Letters: Arbitrary arbitration

This refers to M J Antony’s column “Arbitration in the doldrums” (Out of Court, January 23). One of the avowed objectives of the Arbitration and Conciliation Act, 1996 was to minimise the supervisory role of courts in the arbitral process. The reverse seems to have been done by the judiciary. By sitting as regular appellate courts over arbitral awards, the judiciary has converted the arbitration mechanism into a new tier in the already existing multi-tiered judicial system. The judicial intervention became so pervasive in arbitration proceedings that the Supreme Court extended the jurisdiction of the Indian courts to arbitrations with seats outside India. Only recently, the Supreme Court overturned the ruling by holding that no application for interim injunction under the Act would be maintainable in India on the basis of an international commercial arbitration with a seat outside India. This provides an innovative way for businesses to circumvent the meandering Indian judiciary. Parties choosing seat of arbitration outside India to avoid the judicial process will deprive the development of institutional arbitration mechanism in the country. The beneficiary will be countries like Singapore, Hong Kong and the UK — and amount to reverse “judicial process outsourcing”.

K D Singh New Delhi

Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number