Negative Effect of Kompetenz – The Only Way to Save Arbitral Law in India by Aniket Ghosh

The Author: Aniket Ghosh is a Law Student Studying at WBNUJS, Kolkatta

Introduction and Background

Litigation in India is a terrrible business. Sometimes even the simplest of cases, can drag on for years. As of September 4th, 2014, the judicial system is staring at a staggering figure of 31.3 million pending cases.[1] There are many ways in which a case can be delayed, be it by way of interim applications, miscellaneous petitions etc. All of these, severely impact the pace at which a case progresses, not to mention the countless, levels of appeals, reviews etc. that are possible at each stage. It is due to these reasons, that alternate dispute resolution mechanisms seem to be infinetly more attractive to most litigants, the so called “out of court settlement” as it is known in common parlance. This is especially so in this country because the backlog and delay is far higher than in most other progressive jurisdictions.

One preferred type of alternate dispute settlement mechanism is arbitration.  The most attractive feature of the arbitral process over that of other alternate dispute settlement mechanisms is the binding nature of the arbitral award. Moreover, because the parties themselves nominate a neutral person or  persons whom they believe will be objective and impartial in their interpretation of the dispute, it increases the acceptability of the award even for the losing party. Further, unlike a negotiation or mediation, the process itself is largely similar to normal judicial proceedings, except that it is far more flexible and speedy, thereby eliminating the requirement for both parties to reach a common ground. Lastly, with increased globalization of trade and commerce, arbitration has easily become the single most attractive way of resolving disputes worldwide. Transnational contracts involve various different legal systems and various judicial institutions ,jurisdictions and other such complications, which makes transnational litigation a strict no for most commercial enterprises.

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