Arbitration/ commercial disputes' pendency affects ease of doing business: Supreme Court asks Allahabad HC for road map to tackle arrears

The Supreme Court on Thursday expressed its concern over the large number of execution applications pending before the Allahabad High Court under Section 34 of the Arbitration and Conciliation Act [M/s Chopra Fabricators and Manufacturers Ltd. v. Bharat Pumps and Compressors Ltd.]. .A Bench of Justices MR Shah and BV Nagarathna said that pendency of such execution applications and commercial disputes affects the ease of doing business."Time has come to take corrective measures and for that purpose the concerned High Court has to prepare a road map and take a call how to handle the problem to execution proceedings to execute the award passed under the Arbitration and Conciliation Act, 1996 and application under Section 34 decided and disposed of at the earliest so that the ultimate objective of arbitration and the Commercial Courts Act is achieved. If such cases are not disposed of at the earliest, it will ultimately affect the economy of the country and spoil business relations between the parties. It may also affect ease of doing business," the Court observed. The Supreme Court further said that commercial disputes in general should be disposed of at the earliest so that litigants faith in judiciary remains. The Court, therefore, ordered the Allahabad High Court Chief Justice to present a road map towards early disposal of execution petitions under the Arbitration Act as well as commercial cases. Towards this end, it directed the Chief Justice of Allahabad High Court to constitute a special committee of judges to prepare a road map to tackle the arrears of commercial disputes. "We direct the registrar General of Allahabad High Court to present the current case status before the Chief Justice of the High Court. We request the Chief Justice of Allahabad High Court to constitute a special committee comprising of judges of High Court and invite suggestions to prepare a road map to tackle the arrears. High Court has to present to us before next date of hearing how it will deal with such large number of commercial dispute case pendency," the Court ordered. The status report has to be submitted by High Court Registrar General and not any other officer, the Court clarified. The matter was listed for further hearing on May 18..The apex court was hearing a matter regarding the pendency of execution applications under the Arbitration Act before the Allahabad High Court.The Bench stated that before passing further orders, it proposes to have the High Court Chief Justice's response as to how the High Court proposes to deal with pendency of execution applications under Section 34 of the Act."The High Court has to prepare a roadmap for early disposal of commercial disputes to keep faith of litigants in institution as a whole," the Court said..Senior Advocate Vijay Hansaria who was there in the court submitted that the main problem is the vacancies in the subordinate judiciary, to which Justice Shah responded by saying that the problem is 'adjournment culture'.Hansaria suggested imposition of heavy costs if a lawyer takes more than five adjournments. Justice Shah then recounted his experience at the Patna High Court. "When I was Chief Justice of the Patna High Court, people were used to adjournment culture. People used to say 'mere bua ka beta ka phalana is not well ... adjournment needed'. Then I said I will be there in Court and asked them to argue. Slowly no one asked for adjournments," he said. .Advocate Apoorv Shukla appeared for the Allahabad High Court. .[Follow our coverage of the hearing]