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Summary of Deliberations and Recommendations of The International Conference on Emerging Trends in International Commercial Arbitration

Inaugural Session

The International Conference was inaugurated by Hon’ble Mr. Justice R.V. Raveendran, Judge Supreme Court of India. The Session was presided over by Hon’ble Mr. Salman Khurshid, Minister of state (I/C) for Corporate Affairs. The other speakers at the Inaugural Session were Dr. Uddesh Kohli, Chairman CIAC, Mr. Pravin H. Parekh, President Confederation of Indian Bar, Dr. Rahmat Mohamad, Secretary General Asian African Legal Consultative Organization, Mr. T.K. Vishwanathan, Secretary General Lok Sabha, Mr. John Savage, Board Member Singapore International Arbitration Centre, and Mr. Chander Verma, Chairman CIDC.

Dr. Uddesh Kholi --- delivered a generous Welcome Address and introduced the topic at hand. He highlighted the fact that CIAC has been holding several conferences, preparing rules and procedures for arbitration. It has been an observer of the working group in UNCITRAL in 2010 as well as an observer in Online Dispute Resolution by UNCITRAL.

He was of the opinion that the UNCITRAL text, rules, documents must be given wide publicity and more workshops and conferences should be held to encourage arbitration in India. UNCITRAL is focusing upon the agencies in this region and also supporting them. Moreover he claimed that the deliberations in this conference would be very valuable and would provide an opportunity for exchange of views amongst arbitrators, judges, lawyers, in-house counsels and legal officers, engineers, project managers, senior government officials, academicians, policy makers and all those involved in the process of dispute resolution.

Hon’ble Mr. Salman Khurshid,

In spite of the paucity of time, Mr. Khurshid delivered an outstanding Presidential Address. He highlighted that with the emerging boom in trade and commerce in India, there is a focus on India as an attractive destination for business processing and investment. With the G-20, India will be further drawn in the commercial arena.

Thus, as the Indian commercial landscape shall broaden,   the challenges as to how quickly we can put disputes and conflicts behind us would also come up. He mentioned that the government has taken recent steps as legislations, commercial Courts, Company Law Tribunal, and Competition Appellate Tribunal etc. He stated that commercial arbitration remains of highest priority to the Government and that Institutions such as the UNCITRAL, AALCO, SIAC etc will be a landmark for moving forward.

He stated that there has to be a leap of faith linked with attitudinal change. He mentioned that retired judges should not bring in courtroom culture in arbitration.  He also observed that some High Courts have set up special cells for arbitrations and that the Supreme Court by its guidance, has given a major thrust to Alternative Dispute Resolution. Finally, he promised on behalf of the government total undivided attention to this cause.

Mr. T.K. Vishwanathan,

He started his discussion with the Indian Arbitration Act. He mentioned that he, along with Hon’ble Mr. Justice Rao and Hon’ble Mr. Justice Jagannathan had brought forward the 1976 report of the law commission which had suggested measures for improvement.

He stated that there is a unanimous view that India lacks institutional arbitration. We must focus on online dispute resolution, e-commerce and other such methods which challenge the traditional methods. He explained that in a typical ODR, parties resolve their disputes by submitting it to online arbitration. He stated that digital environment is a borderless medium and will involve the issue of denationalization of arbitration process. Online mediation is emerging as a very important tool and that arbitration must be resorted to in every case.

Mr. Pravin H. Parekh,

Mr. Parekh gave a hearty welcome to all the dignitaries present on and off the dais; he was glad that despite the strict schedule Hon’ble Minister Mr. Salman Khurshid could grace the occasion with his presence. Mr. Parekh stated that today commercial arbitration has become an urgent need of the hour for India. It was once in the good old days of barter system, when India was known as the ‘sleeping tiger’ but now it has become the fastest growing economy. India has a lot of commerce and hence commercial arbitration should be provided as the parties can resolve their disputes in the country and do not have to travel far and wide for resolving their disputes. Also if there are more than one country involved in the dispute, it is difficult for the countries to resolve to a common place of arbitration and a common law, in such cases further chances of dispute may arise relating to the place and jurisdiction of the matter, issues such as which country may arbitrate the matter in accordance to which law etc. All these are very essential factors and hence necessary guidelines should be drawn in order to resolve all these matters. India has everything which makes it a hub of arbitration, for eg:

  • Stable democracy
  • Rule of law
  • Judiciary and Bar
  • Free Press
  • Knowledge

He concluded by saying that International arbitration provides for  fast track judgments , but the disposal of award takes a lot of time in India and hence parties run to other countries for  dispute resolution. The only remedy pertaining to the award lies in Section 34.

