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Innovation during a crisis

By 13/10/2020March 12th, 2021No Comments

With the country being in the midst of an extended lockdown, businesses and individuals are feeling the anxiety and stress brought on by uncertainty regarding the future. Though India Inc. plans a partial exit strategy but to jumpstart a stalled economy is an onerous task. It is, therefore, a valid assumption that economic disruptions caused due to a nationwide lockdown might give a two-fold rise to disputes. The closure of courts and tribunals to curb the spread of the virus has understandably delayed justice to companies and individuals alike. Although the Supreme Court is hearing important cases via videoconferencing, lower courts lack the infrastructure to keep up with these advancements. Therefore, in such times, the traditional reliance on litigation is far from the optimal way of dealing with conflict.

Desperate times call for desperate measures. Fortunately, Alternate Dispute Resolution (ADS) is at last beginning to emerge as a response to conflict in its myriad forms and to the challenge of building a more peaceful world. ADS mechanisms prescribed by the Civil Procedure Code (CPI) under Section 89(1)-(2) include arbitration, mediation, conciliation, judicial settlement, judicial settlement through Look Adalats (people’s courts). ADS, being an informal process, provides quick, interim solutions to parties of a dispute, thereby mitigating conflicts by large. The arbitral institutes can broker an agreement between the parties in two or three successive meetings. In comparison to this, the other dispute resolution methods would take several months, if not years. At the outset, if time is on the claimant’s side, a well thought out, well-crafted demand with factual statements and even detailed legal analysis may help the client avoid the prolonged stress of litigation dispute escalation and yield an early influx of settlement funds. Some of the most compelling reasons for choosing ADS are high litigation expenses, time-consuming adjudication and most importantly, an appropriate method of carrying out dispute resolution whilst following social distancing amid the pandemic.

Though it started with trying to resolve disputes via e-mail, it went on to incubate an online dispute resolution (ODR) platform, known as the Centre of ADS Excellence. This method of dispute resolution was made a reality by marrying ADS mechanisms with technology. Typically, an ADS meeting or conference can be called at a short notice and if both parties are in agreement with the arbitration rules, an arbiter is appointed and time-stamped intimations are sent via e-mails, WhatsApp messages and SMSs (Short Messaging Services). This platform facilitates communication via video calls and eliminates the need for face-to-face communication. The question of its legality can be put to test by going through Section 19 of the Arbitration and Conciliation Act, 1996 which states that the tribunal is not bound by provisions of the Criminal Procedure Code (CrPC) and the Indian Evidence Act (IEA) and may decide upon the procedure to be followed in conduct of such proceedings, thereby making online or live conduct well within the legal domain. No one can challenge such proceedings merely on the ground of being an online resolution proceeding. International Commercial Arbitration rules, which serve as a guideline to arbitration institutions around the globe and have been adopted by the India Council of Arbitration, also mandate that arbitration tribunals have the power to conduct proceedings via videoconference, telephone or any such other means of communication as may be deemed fit. This transposed the concept of ADS towards a highly advanced and a far more cost-effective method of ODR. The ODR also helps overcome jurisdictional issues, eliminate geographical barriers, automate administrative tasks, improve productivity of professionals, promote eco-friendly processes and finally, deliver a quick, economical and effective solution to disputes. The need for use of modern technology in courts was emphasised by the Reserve Bank of India (RBI) and the Supreme Court in the matter of Meters and Instruments Pvt. Ltd. and Anr. v. Kanchan Mehta while hearing a petition on expeditious settlement of cases, especially those relating to business like the Negotiable Instrument Act.

The question of time-bound proceedings had already been answered by the Supreme Court vide its order dated  March 23, by freezing the limitation period from March 15 until further orders. For instance, Section 29A of the Arbitration and Conciliation Act, 1996 stipulates passing of award within 12 months of commencement of proceeding, which may be extended by six months upon agreement of parties to the dispute.

It is necessary that technologies be effectively implemented in the regular course of business and move away from the Supreme Court’s “urgent only” requirement for using videoconferencing and delve into full swing application of online proceedings for all cases and promote ODR, wherever applicable. The COVID-19 crisis has catapulted an archaic industry such as the law to adopt technology at a never-seen-before pace and is believed by many to be the way forward.

Sonam Chandwani

Sonam Chandwani

Sonam Chandwani is the Managing Partner at KS Legal & associates and heads the firm’s Corporate Litigation Practice.

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