High Pendency Of Arbitration & Commercial Cases : Supreme Court Asks Allahabad HC CJ To Devise Roadmap To Tackle Arrears

Being apprised of the burgeoning pendency in the execution proceedings of arbitral awards and applications to set aside award under Section 34 of the Arbitration and Conciliation Act, 1996, in the State of Uttar Pradesh, the Supreme Court, on Thursday, requested the Chief Justice of Allahabad High Court to constitute a committee of Judges to device a roadmap to tackle the arrears. "We request the Chief Justice to constitute a committee of the judges of the High Court and invite the suggestions for a roadmap on how to tackle the arrears. We request the Chief Justice…to make suggestions before the next date of hearing how the High Court proposes to deal with such a situation and huge pendency of commercial litigation in the State."A Bench comprising Justices M.R. Shah and B.V. Nagarathna observed that the Chief Justice of the High Court ought to consult his fellow judges and come up with a roadmap. "In Ghaziabad, execution petitions have been pending since 1993. We don't even know when the arbitration began. Nobody is coming with a roadmap. The CJ ought to have come up with a roadmap. It is shocking that execution petitions have been pending since 1993. Commercial appeals have been pending since 2011."The Bench opined that delay in adjudication of commercial disputes have a far reaching effect - "If commercial disputes are not disposed of at the earliest it may affect the economy of the country. It may spoil the business relation between the parties. It may also affect the ease of doing business."On the last occasion, the Bench had directed the concerned Registrar General to file an affidavit addressing the following queries : how many execution petitions to execute the Award both under the Arbitration Act, 1940 and under the Arbitration and Conciliation Act, 1996 are pending in the subordinate courts/executing courts in the entire State; how many Section 34 applications are pending in the entire State and from which year and how many Section 37 applications are pending before the High Court and from which year. On Thursday, reading from the affidavit, the Bench noted that - 30,154 execution petitions are pending in various District Courts/Courts, the oldest one is of the year 1981;13,367 execution petitions are pending before the Commercial Courts, the oldest one is of the year 2002;10,436 applications under Section 34 are pending before the District Courts, the oldest one is of the year 1987. Upon perusal of the affidavit, Justice Shah remarked - "What has happened in criminal matters in UP is exactly what is happening in commercial matters. What face will we show to the world?"He was displeased that the two statutes i.e. the Arbitration and Conciliation Act, 1996 and the Commercial Courts Act, 2015 which envisages the speedy disposal of cases are witnessing such huge pendencies. The whole purpose of the two legislations, he opined, is getting frustrated. "What is the purpose of the constitution of commercial courts? What is the purpose of Arbitration? Arbitration is a substitute to suit. Now with arbitration also the same delay. Where will people go?" The Bench was of the view that arbitration, which was to serve as an alternative dispute resolution mechanism had fallen into the traps of traditional litigation in terms of delay. "It cannot be disputed that the Arbitration Act was brought into force and has been amended for speedy disposal of commercial disputes because of the pendency of cases before the ordinary civil courts for a number of years the commercial disputes remain pending." It noted that the aim of the Commercial Courts Act and subsequent amendments to facilitate speedy disposal of commercial disputes have also not fructified. "With similar object and purpose the Parliament came out with the Commercial Courts Act. The Parliament in its wisdom and with a view to see that commercial litigation are decided at the earliest, came out with an amendment in Arbitration Act and Commercial Courts by which it is mandated that Arbitration Proceeding and proceedings before Commercial Courts are decided preferably within one year."Coming to the causes of the pendencies, Justice Shah identified the reduction of the pecuniary jurisdiction of the Commercial Courts from Rs. 1 crore to Rs. 3 lakh as one of the primary causes. He stated - "Earlier the monetary limit for commercial courts was 1 crore, now it has been reduced to 3 lakhs. So the litigation in the commercial courts have increased. The legislature has to see to this and come up with an amendment. If it is 3 lakhs, then what is the difference between a normal court and a commercial court."The Bench was apprised that pendency is also largely attributable to the repeated adjournments. Justice Nagarathna responded saying - "If adjournments are not given then the judge becomes unpopular and resolution is passed in the Bar...

High Pendency Of Arbitration & Commercial Cases : Supreme Court Asks Allahabad HC CJ To Devise Roadmap To Tackle Arrears

Sohini Chowdhury

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