The Arbitration and Conciliation Act, 1996 -- The Need for a Change

(By S. Nikhil Sankar, 4th year Student, (NUALS), Kochi)

ABSTRACT

Through this article the author tries to point out the shortcomings that have crept into the Arbitration and Conciliation Act, 1996. The article also throws light on the failure of the erstwhile Act i.e. Arbitration Act, 1940. The author suggests the necessary amendments to be incorporated to the current Act to correct the inadequacies pointed out here.

I. Introduction

“Justice delayed is Justice denied”^_1.The most popular criticism levelled against the Justice delivery mechanism. Inordinate delay in dispensation of Justice is construed as synonymous to its denial. As the process of Justice delivery mechanism and interpretation of statutory provisions are not easy tasks delay in delivery of justice is inevitable, but can the delay be colossal resulting denial of justice to its seekers?

As court room procedures involved a lot of formalities, it was thought of a new mechanism which would result in the speedy dispensation of justice. That paved the way to evolve several alternative methods and one of such resolutions was the Arbitration Act, 1940.

II. The Arbitration Act, 1940: Its Prospects and Failures

The Arbitration Act, 1940 was enacted with the objective of providing ‘Speedy Justice’. The Act stipulated for the amicable settlement of disputes between the parties outside the court room. This process of out of court settlement mechanism helped to a great extent in surpassing the normal lengthy court room procedures. Only matters of civil nature, mostly disputes arising out of commercial transactions, were subjected to the process of Arbitration.

The Arbitration Act, 1940, brought about a seachange in the justice delivery mechanism by reducing the expenditure and saving a lot of time and labour of the litigating parties. But as time progressed the Act was considered to be inadequate. Major set backs of the Act may be summarized as follows:

- The Act was silent about the inherent shortcomings in private contracts.

- Rules regarding filing of awards are different from one High Court to another.

- There is no provision for avoiding an arbitrator or resignation of an umpire in cases where mala fides are alleged/involved.

- There is distinction in the Act between the agreement made in advance to submit future differences and a submission after a dispute had arisen (V/0 Tractor Export, Moscow v. Tarapore and Co. AIR 1971 SC 1.).

- There is no provision requiring the arbitrator to specify reasons for sustaining the award (See O.P Malhotra and Indu Malhotra. The Law and Practise of Arbitration and Conciliation, Lexis Nexis Butterworths, New Delhi (2"d edn..(2006) p 13.).

The Law Commission of India under the Chairmanship of Mr.Justice H.R.Khanna in its 76th report (See Universal’s Compendium, (70th to 78th report), Reports of the Law Commission of India. Universal Law Publishing Co. (Vol.9,2007 edn.) p 76.5 to 76.100.) dated 9th November, 1978 recommended drastic changes to the Arbitration Act, 1940.

The inadequacies of the Act was further exposed when the Apex Court itself speaking through his Lordship Mr.Justice Desai in M/s.Guru Nanak Foundation v. M/s. Rattan Singh & Sons(AIR 1981 SC 2075 (para. 1).) observed:

“The way in which the proceedings under the Act are conducted and without an exception challenged in courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal Forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts been clothed with ‘legalise’ of unforeseeable complexity.”

A Constitution Bench of the Supreme Court in Raipur Development Authority v. Chokhamal Contractors(AIR 1990 SC 1426 (para. 37).) observed:

“Indeed, this branch of the system of dispute resolution has of late acquired a certain degree of notoriety by the manner, in which many cases, the financial interests of Government have come to suffer by awards which have raised eyebrows by doubts as to their rectitude and propriety.”

These further developments, accentuated the need for a modern law to deal with the field of ‘Arbitration’ based on updated modern principles and thus the current Act i.e. the Arbitration and Conciliation Act, 1996 was enacted.

