Alternative Regulatory Practices and Alternative Dispute Resolution

172 Pages·2002·0.75 MB·English

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©Held by the Tata Energy Research Institute on behalf of South Asia Forum
for Infrastructure Regulation (2002)
The material in this publication is for free reproduction with appropriate
acknowledgement.
A suggested format for citing this publication is as follows.
Author’s name. 2002
Title of the chapter
In Legal aspects of regulation in South Asia, pp. 00–00, edited by S K Sarkar
and Vivek Sharma
New Delhi: TERI on behalf of SAFIR (South Asia Forum for Infrastructure
Regulation). 167 pp.
Published by the Tata Energy Research Institute on behalf of SAFIR
South Asia Forum for Infrastructure
Regulation
C/o TERI
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vii Foreword
M S Verma
ix Preface
R K Pachauri
xi Acknowledgements
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3 Welcome address
M S Verma
7 Opening remarks
Apurva Sanghi
9 Special address
Syed Marghub Morshed
11 Inaugural address
Barrister Aminul Haque
15 Vote of thanks
S K Sarkar
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19 Chairperson’s remarks
M S Verma
21 Rationale and principles of infrastructure regulation
S K Sarkar
28 Session summary
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35 Chairperson’s remarks
Justice Top Bahadur Singh
36 Alternative regulatory practices and alternative dispute resolution
Rohan Samarajiva
45 Session summary
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51 Chairperson’s remarks
Justice Suhas C Sen
54 Appeal and review of regulatory decision: the challenge of balancing interests
Kamal Hossain
57 Session summary
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61 Chairperson’s remarks
Justice Mainur Reza Chowdhury
64 Market development and regulatory process
Craig Glazer
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73 Regulatory interface with judiciary: experiences and issues in developed
countries
Craig Glazer
83 Session summary
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89 Chairperson’s remarks
Justice A K Shah
95 Regulatory interface with judiciary: the Indian experience
S Sundar, S K Sarkar, and Prerna Kohli
113 Session summary
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117 Chairperson’s remarks
Themiya Hurulle
118 Regulatory decision making: some thoughts – the Bangladesh experience
K M A Bakar
124 Session summary
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129 Chairperson’s remarks
Justice S I Imam
130 Analytical case studies of select judicial interventions: the Sri Lanka experience
Rohan Samarajiva
139 Session summary
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143 Chairperson’s remarks
T L Sankar
145 Session summary
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151 Rapporteur’s summary
S K Sarkar
154 Introductory remarks
S Sundar
155 Concluding remarks
Ahsanul Haque Molla
157 Vote of thanks
F Q M Farooq
159 Index
163 Speakers
165 Participants
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Regulatory institutions in the infrastructure sectors are unique: these
are neither administrative nor judicial bodies, although their duties are
carved out from the functional framework for policy-makers, service
providers, and the judiciary. In the early stages of liberalization in the
infrastructure sectors, particularly in developing countries, regulators
experience lack of information as well as asymmetry in the negotiating
strengths of the operators. These make the regulation process complex
as the regulator’s objective is to maintain a level playing field, mainly,
in terms of access to scarce resources, and access to consumers and
existing infrastructure.
While regulators are independent, they must be accountable for
their decisions. Thus, regulatory decisions are subject to appeal. Often,
due to delay in traditional judicial process, some vested interests use
the normal appeal and review process to delay implementation of
regulatory decisions. It is, therefore, necessary to ensure that adjudica-
tion is not misused to promote such interests. Obviously, there is a
need for more accommodative dispute resolution framework to facili-
tate quick decisions in the infrastructure sector, where timely imple-
mentation of the regulatory decisions and long-term relationships
amongst players are important.
In this regard, ADR (alternative dispute resolution) approaches
such as mediation, conciliation and arbitration, play an important
role. Certainly, ADRs will not replace the judicial process, but will
supplement it by narrowing down the range of disputes. While ADR
mechanisms have their basis in contracts, the judicial institutions have
a constitutional basis. Further, while a judicial appeal is possible even
if one of the parties approaches the court and also in absence of any
contract or agreement, the ADRs are applicable where both the parties
have agreed to the procedure. The effectiveness of ADRs and the areas
of their applicability in business dealings are now well recognized.
However, the efficacy of the mechanism, particularly in developing
countries, needs to be tested in different circumstances. How can the
process be made really effective? What roles can the regulator and judi-
ciary play? Should there be a compulsory time-bound ADR process
before the appeal to courts? These are some of the issues that would
require debate and discussion.
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Given this background, SAFIR (South Asia Forum for Infrastruc-
ture Regulation), constituted in 1999, felt a need to bring in important
stakeholders – namely, regulators and judicial authorities – by organi-
zing a workshop in Dhaka on 3–4 August 2002 to discuss various legal
aspects of regulation in South Asia. In particular, the workshop aimed
at understanding various legal aspects of regulation by examining al-
ternative regulatory processes, and relevance of alternate disputes
resolution mechanism in infrastructure regulation, and understanding
viewpoints of regulators and judiciaries on independent regulation by
critically understanding their roles and responsibilities.
The publication of the workshop proceedings is expected to assist
capacity building in the region and would assist various stakeholders,
including regulators, policy-makers, and judicial functionaries, to take
further action for making independent regulation in the infrastructure
sector a smooth process. We expect that the book will be useful to all
those associated with infrastructure sectors in South Asia.
I hope the book will meet expectations.
M S Verma
Chairman of SAFIR and
Chairman, TRAI, New Delhi
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The proceedings of the SAFIR Workshop on Legal Aspects of Regula-
tion in South Asia, which are published in this volume, represent a
major step forward in creating and disseminating knowledge on a sub-
ject that would be of critical importance to the South Asian region.
Several sectors of the economy in South Asian countries are undergo-
ing major reforms, and particularly in those sectors where pricing and
related decisions would now lie in the hands of independent regulatory
bodies. Therefore, there is a need to define and comprehend the role of
different actors involved in the process. Essentially, these actors would
include the regulatory bodies themselves, decision-makers in the sec-
tors that are to be regulated, the public at large, and, of course, the
judiciary.
Independent regulation in most countries of South Asia is being ini-
tiated on the foundations of legislation bringing into existence regula-
tory bodies and processes, which have clearly resulted in changes in
the legal framework under which these sectors have performed in the
past. It is, therefore, necessary now to understand the laws and the
limits related to the functioning of these sectors within a regime of
independent regulation. Since this is an area of equal concern to every
country in the region, and since experience on decisions within the
revised framework is evolving in every country in the region, there are
great benefits in sharing experiences and knowledge as it is generated.
The workshop in Dhaka was, therefore, a landmark event in the South
Asian region, and given the high level of participation from the judici-
ary and other relevant sectors, the material presented and discussed
provides considerable addition of substance to existing knowledge and
experience in the field.
It would be useful to say a few words about SAFIR which has
evolved as a unique body of expertise and understanding in the field of
independent regulation, linking the countries of South Asia in a mutu-
ally productive relationship. The workshop in Dhaka was an extremely
useful event in a series that has been organized during the past three
years under the guidance and direction of a group of decision-makers
drawn from various countries of this region who are responsible for the
overall functioning of SAFIR. I am sure the proceedings of the Dhaka
workshop included in this volume would be of great interest not only
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to professionals from the South Asian region, but also to potential in-
vestors from other countries who are looking at opportunities in South
Asia. This material would also be of value to other developing coun-
tries which are in the process of bringing about changes in their eco-
nomic structure with accent on independent regulation.
R K Pachauri
Director-General, TERI
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