Supreme Court’s DMRC decision has undermined confidence: Gaëtan Verhoosel KC on India's arbitration prospects

Gaëtan Verhoosel is a founding partner of Three Crowns, a law firm that specialises in international commercial arbitration and has offices in London, Singapore, Paris, Washington DC and Madrid. Verhoosel has over 20 years of experience as an advocate and arbitrator in commercial and investment treaty arbitration..Delhi Airport Metro: Win for DMRC as Supreme Court sets aside arbitral award in favour of Anil Ambani firm.In this interview with Bar & Bench, Verhoosel speaks about India as a hub of international arbitration, the imminent opening up of the Indian legal market, top trends in international arbitration and much more..Pallavi Saluja (PS): How did the founders go about setting up Three Crowns LLP?.Gaëtan Verhoosel (GV): The vision behind Three Crowns was to create a firm dedicated to the practice of international arbitration. The six founding partners wanted to build a firm that distinguished itself through excellence in advocacy and client advice, and we sensed that there was an opportunity in the market to do this.This led to our launch in April 2014, with offices opening simultaneously in London, Paris and Washington DC. This immediately established our presence in three of the busiest international arbitration hubs. We were also fortunate to have a set of clients who trusted and believed in the vision of the firm, meaning we hit the ground running on day one, and were able to immediately attract talented lawyers, many of whom are still with us today..PS: You have experience working at firms like Debevoise & Plimpton and Covington & Burling. How is Three Crowns different from other international law firms?.GV: In contrast to the firms we came from, Three Crowns is exclusively dedicated to international arbitration. This means every Three Crowns lawyer is an international arbitration specialist.We also aspire to practice differently to our competitors. From the outset, we have always made sure that clients benefit from lean teams and hands-on partner immersion throughout. In this way, we maximise efficiency and delivery of advice. It also means that we avoid hierarchy, with clients ultimately benefiting from the close senior direction that partners give from the very early stages of a matter. Many firms choose to engage barristers to conduct oral proceedings. At Three Crowns, we conduct the oral advocacy ourselves. Again, this delivers efficiency for our clients: the advocate has been closely involved in the case, knows it in detail, and is best placed to present it to the tribunal..PS: How serious are conflict-of-interest issues for arbitration practice groups at big law firms?.GV: Conflicts can pose significant issues for disputes lawyers who practice in large, full-service law firms. Broadly speaking, the clients who instruct large international firms on transactional work are the same clients whose transactions give rise to arbitration. Firms are reluctant to risk transactional relationships by suing a client, and conflict rules will typically prevent them from accepting work on the other side of a dispute from a client. Undoubtedly, this has contributed to the recent trend of senior arbitration lawyers leaving large firms to launch or join smaller platforms..PS: Do you think India has the potential to become a hub of international arbitration?.GV: India shares many attributes with the world’s leading arbitral hubs.First and foremost, the size of its economy and its potential to generate disputes. India is one of the world’s top five economies; it is predicted to grow further as investors shift away from other countries facing recession and low growth. The world’s biggest corporations are investing heavily in India across a wide range of sectors including energy, pharmaceuticals, telecoms and technology. Importantly, we are also seeing Indian corporations making significant outbound investments, and we expect that trend to continue.Such high levels of activity inevitably generate disputes and many, if not most, of those disputes are subject to arbitration agreements.Indian parties are already sophisticated users of arbitration, and there are numerous Indian lawyers – both in and outside the country - who are familiar with arbitral practice and procedure. India boasts arbitration lawyers who are internationally recognised as leaders in the field, and there is a thriving community of more junior lawyers who are focusing on arbitration.The Indian government is supportive. It has acted to improve India’s arbitration law, most recently in 2019 and again last year, when it set up an expert committee to consider further reforms.....the Supreme Court’s decision in DMRC v DAMEPL to exercise curative jurisdiction to set aside an award – have undermined confidence.Gaëtan Verhoosel KC.India’s recent decision to liberalise its legal market is a significant step towards attracting international arbitration. Of particular interest are the Bar Council of India regulations that permit foreign firms to act as counsel in international commercial arbitration seated in India. These regulations are still being developed, but they demonstrate that India recognises the need for arbitration expertise within the country, given the tremendous growth in its arbitration market.Having said that, there are some hurdles for India to overcome if it is to compete with hubs like Singapore, Hong Kong and London. India’s courts have been largely supportive of arbitration, but a few less constructive decisions – most recently the Supreme Court’s decision in DMRC v DAMEPL to exercise curative jurisdiction to set aside an award – have undermined confidence. The length of the Indian court process also deters international parties from arbitrating in India (while arguably increasing the number of domestic parties who select arbitration over litigation). There is also a tendency – perceived or otherwise – for Indian arbitrators to apply domestic court procedures to arbitral proceedings. This, too, discourages international parties from agreeing to an Indian seat.Finally, the recent rules aimed at liberalising the legal sector, while welcome, would benefit from clarification in certain areas. In particular, it would be helpful to have clearer guidance on whether foreign lawyers can represent Indian parties in Indian-seated arbitration.With support from the government, the judiciary and India’s arbitration community, there is no reason these hurdles cannot be overcome. India can develop into an arbitral centre that both competes with existing hubs and is commensurate with its position in the global economy..PS: What is your take on Indian legal professionals competing with international law