India is the largest democracy in the world with a comprehensive written Constitution that has governed a diverse and complex nation together for over 50 years. The Indian legal system, its jurisprudence and many of its laws, while inherited from the British, have operated within the framework of the Constitution adopted in 1950. The Indian Republic is federal in nature with the federal government having greater powers than the state governments. Most of India's commercial laws are federal in nature and therefore there is no significant difference between states on commercial matters.

The judicial system

Given the diversity of the nation, it is not surprising that India has a rather complex judicial system. For the most part, justice is dispensed through separate networks of civil and criminal courts. In addition, there are a number of special courts or tribunals that adjudicate on disputes under specific statutes (for example, the labour courts or the debt recovery tribunals). Courts and tribunals located in each state are under the direct supervision of the High Courts - which except for a few cases are situated in the capitals of the various states in the country. The High Courts in addition to their supervisory jurisdiction also serve as appellate and revisional courts from the decisions of the civil and criminal courts and tribunals. The Supreme Court of India is the final court of appeal from the decisions of the High Courts. The High Courts and the Supreme Court, through their writ jurisdiction, also function as protectors of fundamental rights set out in the Constitution - persons whose rights are affected by the actions of the government or governmental agencies can directly approach the High Courts or Supreme Court for relief.

India has a long history of fairness in the justice delivery system as can be seen in well-codified legislation on procedural matters, evidence and limitation, and a body of case law that has evolved over the years. Costs of litigation are by and large reasonable though high-profile litigation in the larger cities can be relatively more expensive. Courts have discretion in requiring a plaintiff to provide security for costs incurred or those likely to be incurred by the defendants. Such security would be mandatory if the plaintiff resides outside India and does not possess sufficient immovable property (except any property involved in the lawsuit) in India. The suit can be dismissed if security for costs is not provided.

Unfortunately, despite the well laid out court network, various specialized courts and well-codified legislation, the litigation process is extremely slow and cumbersome. Monetary claims and commercial litigation can take many years to conclude. The Indian government, being conscious of the need to reduce the delays, has recently carried out a number of changes in the procedure of a civil case by way of an amendment to the Code of Civil Procedure. Courts can now fix a time limit for oral arguments by the parties and restrict the ability of parties to seek adjournments. Summonses can also be served by fax and email. The success of these amendments has yet to be tested.

Enforcement of foreign judgments

Judgments of specified courts in countries such as the UK, Aden, Fiji, Singapore, Malaya, Trinidad & Tobago and New Zealand (all reciprocating countries) can be enforced directly by execution proceedings as if these foreign judgments are decrees of the Indian courts. Foreign judgments of non-reciprocating countries can be enforced in India only by filing a suit based on the judgment. A foreign judgment would be recognized by Indian courts unless it is proved that:

• it was pronounced by a court which did not have jurisdiction;
• it was not given on the merits of the case;
• it appeared on the face of the proceeding to be founded on an incorrect view of international law or a refusal to recognize Indian law (where applicable);
• principles of natural justice were ignored by the foreign court;
• the judgment was obtained by fraud; or
• the judgment sustained a claim founded on a breach of Indian law.

Alternative dispute resolution

Arbitration is a well established and increasingly popular mode of dispute resolution, particularly in the context of commercial disputes. The popularity of conciliation and mediation is also increasing. The Indian Arbitration and Conciliation Act (1996) is based on the UNCITRAL model law and facilitates international and domestic arbitration and conciliation. An arbitral award can be challenged on limited grounds. Domestic awards and foreign awards (to which the New York Convention or the Geneva Convention applies) can be enforced as a decree of the courts by an application for enforcement before the Indian courts. While a party to an arbitration agreement can approach the courts for resolution of its dispute with the other party (or parties), the courts will refer the matter to arbitration if the other party makes an application requesting such reference.

Conclusion

Alternative dispute resolution methods are likely to continue to be the preferred mode for resolution of commercial disputes. However, India is poised for significant procedural reform in the years to come, intended to overcome litigation delays. For example, the Supreme Court has already taken steps to allow petitions to be filed online. There is a growing realization that one of India's greatest strengths in a globalized marketplace is its well-developed and mature legal system which has over the years built a reputation of independence and fairness.