ADMINISTATIVE TRIBUNALS

A dispute mechanism is a structured process that addresses disputes or grievances that arise between two or more parties engaged in business, legal, or societal relationships. Dispute mechanisms are used in dispute resolution, and may incorporate conciliation, conflict resolution, mediation, and negotiation.

Dispute Redressal Mechanisms are typical non-judicial in nature, meaning that they are not resolved within the court of law.

Indian scenario

Article 21 of the Constitution of India declares in a mandatory tone that 'no person shall be deprived of his life or his personal liberty except according to procedure established by law. The Right to Speedy Trial has been rightly held to be a part of Right to Life or Personal Liberty by the Supreme Court of India. This liberal interpretation of Article 21 is to redress that mental agony, expense and strain which a person proceeded against in criminal law has to undergo and which, coupled with delay, may result in impairing the capability or ability of the accused to defend himself effectively. Thus, the Supreme Court has held the Right to Speedy Trial a manifestation of fair, just and reasonable procedure enshrined in Article 21.

Before formation of law Courts in India, people were settling the matters of dispute by themselves by mediation. The mediation was normally headed by a person of higher status and respect among the village people and such mediation was called in olden days "Panchayath". The Panchayath was headed by a person of higher statues, quality and character who deemed to be unbiased by people of the locality, called Village headman and he was assisted by some people of same character or cadre from several castes in the locality. The dispute between individuals and families were heard by the Panchayath and decision given by the Panchayath was to be accepted by the disputants. The main thing that was considered in such Panchayath was the welfare of the disputants as also to retain their relationship smooth.

But in a developing country like India with major economic reforms under way within the framework of the rule of law, strategies for swifter resolution of disputes for lessening the burden on the courts and to provide means for expeditious resolution of disputes, alternative modes of dispute resolution (ADR) came up by establishing facilities for providing settlement of disputes through arbitration, conciliation, mediation and negotiation. In this context the GOI has set up different Dispute Redressal Mechanism to address the problems.

The different mechanisms formed in India are Gram Sabha, Nyaya Panchayat, Lok Adalat, Family Court, Counseling Centers, Commission of Inquiry, Tribunal, Consumer Court, Indian Legislation on ADR, etc.

In essence the system focuses on: Mediation rather than winner take all; Increasing Accessibility to justice and Improving efficiency and reducing court delays.

However, a well-functioning grievance mechanism should:

• Provides a predictable, transparent, and credible process to all parties, resulting in outcomes that are seen as fair, effective, and lasting.
• Builds trust as an integral component of broader community relations activities.
• Enables more systematic identification of emerging issues and trends, facilitating corrective action and preemptive engagement.

In this series we are discussing different forms of Dispute Redressal Mechanism, issues and challenges related to it.

Inter-state water disputes are different from other interstate disputes. The Constitution, under Article 262, bars the jurisdiction of the Supreme Court or any other court over inter-state water disputes. The Inter-state (River) Water Disputes Act 1956 provides for the resolution of disputes. Under its provisions, the disputes are to be adjudicated by ad-hoc, temporary and exclusive tribunals.

Provisions of Inter State Water Dispute Act (1956)

The Inter-State river water disputes are governed by the Inter-State Water Disputes Act, 1956.

As per the current provisions of the 1956 Act, a tribunal can be formed after a state government approaches Union Government with such request and the Centre is convinced of the need to form the tribunal.

This act was further amended in 2002 to include the major recommendations of 'The Sarkaria Commission'.

The amendments mandated a one year time frame to setup the water disputes tribunal and also a 3 year time frame to give a decision.

This system has had some successes, especially with the first generation of tribunals set up soon after independence-to adjudicate on the Krishna, Narmada and Godavari rivers.

But in general, it has struggled to bring warring parties on the same page and offer equitable solutions.

 List of Existing Water Dispute Tribunals

 The Centre has already received a request to set up a tribunal as a new dispute has emerged between Odisha and Chhattisgarh over Mahanadi river water.

Issues with Existing Water Dispute Act

There are three main problems with the existing system.

• Protracted proceedings and extreme delays in dispute resolution.
• Opacity in the institutional framework and guidelines that define these proceedings.
• Ensuring compliance.

The delays happen for a variety of reasons at every stage of the process.

Sometimes, the Centre takes years to decide whether a matter needs to be heard by a tribunal in the first place.

Example, the Godavari and Krishna disputes started around 1956 but the matter was referred to a tribunal only in 1969.

After the tribunal has been formed, it again takes many years to pronounce its award-it took nine years from reference in the case of the Narmada tribunal.