firms/lawyers in established arbitration hubs like London, Singapore and Paris?.GV: Many Indian lawyers have built successful arbitration practices outside India. Most of the large international firms have India teams or “India desks”, staffed by India-qualified attorneys. At Three Crowns, we benefit from a strong bench of Indian talent, led from London by our Head of India Practice Manish Aggarwal. Over ten percent of our fee earners are qualified in India or have other Indian connections. As a result, we attract a significant number of cases with an Indian nexus, for clients based in and outside India. And, of course, our Indian lawyers also work on cases that are not related to India, as part of their broad practices. .We are also seeing more India-based advocates taking door tenancies at UK chambers, and top Indian firms establishing offices in arbitral hubs like Singapore, New York and Abu Dhabi.Where an arbitration involves issues of Indian law, Indian lawyers routinely co-counsel with their non-Indian counterparts. Co-counselling is a common feature of international arbitration, and a great way for firms and individual lawyers to develop strong working relationships, the best of which endure over many years and multiple cases. International arbitration boasts one of the most diverse professional communities in the law. Indian lawyers have always played a role in that community; I am confident that will continue..PS: With the Indian market opening up (hopefully very soon), do you think international firms will rush to open offices in India?.GV: Opening a new office is a serious decision for any firm, and one which requires careful consideration. Last year’s Bar Council announcement promising liberalisation was welcome, and we have recently learned that the Indian legal market may open to UK firms very soon. These are significant developments, which international firms are watching closely.However, there are still areas of uncertainty that international firms may wish to be resolved before rushing to open offices in India..PS: What advice would you give to Indians who wish to pursue careers in international arbitration?.GV: Be visible in the arbitration community and demonstrate substantive expertise. Speaking at conferences, publishing and networking all help to build profile. Getting to know the arbitral institutions is also important. Apart from joining their panels of arbitrators, offer to help with institutional initiatives (training, projects, conferences, drafting rules and guidance, etc) if you can. Finally, get to know local arbitration lawyers. This is critical: most arbitral appointments are made by parties on the advice of their counsel.For Indian arbitrators specifically, it is important to demonstrate that you know and understand international arbitration procedure. Rightly or wrongly, there is a perception that Indian arbitrators are principally retired judges who run arbitration like domestic court proceedings. In practice, this is not always the case, but Indian arbitrators looking to sit in other seats should be alive to the perception and equip themselves to refute it.Establishing an arbitrator practice is generally a slow process; patience is vital. But there are eminent Indian arbitrators who sit in all the major hubs. With patience and perseverance, it is an achievable ambition..There is a perception that Indian arbitrators are principally retired judges who run arbitration like domestic court proceedings...Gaëtan Verhoosel KC.PS: Tell us a little bit about Three Crowns foray into Singapore. Where do you see the firm going next?.GV: Since we opened in 2014, we have been fortunate to receive instructions from clients across Asia, including India. Expanding into Asia was always a natural next step to enhance our offering in the region. Singapore has successfully established itself as a leading arbitration hub with not just regional but global ambitions; it was a natural choice for us. The office has gone from strength to strength since we launched in 2022, working for clients based across Asia and beyond.As to where Three Crowns goes next, our ambition is to continue to grow while ensuring we deliver the premium service our clients expect. We have always been measured in our thinking around expanding our geographical footprint, with the focus firmly on our clients’ needs. The opening of our most recent office in Madrid in 2023 was a decision to meet client needs in Iberia and Latin America, as Madrid increasingly becomes a hub for Ibero-American arbitration. .PS: What are the top three trends in international arbitration today?.GV: In England and other common law jurisdictions, there has been a sharp rise in arbitration-related anti-suit injunctions. This is driven primarily by sanctions against Russia and subsequent Russian legislation that permits their courts to hear disputes that are subject to valid arbitration agreements. Coupled with this, we have seen an increase in the use of mandatory injunctions ordering parties to withdraw Russian court proceedings, and anti-enforcement injunctions.Another hot topic is artificial intelligence (AI). Users of arbitration are working to learn how AI might improve the arbitral process, and on implementing suitable safeguards. Law firms, arbitrators and service providers are exploring AI at every stage of an arbitration, from document collation and review to legal research, witness examination and even drafting awards. Bodies including the Silicon Valley Arbitration and Mediation Center and the Chartered Institute of Arbitrators have published guidelines on AI, with a focus on responsible use and preserving the integrity of the legal process. Perhaps the biggest impact on arbitration will come from using AI to avoid disputes altogether. AI is increasingly used as a contract management tool, particularly in the construction industry. As well as optimising processes, including design, cost estimation and scheduling, AI tools can flag potential breaches before they occur, allowing parties to avoid the situations that give rise to disputes.A third trend is disputes in the energy sector. Very often, these involve decommissioning of oil and gas assets, either in the context of the energy transition or because they have reached the end of their lifecycles. Owners must comply with decommissioning obligations in contracts, national legislation and treaties, and decommissioning can be a complex and risky process. Many of the relevant contracts and legal instruments refer disputes to arbitration; this is an area that we believe will continue to give rise to disputes for the foreseeable future..India is undoubtedly going to be a centre for international arbitration in the future: Constantine Partasides explains why