Abstract
India’s arbitration framework has undergone two major waves of reform in the last decade: the 2015 and 2019 amendments to the Arbitration and Conciliation Act, 1996, followed by the 2021 amendment.
While the 2015 amendment sought to curb excessive judicial intervention and strengthen tribunal autonomy, the 2019 amendment was expressly framed as a move towards institutional arbitration, introducing the Arbitration Council of India (ACI) and shifting appointment powers under Section 11 to designated arbitral institutions.
Yet, as of today, key provisions relating to the ACI and Section 11(3A) remain unimplemented, and India continues to be dominated by ad hoc arbitration.
This article examines the future of institutional arbitration in India in this post-2019 landscape.
It analyses the legislative design of the 2019 and 2021 amendments, landmark Supreme Court decisions such as Mayavati Trading and Vidya Drolia, and recent institutional developments including MCIA, DIAC and IAMC Hyderabad.
It argues that while the statutory framework creates a promising blueprint, several structural challenges like delayed operationalization of the ACI, uneven institutional quality, judicial “over-supervision”, and competition from established foreign centers must be addressed if India is to emerge as a globally competitive arbitration hub.
Key Themes Addressed in the Abstract
- Two major waves of reform in the last decade: the 2015 and 2019 amendments, followed by the 2021 amendment
- Curbing excessive judicial intervention and strengthening tribunal autonomy
- Move towards institutional arbitration and the introduction of the Arbitration Council of India (ACI)
- Unimplemented provisions relating to the ACI and Section 11(3A)
- Continued dominance of ad hoc arbitration in India
- Analysis of landmark Supreme Court decisions such as Mayavati Trading and Vidya Drolia
- Recent institutional developments including MCIA, DIAC and IAMC Hyderabad
- Structural challenges: delayed operationalization of the ACI, uneven institutional quality, judicial “over-supervision”, and competition from established foreign centers
Central Argument of the Article
| Aspect | Description (As Stated in the Abstract) |
|---|---|
| Statutory Framework | Creates a promising blueprint for institutional arbitration |
| Current Reality | India continues to be dominated by ad hoc arbitration |
| Key Obstacles | Delayed operationalization of the ACI, uneven institutional quality, judicial “over-supervision”, and competition from established foreign centers |
| Ultimate Goal | India emerging as a globally competitive arbitration hub |
Introduction: From Ad Hoc Dominance to Institutional Aspirations
For years, India’s arbitration culture has been overwhelmingly ad hoc, parties draft their own procedures, appoint arbitrators individually, and rely heavily on courts for support and supervision. This model, although flexible, has often produced delay, unpredictability and excessive judicial interference, undermining India’s image as an arbitration-friendly jurisdiction.
Recognising these concerns, the Government repeatedly articulated a policy objective of making India a global “arbitration hub.” The 2015 amendment represented the first serious attempt, tightening timelines and embedding a pro-arbitration jurisprudence. The Arbitration and Conciliation (Amendment) Act, 2019 (“2019 Amendment”) was the second step, aimed specifically at promoting institutional arbitration through a new Part IA and the proposed Arbitration Council of India (ACI), and by re-designing Section 11 so that arbitral institutions not courts would handle appointments.[1]
However, the story since 2019 has been mixed. Some provisions on timelines, confidentiality (Section 42A), and protection of arbitrators (Section 42B) have been notified and are operational. Others, especially those central to institutionalization like Part IA (ACI) and the full working of Section 11(3A) have not been brought into force, leaving a gap between legislative ambition and practical reality.[2]
Against this backdrop, this article asks: What is the realistic future of institutional arbitration in India after the 2019 Amendment, and what must change for India to compete with global centers like Singapore or London?
2015 and 2019 Amendments: From Judicial Control to Institutional Design
The 2015 Amendment and Section 11(6A)
The 2015 Amendment was primarily a reaction to the Supreme Court’s expansive reading of Section 11 in SBP & Co. v. Patel Engineering[3] and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd.[4], which had allowed courts to conduct mini-trials on issues like limitation and “dead claims” at the appointment stage. The new Section 11(6A) restricted courts to one narrow question: whether an arbitration agreement exists,
Subsequently, the Supreme Court in Mayavati Trading v. Pradyuat Deb Burman[5] and Duro Felguera S.A. v. Gangavaram Port Ltd.[6] confirmed that Section 11(6A) is to be understood in a “narrow sense” and that other objections must be left to the tribunal under Section 16. This narrow referral jurisdiction is a crucial precondition for successful institutional arbitration: institutions cannot thrive if every appointment is preceded by a full-blown court battle.
