Covid-19: What it means for courts and businesses – analysis – Hindustan Times

With the number of litigations expected to go up, alternative dispute settlement mechanisms such as mediation should be resorted to solve the cases(Amal KS/HT PHOTO)

Much like other sectors, the coronavirus disease (Covid-19) has the potential to impact the legal framework globally. It might bring manpower rationalization, closure of business units, disruptions in supply chains and non-performance of contracts and calling-off of projects among other things. This will add to the existing caseload in Indian courts. This requires a proactive approach to insulate the legal system from a possible breakdown.

But, every crisis brings in its wake opportunities. Covid-19 can be leveraged to introduce the greater use of technology to improve the accessibility and affordability of the system for litigants. During the lockdown, a few benches of the Supreme Court and high courts successfully heard important cases through the virtual medium. But to make it work efficiently across the country, the process must be intensified and widened to equip every court with the right technology and bandwidth.

The use of technology is not low-hanging fruit. Considerable work has to be done in integrating and linking systems and data, harmonising procedures, and creating user-friendly digital structures. For instance, in the United States, the legal system began using technology over a decade ago. It required meticulous planning and implementation, which was comprehensive and capable enough to take care of all possible disruptions the system could cause. Instead of reinventing the wheel, India can borrow from the expertise that the US has.

With Covid-19 shutting the country, it will likely bring a groundswell of cases that will focus on force majeure, since the parties involved in contracts may seek an escape-route invoking the disruptions in the supply chain and other eventualities.

Under both Indian and English law, force majeure does not simply mean anything outside the control of the parties to a contract. Its meaning and applicability depend on the wording of a contract intended to anticipate unforeseen events and remedies for that. Implicit in it is the possible variance in the force majeure clauses incorporated in contracts. There are possibilities that some contracts might not have visualised such an eventuality or have opted for a restricted narration of the clause.

In the given situation, it is important for SC to revisit the Doctrine of Frustration of Contracts/force majeure, and lay down conditions for the applicability of the doctrine, especially when the Indian Contract Act is largely silent on the issue.

Much as the legal world, Covid-19 has triggered fear among both employees and employers about the continuity of employment and operations of businesses, which are affected across sectors. Even if the lockdown is lifted in the near future, its impact will be felt for long. Some business entities are already contemplating closing down, others are scaling down, and some, including the public sector undertakings, have announced pay cuts and retrenchment of contract workers.

With the quantum of litigation expected to go up, alternative dispute settlement mechanisms such as mediation should be used to solve the cases, particularly related to tenancy, employment, deferment of loans, and the interest chargeable. The cases decided should have finality, with appeals going to higher courts only under exceptional cases. To handle the cases of litigation efficiently, cross-country special courts and benches should also be considered.

Covid-19 also necessitates amendments to a number of existing laws to make them contextual to the change. Legislations such as Indian Contract Act, Indian Evidence Act, Intellectual Property Rights, labour laws, Disaster Management Act and Epidemics Act need to be reviewed to align them with the changes in the economic and legal framework.

Lalit Bhasin is president, Society of Indian Law Firms and Bar Association of India, and chairman, CII Legal Services Committee and Chartered Institute of Arbitrators

The views expressed are personal