Given the huge backlog of cases in India’s courts, prime minister Narendra Modi is right in wanting to quicken the process of alternative dispute resolution like arbitration—at a recent conference, Modi even spoke of the need to make India a global hub for arbitration. The speech, however, will carry little conviction till the government’s actions match its words. If the atrocious tax demands made to global firms like Vodafone and Cairn were not bad enough, the government has delayed the finalisation of the arbitrators panel—more recently, in the case of Cairn, it even asked the global arbitration panel to put off the hearings until a similar case with the Vedanta Group was concluded. More famously, the government is in the process of amending its bilateral investment treaties with various countries to exclude tax matters from the ambit of such treaties.
Nor are matters very different in the case of non-tax matters or disputes with local companies. Reliance Industries Limited is embroiled in three to four arbitration matters with the government and in some of them, it had to petition the courts to force the government to appoint arbitrators—in one famous case, the petroleum minister asked intelligence agency RAW to investigate Reliance’s arbitration lawyers and alleged a link between them and the presiding arbitrator. In the case of Antrix-Devas where a global arbitration panel ruled against Isro’s subsidiary Antrix, the government got Antrix to challenge the award in a local court instead of making the payment. With such an attitude, in all these cases, the process of arbitration becomes quite similar to a normal court case with the parties having to first fight to get arbitrators and then battling to get the awards enforced in Indian courts—the case of White Industries which has still not been able to enforce its 2012 award against Coal India is, of course, the most egregious case. The prime minister needs to get his government to take action on these cases if he hopes to convince investors to come and arbitrate in India.