Rajshri Rai (RR): What is the potential impact of the Indian government’s proposed amendments to the Arbitration and Conciliation Act, particularly the redefinition of “court” and the provisions for a more streamlined, time-bound process, on India’s goal of becoming a major international arbitration hub?
Justice Hemant Gupta (JHG): The goal is to make India a hub for international arbitration, similar to Singapore. The proposed Arbitration and Conciliation Amendment Bill, 2024, aims to reduce the tiers of disputes, which currently include objections under Section 34, appeal to the High Court, and further appeal in the Supreme Court. However, constitutional provisions limit the government’s ability to contain the powers of the High Court and Supreme Court. One potential solution is the creation of an Arbitral Appeal Tribunal, which would have its own mechanism for appeals and objections, parallel to Section 34. This could save time and reduce the burden on courts. The Tribunal could consist of a single member or a panel of three to five members, including former Supreme Court judges and subject experts.
The creation of such a Tribunal could be a meaningful step towards making India a hub for international arbitration. By providing a more efficient and effective dispute resolution mechanism, India can attract more international arbitration cases and establish itself as a reliable and trustworthy jurisdiction.
RR: The issue of copy-paste in arbitration awards has raised concerns about the seriousness of arbitration mediation. The Singapore Court of Appeal’s decision to set aside an arbitral award by a tribunal led by former CJI Dipak Misra due to “copy-pasting” has brought the practice of verbatim reproduction in awards to the forefront. What measures should be adopted by arbitral institutions and the judiciary in India to ensure the originality, independence, and intellectual integrity of arbitral awards?
JHG: A Singapore tribunal recently criticized an Indian arbitrator’s award for being a copy-paste, which is embarrassing for India. While technology can contribute to such mistakes, it is essential to take arbitral work seriously.
But making such an issue out of this seems unnecessary. It is crucial to address the underlying problems. Just like how our media tends to overreach, we need to focus on the real issues. It seems that Singapore’s approach to arbitration is driven by its branding strategy, reflecting a mindset that implies they are superior in its functioning. If that is the case, India needs to find a way to counter this perception. If we want to attract top arbitrators from around the world, we should consider expanding into new areas and improving our arbitration infrastructure. I would like to add that this was a significant issue that needs to be addressed. In contrast, institutions like the International Court of Commercial (ICC) in Paris are meticulous about their awards, reviewing and correcting them carefully.
The Singapore court’s criticism of Indian arbitrators may be part of a larger effort to promote Singapore’s arbitration system. The mistake made by the Indian arbitrator in a dedicated freight corridor dispute highlights the need for attention to detail and proper procedures in arbitration. Rather than overreacting to such mistakes, it is essential to learn from them and improve the arbitration process. By doing so, India can establish itself as a reliable and trustworthy jurisdiction for arbitration.
RR: In the backdrop of disqualification of Vinesh Phogat, it would be interesting to know how burgeoning field of sports arbitration in India is evolving. What are the key jurisdictional and procedural challenges that a specialized tribunal like the Court of Arbitration for Sport (CAS) would face when hearing disputes arising from Indian sports bodies?
JHG: To attract international arbitrators and establish India as a hub for arbitration, we need to open up new areas and genres. India has the talent and expertise to handle various disputes, including sports and other specialized fields. The key is to tap into this expertise and develop a mindset that favours arbitration over litigation. By doing so, India can become a go-to destination for arbitration and mediation in new and emerging fields. With the right approach, India can leverage its vast pool of experts and infrastructure to provide effective dispute resolution services.
The challenge lies in shifting our mindset from litigation to arbitration and mediation. By believing in our people and our institutions, we can unlock India’s potential as a hub for international arbitration.
RR: How are Indian arbitral institutions and practitioners preparing for the ethical and procedural challenges posed by the increasing use of Artificial Intelligence (AI) in international arbitration, particularly in areas like document review, predictive analysis, and even decision-making support?
JHG: Honestly, I don’t consider myself an expert in AI, but I believe AI is a valuable source of information. It collates data from various sources on the internet and provides it to us. This can be useful for research purposes, saving time and effort. However, the challenge lies in how to effectively utilize AI. Is it limited to research, or can it be used for other purposes? I recall a professor who used AI to prepare speeches, but the content was below average. This highlights the importance of human touch and creativity. Humans are indeed supercomputers when it comes to nuanced thinking and original ideas.
