Arbitration delays hit investor mood. Leading US-based
investment bank Lehman Brothers, affirmed last week that India remained one of
the world’s hottest investment destinations, but while the market and business
opportunities beckon, the adjudication of commercial disputes is still a thorn
for many investors looking for a system that would make things easier.
Experts say arbitration, involving a friendly third-party
to help business disputes, suffers many handicaps in India, dampening foreign
investor sentiment somewhat. The Arbitration and Conciliation Act, 1996, has
failed to provide an effective alternative redressal for commercial disputes,
because arbitration has become the beginning of a litigation, while elsewhere
in the world, it usually marks the end. “Companies are losing trust in the
arbitration process in India. In-house advocates are advising their clients
not to insist for an arbitration clause in agreements”, says Dushyan Dave, a
senior Supreme Court Advocate.
Jurists argue that with a 2-Judge Bench decision in 2003,
the Supreme Court enlarged the extent to which Courts can intervene in
arbitration proceedings. This, says Dave, has increased litigation on arbitral
awards in the Indian Courts. “Several decisions by the Courts have truncated
Article 16 of the model law evolved by UNCITRAL. As a result, Judges can now
actually enter into an arbitration treaty while deciding on the question of
appointing an arbitrator”, adds Dave. The Law Commission had in 2003 said the
delays in arbitration proceedings have practically made it similar to the
Indian judicial system and an expensive proposition for corporate houses.
“Therefore, the commission had recommended fast track arbitration wherein
arbitrators were required to sit for five hours every day”.
(Source : Hindustan Times, dated 11.05.2009)
