Balancing Judicial Interference In Arbitral Awards Vis-À-Vis’ Ease Of Business: Perspectives In View Of MP Road Development Corporation V. Jabalpur Corridor Pvt. Ltd.
Subhankar Das, Advocate, Orissa High Court
INTRODUCTION
In the era of modernization, recourse to arbitration has become the most sought after exercises undertaken for the purpose of resolution of a multitude of disputes arising out of commercial transactions that involve complex questions of financial and legal implications. Since the inception of the Arbitration Act, 1940, to the reforms/amendments made in view of the Arbitration and Conciliation Act, 1996, further amended in 2015, India has been at the cornerstone of a robust jurisprudence and overhauling of judicial precedents in this widely sought after area of law, in terms of domestic arbitration and international commercial arbitration. However, despite of a comprehensive and extensive legal framework of arbitration, India still occupies a relatively lesser position in the Ease of Business rankings, primarily due to the extensive judicial process and the technicalities involved in the enforcement of judicial awards which are akin to enforcing decrees of civil courts.
The debate over the scope/extent of judicial interference vis-à-vis’, was further re-ignited and re-evaluated by the Hon’ble Apex Court in the decision of MP Road Development Corporation Ltd v. Jabalpur Corridor Pvt. Ltd., wherein the Hon’ble Court while examining the principles under Sections 34 and 37 of the Arbitration Act, held that, by placing reliance upon prior precedents arbitral awards ought not to be interfered ordinarily and further made a detailed observation regarding the fact that inordinate delay/lengthy procedures in enforcement essentially frustrates the purpose of the arbitration and therefore renders it nugatory. The concept of arbitration which is intended to aide and facilitate resolution of disputes, and to provide an efficacious relief to the concerned party whose rights/obligations under the contractual arrangement are jeopardized, however, when the process of arbitration and finalization of the arbitral award itself undergoes an ardent path due to the judicial hierarchy of courts, in such cases, the recourse to arbitration often raises dilemmas, wherein certain parties prefer initiating criminal/civil prosecutions as a substitute to the same, thereby also leading to abuse of legal processes. Therefore, a negative/cascading effect of the same is with regards to the fact that, apart from arbitration there are multiplicity of litigations, which has a detrimental effect on the business relations between the parties and also becomes a cumbersome process due to the costs involved in the legal processes. The verdict of the Hon’ble Apex Court in the above mentioned decision, has once again laid down the factum of minimal judicial intervention in the arbitral processes and awards, however, while the decision lays down the above, it is essential to consider that since the Indian judicial landscape functions on the cardinal principle of hierarchy of judicial forums from the commencement of the proceedings under the Arbitration Act before the Tribunal to Section 34 and 37 applications and one final resort to Article 136 of the Constitution of India, therefore, the practical realities in efficacious enforcement of the arbitral awards have to be considered and observed to facilitate the effectiveness of the same as a mechanism of alternative dispute resolution. By virtue of the present paper, the author intends to undertake a concise examination of the recent decision in MP Road Development Corporation Ltd, reiterating the need for minimalized judicial interference in the arbitral process, in order to improve ease of doing business in India, and also undertake a coherent exercise as to how restrictive judicial discourse can improve the viability of arbitration, in similar footing like the jurisdictions under Vienna, Singapore and Hong Kong etc., in the prevailing circumstances, in consonance with the legislative intent of the Act.
