Chief Justice of India (CJI) Dipak Misra has favoured institutional arbitration to resolve commercial disputes rather than ad hoc arbitration in the country and clarified that the court interferes less into the arbitration and believes in the maximum realisation of award passed by the arbitrator.
Advocating for an alternative disputes resolution mechanism and cost-effective arbitration system to enable the country’s speedy economic growth, the CJI said ad hoc arbitration should be abandoned by litigants and disputes be referred to arbitration centre for more meaningful awards.
“Whole economy of the nation is based on trust, which is the backbone of economic growth,” he said.
The CJI’s statement assumes significant when the Narendra Modi government has been taking measures, including relaxing legal provisions and repealing obsolete laws, to make India the hub of international arbitration.
Inaugurating the international conference on ‘Arbitration in the Era of Globalisation’ at FICCI in New Delhi, Justice Misra said court interferes in arbitration only when there is any scope left.
“We know where interference is required. We see what could be the ground for minimum interference. It is not because of any kind of friendly attitude of the court.
“The court has to see what procedure was adopted by the arbitrator, whether his view is plausible or not. Most of the time, the court sees to it that the award is upheld,” the CJI said adding that several judgments like Balco vs Kaiser Aluminium Technical Service and Bhatia International vs Bulk Trading SA have already upheld the same.
Referring to Nobel Prize winner Amartya Sen’s quote, Justice Misra said: “The theory of economics basically says there has to be economic growth because of trust. But despite the trust, disputes arise and it is through institutional arbitration that disputes can be solved.”
For more effective and meaningful awards, the arbitrators need to be trained.
“Time has come; the arbitrators need to be trained. Neutrality and impartiality of arbitrator is the most important to gain the trust of the litigants. In the light of foreign direct investments and companies across the world intending to have business here, we should have our own arbitration system,” he said.
Justice Madan B Lokur, judge of Supreme Court, also addressed a session titled ‘Arbitration-India and Global Contour’. He concurred with the CJI on the issue of need for training to arbitrators, lawyers and litigants.
The government, legislature and judiciary are proactive as far as arbitration is concerned. But the mindset of the lawyers and litigants need to be changed. The technological skills should be used for successful of arbitration system in the country.
He said: “Setting of arbitration is not a problem, but we have to ensure the sustainability of it. Looking into the success and failure of arbitration system in other countries and also the past record of our system, there is a need to introspect and deliberate the procedural arbitration system.”
“Who is ultimately the driver of change: is it judiciary, is it government or legislature, or is it business community? Maybe all of us are drivers of change. We should introspect in the global context,” Justice Lokur said, while expressing hopes that in the next few years, there would be positive change in the economic growth.