The journey of DMRC vs. DAMEPL
Judicial intervention: A necessary evil?
Let us juxtapose this law relating to judicial review of arbitral awards in India with the law relating to judicial review of arbitral awards in other countries.
United States:
In the United States, the Federal Arbitration Act (FAA) strictly limits judicial review of arbitration awards. The seminal case Hall Street Associates, L.L.C. v. Mattel, Inc.[i] (2008) reinforced that courts could not expand the grounds for review beyond those explicitly stated in the FAA, thereby preserving the autonomy of arbitration.
United Kingdom:
In the United Kingdom, the Arbitration Act 1996 allows for broader judicial intervention in cases of serious irregularity affecting the tribunal, the proceedings, or the award. The case of Lesotho Highlands Development Authority v. Impregilo SpA (2005) demonstrated the UK courts' readiness to correct fundamentally flawed awards, similar to the Indian Supreme Court’s approach in DMRC vs. DAMEPL.
France:
French arbitration law, particularly under the Code of Civil Procedure, maintains a balance between autonomy and judicial oversight. French courts generally respect the finality of arbitral awards, but they will intervene in cases where the award is contrary to public policy, lacks impartiality, or if the arbitral tribunal exceeded its mandate.
Singapore:
Singapore's International Arbitration Act, along with the Arbitration Act, provides for limited judicial intervention, focusing on procedural integrity and public policy. The case of PT First Media TBK v. Astro Nusantara International BV and Ors. (2013) highlighted Singapore's cautious approach to intervention, ensuring that arbitral awards are respected unless they violate fundamental principles of justice.
Hong Kong:
Hong Kong follows a similar approach under the Arbitration Ordinance, where the courts respect the finality of arbitral awards. Judicial intervention is limited to instances of serious procedural irregularity or when the award violates public policy, as seen in the case of Gao Haiyan v. Keeneye Holdings Ltd. (2011).
From this, it appears that the laws and precedents of the United Kingdom regarding judicial review of arbitral awards are comparable to those of India. In contrast, the laws and precedents of Singapore, the United States, Hong Kong, and France provide robust protection to arbitral awards and maintain their finality more effectively.
Here are some key impacts of DMRC vs. DAMEPL Judgment:
Heightened Scrutiny: Arbitrators will face increased scrutiny, ensuring that awards are well-reasoned and free from fundamental errors. This could elevate the standards of arbitral proceedings in India.
Judicial Oversight: While the ruling underscores the importance of judicial oversight, it necessitates a balanced approach to avoid undermining the arbitration process’ efficiency and attractiveness.
Arbitration Preference: Parties may become hesitant to opt for arbitration, fearing prolonged litigation and judicial interference, which could lead to a preference for traditional litigation.
Legal Precedents: The judgment sets a precedent for future cases, influencing how courts interpret and intervene in arbitration awards, particularly concerning curative jurisdiction.
Institutional Arbitration: The ruling could prompt a shift towards institutional arbitration, where established arbitration institutions provide greater oversight and ensure adherence to best practices, thereby reducing the need for judicial intervention.
Mediation as an Alternative: Mediation and conciliation, especially for high-value disputes, may provide a less adversarial and potentially quicker resolution method. We may see the focus shifting from mere arbitration to Med-Arb or Med-Arb-Med.
The government of India’s recent guidelines for arbitration and mediation in contracts of domestic public procurement, issued in June 2024, further highlight the evolving landscape of dispute resolution in the country. These guidelines stress the importance of speed, convenience, and finality in arbitration while addressing the unique challenges faced by government entities. They also indirectly discourage opting for arbitration as a method of dispute resolution in public procurement by the government.