India – Setting the stage for International Arbitration

Introduction

In India, the process of mitigating dispute is very large. Various options such as adjudication by way of court proceedings, mediation, conciliation, mutual settlement and arbitration play a vital role in the development of dispute resolution method.

 Arbitration in India is governed under the Arbitration and Conciliation (Amendment) Act, 2015. Arbitration is one such mechanism whereby parties are able to resolve the dispute in a cost-effective manner with speedy disposal of the dispute. The approach to arbitration can be either by way of ad hoc arbitration or institutional arbitration.  An ad hoc arbitration is intended when the parties regulate the arbitration proceedings themselves. Whereas institutional arbitration is intended when the parties to the agreement decide to incorporate the rules of a recognised arbitration institution and adopt the institution as the appointing authority. The arbitration is then conducted under the auspices of that institution.

THE CHANGE

In order to accommodate the growing needs for institutional arbitration, the government of India initiated a policy reform in the Arbitration and Conciliation Amendment Act, 2019 (“2019 Amendment”). Under the said amendment, The Arbitration Promotion Council of India (APCI) was established to boost institutional arbitration’s efficiency and impartiality and further to brings efficiency and structure to the process, reducing the burden on Indian courts.

The APCI is responsible for formulating policies for a transparent and efficient system to grade arbitral institutions.

APCI has also recommended setting up of the Arbitration Bar and Arbitration benches. While APCI’s role would include incorporation of trained arbitrators accredited by the APCI, the Bar and Bench would mainly comprise of judges, who would be introduced to advancements in arbitration by way of refresher courses on recent developments in the field. This would provide training to the judges in order to strengthen traditional arbitration, while simultaneously modernising it with recent developments and foreign good practices.

The committee established for overlooking the governance of international arbitration has also recommended that foreign lawyers should be permitted to represent clientele in Indian seated arbitrations along with lifting restrictions related to immigration and taxation in order to boost institutionalisation of arbitration in India.

The India International Arbitration Centre (IIAC), established by APCI is an autonomous organisation which was set up in order to facilitate the promotion of ADR methods. Subsequently, vide the notification passed by the government of India, the India International Arbitration Centre (Conduct Of Arbitration) Regulations, 2023 was passed on 31st March 2023, whereby the procedure and conduct of arbitration proceedings appointment of arbitrators and passing of Award was laid down.  Some of the essential highlights of the regulation that assist in speeding up the procedure of arbitration are as follows:

  • Regulation 4 and 5 provides for request of arbitration by the party and the response by the other party within 14 days of the request.
  • Regulation 17 provides for fast track procedure for resolving disputes. In such a case, the disputes have to be resolved within six months from the date of intimation by the Registrar to the parties, of the constitution of the arbitral tribunal.

Conclusion

India’s undeniable progress in arbitration requires a steadfast commitment to embracing institutional arbitration, nurturing an arbitration culture, and ensuring supportive legislation and policies. The establishment of the India International Arbitration Centre underscores India’s dedication to making institutional arbitration the centerpiece of its dispute resolution framework. With focused efforts, India can ascend as a global leader in arbitration, appealing to domestic and international parties seeking efficient and dependable dispute resolution.

Bosky Tanmay Gokani Bosky Tanmay Gokani

Bosky Tanmay Gokani

Legal Advisor
Bosky Gokani, a qualified Indian lawyer, is currently based in Shanghai.

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