The Justice Nariman Series (Part II) – The Arbitration Judge of India


[This article is the second part of a two-part series and has been authored by Prof. Ashwin Mishra, Managing Editor, Mapping ADR Blog.]


Keywords: Rohinton Fali Nariman, Justice, Judge, Arbitration, Decisions, Judgments, Legacy, Interpretation

Introduction

Justice Rohinton Fali Nariman was elevated to the Supreme Court of India on 7th July 2014. His elevation was historic for many reasons, chief among which was the fact that it marked only the fifth occasion in the entire history of the Court where a member of the Bar had secured elevation directly from Senior Counsel to Supreme Court Judge. During his tenure on the Bench, Justice Nariman has adjudicated and decided cases on a myriad of issues, with his portfolio including matters pertaining constitutional law, commercial law matters, corporate law matters, and criminal law, among others. Although, his contribution towards the law in these fields is undeniable, one of his crowning achievements as a member of the Bench would have to be his contribution towards expanding the jurisprudence on arbitration law in India.


Why did we need a Justice Nariman?

The law of arbitration in India has been in a permanent state of flux since its inception. Having had UNCITRAL Model Law as a reliable foundation, there was a hope that the Arbitration & Conciliation Act, 1996 could bring a degree of legal stability to this area. But unfortunately, this aspiration did not bear fruit, with the decade following the enactment of the statute proving to be quite a forgettable period in history of arbitration law in India. This period is best characterized by the infamous Bhatia International v. Bulk Trading decision, which is often criticized for having inflicted significant damage to India’s global reputation in regards its capacity to recognize, or for that matter even understand, how ADR could be an effective system of dispute resolution.


Although the pitfalls of the Bhatia principles were identified promptly, the course correction for arbitration in India did not begin to materialize till almost a decade later with the reversal of the Bhatia position in the 2012 Bharat Aluminium v. Kaiser Aluminium case (“BALCO”). This decision in BALCO undoubtedly gave scholars and practitioners of arbitration a reason to rejoice, but it in isolation was not successful in inspiring a great deal of confidence of the future of arbitration in India. There was a need to ensure that the BALCO decision was only a beginning, as there was still a significant degree of uncertainty, both at home and abroad, on the question of where India stood when it came to several issues relevant to the procedure and practice of arbitration in India.


The Good, the Bad & the Ugly

It was in this cautiously optimistic phase of India’s arbitration history that Justice Nariman was elevated to the Bench. While the question of whether Justice Nariman’s roster allocation was by design or happy coincidence is a matter that will always be within the realm of speculation, the fact still remains that he was presented with the opportunity to forge, or more accurately re-forge, Indian arbitration law by his rulings.


Over the course of his seven-year tenure on the Bench, he has authored judgments that addressed almost all aspects of arbitration jurisprudence in India. At the time of his elevation, there existed certain ambiguities on even some of the most basic facets of arbitration law, which Justice Nariman helped to address through his rulings. This is best illustrated by the BGS SGS Soma JV v. NHPC Ltd. case, which focused on the clarifying the concept of seat of arbitration and its distinction from place and venue, and took us a step in the direction of legal certainty on the issue after years of confusion that had persisted from the Bhatia & BALCO era.


Another attribute of his rulings that aided in enhancing legal certainty was the comprehensive nature of his analysis on issues in his rulings. An example of this would be the manner in which he approached the question of arbitrability in the case of Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius) Limited. There was already a plethora of cases on arbitrability authored by different judges, ranging from Ayyasamy v. Paramasivam on fraud & arbitrability, to Vidya Drolia & Ors. v. Durga Trading Corporation on tenancy & arbitrability. But Justice Nariman’s decision in the Avitel case not only analyzed the existing precedents on the issue, but also served to provide a metaphorical exclamation mark on the discussion. This transformed his decision from being a ruling that would only be relevant in a specific context, into a judgment that has the effect of interpreting the law in a more holistic and consequential manner.


His judicial pronouncements on arbitration were undoubtedly important towards promoting arbitration and ADR in general, but they were not always without controversy. While most of his judgments did expand the jurisprudence on arbitration and further the cause of legal certainty in this area, his tendency to over-simplify or over-analyze an issue on occasion did contribute towards creating a degree of confusion in the field. This is best illustrated by the cases of Government of Maharashtra (Water Resources Department) v. M/s. Borse Brothers Engineers & Contractors Pvt Ltd & M/s. NV International v. State of Assam. Both these judgments pertained to the question of condonation of delay in regards an appeal filed under Section 37 of the Act, and, despite being authored by Justice Nariman, arrived at starkly contradictory findings. This earned him the distinction of being one of the few judges in the history of the Supreme Court to have overruled himself. While it may be argued that being open minded enough to recognize the flaws in one’s own line of argument and taking corrective action is the hallmark of an exceptional jurist, his actions in this regard did cause a degree of confusion to an area which was in dire need of certainty and consistency.


Another facet of his process of adjudication that drew ire from some quarters of the Bar and the Bench was his unorthodox approach towards ruling on cases, and his tendency to engage in conduct that might be characterized as judicial activism. The best illustration of this was his verdict in the case of BCCI v. Kochi Cricket, which pertained to Arbitration and Conciliation (Amendment) Act, 2015 and its applicability to pending arbitral proceedings. In addition to adjudicating the issue that formed the subject matter of the dispute before him, Justice Nariman spared some words of caution for the Government regarding its plans to further amend the Act, in essence commenting on a law that the legislature had yet to enact. While the observations made in regards the proposed amendment were not entire without merit, many argued that issuing warnings to the legislature via judicial pronouncements struck at the core of one of the most fundamental constitutional principles of separation of powers between different facets of Government.


The Adjudicator or the Educator?

The tenure of an average Supreme Court Justice will inevitably include some significant judgments and, from time to time, a possible lapse or potential oversight. But regardless of the nature and extent of our concurrence with Justice Nariman on issues of the law, it would surely be impossible to classify his tenure as anything even remotely resembling average. Overall, when we look back at his stint on the Bench, it is quite possible to argue with some of the propositions that he has expounded into the law of the land when it comes to arbitration in India. But, there is no denying that through his rulings, Justice Nariman had made sure that arbitration law in India has an identity that is more well defined and predictable than it was when he assumed office.


This is not to say that we no longer have issues that are yet to be addressed. But at least we no longer have to debate and discuss the basic fundamentals of arbitration law that the rest of the world has taken for granted for a long time. His rulings have contributed towards enhancing the nature of the conversation that we engage in when it comes to arbitration in India. Chief Justice Roberts of the United States Supreme Court once remarked, “You can’t fight for your rights if you don’t know what they are.” When we look back at Justice Nariman’s tenure as a Judge of the Supreme Court, it is entirely possible that one may differ from him as an adjudicator. But at the same time, there is no denying the fact that he was the educator that the Indian arbitration discourse so desperately needed – and at the end of the day, that is Justice Nariman’s legacy.


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