by Michael McIlwrath
Earlier this year, Italian lawyers went on strike to protest the country’s introduction of a law imposing a requirement to attempt settlement through mediation as a precondition to proceeding to litigate in court. Perhaps not wanting to be outdone by their European brethren, the Association of Indian Lawyers (AIL) has filed suit in the High Court of Delhi to thwart an innovate effort to provide parties with an alternative to a famously inefficient legal system.
Some background: in April 2009, the London Court of International Arbitration (the LCIA), a leading provider of international arbitration services, opened a subsidiary office in Delhi. Called LCIA India it is today in full operation, complete with its own set of India Arbitration Rules.
As explained on the organization’s website, LCIA India purports to offer, “all the services offered by the LCIA in the UK, and with the same care to ensure the expeditious, cost effective and totally neutral administration of arbitration and other forms of ADR conducted under its auspices, whether according to LCIA India’s own rules, or the UNCITRAL rules, or any other procedures agreed by the parties.” In other words, the same services widely available from a variety of providers in any modern economy.
This, apparently, was too much for the AIL, which petitioned the High Court of Delhi for an order removing “London Court” from the LCIA’s name, and which the High Court instructed should be notified to all concerned parties on May 31, 2011. On the surface, the petition appears to lament that the LCIA is attempting, “to create a parallel system of administration of law in defiance to the prevailing judicial system in India.”
As with the Italian lawyers strike, the invocation of what might be viewed as public interest is at most superficial. It’s the fear of losing the ability to hold clients captive to judicial inefficiency that is the real driver, as well as the fear that new forms of dispute resolution might also inject competition for legal services. India currently prohibits foreign lawyers from practicing (you’ll find none of the large firms listing offices in Delhi or Mumbai), and the AIL’s petition openly lays out the concern that the LCIA, “is trying to circumvent the law by allowing foreign legal practitioners to provide professional legal services in the grab of conducting arbitration.”
The LCIA is not the only institution feeling heat from those with vested interests in keeping litigants captive of slow justice dispensed exclusively by local practitioners. For this post, I touched base with Anil Xavier, the President of the Indian Institute of Arbitration & Mediation www.arbitrationindia.org, based in Bangalore/Cochin. Anil has been working to promote institutional arbitration and mediation in India. He calls the AIL’s allegation “absurd” and fears that India’s domestic bar will continue to undermine any effort to provide alternatives to local, ad hoc arbitration and court litigation. He calls the petition, “just another example that international or domestic arbitration have still not escaped the clutches of the majority of the Indian lawyers, who have not accepted arbitration or ADR as a main area of practice. The fact that more international arbitral institutions are coming to India, however, is an expression not just of a jurisprudential need, but a requirement for smooth business and commercial operations.”
In fact, the irony of the AIL’s protest is that it so fundamentally misunderstands what LCIA India is attempting to accomplish, or why both the Minister of Law and Justice and the Chief Justice of India attended its opening in April 2009. As an international institution, the LCIA knows well that few non-Indian commercial parties will agree to have their disputes resolved in India. The LCIA initiative of creating an Indian subsidiary would ultimately keep work in India that today goes elsewhere, and foster closer ties between Indian and foreign companies. Instead of insisting on say, arbitration in Singapore or London, international companies might actually be convinced to one day accept arbitration in Delhi. That’s not the way it is today, at least when non-Indian parties believe they have other options, which they almost always do.
Still, this may not be bad news for international dispute resolution in India or the LCIA, at least for now. While the striking Italian lawyers chose a method of protest that had an immediate impact, the AIL has chosen a different forum…. the Indian courts. According to one authority (Justice V.V. Rao), it will take until the year 2330 for the country’s courts to clear their existing backlog at the current pace of deciding cases, although most are decided in under 15 years (before appeals).
If the AIL had wanted an earlier resolution, they might have considered mediating or arbitrating instead….
MICHAEL MCILWRATH is Senior Counsel, Litigation, for the GE Oil & Gas Division in Florence, Italy. His experience in international arbitration includes representing the company in disputes under the rules of various international and regional arbitration institutions and under ad hoc procedures around the world, and in coordinating the activities of outside counsel in domestic court and arbitral proceedings. He has published numerous articles in the fields of international arbitration, mediation, and negotiation, and is co-author, with John Savage, of International Arbitration and Mediation: A Practical Guide (Kluwer Law International).
Michael is a member of the European Advisory Committee of CPR, and acted as an industry representative to the European Commission (Justice) in the creation of a European ADR Code of Conduct. He was Chair of the International Mediation Institute (IMI), in 2009. In addition, he was the co-vice chair with mediator Judith Meyer (and chair, Singapore ambassador at large Tommy Koh) of the IMI Independent Standards Committee. He is also a member of the board of directors of the National Center for Science Education, in Oakland, California.