IS INDIA AN ONLINE ARBITRATION FRIENDLY JURISDICTION?
Final year student, B.B.A.LL.B
New Law College, BVP, Pune
India provides for a specialized law that specifically deals with alternative dispute resolution, namely Arbitration and Conciliation Act, 1996. With the outbreak of Covid-19, Indian courts were bound to accept the technological advancement and started the hearing of urgent matters through virtual means. But the question arises are the laws keeping up with technological advancements? Through this article, the author tries to answer whether the Indian laws are compatible with the procedures of online Arbitration.
The procedure involved in online Arbitration
For online arbitration proceedings to be successful, the following things must be ascertained:
Section 7 of the Act deals with the arbitration agreement provides that the agreement must be in writing. Furthermore, as per section 7 (2), the agreement would be considered in writing even if there is an exchange of communication through electronic means. Also, section 10A of the Information Technology Act, 2000 upholds the validity of contracts formed solely through electronic means. A Similar provision relating to an arbitration agreement to be in the form of E-mails or letters can be found in Article 7 (2) of the UNCITRAL Model Law on International Commercial Arbitration. Therefore, it can be inferred that section 7 of the Act upholds and recognizes the validity of online agreements.
In the case, Shakti Bhog Foods Ltd. Vs. Kola Shipping Ltd and Trimex International FZE Ltd. Vs. Vedanta Aluminum Ltd., the Supreme Court held that it will amount to a valid arbitration agreement if there is an exchange of emails by the parties to enter into an arbitration agreement, though no formal agreement is made in writing.
Place of Arbitration:
The place of arbitration in any arbitration agreement is important in order to determine which court will have jurisdiction over the proceedings. Article V 1(d) of the New York Convention of 1958 on the Recognition and enforcement of Foreign Awards makes it mandatory for the parties to elect a seat of arbitration and empowers the court to refuse the enforcement of the award in absence of the same. Section 20 of the Act deals with the provision relating to the seat of arbitration and provides that parties are free to decide the place of arbitration if are unable to do so the arbitration tribunal is given the power to do so.
In case of Online Arbitration, the parties can voluntarily decide the place of arbitration only to determine which court will have jurisdiction over the process, if any party wants to seek interim relief or for enforcement of the arbitral award.
If the proceedings will take place virtually, then the evidence will also be produced by the parties virtually. Section 65A and 65B were inserted in the Indian evidence Act, 1872 to integrate the Admissibility of electronic evidence, and section 4 of the Information Technology Act,2000 recognizes electronic records. Therefore, it can be deduced from this given provisions that India gives legal recognition to electronic records and evidence.
Section 5 of the IT Act provides for legal recognition to the electronic records. Furthermore, section 31 describes that the arbitral award must be signed by all the members of the Arbitral Tribunal and since IT Act provides legal recognition to the electronic signature. Therefore, e-signature must be attested to the arbitral award and as required by section 31, the signed copy of the award must be provided to the parties.
In the case, Bright Simons V. Sproxil Inc., the Delhi HC gave legal recognition to online arbitration as a means of dispute resolution.
The Supreme Court in the case, Meters and Instruments Pvt. Ltd. V. Kanchan Mehta, realized to resolve disputes online and must use it not only in the times of pandemic.
As mentioned above, it can be seen that the Indian laws very well provide for procedures relating to online arbitration. It can also be seen that India as a country is very accepting of the technological advancements which help in promoting the speedier justice delivery mechanism in the country.
Disclaimer: Kindly note that the views and opinions expressed are of the author, and not Law Colloquy.