The grave issue affecting the legal system and the people

Mending pendency

“Justice Delayed is justice denied“is the oft repeated sentence which itself is delayed and denied both in letter and spirit. The towering Supreme Court, judges, lawmakers, legal luminaries etc have made the topic a routine subject for tea time chats. Pendency is an ever pervading dilemma mutant in the legal system, stultifying the cause of justice. Commissions have had recommended different thing to tackle the ever growing ‘gigantic’ problem as opined by Justice J.B Sinha, pioneer of Lok Adalats in India. However pragmatic the studies are, in reality they have not been enforced or an effective paradigm shift witnessed.

Faith in the legal system is determined by its ability to provide accessible, speedy and cost effective justice to all equally. The people are a mute witness to the court process, often spending their lifetime savings to their unending case. Pendency is a result of the court procedures, lawyer’s tendency to drag cases and other unavoidable reasons. At the end it is the clients who are left to suffer this ignominy. The fact is that for every 1467 Indians, a lawyer is there to take their briefs and for every million Indian population 14 judges help to render justice, however 2.7 crore cases are left pending in the Trial courts alone. Financial experts had opined that the delay is eating up 2 percent of the GDP on an average especially creating a hostile environment for investment. Financial investors investing in India has a “legal risk premium” which is an additional cost involved for investment due to the weak legal system. This arises because of the obstacles affecting enforcement of a claim or a contract especially in matters relating to land acquisition. A 2009 report of the World Bank on Doing Business had ranked India 173rd worldwide in terms of enforceability of contracts. The report listed 56 procedural steps which totaled 1420 days from filing the claim to the enforcement of judgment. In addition to this for enforcing a contract it takes 462 day .Most big aid donors to India believe that badly prepared contract documents and poor enforcement of agreements ground proper utilization of funds. Finance Minister, Mr Pranab Mukherjee himself expressed the dire need to resort to Alternative Dispute Resolution owing to the situation existing and has called upon a Legal framework wherein it can be successfully implemented. According to him “Delays in court rooms lead to corruption in government; lack of investment in vital economic spheres due to uncertain contract enforcement; higher transaction costs and a general inflationary bias. The study estimates indicate that streamlining the judicial system will increase GDP growth rates by 2% per annum! This high payoff surely outweighs the costs of investing in improving the system.”

The recent National Conference on “The National Consultation for strengthening the judiciary towards reducing the Pendency and Delays” provided the perfect platform for a thought on examining and conducting a post mortem on the issues of pendency and arrears. The vision statement contained appreciable changes in the structure of courts. The most far reaching is the concept of ‘Contract judges’ envisaged to decide backlog cases. 15,000 trial judges and 700 high court judges would work in three shifts deciding the legality of contracts etc. The vision is to eliminate the thought of pendency and arrears and securing speedy justice. However whether the contract judges would be able to function within the prescribed ‘procedural’ limits and deliver judgments in a better and faster manner is doubtful. The very concept of ‘contract judges’ goes against the jurisprudential existence of judges in a society, who is considered as an epitome of justice.

The financials involved in the legal system was the topic in the recent Conference at Delhi on “Safeguarding Investment by Litigation process” which also highlighted the need to streamline the judicial process and encourage the ADR System especially by making litigation a last resort and settlement the first resort.

