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Chess Clock Method – Alley to the Due Process and Oral Hearing

Simran Kaplish

Fourth Year, B.Com. LL.B. (Hons.), Institute of Law, Nirma University, Ahmedabad

Arbitration in India is significantly thriving, as one of the most effective procedure of dispute resolution. The disputes being solved with the help of arbitration process have undoubtedly witnessed accession.  The working mechanism of the judiciary has always been criticised for various black holes which includes a tedious procedure, along with incredibly long proceedings. As per a report, there were 3.4 crore cases in the district court pending between February 1 – August 31, 2020.  The condition of High Court and Supreme Court seems to be miserable, subjected to lots of work. At this point of time, the arbitration tribunals come into Play. The main objective of the arbitral tribunal was speedy redressal along with relaxation of procedural complexities to cut short the time of proceedings and make it cost-effective. Besides, it is seen that arbitration proceedings have baffled the objective of the act by bringing in procedural complexities where parties are involved in long proceedings. The whole process of gathering evidence and examination of witnesses has disrespected the objective of the act. Not only this, the consistent interference of the judiciary by granting interim relief and setting aside applications of greater concern. Initially, India had greater scope for arbitration as people preferred it to be a redressal with a speedy procedure and flexible procedure. In today’s time, the courts and tribunals have ended up at the same level, creating lots of chaos and discrepancies. 

Introduction

Arbitration as defined by the American Bar Association means is a private process where disputing parties agree that one or several individuals can decide the dispute after receiving evidence and hearing arguments[1]. As per the black’s law dictionary, arbitration is a dispute resolution process in which the disputing parties uses one or more neutral third parties to make a final and binding decision resolving the dispute. Relying on both these definitions, we can bring arbitration to a crux of three major elements, including a speedy redressal, amicable procedure and cost-saving proceedings. Focusing stress upon the flexible procedure has created a juggle in the functioning of these tribunals.

The Due Process

It is essential to follow a due process of law, for a free and fair trial. These rules of due process protect the rights of people. The term due process of law can be understood from two perspectives. A procedural due process includes following the concept of natural justice whereas the substantive due process is subjected to the restrictions imposed by the Constitution, for the protection of rights. Being particular, in the case of Maneka Gandhi versus the Union of India[2], the concept of due process was elaborated to control the excessive and arbitrary powers of authorities. Similar to the Constitution of the USA, the due process includes a fair trial along with “Audi alteram partem”. Examination of witnesses along with close examination forms to be a very essential element of Indian proceedings. The drawback here is that these procedures are time consuming and tiresome. Hitting on the point, most of the High Court judges act as arbitrators, having the mentality of the functioning of a court[3]. This is a huge reason, due to which the objective of the arbitration act is being violated in India. When we have Arbitral tribunals it becomes a necessity to keep a balance between following the due procedure of law and giving autonomy to the arbitrator and parties to decide for their own.

The UNICITRAL Model Law[4] defines a boundary line for the judiciary to intervene, which has not been adopted by the Indian judiciary for dispute resolution. It is necessary to have bars and waiver of some procedural formalities, to keep intact the essence of the arbitration act in India. The Indian evidence act has a cumbersome procedure to follow methods of recording evidence and checking that admissibility. The arbitration tribunal acts as an exception, for speedy redressal. Justifying this statement, in the year 2015 the amendment brought in a limitation of 12 months, which made the tribunal bound to finish off and pass the award[5]. If the parties mutually agree, the time period can extend by not more than six months at the last and hence becomes mandatory to pass the award unless court extends the application[6]

Whether to follow or not?

The question that arises here is whether the arbitral tribunal has the right to not conduct cross-examination or deny oral hearing from the party, just to achieve the objective of the act. In this case, we can rely on the Chess clock method. This method has not been implemented in India but has shown its positive existence in Singapore and London. As per this, when the parties entered into an arbitration agreement, the tribunal should allow a particular time limit for recording evidence and cross-examination. This should not be based upon the concept of quality but should be equitable. Parties have the superior to justify claims and relieve their burdens, within a sleep-related time. This is a sole solution to the two basic problems of arbitration in India, including the proper follow-up of law along with Speedy redressal. The chess-clock system prohibits one party from devouring an undue amount of time. Using a chess clock to center parties’ attention on the benefits and shortcomings of their respective positions motivates them to seek commercial settlement sooner than they would otherwise.

Moreover, in this time where video conferencing has become the new normal, the concept of fast redressal seems to be paved out totally.  In the case of RateGain Travel Technologies Private Limited v. Ujjwal Suri[7], the Delhi HC gave power to arbitral tribunals to conduct the recording of evidence and oral hearing by way of video conferencing[8]. Calcutta High Court in the case of Saraf Agencies Private Limited v. Federal Agencies for State Property Management[9],   allowed witness for cross-examination, through videoconferencing who was present in Russia. Calcutta High Court in the case of an allowed witness for cross-examination, through videoconferencing who was present in Russia.

