Srikrishna Panel Proposes more Institutions to Improve Existing Institutions.. Is it a good strategy?

(P.S: This is In continuation of the Earlier Article/s) on the subject

The High Level Committee which gave its recommendations on Arbitration was named as a “Committee to review Institutionalization of Arbitration Mechanism in India”. I am not sure if there was a typographic error in the title of the report which could have been “Review of Institutional Arbitration Mechanism in India”.

The title “Institutionalization” suggests that it was a “Fixed” objective of the Committee to “Institutionalize” the Arbitration mechanism in India. The objective was not to “Review the Institutional Arbitration and suggest improvement”. Just as Government agencies define a specification of a tender document so as to suit a particular objective, this Committee was given a myopic objective to suggest how to institutionalize the system rather than how to improve the efficiency of the system.

It is therefore not surprising that the Committee went about conducting its work with the sole objective of turning all its survey observations to the direction of further institutionalization of the ADR process in India rather than making the existing system more efficient.

The approach of the Committee is therefore not keeping with the objective of Mr Modi to have “Less Government and More Governance”. It follows the good old preference of the bureaucracy to have “More Government and Less Governance”. In the process public money is being looted by the Government machinery as expenses while the tax payer keeps contributing to the kitty.

In pursuance of this principle, the Committee observes ” Arbitral Institutions are not working well and therefore we shall create more institutions to supervise institutions”.

Everybody in the Government is happy with this approach since it gives an impression of something being done without any movement on the ground. But more positions are created for the Delhi Babus and the Retired Judges in this case along with more offices, more office staff, more office cars etc.

I would like Mr Modi and Arun Jaitely to review this approach. Recently Mr Jaitely scrapped Cyber Appellate Tribunal unmindful of the consequences on the Citizens in the pretext of saving costs. At the same time scores of CERTs are being created and now several new institutions are being recommended by the High Level Committee when the ADR system itself is not yet adopted by the community fully. Is there any logic in such a move?

At one time we used to make fun of bureaucracy that whenever a decision is to be postponed they are in the habit of creating a c”committee”. Now the trend is whenever a decision is to be taken, suggest a “New Institution”.  Either the decision will be endlessly delayed or if it happens, there are many executive positions at Government cost that become available to the influential people who swarm Delhi’s power corridors.

Modi Government is being cheated by the bureaucracy with this approach which in the long run will increase the number of needless departments and institutions that are running at the cost of the tax payer’s money.

Keeping this tradition, this Committee suggests

a) Arbitration Promotion Council of India, (APCI) an autonomous body which will grade arbitral institutions and provide accreditation for arbitrators.

b) Specialist Arbitration Bar consisting of arbitration lawyers, providing courses etc

c) Specialist Arbitration bench  consisting of Judges who will be trained by National Judicial Academy

d) International Center for Alternate Dispute Resolution as a “Flagship Arbitral Institution”.

e) Creating a post of an International Law Adviser

f) Establishing a 5 member permanent Inter-Ministerial Committee

etc.

We need to justify whether the above institutions are actually required to be set up or they can be carved out of the existing institutions so that costs and administrative lag can be reduced.

The suggestion will ultimately create a ADR structure which will be a shadow of the Judicial structure with multiple institutions each trying to outdo the other and end up preventing a smooth functioning of the system.

There is already bar councils of several description in the country which serve the entire community of advocates. Other professionals such as Chartered Accountants, Computer Specialists, Civil Contractors, etc have their own industry organziations overseeing professionals in their respective domains.

It should therefore be possible for a “Committee to be formed under say the Law Ministry” which can take up the responsibility of creating “Arbitrator Capacity Building” within their domains and share the knowledge on a common platform so that litigants can chose their preferred Arbitrators. Ultimately it is the rating given by the litigants that should build the value of the Arbitrators. A review system where litigants submit their reviews and is supervised by the committee of experts should be sufficient to create a system of “Grading” of the Arbitrators and also the “Arbitratral Institutions”.  Similarly the academic institutions including the Judicial academies can take up education aspects without the need for the APCI.

I therefore suggest that there is no need for an APCI as an institution and instead an adhoc committee of stake holders under the Law Ministry should be able to handle this responsibility. The Law Secretary or an Additional Secretary can lead this committee with his present secretariat. This will enable possibility of action from tomorrow without the need to create a new institution by a further amendment of ACA2015 as the committee proposes.

Ministerial committee can be called from time to time as required without any permanent cost again under the supervision of the Law Ministry.

The need for International Law Adviser might have been felt after the Kulbhushan Jadhav case and this requirement is not restricted to Arbitration but extends to all matters of international legal issues. The External affairs ministry may coordinate with the Law Ministry and the CJI informally to identify the best talent available for this purpose which may differ from case to case depending on the nature of the issue. A Permanent International Law Adviser has the risk of ending up as an adviser to advise who else has to be appointed to handle a particular assignment and nothing else.

The need for an International Center of ADR is a misnomer since every “Institutional Arbitration Council” should have the necessary expertise for undertaking “International Arbitration”. Domain/Sector specialization is key to the acceptance of the International Community and hence each of the existing Arbitral Institutions should develop a “Domestic Wing” and an “International Wing” and develop the International Expertise within its own sector specialization.

There is actually a need for an International Center for ADR for the IT industry because no such institution exists in India and India is in the forefront of IT industry on a global platform and can claim both a stake in this arbitration and also an expertise.

Effort should be to encourage the industry bodies to think of such bodies with the assistance of the Law Ministry. For example, NASSCOM or STPI could very well take up the initiation of such a project for the IT industry and this has already been proposed by the undersigned to some decision makers.

There could be similar opportunities in other industries such as Auto industry or Pharma Industry and representatives from each of such sectoral International arbitral institutions  can form a “Federation of International Arbitration Institutions of India” which ultimately may emerge as an industry led apex representative body for International Arbitrations making it possible for India to be considered as an International Center for Arbitrations.

We have already highlighted many times that being the “International Center for ODR” is a step in the direction of India developing into an “International Center for ADR” and hence we need to focus on this niche position which is not occupied by countries like Singapore in the ADR space.

Just as the Specialist Bar will only serve the advocates and does not accommodate professionals from other areas, Specialized Bench will also be only serving the current Judicial members. They can be supported within the current systems so that it does not appear that Arbitration becomes the sole preserve of Lawyers and Judges.

The net suggestion therefore is “Donot Create Multiple Institutions, Make use of the existing infrastructure of bureaucrats and the industry led associations to meet the objectives for which APCI, Specialist Bar and Bench etc are being contemplated.

Also Keep the basic principle that Arbitration (and more so the Mediation) can be effectively handled by Non-Advocates and Non Judges and any attempt to make it the sole preserve of Judiciary and Lawyers is dysfunctional and should be avoided.

Naavi

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