Embassy of India, Beijing

Legal/Dispute Resolution System

» Dispute resolution in India
» Important Economic Laws in India

Judiciary

India has a well-established and independent judiciary system. The Supreme Court of India in New Delhi is the highest Court of Appeal. Each State has a High Court along with subsidiary District Courts, which enforce the rule of law and ensure fundamental rights of citizens, guaranteed by the Constitution of India.

India has a three-tier court system with a typical Indian litigation starting from a District Courts and reaching its logical conclusion in the Supreme Court of India. The High Courts along with the various State level forums, situated mostly in the State capitals, constitute the middle rung of this three-tier system. District level courts are the courts of first instance in dispute resolution except in cases where they are prevented from being so by virtue of lack of pecuniary jurisdiction. Cases involving violation of fundamental rights are filed in respective High Court or Supreme Court.

A civil, criminal or commercial dispute may be filed in the court having territorial jurisdiction and depending upon level of crime or pecuniary jurisdiction. The place of cause of action and the place of residence of the defendant are the necessary determinants of territorial jurisdiction.

A number of special courts and tribunals have been constituted in India to deal with specific disputes:-

1. Various Tax Tribunals
2. Consumer Dispute Redressal Forums
3. Insurance Regulatory Authority of India
4. Industrial Tribunals
5. Debts Recovery Tribunals
6. Company Law Board
7. Motor Accidents Claims Tribunals

An appeal can be filed against an order of the civil or criminal judge before the Court of District and Sessions Judge. Next appeal can be preferred before the High Court and after that to the Supreme Court.

Under Article 141 of the Constitution of India, every judgment delivered by the Supreme Court becomes the Law of the Land to be followed by all the other lower courts.

Dispute Resolution

The awards and decrees of the Indian courts are sacrosanct. However, Section 13 of the Code of Civil Procedure 1908 (CPC) lays down that a foreign judgment shall be conclusive as to any matter directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except in few cases.

Section 44A of the CPC provides for execution of decrees passed by courts in a reciprocating territory. It lays down that where a certified copy of decree of any of the superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as it has been passed by the District Court. Government of India has notified Singapore, Malaysia, UK, New Zealand, Hong Kong and Fiji as reciprocating territories. For other countries, a foreign decree may be executed in India by filing a suit in the District Court on the basis of the said decree praying inter-alia, for the execution of the decree passed by the foreign court. In addition, the CPC provides for a summary procedure for faster recovery of a debt or liquidated money in demand under Order 37 of the CPC. In summary suit, defendant is not, as in an ordinary suit, entitled as of right to defend the suit.

Arbitration and Conciliation

Arbitration and Conciliation Act 1996 based on the UNCITRAL model law provides for resolution of a commercial dispute expeditiously for:

» International commercial arbitration, where the seat of arbitration is India and
» Enforcement of international commercial arbitration agreements and awards under the New York Convention and Geneva Convention where the seat of arbitration is outside India.

The Arbitration Act also provides for international commercial arbitration whether contractual or not, considered as commercial under Indian law and where at least one of the parties is a foreign national or incorporated in a foreign country.

Execution Procedure

The Supreme Court of India in the matter of M/s Furest Day Lawson Ltd. Vs. Jindal Exports Ltd 2000(4) AD(SC) 433 held that "The foreign award is already stamped as a decree". The party holding a foreign award can straightaway apply for the enforcement of the same and while enforcing the award, the Court has to proceed in accordance with Sections 47-49 of the Arbitration Act. Once the Court decides that the foreign award is enforceable, it can proceed to execute the same. A foreign award can be executed in India by filing an Execution Application after a foreign arbitration award is held to be enforceable by an Indian Court of competent jurisdiction. In view of the apex court in the above case, a foreign award is deemed and does not become a decree after decision of the court as regards its enforceability.

The domestic award is enforced as per Section 36 of the Arbitration Act, which states that where the time for making an application to set aside the Arbitral Award under Section 34 has expired, or such application having been made, it has been refused, the Award shall be enforced under the CPC in the same manner as if it were a Decree of the Court.

New Dispute Resolution Opportunities offered by Investment Treaties

India has entered into bilateral investment treaties with a number of countries. Each agreement makes provision for settlement of disputes between an investor of one contracting party and an investor of the other contracting party through negotiation, conciliation and arbitration.

India is a party to the Convention establishing the Multilateral Investment Guarantee Agency (MIGA), which provides for settlement of disputes between State parties to the Convention and MIGA through negotiation, conciliation and arbitration.

Under Indian Law, the following types of differences cannot be settled by arbitration, and therefore, must be settled only through civil suits: -

Matters of public rights

» Proceedings under the Foreign Exchange Management Act (FEMA) which are quasi-criminal in nature
» Validity of intellectual property rights granted by statutory authorities
» Taxation matters beyond the will of the parties
» Winding up under the Companies Act, 1956
» Disputes involving insolvency proceedings

Information about Indian Judiciary can be accessed at:http://indiancourts.nic.in/sitesmain.htm

Important Economic Laws in India

Reserve Bank of India Act 1934: http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RBIAM_230609.pdf

Insurance Act , 1938: https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_NoYear/sst.aspx?DF=ACT&mid=4.1

Industries (Development and Regulation) Act, 1951: http://siadipp.nic.in/publicat/ip/ipact01.htm