Government decision to avoid arbitration in high stakes matters undesirable: Justice Sanjay Kishan Kaul

Retired Supreme Court judge Justice Sanjay Kishan Kaul on Saturday took exception to the recent memorandum issued by the Union Finance Ministry which advised government and its entities or agencies not to resort to arbitration in disputes involving a sum of more than ₹10 crores..The former apex court judge said it is opposite of what should have been done."I came across a circular recently where the government says let us not go for arbitration in high profile cases. This is just the opposite ... Challenges we are still facing is how far we go on this. The curative jurisdiction has led to huge debate among arbitrators. The signals in the arbitration circle is that should arbitration be there at all if one party is government? This is the signal. This cannot be so. Spot arbitration is important and mediation is also very important.".Justice Kaul was speaking at the launch of the book, Commercial Dispute Resolution - State of the Law in India, written by Anirudh Krishnan. Supreme Court judge Justice KV Viswanathan was the chief guest at the event..The guidelines issued by the Union Ministry on June 3 also recommended that arbitration clauses in public procurement contracts involving the government should not be routinely used.The Ministry stated that the guidelines were based on 'unsatisfactory experience with arbitration' where the government was a party. It clarified that the guidelines are flexible and permit arbitration for high value disputes after application of mind by the body concerned.The Arbitration Bar of India (ABI) and Indian Arbitration Forum too had expressed their concerns with the said memorandum, arguing that it undermines the efforts by the government to foster a robust arbitration ecosystem in India..Justice Kaul in his speech flagged the time taken to resolve commercial disputes in the country, and said that tribunals handling the same should be manned by experts too instead of becoming retired judges' hubs. "Somewhere down the line, the institutions are not able to handle the workload. The appointment process including for tribunals should take into consideration the knowledge of the judge in subjects he will deal with. If commercial disputes are to be resolved in a faster way, experts must be persuaded to accept such appointments. The tribunals should not be a refuge for retired lawyers or judges but be a place for the experts," he said. Every commercial dispute should not end up becoming a never-ending trial, he emphasised."It is said lawyer not trained in economics and finance is a public enemy. A lot needs to be done in terms of implementation. In foreign countries, only three to four percent cases in the commercial domain go to trial and here 99 percent cases go to trial and numerous levels of trial and I believe only two levels of scrutiny is enough," he said in conclusion..Justice Viswanathan in his speech praised Krishnan's book and spoke about its relevance in today's times, especially in the age of Artificial Intelligence (AI). ."AI cannot be ruled out as inventor of parents and the role it plays and this aspect has been touched upon in the book as well," he said.