Insights

LITIGATING IN INDIA IN THE COVID-19 ERA

April 8, 2020 | Neerav Merchant (Disputes, White collar, Anti-corruption, Employment)

Tolling of the statute of limitation

As a result of the health emergency situation arising out of the COVID-19 pandemic, with effect from March 15, 2020 until further orders, India’s Supreme Court (SC), in exercise of its extraordinary powers under Article 142 of the Constitution of India, read with Article 141, has extended the period of limitation applicable to all Indian laws. The SC’s order is binding across all subordinate courts and tribunals in India. Notwithstanding this, we recommend that parties to a dispute seek appropriate advice on the applicability of this order to their dispute on a case-to-case basis.

Force Majeure in supply chain contracts

By its circular dated February 19, 2020, India’s Ministry of Finance has clarified that, if there is a disruption of the supply chain due to the spread of COVID-19, then such a disruption is to be considered as a case of natural calamity within the meaning of Force Majeure (FM). Accordingly, an affected party may invoke FM if appropriate. In addition, an affected party should check its contracts and, if necessary, renegotiate commercial terms with counterparties, should fulfilment become impossible due to COVID-19 lockdowns and disruptions.

As the circular only covers contracts pertaining to procurement of goods and supply chain disruptions, it is advisable to seek legal guidance before invoking the FM clause randomly.

Urgent remedies in civil matters

Since the onset of the COVID-19 emergency, the SC and the High Courts of various states have issued circulars requiring litigants to approach courts only for when matters are urgent and not otherwise, i.e., only those who need urgent remedies will be heard. In a recent case, the Bombay High Court imposed costs of INR25,000 on a party who approached the court claiming urgency, whereas the court did not find any.

In addition, courts have substantially eased the filing process, and the SC has been hearing urgent matters via video conference (VC) if all parties to the dispute are agreeable to do so. If a party disagrees or is unable to have a VC hearing, then the Advocate-on-Record is required to mention the matter via telephone at a designated time before the concerned presiding judge, who will decide whether the matter is urgent enough to be admitted.

The Bombay High Court has designated two (2) courts for VC hearings, and the court registry has permitted litigants to present extremely urgent matters directly to the court without filing the proceedings or even paying the appropriate court fees.

Urgent remedies in criminal matters

The Bombay High Court has instructed all subordinate courts in the state of Maharashtra to entertain only urgent matters, as for example, bail and anticipatory bail applications, remand orders and orders for grants of stay. The principal district judges of the subordinate courts have also been given the discretion to control their own operation and functionality.

An Advocate is required to convince the court about the urgency of a criminal matter before it can be listed for hearing. Given the nature of criminal jurisprudence, subordinate courts often insist that parties appear in-person instead of via VC. In many cases, such courts do not have the IT infrastructure to support a VC. As such, if a party needs an urgent order in a criminal matter, especially in a cognizable offence case, it may become necessary to have an urgent in-person hearing.

Importance of mediation and arbitration

As the COVID-19 challenge is likely to continue for some time and as India has signed the Singapore Convention on Mediation 2019, this may be an opportune time for Indian parties to explore mediation in a more substantial manner. Mediation proceedings can be conducted remotely and can be a huge cost saver. Parties in litigation may also agree to go into mediation midway.

Similarly, resolving disputes through binding arbitration can be cost effective and speedy, especially considering the recent amendments to Indian arbitration law which require a time bound resolution. Mediation and arbitration also enable parties to maintain the confidentiality of a dispute. However, it is important that detailed mediation and arbitration clauses are drafted laying out the scope of the arbitration, the timelines, the use of VC and other technologies, ability to obtain emergency orders, witness testimony versus documentary evidence, etc.

Conclusion

The Indian judiciary is trying its best to ensure that it continues to mete out justice in these difficult times and protects the rights of aggrieved parties. However, the adoption of technology has been slow in Indian courts and is very judge specific. It is high time that the judiciary institutionalizes the use of technology and makes its use mandatory for all.

Finally, this is a good time to dust out contracts and check force majeure and dispute resolution clauses.

Tags:
Covid-19, Disputes and Arbitration

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