The 2019 Amendment: Part IA and Section 11(3A)
The 2019 Amendment goes a step further:
- Part IA (Sections 43A–43M) creates the Arbitration Council of India, envisaged as a regulatory and promotional body responsible for grading arbitral institutions, accrediting arbitrators, and generally improving quality standards.[7]
- Section 11(3A) authorizes the Supreme Court and High Courts to designate arbitral institutions, graded by the ACI, to perform the task of appointing arbitrators. Where no institution exists in a particular jurisdiction, the Chief Justice of that High Court may maintain a panel of arbitrators.
The amendment also adjusts Section 29A so that the 12-month timeline runs from completion of pleadings, and makes international commercial arbitrations subject only to an “endeavor” to finish within 12 months, not a hard deadline.
New Sections 42A and 42B introduce confidentiality of proceedings and immunity for arbitrators acting in good faith.[8]
These provisions clearly signal a shift from a court-centric to an institution-centric architecture: courts designate, institutions administer, and tribunals decide.
Partial Notification and the “Frozen” ACI
Crucially, however, only Sections 1, 4–9, 11–13 and 15 of the 2019 Amendment were brought into force on 30 August 2019.[9] Commentary notes that the ACI-related provisions and the full operational framework of Section 11(3A) remain unnotified, meaning that there is still no functioning Council grading institutions or a fully institutionalized appointment mechanism.[10]
Thus, while the Act on paper looks ready for institutional arbitration, the underlying infrastructure is still emerging.
Introduction: From Ad Hoc Dominance to Institutional Aspirations
For years, India’s arbitration culture has been overwhelmingly ad hoc, parties draft their own procedures, appoint arbitrators individually, and rely heavily on courts for support and supervision. This model, although flexible, has often produced delay, unpredictability and excessive judicial interference, undermining India’s image as an arbitration-friendly jurisdiction.
Recognising these concerns, the Government repeatedly articulated a policy objective of making India a global “arbitration hub.” The 2015 amendment represented the first serious attempt, tightening timelines and embedding a pro-arbitration jurisprudence. The Arbitration and Conciliation (Amendment) Act, 2019 (“2019 Amendment”) was the second step, aimed specifically at promoting institutional arbitration through a new Part IA and the proposed Arbitration Council of India (ACI), and by re-designing Section 11 so that arbitral institutions not courts would handle appointments.[1]
However, the story since 2019 has been mixed. Some provisions on timelines, confidentiality (Section 42A), and protection of arbitrators (Section 42B) have been notified and are operational. Others, especially those central to institutionalization like Part IA (ACI) and the full working of Section 11(3A) have not been brought into force, leaving a gap between legislative ambition and practical reality.[2]
Against this backdrop, this article asks: What is the realistic future of institutional arbitration in India after the 2019 Amendment, and what must change for India to compete with global centers like Singapore or London?
2015 and 2019 Amendments: From Judicial Control to Institutional Design
The 2015 Amendment and Section 11(6A)
The 2015 Amendment was primarily a reaction to the Supreme Court’s expansive reading of Section 11 in SBP & Co. v. Patel Engineering[3] and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd.[4], which had allowed courts to conduct mini-trials on issues like limitation and “dead claims” at the appointment stage. The new Section 11(6A) restricted courts to one narrow question: whether an arbitration agreement exists,
Subsequently, the Supreme Court in Mayavati Trading v. Pradyuat Deb Burman[5] and Duro Felguera S.A. v. Gangavaram Port Ltd.[6] confirmed that Section 11(6A) is to be understood in a “narrow sense” and that other objections must be left to the tribunal under Section 16. This narrow referral jurisdiction is a crucial precondition for successful institutional arbitration: institutions cannot thrive if every appointment is preceded by a full-blown court battle.
The 2019 Amendment: Part IA and Section 11(3A)
The 2019 Amendment goes a step further:
- Part IA (Sections 43A–43M) creates the Arbitration Council of India, envisaged as a regulatory and promotional body responsible for grading arbitral institutions, accrediting arbitrators, and generally improving quality standards.[7]
- Section 11(3A) authorizes the Supreme Court and High Courts to designate arbitral institutions, graded by the ACI, to perform the task of appointing arbitrators. Where no institution exists in a particular jurisdiction, the Chief Justice of that High Court may maintain a panel of arbitrators.
The amendment also adjusts Section 29A so that the 12-month timeline runs from completion of pleadings, and makes international commercial arbitrations subject only to an “endeavor” to finish within 12 months, not a hard deadline.