III. The Arbitration and Conciliation Act, 1996

Arbitration and Conciliation Act, 1996 was enacted based on the United Nations Commission on International Trade Law (UNCITRAL) Guidelines: It repealed three Acts simultaneously(S.85 reads as Repeal and Saving (I) The Arbitration (Protocol and Convention) Act, 1937) (VI of 1937) the Arbitration Act, 1940 (X of 19, 1Q) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (XLV of 1961) are hereby repealed.). (The Arbitration (Protocol and Convention) Act, 1937, the Arbitration Act 1940, and the Foreign Awards (Recognition and Enforcement) Act, 1961). The new ‘Act’ tried to remove all the inadequacies of the repealed Acts. A consolidated system of administration in the realm of ‘arbitration’ is envisaged providing for a novel concept of ‘Conciliation’ also which has been incorporated in Part III of the Act. Part II of the Act provides for the enforcement of Foreign Awards based on the guidelines framed under the New York and Geneva Conventions.

Though this Act is being described as a ‘sacro sanctum’ piece of legislation but, over the past 12 years certain defects have been noticed in the Act which may lead to defeat the objectives of the legislation in its true sense.

IV. Shortcomings found in the Act and their remedies

(A) Sole Arbitrator Clause

The Act provides^₂ that parties are free to choose and determine the number of Arbitrators, provided that it should not be even in number. If the parties want more than one Arbitrator, they will have to expressly mention it in the agreement. The sole arbitrator is appointed jointly and with the consent of the parties (S.11(2).). If the opposite party declined to give his consent even after second notice, the power would vest in Court to appoint arbitrator based on the request of the first party.(B.S. Jaireth v. S.P.Sinha, AIR 1994 Cal.68.).

The danger of sole arbitrator clause is very much prominent in the case of Government contracts i.e, standard form contracts, where both the parties are not in equal footing to decide the arbitrator. The party who applies to appoint arbitrator, is likely to get appointed a person of his choice. That will lead to a situation where the delivery of justice would be in peril.

Remedy

In the cases of appointment of sole arbitrator especially in cases of standard form of contracts, the procedure should be circumscribed by stringent conditions. Guidelines have to be formulated to ensure appointment of independent arbitrator. The Arbitration and Conciliation Act should be amended accordingly for incorporating adequate remedial measures in the matter of appointment of sole arbitrator.

(B)  POSSIBILITY  OF  PARALLEL  PROCEEDINGS

S.8(3) of the Act reads thus:

“Notwithstanding that an application has been made under sub-s.(1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

Sub s.(1) of S.8  of the Act enables the judicial authority to refer the parties to arbitration when a party applies for the same.

While proceeding before such Arbitral Tribunal is going on, the judicial authority before which an action is brought in regard to the same matter can as well proceed with the action. Again, if the application for reference to arbitration is not filed before submission of the first statement, the action before the judicial authority has to be proceeded with. So the possibility for there having parallel proceedings is very much.

The decree or order that may be passed by the judicial authority and the award by the Arbitral Tribunal may be conflicting. That is a situation which cannot be allowed in the interest of not only the parties, but public policy also.

Remedy

It is suggested that S.8(3) of the Act may be suitably amended to avoid plurality of proceedings for the same matter.

(C) No Fixed Time Schedule

S.23^₃ of the Act provides for laying down the claim and defence of the parties. The statute does not provide for a fixed time limit within which the parties have to submit the aforementioned statements. It just provides a vague time limit stating that it shall be fixed on the basis of the agreement between the parties. This provision appears to be absurd and erroneous as it would defeat the founding principle i.e. ‘speedy dispensation of justice’ which is enshrined as the hallmark of the Act.
 

Remedy

The Act should be amended to include a provision mandating the maximum time limit for filing the statements. The parties should never be allowed, to fix the time limit according to their whims and fancies. The proposal in the Arbitration and Conciliation Bill 2003 for insertion of S.29A is aimed at fixing the maximum time limit for passing the award, but this provision has not so far been incorporated.

