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Delhi High Court Arbitration Centre |
A key driver in improving the country’s litigation processes is improving the efficiency of the court system. However, the hefty backlog of cases makes this challenging. At the administrative level, an e-court system is being developed, with the ultimate objective of moving towards a ‘paperless court system’. “Efforts are being made towards the introduction and application of information and communication technology (ICT) to the justice delivery system,” confirms Khaitan & Co partner Chakrapani Misra. “A scheme for computerising all the district and subordinate courts across the country and for upgrading the ICT infrastructure of Supreme Court and High Courts has also been set in motion.”
In addition to IT developments, steps have been taken to appoint ad hoc judges to clear the substantial backlog of cases that have accumulated in recent years. “A further intention is to tune up the justice delivery system to reduce the average life of litigation from 15 years to three years,” adds Misra.
A great number of cases in the backlog involve India’s central and state governments as litigants. Majmudar & Co partner Neerav Merchant says: “The National Litigation Policy is designed to project the government as a ‘sensible and a sensitised’ litigant. A key element of this is to prevent the government from entering frivolous litigation as a ‘compulsive litigant’.”
Special attention has been devoted to setting up commercial courts across the country. Cases pertaining to commercial disputes over and above INR500 million (US$11.3 million) will go to these commercial divisions that will soon be established in the High Courts. And these special benches will have judges that are trained to address specific financial and commercial issues. Luthra & Luthra litigation partner Ajit Warrier says: “This change is expected to be introduced in the form of a bill before the Parliament in the monsoon session. This will ensure that commercial disputes are taken up on priority by the High Courts, and decided expeditiously by those Courts that have the relevant expertise.”
Alternative Dispute Resolution
In addition to the focus on improving litigation processes, developments with various ADR mechanisms are being considered by the legislature and judiciary. Desai & Diwanji partner Devika Cariappa says these will need to be significant if they are to placate a sceptical foreign investor community that has been discouraged by past trends and case law. “Foreign companies are concerned with applications for interim measures in Indian courts in relation to international commercial arbitrations outside of India,” he says.
Foreign companies often seek to ensure that arbitration agreements with Indian parties specify a foreign seat of arbitration, foreign curial law and a foreign law governing the contract, as they don’t want to risk litigation in Indian courts. However, J Sagar Associates partner Amar Gupta says: “By excluding any or all of Part I of the Arbitration Act, companies can reduce the scope of court interference. In this manner, foreign companies can maintain their independence regarding the choice of law and forum, and also reduce the time for and scope of challenges to the award by Indian courts.”
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Maxwell Chambers, Singapore |
A further deterrent is the fact that there is no statutory provision for setting aside a foreign award, and all of these developments have made foreign companies more cautious in their approach to drafting arbitration agreements with Indian parties.
A comparative lack of sophistication and speedy processes has hindered the development of ADR in India. To address this problem, major efforts are being made to develop arbitral institutions to project India as a global arbitration hub. For example, several High Courts, such as those in Delhi, Karnataka and Chennai, have opened ADR centres to promote litigants towards this form of dispute resolution. In addition, international institutions such as the arbitration centre of the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian wing of the London Court of International Arbitration (LCIA) have gained some prominence in recent past.
Legislative developments being considered include amendments to the Arbitration Act. Proposals are due to be discussed in the monsoon session of Parliament, although it is not clear when changes might be approved and take effect. Warrier says: “The amendments seek to remove the various deficiencies in the existing statute, substantially reduce the scope of court intervention in arbitration-related matters, and nullify the effect of various judicial pronouncements which have, in a sense, created various bottlenecks for speedy arbitration processes.”
Mediation is another ADR mechanism under the spotlight. As the fastest growing ADR vehicle, mediation is increasingly favoured by dispute parties as a way of resolving anything from personal and family disputes to commercial disagreements. Gupta says: “The judiciary is encouraging out-of-court settlements as a means of reducing the huge backlog of cases.”
The move by the Delhi High Court and the Supreme Court to create dedicated mediation courts has also been welcomed as yet another way of categorising cases and ensuring that matters are dealt with efficiently. Karanjawala & Co partner Raian Karanjawala says: “An added benefit is that mediation litigants do not have to spend a great deal of money thus ensuring cost effectiveness.”
With the entire dispute resolution landscape set for an overhaul in India, lawyers are optimistic that previously ingrained views about the deficiencies of the judicial system can be overcome.
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Amar Gupta, J Sagar Associates |