Rule of law remains protected in Indian arbitration: SG Tushar Mehta

Solicitor General of India (SG) Tushar Mehta recently expressed his confidence in the implementation of the rule of law in Indian arbitration, while speaking at an discussion held as part of the London International Disputes Week (LIDW)..He highlighted that the architecture of the Arbitration Act has checks and balances to prevent deviations from the rule of law, and that parties can approach Constitutional courts for any violation of rights."Considering the very nature of the arbitration, which is supposed to be speedy, which is supposed to be less expensive etc., whenever there is defiance or deviation from rule of law, there are remedies provided. But some remedies are deferred - it's not immediately provided - and the object is (to ensure) that the arbitration is not protracted. The defiance or deviation of rule of law remains, (but) it could be ultimately challenged at an appropriate stage, mostly at the final stage of the award," he said..SG Mehta said that he is proud of the implementation of the rule of law in India, while recounting that he has lost many cases where even he felt that the rule of law required the other side to succeed."I would say as a government lawyer, the government is usually the respondent and on the receiving end, that the rule of law implementation in India is something of which I would be proud of because I have lost many cases where even I feel that the rule of law required the other side to succeed," he stated..The SG made the observation while speaking on the theme, India: Changing face of dispute resolution in the new economic powerhouse. The other speakers for the session were Nick Panes of HKA; Vivek Kapoor of 39 Essex Chambers; Chair of ICC India Arbitration Group Shashank Garg; Justice Alison Foster of the High Court of England and Wales and Registrar of Singapore International Arbitration Centre (SIAC) Kevin Nash..When asked by Vivek Kapoor whether he thinks than the Indian government is favoured when its disputes with foreign investors are seated in India, Mehta answered in the negative.He explained that arbitration is party-driven and that in international commercial arbitration, the tribunal is usually a multi-member tribunal.Since procedure dictates that both parties together choose the presiding arbitrator, the government does not have the upper hand, he said."That system, that procedure, by its very nature ensures that the government does not have an upper hand or the other party does not have less of the choice," Mehta said.In international commercial arbitration, the scope for challenge is minimal and such arbitral awards can only be challenged before the Supreme Court of India, leaving no room for delays, he added..Shashank Garg discussed the recent establishment of the Arbitration Bar of India (ABI). He recounted that despite several discussions by high-level committees, there had earlier been no unified voice for arbitration practitioners in India.He said that the new arbitration Bar aims to address this gap by filling in the gaps in laws, creating guidelines based on international best practices, and assisting the government and courts in policy-making and ensuring consistency."Over the course of last 20 years, the amount of disputes and also the stakes involved, has gone dramatically up. So we obviously need an Indianised version of some of these guidelines which are international best practices," he said..Garg was also asked by Vivek Kapoor whether the recent decision of the Indian Supreme Court in Delhi Airport Metro Express Pvt Ltd (DAMEPL) v. Delhi Metro Rail Corporation (DMRC) Limited was a setback for international arbitration in India.In that case, the Supreme Court set aside a ₹2,800 crore arbitral award. The judgment drew attention as it involved reversing an earlier Supreme Court ruling in favour of the award's validity. Garg explained that this judgment should not be seen as a setback for international arbitration in India. "It is absolutely not a setback for the international arbitration community because it is a domestic arbitration where on a specific ground of patent illegality, the award was found to be perverse and was set aside for various reasons. The ground of patented illegality all of us know is not available in international arbitration. So that is not certainly going to impact the international community," he said.Further, he suggested that any future challenges by public sector undertakings (PSUs) could be regulated by requiring certification from the Attorney General (AG) or the SG to ensure that only substantial cases proceed.SG Mehta added that curative petitions, like the one in the DMRC case, are rarely admitted. He emphasized that this case should be viewed as unique and not as a precedent..SG Mehta also addressed a question on whether Indian courts were equipped to set aside arbitral awards. Vivek Kapoor referred to a recent decision of the High Court of England and Wales in Nigeria vs P&ID, which set aside an arbitral award because it was obtained by fraud.In his response, Mehta mentioned that the Indian Arbitration Act was amended in 2019 to provide fraud and corruption as grounds for challenging an award."So, it's not as if a district judge or for a High Court judge, or for that matter, the Supreme Court judge will have to refer to Nigeria judgment. He has a statutory mechanism available at its disposal," he said.He added that Indian judges have also set aside awards passed by former Supreme Court judges and that their judgments have been upheld even by the Supreme Court."So, I as a lawyer - forget as a government law - as a lawyer would never doubt the competence, strength, boldness ability and integrity of a district judge in setting aside an arbitral award - of course, if you make out a case," Mehta observed..Courts, arbitral centres and mediation providers should collaborate: Chief Justice of England & Wales Sue Carr at LDIW