Our Bench vs Their Bench

Amidst the hype about the 8216;feel good8217; economy, international businesses may still be feeling a little bad about certain aspects of...

Amidst the hype about the 8216;feel good8217; economy, international businesses may still be feeling a little bad about certain aspects of the Indian business environment. Although foreign firms are evidently more willing than before to do business here, yet foreigners continue to be wary of submitting themselves to the notoriously slow Indian justice system. To tackle this particular problem, the Law Commission has come up with systemic reforms to cut down the time taken to dispose of high value commercial disputes.

In its latest report submitted last month, the commission headed by former Supreme Court judge M Jagannadha Rao proposed that a 8216;8216;Commercial Division8217;8217; be set up in each High Court to deal exclusively with contract, letter of credit, bank guarantee and other such business cases worth at least Rs 5 crore.

Designed to reduce litigation time to no more than one to two years, the proposed division consists of a two-judge bench specially empowered with a fast-track procedure and equipped with high-tech features such as video conferencing and on-line filing comparable to 8216;e-courts8217; in Singapore and New York.

The provocation for all these recommendations is The Sunday Express report on September 14, 2003 on the New York Supreme Court8217;s decision to exercise jurisdiction over a dispute between ICICI Bank and a little-known Japanese company because of a controversial opinion given under oath by former Chief Justice of India B N Kirpal.

The New York court verdict, which went against ICICI Bank, quoted Kirpal saying at the instance of the Japanese company that India was not 8216;8216;a convenient forum8217;8217; for commercial disputes and that 8216;8216;if the action were pursued in India it would take between 15 and 20 years to be resolved.8217;8217;

Citing the ICICI Bank case, the Law Commission8217;s report stresses the need to 8216;8216;negate8217;8217; the growing trend of judgments from US and UK courts generalising that all cases take over 20 years for disposal in India.

The report also deplores the 8216;8216;equally broad generalisations8217;8217; made by Indian experts such as Kirpal about the protracted nature of litigation in India.

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This rather unfair stereotyping of India began in 1995 when Marc Galanter, an American expert on the Indian judiciary, and Shardul Shroff, an Indian lawyer and son-in-law of former Chief Justice P N Bhagwati, gave affidavits in a business case before a US court saying that 8216;8216;the Indian court system was in a state of virtual collapse.8217;8217;

Significantly, Shroff sought to bolster his affidavit by quoting his illustrious father-in-law. If Bhagwati himself did not file an affidavit then, it was probably because it was still unthinkable that a former Chief Justice would run down the Indian judiciary for a fee. Kirpal seemed to have crossed the psychological barrier last year when he himself swore the affidavit in the ICICI Bank case to help the Japanese company escaped the jurisdiction of Indian courts.

The Law Ministry is reportedly keen on tabling this report in Parliament this session.

In this age of globalisation, it is wise to bear in mind the manner in which US and UK courts have often been less than fair to aliens. The Law Commission report brings out studies by jurists to show that foreign courts betray bias on the question of 8216;forum non conveniens8217; as their positions seem to be determined by who is the plaintiff.

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In the Bhopal gas case, for instance, where the Indian Government was the plaintiff, the US court sent the case back to India saying its courts were perfectly capable of dealing with it. But in cases where the plaintiff is a foreign company, there is a clear pattern of foreign courts holding that their Indian counterparts are not a convenient forum.