A Quagmire of Public-Private Arbitration IN INDIA

Received: 17.09.2021; Revised: 26.10.2021, Accepted: 22.11.2021, Published Online: 14.12.2021

Apoorvi Shrivastava

Assistant Professor, Ifim Law School

Abstract

Every nation in the world aims to accelerate its growth curve and develops novel policies and innovative frameworks to achieve the same. Public Private Partnership (hereinafter referred as PPP) is one such initiative through which the government tries to mend the gap in its basic services. Indian Government, through its Union Budget (2020-2021) highlighted the vital role of such PPPs. It was stated that “Development of infrastructure through PPPs help in the economic growth and development of a nation, creation of jobs, provides opportunities for private sector participation, and improves living conditions”[1] Nonetheless, as every innovation is not devoid of obstacles, this route of progress also has certain stumbling blocks. Infrastructure and Construction contracts are often long-term transactions coupled with various complexities, which in turn escalates in manifold when parties are both public and private entities having different interests, approach or objectives. This fusion often leads to insidious conflicts, which are customarily referred to arbitration, by the parties of the contractual dispute, owing to its flexible, confidential and expeditious nature.

Arbitration is a private dispute settlement mechanism and often those matters concerning public elements are kept out of its purview by the virtue of the “Public Policy” element in the Indian Jurisprudence through Sections 34 and 48 of the Indian Arbitration and Conciliation Act, 1996. When a Public Entity is involved, then, questions of public interest, accountability, government’s supremacy, transparency, court’s right of interference automatically gets triggered, thereby defeating the very essence of this dispute resolution mechanism and also the corporate setting of private institutions. Unfortunately, the Indian legal regime does not provide distinct provisions to deal with public – private matters and thus unwraps floodgate of litigations.

The Researcher, through this paper, has highlighted the issues of this twisted triad-“private entity, public unit and arbitration”. Further, the Researcher has also proposed the necessary provisions and required amendments so as to create a smooth path for successful Public-Private Arbitration. Furthermore, an attempt has been made to suggest a narrow application of the “Public Policy” sword under the Indian arbitration legislation in order to bring the balance between corporate needs and the public interest.

Keywords: Arbitration, Public Policy, Corporate Need, Public-Private Matter

[1] Infra development through PPP to spur growth, create job; Projects worth Rs 27,514 Cr. in FY20 till date, The Economic Times (Feb 20, 2020 12:50 PM) https://economictimes.indiatimes.com/news/economy/indicators/infra-development-through-ppp-to-spur-growth-create-job-projects-worth-rs-27514-cr-in-fy20-till-date/articleshow/73866469.cms.