(D) Reference to arbitration in criminal proceedings

Literal interpretation of S.8(1) of the Act may support the theory that reference to arbitration is possible in a proceeding before a Criminal Court. In a proceeding before a Magistrate, for example, a complaint under S.138 of the Negotiable Instruments Act, one of the parties may file application for reference to arbitration, if the agreement evidencing transaction in which the impugned cheque was issued, contains an arbitration agreement. There is no specific prohibition in invoking S. 8(1) of the Act in a proceeding before a Magistrate.

The possible counter argument is that the matter relating to which action is brought before a Magistrate should be subject of an arbitration agreement, for referring the parties to arbitration. The matter before the Magistrate is whether the accused has committed the offence and that matter cannot be a subject of an arbitration agreement. Therefore, it may be said, S.8(1) of the Act cannot be invoked in a proceeding before a Magistrate.

Both the arguments may appear reasonable.

Remedy

S.8(1) of the Act be amended to take out all proceedings before criminal courts from the purview of the provisions of the Act.

E). Appellate Provision

The present provision for preferring appeals under S.37(2) (a) of the Act only enables to challenge order issued by virtue of S.16 of the Act holding that the Tribunal has usurped its authority or on the plea of lack of jurisdiction. No appeal lies against orders holding that Tribunal has exceeded jurisdiction or arbitrator is biased. Eventually if the Appellate authority were to hold that Tribunal had exceeded its jurisdiction, or that the arbitrator was biased, the whole process of litigation has to start again causing undue loss of time and money to the parties (See Avatar Singh, Law of Arbitration and Conciliation, Eastern Book Company. Lucknow (8th edn.2007), p.3.). The argument raised against this is that it would delay the arbitral proceedings. The Apex Court too has ruled it as a shortcoming of the Act (Centro Trade Minerals & Metal Inc v. Hindustan Copper Ltd. (2006) 11 SCC 245).

Remedy

One possible way of avoiding aforementioned dilemma is by incorporating a provision enabling a party to go in appeal against an order holding that Tribunal has usurped its jurisdiction or is biased while allowing the normal arbitral proceedings to go on. Both the proceedings should proceed simultaneously without any stay of the proceedings. This would very much help to ease the undue burden and avoid confusion of the parties. The Arbitration Bill of 2003 proposed the insertion of S.37 A to provide for an Arbitral Division in the High Court for expediting the appeals, but so far it has not been brought into the statute book.

F). Qualifications to be an Arbitrator

The Act nowhere specifies what are the qualifications to be possessed by an arbitrator. Though, expressly it cannot be said as a shortcoming of the Act, it is felt that some provision should be incorporated specifying the necessary qualification to be possessed by an Arbitrator. As an ‘arbitrator’ is considered to be a ‘private Judge’, there should be some essential guidelines to be adopted and followed for protecting the dignity and status of the position he holds.

Remedy

A new provision specifying the necessary qualifications to be possessed by an arbitrator as follows may be incorporated.

S.10A: Qualifications to be an Arbitrator\

1)    A person shall be qualified to be an arbitrator, if he satisfies the following:

     (i)   be not less than thirty years of age.

  (ii)  be persons of ability, integrity and acquaintance in dealing problems relating to Commerce, Accountancy, Industry, Law and Economics.

    (iii) Should possess a Bachelors degree from a recognized University.

    (iv)  Should not have been convicted and sentenced to imprisonment for an offence involving moral turpitude.

    (v)   Should not be a person having vested interest, so as to effect the independence of Arbitral Proceedings.

Conclusion

Some of the shortcomings which are likely to defeat the objectives of the Act are pointed out above. Removing them by incorporating adequate remedial measures by way of necessary amendments in the ‘Arbitration and Conciliation Act’ will make it a vibrant statute that would cater to its objectives and responsive to the contemporary requirements.

1. According to Respectfully Quoted: A Dictionary of Quotations, it is attributable to William Gladstone, as viewed in http://bartleby.com/73/954.html., last viewed on 11th March, 2009. Also see Magna Carta, Cl. 40 which reads: “To no one will we sell, to no one will we refuse or delay right or  justice”. As viewed inhttp://www.britannica.com/history/docs/magna2.html.last viewed on 11th March, 2009.

