On 31st July 2010, Ms. Indu Malhotra, Senior Advocate addressed the legal workshop on “Administration as an Alternative Dispute Resolution Mechanism,” that was presided over by Dr. Justice Mukundakam Sharma, Judge of the Supreme Court of India. It is significant to note that Ms. Indu Malhotra is one of the first women to be designated as Senior Advocate in the Supreme Court of India. Advocates, students and academicians awaited her inputs at the session with considerable interest and enthusiasm.
Legal Workshop Series: Landmark SC Judgments on Arbitration in India
Known for tremendous expertise in tackling problems pertaining to government contracts and PSUs, Ms. Indu Malhotra, Senior Advocate, made the discussion informative and interesting by discussing topics of relevance such as follows:
One sided arbitration clause that are typical when PSUs enter into contracts because they force the other party in domestic arbitrations to accept the clause. This is due to their unreasonable bargaining position.
Consensus – This is usually insisted upon in large infrastructural government contracts.
Institutional arbitration – The end result should be impartial examination of a dispute so as to make the award more effective.
No dues certificate has to be given by the private sector. The Supreme Court has held that any financial duress shall set aside the certificate.
As Ms. Indu Malhotra ended her discussion, she stated, “Government contracts should be just and fair.”
Legal Workshop Series: Increasing Fees and Costs of Arbitration in India
Keeping in mind, the importance of India emerging as a premier arbitration destination, there is an important component that was not touched upon in the workshop. Typically, arbitration is considered to be cheaper mechanism than litigation in India, it is becoming a matter of concern that arbitration in India is becoming expensive and time consuming. Typically, arbitration costs include an arbitrator’s fees, rent for the venue of arbitration, clerical expenses, profession fees of lawyers and expert witnesses and so on.
Institutional arbitration bodies in India establish their own fee schedules and administrative fees based on the claim amounts. The professional fees of lawyers depend on several factors such as the lawyer’s expertise, years of experience, reputation, professional standing and so on. The fees can be as meager as Rs.500/- and as high as Rs. 2 lakhs per appearance. Further, parties have to pay hefty fees to the arbitrators per hearing and this involves a large amount of money, besides other miscellaneous expenses.
This trend of increasing arbitration fees and related costs clearly frustrate the primary purpose of establishing an arbitral system in India – that is to ensure fair, affordable and speedy dispute resolution mechanism in the context of commercial and contractual interests.
[Swapna Raghu Sanand, Editor @lawisgreek.com , authored this report on Ms. Indu Malhotra’s brief address at the working session titled “Arbitration as an Alternative Dispute Resolution Mechanism,” held as part of the All India Seminar on Judicial Reforms on 31st July 2010.]