Share :
INDIA: A POTENTIAL RISING HUB FOR INTERNATIONAL ARBITRATION
In recent years, with the development of Asia, India has emerged as an active player in the field of international arbitration. Interestingly, India was one of the first few countries to be a signatory of the New York Convention in 1960. Yet the nation was historically perceived as a country that prioritizes litigation; the nation has experienced notable legislative and administrative transformations with the objective of including arbitration as a mode of dispute resolution.
ARBITRATION’S CONTEMPORARY LEGAL LANDSCAPE IN INDIA
The legal landscape of India is evaluated in two discourses. First pertains to the development of corporate culture, subsequently eradicating the preconceived notion of arbitration as a costly and complex process. The second is the realization of opportunities offered by arbitration as an economical fuel for the expansion of the Indian market.
Any jurisdiction that is favourable to arbitration must have a strong legal foundation. The UNCITRAL Model Law (United Nations Commissions on International Trade Law) was the foundation for the passage of the Arbitration and Conciliation Act of 1996, marking the beginning of India’s journey. The purpose of this Act was to harmonize Indian traditions with global norms by streamlining arbitration proceedings. Modifications have been made throughout time to improve efficiency and resolve flaws. Two of the major developments are fast-track dispute resolution procedures and measures to reduce arbitration proceedings’ delays.
The government has also taken the initiative to establish India as a centre for arbitration. The goal of the Arbitration and Conciliation (Amendment) Act, 2019 was to institutionalize arbitration in India. It was based on the recommendations of the B.N. Srikrishna Committee Report. Additionally, it establishes the Arbitration Council of India pursuant to Sections 43-A through 43-M.
Moreover, arbitration law is significantly shaped by judicial interpretation. The Indian judiciary, through cases like Bharat Aluminium Co. v. Kaiser Aluminium Technical Services, has defined the purview of judicial review by demonstrating a pro-arbitration stance by minimizing judicial interference in arbitral decisions and upholding party autonomy. Hence strengthening arbitration’s effectiveness as a substitute for conflict settlement.
INSTITUTIONAL INFRASTRUCTURE: BUILDING BLOCKS OF CREDIBILITY
Effective dispute-resolution procedures are becoming necessary due to India’s expanding economy and increasing foreign direct investment. An efficient arbitration structure is important as more foreign companies are joining the Indian market. The current state of the economy gives India a solid platform on which India is growing its arbitration landscape.
A crucial aspect of arbitration is the presence of reputable arbitral institutions that can administer proceedings efficiently. The Indian landscape is equipped with institutions like the Mumbai Centre for International Arbitration (“MCIA”) and the Delhi International Arbitration Centre (“DIAC”) have been established to provide institutional support. These institutions offer state-of-the-art facilities, experienced arbitrators, and procedural rules aligned with international standards. Their emergence reflects India’s commitment to enhancing its institutional arbitration framework, bolstering credibility among global stakeholders.
Moreover, international institutions such as the International Chamber of Commerce (“ICC”) and the Singapore International Arbitration Centre (“SIAC”) have also gained traction in India. Parties often opt for these institutions due to their established track record and familiarity in handling complex international disputes. Collaborations between Indian and international institutions further enrich the arbitration landscape, promoting cross-border cooperation and expertise exchange..
CHALLENGES: A WAY FORWARD
India has made significant progress in positioning itself as a favorable country for international arbitration, but challenges remain. Concerns have been raised about perceived delays in the Indian judicial system and occasional judicial interference in arbitration proceedings. It is important to address these challenges through ongoing reforms to improve judicial efficiency and reduce procedural obstacles. This will be crucial for India to maintain its competitive advantage in the global arbitration landscape.
India has the opportunity to further strengthen its institutional capabilities, raise awareness among international businesses, and improve its arbitration infrastructure. Initiatives such as the proposed International Arbitration Centre (“IAC”) in New Delhi are intended to solidify India’s standing as a preferred destination for conducting large-scale international arbitrations.
KEY OBSERVATION
India has firmly established itself as a desirable location for international arbitration, propelled by a progressive legal framework, a supportive judiciary, expanding institutional infrastructure, and strategic geopolitical advantages. The Arbitration and Conciliation Act of 1996 provides a robust foundation for arbitration proceedings, emphasizing party autonomy and the enforceability of awards. The consistent judicial support for arbitral decisions further solidifies India’s reputation as a dependable arbitration jurisdiction.
With a steadfast commitment to ongoing reforms and the growth of arbitration institutions, India is well-positioned to capitalize on its strengths and enhance its role in the global arbitration landscape. As international businesses increasingly acknowledge the advantages of selecting India as a seat for arbitration, the country’s influence in facilitating cross-border dispute resolution is poised to expand, bolstering economic development and fostering international trade relations.
As India continues to refine its arbitration framework and tackle challenges, the future holds promise in further cementing its standing as the preferred destination for resolving international commercial disputes through arbitration.
For more information or queries, please email us at
[email protected]