2.   S.10 - Number of Arbitrators.

       (1)   The parties are free to determine the number of arbitrators, provided that such   number shall not be an even number.

       (2)   Failing the determination referred to in sub-s.(1), the Arbitral Tribunal shall consist of a sole arbitrator.
 

3.    S.23. Statement of Claim and Defence

       (i) Within the period of time agreed upon by the parties, or determined by the Arbitral Tribunal, the claimant shall state the facts supporting his claim, the points at issue and relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

High Court’s Roster of Waste

(By Jijo Paul, Advocate, High Court of Kerala)

‘From Probation to Pension’ authored by the redoubtable Sri. K. Ramakumar, published in 2008 (4) KLT Journal 49 provokes thought. It suggests a method to save the time spent by the High Court on the intake of new cases. Whether one agrees with the suggestion made or not, it should open the doors for a fresh creative discussion on ways and means to improve the alarming delays in the High Court of Kerala.

I do not agree with the pundits who predict that the system will soon crumble under its own weight. It will not - because it has not happened this far. Has history ever recorded any civilized State turning disorderly because the cases have piled up in courts? Anyhow, it is not commonplace. But still it is dangerous because there is always a first time. Nobody knows what will happen if the system crumbles - be it under its own weight or because the people lose confidence in it or a combination of both with other factors. In nations that have attained advancement, courts have less work load since the other systems work better. Some countries keep the litigation costs prohibitively high to reduce litigations - something that would be absolutely unworkable and unacceptable in the Indian context.

It is a huge challenge to keep the courts accessible to the common man and simultaneously to keep the pendency within limits. There are so many questions but so few answers. In the sixty years of independent existence, none has come up with practical suggestions to keep the numbers less frightening. It is nobody’s fault. There are no magic solutions either.

Taking a cue from Sri. Ramakumar’s enlightened words, “Tough and taciturn action should take the place of the tabor of statistics”, let me share some thoughts to improve things in the High Court. Let us be reminded that it is the High Court that has the longest queue in the State and, comparatively, the period of gestation in the subordinate courts is negligible.

Some minor administrative and statutory changes could - albeit slightly - improve the pendency situation. I may endeavour to make some suggestions.

Suggestion No.1:-

Amend S.3(1)(6) of the Kerala High Court Act and confer jurisdiction on the Single Judge to hear all appeals from original decrees or orders in any suit or other proceeding where the value of the subject matter is upto twenty lakh rupees (against the present one lakh rupees).

This will take the burden of a large number of Appeal Suits/Regular First Appeals, Motor Accident Claims Appeals, Miscellaneous First Appeals, Land Acquisition Appeals and the like from the Benches of two Judges. The amendment may be retrospective in its operation to take in appeals which are (long) pending. It being a procedural matter (arguable, of course), retrospective amendment will survive the test of constitutionality.

The limits of pecuniary jurisdiction as they stand after the amendment to the Kerala Civil Courts Act, 1957, by Act 6 of 1996 in anomalous, if not absurd. The District Courts are conferred with jurisdiction to hear appeals from courts of Subordinate Judges, where the amount or value of the subject matter of the suit does not exceed two lakh rupees. The Single Judge of the High Court has jurisdiction to hear appeals only up to a pecuniary limit of one lakh rupees. The fact that Kerala High Court Act was not appropriately amended after the Kerala Civil Courts Act was amended has caused criminal waste of the precious judicial time of the Kerala High Court over the last eleven years.

It would also be ideal to further amend the Kerala Civil Courts Act to increase the pecuniary jurisdiction of the District Courts in the matter of hearing appeals to reduce the number of civil first appeals in the High Court.

Suggestion No.2:-

Writ Petitions seeking relief of Police Protection and against police harassment consumes considerable time of the Division Bench. Under S.3(10)(iii) of the Kerala High Court Act, the Single Judges are conferred jurisdiction to exercise power in relation to matters falling under “cl.(l) of Art.226 of the Constitution of India except where such power relates to the issue of a writ of the nature of habeas corpus”.

