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Mr. Tariq Ahmed Khan is currently working as a Principal Associate, Advani & Co. (New Delhi) and also as secretary to the tribunal for a SIAC arbitration. He was featured in Fortune 500 (India) magazine (2017-2018) for authoring the best seller book ‘On the Rise’ published by Universal Law Publishing. He has a wide experience on International and Domestic Arbitrations, MSME disputes and Commercial Laws.
In this interview with the IJLPP he discusses arbitration amidst COVID-19, challenges to virtual arbitrations and future of institutional arbitration in India.
Today, the entire world including the legal field is fighting with the COVID-19 and is limited by its associated precautions. Lockdown in the country has affected all the socio-economic activities. With litigation and court functioning being strongly impacted, what all positive and negative impacts has this unprecedented situation brought for an evolving sector like Arbitration in India?
Mr. Tariq: The COVID-19 pandemic has created a chaotic situation with respect to timelines and schedules in arbitration matters all across the globe. Physical hearings have been taking place since a long time and that’s why we are used to it. If you see the journey of Arbitration and how it has progressed, it has been evolving from time to time and if you compare how arbitration hearings were conducted fifteen years ago there is a total paradigm shift depending on various exigencies including introduction of concepts like emergency arbitration, fixed time period, arb-med-arb, med-arb etc. for making arbitration mechanism more effective and suitable for parties. From that perspective, we must take virtual hearings as a development rather than seeing it as something that has been imposed on the parties. Insofar as the negative impacts are concerned, I feel that in many arbitrations where the record is voluminous, especially during cross examination where the witness will have to be confronted with various documents, then of course a physical hearing will be desirable. Other negative impacts can be that the arbitrator may not be able to see the conduct of the witness and the examiner during a cross examination the way it can be seen in a physical hearing. Further, many lawyers and arbitrators are not proficient in technology which may make the virtual hearings very inconvenient at times. Nevertheless, wherever possible, I feel virtual hearings will be more convenient and will make arbitration in India a preferred method of dispute resolution.
After the national lockdown, there were concerns about limitation period under the Arbitration Act (being time bound) but there has been some relief since the Hon’ble Supreme Court directives on extension of the concerned time. Is this the right time to adopt better practices within the arbitration process to enable virtual methods? Do we have sufficient legal apparatus?
Mr. Tariq: This pandemic has called for various changes including conducting virtual hearings. To ensure resolution of disputes certain proceedings were conducted using virtual mediums. However, there have been various issues in virtual hearings especially in cases where evidence was being recorded. In a case the parties refused to go ahead with cross examination via video conferencing and in some cases after the evidence was recorded, the counsel requested the tribunal to disregard the testimony as the cross examination was not recorded properly. Even before the pandemic came into existence the need for adoption of technological advancements was seen to be relevant and growing to save time and costs. In fact transcription services in arbitration hearings is very common in international arbitrations as it saves a lot of time. Since nobody was prepared for the pandemic and nobody anticipated that virtual mediums will become the primary tool for conducting hearings, there is no robust virtual setup or proper guidelines for conducting such hearings. Technologies that ensure accuracy and help in conducting face-to-face interactions between parties, witnesses and arbitrators, without malfunctions and setbacks need to be developed.
There has been a continued criticism on the choice of arbitrators available in India. The process lacks opportunity to the experts of arbitration and that continued dominance of same judges as arbitrators after their retirement does not change their perspective from regular legal process. How far do you agree with it and your reason(s) for the same.?
Mr. Tariq: The reason why judges are preferred as arbitrators is because of their integrity and fairness. Before the amendment of 2015 to the Arbitration Act, 1996, a party used to appoint a sole arbitrator unilaterally and in some cases these arbitrators were the officers of the same company. In such cases, the independence and impartiality of these arbitrators was questionable. Thus, whenever an application for appointment of an arbitrator was filed in court, the courts were inclined in appointing retired judges as arbitrators. However, recently there has been a change in this approach as arbitration experts are also being appointed as arbitrators by parties as well as by the courts. Further, the amendment of 2015 introduced a disclosure to be given by the arbitrator before entering into reference wherein he/she must disclose his relationship with the parties, counsels or the subject matter of the dispute etc. and also disclose whether he/she can devote sufficient time to the arbitration. Also, a fixed time period was introduced for passing an award. Due to these amendments, there has been a rise in appointment of advocates and experts as arbitrators. Some of the arbitrators who are also retired judges are in demand as they do not apply the regular legal process and are very efficient and flexible. Though there may be few cases where the tribunal insists on the technicalities and strict rules of evidence and code of civil procedure as opposed to the mandate of the Act.
Has the Indian arbitration sector now matured enough to allow foreign law firms to engage directly in arbitration at the same level as it happens in Singapore or UK? Or the current practice of allowing foreign lawyers only in International Commercial Arbitration as subject of India law shall be carried?
Mr. Tariq: Foreign law firms/lawyers can’t practice in India. They can only come on a “fly in and fly out” basis for rendering legal advice to clients in India. In international arbitrations it is very common for a foreign party to engage a foreign law firm/counsels who then engage an Indian firm as they are well versed with the Indian Law and practices. In fact many institutions like ICC, SIAC etc. appoint foreign arbitrators in Arbitrations seated in India. Apart from International Commercial Arbitrations I have personally not come across any proceedings wherein foreign lawyers or law firms are engaged directly. The current practice is in line with the idea of keeping costs under control as engaging a foreign lawyer/firm will add financial burden on the parties.
Do you believe that the vision of the current government to institutionalize arbitration and make India the Hub of Arbitration like Singapore, Stockholm, Geneva is a far-fetched dream or a near possibility? What do you think should be the approach of the policy makers and the legal fraternity to this vision?
Mr. Tariq: Despite the existence of various arbitral institutions, institutional arbitration in India remains in a nascent state which is evident from the fact that almost 90% of arbitrations in India are ad hoc. The main reasons of parties being reluctant in approaching these institutions are lack of awareness about the advantages of institutional arbitration over ad hoc arbitration, outdated rules of procedures and poor infrastructure. The New Delhi International Arbitration Centre Bill, 2019 has been passed recently with a view to make India the hub of International Arbitration. The government has taken a step in this direction to make India the golden paradise for arbitration. However, larger issue has been missed i.e. why India is languishing for decades and has not been able to become an arbitration hub. The reason in my view is that emphasis is put only on cities like Delhi and Mumbai and that the concerns of other cities which are in need of an arbitration culture and institutions are not addressed. Additionally, we must learn from the development of the best three arbitral institutions i.e. International Court of Arbitration, Singapore International Arbitration Centre and London Court of International Arbitration that have huge number of cases, growth in revenue etc. (e.g SIAC’s case filings have increased by over 300% in the last ten years). Therefore, it is necessary that arbitral institutions in India adopt modern rules, make effective use of technology and provide organized structure of proceedings, excellent administrative support and good infrastructure. Additionally, ease of doing business in India also needs to be facilitated, to provide a solid base and ensure longevity. Not only will it make India the hub, but also create a dynamic arbitration culture.