Lawyers, parties, courts need to change mindset to aid arbitration: Justice Manish Pitale of Bombay High Court

Courts should be slow to intervene in arbitration proceedings and lawyers should not treat arbitration as a side business, opined Bombay High Court judge, Justice Manish Pitale recently, while speaking at an event..The Bombay High Court judge was the Chief Guest at a breakfast event organised by the Indian Arbitration Forum to discuss India’s new arbitration regime and what the future of the regime may look like.Maharashtra Advocate General Dr Birendra Saraf was also present at the event as a Guest of Honour..Justice Pitale pointed out that there was a huge number of applications pending in the Bombay High Court, seeking an extension of time to complete arbitration proceedings.The judge said that while this initially surprised him, he later realised that this was because arbitration meetings did not take place frequently. The judge added that he has tried to dispose of many such applications at the earliest. However, this was not a solution at all, he said.One reason for such applications, the judge further noted, was that lawyers treated arbitration as a side business instead of treating it as a full-fledged business. .He opined that changing the mindset of the parties involved in the proceedings is important and that the courts could aid in doing so.“The object of the (Arbitration) Act is ‘fair resolution of disputes without unnecessary delay and expense’. We have somehow forgotten about the latter part about ’unnecessary delay and expense’. Courts need to bring it back in focus,” the judge said.The judge also gave the following suggestions on how stakeholders could aid in arbitration..1. On dealing with Section 11 applications, concerning the appointment of an arbitratorJustice Pitale said that it was important for the judge to have a mindset to crack the whip to fasten this process.“We must take out these applications and pass orders at the earliest. Bar members should be candid and honest and agree to the appointment of arbitrators. Routinely opposing the applications is not required. Arguments go on ad nauseam. This is where the mindset of judges matters, they must crack the whip and at least ensure a tribunal is constituted,” he said. .2. Courts should limit their intervention in appeals challenging arbitral ordersJustice Pitale opined that once parties move out from the traditional court system into private courts, the traditional courts should limit their intervention as much as possible. In view of this, appeals under Section 37 (appealable orders) of the Act should not to be heard like appeals ‘in the traditional sense’, he said.“When the scope of Section 34 (challenge to the final award) has been narrowed, how can Section 37 be dealt with like an appeal? They have the same narrow scope, if not narrower. Section 37 applications come during the interim stage of the arbitral proceedings. The High Courts should be slow in interfering at such stages and let the arbitration go on,” the judge remarked. .3. Enforcement of arbitration awardsJustice Pitale suggested that lawyers could advise parties to avoid unnecessary resistance to enforcing arbitration awards. The judge also advised lawyers to be vigilant at the stage of drafting contracts and be aware of the arbitrability of an issue in the country where they choose to arbitrate. In this regard, he referred to the judgment he recently passed in a case concerning Shaadi.com CEO, Anupam Mittal, where the parties had agreed on an arbitration clause with jurisdiction being conferred on a foreign country. However, the disputes involved were not arbitrable in India, which could make it difficult to enforce such a foreign award in India, he noted. The judge also hoped the legislature would amend certain provisions to bring more clarity when it comes to implementing arbitral awards.“Till that happens we need to change our mindset. This is a fair resolution of disputes before an impartial tribunal without unnecessary expense. If we change our mindset we can achieve the objective,” the judge said..Each stakeholder has failed arbitration in India: AG Saraf .The Advocate General spoke of the role of lawyers and courts and how it was important for each stakeholder to pay attention to their role and introspect.“Today I am reminded of the words of Dr Babasaheb Ambedkar. He said, ‘However good this constitution is, it may fail if the people who work on it are bad. Similarly, it is bound to succeed if people who work on it are good.’ I believe this applies to all laws. If we keep discussing what the law should be, we pay less attention to what our roles should be. Has arbitration failed us or have we failed arbitration?” Saraf questioned..Saraf elaborated on how each stakeholder - the parties, lawyers, and court - had, in fact, failed arbitration in India..He pointed out that applications under Section 17 of the Act for interim reliefs were heard for 10-15 sessions each and cross-examinations went on indefinitely. He also touched upon the high costs borne by parties to an arbitration, recounting that in one case it turned out to be ₹7,500 per minute. “If that is the cost and this is the pace, how will we ever succeed? A small application is heard for days together. Applications come under Sections 34 and 37. The burden of courts is immense, courts don’t have time. One judge hears all kinds of arbitration applications,” he remarked..He added that a massive change is needed in the mindset of lawyers to help arbitration grow in India.“Arbitrations start in the evening with lawyers coming from court huffing and puffing as it is their part-time business. However much we amend the law, we will not succeed. Unless we change our mindset we will not succeed. In institutional arbitrations, the Indian institutions rarely abide by timelines. But if it is the same thing as an institution in London, we are more than willing to submit to the authorities. We are willing to accept the authority of a foreign arbitrator but we do not heed the crack of the whip of an Indian arbitrator,” Saraf said..“We must introspect on these lines and we may see a future in arbitration in India,” the AG added, on a parting note..Lord George Leggatt, Justice of the Supreme Court of the United Kingdom was another attendee at the event, who spoke very briefly about how arbitration petitions were dealt with in the United Kingdom.