The activities relating to entry of foreign law firms in India gathered pace this month as the Government actively took initiatives. The biggest impetus to keep the momentum going was the Prime Minister’s views and directives to enable the Government machinery to expedite. Some major changes have been proposed to the current arbitration regime to make India a hub of arbitration.

Push from the Top: It is none other than India’s Prime Minister who has now stepped in to expedite the entry of foreign law firms. In what is seen as the most decisive step yet, earlier this month, Mr. Narendra Modi has instructed both the law and commerce ministry to prepare a draft notification within a timeframe of four weeks for entry of foreign law firms. This is an outcome of the Prime Ministry’s foreign visits where the need for opening up India’s legal sector has been a recurring point of discussion. The Prime Minister’s decision to allow foreign law firms to set up shop in India has resulted from feedback from various foreign investors that they want to work with lawyers whom they are comfortable with. There was a high profile meeting called recently by none other than the Law Minister, Ravi Shankar Prasad along with Ministry of Commerce Secretary, wherein they met with a whole host of domestic law firms and held discussions around this decision.

Subsequently, in an interview to ET Now, Harish Salve, India’s most high-profile lawyer, expressed his support towards this decision and his agreement on entry of foreign law firms in general.

Proposal to make India an Arbitration Hub – The Government of India is committed for speedy resolution of commercial disputes and to make India an international hub of Arbitration and a Centre of robust ADR mechanism catering to international and domestic arbitration, at par with international standards available. To give an impetus to this endeavor, the Department of Legal Affairs, Ministry of Law and Justice, constituted a ten Member, High Level Committee under the Chairmanship of Justice B.N.Srikrishna, Retired Judge, Supreme Court of India, in the month of January 2017. The High Level Committee was given the mandate to review the institutionalization of arbitration mechanism and suggest reforms thereto. The Committee held 7 sittings. It submitted its report on 3 August, 2017 to Shri Ravi Shankar Prasad, Hon’ble Minister of Law & Justice.

The Committee has divided its Report in three parts. The first part is devoted to suggest measures to improve the overall quality and performance of arbitral institutions in India and to promote the standing of the country as preferred seat of arbitration. The Committee in this context has inter alia recommended:

  • Setting up an autonomous body, styled the Arbitration Promotion Council of India (APCI), having representatives from all stakeholders for grading arbitral institutions in India.
  • The APCI may inter alia recognize professional institutes providing for accreditation of arbitrators.
  • The APCI may hold training workshops and interact with law firms and law schools to train advocates with interest in arbitration and with a goal to create a specialist arbitration bar comprising of advocates dedicated to the field.
  • Creation of a specialist Arbitration Bench to deal with such commercial disputes, in the domain of the Courts.
  • Changes have been suggested in various provisions of the 2015 Amendments in the Arbitration and Conciliation Act (as reported by Asia Law Portal in December 2015) with a view to make arbitration speedier and more efficacious and incorporate international best practices.

The Committee was also of the opinion that the National Litigation Policy (NLP) must promote arbitration in Government contracts.

The Committee in Part II of the Report reviewed the working of the International Centre for Alternative Dispute Resolution (ICADR) working under the aegis of the Ministry of Law and Justice, Department of Legal Affairs. The Institution was set up with the objective of promoting ADR methods and providing requisite facilities for the same. The Committee has preferred for declaring the ICADR as an institution of national importance and takeover of the institution by a statute. The Committee is of the view that a revamped ICADR has the potential be a globally competitive institution.

As regards the role of arbitrations in matters involving the Union of India, including bilateral investment treaties (BIT) arbitrations, the Committee in Part III of the Report has inter alia recommended for creation of the post of an ‘International Law Adviser’ (ILA) who shall advise the Government and coordinate dispute resolution strategy for the Government in disputes arising out of its international law obligations, particularly disputes arising out of BITs. The Committee has emphasized that ILA may be consulted by the Department of Economic Affairs (DEA), at the time of negotiating and entering into BITs.

Posted by Sourish Mohan Mitra

Sourish Mohan Mitra is an India-qualified lawyer from Symbiosis Law School, Pune and currently working as an in-house counsel with a global research firm in Delhi, India; views expressed are personal; he can be reached at sourish24x7@gmail.com; Twitter: @sourish247

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