New Sections 42A and 42B introduce confidentiality of proceedings and immunity for arbitrators acting in good faith.[8]
These provisions clearly signal a shift from a court-centric to an institution-centric architecture: courts designate, institutions administer, and tribunals decide.
Partial Notification and the “Frozen” ACI
Crucially, however, only Sections 1, 4–9, 11–13 and 15 of the 2019 Amendment were brought into force on 30 August 2019.[9] Commentary notes that the ACI-related provisions and the full operational framework of Section 11(3A) remain unnotified, meaning that there is still no functioning Council grading institutions or a fully institutionalized appointment mechanism.[10]
Thus, while the Act on paper looks ready for institutional arbitration, the underlying infrastructure is still emerging.
III. The 2021 Amendment and Its Indirect Impact on Institutional Arbitration
The Arbitration and Conciliation (Amendment) Act, 2021 focuses primarily on enforcement. It inserts a proviso to Section 36(3) allowing courts to grant an unconditional stay on enforcement of awards where the arbitration agreement or underlying contract appears to be induced by fraud or corruption.[11]
Although not directly about institutions, this change affects India’s reliability as a seat. Institutional users particularly foreign investors are sensitive to enforcement risks. The broader and more subjective the grounds for stay or setting aside, the less attractive India looks compared to jurisdictions like Singapore or London where post-award intervention is narrow and predictable.
For institutional arbitration to flourish, pre-award efficiency must be matched by post-award certainty. The Indian trajectory is mixed: pro-arbitration on appointment and arbitrability but cautious on enforcement.
Institutional Landscape: MCIA, DIAC, IAMC Hyderabad and Others
Despite the statutory lag, India’s institutional ecosystem has been expanding.
Mumbai Centre for International Arbitration (MCIA)
The MCIA, established in 2016 as a joint initiative of domestic and international business and legal communities, positions itself as India’s premier arbitral institution.[12] Recent reports show a steady growth in caseload over 2023–24. The Centre recorded a significant increase, with a diverse portfolio of commercial, shareholder and cross-border disputes and a high rate of awards completed within the statutory 18-month period.
The MCIA Rules 2025 introduce modern features aligning MCIA with leading institutions such as SIAC and ICC, including:
- Enhanced joinder and consolidation
- Emergency arbitrators
- Expedited tribunal formation
- Early dismissal procedures
- Provisions on concurrent proceedings
- Third-party funding
Delhi International Arbitration Centre (DIAC)
The Delhi International Arbitration Centre, attached to the Delhi High Court, has updated its Arbitration Proceedings Rules 2023, which provide for:
- Fast-track procedures
- Emergency arbitration
- Structured fee schedules
The High Court’s active involvement, including periodic amendments to rules, shows a judicial commitment to institutionalization, though some scholars caution that excessive court oversight may inadvertently undermine institutional autonomy.[15]
International Arbitration and Mediation Centre (IAMC), Hyderabad
The IAMC Hyderabad, inaugurated in 2021, is branded as a “new-age” institution with state-of-the-art facilities, online hearing capability and a dual focus on arbitration and mediation.[16]
The Government of Telangana’s decision to route disputes above a certain value involving state entities through IAMC illustrates how government policy can seed institutional caseloads.
IAMC has also been actively building international partnerships, including:
- Memoranda of Understanding with the Dubai International Arbitration Centre
- Regional initiatives linking India and the MENA region
New Delhi International Arbitration Centre (NDIAC) and Others
The New Delhi International Arbitration Centre Act, 2019 aims to transform the erstwhile ICADR into an autonomous NDIAC. The Permanent Court of Arbitration’s decision to open a New Delhi office in 2024 further signals confidence in India’s institutional direction.
Collectively, these developments suggest that the supply side of institutional capacity is growing, even though the statutory ACI framework is yet to be fully implemented.[18]
Why Institutional Arbitration Still Struggles: Key Challenges
Despite these promising developments, most India-seated arbitrations remain ad hoc. Scholarship identifies several recurring challenges.
Cultural Preference for Ad Hoc Arbitration
Historically, Indian parties (and many domestic lawyers) are comfortable with ad hoc processes where they directly control appointments, fees and timetable. Institutions are seen as adding another layer of bureaucracy and cost, especially for mid-value disputes.
Uneven Institutional Quality
While MCIA, DIAC and IAMC are high-quality centers, earlier experiments with institutions suffered from poor administration, lack of transparency, and inconsistent rule-application. This legacy has created trust deficits; some users still believe that Indian institutions are unpredictable compared to SIAC or ICC.
