A. Introduction
Complex disputes are not easy to define as a class. But they do occur frequently in court litigation or arbitrations. Hallmarks of complex disputes are multiplicity of parties and issues, both legal and factual. Various jurisdictions have built mechanisms to deal with complex disputes through special rules and procedures. This article focuses on litigation and arbitration as methods for resolving complex disputes, though other methods like mediation are also useful. In particular, this article analyses the need for improving Indian legal system’s tools and capacities to resolve complex disputes by adapting global best practices.
B. Nature of Complex Dispute Resolution
Black’s Law Dictionary, defines complex litigation[1] as, “litigation involving several parties who are separately represented, and usually involving multifarious factual and legal issues”. Right below the definition, the same dictionary quotes from Tidmarsh and Trangsrud’s 2002 book titled, Complex Litigation. The quote partly states, “complex civil litigation has an ‘I know it when I see it’ quality. Nearly everyone agrees that matters like the massive asbestos litigation, the AT&T anti-trust suit, or the remedial phase of a school desegregation case are complex”.
Complex litigation is now taught in several US law schools as a formal course[2]. Alternative methods of resolving complex disputes exist, for example, mediation, which may be very effective in a given factual matrix. Many mass tort or class action litigation of a complex nature end in a conciliation expressed as a settlement with payouts to the victims.
C. Difficulties of Resolving Complex Disputes in India
Post-independence, India’s first brush with complex dispute was the Bhopal gas leak disaster (1984) related litigation. The leak of methyl isocyanate (MIC) poisonous gas killed thousands (est. 3,000-5,000) of people and with thousands more disabled. In 1985, Indian Government joined a claim against the American company, Union Carbide, in the United States District Court, Southern District of New York[3] (US Bhopal Case). The core issue raised in a motion filed by Union Carbide was forum non conveniens. Union Carbide argued that Indian courts were a more appropriate forum rather than US courts for claims by gas leak victims. Indian Government’s position in the case was that US courts were appropriate forum to assert their claims.
The underlying strategy of parties in Bhopal gas disaster’s US litigation was simple. Union Carbide wanted Bhopal gas leak claims to be not litigated in US courts before juries as that would result in multi-billion dollar judgments or settlements. The track record of US juries for mass torts was pro victim having granted multi-billion dollar verdicts — one of those could have bankrupted Union Carbide. While, Indian Governments, at least initially, and victims wanted substantial damages for their injuries which could only be possible in US courts’ jury trials.
In the US Bhopal case, Prof. Marc Galanter filed an affidavit pointing out severe handicaps of Indian legal system in handling complex personal injury litigation involving mass torts[4]. One problem that his affidavit highlighted was at Para VII.C tilted, “Indian Civil Procedure Contains no Special Provisions or Devices for the Conduct or Management of Complex Cases.”
In response, the eminent Indian lawyer, Mr Nani Palkhivala, and others legal experts had filed affidavits asserting the competence of Indian legal system to handle mass tort claims. Mr Palkhivala’s affidavit detailed how Indian Bar and judiciary was capable of handling complex litigation including mass torts[5]. Which opinion turned out to be true after nearly 38 years can be seen from Government’s own data: of the 1,029,517 claims only 574,366 were awarded a mere Rs 3,840 crores in total while 455,151 claims were rejected[6]. And the litigation to demand more compensation still continues[7]. Clearly, India legal system needs tools to manage complex litigations that compensate claimants adequately and within a short time.
Ultimately, Union Carbide got away easily with a relatively small payment of US $470 million as settlement to Indian Government, though they have given explanations for the same on a specially created website[8]. The trial(s) where Indian courts could have granted multi-billion dollar equivalent award for the Bhopal mass torts and execution of that judgment or judgments in US never arrived due to the paltry settlement by Union Carbide accepted by the Indian Government.
