From the Mailbag

Recently (before my vacation last week), a reader posed a question about the benefits of alternative dispute resolution in emerging markets, namely India. Given the influx of multi-national corporations and investment in the country, our reader asks:

(1) How the use of mediation and/or arbitration might foster India's economy and
(2) What foreign corporations expect of the country's dispute resolution policy.

To promote India's economy, and ease dispute resolution related to increased investment, ICSID membership would provide one method for addressing disputes. This system ensures enforcement of arbitral awards, through the Washington Convention, without requiring parties to resort to the local court system for enforcement, as with the New York Convention. While I stand by my previous statements that the ICSID system is archaic and drawn out, it's probably much better than trying to litigate in India. Moreover, when looking to a country's own procedures for dispute resolution, parties usually like to see rules based on those provided by UNCITRAL for arbitration and conciliation.

But more generally, the increased use of mediation and arbitration might help India's growing economy by providing litigants with more flexible and less expensive means for resolving disputes. ADR is less time-consuming, when compared to traditional Indian litigation and the attendant red tape and roadblocks associated therein. Moreover, ADR may also be utilized in a manner that is sensitive to cross-cultural communication and may assist in preserving business relationships between the parties.

It's interesting; the amount of growth in India over the past decade has been phenomenal, yet I have not been able to identify much discussion on dispute resolution mechanisms available within the country for international dispute resolution. Further, it does not appear that the larger international dispute resolution institutions have concentrated efforts to promote ADR in this region. This seems surprising given the number of foreign businesses in India.

In closing, I now send these questions out to the blogoshere. If you have any additional ideas, insights, or think I am wrong, let the world know. I am Orwellian enough to know that I have readers, so let's help each other out.