Arbitration in India needs immediate attention due to delays and growing costs.
The decline in arbitration, fuelled by increased costs and slow processes, has received a lot of attention. Lawyers on both sides sometimes prolong arbitration procedures by filing faulty petitions at varying stages. Litigants might also add to the delay by refusing to admit defeat or loss. The Indian legal system lacks early awareness and analysis of the risks and costs of seeking legal action, which is the major cause of its high costs and inefficiencies.
With time, arbitration processes have gotten increasingly complicated. Arbitrators have tried to make the process as simple as possible by limiting the number of pleadings, requiring written arguments, minimizing the number of sittings, and establishing a timeline for key milestones. However, the parties and their attorneys frequently stymie the processes by submitting many unnecessary petitions, interrogatories, discovery requests, and applications for more documents and evidence at the last minute, resulting in never-ending oral and written submissions.
The pandemic hasn't spared arbitration, with most cases being put on hold and claims languishing in the cold storage. The next economic downturn is expected to exacerbate the issue and increase the number of bogus claims. Hudson’s Building and Engineering Contracts reflects on this paradox and remarks that, “Contractors in recessions have both the competent staff available and a compelling motive to re-examine the history of their completed contracts to wring every last drop of additional payment from those contracts' claims procedures and legal ingenuity can provide. Owners and developers may also attempt to minimize or postpone payment by any methods available, however reckless, under the financial strains of the crisis and frequently witnessing decreasing markets for their commercial ventures. This is in addition to opportunistic contract terminations by either party under such circumstances to escape the contract's implications.” As a result of these flaws, the government, the world's largest litigant, is gradually withdrawing from the arbitration arena.
“Arbitration of late is being viewed as a guaranteed path to instant riches and affluence,” it was said in the State of Orissa v. Gangaram Chhapolia. It has turned into a major business.” These terms have made a comeback in the world of arbitration. To get its wheels back on the rails, it will need constraints from all sides. It retains the inherent potential and characteristics to outperform other modes of dispute resolution, with a minimum reform in arbitral fees and timelines, careful drafting of arbitration clauses, strict procedural protection to prevent interruptions, expedited disposition of court proceedings, and legislative intent toward all of this.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.