellant relied heavily on this decision, while the Respondents asked for the decision to be reconsidered. The correctness ofOberaiwas then referred to a 3-Judge Bench, which in turn referred the matter to a Bench of 5 Judges. This Bench framed four questions:
a. Where a letter of subrogation executed by an assured in favour of the insurer contains, in addition to words referring to subrogation, terms which may amount to an assignment, whether the document ceases to be a subrogation and becomes an assignment?
b. Where the insurer pays the amount of loss to the assured, whether the insurer as subrogee, can lodge a complaint under the Act, either in the name of the assured, or in the joint names of the insurer and the assured as co-complainants?
c. Where the rights of the assured in regard to the claim against the carrier/service provider are assigned in favour of the insurer under a letter of subrogation-cum-assignment, whether the insurer as the assignee can file a complaint either in its own name, or in the name of the assured, or by joining the assured as a co-complainant?
d. Whether relief could be granted in a complaint against the carrier/service provided, the the absence of any proof of negligence?
The Court clarified the position with extreme clarity, partially overruling and partially affirming the decision inOberai. To take an illustration from the judgment itself (para 36 ofSCC), let us assume that the loss to the assured is Rs. 100000. The insurer settles the claim of the assured for Rs. 75000. The wrongdoer is sued for recovery of Rs. 100000. Four possible scenarios arise.
1. Where there is no letter of subrogation and the insurer relies on the equitable doctrine of subrogation and the suit is filed by the assured:
i. If the suit is filed for recovery of Rs. 100000 and is decreed as prayed, and the sum is recovered, then the assured would retail Rs. 25000 and the doctrine of subrogation would enable the insurer to claim the balance Rs. 75000
ii. If the suit is filed for recovery of Rs. 100000 and is decreed as prayed, but the assured is able to recover only Rs. 50000 from the judgment-debtor, the assured will be entitled to appropriate Rs. 25000 and the insurer will be entitled to receive the balance of Rs. 25000 even when it has paid Rs. 75000 to the assured.
iii. Where the suit is filed for recovery of Rs. 100000 but the Court assesses the loss actually suffered by the assured as only Rs. 75000 and awards Rs. 75000 as damages, then the insurer will be entitled to claim the whole amount of Rs. 75000 in view of the doctrine of subrogation.
2. Where the assured executes a letter of subrogation entitling the insured to recover Rs. 75000 and the suit is filed in the name of the assured or jointly by the assure and the insurer:
i. If the suit is filed for recovery of Rs. 100000, and is decreed as prayed, the insured gets Rs. 75000 and the assured gets Rs. 25000.
ii. If the insurer sues in the name of the assured for Rs. 75000 and recovers that amount he can retain the same in pursuance of the letter of subrogation, even if the assured has not recovered the entire loss of Rs. 100000 but has only received Rs. 75000 from the insurer. If the assured wishes to recover the balance Rs. 25000 of the loss, he should ensure that the claim is made against the wrongdoer for the entire sum of Rs. 100000 by bearing proportionate expenses.
iii. If the letter of subrogation executed by the assured on settlement of claim by the insurer uses the words “assured assigns, transfers and abandons unto the insurer, the right to get Rs. 75000 from the wrongdoer…”, the document will be a subrogation in spite of the use of the words ‘transfers’, ‘assigns’ and ‘abandons’. The reason is that the insurer having settled the claim for Rs. 75000 is merely entitled under the instrument to recover that Rs. 75000 and nothing more. The general principles of insurance law and subrogation will continue to apply in interpreting the document.
3. Where the assured executed a letter of subrogation-cum-assignment for Rs. 100000:
If the document between the assured and the insurer provides that in consideration of the settlement of Rs. 75000, the assured has transferred and assigned by way of subrogation and assignment the right to recover the entire value of the goods lost and retain the same without being accountable to the assured for any excess above Rs. 75000 which may be recovered, and provides that the insurer may sue in the name of the assured or in its own name without reference to the assured, then the document is to be treated as a subrogation-cum-assignment. In such a case, the insurer has a choice – it can sue in the name of the assured or in its own name.
4. Where the assured having received Rs. 75000 from the insurer executes a letter of assignment in favour of a third party to sue and recover the entire value of the consignment:
In this case, the document will be an assignment. The assignee is not a consumer. The document s the transfer of a mere right to sue and is void and unenforceable under the provisions of Section 6(e) of the Transfer of Property Act, 1882.
After this analysis, the Court held, “whether the document executed by the assured in favour of the insurer is a subrogation simpliciter, or a subrogation-cum-assignment, is relevant only in a dispute between the assured and the insurer. It may not be relevant for deciding the maintainability of a complaint under the [COPRA]”. A complaint will be maintainable in either case if it is filed by the assured represented by the insurer as its attorney holder, or by the assured and the insurer jointly. The presence of the insurer must be explained as being a subrogee. On the other hand, if the assured does not file the complaint and the insurer alone files a complaint in its own name, the same will not be maintainable. The assured must be made a co-complainant (or the assured must be represented by the insurer as the PoA). On this point,Oberaiwas overruled – underOberai, there was no clear distinction between assignment simpliciter, and subrogation-cum-assignment. The ultimate decision in Oberai happened to be correct on facts as the insurer in that case was claiming in its own name making a claim for entire value in excess of what had been paid to the assured.
Thus, on questions (a) to (c) listed by the Bench, the answers were as follows (para 51):
i. The insurer as a subrogee can file a complaint under the COPRA either in the name of the assured as his attorney-holder or in the joint names of the assured and the insurer.
ii. In the case of both subrogation as well as subrogation-cum-assignment, the complaint will be maintainable as long as it is in the name of the assured and the insurer is a complainant only as an attorney-holder or subrogee.
iii. The insurer cannot maintain a complaint under the COPRA in its own name even if its right is traced to the terms of a letter of subrogation-cum-assignment executed in its favour by the assured.
iv.Oberaiis not good law insofar as it construes a letter of subrogation-cum-assignment as a pure and simple assignment. To the extent is holds that an insurer alone cannot file a complaint under the COPRA in his own name, it is correctly decided.
(Of course, this assumes that the assured is not availing of the service for a commercial purpose in terms of the 2002 Amendments to the COPRA which operates prospectively from March 2003).
On the fourth question, the Court held that the presumption under Section 9 of the Carriers Act, 1865 continues to be available even in proceedings under the COPRA. On this, the Court followed several of its previous judgments. The decision is certain to bring a large amount of clarity on principles of subrogation in insurance law, and on the interrelationship between insurance law and consumer protection law.
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