Ease of doing business: PM Narendra Modi, CJI push for arbitration to settle rows

The government and the highest judiciary were at the same page to unburden courts of commercial disputes and hand these over to professionally trained arbitrators.

Written by Utkarsh Anand | New Delhi | Updated: October 24, 2016 6:20 am
Narendra Modi, cji, india business, judiciary, india judiciary, Chief Justice of India, T S Thakur, commercial disputes, business commercial disputes, india news, indian express Modi, CJI Thakur in New Delhi on Sunday. (Source: Express photo by Prem Nath Pandey)

Concerns over ease of doing business in India, Sunday brought the government and the judiciary together as Prime Minister Narendra Modi and Chief Justice of India T S Thakur appealed in unison to promote arbitration instead of regular court proceedings for resolving commercial disputes. Even as they struggle to find a meeting ground on the new mechanism to appoint judges, the government and the highest judiciary were at the same page to unburden courts of commercial disputes and hand these over to professionally trained arbitrators, who could decide in a time-bound and cost-effective manner.


While Modi exhorted that “availability of quality arbitration mechanisms is an integral component of ease of doing business,” Justice Thakur cited the “ever increasing avalanche of cases” to push this alternative method of resolving commercial disputes.They were addressing a global conference on ‘National Initiative Towards Strengthening Arbitration and Enforcement in India’, organised by NITI Aayog. The three-day conference was attended by chief justices and judges of foreign courts, apart from various Supreme Court judges, including Justices Anil R Dave, J S Khehar, A K Sikri, S A Bobde and Uday U Lalit.

Seeking that India emerge as a global hub for arbitration, the PM pointed out that businesses seek assurances that commercial disputes would be resolved efficiently. Hence, a robust legal framework backed by a vibrant arbitration culture is essential, he said. This alternative dispute resolution should simultaneously facilitate arbitration, mediation and conciliation, Modi said. “This will provide additional comfort to investors and businesses. More importantly, it will also ease the case load on Indian courts. An enabling alternative dispute resolution ecosystem is a national priority for India. We need to promote India globally as an arbitration hub,” he said.

Calling independence of the judiciary a basic feature of the Indian Constitution, the PM added that common citizens as well as businesses repose immense faith in the integrity of the judicial process. CJI Thakur rued that 18,000 judges have to hear five crore cases every year. “Out of the 50 million cases, 20 million are disposed of every year but this ever increasing avalanche of cases filed in courts is putting the judicial system under stress. So we have to look at some alternative to the conventional method of dispute resolution systems,” said Justice Thakur.

He regretted that India ranked 130 among 189 countries on ease of doing business despite the push for ‘Make in India’ and increase in foreign reserves. “The need to strengthen the judicial system is intrinsically and deeply connected with our zeal to attract foreign direct investment,” asserted the CJI.

Emphasising the need to have credible institutions to offer arbitration, he said that not only former judges but also domain experts should be engaged. The CJI acknowledged that criticism of courts for regular interference in arbitration awards was “not misplaced”, underlining that former judges may also falter as arbitrators. “There is a need to sensitise courts for deference to arbitration awards. We need to not only train judges but re-look at the statutory provisions.”

Union Law Minister Ravi Shankar Prasad highlighted various initiatives undertaken by the NDA government to facilitate business in India and said that not only ‘Make in India’, it is also time for ‘Resolve in India’ through efficient arbitration mechanism. Speaking at the event, Attorney General Mukul Rohatgi tackled the criticism of the legal fraternity over fixing a time limit of one year for deciding disputes through arbitration. He cited a 2014 judgment of the apex court making it mandatory for trial courts to finish within a year proceedings involving politicians as accused.

“If criminal cases can be decided within one year, it is not too short a period for arbitration proceedings to wrap up. Arbitration cannot become replica of ordinary courts and they must be decided expeditiously,” said the AG.

