India's investment forum actively contributing to pursuit of meaningful engagements: CJI NV Ramana
Chief Justice of India (CJI) N.V. Ramana on Saturday said India’s investment forum has been actively contributing to the pursuit of meaningful engagements. It has been on the forefront of garnering opportunities for Indian businesses and start-ups.
Inaugurating the fourth edition of international conference on “Arbitration in the era of globalisation” in Dubai, he said ICA is one of the leading arbitration institutions in South Asia and is dedicated to the cause of quick and inexpensive justice.
In the last two decades, Dubai has transformed itself into a preferred arbitration destination for Asian countries. It is the best suited to host such a conference.
The world today is very different from when I started my profession in 1980’s. Countries across the world have moved from protectionist states to open economies.
There has been immence growth in trade and commerce between countries. In the 1980s total value of world trade stood at around 2 trillion US dollars. In 2019 the value of global trade was more than 19 trillion US dollars.
This clearly shows that there has been a growth in the world trade over the past four decades and the trend suggests that it shall grow further.
Advancements in the field of Science and technology, easier travel and faster communication have turned the world into a global village.
At the same time, the enhanced interdependence also makes us vulnerable. Crisis in one part of the world often creates a ripple effect in other affecting the global supply chain.
From time to time conflicts between territories, environmental changes, natural calamities even the ongoing Pandemic have resulted in economic disturbances. Such disturbances tend to leave a lasting impact on global trade.
We live in a closely knit world, yet we continue to be sovereign nations having our own independent legal regime. Each state has to legislate, keeping in view it’s past and socio-economic conditions.
Different nations, therefore, regulate issues like intellectual property rights, taxation and tariffs, crypto currency differently. Any and every effort to evolve a universally acceptable mechanism for dispute resolution must be alert to the reality.
Harmonising driver’s interest, while trying to achieve a common goal, is a huge challenge. It is in this context that conferences such as today will help us navigate the path smoothly. The globalized world demands embracing a dispute resolution mechanism.
That is fair and acceptable to everyone. Fairness demands a platform where everyone gets an equal day in the resolution of fair dispute. This is where international arbitration comes into play. Arbitration is the best suited dispute resolution for the globalized world.
International arbitration is a party driven, as procedural felixibility and involves domain experts for arbitration is a time bound mechanism structured to delivered immediate relief.
No one should be able to say about Arbitration what Evelle Younger an American jurist said about traditional litigation, ” An incompetent lawyer can delay a trail for months or years.
A competent lawyer can delay one even longer.” this brings me to the aspect of uniformity and stability in the dispute resolution process.
Parties should be confident that an award rendered by the Tribunal in one nation will be executable in another without hassle. To meet this goal the nation’s around the world have attempted to create effective structural mechanisms.
Efforts were made to ensure that arbitration becomes a popular mode of dispute resolution. To increase the faith of parties in the arbitration framework of the nation, adequate statutory backing regarding.
Enforcement of awards is necessary. Interim measures of protection are also important. It might be relevant to mention that when it comes to Enforcement of foreign decrees, different countries follow different procedure for recognition and Enforcement of the same.
India and the UAE have entered into a reciprocal arrangement in 2020 to opt for automatic Enforcement of foreign decrees by course of either countries.
This is a special procedure meant only for decrees from specialised reciprocating countries which form a part of the schedule of recognised countries under Section 44 (a) of the Code of Civil Procedure in India.
India has entered into similar understandings with UK, Singapore, Bangladesh, Malaysia, New Zealand and HongKong among others. I think it is necessary to mention at this juncture, another form of Dispute Resolution that is mediation.
Mediation is increasingly gaining performance in the international commercial sphere. Probate mediation that take place at the pre- litigation stage are also becoming more prevalent in the country.
Most arbitration clauses in commercial contracts have a multi-tiered approach where the first attempt to resolve the disputes between the parties is through mediation or negotiation.
As the famous author, Robert Louis Stevenson said, ”Compromise is the best and cheapest lawyer”
Morden arbitration law in India can be tracked back to 18th and 19th century laws which are the Bengal regulation act and the Madras regulation act, where parties to the dispute could submit themselves to an arbitrator.
Meanwhile in 1985, keeping in view the increasing cross-border transactions and disputes thereof, UNCITRAL came up with a modal law on international commercial arbitration.
In India, its economic liberalisation was felt to provide a viable alternative for parties, both National and International. To resolve their commercial disputes, arbitration and conciliation act, 1996 was enacted in line with the modal law to provide an effective alternative to court based resolution.
I remember what the then Prime Minister of India, PV Narasimha Rao said during the inauguration of the international conference on arbitration in Delhi, 26 years ago,’ …any democracy worth the name must provide for adequate and effective means of dispute resolution at a reasonable cost otherwise the rule of the law becomes a platitude and people may take law into their own hands disrupting peace, order and good governance’.
Effective dispute resolution is also necessary to secure smooth functioning of trade and commerce. To make arbitral process more effective and to bring at par with the international law, the arbitration and conciliation act of 1996 was amended in 2015,2019 and 2021 respectively.
Wherever I travel, I was often asked a question as to how investor friendly the Indian judicial system is ? My answer is always the same-you can trust the Indian judiciary for its absolute independence & its inherent constitutional strength to treat all parties equally & equitably.
A pre requisite for achieving globalization in its true sense is ensuring universal respect for the rule of law. Rule of law and arbitration are not in conflict with one another. Both aim to serve the same goal to pursue justice.
