Arbitration continues to be the most popular method for dispute resolution in large commercial disputes. Conciliation or mediation has not yet taken off in India. This is due to a variety of reasons, including an absence of a culture of dispute resolution through these methods. Dispute Resolution Boards (DRBs) have recently been introduced in Government Standard Form (Model) Contracts in the construction industry for large infrastructure projects (see Question 28). It is expected that DRBs will increase in use.

India has a quasi-federal system. Some federal taxes include:

• Income tax.
• Customs duty.
• Excise duty.
• Central sales tax.

Statutes that affect the public interest override choice of law clauses. They include:

An example of this is the case of Man Roland v Multicolour Offset (2004) (7) SCC 447 where, in relation to a sale and service contract, the parties had provided that German law would apply. However, the Supreme Court of India (see Question 4) held that the jurisdiction vested on the special commission under the MRTP Act would not be ousted and the Indian party could approach the commission despite the arbitration agreement providing for arbitration in Germany.

.3. Are there any circumstances in which the local courts would claim jurisdiction over a dispute irrespective of the choice of jurisdiction expressed in the contract?

The courts have taken the view that the parties' choice of jurisdiction will be respected but, at the same time, the parties cannot by agreement deprive the court of jurisdiction which otherwise vests in it by law. Therefore, a party can bypass the choice of forum clause in a contract on the ground that is an inappropriate forum (forum non conveniens). The parties cannot, by agreement, confer jurisdiction on a court which it otherwise does not have (that is, where there is inherent lack of jurisdiction in a court).

4. In which court are large commercial disputes most likely to be brought?

India is politically divided into 25 states. In addition, depending on the population of the state, there are about 600 administrative districts. Each district is headed by a district court and each state has a high court. The highest court of the land is the Supreme Court of India. Most large commercial disputes are, in the first instance, brought in a district court irrespective of the amount of dispute, as the district courts have unlimited pecuniary jurisdiction. The High Courts of Delhi and Mumbai are an exception to this rule and have first instance jurisdiction to hear large commercial disputes.