At the Commonwealth Attorneys and Solicitors General Conference 2024, the Prime Minister emphasised the need to rethink, reimagine and reform legal systems. This comes in the backdrop of a spate of legislative and policy actions that have signalled a commitment towards undertaking wide ranging reforms and innovations to attract foreign trade and investment to India and modernise India's legal system.
It has now become crucial to establish a flexible and expeditious mechanism that appropriately meets the needs of commercial litigants engaged in trade and business across borders. At present, parties can choose to litigate disputes that arise within such commercial relationships within the national court system where either party is based, or through international commercial arbitration. However, despite their merits, each of these forums can also suffer from certain limitations.
In this context, International Commercial Courts have emerged as an additional avenue for the resolution of cross-border disputes. ICCs typically combine the judicial structure and legal certainty offered by courts with processes tailored toward the needs of international commercial disputes, thus often allowing for greater efficiency. A number of ICCs have been established across various jurisdictions in the recent past, such as the Singapore International Commercial Court, China International Commercial Court and the Dubai International Financial Centre Court — with varying aims, such as expanding the legal services market of the jurisdiction, catering to a particular economic region and/or attracting more foreign investment by acting as a jurisdictional carve-out.
The establishment of an ICC in India that enjoys the backing of the Indian judicial system, while introducing the necessary procedural innovation and flexibility required for the effective adjudication of international commercial disputes, could serve the dual purpose of attracting foreign investment by providing parties an efficient and cost-effective alternative, as well as enhance India's position as a dispute resolution hub. Importantly, just as in the case of the SICC, which enjoys synergies with the Singapore International Mediation Centre and Singapore International Arbitration Centre — such an Indian ICC would complement arbitral institutions, and mediation, enabling India to establish its credentials as a composite dispute resolution centre.
The unique propositions of ICCs are that they offer litigants the chance to enjoy the legal certainty of a national judicial system, while also offering tailored features, such as panels of judges with expertise in international commercial law and streamlined procedures that may not be available within the national court system. For instance, a feature of certain ICCs is the option to maintain the confidentiality of proceedings and judgments, enhanced case management features and greater adoption of remote hearing systems. Some ICCs also have an international panel of judges with both common law and civil law expertise, allowing litigants to benefit from a truly international character of adjudication.
The establishment of an ICC in India may also allow India to attract a higher volume of cross border litigation, expand its legal services market and have far reaching impact on the development of commercial jurisprudence. However, an extensive process of stakeholder consultations and alignment of objectives across the government, judiciary, legal community would be required to answer key questions such as the composition of judges, extent of jurisdiction of the ICC, and methods of enforcement of ICC decisions.
In terms of enforceability, an Indian ICC may be envisioned as a division of the Indian Supreme Court, allowing the enforcement of its judgments under existing reciprocal arrangements, as a start. Since the speedy enforceability of decisions would be one of the most important factors influencing parties' choice of dispute resolution forum, significant thought will have to be given to formulating effective enforcement mechanisms for such an ICC. This may require the framing of specific legislations or rules for the enforcement of ICC decisions and even consideration of entering into multilateral or bilateral instruments with other jurisdictions for such enforceability.
As for likely litigants at such an ICC, parties from emerging economies and BRICS countries engaged in business with an Indian party may consider an Indian ICC, which is backed by a strong legal system and judges specialised in commercial law, but is less costly than international arbitration, as an attractive option.
As the global competitiveness for increasing the inflow of investments increases and jurisdictions vie for more legal business; the time is ripe for legal, governmental and commercial stakeholders to seriously consider the potential of establishing an ICC in India.
By – Raj Panchmatia (Partner), and Ishrita Bagchi (Associate), Khaitan & Co
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