Arbitration is experiencing a momentum of growth with an accelerated rate of
development. The impact of technology has been on a hike in India since the late
19th century. This has greatly contributed to fuelling the growth of Arbitration
in India. Alongside growth, India also harnesses the desire to emerge as a
potential hub that facilitates arbitration on an international scale.
Arbitration is, in short, a private dispute resolution procedure instead of
going to court wherein the dispute is submitted to arbitrators (by agreement of
the parties involved in the dispute) who make a binding decision on the issue.
This article attempts to evaluate the state of arbitration, the growth and
benefits it holds, and its potency in India.
Arbitration in India - Governing Laws
The 100 years of foreign rule have greatly influenced India's law-making
When it comes to the laws that concern arbitration, the English Common Law has
been a major factor. The Arbitration and Conciliation Act of 1996 regulates
Arbitration in India. This act was framed in the light of UNCITRAL Arbitration
Rules of 1976 and 1985 UNCITRAL Model on International Commercial Arbitration.
The Arbitration and Conciliation Act 1996 differentiates between Institutional
Arbitration and Ad hoc Arbitration. In the former, the rules that govern and
regulate the arbitration procedure depend on rules of the procedure of a
particular institution like a tribunal. Whereas in the latter, the procedures of
arbitration will follow the set of rules and regulations that are agreed by the
parties concerned. The act mandates that the arbitration agreement abides by the
recognized set of mandatory rules.
It is also important that the litigations that will be held and discussed by the
arbitrators are indicated in the Arbitration Agreement. Along with that, it
should also contain a mandate that shall indicate and conclude the formalities
of arbitration and the chances that the parties hold to challenge the arbitral
Disputes Governed and the Current State of Arbitration
The current state of Indian Institutions is lacking effectiveness. This
statement is made in the light of India's world ranking in a few spectrums of
law. For example, take the case of the World Bank Report 2019.
Ease of Doing Business - Rank 77 out of 190
Enforcing Contracts - Rank 163 out of 190
Average days to Resolving Commercial disputes - 1445 days
These are clear indications that states that India needs to work on the
betterment of its traditional court system and focus on building a more
promising arbitration system.
India's arbitration system is not inclusive of resolving every litigation. Areas
that concern criminal offenses, trust litigations, marital disputes, and
guardianship issues are what allows for arbitrary settlements. Remember that
India currently has 35 Arbitral Institutions for International, Domestic,
e-City-specific chambers of commerce and industry and Merchant and Trade
India's Future In Arbitration
India is quite ambitious in its potential in the area of arbitration. A major
indicator that states how India works on improving the efficiency of its
arbitrary system and making it cost-efficient is - the amendment of the
Arbitration Act. This ensured the de-automation of the challenging arbitral
awards. This amendment has impacted enhancing the quality of India's arbitral
proceedings. Following this, India had limitations in carrying court
interventions in arbitral awards. This also facilitated in improving the trust
institutions of India especially when it has the element of the arbitral award.
Apart from this, India was constantly working on the path of implementing the
technology as a norm within arbitrary proceedings. This has gained momentum
especially with the onset of the Covid 19 pandemic. Section 19 of the
Arbitration & Conciliation Act states:
The parties are free to agree on the procedure to be followed by the arbitral
tribunal in conducting its proceedings.
This authorizes that India can carry out arbitration proceedings through all
means if necessary. According to The Indian Council of Arbitration (ICA),
arbitrary institutions are mandatory to conduct their proceedings no matter if
it is through a video conference mode. This was quite relevant especially during
the Covid scenarios and lockdown times.