Chief Justice N V Ramana Tuesday allayed apprehension about the increasing interference of domestic courts in the arbitration process and said the Indian judiciary treats all parties including foreign entities equally and equitably.
In recent years, there has been some apprehension in the minds of parties about increasing interference of domestic courts in the arbitration process. Let me assure you, Indian Courts are known for their pro-arbitration stance. Courts in India assist and support arbitration and leave the substantive part of adjudication to the Arbitral Tribunal itself.
The Indian judiciary is recognised for giving paramount importance to the rule of law. The Indian judiciary eternally guards the constitutional rights in the worlds largest democracy. You can trust the Indian judiciary for its absolute independence and its inherent constitutional strength to treat all parties equally and equitably, Justice Ramana said.
The CJI was speaking at the annual meet of Indo German Chamber of Commerce on the theme Arbitration in a Globalised World – The Indian Experience at Dortmund in Germany.
He said the Constitutional Courts of India – the High Courts and the Supreme Court – have the power to judicially review every act of the Government.
“They can strike down any law that is not in tune with the Constitutional principles. They can also set aside the arbitrary measures of the executive,” he said.
Ramana said the Indian Constitution enables any person or entity, including a foreign entity, to approach any legal forum in India for redressal of grievances.
Indian Courts do not discriminate on the basis of country of origin. All are equal before the Courts of law in India. Indian Courts have, over time, allowed broader scope for arbitrability of disputes.
This attitude of Indian Courts has further increased the importance of International Arbitration, particularly when it comes to countries like India and Germany. Technology transfer agreements, licensing rights, royalty rights, and other such IPR-related agreements are often subjects of arbitration agreements between corporates, he said.
The CJI said in order to fast-track disposal of commercial disputes, Parliament has also enacted the Commercial Courts Act, which provides for the establishment of dedicated Benches for commercial matters.
“This has led to further streamlining and speedy dispensation of justice in commercial matters. There are instances of the Indian legislature amending the laws to end long-pending commercial disputes,” he said.
Justice Ramana said it is imperative to create adequate infrastructure for developing countries to facilitate the resolution of disputes and it is of utmost importance that our dispute resolution facilities must match our investment inflows.
He said presently the International Arbitration is mostly concentrated around the business centres of the developed world: Singapore, London, Paris or Stockholm and stressed that the Geography of International Arbitration needs to be balanced.
This is despite the fact that most disputes are generated in the developing world. Due to a severe lack of resources and infrastructure, even parties from developing countries choose to resolve their disputes in these established resolution centres at severe cost to them, he said.
One way to ensure such a balance is to establish modern Institutional Arbitration Centers. Institutional arbitration has various benefits. The pre-established rules and framework give parties much-needed certainty and transparency, Justice Ramana said.
He said an eminent arbitrational institution also guarantees esteemed panelists and arbitrators from across the globe, with rich and diverse experiences and knowledge which helps parties go through the entire resolution process without any hassle.
Justice Ramana said that every investor looks forward to a destination that is socially and economically stable and it is the responsibility of the host country to ensure that there is peace and stability in the country, and also an effective legal redressal system so that it attracts investments that generate employment.
In order to maintain and strengthen any existing relation, the primary need is to have stability and trust. In trade and business, as in any other facet of human relationships, the difference of opinions and conflicts are bound to occur.
The need is to establish an efficacious mechanism to address these issues and ensure that business continues to operate without much hassle, he said.
Justice Ramana said the United Nations Commission on International Trade Law in 1985 adopted the Model Law on International Commercial Arbitration, which has contributed greatly in developing a uniform global arbitration landscape, where fairness and efficiency have been given paramount importance.
The CJI said India encourages arbitration, mediation, and other modes of alternative dispute resolution by adopting UNCITRAL Model Law and enacted the Arbitration and Conciliation Act, 1996 “to make the arbitral process more efficient and to harmonise it with the international practice and procedure.” He also informed that an International Arbitration and Mediation Center has been set up in Hyderabad.
Ramana also suggested that the institutional arbitration centres functioning across the world may consider joining hands to form a council or confederation to help in sharing their experiences and adopt best practices.
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