International Commercial Arbitration In India

International Commercial Arbitration In IndiaIndia has been witnessing an e-commerce boom and increased amount of foreign direct investment. Recently Indian government clarified about the Foreign Direct Investment (FDI) In E-Commerce Sector Of India 2016. Parliament of India has also passed the Insolvency And Bankruptcy Code, 2016 to ensure ease of doing business in India. Despite the increasing inflow of foreign capital in the Indian economy, India’s potential to attract FDI from the world has not yet been fully trapped. This is happening because India lacks an efficient dispute resolution system in the country. And this is happening at a time when e-commerce disputes and litigations are set for big rise in India. Even establishment of smart cities in India would require a techno legal smart dispute resolution mechanism.

Indian legal system is suffering from delays and backlog of cases. This is also affecting the quick disposal of commercial disputes between national and international stakeholders. Foreign investors who wish to resolve their dispute expeditiously cannot afford to wait decades for a dispute to reach finality. The current dispute resolution system of India is not only antique in nature, is cumbersome and time consuming as well. The backlog of cases is increasing day by day affecting the outcome of various cases. There was emergent need of judicial and legal reforms in India so that courts in India can meet the expectations of the 21st Century and also that could preserve the courts reputation and supports the courts critical role in maintaining trust by outside world and their confidence in the protection afforded to them by the law.

India experimented with the alternative dispute resolution (ADR) methods like arbitration, conciliation, etc under the Arbitration and Conciliation Act, 1996. However, even the Arbitration Act has failed to bring the desired results. This is more so regarding international commercial disputes that can be better resolved using international commercial arbitration in India. UNCITRAL has promulgated the Model Law on International Commercial Arbitration in June 1985 in response to the lack of uniformity in international commercial arbitration. The Arbitration Act is based substantially on this Model Law. The Model Law’s stated goals prescribe an arbitral procedure which is fair, efficient, and needs-focused to minimise the supervisory role of Courts. Other goals include:

(a) Limiting the role of national courts and to give primacy to the will of the parties in establishing the procedure for the settlement of their disputes;

(b) Securing procedural fairness by means of a limited number of provisions from which the parties could not agree to depart;

(c) Putting in place rules which advance arbitration, even if the parties have not reached agreement on all relevant procedural matters;

(d) Enforcing court decrees as awards; and

(e) That a settlement agreement reached by its conciliation proceedings would have the same status as an arbitral award.

India’s willingness to accept globalisation and FDI has tested its Arbitration law before the global audience. It is now felt that the Arbitration Act needs suitable techno legal amendments keeping in mind information and communication technology (ICT) driven business models. Indian government has already proposed amendments to the Arbitration Act and formulation of a new national litigation policy of India where Indian government would act as a responsible litigant.

One of the fundamental objectives of international commercial arbitration is the procedural neutrality as International disputes almost inevitably involve parties from different home jurisdictions. Perry4Law Organisation (P4LO) suggests that India must speed up the process of adoption of online dispute resolution (ODR) for resolving e-commerce and international commercial disputes. E-commerce disputes resolution in India may be resolved using ODR in the near future. Similarly, international commercial arbitration and dispute resolution in India would also use ODR platforms and websites in the near future. ODR would also solve the problems of procedural neutrality and jurisdiction as a centralised platform can resolve disputes between national and international stakeholders.

As far as recognition of a foreign decree or judgment in India is concerned, it can be held valid and conclusive, only if it complies with all prerequites as laid down in Section 13 of the Civil Procedure Code (CPC) namely (i) that the judgements must be pronounced by a court of competent jurisdiction, (ii) it must decided on merits, (iii) it must not be obtained by fraud, (iv) it is not against natural justice, (v) it should in accordance with principles of international law, (vi) where it sustains a claim founded on a breach of any law in India.

P4LO strongly recommend that Indian laws must be suitably modified so that India can be a premier location for international commercial arbitration in the world. Our techno legal platforms would help Indian government for international commercial arbitration in general and digital India in particular.

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