Another reason for delay is the requirement that the Centre notify the order of the tribunal to bring it into effect; this took three years for the Krishna award.

Now, however, the Centre has proposed that the awards will be notified automatically by the tribunal.

Also, India's messy federal polity and its colonial legacy sets the stage for the third problem of non-compliance wherein state governments have sometimes rejected tribunal awards.

For example, the Punjab government played truant in the case of the Ravi-Beas tribunal.

Features of the Proposed Amendment

a) Formation of Single Tribunal for dispute settlement

The National Water Policy 2012 proposed setting up of a permanent tribunal to replace multiple water tribunals working in the country.

Its revival now shows the non-political nature of the idea justifying serious consideration and approval.

The amendment will be introduced early during the budget session of Parliament, which begins in January 2017.

b) Centralized data collection centre

Apart from the tribunal, the proposed amendment to the 1956 law also seeks to create an agency to collect and maintain all relevant water data, like rainfall, water flow and irrigation area, in each of the river basins of the country. Collection of data is usually the first exercise in resolution of water disputes. A specialised agency would ensure that this kind of data is always available, in updated form, and does not need to be collected after a dispute has arisen.

c) Setting up of Disputes Redressal Committee

The proposed amendment provides for setting up a Disputes Redressal Committee comprising experts before referring a dispute to the new permanent tribunal.

It is hoped that most of the disputes would be settled at the committee level itself, if the committee has access to reliable and updated data.

The committee would also serve as the technical advisor to the tribunal.

Under the current law, the tribunals have three years to give their awards.

In order to give more teeth to the Tribunal, it is proposed that whenever it gives order, the verdict gets notified automatically. Until now, the government required to notify the awards, causing delay in its implementation.

d) Setting up of National Water Commission

The government has proposed a new National Water Commission (NWC) in place of the existing Central Water Commission (CWC) and Central Ground Water Board (CGWB).

One of the departments of the NWC is supposed to act as a comprehensive and specialized water data bank.

It's an agency to collect and maintain all relevant water data, like rainfall, water flow and irrigation area, in each of the river basins of the country.

Collection of data is usually the first exercise in resolution of water disputes.

A specialized agency like NWC would ensure that this kind of data is always available, in updated form, and does not need to be collected after a dispute has arisen.

Analysis

Unification of water tribunals seems necessary as river water is a national resource to be shared by all States.

In federal constitutions, there are three types of resolving inter-State disputes:

• States entering into inter-State pacts
• Accepting court decisions
• Giving paramount power to the federal government to resolve claims

A rare case of cooperation was recently presented by Telangana and Maharashtra States signing a pact for construction of major irrigation projects on the Godavari and its tributaries thus ending decades' old dispute.

On the other hand, unilateral repudiation of inter-State agreement on Sutlej-Yamuna Link Canal by the Punjab Assembly in March 2016 against the order of the Supreme Court to maintain status quo is nothing short of a challenge to the judiciary.

Tamil Nadu and Karnataka present a typical model of the highest level of non-cooperation in sharing the Cauvery river water.

Water is a state subject but the "regulation and development of inter-state rivers and river valleys… in the public interest" is on the Union list.

Given the number of ongoing inter-State disputes and those likely to arise in future, it may be difficult for a single institution with a former Supreme Court judge as its chairperson to give its ruling within three years.

Secondly, its interlocutory orders as well as final award are likely to be challenged in the Supreme Court.

The idea of a Dispute Resolution Committee, an expert body that will seek to resolve inter-State differences before a tribunal is approached, will prove to be another disincentive for needless litigation.

A positive feature of the proposed changes is that there will be an expert agency to collect data on rainfall, irrigation and surface water flows.

This acquires importance because party-States have a tendency to fiercely question data provided by the other side.

A larger and more significant downside to any adjudicatory framework is the refusal or reluctance of parties to abide by judicial orders.

Water disputes have humanitarian dimensions, including agrarian problems worsened by drought and monsoon failures.

The Central government must keep these factors in mind when setting up the proposed tribunal.

A robust institutional framework-and a transparent one to ease state and public buy-in is a must.

Without that cooperative approach, India's water dispute resolution is unlikely to see much improvement.

Introduction

With the steep growth in the number of laws and the number of cases, the Court system is under great pressure. In order to reduce the heavy demand on Court time, efforts need to be made to resolve the disputes by resorting to Alternative Dispute Resolution Methods before they enter the portals of the court. The Arbitration, Mediation and Conciliation are tools of Alternative Dispute Redressal System.

