Chief Justice of India DY Chandrachud on Friday said that the UK and India share a strong legal relationship, based on shared history and values.
Speaking at the Supreme Court of the United Kingdom during the London International Disputes Week (LIDW) 2024, the CJI said that it was a distinct honor and privilege to lecture here on a topic having both contemporary and institutional relevance.
Speaking on the Law and Practice of Commercial Arbitration, he said he has studied with interest the erudite lecture by the Lord Chief Justice of England, Dame Sue Carr who dwelt on the shared learnings from mediation, arbitration and litigation.
Institutionally, India has replaced a regime of judicial interference with arbitration, with one that supports arbitration, recognizes party autonomy and structures the role of courts in facilitating arbitration.
He said the development of arbitration law in the two jurisdictions was a shared heritage. The present system of arbitration law is based on principles drawn from the common law and civil law.
The importance of arbitration was recognized by the founding parents of the Indian Constitution. Article 51 exhorts the State to “encourage settlement of international disputes by arbitration.”
India had a culture of arbitration and mediation for centuries. Then, it was primarily a system of dispute settlement by village elders.
The Arbitration Act of 1698 drafted by John Locke and passed by Parliament with minor amendments, laid down the framework of modern arbitration law. It allowed private individuals to enter into arbitration agreements and enforce awards with the assistance of courts.
Importantly, it precluded the courts from interfering with arbitral awards except when they were procured by corruption or undue means. However, the culture of commercial arbitration in England predates the Act of 1698, he added.
However, the culture of commercial arbitration in England predates the Act of 1698, he noted.
The CJI then said hypothetically, “Imagine that one of us was a wholesaler of oranges in London in the early 16th century. If you believe in reincarnation, one of us judges or lawyers present here was the seller. There was an agreement to sell 50 barrels of oranges to a merchant in Antwerp. The goods were delivered. The merchant accepted the goods but refused to pay.
What would have been done to recover the price of the goods sold, he asked? He said the history suggested that the seller would have probably approached adroit arbitrators such as Thomas More or Thomas Cromwell to mutually settle the dispute with the Antwerp merchant.
He then quoted Hilary Mantel describing Cromwell in a book titled Wolf Hall. It said, “He has a sideline in arbitration, commercial disputes mostly, as his ability to assess the facts of a case and give a swift impartial decision is trusted here, in Calais and in Antwerp. If you and your opponent can at least concur the need to save the costs and delays of a court hearing, then Cromwell is, for a fee, your man; and he has a pleasant privilege, often enough, of sending away both sides happy, he noted.
The CJI said he was not sure that many of judges today had that ‘pleasant’ privilege of sending both sides happy! But this prose gave the idea of arbitration – which was the resolution of disputes between parties by a neutral decision-maker outside domestic court systems.
The prose also furnished the reason why commercial arbitration was still, certainly more relevant today, as it was five centuries ago. He said the courts in India were overburdened despite the High Courts disposing of 2.15 million cases and the District Courts disposing of 44.70 million cases in 2023.
These figures showed the trust that the people of India had in their judiciary. He said the Indian judiciary functioned on the mantra that no case was small or big. Every aggrieved person who approached the doors of the judiciary had the right to a just remedy.
In attending to these grievances, the courts in India performed their plain constitutional duty. The width of the jurisdiction was designed to ensure the widest access to justice. But surely every case need not find a remedy before a court, with emerging forms of dispute resolution such as arbitration and mediation gaining acceptance, he added.
The CJI said the values of a liberal democracy enshrined in the Indian Constitution allowed people to seek individualized solutions to their legal problems outside the judicial set-up, if the solutions did not violate established law.
Arbitration was one such alternative method of dispute resolution. Arbitration is no longer an “alternative”. It is in fact the preferred method of seeking commercial justice.
He said an arbitration has three stages – (i) mutual consent of parties to arbitrate; (ii) arbitral proceedings; and (iii) enforcement of arbitral awards. The future of arbitration lies in streamlining the law and practice of arbitration on these three stages.
He said as practitioners of arbitration and adjudicators of disputes, the lawyers and judges must reflect on the future of arbitration because the future was already here. It was important to recognize it and adapt the legal systems to respond to the challenges.
Even today, commercial arbitration was not immune from its deficiencies such as delay, cost, judicial interference, arbitrator bias, and lack of enforceability of awards. The CJI then highlighted the important developments that have taken place in the jurisdictions and which should be allies in overcoming the present challenges.