Incomplete Implementation of the ACI and Section 11(3A)
The ACI is supposed to grade institutions, set standards and channel appointment powers through them. As long as these provisions remain un-notified, there is no unified regulatory framework or clear signal to users that institutional arbitration is the default.[19]
Judicial Over-Involvement and Uncertainty
Although Supreme Court decisions like Mayavati Trading and Vidya Drolia endorse a narrow Section 11 inquiry and robust kompetenz-kompetenz, High Courts sometimes continue to entertain extensive arguments at the referral stage or in challenges to institutional decisions (for example, over fee schedules or appointment procedures).[20]
This uncertainty discourages parties who expect that once they choose an institution, court interference will be minimal.
Competing Global Hubs
Singapore’s SIAC and Hong Kong’s HKIAC offer highly efficient case management, global rosters of arbitrators, and strong enforcement backed by pro-arbitration courts. Recent commentary notes that Indian parties increasingly opt for SIAC as a neutral and reliable venue, even for India-related disputes.
For India to compete, its institutions must match these benchmarks in speed, quality, and neutrality.
Post-2019 Jurisprudence: Building a Stable Foundation
Despite structural challenges, recent case law contributes positively to the environment in which institutions operate.
Mayavati Trading and Section 11(6A)
The Supreme Court in Mayavati Trading clarified that even though the 2019 Amendment contemplates omission of Section 11(6A), this was not intended to revive the pre-2015 SBP Patel regime. Courts must still confine themselves to the existence of an arbitration agreement, leaving limitation and arbitrability to the tribunal.
This maintains a low-intervention standard that is friendly to institutional appointments.
Vidya Drolia and the “When in Doubt, Refer” Principle
In Vidya Drolia v. Durga Trading Corporation[21], the Court developed a structured test for arbitrability and reiterated that at the Section 11 stage, courts should decline reference only in rare cases of clear non-arbitrability; otherwise, the “when in doubt, refer” rule applies.
This jurisprudence supports institutional arbitration by ensuring that most disputes nominated to institutional rules will reach the tribunal rather than being derailed at the threshold.
Interaction with Institutional Rules
High Court decisions on DIAC’s power to adjust fee schedules under its rules show courts beginning to respect institutional autonomy, although occasional challenges continue. Over time, a consistent pattern of deference will be crucial to strengthen trust in institutions.
VII. The Road to Global Competitiveness: What India Needs to Do
To translate legislative ambition into actual global competitiveness, India must address several concrete issues.
Operationalize the Arbitration Council of India
The single biggest reform would be to notify and operationalize Part IA so that the ACI can begin grading institutions, accrediting arbitrators, and issuing soft-law guidance. A functioning ACI would:
- Create a public list of credible institutions;
- Give courts a clear basis for designating institutions under Section 11(3A);
- Provide transparent standards on fees, ethics, and infrastructure.[22]
Without this, institutional growth will remain fragmented and personality-driven.
Encourage Government and PSU Use of Institutions
State entities and PSUs are among India’s biggest litigants. Mandating institutional arbitration clauses (for example, MCIA/DIAC/IAMC/NDIAC) in standard government contracts above a certain value can rapidly build caseload and normalize institutional usage, much like the Telangana Government has done for IAMC Hyderabad.
Build Professional, Independent Secretariats
Global competitiveness depends less on statutory text and more on day-to-day case management. Institutions must invest in:
- trained case managers;
- digital case platforms;
- transparent fee tables;
- user feedback mechanisms.
Reports on MCIA’s growth suggest that professional administration and enforcement track-record are major reasons parties now trust it as a seat.
Align Court Practice with Institutional Needs
Courts should resist the temptation to micro-manage institutional decisions that whether on appointment, consolidation, or fees unless there is clear mala fides or violation of natural justice. A standard of deferential review will reassure users that selecting an Indian institution will not expose them to unpredictable judicial oversight.
Specialized arbitration benches and better case-management of Section 11, 34 and 36 petitions can further reduce delay.
Internationalization and Diversity
To attract cross-border disputes, Indian institutions must:
- maintain international panels of arbitrators,
- adopt rules that are harmonized with global best practices (emergency arbitration, joinder, consolidation, third-party funding, summary dismissal), and
- promote diversity in appointments, including gender and regional diversity.
Collaborations like IAMC’s MoU with DIAC (Dubai) and the establishment of the Arbitration Bar of India in 2024 are promising steps in this direction.
