INTRODUCTION
In recent years, the global landscape of commercial disputes has witnessed a radical shift from traditional courtrooms to alternative dispute resolution ("ADR") mechanisms, such as Arbitration and Mediation. While this sudden shift is triggered due to global economic fluctuations and evolving regulatory regimes, it has gained importance owing to its confidentiality and privacy in resolving disputes. With the world navigating rapid technological advancement and experiencing the introduction of Artificial Intelligence ("AI"), the arbitration community has witnessed a shift to Online Dispute Resolution (ODR), inclusion of ESG-based claims and an increase in Insolvency and restructuring cases, including shareholder disputes as well. This shift not only welcomes technological innovation in Arbitration and Mediation but also reflects global commercial realities and emphasizes the need to shift to other methods of dispute resolution which are not only convenient, but also cost and time effective for the parties. This article aims to identify and address the upcoming trends in commercial disputes by comprehensively assessing them and gauging their impact on the parties.
ADR AND ONLINE DISPUTE RESOLUTION (ODR)
Alternate Dispute Resolution (ADR) has in recent times, not only become a cornerstone in the management of commercial disputes but has also established itself as an essential boilerplate clause in commercial contracts due to its confidentiality, timeliness and cost-effective nature. It becomes the most sought-after dispute resolution mechanism due to its flexible nature and provides the parties with the utmost autonomy of appointing their arbitrators, choosing the seat and venue of the arbitration and deciding the arbitration procedure itself. The Arbitration and Conciliation Act, 1996 (hereinafter referred to as " the Act") plays a key role in providing the parties with such great autonomy, by stating the very words "unless the parties choose otherwise". Thus, providing the parties with flexibility and autonomy to implement the procedure at their pace with utmost confidentiality and privacy. Additionally, Section 11 of the Act, provides the parties with the option to nominate and appoint a minimum of 1 and a maximum of 3 arbitrators, who shall comprise the Arbitral Tribunal. However, whenever the parties are indecisive about the panel's composition, this section gives them the opportunity to file an application before the High Court to appoint the panel. Thus, the procedure not only establishes specialized commercial courts and tribunals but at the same time also provides the disputing parties with the option to seek other ADR methods, thereby reducing the backlogs from the courts, offering a more accessible and convenient way to resolve disputes.
Further, while arbitration still remains a court-driven process, Mediation, on the other hand, has been gaining much prominence amongst commercial parties due to its focused approach in negotiations and favorability to the parties. This can be seen from the introduction of the Mediation Act, 2023, which aims to promote and facilitate institutional mediation. It also introduces Online Mediation Mechanisms which is cost-effective and results in faster resolution of disputes in comparison to court-based litigation. Mediation has gained further impetus under Section 12A of the Commercial Courts Act, 2015 and Section 89 of the Code of Civil Procedure, 1908, which mandate pre-suit mediation settlement agreements enforceable like arbitral awards.
LITIGATION FUNDING
As legal battles are becoming expensive, commercial parties have now started seeking alternative methods of dispute funding. One such sought after method is 'litigation funding', also known as third-party funding, under which a third party provides financial support for the legal proceedings in exchange for a share or a percentage in the recovery of the party post litigation if the party they have invested in, succeeds in the proceedings. Due to its attractive nature, it can heavily help justice ridden disputants access justice in a timely and cost effective manner.
ESG CLAIMS AND GREENWASHING
With the introduction of the Sustainable Development Goals (SDG's) and the Paris Agreement, 2015 binding its signatory countries to limit their carbon emission and global warming levels, companies are now legally mandated to not only contribute annually to their Corporate Social Responsibility ("CSR") initiatives but also provide for ESG clauses in their commercial contracts. The inclusion of ESG claims has now surfaced as a significant area of commercial disputes and also invokes the trust of all stakeholders, including the investors as well as the consumers, in the company they are associated with.
However, a significant legal issue that arises due to ESG claims, is greenwashing, wherein organizations in order to fulfill their CSR obligations, through misleading marketing gimmicks claim false or exaggerated claims about their organizations sustainability practices, both globally and domestically. They project their companies as more environmentally, socially, and governance-friendly with the intent of gaining a competitive edge to attract investors and consumers. This issue also arises from the fact that while regulatory bodies such as the Securities and Exchange Board of India ("SEBI") mandates the top 1000 listed companies of India to file their Business Responsibility and Sustainability Reporting Regulations ("BRSRR") with the SEBI on an annual basis, however, ESG reporting still suffers from various lacunae such as ambiguity, lack of third party verification, lack of measurability and improper ESG certifications and standards.
