As India aims to streamline its dispute resolution system, former law secretary PK Malhotra shares his views on what needs to change.
PK Malhotra retired as India’s law secretary in April 2016. He is currently an independent legal consultant and arbitrator. He spoke to India Business Law Journal’s Rebecca Abraham about what is needed to bring greater efficiency to the dispute resolution process.
Can India really become a hub for international arbitration?
There is a big question mark on this. I don’t see that arbitrators in India are different to arbitrators in other parts of the world. Our arbitrators are equally competent and equally effective. The only problem is that our arbitrators do this job not on a full-time basis and that gives us a bad name.
Why then does the government chose to appoint arbitrators from other jurisdictions when it is a party to a dispute?
There are multiple factors that come into play for the appointment of an arbitrator … you possibly have to appoint an arbitrator so as to match the person who has been appointed by the opposite side. These are practical aspects, but that does not mean that Indian arbitrators are not competent.
I remember the law minister remarking in a conference that our arbitrators are appointed even in London and Singapore. So it’s not that they are not appointed but their numbers are not large. There are also issues with foreign arbitrators and the statistics show that they have a bias in favour of the developed world as compared with the developing world, which is not a healthy trend.
Ad hoc arbitration continues to be the norm in India. Can we expect this to change?
It is the prerogative of parties to decide between ad hoc and institutional arbitration, as arbitration is a private agreement between parties.
There are issues relating to ad hoc arbitration – delays, high fees – because of which I personally have been a votary of institutional arbitration. In institutional arbitration parties are assured that the rules and regulations of the institution provide for a time frame and cost to resolve the dispute and if the arbitration is not following the rules, the institution will correct the situation.
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PK Malhotra can be contacted at firstname.lastname@example.org