Arbitration is a method for settling disputes privately, but its decisions are enforceable by law. An arbitrator is a private extraordinary judge between the parties, chosen by mutual consent to sort out controversies between them. Arbitrators are so called because they have an arbitrary power; for if they observe submissions and keep within due bounds their sentences are definite from which there is no appeal. Arbitration offers greater flexibility, prompt settlement of national and international private disputes and restricted channels of appeal than litigation. In the words of Richard Cobden "At all events, arbitration is more rational, just, and humane than the resort to the sword."

Arbitration is a simplified version of a trial involving no discovery and simplified rules of evidence. Either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third to comprise a panel. Arbitration hearings usually last only a few hours and the opinions are not public record. Arbitration has long been used in labour, construction, and securities regulation, but is now gaining popularity in other business disputes. Litigation is expensive, time consuming and full of complexities.

The technique of ADR is an effort to design a workable and fair alternative to our traditional judicial system. It is a fast track system of dispensing justice. There are various ADR techniques viz. arbitration, mediation, conciliation, mediation-arbitration, mini-trial, private judging, final offer arbitration, court-annexed ADR and summary jury trial.

 Procedure

The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in writing. The contract, regarding which the dispute exists, must either contain an arbitration clause or must refer to a separate document signed by the parties containing the arbitration agreement. The existence of an arbitration agreement can also be inferred by written correspondence such as letters, telex, or telegrams which provide a record of the agreement. An exchange of statement of claim and defence in which existence of an arbitration agreement is alleged by one party and not denied by other is also considered as valid written arbitration agreement.

Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. There are only two grounds upon which a party can challenge the appointment of an arbitrator - reasonable doubt in the impartiality of the arbitrator and the lack of proper qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or panels of arbitrators so appointed constitute the Arbitration Tribunal.

Except for some interim measures, there is very little scope for judicial intervention in the arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request, there is little the party can do accept to approach a court after the tribunal makes an award. Section 34 provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award.

Once the period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a 'decree of the court'.

Advantages

• Arbitration promises privacy. In a civil court, the proceedings are held in public.
• Arbitration provides liberty to choose an arbitrator, who can be a specialist in the subject matter of the dispute. Thus, arbitrators who are sector specialists can be selected who resolve the dispute fairly and expeditiously.
• The venue of arbitration can be a place convenient to both the parties. Likewise the parties can choose a language of their choice.
• Even the rules governing arbitration proceedings can be defined mutually by both the parties.
• A court case is a costly affair. The claimant has to pay advocates, court fees, process fees and other incidental expenses. In arbitration, the expenses are less and many times the parties themselves argue their cases. Arbitration involves few procedural steps and no court fees.
• Arbitration is faster and can be expedited. A court has to follow a systematic procedure, which takes an abnormally long time to dispose off a case.

Ground reality

• Delay: Arbitration in India is rampant with delays that hamper the efficient dispensation of dispute resolution. Though the 1996 Act confers greater autonomy on arbitrators and insulates them from judicial interference, it does not fix any time period for completion of proceedings.

          However, the reality is quite different. Arbitrators, who are mostly retired judges, usually treat the arbitration proceedings in the same manner as traditional litigations, and are willing to give long and frequent adjournments, as and when sought by the parties. Although the scope of judicial intervention under the 1996 Act has been curtailed to a great extent, courts through judicial interpretation have widened the scope of judicial review, resulting in the admission of large number of cases that ought to be dismissed at the first instance. Moreover, the parties usually approach arbitration with a similar mindset as for litigation, with the result that awards invariably end up in courts, increasing the timeframe for resolution of the disputes. Thus concept of fast track arbitrations has been established. Fast track arbitration is a time-bound arbitration, with stricter rules of procedure, which do not allow any laxity or scope for extensions of time and the resultant delays, and the reduced span of time makes it more cost-effective.

• Cost: Arbitration is generally considered cheaper over traditional litigation, and is one of the reasons for parties to resort to it. However, the ground realities show that arbitration in India, particularly ad hoc arbitration, is becoming quite expensive vis-à-vis traditional litigation. A cost analysis on arbitration vis-à-vis litigation will throw light on the higher cost of arbitration over litigation. This is a crucial factor which weighs against developing a cost effective quality arbitration practice in India.

          Arbitration costs incurred by the parties may include the arbitrator's fees, rent for arbitration venues, administrative/clerical expenses, and professional fees for the representatives of the parties (which may include lawyers and expert witnesses). The sum of these fees may differ significantly between ad hoc and institutional arbitrations.