In current times, a new category of complex arbitrations has arisen in India. As there are no specialised constructions courts across India (exceptions exist in a few States as tribunals), construction disputes now are invariably arbitrated rather than being litigated in courts. As India constructs infrastructure like roads, high speed rails, airports, etc. inevitably disputes arise between contractors and the public sector. Construction disputes has become a large category of complex disputes in India in last two decades. But the conduct of construction arbitrations in India can be made much more efficient. The delays in arbitration process involving thousands of documents of any construction project are common. Later in this article, recommendations are made to speed up complex arbitrations in India.
D. Current Dispute Resolution Methods in India
The core statute that defines civil litigation in India is the venerable Civil Procedure Code, 1908 (CPC). All other judicial and quasi-judicial procedures in India are derivatives of the CPC. For a country as vast as India, to have a common country-wide Civil Procedure Code for Federal or State Courts in the CPC is a magnificent achievement. Contrast this with the United States, the only nearest comparable common law jurisdiction in its scope to the Indian legal landscape. The United States of America has a Federal Rules of Civil Procedure for Federal Court litigation and as many State Civil Procedure rules as there are States in the United States[9].
The CPC has a core set of 158 sections that are enacted by the Central Government and rules (organised in groups of 51 “orders”) that can be modified by the High Court of State with State wide applicability[10]. The CPC is flexible in its legislative design but due to a complex set of factors it is somehow always blamed for delays in courts. But when one generally compares the broad structure of England and Wales’ Civil Procedure Rules or US’s Federal Rules of Civil Procedure, they are pari materia to the CPC except that the CPC includes a detailed execution mechanism.
The CPC in its original design was to be the minimum common code for all courts, for disputes small or large, lacks tools for managing complex litigation.The Commercial Courts Act, 2015’s amendments to the CPC are a step in right direction for resolving complex commercial disputes. The CPC’s basic tool for multiparty representative litigation is the Order 1 Rule 8 (one person may sue or defend on behalf of all in same interest) that permits a “representative suit”. The requirements for applying Order 1 Rule 8 are: (i) parties are numerous; (ii) parties have same interest; and (iii) necessary permission is obtained, and a notice is given[11].
Arbitration is the preferred option for commercial dispute resolution in India, particularly for construction disputes. As a country building large scale infrastructure, construction disputes are increasing. But efficiency of arbitrating these disputes is questionable. Several reasons exist for inefficiencies in arbitrating construction disputes. Some causes of these inefficiencies are: inability of parties to narrow down disputes to a few key issues, lack of proper documentation and correspondence, inadequately experienced tribunals, archaic evidentiary methods, etc. This article offers some suggestions to remove inefficiencies in commercial and construction litigation through better practices.
While the Companies Act, 2013 includes a Section 245 for class action litigation and the Consumer Protection Act has a class action provision, these remain largely unused being untested by litigants[12]. Some class actions are asserted via public interest constitutional writ litigation. In a nutshell, class action or mass tort actions that grant substantial damages to victims are virtually absent in India.
There is no doubt that some judicial administrative policy work is happening in India too. But it is all ad hoc. Some examples of judicial policy innovation exist. For example, like the Restatement of Values of Judicial Life, adopted by Full Court meeting of the Supreme Court of India in 1997[13]. But ad hoc nature of these efforts is illustrated by an observation in a recent case concerning electronic evidence: Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal[14]. Here, the Supreme Court hoped that authorities will take notice of effort put in by a committee of Judges to create a set of rules for electronic evidence:
- 65. … A five-Judge committee was accordingly constituted on 28-7-2018. After extensive deliberations, and meetings with several police, investigative and other agencies, the Committee finalised its report in November 2018. The report suggested comprehensive guidelines, and recommended their adoption for use in courts, across several categories of proceedings. The report also contained draft rules for the reception, retrieval, authentication and preservation of electronic records. In the opinion of the court, these draft rules should be examined by the authorities concerned, with the object of giving them statutory force, to guide courts in regard to preservation and retrieval of electronic evidence.[15]
E. Global Best Practices for Complex Dispute Resolution
The United States of America’s Federal Rules of Civil Procedure includes provisions for complex litigation. For example, Rule 16 concerns, “Pretrial Conferences; Scheduling; Management”. Specifically, Rule 16(c)(2)(L) permits the trial Judge to adopt special procedures for , “… managing potentially difficult or protracted actions that may involve complex issues, multiple parties, difficult legal questions, or unusual proof problems”. This provides flexibility to a federal court’s trial Judge to customise procedures in complex litigation to manage issues related to multiplicity of parties, legal challenges, or evidence.
