You must be joking, Mr Ravi Shankar Prasad

In order to attract foreign investors, Law Minister Ravi Shankar Prasad announced that India aims to become an international arbitration centre. He must be joking!

India’s ranking on Ease of Doing Business is 130 out of 189 countries. The country is ranked 183rd in ‘Dealing with Construction Permits’, and stands at 178th in ‘Enforcement of Contracts’.

Given this, any talks of becoming an international arbitration centre can be taken with a bucket of salt.

As Law Minster Prasad must know that a case filed in 1878 is still undecided! After 138 years! And we hope to become an international arbitration centre?

Why only foreign investors? Don’t domestic investors count? Why is the government protecting them?

Say, a domestic investor wants to buy a house. The builder can postpone delivery indefinitely, without penalty. Neither the administration, nor the judiciary, nor the government, bothers. The Bombay High Court said last week that whilst residents lose homes, builders live a lavish life.

Say, he has invested in NSEL. Despite several independent reports pointing out that this has been a collusive fraud, the case drags on and on. As an article in ET ‘NSEL scam: Default lies in courts’ points out the delay is because judges are liberal in grant of adjournments, demonstrating leniency towards the culprits rather than towards the victims. How can India become an international arbitration centre unless there is a disciplined and time-bound approach towards judicial processes?

Thirdly, how can India expect decisions taken by it as an international arbitration centre to be respected by others, if it does not respect arbitration awards given by other jurisdictions. There are several examples, the latest being the NTT DoCoMo versus Tata Sons case. The government is not permitting Tatas to repatriate it. It also believes that this incident will not affect Indo-Japan relations. That is a facile assumption. Japan is funding India’s DMIC project and high speed rail projects at low rates of interest.

So, Mr Prasad, if India wants to be taken seriously, as Law Minister, first fix the judicial system. Start by asking the judiciary to consider a maximum of two adjournments per case, whatever the reason. Judges should draw up a schedule of hearings at the start of any trial, and stick with it. Open up the legal system to foreign competition. Legal charges make a mockery of justice for all. High fees benefit those who steal money with which they can afford to hire the most expensive lawyers and penalise those who are victims and cannot afford legal fees.

An honest, former Coal Secretary, has pleaded to be sent to jail as he cannot afford legal costs of defending his sullied reputation in a court. Is this how we want the country to progress?

After setting India’s house in order, start dreaming of an international arbitration centre.

(The writer is India Head, EuroMoney Conferences)

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