Bulky pleadings, lengthy evidence: Supreme Court flags issues in Indian arbitration

The Supreme Court on Monday lamented that arbitral proceedings in India have become synonymous with bulky pleadings and evidence and time consuming submissions. [Bombay Slum Redevelopment Corporation Private Limited v. Samir Narain Bhojwani].A Bench of Justices Abhay S Oka and Pankaj Mithal even observed that observed in appropriate proceedings it would have to examine whether arbitration has been cost-effective in India.It expressed 'serious concerns' in this regard, stating,"Case after case, we find that the arbitral proceedings have become synonymous with very bulky pleadings and evidence and very long, time consuming submissions, leading to very lengthy awards. Moreover, there is a tendency to rely upon a large number of precedents, relevant or irrelevant. The result of all this is that we have very long hearings before the Courts in Sections 34 and 37 [Arbitration and Conciliation Act] proceeding," the Court said. Appeals against arbitral awards are being contested like they are appeals under Section 96 of the Code of Civil Procedure with innumerable grounds cited that waste judicial time, the top court lamented. "The time of our Courts is precious, considering the huge pendency. This is happening in a large number of cases. All this makes the arbitral procedure inefficient and unfair. It is high time that the members of the Bar show restraint by incorporating only legally permissible grounds ... Everyone associated with the arbitral proceedings must remember that brevity will make the arbitral proceedings and the proceedings under Sections 34 and 37 more effective," the Bench underlined. Hence, it urged all stakeholders to introspect so to avoid delays and ensure arbitration is cost effective."Arbitration must become a tool for expeditious, effective, and cost effective dispute resolution," the Court emphasised..The observations came while disposing of appeals against a July 2023 order of a Division Bench of the Bombay High Court. The Division Bench had remanded the case concerning appeals against an arbitral tribunal decision to a single-judge, who had set initially set aside the award on grounds of illegality and perversity.The top court in its verdict added that the award itself ran into 139 pages, while the petition under Section 34 of the Arbitration Act ran into 93 pages and incorporated 151 grounds. Moreover, the judgment of the single-judge was 101 pages, and relying on 35 precedents. The appeal against the same ran into 46 pages with 164 grounds cited."As per the practice in the High Court of Judicature at Bombay, a memorandum of appeal under Section 37 of the Arbitration Act does not contain the facts but only the grounds of challenge ... Considering the narrow scope of interference under Sections 34 and 37 of the Arbitration Act, we cannot comprehend how there could be 151 grounds in a petition under Section 34 and 164 grounds in an appeal under Section 37. It is not surprising that this appeal has a synopsis running into 45 pages, and it contains as many as 54 grounds of challenge," the Supreme Court said..The appeals were, thus, partly allowed and the matter was remanded to the Division Bench of the High Court for a decision on merits in line with the Arbitration Act..Senior Advocates Dr. Abhishek Manu Singhvi, Ramesh Singh, Maninder Singh and Meenakshi Arora appeared for the appellant, Bombay Slum Redevelopment Corporation Private Limited.Senior Advocates Mukul Rohatgi and CU Singh appeared for the respondent..[Read Judgment]