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The pendency of cases in Indian courts is as high as 3.3 crore. The Indian courts are burdened to the extent that if the crisis is left unattended, it might destroy the stability of the judiciary as an institution. Alarmed by all this, the ministry of law and justice recently conducted a meeting in New Delhi in order to come up with a plausible plan of action to prevent this crisis.

In the light of all this, it is maybe the perfect time to stop and introspect if alternative dispute mechanisms have proven to be reliable alternatives or not

. One of the most famous alternative dispute mechanisms is arbitration. According to black’s law dictionary, arbitration is a means of investigating and determining disputes between two parties which is facilitated by one or more unofficial persons. Before it was codified in the arbitration act 1940 and later in the arbitration and conciliation act 1996, it was relied upon in traditional Indian societies where the panchayats played an instrumental role in facilitating arbitration.

The need to codify this method of alternative dispute resolution was felt due to the rising numbers of commercial disputes and high pendency of cases in civil courts. The idea was to bring in an alternative to the courts where matters could be resolved with efficiency. It was said to have many benefits. Arbitration was quick, efficient, pocket friendly and was devoid of procedural complexities and legal jargon that was an inextricable part of the conventional court preceding’s.

But recent trends show that there is a wide gap between the expectations and the actual potential of arbitration in the Indian context. On the contrary, it has proven to be an expensive, time consuming and unreliable means of resolving disputes. Moreover, it has failed to avoid litigation which was actually the very purposeof the arbitration and conciliation act 1997 as per itspreamble.

It is expensive because parties to the arbitration end up paying the fee of the arbitrator, expert witnesses and lawyers, the rent of the venue of arbitration etc. moreover, a lot of cost   is involved at every stage of arbitration right from the appointment of arbitrator uptill the execution of the award as one is supposed to go to the  district court as a primary forum. Further, there is always a possibility that the order may be challenged in the higher court. This does not only lead to an inordinate delay in the resolution of disputes but also makes the process heavily expensive. Needless to say, it does not help in avoiding litigation or courtroom complexities.

Another major problem is that, most of the times retired judges are preferred for facilitating the arbitration. It is not a written rule but it is felt by the legal community that the decisions rendered by the retired judges have more binding value than other arbitrators and therefore, there is always a lesser probability of these decisions being over turned in the court of law.  These judges charge huge fees that adds up to the expense involved. Further, the lack of retired judges translates into a lack of availability of arbitrators which leads to delays again.

It is unreliable because there is no regulatory body that accredits arbitrators or imposes any ethical standards on them. This allows for corruption and arbitrariness on their part.

It is time consuming because there are wide grounds on which an arbitral award can be challenged under section 34 of the arbitration and conciliation act 1996. The ground of public policy is the favourite of all the lawyers as it is extremely subjective and is a great option for them in case they wish to stall and delay the process of arbitration. Moreover, the lack of commitment on the part of judiciary to promote arbitration also leads to further supervisory interference of the courts at every possible stage of arbitration.

In the view of all these reasons, arbitration as a mechanism has not been as successful as it was speculated by the drafters back in 1940. There is an immediate need to bring in structural and institutional reforms in order to selvage arbitration as a reliable ADR technique. Needless to say such a positive intervention would be instrumental in salvaging the conventional courts as well, which are currently collapsing under the burden of crores of cases.

Anchal Bhatheja, National Law School of India University, Bangalore


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