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London tribunal slams SC delay

delhi Updated: May 23, 2012 01:41 IST
Nagendar Sharma
Nagendar Sharma
Hindustan Times
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India’s slow-moving judicial system has come in for some more stick.

The International Arbitration Tribunal, London, has slammed the Supreme Court for a five-year delay in deciding a dispute between an Australian company and the government-owned Coal India Limited. It has also directed the government to pay around Rs 50 crore to the firm.

“... The Indian judicial system’s inability to deal with the issue in over nine years and Supreme Court’s inability to hear the appeal for over five years amounts to undue delay and constitutes a breach of India’s obligation,” the tribunal stated in its recent order.

The issue was highlighted in Rajya Sabha on Tuesday by CPM’s P Rajeeve, who questioned the Centre’s silence over what he termed an “assault on the independence of the judiciary”.

Coal India entered into a contract with White Industries Australia Ltd in 1989 for the supply of equipment and development of a coal mine in UP. Disputes arose a nd were referred for arbitration under the terms of the contract. The matter reached the SC in 2006, which referred it to a larger bench, where it is still pending.

In the meantime, the Australian firm approached the UN Arbitration Tribunal, which formed a panel mutually agreed to by both parties to hear the matter at the London tribunal.

On the ruling that the government had breached its obligations to the firm under the provisions of the India-Australia Bilateral Investment Treaty, Rajeeve said, “It is shocking that investors can sue the government under a bilateral treaty.”

The order comes at a time when the government is considering dropping from investment treaties the clause that permits a foreign investor to sue it.