The government is not playing a "proactive role" in making India an international arbitration hub, senior advocate Arvind Datar has said. Datar, who is also the director of Nani Palkhivala Arbitration Centre (NPAC), said though there are thousands of domestic arbitration cases in India, most public sector undertakings (PSUs) have dropped the arbitration clause.
"Indian government is not as proactive as other countries like Singapore which has a high reputation as an arbitration hub... They (PSUs) still go ad-hoc. Institutional arbitration should be there. It should be fixed as to which centre one should go with an arbitration case," he told PTI during an interaction. Datar said that to make India an international hub of arbitration, "we need a favourable ecosystem where arbitration should finish on time".
"It should start on time and finish on time and ensure that it goes in a disciplined manner. Definitely I feel that the trend is no adjournments. Arbitrator knows he has a time limit. People take it much seriously now because of this time limit," he said. The senior counsel said that future of arbitration in India is bright as the most important thing is time limit of 18 months in which one has to complete a case but arbitration cases are still a minority compared to civil litigations.
"It has been a huge boost. People know that dispute will be resolved in 18 months now, instead of waiting for 3-4 years in courts. Also, there are no court fees," he said. "One of the main factors is historically we have been going to courts as there were mostly property litigations, 'zamindari' litigations, land litigations but very little commercial litigations. Whereas in London, there have been centuries of arbitration history. We have to slowly build this reputation," he said.
Datar said that in many cases, the PSUs have dropped the arbitration clause. "For example in Tamil Nadu and Haryana, in all irrigation contracts and PWDs the arbitration clause has been dropped because arbitrators have to be someone from the government due to which there could be all sorts of malpractice," he said.
"It is counter productive. You can appoint an independent arbitrator. if you have a headache, you don't chop the head," the senior counsel said. Datar further said though there are nearly 300 public sector undertakings, there is no institutional arbitration in India.
He said one of the cons of the Arbitration and Conciliation (Amendment) Bill, 2018 was that one had to be legally trained to be an arbitrator. "One of the reforms needed in the legal ecosystem is to bring in arbitrators from all professions and not just lawyers... This trend of having lawyers as arbitrators is not right. There should be no such regulation. There should be a council which will have the overall power of accreditation.
"Lawyers do courts in day time and arbitration after that. It would be difficult for them to adhere to a time limit. One solution is to have a dedicated set of lawyers who will only be arbitrators," he said. He added that the practice of appointing an independent arbitrator will further encourage the trend of arbitration in the country.
(With inputs from agencies.)