Arbitration has a long history in India that dates back to ancient times when the Mitakshara School of Law established Shreni, Kula, and Paga as the governing bodies for resolving disputes. However, the legislation of arbitration law in modern India was adopted during British rule when the Indian government passed several laws, including the Indian Arbitration Act of 1899. Over the years, India has made significant progress in the development of arbitration law, drawing from international conventions and treaties such as the Model Law and Amendment Acts of 1996, 2015, 2019, and 2021. The Prime Minister of India, Shri Narendra Modi, has emphasized the government's commitment to creating an arbitration culture where disputes can be resolved efficiently. As India sets its sights on becoming a global hub for international arbitration, this article aims to evaluate its potential to achieve this goal.
International arbitration consists of protocols akin to judicial adjudication wherein the parties refer their dispute to a neutral third party for disposal. The process is categorically split into ad-hoc and institutional arbitration, with the former involving the parties themselves choosing individual arbitrators to conduct the proceedings, and in the latter, a specific institution conducts the whole process.
The versatile nature of international arbitration has allowed the industry to flourish as a preferred private adjudication forum to the extent that all jurisdictions amend their lex arbitri to align them with prevailing global arbitration practices. When it surpassed the UK, to be the world’s 5th largest economy, India’s dominant global economic position could no longer be overlooked. Concurrently, as its global economic power continues to rise, the demand for an efficient dispute-resolution mechanism is increasing in the international business community. It is for this purpose, that India strives to be a leading hub for international arbitration on par with the likes of Singapore and Hong Kong.
Traits of a Prominent Arbitration Destination
The following are the factors that highlight what it means to be an international arbitration hub
- The New York Convention: It is the most prominent treaty providing for the minimum standards in recognising and enforcing arbitral awards and agreements. As such, unless it has a better system, the arbitral seat should comply with the New York Convention.
- Speedy and Efficient Dispute Settlement: One of the Primary aims of bringing a dispute to arbitration is its quick and efficient methods of resolving the same. Needless to say, parties are more likely to flock to where such norms are being upheld.
- Lack of Corruption: A corrupt-free legal system highlights the expectation for fairness, neutrality and impartiality from the arbitral seat. The lack of corruption creates a favourable atmosphere for dispute resolution. For example, Singapore is ranked 5th on the Transparency International, Corruption Perception Index 2022.
- Limited Grounds for Annulment: The Finality of an arbitral award is a shining feature of arbitration. The reputation of the arbitral seat providing restricted grounds for the annulling or arbitral awards is essential for parties choosing a seat for arbitration.
- Supportive Arbitral Regime: A government system that assists the arbitral process in areas such as the appointment of arbitrators and anti-suit injunctions within the period of limitation will be chosen by parties. Minimal or no interference is preferred in the arbitral process.
- Possession of Competent Professionals: This condition is not limited to legal professionals, rather, a seat that has experts in other fields such as interpretation, translation and secretariats at its disposal is more capable of supporting arbitration exponentially.
- Convenience of Location: This includes costs of stay and accessibility.
- Innovation: Leading seats are innovative in responding to the international business community’s demands and needs.
India’s Position as a Hub for International Arbitration
“It is clear that India has a solid foundation from which to pursue its goal of becoming a leading arbitration hub.”- Lord Goldsmith KC
Outlined below are the aspects that are in India’s favour:
- Availability of Competent Professionals: India has astute advocates, solicitors and major domestic law firms well versed in resolving disputes and commercial arbitration practices.
- Pro-arbitration judicial decisions: These include the determination of arbitration seats where the arbitration agreement merely provides for the venue. The Dholi Spintex case recognized the Parties’ autonomy in selecting a foreign law as the governing law. The landmark judgment of the PASL case held that parties are at liberty to choose a foreign arbitral seat as a result of which Indian arbitrations are increasingly being seated in India compared to the past.
- Supportive Arbitral Regime: The Indian government created an arbitration culture via legislative and institutional support viz; The 2015 Amendment Act which resolved the applicability of part one to foreign seated arbitration and a shift to seat-oriented jurisdiction at Section 2(2), and Sections 29A and 29B were inserted to include time-bound and fast-track arbitrations respectively; The 2019 and 2021 Amendments promoted institutional arbitration in India and promoted India as a hub for International commercial arbitration; The establishment of the New Delhi International Arbitration Centre (NDIAC) or India International Arbitration Centre (IIAC) paved the way to make it an institution for international and domestic arbitration with institutional autonomy and independence; Setting up a mandate that particular State government contracts must provide for institutional arbitration.
- Common Law System: India’s Common law tradition featuring foreign sources such as the United Kingdom allows it to benefit from jurisprudence everywhere.
- Innovation: To improve supervision and administration of arbitrations, India introduced timelines in the 2015 Amendment and by 2019, parties were to ‘endeavour’ to complete international arbitration matters within 12 months from the date of completion of the pleading. India’s innovation can also be seen in its swift response to the circumstances during the Covid-19 pandemic as it quickly adopted technological solutions for efficient arbitration despite the challenges.
To sum it all up, the ambition of establishing India as a leading hub for international arbitration has been clear for a long time now and based on the above analysis, it is safe to say that despite certain shortcomings India is closer to achieving it than ever before.
 At the ‘National Initiative Towards Strengthening Arbitration & Enforcement in India’ global conference held from 21/10/2016 – 23/10/2016 a Valedictory speech by the Prime Minister at National Initiative towards Strengthening Arbitration and Enforcement in India (pib.gov.in)
 India overtakes the UK as the world's fifth-largest economy | World Economic Forum (weforum.org)
 See Gary B. Born, International Commercial Arbitration Vol. II 1680 – 1686, Wolter’s Kluwer (2009); White & Case et al. 2015 International Arbitration Survey: Improvements and innovations in International Arbitration 14 (2015)
 2022 Corruption Perceptions Index: Explore the… - Transparency.org
 Delhi Arbitration Weekend on ‘Establishing India as a Leading Hub for International Arbitration’ held at Delhi International Arbitration Centre (DIAC) on 16/02/2023 available at establishing-India-as-a-leading-hub.pdf (debevoise.com)
 Legal Market Overview in India | Law firm and lawyer rankings from The Legal 500 Asia Pacific guide Legal Market Overview in India | Law firm and lawyer rankings from The Legal 500 Asia Pacific guide
 BGS SGS Soma JV v NHPC Ltd 2019 SCC OnLine SC 1585
 Dholi Spintex Pvt. Ltd. V. Louis Dreyfus Company India Pvt. Ltd CS, (COMM) 286/ 2020
 PASL Wind Solutions Pvt. Ltd v. GE Power Conversion India Pct. Ltd Civil Appeal No. 1647 of 2021