Dispute resolution
Courts
India has a written constitution and codified central and
state laws. It has a three-tiered court system comprising the Supreme Court of
India, the High Court located in each state, and lower civil, criminal and
revenue courts and various tribunals. There are also specialized legal forums
such as industrial courts, cooperative courts, family courts, consumer courts
and other judicial tribunals.
For the settlement of company disputes, there is a Company
Law Board constituted under the Indian Companies Act 1956 (to be replaced by
the National Company Law Tribunal), direct and indirect tax tribunals,
Competition Commission etc. Listed companies are regulated by the SEBI and its
appellate tribunal. Intellectual property disputes such as infringement actions
and trade mark objections may be settled before boards constituted under the
relevant statutes.
The time taken for a suit to be heard by an Indian court can
be lengthy. As a result, interim relief has assumed great importance.
Specifying remedies available in a contract assists with the grant of interim
relief. Negotiable instruments, guarantees and written contracts providing for
a liquidated sum can be enforced through a summary procedure.
Recognition of
foreign judgments
Indian courts will consider foreign judgments conclusive
after their validity is determined according to the following principles:
- the foreign judgment is determined by a court of competent
jurisdiction
- the foreign judgment is not contrary to natural justice
- the foreign judgment is not obtained by fraud
- the foreign judgment is not founded on an incorrect view of
international law
- the foreign judgment is given on the merits of the case
- the foreign judgment is not founded on breach of any law enforced
in India.
Arbitration
The Arbitration and Conciliation Act 1996 provides for
dispute resolution through arbitration and conciliation as an alternative to
litigation. Most companies choose arbitration as the most suitable method for
resolving disputes. India’s Arbitration and Conciliation Act 1996 is based on
the United Nations Commission on International Trade Law.
Arbitration in India can be an efficacious remedy, and the
law allows interim relief in the course of arbitration proceedings. However, arbitration
can only be initiated in the case of a dispute between parties. Arbitral awards
are enforceable as decrees of Indian courts.
Indian courts can, however, refuse enforcement of a foreign
award on certain grounds, including if enforcement of the relevant award would
be contrary to public policy. To limit the possibility of challenges to foreign
awards, parties can agree to exclude the application of the relevant provisions
of the Arbitration and Conciliation Act.
India is a signatory to both the Geneva Convention on the
Execution of Foreign Arbitral Awards (1923) and the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (1960).
An arbitral award obtained in a signatory nation to either
the Geneva or New York Conventions is enforceable in India pursuant to the
Arbitration and Conciliation Act 1996.
Choice of law
Indian private international law follows the English private
international law rules. It therefore allows the parties to choose a proper law
of contract provided the choice is not contrary to public policy. The laws of
India, which are considered “mandatory” laws, cannot be excluded. For example,
in the case of foreign collaboration agreements, which require government
approval, the government imposes a condition that the contract must be governed
by Indian law.