On Monday(8th July), SC highlights inefficiencies in arbitral proceedings marked by bulky pleadings, extensive evidence, and lengthy awards, urging reforms for efficiency and effectiveness in Indian arbitration.
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NEW DELHI: On Monday(8th July), The Supreme Court of India expressed serious concerns regarding the inefficiencies plaguing arbitral proceedings in the country. A Bench comprising Justices Abhay S. Oka and Pankaj Mithal highlighted that arbitration in India has become synonymous with excessively bulky pleadings, voluminous evidence, and lengthy, time-consuming submissions.
The Bench’s observations came during a hearing where it noted the growing complexities and inefficiencies within arbitration processes.
The Court remarked-
“In numerous instances, arbitral proceedings are characterized by excessively voluminous pleadings and evidence, along with prolonged submissions, resulting in lengthy awards. Additionally, there is a tendency to reference numerous precedents, whether pertinent or not.”
This practice, the Court observed, results in unnecessarily prolonged hearings, especially in proceedings under Sections 34 and 37 of the Arbitration and Conciliation Act.
“As a consequence, we witness extended hearings in Courts during Sections 34 and 37 proceedings under the Arbitration and Conciliation Act.”
-the Court stated.
The Supreme Court also pointed out the inefficiencies in appeals against arbitral awards, noting that these are often contested as if they were appeals under Section 96 of the Code of Civil Procedure. This involves citing innumerable grounds, many of which are unnecessary, thereby wasting valuable judicial time.
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“The time of our Courts is precious, especially given the extensive backlog. This issue is prevalent across numerous cases, contributing to the inefficiency and inequity of the arbitral procedure.”
-the Court lamented.
It emphasized the need for brevity and efficiency in arbitral proceedings, urging members of the Bar to exercise restraint and focus only on legally permissible grounds.
“It is crucial for members of the Bar to exercise restraint, limiting arguments to legally permissible grounds. Emphasizing brevity will enhance the effectiveness of both arbitral proceedings and those under Sections 34 and 37.”
– the Bench underlined.
The Court’s critique extended to the overall arbitration ecosystem, calling for introspection among all stakeholders to prevent delays and ensure that arbitration remains a cost-effective method of dispute resolution.
“Arbitration should serve as a tool for swift, efficient, and cost-effective dispute resolution.”
-the Court emphasized.
This call to action by the Supreme Court highlights the urgent need for reforms in the arbitration process in India. By addressing these inefficiencies, the judicial system can ensure that arbitration fulfills its purpose of providing a swift and fair resolution to disputes, thereby alleviating the burden on the courts and contributing to a more effective legal framework in the country.
The Supreme Court of India has remanded a case back to the Division Bench of the Bombay High Court, underscoring the complexities and extensive documentation involved in the appeals against an arbitral tribunal decision. The apex court’s observations were made while disposing of appeals against a July 2023 order of the Division Bench of the Bombay High Court.
The Division Bench had previously sent the case back to a single judge, who initially set aside the arbitral award on grounds of illegality and perversity. The Supreme Court, in its verdict, highlighted the exhaustive nature of the documents associated with the case. The arbitral award itself was a voluminous document, running into 139 pages. The petition under Section 34 of the Arbitration Act spanned 93 pages and incorporated a staggering 151 grounds for challenge.
Adding to the complexity, the judgment of the single judge who reviewed the case was detailed in 101 pages, referencing 35 legal precedents. The appeal against this judgment was another lengthy document, extending to 46 pages and citing 164 grounds of challenge.
The Supreme Court noted-
“In accordance with the practice in the Bombay High Court, a memorandum of appeal under Section 37 of the Arbitration Act includes only grounds of challenge without factual details. Given the limited scope of interference under Sections 34 and 37 of the Arbitration Act, it is perplexing to encounter 151 grounds in a Section 34 petition and 164 grounds in a Section 37 appeal. This appeal, with a 45-page synopsis and 54 grounds of challenge, exemplifies the issue.”
This observation by the Supreme Court underscores the intricate and often overwhelming nature of legal documentation in arbitration cases. The court’s comments reflect a concern over the extensive grounds for challenge presented in the petitions and appeals, which can complicate the judicial process.
The Supreme Court’s decision to remand the case back to the Division Bench of the Bombay High Court is a crucial step in ensuring that the matter is reconsidered on its merits in line with the provisions of the Arbitration Act. The appeals were thus partly allowed, and the matter was sent back for fresh adjudication.
In this high-profile case, the appellant, Bombay Slum Redevelopment Corporation Private Limited, was represented by a team of eminent legal professionals, including Senior Advocates Dr. Abhishek Manu Singhvi, Ramesh Singh, Maninder Singh, and Meenakshi Arora. On the other side, the respondent was represented by Senior Advocates Mukul Rohatgi and CU Singh.
