Interview with Senior Advocate P.H. Arvindh Pandian: Balancing Law and Strategy in Commercial Litigation

The following interview was conducted by Kusha Grover and K Danitta, editors at RSRR. Senior Advocate P.H. Arvindh Pandian gives insights into litigation strategies in India’s commercial law, the experiences of legal practitioners before the tribunals such as NCLT and NCLAT, and the emerging trends shaping the future of commercial litigation. Drawing from his rich experiences and observations, Mr. Pandian also gives valuable advice for young and upcoming lawyers.

In commercial litigation, there is often a strategic dilemma—whether to initiate proceedings under general civil law or approach a specialised tribunal like NCLT or NCLAT. How do you guide clients in choosing the appropriate forum, especially when the legal issue involves both areas?

Corporate clients are of a wide variety. While some may require client counselling on the nature and type of litigation that they are about to initiate, others may require discussions about why initiating settlement talks with the other side while filing the petition will meet their best interests. In my practice, I look at the long term interests of the client, viability and workability of possible interim reliefs, the reactions of the other side till their last communication with the clients, a conspectus view of the facts and the client’s own appetite for a long drawn court innings. If the issue primarily is to do with solvency in the strictest terms and the time value of money is tied to it without pre-existing disputes, I recommend taking the NCLT/NCLAT route, while the approach through general civil law is open in all other cases. In all cases, clients need to adopt enlightened decisions based on self-interests and the changing contours of their enterprise especially if the facts are complex and time consuming before any forum.

NCLT and NCLAT, being quasi-judicial bodies, follow a procedure different from the traditional civil courts. Do you believe that an advocate practising before these tribunals requires skills that are different from one practising before civil courts?

It is to be remembered that the proceedings before the NCLT/NCLAT under Section 241, 242 of the Companies Act, 2013 contemplate a civil trial, with the NCLT being designated with the powers of a civil court. However, the character of litigation, especially those concerning family-based companies does not easily culminate in civil trials and instead takes the path of application, sub-applications, and protracted pleadings and interim appeals. As a Senior Counsel who began practice in the days of the Company Law Board; I have seen the tenor of company litigation shift from a civil lawyer’s model to a corporate advisor’s model of advocacy and execution of pleadings. For advocates who concentrate exclusively before the NCLT/NCLAT, it is important to be thorough with the basic ideas of civil procedure and its interplay with the Companies Act, 2013 and the Insolvency & Bankruptcy Code, 2016. Apart from that, these advocates require to keep up an undying curiosity for the ways of business operations, the flow and working of capital requirements, arrangement and expression of commercial details and ultimately, to find out how these facts can be presented before these forums. Knowledge of a client’s business field and how the proceedings impact such businesses is vital. After all, clients come to us not just for putting forth the law, but to find solutions to their problems with the help of legal tools.

A number of matters in commercial law depend on the discretion of the tribunals. For instance, approval or rejection of resolution plans, and relief in oppression and mismanagement cases. In issues like these which are largely contingent on tribunal discretion, how do you advise your clients on the prospects of pursuing the case?

Discretion guided by the provisions of the IBC, 2016 is the hallmark of any tribunal proceeding these days. Clients come with all round concerns of where their money will ultimately land and how would it turn or uproot their business fortunes. After explaining the statutory timelines under the IBC, 2016, I ask clients to be ready mentally for any of the possible outcomes, since guarantees relating to the future of a case are not possible. Whenever cases relating to oppression and mismanagement are filed, we find that there is considerable anxiety to secure interim orders at the first instance, since there is every possibility of inordinate delay and a noted inability on the part of both sides to take any decision. In those cases, clients are advised to contemplate over the purpose of their litigation and what they really want.

Clarity and sincerity of purpose amongst clients can help counsel in drafting petitions and also guiding them before tribunals. Finally, I ask each of the clients to be free and frank with their discussions and provide all documentary support to study the matter in detail. After exchanging notes and discussions, I ask my instructing counsel to brief them about the law that applies and the current trends in that domain of litigation. After this exercise, I leave it to the wisdom of the clients to take a decision on whether to pursue a litigation or not.

