Arbitration Should Not Be Rendezvous For Elitist But A Common Man-Friendly Mechanism: Supreme Court Justice NV Anjaria

While speaking at an Arbitration Law Conference in Gujarat High Court on Saturday (September 20) Supreme Court Justice NV Anjaria emphasized that arbitration should not become a rendezvous for the elite but it should be a common man friendly mechanism for it to truly be a real alternative justice delivery system. 

"There is an ardent school of thought even today which prefers to seek justice from the persons in the traditional attire, sitting and sweating in the normal court room, rather than obtain or looking at suited...arbitrators and lawyers. It is my firm belief that arbitration should not become the rendezvous for elitist. It should be common man friendly mechanism if it is to work as a real alternative justice delivery system. This is the main challenge of the day when we deal with arbitration laws," Justice Anjaria said. 

Justice Anjaria was speaking at the Inaugural Session of a two-day conference on Arbitration Law organized by the Gujarat High Court in collaboration with the Gujarat State Judicial Academy as its Chief Guest.

Other dignitaries at the event included Gujarat High Court Chief Justice Sunita Agarwal, Justice A.Y. Kogje, Justice A.S. Supehia, Justice Bhargav D. Karia, other Gujarat high court judges as well as judges from other high courts, bar members as well as retired judges including Supreme Court Justice Hima Kohli. Various members of the District Judiciary and Lawyers were also present at the inaugural address. 

In his speech, Justice Anjarai appreciated the Gujarat High Court for its involvement in boosting alternative dispute resolution systems–one for arbitration, one for mediation, Med-Arb Centre (Mediation Centre for Arbitration inaugurated in August 2024).

He said, "So its good that this high court is a replica for a multi-house temple for conducting all kinds of ADR in addition to the traditional justice delivery system".

He said that arbitration must be an easy process free from procedural wrangles, must be free system, speedy, honest and dispute must be settled on both legal and moral grounds.

"One of the most important reason which can attributed as a good feature of arbitration, is that this mechanism ensures presence of control of the parties over the proceedings, which is absent in traditional methods of dispute resolution...less cumbersome procedure. Arbitration is a process where...law will follow equity converse to traditional system. Equity must have pre-dominant role in solving the dispute," the judge said.

On what arbitration teaches lawyers he said:

"In arbitration you learn all the laws, it is a very peculiar and wonderful thing. When you conduct arbitration, you have to understand principles of contract act, partnership act, transfer of property act, civil procedure act...so you can come out with lot of benefits and learning". 

On the concept of Arbitration the judge said, "When we come to the system of arbitration, basically it is a voluntarily chosen and self evolved private mechanism to solve and put an end to the disputes. The unique feature of arbitration is parties chose their own judges who will be arbitrator. Nobody would say that you are indulging in forum shopping".

He said that ordinarily since arbitration is a self chosen system, the parties would stand satisfied to a large extent with the outcome of the process except sometimes for the reason of the fees of the arbitrator. He remarked that the advantages of this mechanism are that it is voluntarily chosen and when judges are chosen by parties themselves there is no trust deficit.

He further said, "somebody says that it is lawyers paradise. I just added, it is not only lawyers paradise but its is arbitrators joyride also. I'm really not critical of the process, but just trying to highlighting what needs to be done in the area". 

Speaking on certain critical and emerging areas, Justice Anjarai referred to the Group Company Doctrine (laid down by Supreme Court in Cox and Kings Ltd v. SAP India Pvt Ltd) and said that it allows non-signatories of agreement to be read as parties in arbitration and by doing so the conventional doctrine of privity that only parties which are signatories to contract are bound by it is getting effaced. 

He further said, "Lack of expertise dealing with complex arbitrations under Sections 34 and 37, the result of which is huge pendency of cases in courts which is counter productive to very idea of arbitration where party expects quick resolution of disputes". 

He also emphasized on the need to strengthen the institutional rules of arbitration

He further referred to the Supreme Court's judgment on unilateral appointment clauses (CENTRAL ORGANISATION FOR RAILWAY ELECTRIFICATION vs. M/S ECI SPIC SMO MCML (JV)), and said that it would be beneficial in public private partnerships where arbitration clauses are asymmetrical. 

"But asymmetrical clauses should not be preferred because it gives upper hand to one party", he said. 

He also said that conciliation and mediation within arbitration process should be encouraged and it might help in speedy outcomes of resolution. 

"I'm sure this conference would chalk out the path for arbitration by dispelling doubts and apprehension which persist for the effectiveness of arbitration and utility of it as an alternative dispute resolution system," he concluded.