True, the Single Judge has the power to “adjourn it for being heard and determined by a Bench of two Judges” and the Bench of two Judges may exercise powers in “any matter in respect of which the powers of the High Court can be exercised by a Single Judge” (see S.4(1)). Still there is no reason why the Writ Petitions filed under Art.226(1) of the Constitution of India should be heard by a Bench of two Judges. An administrative order by the Chief Justice to effectuate this will save substantial judicial time of the Division Benches.

Suggestion No.3:-

The Division Benches of the Kerala High Court have already wasted considerable time or revisions under S.20 of the Kerala Buildings (Lease and Rent Control) Act, 1965. Upon a reference made by the Single Judge, a Division Bench of the Kerala High Court held that under the existing law “a Single Judge is not competent to deal with revision under S.20 of the Rent Control Act” (See Kunhi Velu v. Abdul Samad (1990 (2) KLT 506), but hastened to observe:

“It is a matter for the legislature to provide a remedial situation, if felt necessary. Rent Control Revisions hitherto have been dealt with by a Single Judge of the Court, though circumstances were slightly different. There is no reason why revisions of the type, and in respect of the problems covered by the Rent Control Legislation, could not be dealt with and disposed of by a Single Judge”.

An amendment, either to the Rent Control Act or the High Court Act will be required for the purpose. Despite the observation of the Bench, Division Benches did continue to waste time and energy on Rent Control Revisions for the past seventeen years, as the legislature failed to amend the laws.

Suggestion No.4:-

An appeal filed under Section 19 of the Family Courts Act, 1984 has to be heard by a ‘Bench of consisting of two or more Judges” (See S.19(6)). Of course, the parliament in it’s wisdom thought it necessary to provide such. The logic behind the provision, however, is hard to comprehend. Is it because the appeals under S.19(1) of the Family Courts Act involve substantial questions of law which require consideration by Division Benches? Or, is it because the Parliament felt that the sanctity of marriage can be better preserved by Benches of two Judges? Neither seems to stand to reason. For one, very few matrimonial appeals involve questions of law and still few, substantial questions of law. Most of them are filed for return of the property and money gifted to the wife at marriage and/or for divorce, both mostly involving questions only of fact.

It is not prudent to assume that the sacrosanct institution of marriage is unsafe in the hands of the Single Judge of the High Court. The Parliament may need to re-think - in its wisdom - to amend S.19(6) of the Family Courts Act.

Why reduce the number of Division Bench Cases?

The courts are established on the premise that the disputes in an organized civil society have to be resolved by independent arbitrators. The role of the civil, constitutional and criminal courts, therefore, is limited to resolution of disputes in accordance with law. In most of the cases, it does not make a difference whether the court is manned by one or more Judges as long as they are independent and fair. Statistics of the High Court would show that Division Bench cases await disposal for much more years than Single Bench cases. With the existing Judge strength the number of Courts can be increased with the result of bettering disposal rate, if the Division Bench cases are limited to ones that, in the interests of justice, require consideration by Benches of two Judges.

Re: Educating the Legislature

Wisdom is the height of knowledge. From what the legislatures have not done in the past couple of decades, it seems that the legislatures do not have sufficient knowledge of the reasons for delays in court for the wisdom to legislate appropriately to dawn on them. Knowledge can be acquired only though education. It is the duty of the legal fraternity to educate the legislature regarding the ways and means by which cases in the High Court can be disposed of quicker.

Tailpiece

These are only some thoughts - not a researched article. The inputs are gathered from loitering in the Kerala High Court premises for a little over a decade, considerably influenced by the illuminating discussions on the verandahs.