The Federal Judicial Centre has published a “Manual for Complex Litigation”[16]. This manual has excellent guidance on managing judicial supervision, role of counsel, pretrial issues like discovery, trials, settlement, and class actions as a specific type of complex litigation. The Judicial Conference of the United States has published a “civil litigation manual”[17]. This manual has detailed guidance for Judges to execute a case management plan, pretrial discovery, electronic discovery, pretrial motions, alternative dispute resolution methods, trial planning and actual trial itself. Of specific interest is its Chapter 7, “special case matters”, that deals with complex litigation. The Chapter 7 includes general guidance on complex cases, mass torts cases, class action litigation and expert evidence. Further guidance is given on high profile cases. Interestingly, there is guidance on media management in high profile cases, an increasing need in India too.
There is academic guidance on complex litigation available too through dedicated research centres in American universities. For example, George Washington Law School’s James F. Humphreys Complex Litigation Centre has published “Guidelines and Best Practices in Class-Action Litigation” for public comments[18].
The Business and Property Courts of England and Wales’ publishes various litigation guides, for example, commercial court guide[19] (incorporating the admiralty court guide) and the technology and construction court guide[20] and the intellectual property enterprise court guide[21]. While these are non-binding and litigation guides for specific courts, they include elements of managing complex litigations.
Arbitral rules or guidance notes from arbitral institutions provide specific guidance to manage key aspects of complex disputes. There is guidance available for discovery best practices in construction arbitration specially[22]. Specialised arbitration centres and their rules for complex disputes like construction are also emerging fast[23]. There is ongoing research by arbitral institutions to streamline document production[24].
F. Suggested Remedies for Efficient Dispute Resolution in India
A few suggestions for improving methods of complex dispute resolution in India are describe next:
(a) A dedicated body for judicial procedural innovation. India needs a permanent judicial body with a statutory basis that is focussed on process innovation in judiciary from District Court to Supreme Court level. An example of this is the Judicial Conference of the United States, a century old body, that includes Judges across Full Federal judiciary from District Court upwards that makes direct recommendations to the US Congress on federal judicial issues[25]. The Judicial Conference of the United States does useful work through its sub-committees. Integration of trial and tribunal judiciary is critical in any such body. Some innovations have happened in Indian judicial meetings held at times but there is no institutional basis to these nor any regular published outputs of such ad hoc efforts.
(b) A guide for best practices in implementing Commercial Courts Act, 2015 is much needed. While a few high courts have amended their original side rules for commercial courts, but much needs to be done to separate conventions and practices of the ordinary civil trials from commercial court trials. There needs to be a scale of sanctions that include fines for violating case management timelines. These can be implemented by amendments to the law or through rules to make the commercial courts effective.
(c) A great opportunity exists for arbitration centres with their dedicated set of rules to innovate on complex arbitrations. Indian arbitral institutes can create dedicated construction or complex arbitration rules to expedite construction arbitrations considering the industry practices in India. In particular, voluntary disclosure of documents is a much required feature in expediting construction arbitration in India. Guidance in form of how to claim and prove common heads of construction claims would be very useful. Further, guidance on how to effectively produce and manage massive documentary evidence by building a common correspondence index and a statement of jointly agreed facts can be done.
