New Delhi, Apr 11 (PTI) Supreme Court judge Justice BV Nagarathna on Saturday said that arbitration and mediation are integral components of a modern and responsive justice system and should not be viewed merely as alternatives to traditional litigation.
Speaking at the International Conference on ‘Arbitration in the Era of Globalisation’ organised by the Indian Council of Arbitration here in the national capital, Justice Nagarathna highlighted the growing importance of alternative dispute resolution (ADR) mechanisms in an increasingly complex and globalised economy.
“Disputes are not only legal questions, but also social, commercial and relational questions that may require more voluntary solutions than a court adjudication. Arbitration and mediation, therefore, are not merely alternatives to litigation, but integral components of a modern and responsive justice system,” she said.
The top court judge said that there has been a discernible shift from the traditional mode of dispute resolution towards the ADR mechanisms such as mediation and arbitration.
Justice Nagarathna said arbitration has emerged as the most preferred method for resolving cross-border commercial disputes because of advantages such as neutral forums, procedural flexibility, confidentiality and party autonomy.
“Its advantages, namely, neutral forums, procedural flexibility, confidentiality, party autonomy and the enforceability of awards under international conventions have made it indispensable in global commerce for practitioners,” she said.
She noted that the effectiveness of international arbitration is strengthened by the New York Convention, which allowed arbitral awards to be recognised and enforced across more than 170 jurisdictions.
Justice Nagarathna also referred to the investment arbitration under bilateral investment treaties in her speech and said such mechanisms protect foreign investors against unlawful expropriation.
“These treaties provide foreign investors with protection such as fair and equitable treatment, protection against unlawful expropriation, and access to neutral dispute resolution mechanisms against host states,” the top court judge said.
Justice Nagarathna also pointed out that disputes across sectors such as infrastructure, construction, technology and telecommunications often require arbitrators with specialised industry expertise in addition to legal knowledge.
“Developing greater sector-specific arbitration expertise in India will be essential if we wish to strengthen India’s position as a credible arbitration jurisdiction,” she said.
On mediation, the judge said it reflects a different philosophy of dispute resolution by facilitating dialogue between parties and helping them arrive at mutually acceptable outcomes.
She observed that mediation is particularly useful in disputes involving long-term commercial relationships, family matters and community conflicts as it helps preserve relationships and promotes durable settlements.
Referring to the Mediation Act, 2023, Justice Nagarathna said the legislation represents an important step towards institutionalising mediation in India, but acknowledged that its implementation remains limited.
“While we have the structure in the form of a legislation, there is no real active implementation as many provisions are yet to be notified and the Mediation Council of India has not been constituted,” she said.
The judge also highlighted the importance of pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015 and called for better coordination between mediation centres, legal services authorities and training institutions to ensure that the provision is implemented in its true spirit.
“Mediation is increasingly proving effective in sectors where commercial relationships are ongoing, for instance, in joint ventures, shareholder disputes, supply chain relationships and commercial partnerships,” she said.
She noted that jurisdictions such as Singapore have successfully institutionalised such models through institutions like the Singapore International Arbitration Centre and the Singapore International Mediation Centre.
“So far as India is concerned, wherever we have arbitration institutions that is institutional arbitration, whether which are attached to the high courts or the Sui juris, one like the ICA, it is necessary that they have trained mediators side by side, so that in an arbitration which has been commenced, even possibly after the issues are crystallized,” she said.
Emphasising the role of negotiation, she said it remains the most fundamental and often underappreciated form of dispute resolution and can help resolve disputes even before they escalate into arbitration or litigation.
“No single dispute resolution mechanism can address every kind of conflict. A mature legal system must therefore support a diverse and complementary ADR framework,” she said. PTI SKM AMJ AMJ
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