"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Wednesday, May 4, 2011

Expert Arbitrators in India?

An article in the recent issue of Arbitration Law Reporter titled "Qualification of Arbitratiors with regard to their Appointment in Engineering Contracts" 2011(2) Arb LR 1 (J), (penned by KK Singal & VK Tyagi -both are engineers but the latter is an engineer as well as a lawyer), argues that people well-versed in engineering are better equipped to be arbitrators in disputes pertaining to engineering, construction and other contracts which are technical in nature. They draw an analogy to the appoint of lecturers in colleges. According to the authors, appointing non-technical people as arbitrators in technically intensive contractual disputes is akin to asking a layman to lecture on an engineering subject. The authors, after a textual analysis of the provisions of the Indian Contract Act, 1872 and the Arbitration and Conciliation Act, 1996 argue that "only technically qualified persons with adequate relevant experience would qualify for appointment as arbitrators in construction contracts."

A few points on the article:
  1. The authors are correct in arguing that there are issues in construction contracts (for that matter in any technically intensive contract) that are better decided by engineers than laymen (i.e., Ex-Judges and advocates). The authors aptly provide five illustrations of such issues. As an In-house lawyer. this blawgger has been in several unenviable situations acting as a link between the technical man and the legal man, translating technical language into legal language and vice-versa. A tougher situation is when at stage of arguments, one of the arbitrators, an ex-judge of the apex court, asks the counsel as to the meaning to a term which is a basic concept in the agreement from which disputes arose. It is extremely difficult to make such arbitrators understand the technical intricacies. Hence, the authors are right in stating that Engineer arbitrators would be better placed to decide such issues
  2. The authors are also correct in conceding that in arbitrations complex legal issues might arise. They argue that such legal issues are, nevertheless, matters of common sense and technocrats with experience as arbitrators would have no problems dealing with such issues.
  3. However, the authors err in trying to place an obligation on the courts to appoint technical arbitrators from the text of the statute. The nearest provision that comes to casting such an obligation on the appointing judge is under Section 11(8), which reads:
    "The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to-
    (a) any qualifications required of the arbitrator by the agreement of the parties and
    (b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator."
  4. Here, the provision casts an obligation on the Chief Justice or his designate to "have due regard to" the qualifications of the arbitrator required by the arbitration agreement. There is no independent duty on the arbitrator in the absence of an arbitration agreement. 
  5. Nevertheless, it is good practice for the High Courts and the Supreme Court to have due regard to the nature of issues while appointing arbitrators. 
The manner of selecting an arbitrator by a High Court, or for that matter the Supreme Court, under Section 11 does not seem very transparent. The manner of selecting a person to be an arbitrator is also not open. Further, the roster of arbitrators with the relevant High Court needs to be publicised. The courts must have even technical men in their roster and refer technically-intensive disputes to such expert arbitrators than to ex-judges. It would seem that the courts are only keen in giving business to their retired brother/ sister judges!

[Also see, Rajiv Sinha, Specialist Arbitrator- A Call for Future, 2006(4) Arb LR 6 (J)]

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