Branding India as a Neutral and Efficient Seat
Finally, India must craft a consistent narrative through judicial decisions, state practice, and institutional marketing that it is a neutral, efficient, and enforcement-friendly seat. The opening of a PCA office in New Delhi and increasing references to India in cross-border clause negotiation demonstrate that international perception is slowly improving.[23]
VIII. Conclusion
The 2019 Amendment marks a crucial turning point in India’s arbitration journey. By conceptualizing the Arbitration Council of India and shifting appointment powers to designated institutions, Parliament has clearly signaled that the future lies in institutional, not ad hoc, arbitration. Subsequent jurisprudence of Mayavati Trading, Vidya Drolia and related cases has strengthened this framework by keeping Section 11 scrutiny narrow and affirming kompetenz-kompetenz.
Yet, India has not fully crossed the bridge. The ACI remains on paper, court practice is uneven, and competition from established foreign centers is intense. At the same time, there are encouraging signs: the rapid growth of MCIA, the emergence of IAMC Hyderabad and DIAC’s updated rules, the NDIAC framework, and the PCA’s New Delhi office all indicate that institutional arbitration in India is no longer a mere aspiration.
If the Government now completes the institutional architecture by operationalizing the ACI, aligning PSU contracting practice, and ensuring consistent judicial deference to institutions, India can realistically position itself as a regional arbitration hub by the end of this decade. In that scenario, the story of Indian arbitration would no longer be one of “one step forward, two steps back.” but of a jurisdiction that learned from its ad hoc past to build a robust, competitive, and institutionally grounded future. For a country aspiring to be a preferred seat of arbitration, institutional credibility rather than legislative symbolism will determine global confidence. References:
- Arbitration and Conciliation (Amendment) Act, 2019, S. 11(3A), Ministry of Law & Justice, Department of Legal Affairs, Government of India, https://legalaffairs.gov.in/sites/default/files/arbitration-and conciliation(amendment)-act-2019.pdf
- Nishith Desai Associates, The Indian Arbitration and Conciliation (Amendment) Act, 2019: A Reflection (2019), https://www.nishithdesai.com/Content/document/pdf/Hotline/NEW_The_Indian_Arbitration_and_Conciliation__Amendment__Act_2019-a_reflection.pdf
- (2005) 8 SCC 618
- (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117
- (2019) 8 SCC 714
- (2017) 9 SCC 729 : (2017) 4 SCC (Civ)
- Supra. 1
- Id.
- Press Information Bureau, Government of India, Arbitration and Conciliation (Amendment) Act, 2019 Brought into Force (Aug. 30, 2019), https://www.pib.gov.in/PressReleasePage.aspx?PRID=1584067
- Supra. 2
- Vidya Drolia v. Durga Trading Corporation, NLS Business Law Review, National Law School of India University, Bengaluru, https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1099&context=nlsblr
- Mumbai Centre for International Arbitration (MCIA), About MCIA, https://mcia.org.in/
- Id.
- Delhi International Arbitration Centre (DIAC), DIAC Arbitration Proceedings Rules, 2018, https://dhcdiac.nic.in/diac-arbitration-proceedings-rules-2018/
- Challenging Arbitral Institution Decisions: Time for India to Draw the Line, Indian Review of Corporate & Commercial Law (IRCCL), https://www.irccl.in/post/challenging-arbitral-institution-decisions-time-for-india-to-draw-the-line
- International Arbitration and Mediation Centre, Hyderabad (IAMC), About IAMC – Arbitration and Mediation Framework, https://iamch.org.in/
- Id.
- The New Delhi International Arbitration Centre Act, 2019, No. 33 of 2019, Department of Legal Affairs, Ministry of Law & Justice, Government of India, https://legalaffairs.gov.in/sites/default/files/The New Delhi International Arbitration Centre Act%2C 2019.pdf
- Supra. 2
- Vidya Drolia Case: Final Chapter in the Arbitrability of Fraud Saga, IndiaCorpLaw (Jan. 6, 2021), https://indiacorplaw.in/2021/01/06/vidya-drolia-case-final-chapter-in-the-arbitrability-of-fraud-saga/
- (2021) 2 SCC 1
- PRS Legislative Research, The Arbitration and Conciliation (Amendment) Bill, 2019, https://prsindia.org/files/bills_acts/bills_parliament/2019/THE ARBITRATION AND CONCILIATION %28AMENDMENT%29 BILL%2C 2019.pdf
- Institutional Arbitration: Where India Stands and the Future Outlook, The Legal 500, https://www.legal500.com/doing-business-in/institutional-arbitration-where-india-stands-and-future-outlook/
