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Dispute forum vital for trade corridor to work, says law officer

Indian prime minister Narendra Modi, who claimed victory in the elections this week, says the corridor forms the 'basis of world trade for hundreds of years to come' Reuters/Rahul Singh
Indian prime minister Narendra Modi, who claimed victory in the elections this week, says the corridor forms the 'basis of world trade for hundreds of years to come'
  • India-Middle East-Europe Corridor
  • Modi hails project
  • Israel-Hamas war could cause delay

A robust forum for resolving disputes will be vital to the success of the planned  India-Middle East-Europe Corridor, a senior official from the Indian Supreme Court told delegates at an event in Abu Dhabi.

Seven countries signed an agreement during the 2023 G20 Summit in New Delhi to establish an economic corridor connecting the Middle East, South Asia and Europe. 

The US-backed agreement, seen as a counter to China’s Belt and Road Initiative, aims to develop new ship-to-rail transit networks, energy links and other infrastructure connecting India, the UAE, Saudi Arabia, Jordan, Israel and Europe.



The corridor is expected to slash trade costs and increase logistical efficiencies, boosting cross-border investment. 

India’s prime minister, Narendra Modi, hailed the India-Middle East-Europe Corridor as the “basis of world trade for hundreds of years to come”.

Tushar Mehta, India’s solicitor general, and the second most senior law officer of the country’s supreme court, told a panel last month that the different regulatory frameworks across jurisdictions could impede the corridor’s progress.

“When investing millions of dollars, you can’t afford to have a weak or a slow dispute resolution mechanism,” he said at the India-UAE Business Forum in Abu Dhabi.

Untapped trade opportunities between India and the Middle East, North Africa and Turkey could be worth more than $112 billion, research published in February said.

However, investment from India into Gulf countries has dropped considerably, despite growth in bilateral trade, after the country adopted a more protectionist approach.

Trade between India and the group of six GCC countries, Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE, dropped from almost $10 billion in the five years from 2013 to 2017 to just over $5 billion from 2018 to 2022, the latest report from Alpen Capital says.

Mehta said the choice of jurisdiction when a dispute arises was typically based on the bargaining capacity of the parties, leading to a “trust deficit”.

Unified forum

To counter this, he proposed establishing a unified forum for resolving disputes involving “corridor contracting parties”, covering everything from arbitration to awards and appeals.

This would help create trust in terms of judicial dispensation, Mehta said. 

“If we have a common forum, I think a substantial worry of the contracting parties will be taken care of,” he said. 

“If my company [in India] has a dispute with a company [in the UAE], we neither go to the court in India nor the court in UAE. We go to the forum.” 

He suggested that such a forum might follow the United Nations Commission on International Trade Law rules or operate under a standalone legal system, which would “inspire more confidence” among investors.

The future of the India-Middle East-Europe Corridor remains complicated because of the ongoing conflict between Israel and Hamas.

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