In the latest edition of the EPW, PK Suresh Kumar discusses the implications of a recent arbitral award in Singapore. In (White Industries Australia Limited and the Republic of India 2011) the arbitral tribunal criticized the Indian Supreme Court for delays and directed the Union government to compensate the company for the delay.
Suresh Kumar’s critique of the judgment is based on the idea of judicial sovereignty By holding the executive liable for judicial delays, would imply either imply the lack of independence of the judiciary or create an incentive for the executive to intervene in judicial enforcement. The author is scathing in his critique of bureaucrats, who he believes have compromised India’s judicial sovereignty by drafting the investment treaty badly.
The article is interesting for two questions it opens up
1) Is there a distinct entity judicial sovereignty? With increased globalization of economic and human rights regimes, ideas of national sovereignity have undergone dramatic changes. In India, the Supreme Court has already held in the GATT and WTO cases that the Union government may transform the constitutional separation of powers between the state and the centre by taking on international agreements. Could this analogy be extended to the separation of powers between the executive and judiciary?
2) What sort of claims for compensation for judicial delays be made in domestic situations, given that the right to speedy trial has been recognized as part of the right to life?
The relevant order can be found here (HT: Nick Robinson)
Very interesting case, although does the Bharat Aluminum judgment overruling Bhatia International now make the specific facts in this case moot? The controversy reminds me a bit of the concern over Chapter 11 in NAFTA interfering with judicial sovereignty in the US such as in the Methanex case (where Methanex tried to claim under NAFTA that a Mississippi jury award against it was excessive – they eventually lost (http://www.state.gov/s/l/c5818.htm).
So what happened in this case? Has the government appealed this order? Refused to pay the 50 crore?
And here is the judgement for those interested:
http://italaw.com/sites/default/files/case-documents/ita0906.pdf
Rohit, I just read this yesterday and was thinking of writing a response. Without getting into the details, here are some thoughts:
1. First, and as a matter of international law doctrine, it is well established that state responsibility can be invoked for acts of any state organ, including the judiciary. The author here seems to take issue with the government (executive) paying for the judiciary, whereas technically it is India (and not particularly the government) that is held responsible under the treaty arbitration. The point being that if India enters into a treaty, the obligations under the treaty apply to all state organs (and at all levels), and not just the union government. Similarly, domestic law cannot be offered as an excuse for non-compliance with international obligations.
2. "Denial of justice" by national courts has been successfully argued before international tribunals on a number of occasions. Admittedly, the tribunal in White Industries adopted a broad definition of a difficult to define concept ("effective means" for enforcement of the investor's rights), and one can well argue against the desirability of the tribunal's approach. But, to say that national court action or inaction cannot be challenged before international tribunals because of "judicial sovereignty" is misplaced, and a step too far, I think. For one, there are several cases of non-independent national courts ruling against aliens.
Further, most executive action is subject to judicial review, such that the Court's have the final say on a decision. Once the Court has come out with a decision, the position can be said to be consistent with domestic law and the Constitution, which the national courts apply. However, this still does not answer the question of the obligations a state undertakes under international. Only an international tribunal can decide that, and hence national court decisions (representing a State's position on an issue) are reviewed by international tribunals/courts.
Cont…
cont…
3. to put this in terms of sovereignty, international law limits the freedom available to states (the PCIJ's famous dictum in the Lotus case). As I said before, this restriction upon sovereignty applies to all organs of the state, including the judiciary. In my opinion, the author is particularly against the White Industries tribunal because he sees it as an "appellate court" sitting above the Indian courts. This is not true. At the risk of sounding formalistic, I still think that the tribunal was assessing India's compliance with its treaty obligations, and not sitting in judgment over the Court. The fact that it actually based its award on the courts' inaction is immaterial.
4. Nick, I think what you are referring to in the NAFTA context is the Loewen arbitration (and not Methanex): http://www.state.gov/s/l/c3755.htm
As far as White Industries is concerned, I heard Salman Khurshid at some point say that India will pay the award, and I think it has already.
5. As an aside, I see an interesting similarity between this critique of White Industries and the recent developments relating to disqualification of the Indian Olympic Association by the IOC. To begin with, I think we all agree that having the likes of Kalmadi, Bhanot and Chautala head the IOA is not a good thing. We should not have self-interested (and busy) politicians governing sports. Normatively speaking therefore I would welcome the IOCs threats and disqualification because they are aimed at changing the structure of sports governance in India for the better, in my opinion. However, an Indian Olympic medalist — Rajyavardhan Rathore — had an interesting take on the IOCs decision (this critique has come in from several quarters). He criticized the IOC for meddling in the domestic affairs of India and was of the view that it had acted beyond its powers in directing the IOA elections etc. Compare this to the present critique of White Industries in EPW: We all know that Indian courts are not the quickest of cats and would like to speed up the judicial process. CJIs and PMs have acknowledged as much. As soon as an international tribunal sits up and takes notice of this, however, we have a problem with it. This pattern makes me wonder about the use of nationalism and the extent to which this can blur our normative vision. The dominant paradigm in India when analyzing international obligations and assessing compliance thus still seems to be a Westphalian approach, as opposed to the (newer) vision of international law as a transnational legal process (or the other IR based accounts).
Shashank