AI AND COPYRIGHT
The introduction of AI is revolutionizing industries, from entertainment to finance, but at the same time, it also poses novel legal challenges, particularly in the realm of copyright in the world of content creation. In today's time, where digital content is being created day in and day out by millions of creators, copyright finds it precedence as AI systems not only help in the generation of text, but also assist creators in providing them with ideas, leading to disputes over idea- expression dichotomy under copyright law. Another dispute which arises is as to what extent can AI generated content be copyrighted and who will be assigned the copyright, the user, the developer or, the AI itself.
While copyright disputes remain arbitrable, a core question yet remains - till what extent can disputes concerning AI in copyright be arbitrated?
RESTRUCTURING AND INSOLVENCY
The Post- pandemic economy has led to a wave of increased insolvencies and restructuring of big business houses due to factors such as high interest rates, rising costs and reduced consumer demand. With the Insolvency and Bankruptcy Code, 2016 in place, corporate debtors are now provided with a fair opportunity to save their company from liquidation, by initiating the corporate insolvency resolution process ("CIRP"). Additionally, post-covid, the Code now also provides for the corporate resolution of Micro, Small and Medium Enterprises (MSME's) through the pre-packaged Insolvency Resolution Process ("PPIRP").
SHAREHOLDER DISPUTES
With the surge in mergers, takeovers and acquisitions year on year, there has been a steady rise in shareholder disputes, especially those related to unfair prejudice, duty of good faith, limitation periods, and derivative actions. While shareholders, are provided with the opportunity to complain against their companies' oppressive practices under section 241 of the Companies Act, 2013, there has also been a rise in shareholders opting for ADR mechanisms to resolve their disputes in a more amicable manner.
GROUP LITIGATIONS AND CLASS ACTION SUITS
The rise of corporatization and globalization across nations, including India, has led to a rise in class action suits. This is most prevalent in construction disputes, anti-trust breaches and data privacy. While other jurisdictions such as the United Kingdom and the United States of America, enthusiastically support class action suits, India on the other hand, offers a more limited and retracted outlook towards such suits due to the legal and reputational risks it carries inclusively.
TECHNOLOGICAL INTEGRATION IN DISPUTE RESOLUTION
Technology is rapidly reshaping how commercial disputes are to be managed and resolved by big commercial houses. It stands as the need of the hour, as it provides a breather for parties involved in heavy litigations, by providing them with AI-based research tools, deadline managers, e-filing systems, digital evidence management, contract management and analysis, thereby significantly reducing both time and costs involved in such litigations.
The successful inclusion and implementation of technology in dispute resolution can be seen from courts and arbitral institutions, which now provide for e-filing system, case status tracker and manager. This helps the parties and their counsels to efficiently streamline and track their cases, thus increasing transparency and accountability amongst the parties.
CROSS BORDER COMMERCIAL DISPUTES
Cross- border commercial disputes arise when legal disputes surface based on the nationalities of the parties and their business operations which are spread across various countries, leading the parties to enter into international commercial agreements. However, such contracts suffer from issues such as jurisdiction, mandatory and directory clauses, applicable choice of law and right court/forum, and recognition and enforcement. Such disputes can be resolved by drafting clear, precise and unambiguous dispute resolution clauses, which help the parties in easily identifying the law of the seat, applicable forum/court etc. Further, parties can also opt for institutional arbitration facilities from various institutions such as ICC, SIAC, LCIA, DIAC and many more.
CONCLUSION
In an era marked by globalization, technological innovation, and evolving regulatory frameworks, the nature of commercial disputes has dramatically transformed from being adversarial in nature to being presented before specialized tribunals and quasi-judicial bodies. The inclusion of technology in the field of law and ADR has seen the rise of ODR mechanisms which has started gaining preference amongst commercial parties due to the convenience and high level of confidentiality it offers, thus, significantly changing the landscape of ADR disputes. It is quintessential for disputing parties to stay informed and strategically prepared to deal with multifaceted legal challenges emanating from parties belonging to different jurisdictions. Therefore, embracing these growing trends not only helps parties to mitigate legal risks but at the same time, also helps parties to strengthen corporate resilience in an increasingly complex commercial world.
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