The onset of International Commercial Arbitration
If not for the opening of Indian markets to the global economy, India would not have been introduced to the idea of international commercial arbitration, among other economy-boosting tactics and mechanisms. The liberalisation, privatisation and globalisation model allowed the influx of international trade, which further pushed Indian companies to enter into contracts with overseas companies and for the same, the Government had to lay down provisions to allow dispute resolution through alternative means.
By 1995, the Government decided to encourage the use of arbitration for dispute resolution. It introduced a bill for the same in the Parliament of India, which lead to the adoption of the Arbitration and Conciliation Act, 1996. Much like other countries who had followed the UNCITRAL Model's steps to develop their laws on arbitration, India too created a legal framework with the motive of creating laws uniformly related to arbitration.
The Varying Role & Take of High Courts & the Supreme Court
Ever since the formalisation of arbitration laws about international commercial contracts has taken place, there has always been a dispute regarding which cases constitute or fulfil the requirement to be termed an international dispute. Through various precedents and differing judgements, the outlook on what can be considered an international case has been solidified to a certain extent. However, the room for grey is persisted.
- Before the 2015 amendment to the Act, the High Courts, which has minimal jurisdiction on international arbitration disputes, have often interfered in the proceedings of such conflicts and have taken up the authority to set aside arbitral awards and sometimes even interim orders.
- The Supreme Court has not shied away from intervening in cases where competent arbitral tribunals adjudicating over the concerned international dispute has already made the award for the case, this was seen in cases like Venture Global Engineering v Satyam Computers Services, but the same was then justified through the application of s.9 & s.34 of the Act, mainly because the parties to the case had not included the application of Part I of the Act to their agreement.
- For the longest time, the Apex Court was not clear on the qualifications of an international case vis-à-vis the nationality/residence of the parties. Still, the same was clarified in the very recent Amway Enterprises Dispute that the Court decided.
- Through the various Amendments that the Act has seen in 2015, 2019 and 2021, the courts in India have reduced the level of interference in arbitration disputes and have made efforts to make the tribunals independent and systematic enough to deal with all cases that come their way.
- These amendments have time and again improved the quality of arbitration procedures and the provisions surrounding them by tweaking the structure of essential features such as independence and impartiality of arbitrators and the tribunals, by limiting the judiciary’s interference in these disputes and budgeting the costs involved in arbitration among various other things.
These efforts and change of the judiciary’s approach to arbitration as a whole, has improved not only the efficiency of tribunals vis-à-vis domestic cases but has helped India develop in terms of International Arbitration and, in fact, has tried to move it on the world map to make India a desirable country for international arbitral dispute resolutions.
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