CJI Ramana Calls For Balance In Geography Of International Arbitration Between Developed & Developing Countries

"Moreover, especially for developing countries, it is imperative to create adequate infrastructure to facilitate resolution of disputes. It is of utmost importance that our dispute resolution facilities must match our investment inflows."

He recommended that a balance can be struck by establishing modern Institutional Arbitration Centres. The pre-established rules and framework of such institutions, he believed, provides certainty and transparency that the parties are looking for in a dispute resolution mechanism. Moreover, the panelists and arbitrators coming from all over the world, adds to the diversity in experience and facilitates effective knowledge sharing. CJI, Ramana suggested that Institutional Arbitration Centres functioning across the globe should join hands to form a Council or Confederation to provide a level playing field in arbitration world over.

Today, if we see the geography of International Arbitration, it is mostly concentrated around the business centres of the developed world: Singapore, London, Paris or Stockholm. This is despite the fact that most disputes are generated in the developing world. Due to a severe lack of resources and infrastructure, even parties from developing countries choose to resolve their disputes in these established resolution centres at severe cost to them. THE GEOGRAPHY OF INTERNATIONAL ARBITRATION NEEDS TO BE BALANCED.

The participants were apprised that in an attempt to augment the arbitration experience, the Indian International Arbitration and Mediation Centre has now been set up in Hyderabad under the aegis of the CJI. Appreciating the initiative taken by Indo-German Chamber of Commerce (IGCC) is setting up an Arbitration Centre, he noted -

"The Indo-German Chamber of Commerce (IGCC), with its extensive training and skill development programs, is enabling the Indian workforce with necessary guidance to integrate with the German business world. It is a strong guiding force for German businesses to understand and delve into the Indian market. The IGCC is moving in the right direction by having set up an Arbitration Centre with its own set of rules, and a Claim Case Procedure for mediation. These need to be further strengthened and popularised. Additionally, I would welcome setting up of more and more International Arbitration Centres."

CJI Ramana acknowledged that investment is co-related to the dispute resolution mechanism of the destination country. Investors look forward to investing in a country, which apart from being socially and economically stable, has a legal system which is effective in resolving disputes.

There are several reasons, he pointed out, for encouraging international arbitration. The first and the foremost being the party autonomy. The parties to arbitration can not only choose the procedure of laws governing the transaction; place, but also the arbitrator, which instills a sense of neutrality in the process. Unlike traditional litigation mechanisms, arbitration contemplates uniformity of law. Other benefits are flexibility of procedure, lower cost, increased enforceability, confidentiality and the benefit of having domain experts.

He stated that India has come a long way with the Indian Courts actively encouraging all forms of alternative dispute resolution mechanisms.

"…Let me assure you, Indian Courts are known for their pro-arbitration stance. Courts in India assist and support arbitration and leave the substantive part of adjudication to the Arbitral Tribunal itself."

In strengthening the arbitration mechanism, the contribution of the Indian judiciary, which, he noted, is known for eternally guarding the constitutional rights of the world's largest democracy; is immense. CJI Ramana was of the view that the Indian Courts had increased the importance of International arbitration by broadening the ambit of arbitrable disputes -

"Indian Courts have, over time, allowed broader scope for arbitrability of disputes. This attitude of Indian Courts has further increased the importance of International Arbitration, particularly when it comes to countries like India and Germany. Technology transfer agreements, licensing rights, royalty rights and other such IPR related agreements are often subjects of arbitration agreements between corporates. To give impetus to arbitration as well as innovation, Indian Courts have allowed such disputes to be arbitrable."

In the Indo-German context, he noted, that in order to encourage trade by integrating medium size German companies into the Indian market and vice versa, both the countries have entered into a bilateral understanding to set up a Fast-Track Mechanism. This mechanism helps with the resolution of regulatory issues.