AHMEDABAD
Only ruthless enforcement of clear thinking with right intentions will bring in the desired results of making contracts truly enforceable in India
Earlier this month, on May 8, the Supreme Court of India in the case “Ssangyong v. NHAI” decided against enlarging the “public policy” challenge in arbitration awards, and emphasised on the sanctity of contracts. This is heartening and will pave the way for better enforcement of contracts with lesser legal obstacles in dispute resolution. The Supreme Court also referred to the highly unsatisfactory position of India regarding contract enforcement in India as it is lower than 160 in ranking in the ease of doing business index of the World Bank for contracts. In simple words, it sends the message to the world that India does not care much about the contracts.
This has to change for the better for the new government at the centre to consolidate its position and get the country in the fast lane of infrastructure development and getting different works done through numerous contracts with Indian and foreign businesses, investors and service providers. The role of the private sector –whether Indian or foreign – is crucial in getting the new government fulfill the promises and rise to the expectations and aspirations of the people of India. The Supreme Court’s verdict with many observations can be truly effective in making the road a bit easy for the government to get things done efficiently without wasting resources of time, effort and money in dispute resolution.
In the instant case, a contract was entered into between the Korean company Ssangyong and the NHAI in 2005 for construction of a four-lane bypass on NH 26 in Madhya Pradesh, however, disputes arose and the matter was referred to arbitration – resolution of a dispute by appointing arbitrator(s) by mutual consent who decide on the basis of the contract between the parties within the periphery of the law of the land, primarily the contract law and the arbitration law. Usually, the arbitrators are subject-matter experts. Interestingly, the law is dynamic in nature and amendments are made to make the law more effective by trying to tweak the existing law in the light of the problems and loopholes experienced.
One such amendment was made in the 1996 arbitration law in 2015, however, the date of enforcement of any amendment often creates issues of clarity, or rather lack of it, for on-going matters or even for matters which could be contested due to the changed law. The role of judiciary in making this transition – from old to new law – is immense. The transition is typically necessitated by legislative change, which again is mostly piloted by the government of the day. Thus, there is a very close relationship between the executive – the government – and the judiciary to make things work as aspired by the affected section of society and recommended by experts. The dispute between Ssangyong and NHAI had been pending for more than a decade and the same has been the case with so many other contractual disputes with arbitration clauses.
Legal wrangling had made it next to impossible to resolve these disputes by exhausting all legal possibilities. It is up to the government to make the dialogue between the parties amicable and somehow make it really attractive for the parties to settle the matter without doing through the complete legal process, at least in the cases where one of the parties is directly or indirectly under the control or some supervision of the government. For a dispute between two government parties – ministries, departments, public sector undertakings or any other instrumentalities of State – it is not at all acceptable that the parties use the method of arbitration or litigation to resolve disputes. It is criminal waste of national resources and loss of precious opportunities. Resolution must be through dialogue and negotiation only, and by no other means.
Can the country afford to squander invaluable resources in just resolving disputes? No way. The label of “delay and slow” affixed to judiciary in India has to be eventually removed, without bothering about the vested interests. Only ruthless enforcement of clear thinking with right intentions will bring in the desired results of making contracts truly enforceable in India and sending the message that the government is serious about consolidating the legislative changes and judicial pronouncements.
The author is a professor at IIM-A,
akagarwal@iima.ac.in
Hidden danger in your spice rack: Turmeric's lead contamination crisis
Dev Uthani Ekadashi 2024: When is Devutthana Prabodhini Ekadashi vrat? Know date and significance
J-K: Fresh encounter breaks out in Kishtwar between security forces, terrorists
No water supply for 16 hours on November 11 in THIS part of Delhi, check details
Viral video: Man finds live worm in pizza ordered online, furious netizens demand action, WATCH
How many meals in a day is healthy for Indians?
New health directive in Tamil Nadu, Government declares THIS as notifiable disease
How Indian airports are becoming hubs for drug-trafficking?
Maharashtra Assembly Elections 2024: Union Home Minister Amit Shah releases BJP manifesto
J-K: Exchange of fire between terrorists, security forces in forest area of Srinagar
'These kids will regret': Kartik Aaryan fans IGNORE Sonu Nigam, viral video leaves netizens angry
Liam Payne's death 'NOT' suicide: Autopsy reveals One Direction singer died due to...
