Best of BS Opinion: Of arbitration, agreements, and artificial intelligence

Our opinion page today makes a strong argument for better management of the arbitration process, as well as the precedent that the Supreme Court's judgement sets

Hello, and welcome to BS Views, our daily wrap of Business Standard's opinion page. Today's pieces cover a gamut of issues, from the detrimental effects of the Supreme Court's verdict in the resolution process for Bhushan Steel, the amoral trappings of the US-Ukraine deal, the potential effects of AI-coding on India's IT industry and the strange reaction of markets to Donald Trump's tariffs. Lastly, our book review examines the migration debate in the US through the early migration of Chinese labour.   Our first editorial states that the Supreme Court's decision last week deeming JSW Steel’s resolution plan for Bhushan Power & Steel (BPSL) illegal could lead to a serious setback to the much-touted bankruptcy process. The court’s order raises critical questions about the effectiveness of the resolution process under the Insolvency and Bankruptcy Code (IBC). The biggest takeaway is that procedures were regularly side-stepped. The order is also a blow to lenders, who will have to return the recovery funds. Therefore, in economic and commercial issues, courts should consider the unintended consequences of their decision. While the court may have followed the letter of the law, the liquidation of BPSL sets an undesirable precedent. Delays in the resolution process were already affecting confidence, and this particular case has further eroded it.

 

The Ukraine-US mineral deal underlines a shift in the latter’s positioning as the superpower guarantor of democracy to a transactional power, notes our second editorial. The deal signals to Russia that the US is invested in a free Ukraine for the long term. But it also suggests that the US is prepared to deal with any country on the basis of hard-nosed reciprocity. The other question is whether it will meaningfully outline a path to ending the war. But the key question this deal raises is ethical. It reduces US’ geopolitical standing and principles to deal-making but fails to address the fundamental cause of the war: Putin’s territorial aspirations and Russia’s occupation of Crimea. Nor does it preclude Ukraine joining the European Union. While the symbolic value of the agreement is what counts for now, it could also open up a new proxy frontier with China.

 

Our first columnist Ajit Balakrishnan wonders what new AI models' so-called 'vibe coding' skills could do to the Indian information technology market which provides employment to over five million programmers? Will the IT industry see a sudden decline, as Indian weavers did when the spinning jenny was invented in England that multiplied productivity multifold and decimated the Indian handloom industry. Or will it find a way out this knotty problem, turning it into an opportunity as it did converted fears around the Y2K bug into a colossal opportunity?

 

Debashis Basu ponders the seemingly contrarian movement of the markets to US President Donald Trump's tariff announcements. Global markets fell in the immediate aftermath of the declaration, but saw a relief rally when tariffs were paused for 90 days, and in some geographies even turned into a full-fledged bull market. Basu says the message from the market seems to be that investors now believe this trade war will end in a last-minute compromise. If right, this could be a rare moment in which retail investors outplayed the professionals. A more cynical view, he points out, is that if investors believe the President is constrained by courts, by Congress, or by his own volatility, then his threats may not matter.

 

In our book review section, Steve Inskeep approaches the issue of immigration through Michael Luo's book 'STRANGERS IN THE LAND: Exclusion, Belonging, and the Epic Story of the Chinese in America', which looks at Chinese migration into the US. Opponents of Chinese migration claimed to be taking a progressive stance for free labour, and ended up transforming American ideas about border security. In early American history there was no class of people called “illegal immigrants,” because there were few laws regarding immigration. That changed specifically for the Chinese. While courts said the government had the right to expel migrants, others argued for free migration. That debate is still going on.