RR: How effective is the current framework for emergency arbitration in India, and what measures are needed to ensure that emergency awards are expeditiously recognized and enforced by Indian courts, particularly in time-sensitive commercial disputes?
JHG: Emergency arbitration is a process that provides urgent relief in disputes. It is a simple yet effective way to resolve disputes quickly, especially in situations where time is of the essence. In emergency arbitration, an arbitrator is appointed to make a swift decision, often within a short timeframe. This process can be particularly useful in avoiding court intervention and ensuring that disputes are resolved efficiently. The provision in the civil court to do something immediately is provided in Order 39, Rule 1 and 2, CPC. Arbitrators did not have such a provision. We have made a provision for emergency arbitration in our regulations. It says that if anyone requests emergency arbitration, within two days, the arbitrator will be appointed. The most typical case of emergency arbitration was of Amazon and Future dispute, in which the emergency arbitrator gave the award and the Supreme Court upheld the emergency award. The proposed draft bill also has a provision for emergency arbitration. Many institutions have adopted emergency arbitration, which aims to avoid civil court intervention. By providing urgent relief, emergency arbitration can be a powerful tool in resolving disputes efficiently. It is designed to mirror the swift relief available under Order 39, Rule 1 and 2 of the Civil Procedure Code (CPC), but through arbitration.
RR: When it comes to data, isn’t it crucial to maintain the confidentiality of high-value cases, and therefore, ensure robust data protection? Is India adequately equipped to handle confidentiality in arbitration, particularly in terms of maintaining confidentiality and preventing data leaks? Do our arbitration centres have the necessary infrastructure and systems in place to ensure secure and efficient dispute resolution?
JHG: The lack of a unified database makes it difficult to track arbitration cases and awards. Data protection is also essential, especially for high-value cases that require confidentiality. If I recall correctly, in 2019 amendment mandated that arbitral awards be kept confidential, except when the matter is taken to court. I was once approached by a publishing house that proposed redacting and publishing an award with the parties’ names and identifiable information blackened. However, we declined because even redacted awards can still contain traceable information. Publishing without the parties’ consent isn’t feasible. The benefit of confidentiality is that the award remains opaque to the public. Unlike court proceedings, arbitration takes place in a closed-door environment, accessible only to the parties involved. While transparency might be achieved through redacted awards, confidentiality is a key aspect of arbitration.
RR: How can a dedicated and specialized arbitration bar be fostered in India to raise the standards of advocacy, ensure a deeper understanding of arbitral jurisprudence, and improve the quality of both the proceedings and the awards?
JHG: The concept of an arbitration bar arises from the need for dedicated professionals who specialize in arbitration. The main issue with the current set up is that many lawyers who practice arbitration also have court commitments. They often prioritize their court cases, which can lead to scheduling conflicts and delays in arbitration proceedings. To address this, there was a proposal to establish a separate arbitration bar comprising lawyers who specialize exclusively in arbitration. This would ensure that arbitrators and parties involved in arbitration proceedings have access to dedicated professionals who can efficiently manage their cases without conflicts. In my experience, I have proposed the idea of an arbitration bar, and it has been supported by legal professionals, including the Attorney General. While any lawyer can technically do arbitration work, having a specialized bar would enhance the efficiency and effectiveness of the arbitration process.
RR: Should we consider establishing an Arbitration Council of India, similar to the Bar Council of India, to oversee and regulate arbitration practices? There was a discussion about recognizing and registering arbitrators as members of this Council. Are we moving forward with this concept?
JHG: The idea of an Arbitration Council of India was proposed based on the Justice Srikrishna report in 2016 or 2017, which led to amendments in the Arbitration and Conciliation Act. Specifically, Chapter VIA was introduced, starting from Section 43A, mandating the constitution of the Arbitration Council of India. Unfortunately, despite the amendment being made in 2019, the Council has not been established yet. The Council was intended to serve as a regulatory authority for arbitrators, maintaining records, and ensuring standards similar to how University Grants Commission grade institutions. It would also have provided crucial data on arbitration cases, including the number of arbitrations and challenges to awards. Currently, India lacks a unified database to track these metrics effectively. The absence of the Arbitration Council of India is a significant gap, and it is hoped that it will be constituted soon.