Dispute Resolution in India in a Post-Covid19 World: Drastic Times call for Drastic Measures

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These are scary times. Drastic measures are called for in drastic times. If anything short of such measures are taken, economies will collapse. India is no exception. Legal services should not stand as a hurdle but should facilitate and innovate. 

This post, based on a presentation given a few days back, puts forth a vision for dispute resolution in the Indian economy hit by the Covid19 crisis. The presentation can be accessed from here. The presentation was for a specific industry but is applicable to all other commercial activities, be it construction, infrastructure, services, sale or other commercial activities. 

How to deal with Contracts Post-Covid19?

• Amicably sort out issues with the objective of completing projects ASAP
• Provide for Amicable Dispute Resolution Solutions to make contracts viable
• To bring to an end contracts made unviable post-Covid19

Accelerated Dispute Resolution Processes in a Covid19 World

• Speedy, Inexpensive and Effective dispute resolution
• Fixed time ~ 3 months & Fixed costs ~5- 6 lakhs
• Completely Virtual
• Construction Dispute Specific
• Neutral
• Interim Measures: Extension of BGs & Preservation- Completion of Project should be the objective
• Three modes: Accelerated Conciliation, Mediation & Arbitration
• Checklists/ Formats for use in Dispute resolution to be fixed

Accelerated Conciliation

• A finance, technical and a legal expert in each Panel
• Fixed fee of Rs 5- 6 lakhs for the entire panel
• Virtual & Time limit of three months
• No external counsels
• Specific disputes to be agreed between the parties and referred
• Common statement of facts and points of disagreement
• Proceedings to be confidential except as to costs
• In case of rejection of Settlement Proposal, costs of conciliation & subsequent legal proceedings to be on Indemnity basis, if unsuccessful.

Accelerated Mediation

• Professional Mediator well-versed in Construction Disputes
• Virtual & Time limit of three months
• No external counsels
• Specific disputes to be agreed between the parties and referred
• Common statement of facts and points of disagreement
• Proceedings to be confidential except as to costs
• For party rejecting the last settlement offer, costs of mediation & subsequent legal proceedings to be on Indemnity basis, if unsuccessful.

Accelerated Arbitration

• Fixed Costs: Not more than Rs. 5- 6 lakhs net for each dispute
• A finance, technical and a legal expert in each Tribunal
• Time limit of three months
• Documents only/ Expedited (S. 29B ACA 1996)
• Specific disputes to be agreed between the parties and referred
• Common statement of facts and points of disagreement reg. facts/ law
• Power to decide on the basis of commercial sense, equity, etc.
• Strict implementation of Loser Pays principle for Costs

Movement Away from Fee based on Claims to Fee based on Workload

• Fee based on quantum of claims is not a scientific way of compensating the tribunal
• Fee based on work load is more scientific
• Many measures could be worked out but the number of pages criterion seems to be the best starting point.
• Need to fix a base fee: 
• Rs. 1 lakh per 5,000 pages to be read; Rs. 2 lakhs for 10,000 pages and so on.

[In putting forth these ideas, this blawgger makes no claim of originality. The suggestions here are based on developments around the world, including the CIArb-CEDR pandemic dispute resolution services and the BIICL's "breathing space" concept notes.]