Given the 3-crore-plus cases clogging India’s courts, the government has done well to clear two Bills—one for arbitration/conciliation and the other for the setting up of commercial courts.
Given the 3-crore-plus cases clogging India’s courts, the government has done well to clear two Bills—one for arbitration/conciliation and the other for the setting up of commercial courts. Indeed, given that the many decades it takes to get cases through India’s courts are a big reason for India’s low ranking on the Ease-of-Doing-Business index, anything that fixes this will be good for economic growth. Given the impact that both Bills can have, what is not clear is why they have not been pushed more actively in Parliament so far—both Bills were first drafted in 2015. But, assuming they do get passed soon, the government still has its work cut out. Being one of the largest litigants in court, it would be the easiest thing for the government to give the arbitration Bill a push by agreeing to shift to arbitration/conciliation courts—apart from a 30-day window to appoint the arbitrators, the court has a maximum of one year in which to deliver the verdict. But, doing so would mean the government is giving up its right to keep appealing verdicts because the grounds for appealing an arbitration ruling are very limited. Can any bureaucrat ever commit that he/she will not appeal a verdict that goes against the government? Also, if the government wants to use arbitration as the preferred tool in India, it should be as willing to submit itself to global arbitrations—its record here has been very poor.
In most such cases, the government has tried to delay arbitrations on one ground or another. And when Docomo won a global arbitration against the Tata group, even though no government money was involved, the government argued in the Delhi High Court that the award should not be enforced. In the case of commercial courts, there can be little doubt that they will do wonders since most civil courts are clogged; and to the extent that judges selected for them will be more familiar with commercial law, chances are the judgments will come quicker. Since, in most cases, this will require setting up new courts, or expanding existing ones to accommodate the new benches, and hiring new judges, it is not clear how fast this will move—more so, given the constant friction between the Supreme Court and the government on the hiring of judges. So, once the Bills are passed, the central government will have to ensure the two processes take off. In the case of arbitration, ensuring a large number of government litigation move to that mode of redressal will be a big start. Similarly, in the case of commercial courts, in the initial phase, some BJP governments can be persuaded to create benches fast, to encourage other states to follow suit.