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.

Whose marriage is it anyway?

ADR systems deals with divorce cases in a good number. This story appeared in TOI gives another angle to divorce cases; may be an ADR Centre can settle it better in the circumstances described.

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