The issue of delays in litigation is a trite comment. Does the time-bound resolution framework under IBC set it apart when it comes to delays? Or does commercial litigation also end up extending this time-limit?

With the coming of the Commercial Courts Act, 2015, India witnessed a sea change of attitudes before courts. This enactment ushered in a time bound justice delivery mechanism that summed up the core of commercial litigation in terms of the effect and speed of the dispute resolution process and this paved way for the IBC, 2016 to reimagine the insolvency and restructuring sphere on the same lines. However, the minds of litigants and their approaches to securing their own ‘just’ ends in each set of facts vary and this variation has impacted the course of commercial litigation. Commercial litigation requires complete synergy between client requirements, counsel strategy, knowledge of law and its procedure, and the eventual interplay of established precedent. Initial enthusiasm on the part of a client may help meet statutory requirements, but more often than not, we find eventual frustration since courts and tribunals are faced with their own set of challenges. It is the plight of counsels who are caught between these challenges that tests professional fortitude most of the times. To answer your question in the most direct terms, it is generally true that the attitude of Indian legislation post-2015 has aimed at speedy resolution, however its efficacy and holistic impact need to be studied, since courts and tribunals adopt non-uniform ways of applying the law.

NCLAT decisions are further appealable before the Supreme Court. How do you advise your clients on the practicalities of preferring such appeals?

Section 61 of the IBC, 2016 is probably one of the most utilised provisions under the Code. However, the filing of appeals needs a keener understanding of what encompasses an appeal and its process has to be understood by counsel and client alike. Most of the time, one finds random filing of appeals on all counts without going through the orders passed by the NCLT and its factual matrix. Most appeals are actually on factual matters and no question of law actually arises. It is my opinion that if lawyers or company secretaries in practice want to demonstrate professionalism, they must economise filing of appeals strictly based on the law. Formulation of legal questions also requires experience and intensive training since these will be adjudicated by the NCLAT. Trivialising the process to merely increase filing and secure interim orders will dilute the mandate of Section 61/62 of the Code and create an impression of mechanical filing of appeals against any/every order amongst clients. We must appreciate and remember the fact that appeals are remedial measures and not mandatory processes.

As a litigation practitioner, how do you view the emergence of ADR, like negotiation and mediation in commercial matters? Is litigation still the primary mode of dispute resolution? If not, do litigation practitioners need to adapt to a new reality of the practice of commercial law?

Alternative Dispute Resolution (ADR) is truly the only way to decrease the increasing burden on our courts system. Personalised and informal at the same time, negotiation and mediation are yet to find their meaning in our legal system because of the over-emphasis on ‘going to’ court with every case landing before the courts or tribunals. It is a matter of realisation that litigation has turned out to be a culture of its own, with lawyers, courts and litigants playing their part in institutionalising the habit of complicating pleadings and repeated filing of writ petitions for the same cause. In this atmosphere, it is critical that ADR takes centre-stage especially in commercial matters. With the passage of the Mediation Act, 2023, professionals in the field need to re-wire their legal thinking and look at maximising the potential of online mediations especially for clients in far flung places. There is also a need to equip our ADR centres with seamless wireless internet facilities and brainstorming rooms for discussion.

The new reality manifests itself through the hybrid combinations of Med-Arb or Arb-Med, where counsel and mediators/arbitrators use a toolkit of techniques to settle disputes. As a fellow of the Harvard Negotiation Institute I recall my days of training from 2010 with gratitude for it totally convinced me that settlement and not litigation should be our first resort of advice.

Going forward, in the next 10-20 years, what trends in commercial litigation should new entrants in the field be aware of?

