Pre-Vetting High Stake Agreements
Polity & Governance
30th Mar, 2022
Statement made by Chief Justice of India underlying the requirement to “pre-vet” high stake commercial and investment agreement.
What is “Pre-Vet”?
- Pre-vetting, in the backdrop of the above news, means checking the provisions and finer points of high stake agreement.
Why is it required according to the Chief Justice of India?
- The Chief Justice of India, while speaking at an international conference titled “Arbitration in the era of Globalisation” in Dubai, said that in many cases parties to agreement disown the contract at the time of its execution if this favours them.
- The above scenario leads to initiation of a lengthy litigation process which normally takes a long time to get adjudicated.
- To avoid such delays and objections, the Chief Justice of India has suggested the formation of a special authority whose function would be to pre-vet high stake agreements.
- CJI though clarified that pre-vetting shall only be done with the prior approval of the parties involved in the agreement.
What would be the result of pre-vetting?
- Less disputes may arise out of the agreements leading to fewer litigations.
On what other topic did the CJI speak at the conference?
- The Chief Justice of India stressed on the need for minimum judicial interference in the disputes that have been submitted for arbitration.
- For more effective arbitration, the CJI suggested:
- Strict adherence to timeline for completion of arbitral process.
- Execution of arbitration award.
- Respect for the autonomy of parties to the agreement.
What is Arbitration?
- Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
- In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
Reason behind delay in judicial process
There are multiple reasons behind the delay:
- Slow and inefficient investigation by law enforcement agencies
- poor judicial infrastructure
- high rate of vacancy in the number of judges
- lack of judicial hours