India’s chequered history with arbitration may soon take another turn after the Central Government announced the formation of an Expert Committee to consider further reforms to the 1996 Arbitration and Conciliation Act. The Expert Committee is chaired by the decorated lawyer and law professor T.K. Vishwanathan.

India was one of the early adopters of the Model Law but for many years thereafter was perceived as an arbitration “unfriendly” jurisdiction, in large part because of the interventionist tendencies of the courts. The other handicap in India is that the vast majority of arbitration taking place there (anecdotal estimates of 95% or more) is ad hoc rather than institutional, which frustrates the development of a robust culture of arbitration from the bottom-up. I have written about some of these dynamics here.

2015 saw some ambitious legislative reforms that were intended to address some of these issues. Apparently the Ministry of Law and Justice is now considering even further amendments to the 1996 Act, undoubtedly with a view to helping promote India as a regional if not global hub of arbitration.

My own take on arbitration reform in India is that too much legislative tinkering may be a problem rather than a cure. The tortured, 50-plus section mediation bill that is currently pending in Parliament is perhaps another example of the tendency in India–and in many other developing states–to think that reform must come from the top down. I rather think that simplifying the legal regime and focusing on other ways to improve the arbitration climate, such as through encouraging more (but regulated) market competition among private arbitral institutions, is an equally if not more important path to be pursued in tandem.

The Expert Committee recently invited members of the public to comment on its proposal for new arbitration reforms. Acting on behalf of the Center for Negotiation & Dispute Resolution at UC College of Law, San Francisco, I collaborated with the preeminent India scholar Srividhya Ragavan at Texas A&M Law School on a response. Our submission emphasized the following broad points:

  • National legislation may not be the best vehicle for reforming all aspects of the arbitration system.  The Expert Committee should consider the important reform and regulatory roles that can be played by private arbitral institutions operating under the oversight of the Central Government.
  • The delays and inefficiencies in the Indian arbitral system may have to do with aspects of the judicial system in general, such as resource limitations, lack of effective case management procedures, and liberal rights of appeal—more so than with failings in the 1996 Act.
  • The importance of reducing the use of ad hoc arbitration and of promoting a robust culture of institutional arbitration, which is the norm in leading arbitration jurisdictions. 
  • The opportunity presented by the current pendency of a mediation bill in Parliament to consider ways to integrate mediation into the arbitration system in order to achieve greater efficiencies, access to justice, and a coordinated ADR ecosystem. 

A LinkedIn post on our submission may be found here.