Falling out of the scope, some laws comply with the chess clock method. The international bar association rules have described the economical and fair process for collecting evidence. Article 2[10] allows the parties to address the scope, timing and manner of taking evidence, which even includes oral testimony under article 2(2) (b)[11]. Similarly, article 22[12] of ICC rules, for expeditious and cost-effective conduct of the tribunal; put a cave yet to make efforts for the fulfilment of the objective. Similarly, in India, section 24(1)[13] of the arbitration and conciliation act, 1996 states that the arbitrator has no right to deny any application unless and until it is agreed by the parties to be more such right of the oral hearing in the contract. In this case of Sukhbir Singh v M/S Hindustan Petroleum[14], the court broadened the ambit of section 24 and stating that the tribunal cannot is at discretion by rejecting the claim of the petitioner, to judge the dispute based upon authenticity, genuineness and credibility. On the other hand, the tribunal definitely can certain discretion on the scope and length of these oral hearings depending upon the circumstances of the case[15]. This keeps intact the position of arbitrators and the parties, to achieve justice.

As per Section 29B[16], the arbitral tribunal does not take into account some statements of facts, arguments, evidence and offers of evidence submitted by one of the parties which ought to be considerations in the decision to be issued it would amount to the violation of due process. This is a contradicting statement that has created the base of the chaos. In this case, it doesn’t say that you can violate the principles of natural justice; oral hearings prove to be one.

Conclusion

In arbitration, maintaining the objective of the act seems to be one of the most essential elements, where tribunals should go for speedy redressal, with less procedural complexities. Following the Just clock, method can help stabilise the condition of tribunals in India.  Denying parties the right to an oral hearing is violate the due procedure of law and hence to maintain the objective and crux of the act, it becomes necessary for the arbitrator to set foundation and limits on these proceedings, unlike courts. The tribunals must act within the boundaries of natural justice, maintaining fair and equitable procedure for one and all. Moreover, setting the tribunals and courts on a similar line could create discrepancies; both should work within their limits, and exercise their freedoms authentically.

 


 

[1] Arbitration American Bar Association, Arbitration, (Apr 18, 2021), available at: https://www.americanbar.org/groups/dispute_resolution/resources/DisputeResolutionProcesses/arbitration/.    

[2] Maneka Gandhi v. Union of India, 1978 AIR SC 597

[3] Arbitration in India: Dispute resolution in the world’s largest democracy Herbert Smith Freehills, (Mar 22, 2021), available at: https://www.herbertsmithfreehills.com/latest-thinking/arbitration-in-india-dispute-resolution-in-the-worlds-largest-democracy.

[4] UNCITRAL Model Law on International Commercial Arbitration (1985)

[5] Arbitration And Conciliation (Amendment) Act, 2015,  S. 29A

[6] Critical Analysis of the Arbitration and Conciliation (Amendment) Act, 2015 Litigation, Mediation & Arbitration Mondaq, (Mar 22, 2021), available at:https://www.mondaq.com/india/arbitration-dispute-resolution/494184/critical-analysis-of-the-arbitration-and-conciliation-amendment-act-2015. 

[7] Rate Gain Travel Technologies Private Limited v. Ujjwal Suri , O.M.P (MISC) 14/2020

[8] Due Process Concerns in Virtual Witness Testimonies: An Indian Perspective Kluwer Arbitration Blog, (Mar 22, 2021), Available at: http://arbitrationblog.kluwerarbitration.com/2020/11/17/due-process-concerns-in-virtual-witness-testimonies-an-indian-perspective/

[9] Saraf Agencies Private Limited v. Federal Agencies for State Property Management , CDJ 2017 Cal HC 084

[10]Article 2, IBA Rules (2010)

[11] Article 2(2)(b), IBA Rules (2010)

[12] Article 22, ICC Rules (2021).

[13] The Arbitration and Conciliation Act, 1996, S.24 (1).

[14] Sukhbir Singh v. M/S Hindustan Petroleum , O.M.P. No. 1118 of 2014

[15] Parties Right To Cross- Examine Witnessess In Arbitration VIA Mediation Centre, (Mar 22, 2021),      available at: https://viamediationcentre.org/readnews/ODQw/PARTIES-RIGHT-TO-CROSS-EXAMINE-WITNESSESS-IN-ARBITRATION

[16] The Arbitration and Conciliation Act (1996) s. 29(b)

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