The courts, the commissions and various legal luminaries have failed to identify the crux of the issue of pendency ; the increase in number of litigants. Indeed legal awareness has enabled people to fight for their justice. However it has failed to enlighten citizens of their rights and duties. They fight ‘their’ justice in the courts but fail to accept the ‘real’ justice only to accelerate the strained relationships. Whenever an issue arises, it takes the clout of a dispute the moment an Advocate Legal Notice is been sent to the opposite party. The thought of settling issues do not arise, with a determination to win over others facing the consequences of the court. Often parties enjoy the pleasure when they drag others to the court even if the case is not favorable to them. An ego-less society is hard to envisage, however a culture to settle disputes rather than litigate is not impossible. The fact such dispute resolution systems are been practiced in other countries and was existing in ancient India strengthens the cause of such a system. Alternative Dispute Resolution (ADR) mechanisms like Mediation, Conciliation and Arbitration involve the participation of the parties with a consensual settlement reached. Procedure-less, cost effective and quick are the various advantages attached to such a process. This would go a long way to reduce burden in the existing courts and more importantly provide the desired justice to the people. A ‘vision statement’ reflecting the encouragement of such a process is the perfect solution to the issue of pendency. It is time for the people to take their own initiative to decide their cases rather than depend on a process which causes delay and is unsatisfactory. While India remembers another Legal Services Day on November 9, we are celebrating a moment of celebration through the implementation of age old Gram Nyayalayas which will provide justice to the doorsteps. However it is time that justice is made by the people, of the people and for the people. This can only be done by cultivating a culture of mediation and settling disputes and encouraging ADR Centres to facilitate this noble endeavour.

New courts for commercial disputes and real estate

Central Government plans to come up with courts designated for commercial disputes, according to union law minister. He says any case involving more than Rs 2 crores shall be heard by these designated courts. Union government also plans to have tribunals to hear the cases involving Real Estate business to save the investors and middle class families from the pranks of builders.

Both are exemplary moves by the Government. But i wonder whether the exchequer will be having enough breathing space for all these? the same law minister says, Government is planning to amend the Arbitration and conciliation act of 96 so that India becomes the hub of ADR like Paris and Singapore. What shall be the priority of the Government? I say helping even the private parties to institutionalize ADR systems by amending the law would be of great impact in Indian context.

Court system in India

Bibek Debroy has written a series of articles on law reforms. rich in content and exciting;

http://www.financialexpress.com/news/rules-of-the-lawi/514028/1

http://www.financialexpress.com/news/rules-of-the-lawii/514585/

http://www.financialexpress.com/news/rules-of-the-lawiii/515049/

http://www.financialexpress.com/news/rules-of-the-lawiv/515511/

http://www.financialexpress.com/news/rules-of-the-lawv/516682/

i wonder if ADR systems are introduced as in the case of www.adrcentre.in, what will be the savings in GDP of this country?

Settlement in Land Acquition Cases

The Need for an effective settlement in land acquisition cases is one of the key areas which the Government has been finding hard. On one hand the emerging need of acquiring private land for public interest purpose on the other hand doing it in a speedy and cost efficient manner. The bottlenecks in law would be made clear once the new Land Acquisition policy comes to the foray. However the burning issue of providing adequate protection and more importantly compensation to the people whose land are acquired assumes importance in a significant way inspite of the larger public interest involved. Most of the land acquisition draws aire from the public for the reason that the government acts as the aggressor repressing the actions of the local community. Indeed politicization and policization are instrumental for such a scenario.

The Government are faced with the challenge of balancing the interest of different sections of the community, especially when one side is a corporate which can bring in big time investment. A few people acts smart especially in cases where their records show less amount than the actual price to avoid stamp duty, which are brought to light while acquiring the land. The government offers amounts in tune with records which would obviously not meet the persons interest or satisfies his wants. At this juncture, both of them normally take the hep of courts, which would get dragged leading to delayed justice or injustice to either of them. It is in such scenarios the government takes the initiative to conduct adalats for settling the disputes. However it is a hard fact that no effective settlement are done because of the inept attitude in handling such issues.

Therefore it is important to have expert and trained mediators for handling such issue who can work out a common platform for settlement balancing the interest of the government and the clients. The success rate would be higher in such cases compared to the existing situation, which generally revolves around the court, with neither parties getting the required wants.

The Government has to take an approach wherein while framing their land acquisition policies in furtherance of settlement of cases amicably. This can reduce the pendency of cases and also save a large amount of public money for the exchequer. The need to encourage Alternative Dispute Resolution is inevitable in this scenario.

