Fali S Nariman, Ten Steps to Salvage Arbitration in India: The First LCIA-India Arbitration Lecture, Volume 27, Issue 2, Arbitration International (2011)
It’s a joy to read the writings of Fali S Nariman (Nariman) on arbitration. His articles contain several never- -appeared-before information apart from insightful analysis and critique. In the First LCIA-India Arbitration Lecture, published in Arbitration International, Nariman’s complaint is that “we have not yet achieved what we initially set out to do when we enacted the Arbitration and Conciliation Act, 1996, which was to establish an efficient, competent and credible system of international commercial arbitration.” To remedy this situation and “salvage” Indian arbitration from the current mess it is in, Nariman suggests ten remedial measures, which are as follows:
- Parties must develop the spirit of arbitration and should learn to honour an arbitral award.
- Supreme Court should be the exclusive forum for enforcing foreign awards in India
- Parties should try to resolve their disputes by mediation
- To discourage frivolous petitions in India, the costs must not be ordinary costs but must be fixed on the basis of indemnity.
- Establishment of an Arbitration bar
- Necessity of good arbitrators.
- Amendments suggested in the Arbitration Amendment Bill, 2003 regarding less strict scrutiny of international commercial arbitration awards and other suggestions should be re-introduced.
- Bhatia International, Saw Pipes and Venture Global must be reversed.
- Foreign parties must expressly exclude Part I
- A new law of arbitration or the amendment of the existing one must incorporate principles like the one contained in the French arbitration law (2010) characterizing the role of the courts as one supporting the arbitral process (juge d’appui)
The measures suggested by Nariman are broad and are meritorious as they do not only address the Legislature but also the other stakeholders such as the parties, courts etc. However, there is nothing phenomenally new in these recommendations. Several of these were already covered in Nariman's article in the George Washington International Law Review.
The suggestion that foreign parties should exclude Part I in its entirety may not be fully correct. If parties exclude Part I completely, there are chances they might not get any interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. Therefore, it might be better to expressly exclude Part I, except for Section 9 and 27. This has been recognized even in Bhatia International (“It must immediately be clarified that the arbitration not having taken place in India, all or some of the provisions of Part I may also get excluded by an express or implied agreement of parties.”).
Nariman's anecdote about Lord Denning’s speech habit was great and we quote it here:
“A great judge, Lord Denning, always began a pre-prandial speech with the reflection that a convivial evening fulfilled three distinct pleasures: first, the pleasure of eating with nice people; next, the pleasure of drinking with nice people; and third, the pleasure of sleeping with-complete peace of mind!”