Legal Workshop Series: Arbitration in India and Landmark Court Judgments

 

Mr. S.Ganesh, Senior Advocate, made the discussion informative and interesting by delving into the landmark SC judgments on arbitration in India. 

 

The learned Senior Advocate began by stating, “In India, you’ve to first litigate, then arbitrate and litigate again. First, there is the Arbitration agreement and parties to the agreement should have agreed to the arbitration clause in the event of a dispute. Section 7 includes not merely a document but it even includes letters, emails and anything that provides a record of the agreement. Section 16 gives arbitrators the power to decide jurisdiction.”

 

The learned Senior Advocate, S.Ganesh cited landmark rulings by the Supreme Court in the following famous cases:

 

In this case, a five judge SC Bench held that the function and power exercised by the Chief Justice as per section 11 of the Arbitration Act is purely administrative. 

 

In this case, a 7 judge SC Bench overruled the above mentioned decision and stated that a court order under section 11 is a judicial order as the Chief Justice has to decide jurisdiction, whether an arbitration agreement exists as defined in the Act and whether the party making the application is party to such an agreement. 

 

The Supreme Court held that the existence of an arbitration agreement has to be understood from the intention of the parties to the agreement to resolve disputes in consonance with the Arbitration Act. Thus, the main issue before the Supreme Court was to determine whether a valid arbitration agreement was entered into between the parties. In this case, the Supreme Court referred the matter to be decided before the Singapore International Arbitration Centre (SIAC). 

 

The 2 judge SC Bench delved into classes of cases such as issues that would have to be decided by the court whether the person is a party to the agreement, whether settlement is vitiated by fraud and it has to be decided by a judge and issues that should not be decided on at all. 

 

A brief study of these landmark SC judgments will show that at the initial stage itself, there are so many process related difficulties. It was pointed out by Mr. S.Ganesh that any issue that requires evidence should be referred to the arbitral tribunal. 

In conclusion at the legal workshop, Mr. S. Ganesh stated that arbitration in India can become a major source of revenue, development and foreign exchange, but first, there are infrastructural problems to address first.

 

[Swapna Raghu Sanand, Editor in charge, Lawisgreek.com, authored this report on the working session titled “Arbitration as an Alternative Dispute Resolution Mechanism” held as part of the All India Seminar on Judicial Reforms at Vigyan Bhavan in July 2010.]