Arbitration best-suited dispute resolution mechanism for commercial world, says CJI

FILE PHOTO: Chief Justice of India N V Ramana addresses during a joint conference of CMs of States and Chief Justices of high courts, at Vigyan Bhavan in New Delhi on April 30, 2022. Photograph: Vijay Verma/PTI Photo

FILE PHOTO: Chief Justice of India N V Ramana addresses during a joint conference of CMs of States and Chief Justices of high courts, at Vigyan Bhavan in New Delhi on April 30, 2022. Photograph: Vijay Verma/PTI Photo

New Delhi, July 5 (PTI)Arbitration is the best-suited dispute resolution mechanism for the commercial world, Chief Justice of India (CJI) N V Ramana said on Tuesday while suggesting the establishment of more commercial courts for dealing with arbitration cases and nominating experts in the field to be judges of those courts.

While delivering the inaugural address at a conference on Arbitrating Indo-UK Commercial Disputes' in London, the CJI said the courts are pro-arbitration in India and the growth of the Indian arbitration scenario has been very responsive to global trends and demands.

Saying that it is time to introspect and find ways and means to explore all possibilities to make arbitration an efficient result-oriented institution, he suggested that role of the court in the arbitration process must be supervisory.

We should not cross the fine line between assistance and interference, the CJI said.

He said an issue that has been affecting court systems across the world relates to the fact that decisions within regular courts take a long time and there is no denying that the pendency of cases is a major issue in India.

In the absence of infrastructure and the sufficient number of judges commensurate with the increasing workload, the problem is intensifying. This is why I have been strongly advocating for transforming and upgrading the judicial infrastructure in India, as well as filling up of judicial vacancies and augmenting the strength, Justice Ramana said.

He said after he assumed the office of CJI, in addition to filling up 11 vacancies in Supreme Court, the collegium could secure the appointment of 163 judges to various high courts.

The CJI said 23 more recommendations are pending with the government and the central government is yet to transmit another 120 names received from various high courts to the apex court collegium.

I have been reminding the government to expedite the process so that the remaining 381 vacancies can be reduced considerably. I am hoping for some forward movement in this regard, he said.

The CJI said another way of reducing the burden of pendency is to promote and popularise other means of dispute resolution, such as arbitration or mediation.

Arbitration is the best-suited dispute resolution mechanism for the commercial world. It is an effective alternative to traditional litigation and is regulated primarily by the terms previously agreed upon by the parties themselves. The process is consensual, confidential and the result is binding, he said.

The CJI said India is rated to be one of the fastest-growing economies in trade and business, as, in any human relationship, the difference of opinions and conflicts are bound to occur.

To achieve the title of an investor-friendly destination, India needed to establish and strengthen an efficacious mechanism to address these issues and ensure that business continues to operate without much hassle. This is where alternate dispute resolution and particularly arbitration plays a significant role, he said.

Justice Ramana said several international dispute resolution institutions are being established across India to provide the commercial world with a speedy and effective resolution of their disputes.

There are some specialised institutions like the Indian Council of Arbitration (ICA) and the International Centre for Alternative Dispute Resolution (ICADR). We need more such institutions. Institutional arbitration has to be encouraged and streamlined to provide for continuous hearings and expeditious awards, he suggested.

The CJI said the most important aspect of the success of arbitral proceedings is the efficiency and efficacy of its award enforcement regime and this is especially true for a country like India, which is a hub for investment.

One mechanism to improve enforcement that I have earlier suggested is to constitute a special authority by the State which could assess an investment contract prior to its execution. A contract which went through such prior assessment would be presumed by courts to be in line with the public policy of the State, thereby ensuring a more expeditious execution, he said.

This is just a suggestion, of course. I request the panelists to discuss and come up with new ideas and possible solutions. This is a vital area which requires greater debate and expert opinion, he said.

Justice Ramana suggested that various institutional arbitration centres functioning across the world may consider forming a council or confederation and this would enable them to share experiences and adopt best practices.

He said the presence of international arbitration centers will not only boost India's global position as an investor-friendly nation but will also facilitate the growth of a robust legal practice.

Justice Ramana said keeping the big picture in mind, he has taken the initiative to set up an international arbitration and mediation center in Hyderabad.

I am happy to note that the Government of India has proposed to set up another one in the state of Gujarat, he said.

He said in today's world, where mergers and acquisitions worth trillions of Dollars are being undertaken every year, commercial arbitration is an efficient process to resolve disputes arising from the same.

Apart from ease of enforcement, another advantage for choosing India as a favored investment destination is its judicial system, he said, adding both the legal systems in India and the United Kingdom are known for giving paramount importance to rule of law.