India is witnessing its foray into the global arena of arbitration in all its dimensions. With an increased effort to emerge as an investment and business destination, arbitration has become a necessary concomitant to provide an alternative that can aid in dispute resolution. Therefore, topics like Pre-Arbitral Procedures (PAP), role of expert bodies in construction disputes, sequential dispute settlement through Multi-Tiered Dispute Resolution Clauses (MTDRs), excepted matters in contractual agreements with their interplay of consequence and reaction, the aftermath of judgment in Vidya Drolia v Durga Trading Corporation (2021) 2 SCC 1 and its effect of Section 11 of the Arbitration and Conciliation Act, 1996, independence and impartiality of arbitrators, the controversial idea of third party funding in disputes, are some of the many areas that have gained traction in these times.

In terms of mediation, the Mediation Act, 2023 has opened up the field with its emphasis on community mediation, online mediation, pre-litigation mediation and has effectively democratised the practice. I foresee the setting up of tailor-made ADR courses by renowned law schools across India that will exclusively cater to ADR professionals. Whilst the old debate of whether only experienced civil lawyers must embark on ADR related ventures continues, there is a sustained and growing interest amongst law students to be part of the ADR ecosystem just after graduation itself. The only way of dealing with this is to emphasise on quality and comprehensive understanding of existing ADR mechanisms along with a strong thrust on experience.

With a growing culture of corporate litigation gaining ground, there is bound to be discussion on negotiation as an art of the possible. Trying to define its identity in the mixed ADR web, negotiation can be made part of the pre-litigation scenario, with professionalisation of consultations and opening up of litigation trajectories.

IBC, 2016 is finding newer pastures by the day and topics like moratorium, discretionary powers of the NCLT, position of secured creditors, the role of operational creditors and their place in resolution plans, changing typology of resolution plans and experts’ role, group insolvency and corporate structures and India’s configuration in cross border insolvency cases have drawn the legal mind for endless engagement.

Considering your diverse experience in litigation, including as Additional Advocate General of Tamil Nadu, what would be your piece of advice for aspiring litigation practitioners?

In 2012, I became Tamil Nadu’s Additional Advocate General and continued till June 2016.  I was appointed to the same position in December 2017 and served till May 2021. In those enriching years of learning and appearing in state connected litigation, I was able to grasp the workings of state machinery, its various departments and the formulation and announcement of policy. In those years I really witnessed the intersection of policy through legislation and its treatment by the courts. In doing so, the concepts of judicial review of administrative action and the practical working of the theory of separation of powers came to be engraved in my mind through experienced means of litigation and drafting of opinions. After those deeply rewarding years, I understood that variety and thorough preparation are the golden mean for any aspiring lawyer. While it is important to focus on your area of interest and serve a specialised genre of clientele, it is equally vital that you create long lasting impressions in the broader framework of the courts system and its relevant stakeholders. Recognition is never a miniature project; it is a grander set of aspirations being turned into appreciated realities.

With the wide net of internships, judicial clerkships and online courses; today’s young law students are literally re-defining the thought and theme of law practice. In this exercise, one must be optimistic to face long hauls, humbly accept opportunities, and know to understand that mentorship and training are essentials for any aspiring lawyer. It is not wrong to work under someone for a particular period of time, be trained in that style and brand of legal culture and then set out to face the world on one’s own terms. I also feel that today’s law students can concentrate on private law as much as the accent on constitutional law is always at its peak; and in doing so they can become invaluable assets for any top-notch firm or Senior Counsel Chambers since litigation has become multi-dimensional. With proper training, motivation and concerted efforts of continuous reading with intellectual curiosity, one can be sure that the future of India’s legal profession is not just safe, but very bright!

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Senior Advocate P.H. Arvindh Pandian is a lawyer specialising in corporate law, mergers and acquisitions, insolvency and restructuring, and tax law. He has also served as the Additional Advocate General of Tamil Nadu for nearly eight years. He primarily practises before the NCLAT and the Madras High Court. This interview was the first in the interview segment of RSRR’s Excerpts from Experts series. RSRR would like to thank Senior Advocate P.H. Arvindh Pandian for his valuable insights and contribution to the series.