ADR Centre in News

ADR Centre which was launched on 25th July, 2009 is making news attracting atention of the people and the authorities. The Centre is working in full swing with few cases already been settled. There has been many queries from the people who wanted their cases to be settled. With the backing of trained mediators and experts in various fields in addition to a vibrant team, the Centre is confident that they can reach to the masses and support or help them in identifying and providing a settlement option to them. In Justice Krishna Iyers words "ADR Centre shall be the begining of a National Movement for ADR in India". With the support of the people and the others working the field of law, the Centre believes that anything is possible!!!

Common drawbacks

Alternative Dispute Resolution programs have not fared well in many of the developing

countries. One problem with many community-based systems is that norms controlling dispute resolution can contradict national laws.

In Bangladesh village justice systems often recognize oral divorces despite a 1962 law requiring that all divorces be in writing. A second problem with community systems is that those deciding the cases are often biased against women, poor people, and other underprivileged groups.

Training, outreach, and legal awareness programs can help solve these problems. But these programs cannot solve the larger problem of incentives. In most developing and transition economies the courts are not strong enough to enforce contracts requiring that disputes be submitted for alternative dispute resolution or that the losing party pay the resulting award. Alternative dispute resolution can succeed only if claimants and defendants have incentive to make it work. In Argentina, Colombia, and Peru any firm that fails to arbitrate a dispute after agreeing to do so or refuses to pay an award—quickly becomes known as an unreliable business partner. Thus a firm’s concern about its reputation provides a powerful incentive to participate in alternative dispute resolution and respect the outcome.

Ad hoc and Institutional arbitration

An ad hoc arbitration is one which is not administered by an institution and therefore, the parties are required to determine all aspects of the arbitration like the number of arbitrators, manner of their appointment, procedure for conducting the arbitration, etc. Provided the parties approach the arbitration in a spirit of cooperation, ad hoc proceedings can be more flexible, cheaper and faster than an administered proceeding. The absence of administrative fees alone makes this a popular choice.

An institutional arbitration on the other hand is one in which a specialized institution with a permanent character intervenes and assumes the functions of aiding and administering the arbitral process, as according to the rules of that institution. It is important to note that these institutions do not arbitrate the dispute, it is the arbitrators who arbitrate, and so the term arbitration institution is inapt and only the rules of the institution apply.

In institutional arbitration, the first issue arising for agreement of the parties is choice of the institution, appropriate for the resolution of disputes, arising out of their contract. Whilst making such choice, there are various factors to be considered i.e. nature & commercial value of the dispute, rules of the institution as these rules differ, past record and reputation of the institution and also that the institutional rules are in tune with the latest developments. It is also alleged that national courts have a tendency to grant enforcement of awards made in institutional arbitration, though doubts have been raised, since international arbitration institutions have the benefit of worldwide recognition and their professional capability adds to the certainty and finality of the proceedings. Courts are more likely to even enforce an award obtained in default of the other party, which they would refuse had it been obtained in ad hoc arbitration, in view of the strict arbitration procedures followed by these institutions.

One of the criticisms of institutional arbitration is that, parties need to comply with the procedural requirements, resulting in unnecessary delays in the arbitration. One may argue that such requirements, in fact, avoid delay. In default of a party in ad hoc arbitration, the other party may seek court involvement to make the defaulting party to initiate or continue the arbitration and this may result in longer delays, than that involved in complying with these procedural requirements, intended to ensure smooth and successful dispute resolution.

In the context of international commercial disputes, one may argue that institutional arbitration is more suitable, even though apparently it is more expensive, time consuming and rigid than ad hoc arbitration, keeping in mind the fact that it provides established & updated arbitration rules, support, supervision & monitoring of the arbitration, review of awards and most importantly, strengthens the credibility of the awards. In conclusion, it is must be said that it is hard to claim that institutional arbitration is superior to ad hoc proceedings or vice versa.