Excessive judicial interference at stage of enforcement of foreign awards should be avoided: Justice SK Kaul

Supreme Court judge Justice Sanjay Kishan Kaul on Thursday emphasized on the role of the judiciary in ensuring smooth dispute resolution in cases arising out cross-border disputes and Bilateral Investment Treaties (BITs)..The apex court judge explained that a key feature of BITs is that they seek to balance the rights of investors with a State’s right to regulate in national interest. "Dispute resolution must become seamless to give investors the confidence they need to make investments uninhibitedly. This does not mean that principles such as natural justice and the rule of law, are given a go-by. I say this with a sense of responsibility – the judiciary must also play its part. Excessive interference should be avoided, particularly at the stage of enforcement of foreign awards." .Justice Kaul added that in India, while an award tainted by fraud cannot be enforced, courts can play a facilitative role by granting interim relief at the stage of constitution of the arbitral tribunal. .The judge was speaking at the 12th International Legal Forum of the Asia Pacific Region organised by the Russian Supreme Court..In his speech, Justice Kaul called for a framework to regulate cross-border insolvency, either through territorial proceedings in multiple fora with multiple laws, or under one court having exclusive jurisdiction over insolvency proceedings.He flagged the effectively inoperative status of the World Trade Organisation (WTO) appellate body since 2019 due to a lack of appointments."We must ensure that the appellate body of the WTO resumes its functioning. At the recently concluded G-20 summit in India, members declared that there was a need to pursue reform of the WTO to improve its functions and conduct discussions to ensure a well-functioning dispute settlement system by 2024.".The apex court judge added that treaties should be drafted keeping in mind the rights and interests of developing and underdeveloped countries, so as to achieve global equality.He ended his introductory speech by saying that India is an arbitration-friendly jurisdiction..Later, during a session on mediation, the judge acknowledged that its usage in cross-border conflicts is at a nascent stage. "Its application should not be restricted to certain fields, but rather the parties should remain free to use it as the situation demands. Further, it is important to note that mediation should be viewed as an alternative to the judicial system and not as a supplementary mechanism. This is to say, that a solution that arises consequent to the process of mediation should not be considered inferior to a judicial dictum.".He also spoke on the binding and enforceable nature of mediation agreements, and said that judges must promote the practice at various stages of a dispute."This could be the pre-trial stage, during the middle of the proceedings, and even after the pronouncement of the judgment, if the parties consent and believe that mediation could result in a more equitable outcome. The judiciary should endeavour to give finality and sanctity to mediated settled agreements. The grounds of refusing such agreements should be limited and a strict approach should be adopted in enforcement."