Law Schools and Professional Excellence

(By Sindhu Soman, Lecturer in Commercial Law, School of Legal Studies, CUSAT)

The objective of this paper is for the purpose of obtaining some preliminary reflections between the often noticed divide between legal theory and practice.  Judge Harry Edwards lamented “the growing disjunction between legal education and legal profession”, claiming that “many Law Schools… have abandoned their proper place, by emphasizing abstract theory at the expense of practical scholarship (Harry.T.Edwards “The Growing Disjunction between Legal Education and Legal Profession, 91 Mich.L.Rev.34 (1992).). This observation is said to be true today as much as in the year 1992 when it was written. It is the institutional constraints that limit law school offering courses devoted entirely to legal theory.  This may also be with an objective to attaining good position among the law school ranking that they have increased the number of faculty members devoted to legal theory.  This has led to a certain extent of disapproval of the practitioner’s methods in academic circles.

Whether the Legal Academy should undergo any radical reform?  Answering this question seems to be our most urgent business.  Scholars have recently illustrated why the disapproval of theory is partially wrong? (Neal Kumar Katyal, “Hamdan v. Rumsfeld, The Legal Academy goes to practice” 2006  Harv.L.R. 66.) The case of Hamdan  v. Rumsfeld (126  U.S S.Ct  2749  (2006).) relating to determination of the powers of the President during armed conflict demonstrates some of the benefits of theory to practice.  Three different theoretical tools which were involved in the case were (i)  Psychological research on framing effects and the bias towards compromise. (ii) The Theoretical enquiry into the timing of litigation and the “passive virtues” and (iii) Economical analysis of penalty default rules. The studies in Law Schools of these three are considered as irrelevant at present. The example of the practice of sophisticated experienced lawyers of the Constitutional Courts employing a strategy of extremeness aversion has been subject to analysis.  An advocate files a certiorari petition based on arguments that push the logic of the Lower Court to the maximum and then argues that in case of the opinion becoming law the result will be horrible.  The petition then advocates a strong but seemingly more reasonable position completely opposite to the Lower Court opinion thereby casting the dispute as extreme.  The sharply opposite positions might persuade the Court to hear the case.  At that moment the Advocate changes his goal from getting the case selected to winning it. 

The reasons for decision in cases which the courts allow will be necessarily narrower.  The extreme position announced in the petition, becomes not a liability but rather the useful anchor for the discussion by presenting the advocate as a reasonable friend of the Court who would be contented with more limited relief.  The advocate comes across not as reversing course but merely as trying to win the favour of the court by acceding to the compromises the Justices will seek.  In taking this term a lawyer cannot give up on the broad position but explains that the broad position is not necessary to reach because of an available and more limited ground in his favour.  Oral arguments both continue in strategy and further another objective.  The advocate explains why the other sides’ position is extreme unlike his position which is reasonable.

The pattern, from petition to oral argument, repeats itself all the time. Despite the recurrence of this pattern, legal scholars have given no systematic attention to its implications for Constitutional Courts’ decision making. Cognitive psychologists, meanwhile, have examined similar patterns in a variety of other contests.  They have found that the presentation of extreme positions defines the location of the “middle position” in a way that skews rational decision making by making particular compromise appearing more favourable. This is just one example of how theory can inform practice and vice versa.

At the same time, it is easy to overstate the case for theory. The truth is that very few law schools today prepare students to be lawyers and this responsibility  is shunted off to law firms, the judges for whom students clerk, prosecutor’s offices, and others. The obvious exception is law clinics, which do offer crucial lessons in the art of good lawyering. But, clinics, despite their many virtues still do not reach most law students, and their connection to the theoretical law taught is vague.  The cost of this educational failure is massive, forcing employers to spend their limited resources on training new lawyers on the basis of their jobs. Teaching about court room presence and how to interact and communicate directly in a courtroom are essential to litigating, yet modern law schools do not emphasize them.

One way of understanding the phenomenon is through the lens of administrative law.  In that case the Justices consciously refused to award deference to the presidential determinations at issue because they lack support from the bureaucracy. 