G. Conclusion
Indian legal system needs to build its complex litigation capabilities by continuous research in rules, training for lawyers and Judges, and creating non-binding court guides. The Commercial Courts Act, 2015 provides a great opportunity to build a new system within the existing courts that can handle complex litigation. But it seems there is more emphasis on aligning commercial courts with existing court practices and conventions than a radical rethink in the method and speed of conducting commercial trials. A parallel opportunity exists for arbitration centres in India to innovate on complex disputes by providing industry specific rules, particularly for construction disputes.
† Hasit B. Seth practices as a counsel in the Bombay High Court, India and in arbitrations.
[1] Black’s Law Dictionary, (9th Edn.) p. 1017.
[2] For example, See Harvard Law School’s Prof. Richard Clary’s Spring 2022 course titled “Complex Litigation: Legal Doctrines, Real World Practice”. See HERE https://hls.harvard.edu/academics/curriculum/catalog/default.aspx?o=78392.
[3] See, Union Carbide Corpn. Gas Plant Disaster, In re, 634 F Supp 842 (SDNY 1986).
[4] See, Prof. Marc Galanter’s Affidavit, Law School Digital Repository, University of Wisconsin, https://repository.law.wisc.edu/s/uwlaw/item/301800.
[5] See, Affidavit of N.A. Palkhivala In Support of Defendant’s Motion for Dismissal on Forum Non Conveniens Grounds. See HERE (Part of Baxi, et al., Mass Disasters and Multinational Liability: The Bhopal Case, 1986, Indian Law Institute).
[6] Facts and Figures, Bhopal Gas Tragedy Relief and Rehabilitation, Government of Madhya Pradesh. See HERE.
[7] See, “Bhopal Gas Tragedy: New SC Bench to Hear Compensation Case”. See HERE .
[8] See, Union Carbide’s Bhopal Website. See HERE .
[9] See, Civil Procedure – State Laws, Legal Information Institute, Cornell. See HERE .
[10]Civil Procedure Code, 1908, S.122.
[11] Mulla, The Code of Civil Procedure: Abridged (12th Edn.) p. 421.
[12] Consumer Protection Act, 2019, S. 2(5)(v).
[13] See, Restatement of Values of Judicial Life. See HERE .
[14] (2020) 7 SCC 1, 57.
[15] The draft of these rules cannot be found online as there is not even a website collating such efforts, though good effort has gone into creating these electronic evidence rules can be seen from this note on Centre for Development of Advanced Informatics (C-DAC) website: HERE .
[16] Federal Judicial Center, Manual for Complex Litigation, Fourth, 2004. See HERE
[17] The Judicial Conference of the United States Committee on Court Administration and Case Management, Civil Litigation Management Manual (2nd Edn.) 2010. See HERE .
[18] See, James F. Humphreys Complex Litigation Center, Guidelines and Best Practices In Class-Action Litigation, See: https://www.law.gwu.edu/sites/g/files/zaxdzs2351/f/downloads/Class_Action_Universal_Guidelines_Public_Comment.pdf.
[19] See, The Commercial Court Guide, (11th Edn.) 2022. See HERE .
[20] See, The Technology and Construction Court Guide, (2nd Edn.) 2005. See HERE .
[21] See, The Intellectual Property Enterprise Court Guide, 2019. See HERE
[22] See, American Arbitration Association, Construction Discovery Best Practices. See HERE .
[23] See, American Arbitration Association’s Construction Industry Arbitration Rules and Mediation Procedures (Including Procedures for Large, Complex Construction Disputes). See: HERE. JAMS Construction Arbitration Rules. See HERE . International Institute for Conflict Prevention & Resolution’s Rules for Expedited Arbitration of Construction Disputes. See https://www.cpradr.org/resource-center/rules/arbitration/cpr-rules-for-expedited-arbitration-of-construction-disputes.
[24] See, ICC Arbitration Commission Report on Managing E-Document Production. HERE .
[25] Judicial Conference of the United States. See HERE . Note that this is very different from Indian judicial academies which are roughly comparable to the Federal Judicial Center (FJC) in United States that focuses on policy-making and training: HERE , though Indian judicial academies have no formal role in judicial policy-making. The FJC produces excellent research as seen Here
