We really have had enough. As a law firm, we have decided that we will discourage our clients from accepting generic domestic arbitration clauses in agreements. Bluntly put, we now believe that consensual domestic arbitration unsupervised by a very strong arbitral body (like ICC or SIAC) is a consumer unfriendly dispute resolution process designed to prolong the pain and enhance the cost of dealing with but never conclusively ending a commercial disaster.

Let’s deal with numbers. Because we are a low-trust society, every arbitration our firm does has three arbitrators of which at least two are retired high court judges. Arbitrations don’t generally conclude in less than 30 hearings over several years not including the adjournments. Counsels don’t costs under Rs. 50,000 a hearing and our services are no cheaper. Each arbitrator also charges Rs. 50,000 a sitting. Please add venue costs, travel costs, secretarial costs and what elsebesides. We are talking about an entry level burn rate of Rs. 2 lakhs a hearing for small local briefs. If you fly lawyers out of town, the burn rate triples. Bottom-line:whatever the stake, every out of town arbitration clause costs Rs Two Crores or more!

What you buy for this money is a set of problems both numerous and complex. Because arbitrators are largely ex-judges, arbitrations mimic court cases with protracted procedures and endless delays. Instead of avoiding courts, you generally start arbitration by going to court. As I bluntly put in my new book “Bullshit Quotient: decoding India’s corporate, social and legal fineprint”, India’s Buffalo School of Jurisprudence(based on the maxim that he who wields the stick is the owner of the asset) ensures that we rush to court to stabilize the interim situation and then settle down to a leisurely arbitration in a swanky environment at extortionist cost.

The swanky bit hurts. Court Fees are fixed but arbitration costs are not. Given the average age of the tribunal and the energy levels of the bar after court hours,a sombre environment of purposefulness does not always inform the proceedings. Hearings are frequently interrupted by tea and cookie breaks to say nothing of elaborate ‘hamarezamaane main’ stories dating back to the Munsif Magistrate’s court or was it the sub judge third class in 1960, or was it 1953? The mind-set of the dramatis personae confounds confusion. Arbitration is everyone’s Plan B revenue stream supplement, done after hours, on long weekends, after court hours, during vacations, between vacations, between weddings, outside pregnancies and so forth. Date fixing has all the entertaining ingredients of a medieval comedy, complete with farcical posturing and pseudo emotional manipulation.

Coming as I do from a career begun in Tees Hazari Courts where superb judges did a high pressure job in a utilitarian set up, the dominant environment of entitlement and privilege is incomprehensible. I don’t recall an arbitration where the participants did not care at all about the quality of the arbitration venue, which class of airline seat they were transported, which brand of hotel they were booked in, which quality of room they were checked into, what quality of speciality cuisine they partook of and what other facilitations were offered as a matter of course. We have been asked to purchase brand new very expensive designer leather bags for arbitrators so that they may carry the arbitration papers with dignity. We havebeen asked to provide companion tickets to wives and secretaries, and show tickets for the evenings. How exactly do you define extortion?

The brew thickens because arbitrators are not always young people impatient to delivery quick effective justice and end the proceedings. The Constitution of India retires its judges at an age because it believes that every human being has a Best Before Date. This is not true of arbitrations. You can easily find yourself addressing a Teflon mind to which nothing sticks writing an incomprehensible award that bears no relationship to the arguments. At the best of times, it’s the slow boat to a possible award. This is not the end of it. Indian courts enthusiastically intervene in arbitrations after the award has been made and thank God for that because arbitrators do some very strange things. I am a low-trust lawyer in a low-trust society. The result though is Litigation Round Two.

What you buy then is a luxury cruise in placid legal waters followed by a prolonged and equally expensive in-court litigation where the real business gets done. As often as not, the award gets superseded. Considering that no matter what you do, you will end up in court anyway, isn’t it smart to dispense with the buffet spreads and exotic malts during the arbitration enroute to the final frontier in court and cut to the chase?