Legal advisor with the Indian Ministry of Defence, notes that many contracts have clauses that will not apply to arbitration in India.
Speaking to an international audience, legal advisor Gracious Timothy Dunna warned that while many pre-arbitration procedures are positive, the law in India means they apply differently compared to other jurisdiction.
“In India, procedures tend to be debated on whether they are mandatory or not, so there is a slight difference between how India perceives this issue to other jurisdictions. In India there is a view that pre-arbitration outcomes are voluntarily and thus non-mandatory and, importantly, non-binding,” he said.
Dunna warned that this applies to dispute boards as well. “At the same time, a dispute board is treated as non-binding too. So the court may not find them to have any relevance in an arbitration decision.”
However, while dispute boards are non-binding in India, he stressed that this did not mean they were not valuable. “As a matter of practice, arbitrators to tend to let parties go through those pre-arbitration motions before going to arbitration. And that is good because adopting a practice is necessary to initiate a pattern in the law.”
Time and limitation is another area that Dunna highlighted could cause challenges.
“The usual aim in construction contracts would be to bring closure to claims as quickly as possible rather than ‘pregnanting’ them until nine months later when everyone is left asking ‘who is the father of these issues?’.
“While this may be effective in most jurisdictions, I would suggest that everyone consider carefully the local jurisdiction again. In India we have a law allowing three years for litigants bring claims. So parties do not have autonomy to restrict or expand that three years with clause in contracts.”
He also pointed out that when limitations start from can vary. “In India, that limitation period also starts from the day the event happened, not from the day in which the dispute arose. For example, the limitations for a dispute about additional works, begins from the day the additional works happened, not when they were disputed.”
Gracious Timothy Dunna was speaking at the FIDIC Asia Contract Users Conference on 19 May 2022.