Mediation, Conciliation, Arbitration, Litigation: What Is Best for Business?
With the rapid globalization of the economy and the resulting increase in competition, there has been a significant increase in commercial disputes. The outpaced rate of development has led to increase in industrial growth, modernization, improved socio-economic circumstances, technological development which in turn has led to an increase in case overloads for the already overburdened courts. Arbitration, mediation and conciliation are the main Alternative Dispute Resolution Mechanism which is generally adopted by the people to resolve their disputes to expedite legal proceedings and reduce pendency of matters in court.
In the recent BW Legal 30 Under 30 conclave, commemorated by BW Businessworld and it’s legal community BW Legal, a session was dedicated exclusively to “Mediation, Conciliation, Arbitration, Litigation: What Is Best for Business?”. The session found participation from Siddharth Batra, AOR, Supreme Court of India, Senior Advocate Pramod Dubey of Supreme Court of India Managing Partner of Singhania & Co Krrishan Singhania and Dr. Tamali Sengupta, an Independent Director, Advocate.
The honorable speakers shared their thoughts on what should businesses keep in mind while drafting dispute resolution clauses, what are the peculiar advantages or disadvantages of choosing one ADR method over the other, what must be factors of consideration, is there a method more suitable for certain types of disputes or industries, legislative suggestions on mediation and its impact conciliation, and if ADRs can practically be the final destination when litigation still prevails.
When commenting on the drafting of the dispute resolution clause, Krrishan Singhania said, “Most businesses do not pay attention while drafting this clause. A lot of time, due to mentioning the wrong jurisdiction in such clauses, the clause may not be used effectively. In pursuing the remedy in the court of law, in the case of commercial interest, there should be options of mediation and conciliation. If mediation and conciliation fail, then one can go for arbitration”.
Dr. Tamil Sengupta, joined the conversation by mentioning arbitration is not just governed by the clauses of that contract between parties, but also the rules which govern ADR mechanism in that jurisdiction. At this stage, international companies have also realised that they are more comfortable appointing international arbitrators in India. “The job of legal experts is to interpret the law”, she said.
Senior Advocate Pramod Dubey mentioned that the main advantage of arbitration is the parties can choose their own arbitrator. There is a practice going on as, pre-mediation litigation. Moreover, arbitrators can be selected basis their area of expertise, unlike in the process of litigation. However, a lot of the time, due to undue circumstances, arbitration proceedings have been adjourned and prolonged, leading to an increase in legal expenses.
Advocate-On-Record Siddharth Batra, further added that, “One significant change brought in by the amendment act of arbitration was that arbitration proceedings were to be concluded within one year”.
However, he contended that, for arbitration to be successful in this country, some more work needs to be done in this space. “The jurisdiction of a court after passing of an award are very limited”, he added. Moreover, conciliation needs to be further developed as parties hardly resort to it as a form of remedy. As per the recent commercial courts act, the pre-mediation process has already been mandated.
In conclusion, the speakers agreed that Arbitration has been promoted as a way to resolve disputes efficiently, proponents of arbitration commonly point to a number of advantages it offers over litigation. In the wake of new amendments, the Indian Arbitration Act has become very robust, quick, decisive, and the timeframe is clear.
To watch the 360 degree discussion, click on the link below:
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