Arbitration should have balance between public good and private commercial interests: Shaktikanta Das

Economics Affairs Secretary Shaktikanta Das on Saturday said that BRICS countries should not play the “victim card” but develop capacities to deal with the challenge of arbitration, which should take into account overwhelming public good and not only global business interests.

“Arbitration has to take consideration of the overwhelming public good…there has to be an optimal balance between public good and private commercial interests,” he said at a conference on International Arbitration in BRICS, while giving the example of pharmaceutical drugs in developing countries that are often out of the reach of the poor and have to be provided by the local governments.

In this regard, Das underlined the lack of adequate representation of developing countries under the current international arbitration framework.

“There is a structural bias to developed nations,” he said.

The Economic Affairs Secretary also noted the challenge of “forum shopping” where in investors decide to go for local dispute resolution or international arbitration based on their needs.

To resolve this issue, India’s new model Bilateral Investment Treaty has said that the first recourse to investors will be the judicial system, and they can go to international arbitration only after a period of five years.

Das also highlighted the need to provide a mechanism of early dismissal of frivolous claims. “There has to be a system of outright rejection of such claims,” he stressed.

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