It is extremely important that the BRICS nations develop an arbitration mechanism among themselves at a time when certain centres in the world have monopolised the bulk of the cases, Union Finance Minister Arun Jaitley said on Saturday.
“It is extremely important that we develop a [dispute resolution] mechanism as far as the BRICS nations are concerned,” Mr. Jaitley said while speaking at a conference on international arbitration in BRICS.
“In order to develop this mechanism, it is necessary that we have arbitrators of the required capability, and lawyers with a great international ability.
“We also need to have a lot of restraint as far as domestic jurisdictions of courts to interfere in those arbitrations. The arbitration centres must be detached from local commitments,” he added.
The experience over the years, Mr. Jaitley said, was that some centres did monopolise the bulk of the international arbitrations, and that many countries fear — and have periodically voiced concerns about — the fact that a lot of the awards emerging from these arbitration centres are loaded against the emerging economies.
“The need today is that over the next few months we [the BRICS nations] have to interact more frequently,” Mr. Jaitley said.
“I would even suggest that we have a taskforce which can discuss this issue at length and then set up an appropriate mechanism where we can have arbitration centres as far as the BRICS countries are concerned.”
Speaking about the role of BRICS in the world, Mr. Jaitley highlighted how, in a troubled global economy, the five BRICS nations have shouldered the global burden of growth.
“Ever since the 2008 economic crisis, except for a brief period, the global economy itself has been challenging,” Mr. Jaitley said. “It was the emerging economies, predominantly the BRICS nations, which had shouldered a large part of global growth.”
Challenges changedIn the last few years, however, the challenges have changed, he added, saying that the drop in commodity and mineral prices has affected Russia, South Africa, and Brazil.
“These economic challenges are almost running parallel to the political challenges,” Mr. Jaitley said. “Among these are security threats created with the IS phenomenon, and you have a new wave of protectionism in the developed economies. The Brexit was born out of that. And of FTAs [Free Trade Agreements] in the developed world there is a very strong comment in the run-up to the US Presidential elections.”
Also speaking at the event, Economic Affairs Secretary Shaktikanta Das listed the issues that currently plague the international arbitration system. Among these, Mr. Das pointed towards the lack of adequate representation of the developing nations in the arbitration process, the need to quickly dispose off frivolous cases, and the need to take into account the exigencies of populous nations.
“There are an overwhelmingly large number of poor people in these countries,” Mr. Das said. “So, for example, if a country tries to make medicines cheaply available for its poor population, then arbitration must balance the public good and the private companies’ gains.”
