- 03-Nov-2025
- public international law
India’s arbitration landscape has undergone significant changes in recent years, driven by a need to enhance efficiency, transparency, and global competitiveness. While the country has made considerable progress, challenges such as delays in proceedings, judicial intervention, high costs, and lack of infrastructure still persist. To address these challenges and make India a hub for arbitration in Asia and globally, a series of reforms have been proposed. These reforms aim to align India’s arbitration laws with international best practices, improve the quality of arbitrations, and promote a pro-arbitration environment.
The Arbitration and Conciliation Act, 1996 governs arbitration in India, but recent amendments have been proposed to make the process more efficient. Reforms include:
Reform Example: The 2019 amendment introduced a six-month timeline for the completion of arbitrations, with an additional six-month extension if required, to make arbitration more efficient and time-bound.
India’s arbitration framework has been traditionally focused on ad-hoc arbitration, where parties choose arbitrators and set their own procedures. However, there is growing support for institutional arbitration (e.g., through institutions like the Delhi International Arbitration Centre (DIAC) and the Mumbai Centre for International Arbitration (MCIA)) to ensure greater efficiency, transparency, and uniformity in proceedings.
Institutional frameworks help reduce delays, as these institutions often have pre-set rules, procedures, and trained arbitrators to handle disputes.
Proposal: Establishing more institutional arbitration centers and encouraging their use to offer professional administration of arbitration proceedings.
One of the most significant proposals is to facilitate the appointment of foreign arbitrators in India. Indian courts and parties have traditionally been hesitant about appointing foreign arbitrators. The reforms seek to promote global expertise by making it easier for foreign arbitrators to be involved, especially in international commercial disputes.
Proposal: Relaxing restrictions that hinder foreign arbitrators from being appointed to arbitral tribunals, thereby enhancing the international appeal of Indian arbitration.
Example: The 2019 Amendment allows for the appointment of foreign arbitrators in domestic disputes if the parties agree to it, furthering India's efforts to become a more attractive destination for international arbitration.
Judicial interference in arbitration has been a persistent issue, especially in terms of delays, challenges to awards, and lack of judicial support for enforcing awards. Reforms focus on minimizing judicial involvement in arbitration, except in cases of extreme circumstances such as fraud or corruption.
Proposal: Encouraging courts to focus only on enforcement and not on the merits of the arbitration award, making the process more efficient.
Example: The 2015 Amendment limited the grounds on which an arbitral award can be challenged, reducing opportunities for delay and interference from courts.
Arbitration infrastructure is essential to the smooth functioning of arbitration proceedings. India’s lack of proper infrastructure for managing arbitration hearings, storing documents, and providing logistical support has been a barrier to arbitration’s growth.
Proposal: Establishing more dedicated arbitration institutions and developing better physical and digital infrastructure to streamline the arbitration process.
Example: Setting up more arbitration-specific venues, such as arbitration centers that provide dedicated facilities for hearings, conferences, and administrative support.
The COVID-19 pandemic has highlighted the importance of virtual hearings in arbitration. The Indian arbitration community has proposed digitizing the process to make it more accessible and efficient.
Proposal: Legal reforms to make virtual hearings and online dispute resolution (ODR) part of the mainstream arbitration process, reducing costs and improving accessibility.
Example: The 2020 amendment to the Arbitration and Conciliation Act allowed for the use of technology in arbitration hearings, including virtual meetings, videoconferencing, and electronic submissions.
A proposal for the establishment of a National Arbitration and Mediation Centre (NAMC) has been made to provide a centralized platform for arbitration proceedings in India. This center would offer institutional support, trained arbitrators, and standardized procedures, which could significantly improve the quality of arbitration in India.
Proposal: Setting up a NAMC to oversee and promote institutional arbitration, provide support to arbitrators, and ensure uniformity in procedures across the country.
Example: The Indian government has announced plans to set up a National Centre for Mediation and Arbitration as part of its broader effort to improve access to justice and dispute resolution.
The reforms propose streamlining the process for the appointment of arbitrators in India. Currently, the process can be cumbersome and delay the proceedings. The proposed changes aim to make the process more transparent and efficient by:
Example: Giving institutional arbitration centers the power to appoint arbitrators, reducing disputes over appointments and accelerating the process.
To make arbitration the preferred method of dispute resolution in India, the government is encouraging businesses to resolve commercial disputes through arbitration instead of relying on court litigation.
Proposal: Tax incentives and awareness programs to encourage businesses to use arbitration for resolving their disputes rather than traditional litigation.
Consider a foreign investor in a construction project in India who is facing a dispute with a local contractor over delays in project delivery. The investor chooses to resolve the matter through institutional arbitration under the Delhi International Arbitration Centre (DIAC).
Reforms the investor might benefit from:
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