LI Network
Published on: November 12, 2023 at 17:22 IST
Justice Sanjay Karol, a distinguished member of the Supreme Court of India, recently delivered a keynote address at the World rounds of the Foreign Direct Investment (FDI) International Arbitration Moot Court Competition hosted by Ram Manohar Lohiya National Law University, Lucknow.
In his valedictory ceremony speech, Justice Karol emphasized the significance of Alternative Dispute Resolution (ADR) mechanisms, highlighting their role in expediting case resolution, granting parties more control, and saving time in the process.
The foundation of arbitration in India, as mentioned by Justice Karol, is rooted in Article 51(d) of the Constitution, emphasizing the state’s commitment to encouraging the settlement of international disputes through arbitration. He illustrated this point with the example of the successful resolution of the boundary dispute between Gujarat and Pakistan in 1965.
Tracing the evolution of arbitration law in India, Justice Karol touched upon the limitations of the 1940 Arbitration Act, leading to the enactment of the 1996 Act after the economic liberalization of 1991. The 1996 Act aims to promote arbitration as a cost-effective, time-efficient, and acceptable procedure, aligning with the ‘UNICITRAL Model Law’ and New York Convention.
While acknowledging the progress made, Justice Karol also highlighted persistent issues, such as the validity of appointments by ineligible arbitrators and non-actionability of unstamped agreements. He commended the 2019 amendment to the Arbitration Act, inserting Section 34(2), and decisions clarifying the scope of judicial interference in arbitral awards.
Expressing concerns about the extensive reliance on retired judges as arbitrators, Justice Karol proposed encouraging young advocates with arbitration knowledge for small-scale matters, emphasizing cost-effectiveness.
Addressing the misconception that arbitration is confined to commercial disputes in urban areas, Justice Karol pointed out the evolving nature of arbitration, especially in family dispute resolution through mediation.
Discussing the correlation between the Commercial Courts Act, 2015, and the Arbitration Act, Justice Karol explained that the former prevails over the latter in appeals and applications related to commercial disputes, emphasizing the need for clarity in legal hierarchies.
Drawing attention to Singapore’s success in arbitration, he praised the country’s time-effective mechanism, minimal judicial intervention, and the role of its judiciary in upholding arbitration decisions.
In conclusion, Justice Karol stressed the need for practitioners and aspiring lawyers to promote awareness of arbitration as a viable option. He advocated for measures to streamline procedures and enhance capacity building to ensure that arbitration becomes the preferred choice for dispute resolution, both nationally and internationally.
