Public sector undertakings must learn to accept arbitration awards and not carry the battle to courts for the sake of completing the formality of filing an appeal, Supreme Court justice Sanjay Kishan Kaul said on Sunday, as he urged the law minister Kiren Rijiju to do something about it.
Justice Kaul was speaking at the concluding session of the Delhi Arbitration Weekend held by the Delhi high court. Airing his views on the Arbitration Vision 2030, justice Kaul envisioned artificial intelligence to play a greater role in future arbitrations, but warned that such tools must be used carefully with consent of all parties and with appropriate protocols in place.
Rijiju in his speech said that without the judiciary’s support, ease of doing business and ease of living will remain a dream. Rijiju shared World Bank data suggesting enforcement of contract is slow in India as it takes an average of 1,145 days (about three years) to resolve a dispute and nearly 38% of the claim value is spent during this process. “These are some of the realities which we have to be mindful of,” the law minister said.
The need to create a robust arbitration will have to have the backing of the government, judiciary and all stakeholders, Rijiju said, emphasizing that nothing stops India from seizing the opportunity of becoming a hub for international arbitration.
“I often say that the parties (to an arbitration process) must learn to accept the (arbitration) award,” justice Kaul said. “The public sector more so requires this. There is no point in carrying the battle through the second and third tier of scrutiny just to complete the formality.”
He referred to a 2020 judgment in the Vijay Karia case, where the top court held that courts must be slow in interfering with judgments enforcing a foreign award. Future award debtors should desist from adopting litigation strategies that may end up making the arbitration process counterproductive, the judge remarked.
Technology was another point of discussion that came up in the speeches of both the judge and the law minister. Justice Kaul noted the rise of ChatGPT, a chatbot that responds to any query in an easy, conversational manner.
“AI tools must be used very carefully as they come with risks associated with due process rights and public policy violations,” justice Kaul said. “It goes without saying that such tools must only be used with parties’ consent and appropriate protocols in place.”
Even on virtual hearings, justice Kaul said that gradually physical hearings will be an exception, but virtual hearings are not foolproof. He flagged certain issues with regard to holding virtual hearings over the objections of one party, concerns about inadequate access to technology, logistical and scheduling issues relating to time zone differences, and the risk of influencing witnesses during their testimony. “Such issues could lead to challenges to arbitral awards and should be carefully decided,” the judge remarked.
Rijiju said the recent proposal in the budget to allocate ₹7000 crore for the third phase of E-courts project clearly lays down the government’s target to ensure all courts in India go paperless. In this, he said the judiciary and government are “in sync” with each other as the proposal was forwarded by the E- committee of the Supreme Court headed by Chief Justice of India Dhananjaya Y Chandrachud that got the government’s nod.
While Phase I and II of the E-courts project faced some shortcomings, Phase III will be “superfast”, Rijiju said.
The Delhi Arbitration Weekend began on Friday and was inaugurated by chief justice Chandrachud. It saw participation of 450 delegates from 14 countries. Justice Kaul hoped that with arbitration expected to go virtual, it will tap diverse arbitrators and promote underrepresented groups such as women by the international arbitration community.