Delhi Ganesh, Kamal Haasan’s Indian 2 co-star, passes away
Why paper cuts hurt so much: Surprising science explained
Donald Trump marks second term victory with formation of inaugural committee for 2025
Citadel Honey Bunny review: Varun Dhawan, Samantha try powering this dull series
Meet Malaysia's richest Indian, owns private satellites, his net worth is Rs...
Delhi-NCR update: AQI improves slightly but remains in 'very poor' category
Meet woman who was first DSP, cracked UPSC exam to become collector, was jailed due to...
SA vs IND, 2nd T20I: Predicted playing XIs, live streaming details, weather and pitch report
SA vs IND, 2nd T20I Dream11 prediction: Fantasy cricket tips for South Africa vs India match
Viral Video: Bride's squad dances to 'Jadoo Ki Jhappi' song at wedding, win hearts online
Viral video: Little girl's adorable dance to 'Gulabi Sadi' leaves internet wanting more, watch
Meet man who built Rs 4500 crore company with MS Dhoni’s help, his business is…
Meet woman, who survived cancer, owns 10 private jets, her net worth is…
MBBS in Russia: Why do Indian students prefer studying medicals in Russia, why not India?
Amid divorce rumours, Aishwarya Rai reveals if she checks Abhishek Bachchan’s phone in viral video
DNA TV Show: Why Ajit Pawar distances himself from CM Yogi's slogan 'Batenge toh katenge'?
Meet Yashvardhan Dalal, Haryana batsman who scored 426 runs in an innings in CK Nayudu Trophy
Pakistani TikTok star Minahil Malik's dance video goes viral amid MMS leak controversy, watch
Gujarat: 38 injured in collision involving bus, two vehicles near Ambaji
MSMEs will get collateral free term loans scheme of upto Rs 100 crore through..., says FM Sitharaman
Rashmika, Samantha, Nayanthara, Tamannaah: Meet top South actresses
New Maruti Dzire vs Old Maruti Dzire: Engine, specs, safety compared
Will Hania Amir-Fahad Mustafa’s romantic drama return for Kabhi Main Kabhi Tum season 2?
Meet man, son of rickshaw puller, cracked UPSC in 1st attempt at 22, currently posted in...
AUS vs PAK Live Streaming: When and where to watch Australia vs Pakistan 3rd ODI live in India?
Tesla CEO Elon Musk becomes world's richest man, enters exclusive club of Rs...
Meet man, Elon Musk’s 'right-hand man', known for re-shaping Tesla, set to lead...
Calculated Risk: Exploring Iran's motives behind alleged Donald Trump assassination plot
Meet Jan Zelezny, Neeraj Chopra's new coach and current javelin throw world record holder
Do you wake up tired? Here's how to fix it
Canada ends fast-track visas for foreign students, know how will it affect Indians
'BJP-RSS want to destroy Constitution, we will keep protecting it': Rahul Gandhi in Jharkhand
'Jab Congress mazboot hogi, desh…' PM Modi's scathing attack on Aghadi bloc in Akola rally
Ajay Devgn says Ranveer Singh talks 'RUBBISH', Kareena Kapoor has all the...
Meet man, who used his pension money to build bridge for his village, he is from...
This was world's largest Eagle which went extinct 500 years ago, was found in...
Ratan Tata disliked this food, ate only this ice cream made by…
Gautam Gambhir to be sacked? Report indicates India coach could lose Test role if...
Bridal beauty routine: 6 essential skincare tips for a perfect wedding glow
IND vs SA: Sanju Samson goes past MS Dhoni, Rishabh Pant to achieve this massive T20I feat
CBSE Datesheet 2025: CBSE class 10, 12 timetables expected soon at cbse.gov.in
What is saree, petticoat cancer? From causes, symptoms to prevention, all you need to know
This is world's largest building 'shaped like chicken', has bonita huts, wave pool, is located in...
'More civilised than...': Viral video captures Japan's Nara deer bowing back at woman, WATCH