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Tracing India's Arbitration Journey
Tracing India's Arbitration Journey
The East India Company's Regulations and later legislative actions laid the foundation for India's extensive arbitration history. However, obstacles including litigants' tactics, the Bar, and the courts have slowed down development. India was motivated to adopt the UNCITRAL Model Law of Arbitration by the UN General Assembly's proposal following economic liberalization. To better suit Indian circumstances, the Arbitration and Conciliation Act (ACA) was implemented with several amendments. Nevertheless, neither legislators nor stakeholders had the proper public discussions or debates before the amendments.
When the Delhi High Court Arbitration Centre (DAC) was first established in 2009, it was marketed as a venue for internal arbitration. On the other hand, petitions for international arbitrations conducted under the auspices of the DAC began to flood in. In other states, the Delhi International Arbitration Centre (DIAC) was founded. Despite these efforts, a significant distance still exists between the anticipated outcomes of these projects and their actual implementation on the ground. Under the direction of Justice B.N. Srikrishna, the government established a High-Level Committee to make recommendations for institutional arbitration promotion and enough steps to encourage litigants to select arbitration as their preferred form of conflict resolution. The government is drafting a Bill to alter the Arbitration and Conciliation Act that will establish, for the first time, arbitrator accreditation, arbitral institution recognition, and classification through an independent agency called the Arbitration Council of India. It is anticipated that this plan will be subjected to a thorough and realistic assessment before lawmakers use their discernment.[1]
There has been a great deal of legal discussion surrounding the Indian Arbitration Code (ACA), with the Supreme Court having to address the "seat" and "place" of arbitration. The question of whether the word "place of arbitration" relates to the juridical seat or a location selected by the parties for convenience emerged despite Section 20 of the ACA allowing parties to agree on the arbitral location. In all international commercial arbitrations, the ACA recognizes party autonomy, including the laws controlling the content of the dispute, the arbitration agreement, and the arbitration's conduct.[2] The case of Bhatia International required the Supreme Court to decide on an application under Section 9 of the ACA submitted by a foreign party before an Indian Court. The court decided that unless the parties specifically agreed to exclude all or all of its provisions, Part I of the ACA would apply even to international commercial arbitrations conducted outside of India. The Indian arbitration law was significantly impacted by this ruling.
The rulings in Bhatia International and Venture Global were overturned in Bharat Aluminium because Indian courts were not authorized to vacate verdicts or impose temporary remedies about arbitrations conducted in foreign jurisdictions. The main conclusions of the BALCO ruling were that awards made in commercial arbitrations seated outside of India would only fall under the jurisdiction of Indian courts if they were requested to be enforced. Additionally, Part I of the ACA would not apply to international commercial arbitrations held outside of India. The dispute persisted as the focal point of the Supreme Court's proceedings, as the Court re-examined these matters in Reliance Industries Ltd. and Anr. v. Union of India. The executive branch, legislature, judiciary, business community, and litigants are all supporting India's attempts to establish itself as a centre for international arbitrations. These efforts are positive and bode well for India's advancement in conflict resolution systems.[3]
References
[1] Dave, Dushyant, et al., eds. Arbitration in India. Kluwer Law International BV, 2021.
[2] Iyer, Aditya Mahalingam, and Radhika Sikri. "Examining India's Journey towards Specialized IP Jurisdictions-Charting a Trail from Comparative Law and History." Indian J. Intell. Prop. L. 13 (2023): 212.
[3] Ganguli, Amal K. “NEW TREND IN THE LAW OF ARBITRATION IN INDIA.” Journal of the Indian Law Institute, vol. 60, no. 3, 2018, pp. 249–81. JSTOR, https://www.jstor.org/stable/26826641. Accessed 20 Feb. 2024.
- India's arbitration history, from East India Company to UNCITRAL Model Law, underwent changes with recent amendments to the Arbitration and Conciliation Act.
- Despite efforts like DAC and DIAC, there's a notable gap between intended outcomes and practical implementation in arbitration centers.
- Supreme Court reversals in cases like Bhatia International clarified jurisdiction and excluded Part I of the ACA from international arbitrations outside India.
