‘Why are most world arbitration court judges from West bloc?’

Law Minister Ravi Shankar Prasad says penal results often unsettle a country’s economy

NEW DELHI: As India seeks to develop into a hub of international arbitration, Law and Information Technology Minister Ravi Shankar Prasad on Saturday lamented that only a “small fragment” of members from the Indian judiciary are part of the international dispute resolution mechanism. Terming it as a “sorry state of affairs”, he wondered why very less number of arbitrators are from nonwestern countries.

“I am proud of my judiciary. It has given some of the best judges. But why do they not get adequate representation in international arbitration?,” he said addressing a conference on International Arbitration in BRICS here. He questioned the presumption that resolutions should come from arbitrators who are either trained in Western systems or who are from the developed world. “It is an important issue and we’ll have to articulate (on this),” he said.

The Law minister said that according to one estimate, 69.8 per cent of the arbitrators are from the developed or first world countries. Prasad also lamented a lack of appellate mechanism in dispute resolution system and said there is a need to consider “some kind of very limited appellate mechanism” so that there is a way to challenge the arbitration award by parties involved in arbitration.

Referring to the quantum of penalties imposed in arbitration awards, he said that when as Law Minister he goes through such orders, the first thing he looks for is the penalty. “My eyes get wide open... I have rarely seen such penalities... should 10 investments and the dispute arising therefrom lead to a dispute redressal with penal consequences that are designed to unsettle the economy of the country (where investments have been made),” he questioned.

Global arbitration must also appreciate the social constraints of investment in a country, he said asking why only “a few world centres” should always remain the “hubs” of international arbitration. Successive governments have been trying to make India into a hub of international arbitration on the lines of London and Singapore.

The 1996 Arbitration law has recently been amended keeping in mind the Narendra Modi’s government’s push for “ease of doing business”.

Later on, after inaugurating the Government-funded ‘Electropreneur Park’, Prasad observed that India has attracted investment from 37 mobile manufacturing companies in the last one year which have generated 40,000 direct jobs and 1.25 lakh indirect employment.

“We decided to make India a big hub of electronics manufacturing. In the last one year, 37 new mobile manufacturing units have come,” Prasad said. He said that 11 crore mobile phones have been made in the country in the last one year compared to 6 crore earlier.