2 agosto 2023 Akshay Sewlikar ArbitrationLinks

India forms a committee to consider a new arbitration ecosystem

India’s Ministry of Law and Justice has established an Expert Committee (the “Committee”) to examine, and make recommendations to reform, the operation of arbitrations in India.

The Committee’s terms of reference go beyond simple reform of the underpinning Arbitration and Conciliation Act 1996 (the “Act”). The terms encompass the entire Indian arbitration ecosystem and the committee has been tasked with recommending a new model arbitration system. The membership of the Committee has been reported as comprising representatives from government, legal practitioners, and private enterprise.

The Committee’s terms of reference

The Committee’s terms of reference are related to several broad areas and include the following:

  • The Committee is required to assess the operation of the current arbitration ecosystem in India. The Act’s strengths, weaknesses and challenges will be examined in comparison to foreign jurisdictions.
  • The Committee is required to recommend an efficient and effective model of arbitration for the country.
  • The Committee will propose a strategy to develop a competitive environment for arbitration (for both domestic and international parties).
  • The Committee is required to propose measures to improve enforcement of awards, by considering amendments to the existing statutory regime.
  • Further to the preceding point, the Committee will also consider amendments to reduce recourse to courts in arbitration related matters.
  • One particular focus of the Committee will be to suggest measures to reduce routine challenges to awards by the government.
  • The Committee is also tasked with recommending principles for determining the costs of arbitration. India, as a jurisdiction, does have an adverse costs regime similar to the UK or Singapore (although costs are awarded in certain cases). Developing such principles (and applying them consistently) should discourage frivolous litigation.
  • The Committee also must consider principles to determine the fees of arbitrators as well as a charter of duties of the tribunal, parties and arbitral institutions.
  • Currently, the Act covers both foreign and domestic arbitrations. The Committee has been tasked with considering the feasibility of enacting separate statutory regimes for domestic and international arbitration, as well as the enforcement of foreign awards.

Though the reforms are in their infancy, the Committee has broad terms of reference; so the Committee’s report, when published, should be of great interest. We will continue to monitor developments as they unfold.

Akshay Sewlikar would like to thank Alexander Hall for his help in preparing this post.