It is heartening to note that the World Bank has recently praised the Modi Government that the “Ease of Doing Business” in India has become better in the current year. (See report from Hindu)
Yesterday, a meeting of the CFO forum in CII, Bangalore discussed the developments relevant to the Ease of Doing Business.
One of the aspects that came up for discussion was the “Mechanism for ADR” which was also a factor that affects the global ranking of India for the “Ease of Doing Business index.”
While the Modi Government tries to take further steps to improve the country’s rankings for the Ease of Doing Business, I would like to draw the attention of the powers be that development of a good ODR system as would be enabled by Arbitration.in would help in India improving its rank significantly.
I suppose that the time for Arbitration.in has arrived.
According to the ranking report, India improved its ranking from 134 to 130 with a DTF score of 54.68.
One of the key aspects of this scoring is “Enforcement of Contracts”. India ranked 178 in this parameter which was the same ranking last year. This and “Dealing with Construction Permits” at 184 dragged down the India ranking significantly. Considering that this year’s movement of ranking from 134 to 130 was aided by a movement of 29 ranks in Getting Electricity (99 to 70) and 9 ranks in Starting a Business (164 to 155), movement of a single parameter such as “Enforcing Contracts” from the low 178 to say around 150 could make a significant contribution to the improvement of the ranking.
One of the aspects that helps in Enforcement of Contracts is the efficiency of the Judicial Systems which is difficult. But it is possible that development of ADRs could help in improving the ranking in Enforcement of Contracts.
Hence just as special efforts are being made to improve the efficiency in “Starting Business” where the number of days required is presently 29 days and is expected to be brought down to less than 20 days, special efforts must be made to improve the ADR mechanism in India.
The Arbitration Act Amendment ordinance (The Proposed Arbitration Act Amendment Bill is pending in the Rajyasabha) provides for fast track arbitration with a six month deadline.
ODR can significantly help in achieving this fast track objective when used alone or in combination with the existing ADR system.
If Government wants, it can add a “Double Fast Track” process with ODR and fix 3 months limit for arbitration. This will be such a unique step that, if brought in, the ranking in “Contract Enforcement” may take a quantum upward jump pulling along the ranking for “Ease of Doing Business” also up by several notches.
While it may take some time for the existing Arbitration s to completely switch over to Full service ODR as suggested under Arbitration.in, a combination of Physical and ODR may also be used with some of the initial hearings held online and argument related hearing held offline. This will also reduce the cost and time of the process.
I invite views on these suggestions.
Naavi
From expensive protracted litigation, we evolved to ADR mechanisms like arbitration which were held in expensive hill resorts. Justice V R Krishna Iyer came down heavily on this extravagant practice in one of his books saying “only if the Judges charged fees equivalent to their last drawn pay”. Holding arbitration in expensive hill resorts became prohibitive and defeated the very purpose of ADR.
ODR is the way forward in this Digital Age, where parties can save costs and conduct arbitration virtually avoiding expensive hotel stay, travel costs, time and resources. This would create a win win situation for all stakeholders.