Hon’ble Mr. Justice R.V. Raveendran

Hon’ble Mr. Justice Raveendran addressed the audience with a lot of gusto. Justice Raveendran elaborated that Arbitration started as a promising option because of the following factors:

  • Freedom of choice of arbitrator
  • Less technicality
  • Less delay
  • Lesser costs
  • Binding Dispute Resolution process.
  • Practical decisions.

International Commercial Arbitration has become an important tool. In India whether it is domestic or international arbitration, it is neither useful nor effective. He stated that Julien Lieu has given figures for commercial arbitration in different nations in the year 2009, but India is significantly missing in the figures. It is because of a general perception that arbitration abroad is

  • More professional
  • Institutional
  • On time

 He pointed out the negative aspects in India viz;

  • Lack of professionalism
  • Time consumption
  • Ad hoc arbitration
  • Unwarranted interference of courts

Justice Raveendran emphasized that in other countries arbitration   is conducted professionally but not in India, which is why Arbitration between two Indian parties with Indian laws is conducted outside India. The result being , that people and laws etc all are Indian but the venue is outside India, say for example: the substantive law is Indian, procedural law is English and the venue Malaysia. So, if we have deficiency in our system, the  remedy does not lie in  running  away but in getting  together and promoting, International Commercial Arbitration in India.

 He proposed certain Solutions for some of the deficiencies as follows:

  • Delay – Parties are represented by counsels who practise in courts. They give secondary importance to it over litigation. Generally the time allotted to arbitration is 4:30 to 7 p.m. This ‘part time arbitration’ is bringing a bad name to it. This is a ‘short –term benefit to lawyer’ but it leads to a ‘long-term loss to the bar, arbitration and India’. Lawyers should set aside their court work and other related tasks while working for arbitration. When the same Indian arbitrator performs arbitration outside India he/she shows professionalism but the same is not reflected in India. We must not treat it as a ‘side-business’.
  • Costs – The Institutional arbitration is not developed as Ad Hoc arbitration in India. In Ad Hoc arbitration, fee is fixed beforehand. Person sitting as a judge and enquiring about his payment is highly unsuitable. If one party pays more, the other has to do the same. Therefore, recourse may be taken to Institutional arbitration where one can choose the arbitrator, and the fees and the panel are determined by the Institution, and sound infrastructure is also provided for. But in Ad Hoc arbitrations costs increase.  On the other hand, Institutional arbitration starts from day one while bringing discipline as well.
  • Professionalism – Arbitrators should be fully conversant with all the rules guiding them. There is ‘judicialisation of arbitration’ in a way that evidence is asked for; witnesses are examined etc in the same manner. So it is necessary to have professionalism. It’s not that we lack professionalism or efficiency. Only thing needed is to use our resources properly. Indian’s do back attorneys in USA . Indian lawyers or even  students from NLUs  ready to blossom as  lawyers are no less a professional. So there is a need to change our attitude to harness and utilise  our  own resources.

 He emphasized that not only the lawyers but the litigants also should change. The litigant keeps his claim low when he chooses his remedy through court, but hikes his claim when seeking remedy through arbitration.On the same trend , even the arbitrators expect  higher fee besides other expenses towards hospitality, travelling etc. Why then, the litigant laments  about the increased cost. So, discipline, awareness and honesty from litigants are also required  in this regard to keep the cost of arbitration under control.

  • Court interference – Courts interfere mostly because of the flaws like non- existence of the arbitration agreement, lack of professionalism etc. Once these flaws are removed, the court’s interference will be reduced.

In the end Justice Raveendran clarified that he did not mean  to belittle Indian arbitration but was only emphasising to bring it on par with International Standards.

Mr. Chander Verma---Vote of Thanks

Mr. Verma maintained that it was his pleasure to be a part of such an august gathering. While noticing the participation of a large number of students, he stated that much is required to be done to improve arbitration. There is a need of timely, cost effective and efficient dispute settlement mechanism in this age of alarming disputes.

He mentioned that there has been an increased volume of overseas transactions. Online Dispute Resolution and strategies should be adopted to suit the needs and demands of the growing industries. He observed that the conference shall enrich our knowledge resources and help in formulating effective recommendations.

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