Swiss Challenge Model: Applicability in the Infrastructure Sector

Public Private Partnerships (PPPs) have been hailed in the infrastructure sector of the country for their ability to bring together public and private entities towards the efficient development of infrastructure. It is an arrangement between a public authority and a participant of the private sector for developing, implementing and executing infrastructure projects wherein the private sector is responsible for financing or design, development, construction, maintenance or operation depending on the project.

In a PPP, the risks are allocated to the party that is better suited to undertake the risk. As consideration for developing the infrastructure, the private sector participant is entitled to receive payments for the services in the form of user charges or annuities or as agreed in the concession agreement entered between the public authority and private sector participant. The first step involved in awarding a PPP project is to identify a bidder and usually, this identification is done through a competitive bidding process.  Recently, the Swiss Challenge Model has also been developed as one of the methods for bidding for projects.  

Validity of the Swiss Challenge Model

Although implemented in several states like Rajasthan, Karnataka, etc., the validity of the Swiss Challenge Model was cemented in the 2009 case of Ravi Development v. Shree Krishna Prathistan & Others.[1] In this case, a suo moto proposal for the development of certain plots of land was made to the Maharashtra Housing and Area Development Authority (MHADA) by the appellant, Ravi Development, where the authority had decided to adopt the Swiss Challenge Method on a pilot basis. The award of the project to the appellant was challenged by several bidders on the grounds that it was unfair, and arbitrary, and conferred preferential treatment to the appellant.

The main contention of the respondents in claiming that the award of the project was arbitrary was that the proposal was not innovative in nature, which according to them was a pre-requisite for a project to be awarded under the Swiss Challenge Method. Based on the aforementioned contentions, the Bombay High Court struck down the bidding process and the contract for the project awarded to Ravi Development.

The High Court, however, failed to consider the fact that there was no such requirement of “innovativeness” specified in any of the bidding documents or the advertisement inviting the bids. Further, the participants of the bid were not only made well aware that MHADA sought to implement the Swiss Challenge Method on a pilot basis for the project, but also explained the process in detail while mentioning that the original proposer to the project would be given the right to first refusal. The participants also submitted an undertaking to this effect which clearly highlights their knowledge of the existence of an original proposer and also of the rights bestowed to him. Thus, the Supreme Court was of the view that with the existence of such a clear notice, the bidding process and the final award of the project could in no way be said to be unfair, arbitrary or seeking to confer preferential treatment upon the appellant. Therefore, the Supreme Court held the process to be valid to that effect.

The validity of this judgement holds good even today where the Swiss Challenge Method is no longer limited to the infrastructure sector alone. The Madras High Court in the case of M/s.Sri Devi Karumariamman Educational Trust  & Ors. v. Central Bank of India & Anr. [2] dealt with the adoption of the Swiss Challenge Method by the bank for the sale of secured assets. The decision in the Ravi Development case was relied on to note that the Swiss Challenge Model is not violative of Article 14 of the Constitution and that it is one of the permissible modes of awarding a contract or tender.

However, the beauty of this judgement comes out not in the manner that the validity of this method was upheld but rather in its ability to understand the prevalent gaps in its implementation. The Court highlighted the importance of having a set of rules and regulations that have to be followed in order to ensure that problems of unfairness, arbitrariness or ambiguity do not arise. In this regard, the Court proposed the following suggestions to State Governments: –

  • The State or Authority has to publish a) the nature of the Swiss Challenge Method and particulars in advance and b) the nature of projects that can come under such a method.
  • Further, the fields of the projects that can be considered under the method and the authorities that have to be approached for the project plans have to be mentioned or notified.
  • The State should also frame rules pertaining to the time limits on the project approval and respective bidding.
  • After a project is approved to be considered under the Swiss Challenge Method, the prescribed rules have to be followed.
  • An opportunity has to be accorded to persons interested in such developmental activities to participate in the venture and it has to be ensured that there is healthy competition between the developers.

These suggestions are not exhaustive, and the State is free to incorporate any other clauses for transparency and proper execution of the scheme.

