Sarosh Zaiwalla comments on the need to reform India’s arbitration system in Moneycontrol

March 16 2022

Read the full article published in Moneycontrol, on 14 March 2022, here.

In the early 1980s, India was involved in over 150 international maritime arbitration cases, which had seats in London. The cases pertained to whether India was liable to pay compound interest as penalty on late payment to owners of ships chartered to collect wheat from US ports for delivery to India.

In 1982, Zaiwalla & Co. was appointed as the Indian government’s lawyer for these arbitration cases.

Sarosh Zaiwalla, Senior Partner, commented:

“We were able to turn things around for India and started to win arbitration cases. Interestingly, in 1982 itself, we won India’s first major challenge to an arbitration award in the House of Lords – the highest court in England.”

“This matter concerned a ship called La Pintada. The issue surrounding this matter was whether India should pay compound interest on the delayed payment of freight and demurrage… thereafter, India continued to win many cases and the key to success was the committed involvement of the local Indian team and my legal team in London.”

Reflecting on recent international litigation trends in India, Sarosh adds that “The decision-making process in India is very bureaucratic and is also very slow. This could be because of the lack of confidence on the part of those making the decisions. I recall for obtaining decisions from our Indian clients, I used to personally travel to India and explain to them face-to-face the need for and importance of the decisions which I required.”

He further notes that “Yes, urgent reform is necessary. The challenge to an arbitration award under the New York Convention rules is a very limited one and it is up to the Indian judges to ensure that the limit is strictly maintained.”

“The Indian courts should therefore honour this requirement unless there is any suggestion of fraud or dishonesty by one of the parties or there is a serious question of the integrity of one or more of the arbitrators.”

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