The court in that way rejected a view of some academics that had taken route in the administration that the President’s interpretation automatically was entitled to a strong deference as held in Chevron v. National Resources Council (467 U.S.837 (1984).). In cases such as Hamdan in which litigants piths with the powers of Congress against the President, deference to latter may be appropriate when the executive can present its interpretation as product of deliberative and sober bureaucratic decisions.  Expertise has been a key component of deference enquires in administrative law.  When courts decide whether to award deference to an executive interpretation they consider three factors, (1) expertise, (2) whether there has been delegation and (3) political accountability.  Judge Stephen Dreyer stated that “Court will defer more when the agency has special expertise than can bring to bear on the legal question” (Stephen Breyer “Judicial Review of Questions of Law and Policy, 38 Admn.L.Rev. 363, 370 (1986)).  Hamdan suggests that when such expertise is lacking or ignored, the court will stand on stronger ground quashing an executive interpretation.

Under both Administrative Procedure Act and Chevron, courts reviewing agency’s decision look for signals that an agency both had and used its expertise! as part of this  inquiry; courts often emphasis agency’s methods which courts have the institutional competency to monitor as a proxy for the agency’s expertise.

Administrative Law is not the first field of law courts relying on evaluation of method as a proxy for evaluation of substance.  In criminal law the case of Daubert v. Merrill Dow Pharms Inc (509. U.S 579,592-94 (1993).) provides for limited structured discretion available with court in deciding the reliability of expert evidence.   The second step mentioned in the Chevron which asks the courts to evaluate whether the agency has developed the permissible construction of the statute is essentially an investigation into the methods of agency decision making.  Court and scholars alike has analogized this stage of review to arbitrary and capricious standard under the A P A with its emphasis on reasoned analysis.   

In State Farm(Motor Vehicle Manufactures Association v. State Farm Mutual Automobile Insurance Co.463. U.S. 29.) the national highway traffic administration having rescinded the requirement that all motor vehicles be equipped with passive meters provides a clear example to demonstrate recent analysis informed by proper methods overcoming the finding on substance. Formal process and expertise may also prove critical in determining which cases fall outside the deference.

  Not all theory is good; however some is downright dangerous, as litigations attest. Practice can in action be seen to reign in theory. Indeed, practice itself provides one way to test whether a theory is good or bad. Generally speaking, one measure of a theory’s validity is whether it comports with the values, traditions, and practices of the nation. Practitioners as that term implies, often have sensible instincts on such questions. As such, they may provide useful insights into why something is done in a certain way, or why a new theory might destabilize other areas of law. We have thus to look forward to the future of both the bar and the academy and outline some possible reforms in law schools to integrate the benefits of theory and practice. Law schools must continue to teach analytic reasoning, close reading, and writing skills. But successful lawyers need to know more. A law school has to provide training specializations and in working groups and speaking and communicating effectively and this is at present beyond the standard curriculum.

For legal educators the reform to undertake is that law schools shall continue to teach theory.  Since the only remedy for bad theory is good theory, by fleshing out concepts in the classroom educators can ensure betting in before entering real world. Such a breadth and the depth of examination cannot be obtained by law review alone.

The revolution in legal education in the passed decade incorporating greater theoretical awareness in the class room as scholarship is a healthy development.  The teaching of innovative thinking skills and methods has potential for benefits beyond those immediately obviously to the law student. At the same time an obsessive focus on theory neglecting the practice of law gives diminishing returns. The law schools must equip the students with practical skills that will allow them utilize theory in their work outside the academy. Only then will theory truly meet practice. 

Legal clinical programmes have to be promoted.  But care should be taken to avoid the divide between class room and practice.  Their practitioners are not able to talk about theoretical concepts and theoreticians are unable to discuss the practice of law.

Students for young laws who are thus equipped can play a vital role in raising the level of debates in important cases. What the students lack in experience and expertise, they make up in enthusiasm and passion.  Law schools contribute to the profession by inculcating this quality in students and shall try to develop outlets to channel the skills outside law clinics.