Observations

The Swiss Challenge Method is a great alternative to other procurement methods as it encourages private entities to come up with solutions to infrastructural problems that may go unnoticed by the government. Further, by pooling resources and technically providing a platform to brainstorm for solutions, more efficient and optimal solutions can be identified and implemented and thus, more governments would seek to adopt this method. In such a situation, as the Court noted, it is important to have uniform rules and regulations to ensure transparency and clarity in the process.    

Thus, through the judgement in the Ravi Development case, the Apex Court was able to address the prevalent on-ground challenges and work towards a more successful future implementation of the Swiss Challenge Model. Although more on-ground issues can be identified only by continued implementation of this model, this judgement provides an adequate pre-cursor, encouraging such models that improve efficiency.

References:

[1] Ravi Development v. Shree Krishna Prathistan & Others. (2009) 7 SCC 462.

[2] M/s.Sri Devi Karumariamman Educational Trust & Ors. v. Central Bank of India & Anr. [C.R.P. No. 1790 of 2019, C.M.P. No. 11733 of 2019].

Image Credits:

Photo by cottonbro studio: https://www.canva.com/photos/MAEARkSehPM-white-metal-bridge/

The Swiss Challenge Method is a great alternative to other procurement methods as it encourages private entities to come up with solutions to infrastructural problems that may go unnoticed by the government. Further, by pooling resources and technically providing a platform to brainstorm for solutions, more efficient and optimal solutions can be identified and implemented and thus, more governments would seek to adopt this method. In such a situation, as the Court noted, it is important to have uniform rules and regulations to ensure transparency and clarity in the process.    

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Sushant Singh Rajput’s Publicity Rights: Delving into the Order’s Reasoning

In an order dated July 11, 2023, the Delhi High Court in the case of Krishna Kishore Singh vs. Sarla A Saraogi & Ors. [IA 10551/2021 in CS(COMM) 187/2021] rejected the plea of the father of late actor Sushant Singh Rajput (SSR) seeking an injunction against the continued streaming of the film, “Nyay: The Justice” which is based on the late actor’s life.

Before diving deep into the Delhi High Court order, let us look at the status of publicity rights after an individual’s death.

In 1979, in a significant ruling, the California Supreme Court held that the name and likenesses of late actor Bela Lugosi were not heritable, and the right of publicity died with him. Thereafter, the Celebrities Rights Act was passed in the year 1985, which established that publicity rights survive the death of the individual. Similarly, in Washington and Indiana, the position is that publicity rights survive the individual’s death. However, the position is different in New York, where such a right exists only during a person’s life.

This can be better understood through a 2012 judgment of a US Federal Court, wherein the Court prevented Marilyn Monroe LLC from contending that the late actress, Marilyn Monroe, was domiciled in California at the time of her demise. With this contention, Monroe LLC wished to bank on California law (on the posthumous rights of publicity) to assert that the usage of Monroe’s image and likenesses by Milton Greene for commercial purposes was in violation of her publicity rights. Rejecting this stand, the Court applied the principle of judicial estoppel since Monroe’s legal representatives had earlier maintained that she was domiciled in New York at the time of death to avoid paying California estate taxes[1].

In India, there is no law which expressly recognises the publicity or personality rights of individuals yet; hence, the heritability of such rights after the individual’s death is a grey area. However, one can rely on case laws in this regard. For instance, the Madras High Court, in the case of Deepa Jayakumar vs. AL Vijay[2], held that the reputation, personality and privacy rights of a person come to an end after their lifetime and cannot be inherited by legal heirs, like movable or immovable property. Here, the niece of the late Dr. J Jayalalitha filed a suit seeking an injunction against the release of the film, “Thalaiva” and the web series, “Queen”, based on the life story of the former Chief Minister.

Brief Facts of the Present Case

In March 2021, when the movie, “Nyay: The Justice” was still in the making, the plaintiff approached the Delhi High Court seeking a decree of permanent injunction against the defendants to prevent them from using SSR’s name, caricature, lifestyle or likeness in any of the projects or films. The plaintiff’s contention was that his permission had to be obtained before doing so. He submitted that in the absence of Class 1 legal heirs, he was SSR’s sole surviving legal heir in Category 1 of Class 2 legal heirs in accordance with provisions of the Hindu Succession Act, 1956.