• Flexibility of procedure, place and language in the arbitration proceedings: The parties to arbitration are free to determine the procedural rules subject, however, to certain mandatory rules. If the parties do not agree to the procedure, the procedure will be as determined by the arbitral tribunal. Arbitral Tribunal has powers to decide the procedure to be followed, unless parties agree on the procedure to be followed and conduct the proceeding in manner it considers appropriate. The Tribunal also has powers to determine the admissibility, relevance, materiality and weight of any evidence.

          The Place of arbitration will be decided by mutual agreement. However, if the parties do not agree to the place, tribunal shall decide the same after having regard to the circumstances of the case, including the convenience of the parties. Similarly, the language to be used in arbitral proceedings can be mutually agreed otherwise, Arbitral Tribunal can decide. The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language agreed upon by the parties or determined by the parties or determined by the arbitral tribunal.

Salient features of Arbitration and Conciliation (Amendment) Act, 2015:

The Amendment Act has introduced some major changes in the principal Act. We have prepared a brief summary of the following key amendments:

• Relevant court for domestic and international arbitration matters: Under the Act, the relevant court for all arbitration matters would be a principal civil court or high court with original jurisdiction.
• The Bill modifies this to state that in the case of international arbitration, the relevant court would only be the relevant high court.
• Applicability of certain provisions to international commercial arbitration: Part I of the Act that included provisions related to interim orders by a court, order of the arbitral tribunal, appealable orders etc. only applied to matters where the place of arbitration was India.
• Under the Bill, these provisions would also apply to international commercial arbitrations even if the place of arbitration is outside India. This would apply unless the parties agreed otherwise.
• Powers of Court to refer a party to arbitration if agreement exists: Under the Act, if any matter that is brought before a court is the subject of an arbitration agreement, parties will be referred to arbitration.
• The Bill states that this power of referral is to be exercised by a court even if there is a previous court judgment to the contrary. The Court must refer the parties to arbitration unless it thinks that a valid arbitration agreement does not exist.
• Interim order by a Court: The Act states that a party to arbitration may apply to a court for interim relief before the arbitration is complete. For example, a party may seek interim protection of goods, amounts, property, etc. that is the subject matter of the arbitration before a court.
• The Bill amends this provision to specify that if the Court passes such an interim order before the commencement of arbitral proceedings, the proceedings must commence within 90 days from the making of the order, or within a time specified by the Court. Further, the Court must not accept such an application, unless it thinks that the arbitral tribunal will not be able to provide a similar remedy.
• Public Policy as grounds for challenging an award: The Act permits the court to set aside an arbitral award if it is in conflict with the public policy of India.  This includes awards affected by (i) fraud or corruption, and (ii) those in violation of confidentiality and admissibility of evidence provisions in the Act.
• The Bill modifies this provision to also include those awards that are (i) in contravention with the fundamental policy of Indian Law or (ii) conflict with the notions of morality or justice, in addition to the grounds already specified in the Act.
• Appointment of arbitrators: The Act permits parties to appoint arbitrators. If they are unable to appoint arbitrators within 30 days, the matter is referred to the court to make such appointments.
• The Bill states that, at this stage, the Court must confine itself to the examination of the existence of a valid arbitration agreement.
• Time period for arbitral awards: The Bill introduces a provision that requires an arbitral tribunal to make its award within 12 months. This may be extended by a six month period.  If an award is made within six months, the arbitral tribunal will receive additional fees.  If it is delayed beyond the specified time because of the arbitral tribunal, the fees of the arbitrator will be reduced, up to 5%, for each month of delay.
• Time period for disposal of cases by a Court: The Bill states that any challenge to an arbitral award that is made before a Court, must be disposed of within a period of one year.
• Fast track procedure for arbitration: The Bill permits parties to choose to conduct arbitration proceedings in a fast track manner. The award would be granted within six months.

Way forward

• The amendments to the Act, though laudable, are only a first step towards making arbitration the preferred mode of dispute resolution in India. It must be acknowledged that increased efficiency in arbitration is unlikely to come solely from the imposition of top-down legislative change, especially one that is as inherently flawed as this one.
• A change in the very culture of Indian arbitration is required.
  
  a) For one, there needs to be a change in the perspective with which arbitration is viewed. The pool of Indian legal practitioners who specialize in the practice of arbitration has to grow, with arbitration viewed as the priority rather than playing second fiddle to Indian court litigation work.
  
  b) And the pool of arbitrators needs to grow as well. Unfortunately, the tendency to appoint retired Indian judges as arbitrators is also stifling the growth of arbitration as a dispute resolution mechanism in India. What is needed is the growth of a community of arbitrators unfettered by the traditions of the Indian courts and focussed on growing arbitration in its own right.
  
  c) The final, and most important, change needed is the minimization of judicial interference.