Courts should find ways to handle arbitration cases fast: Prez

Calling for institutional reforms to strengthen arbitration framework in India, President Pranab Mukherjee today said courts need to devise a mechanism to handle such matters separately and avoid delays arising from judicial intervention.

"Judges have the delicate task of maintaining the balance between interference and over-interference. Indian Courts need to devise an administrative mechanism to ensure that arbitration matters are handled separately and efficiently so as to avoid any delay arising out of the judicial intervention," he said.

Addressing conference on 'Strengthening Arbitration and Enforcement in India', he said State intervention in a market economy should be limited to a situation of market failure and private commercial disputes do not fall under that category.
 

The government must create an enabling framework for institutional arbitrations in India, Mukherjee said.

Stating that India has the basic physical infrastructure to support international arbitration, he said, India needs "basic institutional reform to strengthen arbitration framework."

"Goods laws themselves cannot substitute the need for good institutions," he said, adding arbitral institutions, judiciary and the government are critical for strengthening arbitration structure in India.

While arbitration is an alternative to the judiciary, it cannot function without support from judiciary either, Mukherjee said

Mukherjee said arbitral institutions help to facilitate the core advantage of arbitration but unlike advanced economies, institutional arbitration is still not widespread in India.

"Adhoc arbitration is the norm," he said. "Although, arbitral institutions have come up, there is huge untapped potential for growth of institutional arbitration in India for which both domestic and international arbitral institutions have to play a proactive role in getting this market."

Emphasising that state intervention in a market economy should be limited to a situation of market failure, he defined such a scenario as where the market left to itself cannot work out a solution.

"Private commercial disputes are not market failures by themselves. They can be resolved by the private parties on their own and business will continue.