Film’s Disclaimer

The Court, after watching the impugned film and comparing its story with real-life events, came to the conclusion that its story is indeed a re-enactment of SSR’s life based on news reports and commented that “Hardly any independent inventive input has gone into the movie”.

Rejecting the defendants’ contentions, the Court held that the disclaimer added at the beginning of the film could not be relied upon to determine whether there was any resemblance between the events shown in the film and real-life events.

Publicly Available Information – No Violation of Rights

The Court pointed out that the film was based on news items that were available in the public domain and hence, no right of SSR was violated particularly since the reports were not refuted or challenged at the time of their publication. Even if “arguendo”, it was assumed that the film violated SSR’s publicity rights or defamed him, such a right was personal to SSR and died upon his demise. Similarly, the other rights referred to in the plaint, including the right to privacy, personality rights, etc., vested in SSR and were not heritable. In arriving at this conclusion, the Court relied on multiple case laws, including the Madras High Court judgment in Deepa Jayakumar vs. AL Vijay[3].

The Court reasoned that before making the film, the defendants were not obligated to secure the plaintiff’s consent, and since it was released on the Lapalap platform in 2021, an injunction could not be issued at this point.

Celebrity Rights as a Sub-species of Personality Rights

It was expressed by the Court that though individuals are entitled to rights arising from their personalities and persona, the concept of conferring additional rights on a person “merely because he, or she, is a ‘celebrity’” has not been accorded judicial recognition.

With this, the Single Judge Bench of Justice C Hari Shankar opined that celebrity rights were a sub-species of personality rights, and the same did not merit further deliberation (since it was already decided that SSR’s personality rights were not violated).

Right to Free Trial cannot be affected by Impugned Film

Coming to the petitioner’s contention that the investigation into the death of SSR was still underway and the impugned movie would be prejudicial to the right to a free and fair trial guaranteed under Article 21 of the Constitution, the Court remarked that the country’s “legal system is, fortunately, not so fickle as to justify any apprehension that the dispensers of justice, who constitute its ethos and backbone, would decide on the basis of the facts depicted in the impugned movie”.

Passing Off in Reverse

Explaining that the tort of passing off involves deception, in “portraying the unreal as the real”, the Court stated that the allegation made by the plaintiff was in reverse as the impugned film was “portraying real facts behind a façade of artificiality and fiction”.

The Outcome

The plaintiff’s application for an interlocutory injunction (IA 10551/2021) against the continued streaming of the impugned film was dismissed in the present case. However, it was clarified that the Court’s decision didn’t have any impact on the plaintiff’s right to claim damages from the defendants.

This decision has far-reaching implications on the country’s stand when it comes to posthumous rights of publicity. If publicity rights are considered part of an individual’s property, it would be equitable if the same were heritable for the benefit of the legal heirs. As depicted at the beginning of the article, the legal position in this matter depends mainly on the concerned jurisdiction. India has yet to develop specific legislation and fill the existing gaps.

References:

[1] https://www.theguardian.com/film/2012/sep/03/marilyn-monroe-estate-image-rights

[2] OSA No.75 of 2020 and CMP Nos.2945, 2946 and 9240 of 2020

[3] Supra 2

Image Credits:

Photo: Judge Gavel with Law Scale on the Background – Photos by Canva

The Court pointed out that the film was based on news items that were available in the public domain and hence, no right of SSR was violated particularly since the reports were not refuted or challenged at the time of their publication. Even if “arguendo”, it was assumed that the film violated SSR’s publicity rights or defamed him, such a right was personal to SSR and died upon his demise. Similarly, the other rights referred to in the plaint, including the right to privacy, personality rights, etc., vested in SSR and were not heritable. In arriving at this conclusion, the Court relied on multiple case laws, including the Madras High Court judgment in Deepa Jayakumar vs. AL Vijay[3].

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