Indian courts are known for their pro- arbitration stance. Courts in India support arbitration and leave the substantial part of adjudication to the arbitration Tribunal itself.
A crucial component of attracting investors in provising a stable and efficacious mechanism for redressal of disputes, the legislature, executive and the judiciary of India at all levels are committed to improving the landscape and the ease of doing business in the country.
The commercial courts act enacted by the Indian parliament to further streamline the speedy dispensation of Justice in commercial matters. Promoting culture of arbitration is not a simple task. Having a pro arbitration jurisprudence and policy are not enough. Some innovative steps must be taken in this regard.
A few essential pre-requisites for arbitration to be effective and successful –
1) Scope of judicial interference from pre- reference state, challenge and award needs to be minimised.
2) Timelines for completion of arbitral process should be strictly adhered.
3) Execution of arbitral awards needs to be ensured.
4) Autonomy of the parties should be respected.
5) Mechanism for regulating the Arbitral fees has to be in place.
6) Grounds for challenge of arbitral award should be limited to bare minimum.
7) Granting of stay on arbitral awards should not become the norm.
8) Emergency award should be accorded recognition.
9) Focus has to shift to institutional arbitration.
10) To meet ever increasing demands, more and more arbitration centers needs to be promoted.
11) Institutional mechanism need to be promoted to attract services of eminent panelists and professional arbitrators attached to the credibility of the process.
12) New technologies should be put to use while promoting online interface in proceedings.
13) Practical knowledge of the arbitrator will be a key factor and accordingly needs to be given due importance.
14) Robust training programmes need to be created for training of young professionals.
A new International Arbitration Centre coming up in Gujarat, says CJI
Several dispute resolution institutes are being established across India to provide the commercial world, a centre for speedy and effective resolution of their disputes. Recently, I along with my brother and sister judges siting here and a few other eminently qualified professionals have been involved in setting up of an International Arbitration Centre, in Hyderabad. India also made a provision in their latest budget for setting up of international arbitration center in the state of Gujarat. There is lot of potential for setting up such new centers to meet the increasing demands
Speaking on the occasion, Justice L. Nageswara Rao said, ‘With the growth of business and globalization of the economies especially India, commerce has increased multi fold and necessary corollary of any growth would be disputes and dispute resolution would be also following suit which is the best way of resolving cross border disputes.
A study conducted in 2021 according to Queen Mary’s College, more than 90 percent of the Respondents have preferred international commercial arbitration as the preferred manner of settling their disputes. Like any other system, however well its working there are bound to be challenges and its good that these challenges are discussed at a forum like this. So that we find a way forward and a solution to the problems that international commercial arbitration is facing. At some point if time, India was nit considered to be a pro- arbitration country. About 20-22 years back, I attended arbitration conference in Sydney and during the course of discussions held there, what not to do in an arbitration was with with reference to India. But times have changed. Even the dispensation at the executive as well as the parliamentary regime has taken note of the fact that arbitration has to be strengthened for various reasons.
One of the main reasons being faced in India where access to justice is available to a large extent has increased the number of cases that are filed in court and the number of cases that are pending in courts.
Arbitration, initially under the 1940 Act was seen to be a step to go ahead and then file another suit. Things have changed with 1996 act where the UNCITRAL model has been adopted but there were drawbacks in the implementation of the 1996 act also which was realized by all concern and the advent of amendments that were made to the act in 2015 and thereafter a committee which was appointed by the government which Submitted its report in 2017 which has encouraged institutional arbitrations to be definitely a way forward which culminated in the 2019 amendment. Though some amendments have not been notified, other amendments have come into effect already.
At the interlocutory stage where an arbitration is pending so far as domestic arbitration are concerned, applications that are filed for injunctions, etc. were a little difficult to digest because the arbitrations themselves were being postponed due to unwarranted interfere by the court’s.
By and large the interference by the court’s during domestic arbitrations have been limited at the present point of time but still I am of the personal opinion that at the domestic arbitration levels there should be dedicated courts at the lower ranks. Also there should be high courts for commercial matters to ensure a speedy resolution of the disputes at the supervisory stage by the court that would definitely be helpful.
We also need trained judges manning the specialized courts which would definitely do well so far as speedy disposal of arbitrations even during the pendency of arbitrations is concerned. Even the applications under Section 11 (6) of the arbitration act for appointment arbitrators is pending in the high courts for a considerably long period of time.
Much before the 1996 act, by a judgement of the Supreme Court in Renu Saga, the Supreme Court was of the opinion that Enforcement of foreign awards is concerned, courts would interfere in matters where there is a challenge to the enforceability only on extra ordinary grounds. Public policy as interpreted in that judgement in 1994 was to the effect that you need something more than a violation of law to oppose implementation or Enforcement of foreign award.
There were certain judgements of the Supreme Court which treated part 2 of the arbitration act which deals with Enforcement of awards on par with the domestic awards, but we came a full circle and in the recent past we have gone back to the RENU SAGA times. There is an amendment also made to the Sections 44-48 where it has been made clear in the explanation that the Enforcement of awards as and when it is sought for in courts, they should not interfere with matters on merits.
The recent trend as can be seen for the past five to seven years, you would see that the court has been very supportive of arbitration being a very effective alternate dispute resolution apart from mediation which not only takes burden of the court which can spend their valuable time in deciding other matters but also provides an incentive to investors coming to the country and to help businessmen to find a faster way of resolving their disputes. There is so much more to do.