COURTS AND LITIGATION
India has a highly developed and codified legal system, initially inherited from the British but thereafter extensively re-worked and substantively re-structured. There are detailed codified statutes governing commercial relations between parties including the Contract Act, 1872, the Sale of Goods Act, 1930 and the Specific Relief Act, 1963. The Indian judicial system is administered by a three tiered judicial structure. The Supreme Court of India (“Supreme Court”) is the apex federal court under which the respective High Courts that head state level judicial administration, function. Each state is further divided into judicial districts presided over by a District and Sessions Judge, who is the highest judicial authority in a district. The judicial districts comprise of trial courts of both civil and criminal jurisdiction.
Supreme Court
The Supreme Court exercises original, appellate and advisory jurisdiction. Its exclusive original jurisdiction extends to all disputes between the GoI and one or more States or between two or more States. The Constitution grants an extensive original jurisdiction to the Supreme Court to enforce fundamental rights. The appellate jurisdiction of the Supreme Court can be invoked by a certificate of the High Court concerned or by special leave granted by the Supreme Court in respect of any judgment, decree or final order of a High Court in civil and criminal cases, involving substantial questions of law or as to the interpretation of the constitution. Under its advisory jurisdiction, the President of India is entitled to consult the Supreme Court on any question of fact or law of public importance. The Supreme Court has been responsible for the introduction of several concepts of critical importance including the concept of Public Interest Litigation (“PIL”) which stands for litigation in the interest of the public in general. Through the PIL, the Supreme Court has imparted easier access to the law and introduced a broader public interest perspective to litigation addressing important issues including human rights, consumer welfare and protection of the environment.
High Courts
There are twenty four (24) high courts in India at present. High Courts have powers of superintendence over all courts within their jurisdiction. High Courts have original jurisdiction with regard to certain matters, in addition to appellate jurisdiction.
ALTERNATIVE DISPUTE RESOLUTION
The concept of “Alternative Dispute Resolution” on the lines of internationally accepted standards was comprehensively re-modeled in India with the advent of the economic liberalization. The objective was to facilitate structured economic development, which required quick and cost effective resolution of domestic and trans-national business, and commercial disputes. The law pertaining to arbitration in India is contained in the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) The Arbitration Act is based on the UNCITRAL Model Law of International Commercial Arbitration. It encompasses both domestic and international commercial arbitrations and gives freedom to the arbitrating parties in case of trans-border contracts to choose the venue as well as the rules governing their arbitration. It further accords due recognition to mediation and conciliation The Arbitration Act contains elaborate provisions on the composition and jurisdiction of arbitral tribunals and the conduct of arbitral proceedings. Further, the Arbitration Act incorporates the principle of finality of arbitral awards as in UNCITRAL and ICC and accords arbitral awards final and binding status between the parties. Under the Arbitration Act, interference of the courts in matters connected with matters such as the conduct of arbitration, decision of the arbitrator and challenges to awards have been minimized. However, courts are empowered, to order interim measures of protection including securing the amount in dispute, detention, preservation or inspection of property, injunction and the appointment of receivers. With a view to send out a signal to foreign investors that settling commercial disputes in India will no longer be a time-consuming affair, the Union Cabinet has cleared the amendments in the Arbitration and Conciliation Act, 1996. The aforesaid amendments are aimed at making it mandatory for commercial disputes to be settled within nine months from the case being referred for arbitration, unless the High Court grants an extension and the same shall also be subject to fee caps in order to check the cost of arbitration. The Arbitration Act contains elaborate provisions in respect of “Conciliation” based on the UNCITRAL Conciliation Rules. Conciliation can be resorted to in relation to disputes arising out of a legal relationship, whether contractual or not. There are elaborate provisions regarding the role of the conciliator, disclosure of information, settlement agreements, confidentiality and admissibility of evidence in such proceedings. Settlement agreements are final and binding on the parties and hold the same status and effect as an arbitral award. Settlement agreements can be enforced as a decree of court. Enforcement of a foreign award made by countries to which the New York Convention or the Geneva Convention applies and having a reciprocal arrangement with India is enforceable in India. Such enforceability is subject to compliance with certain conditions prescribed under Part II of the Arbitration Act.