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  1. L
    Oct 23, 2016 at 5:06 pm
    1. M
      Oct 24, 2016 at 3:36 am
      What is the problem setting up tribunals for specific types of cases? Why can't the law society or people in the profession come up with ideas to reduce the pressure?
      1. A
        Ashok Bajaj
        Oct 24, 2016 at 4:35 pm
        Sir, Under the NH Act 1956, the Arbitrators are appointed by the Govt by the MOH for settling the cases of the farmers/ land owners on account of acquisition and compensation and other irregularities. Time limitation has been fixed as per the Arbitration ( Amendment Act) 2015 but farmers are not aware of whether it is applicable or not to the Arbitrators appointed under the NH Act 1956 . Thousand of cases are pending for more than one year , even in majority of the cases , there is not even a single hearing started for completion and farmers are waiting the start of hearing and decisions in their life time . It should be clarified/advised for next appeal in the court of law which are already burdened with heavy pendency in the absence of decision from the Arbitrator to get justice. Kind attention of the Law Ministry on the subject is solicited as the present government is the Pro-farmers so also claimed by the opposition.
        1. D
          Oct 24, 2016 at 1:25 am
          Syncrony between Judiciary and political Executive is need of the hour for fast Development of India.We really need to match and overtake China in Economic clout , then only We can resolve our Boarder Dispute with China and solve sthan-sponsored Anti-India activities. lt;br/gt;Happy to see the image of PM and CJI and hope this will continue for the sake of country.
          1. G
            Oct 24, 2016 at 3:19 am
            For this they will need to address the widespread corruption in courts. Dockets are manited, the judges don't show up and there is collusion between advocates. Add to this lack of competence, inconsistent judgments and repeated delays. The net result is that contracts have no sancy and borrowers don't feel they have to payback. This makes for an impossible business environment.
            1. G
              Oct 24, 2016 at 3:20 am
              The judiciary is not there for anybody - local and foreign. Corruption and incompetence are the primary reason for delays.
              1. K
                Oct 24, 2016 at 5:19 am
                It is the government litigation which is biggest hitch is doing business. Govt. should review why it fails in nine out of ten cases before tribunal and higher judiciary and why investors are jittery in investing in India. Make In India will remain a paper tiger unless the difficulties faced by business community are addressed
                1. L
                  L bhadrapati Devi
                  Oct 24, 2016 at 2:17 am
                  Ease of doing business is the need of the hour to give an edge over the other competing countries. So, any form of business dispute can be resolved through arbitration of competent authority.
                  1. N
                    Oct 24, 2016 at 3:22 am
                    It's all very fine to talk big about arbitration and settling disputes quickly. Can Mr Modi be the first to set an example by accepting our mistakes in the S-Band Devas affair and accepting the arbitrator's award of a USD 1 BN fine on India , plus a further possible huge payment to Deutsche Telekom ?lt;br/gt;lt;br/gt;We hear that India is planning to delay the award by going back to the judiciary . Can the Judiciary walk the talk by stating that an arbitrator's award is FINAL and they will not further adjudicate ?
                    1. P
                      Parth Garg
                      Oct 24, 2016 at 10:05 am
                      Arbitration perhaps comes much after the business is settled. What is necessary is to make the theory of ease of business a reality. For example a person decides to establish a Ayurvedic medicine unit. He is first hared by the FDA for the product name. If this hurdle is crossed, the Trade Mark authorities refuse to approve the product name oka by the FDA. In such cases it is the brokers that have a field day.
                      1. P
                        Pmg Pillai
                        Oct 24, 2016 at 12:12 am
                        Arbitration is a provess toresolve issues with out hudicialprcess but with goof wiland under stndng beteente oncrned This may e lp many insoluble probkems dated monday Octbr 24th 2016 time 0540hrs ist
                        1. P
                          PRAVIN S
                          Oct 24, 2016 at 3:58 am
                          then y courts and middle man r required - arbitration can be done by both parties at home also without giving commis sion to age nts of de ath
                          1. R
                            Ramesh Chhabra
                            Oct 24, 2016 at 10:17 am
                            In tribunal court cases approx. 10% cases are filed to review the judgments, 20% cases are for contempt proceedings. Means, contempt cases are filed due to no acceptance of judgments by the concerned authorities. Later on all these cases along with other cases are filed as 'appeal' before the higher courts.
                            1. V
                              v b
                              Oct 24, 2016 at 7:04 am
                              Whether in Arbitration or through normal courts, the only way of speeding up disposal of proceedings is to disallow adjournments except on very weighty grounds, whether at the request of the Counsels concerned or at the initiative of the presiding Judges and strict observance of time-limit for the various stages of the proceedings.
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