“One of the biggest things that has been bothering us right from the start is the validation of ODR. We know it has been tested but is there in a nascent form across the world, forget India. While the initial feedback has been tremendously positive, the idea was likely to remain in concept phase until we see some reforms / directions at the national level. Sure, we aim to be Batman and bring in the change, but realistically speaking, the concept can only be successful if the Government / Legal system plans to bring in some reforms in adoption of technology. We intend to pioneer that and be the catalyst in bringing this change.”
This was one of my many rants to Umang at 2 am when we were working on our startup. Suddenly, we came across this event – on the occasion of its Golden Jubilee year, Indian Council of Arbitration (ICA) was organizing the International Conference on “Arbitration in the Era of Globalization” during December 11 – 12, 2015 in New Delhi. On 9th December,2015, Umang and I made the decision of spending INR 5,000 of our (Parents’) hard-earned money for the entry passes to this conference. In the student paracosm, that’s worth over a month of meals so you can imagine it was a big sacrifice to make.
As it turned out, the money was worth it.
How do we know that it was the largest arbitration conference in India?
Have a look at this line-up of attendees yourself.
The conference was inaugurated by the newly appointed Hon’ble Chief Justice of India TS Thakur, while the Hon’ble Law Minister of India was invited to address the closing ceremony. It was also addressed by Hon’ble Judges of Supreme Court of India, some eminent jurists like Mr. Mukul Rohtagi, Senior Advocate and Attorney General of India and prominent International arbitration experts including Mr. Peter Hirst, Partner, Clyde & Co., London, Mr. Brandon J Malone, Chairman, Scottish Arbitration Centre, Edinburgh, Mr. Joachim Knoll, Partner, Lalive, Switzerland, Mr. Salim Moollan, Essex Court Chambers, London, Mr. Audley Sheppard, QC, Global Head of Arbitration, Clifford Chance, London, Ms. Andrea J Manekar, Partner, White & Case LLP, Washington DC, Mr. James P. Duffy IV, Partner, K & L Gates, New York, Ms. Sheila L. Shadmand, Partner-in-Charge, Jones Day, Dubai, Mr. Francis Xavier, Partner, Rajah & Tann LLP, Singapore, Mr. Alec Emmerson, CEO & Trustee, DIFC Arbitration Institute, Dubai, Mr. Gary Born, President, Court of Arbitration, Singapore International Arbitration Centre (SIAC) and Partner-Chair, International Arbitration Practice Group, WilmerHale.
The conference was huge. It had more than 300 participants from across the world.
We collected a lot of visiting cards that day.
What Lessons? Read the following four.
1. The recent arbitration ordinance is in consonance with the Prime Minister’s vision of “Making India a Global Arbitration Hub”.
The President of India had recently promulgated two ordinances on 23rd October,2015- 1) The Arbitration and Conciliation (Amendment) Ordinance, 2015 2) Commercial Court Ordinance. A lot of discussion took over the pros and cons of it and many diverse opinions were expressed.
The majority opinion agreed to the fact that the ordinance has made a significant effort to bring structural and transparency related amendments in the current scenario of arbitration. It has tried dealing with the four daunting challenges which the disputing party faces : a) Inordinate delays, b) spiralling costs, c) Frequent court interferences in the arbitration proceedings and d) Setting aside of arbitral awards under the garb of the ‘Public Policy’ doctrine. According to the experts, establishment of commercial courts can also be an effective solution to substantially reduce the number of pending suits and burden on civil courts having jurisdiction over commercial disputes.
The minority opinion was unhappy with the changes made in appointment of arbitrators. The provisions to ensure independence of arbitrators have been elaborated and absolute grounds of ineligibility have been defined. One of the judges quipped- “The ordinance is based on the assumption that every arbitrator in the business is dishonest.”
You cannot please everyone.
Another criticism was on the practical feasibility of the ordinance. Although definite timelines have been set for the completion of proceedings, the practical application of the ordinance will depend upon the promptness for the creation of additional judicial and physical infrastructure, filling up the vacancies newly created, etc.
All said and done it can be concluded that this ordinance is a right step towards raising the standard of domestic arbitration and brining it at par with international arbitration.
2. “Integrity of the arbitrator is very essential. If he is a man of impeccable integrity, we would like to uphold the award. However, if there is a slightest doubt, then we may not,” Chief Justice of India TS Thakur said.
Judiciary has been criticized vehemently by the ADR practitioners for their interference in the arbitration procedure. But this conference gave us the other side of the perspective. Though speedier and efficient justice system is the need of the hour, we cannot in anyway compromise in the quality of justice.
A Judge will not intervene only ( and ONLY!) if he is 100 percent satisfied with the integrity of arbitrators. Awards worth in crores are declared in this process and there is no choice for the judge but to be OVER cautious in reviewing the award. A slight doubt on the arbitrator’s integrity takes away all the credibility.
We need to ensure stringent background checks of the arbitrator and stronger compliance to the high standard qualities required for the process. For example, there might be some cases which are extremely technical in nature and we need to ensure that we have high quality arbitrators specializing in different fields in such circumstances.
If we want to reduce the judicial interference, their trust on the arbitrator is extremely important. Therefore, the efficacy of the arbitration process can only improve if the quality of arbitrators is improved.
3.Inordinate delays happen because of the procedural flaws; 70 percent of time is spent on recording evidence.
Mr. Mustafa S. Doctor, a Senior Advocate in Bombay High Court in the session on ‘Changing face of arbitration India’ brought our attention to procedural delays being caused due to marking documents and recording evidence. He emphasised on the need of realizing the potential of technology in improving the procedural efficacy of arbitration.
Arbitration still remains an evening activity for lawyers. It is just an extra source of making money. Often it happens that they are not well researched and a lot of time wasted in cross examining witnesses for no reason. Also lack of preparation on arbitrator’s part further deters the efficacy of the process. This mindset needs to change.
4. There is scope for Online Dispute Resolution in India.
There was a general consensus amongst the attendees for Arbitration in era of globalization to realize the potential of technology. As noted above the problem with recording evidence and marking documents can be easily solved with using technology. The ordinance also clearly laid down the foundation for this by introducing the concept of ‘fast track procedure of arbitration’ which is based on the concept of written pleadings, documents and issuance of awards within six months. It further solidifies the ODR position by legally recognizing the ‘communication through electronic means’. ICA also agreed to include ODR in their resolution paper which would be published after the conference.
Our main purpose of going there was to take the feedback of experts in the field of ADR on our project of building an Online Dispute Resolution (ODR) platform. Some said that there is a mindset issue in India and it cannot work here. Some said though it will take some time, it is a great idea with enormous potential to improve our justice system.
We chose to believe the latter.