CAO Daily Editorial analysis for UPSC IAS

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1.Pushing institutional arbitration in India

Livemint


Context

The World Bank’s Ease of Doing Business ranking for 2017 reveals that India continues to fare badly on enforcement of contracts, with an average of 1,420 days taken for enforcement.

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  • At its core, arbitration is a form of dispute resolution. Arbitration is the private, judicial determination of a dispute, by an independent third party.
  • An arbitration hearing may involve the use of an individual arbitrator or a tribunal. A tribunal may consist of any number of arbitrators though some legal systems insist on an odd number for obvious reasons of wishing to avoid a tie. One and three are the most common numbers of arbitrators.

The disputing parties hand over their power to decide the dispute to the arbitrator(s). Arbitration is an alternative to court action (litigation), and generally, just as final and binding (unlike mediation, negotiation and conciliation which are non-binding).

General principles of arbitration are as follows

  • The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay.
  • Parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.
  • Courts should not interfere.

Arbitrators, or Tribunal members, are commonly appointed by one of three means

  • Directly by the disputing parties (by mutual agreement, or by each party appointing one arbitrator)
  • By existing tribunal members (For example, each side appoints one arbitrator and then the arbitrators appoint a third)
  • By an external party (For example, the court or an individual or institution nominated by the parties)

Advantages Of Artbitration

Supporters of arbitration hold that it has a multitude of advantages over court action. The following are a sample of these advantages.

Choice of Decision Maker – For example, parties can choose a technical person as arbitrator if the dispute is of a technical nature so that the evidence will be more readily understood.

Efficiency – Arbitration can usually be heard sooner than it takes for court proceedings to be heard. As well, the arbitration hearing should be shorter in length, and the preparation work less demanding.

Privacy – Arbitration hearings are confidential, private meetings in which the media and members of the public are not able to attend. As well, final decisions are not published, nor are they directly accessible. This is particularly useful to the employer who does not want his ‘dirty laundry’ being aired.

Convenience – Hearings are arranged at times and places to suit the parties, arbitrators and witnesses.

Flexibility – The procedures can be segmented, streamlined or simplified, according to the circumstances.

No Appeal – Unless there is evidence of outright corruption or fraud, the award is binding and usually not appealable. Thus if the arbitrator makes a mistake, or is simply an idiot, the losing party usually has no remedy.

Narcotic/Chilling Effects – The chilling and narcotic effects are two related concepts, which many theorists, including David Lipsky, believe to be inadequacies of interest arbitration

Way forward?

  • Increase awareness about institutional arbitration in India so that efforts being taken to reform institutional arbitration are supported by an increase in usage
  • Adopt best practices from around the world which will encourage parties to use their services over foreign arbitral institutions.
  • The government must assist by creating state-of-the-art physical infrastructure for the conduct of arbitration.
  • They must also foster innovation among arbitral institutions to help realize the flexibility, speed and cost-effectiveness  promised by institutional arbitration.

2.Govt. move to minimise legal issues in recruitments

The Hindu


Why in news?

The State government has initiated an exercise to overcome the possible litigations due to zonal regulations in appointments following Chief Minister K. Chandrasekhar Rao’s announcement on massive recruitment to vacancies in different departments.

Article 371 (D)

 It forms a part of the Constitution of India. It safeguards the rights of local people in employment and education and was created after agitation in the state of Andhra Pradesh. It was incorporated as the 32nd Amendment of the Constitution in 1974. It has become a bone of contention for the bifurcation of the state of Andhra Pradesh and Telangana.

Changes offered

  • The recruitment of jobs from three-tier to two-tier system.
  • The zonal system was introduced in the state by the Presidential Order, earlier. Thus, the two-tier system also requires amendments to Article 371(D) of the Constitution.

Why?

The existing system was giving scope for too many litigations and there was need to minimise them.

Consensus

  • The participants discussed whether the recruitment process could be held based on the 31 newly carved districts or on the basis of the 10 old districts.
  • The Law department had been asked to study the issue and come out with its suggestions to avoid legal complications.
  • Sources said the TSPSC chairman brought to the notice of the Government the difficulties the commission was facing on account of less number of staff. He wanted allotment of at least 100 more employees to the commission.

 

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