Search this article on Google: Assessing the Effectiveness of Litigation Law Policies in Resolving Commercial Disputes in India
India is a flourishing country with a rapidly evolving business and commercial landscape. Yet, the potential growth and business dynamism gets impeded by the slow resolution of commercial disputes and litigation issues that plague the Indian legal regime. The efficacy of litigation law policies employed to resolve commercial disputes in India is thus, a subject of substantial significance and merits an in-depth examination.
Litigation Law Policies
Litigation law policies in India have undergone considerable change over the years to facilitate expeditious resolution of commercial disputes. The Civil Procedure Code, 1908 (CPC), and the Arbitration and Conciliation Act, 1996, are two cornerstones of commercial dispute resolution in India. In 2015, India introduced the Commercial Courts Act to fast-track high-value commercial dispute resolution. The Insolvency and Bankruptcy Code, 2016, additionally provides mechanisms to address insolvency-related disputes.
Implications of the Rules and Regulations
The CPC, although historical and deeply rooted, has faced criticism for its slow pace and procedural obstructions in dispute resolution. Its shortcomings have contributed to a substantial backlog of cases, leading to delayed justice.
However, the introduction of the Commercial Courts Act has been a progressive step aiming to expedite dispute resolution for commercial entities where the value is above ₹ 1 crore. Commercial Courts, Commercial Appellate Courts, and the establishment of Commercial Divisions in High Courts have slightly unclogged the overburdened legal system.
The Arbitration and Conciliation Act has been amended frequently to make arbitration a more efficient method of dispute resolution. The current amendment in 2019 introduces an arbitration council to grade institutions based on performance and sets timelines for international commercial arbitrations.
The Insolvency and Bankruptcy Code aims to consolidate existing insolvency laws and expedite insolvency resolution. However, it is still facing a teething phase, getting impeded by litigation and other issues.
Any policy is considered effective when its benefits outweigh the costs, and it accomplishes the stated objective. While India’s litigation law policies are well-intentioned, their effectiveness in resolving commercial disputes can be debated.
The CPC, despite its robustness, has been marked by delays. The heavy backlog of cases has eroded its efficiency, indicating the need for reforms.
The Commercial Courts Act has attempted to induce efficiency into the system. However, the Act’s definition of a commercial dispute is narrow and excludes many commercial matters. Further, the Act’s value cut-off of ₹1 crore tends to neglect smaller businesses that too need an efficient legal system for dispute resolution.
While the Arbitration and Conciliation Act aims to lighten the Courts’ load, its implementation has met with limited success. The 2019 amendment only provides a framework for an Arbitration Council but lacks clarity on its functioning.
In essence, while India’s litigation law policies have undergone several changes and amendments, their efficacy in resolving commercial disputes leaves room for improvement. These laws demand further procedural simplification to cater to all types of businesses, big or small. A broader interpretation of ‘commercial disputes,’ improved infrastructure, stringent timelines for case disposal, and decreasing dependence on court-led processes could enhance these policies’ effectiveness. It is high time for a critical review and comprehensive reform to truly harness India’s commercial potential.