This article on ‘Emerging Trends In Arbitration Law: All You Need to Know‘ was written by Shriharshini Balachandar, an intern at Legal Upanishad.
Arbitration is an alternative dispute resolution mechanism that is increasingly gaining importance in India due to its cost-effectiveness and speedy resolution of disputes. The Indian government has been continuously making efforts to promote arbitration as a preferred mode of dispute resolution, and several recent developments indicate emerging trends in arbitration law. This article will discuss some of these emerging trends and their impact on arbitration in India, with the help of real Indian case laws.
Emphasis on institutional arbitration
One of the significant emerging trends in arbitration law in India is the emphasis on institutional arbitration. In recent years, several institutions have been established to promote institutional arbitration, such as the Mumbai Centre for International Arbitration (MCIA), Delhi International Arbitration Centre (DIAC), and the International Centre for Alternative Dispute Resolution (ICADR). These institutions provide a framework for arbitration, including rules, procedures, and administrative support. They also have panels of arbitrators and mediators, who are experienced in various fields, making the process more efficient and credible.
In the case of Centrotrade Minerals & Metals Inc. v. Hindustan Copper Limited, the Supreme Court of India observed that institutional arbitration was necessary for the development of arbitration in India. The court held that institutional arbitration was more credible and efficient as it provided a framework for the conduct of arbitration, including the appointment of arbitrators, fixing of fees, and rules for the arbitration process.
Expansion of scope of arbitrable disputes
Another emerging trend in arbitration law in India is the expansion of the scope of arbitrable disputes. The Indian government has been taking steps to broaden the types of disputes that can be resolved through arbitration. In 2015, the Arbitration and Conciliation (Amendment) Act were passed, which removed the restriction on the arbitrability of disputes relating to public policy, making it possible to resolve a broader range of disputes through arbitration.
In the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Service Inc.), the Supreme Court held that all disputes, including those relating to fraud, were arbitrable unless they affected the core of the public policy of India. The court observed that the policy of minimal intervention by courts in arbitration was necessary for the development of arbitration in India.
Recognition and enforcement of foreign awards
The recognition and enforcement of foreign awards is another emerging trend in arbitration law in India. In recent years, India has taken steps to align its laws with international arbitration standards, such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. The Indian courts have been increasingly supportive of enforcing foreign awards, which has increased the confidence of foreign investors in the Indian arbitration system.
In the case of Vijay Karia & Ors v. Prysmian Cavi E Sistemi Srl & Ors, the Supreme Court of India held that foreign awards were enforceable in India unless the award was contrary to public policy. The court observed that the New York Convention recognized the importance of enforcing foreign awards, and this was necessary for the development of international trade and commerce.
Use of technology in arbitration
The use of technology in arbitration is another emerging trend in arbitration law in India. In recent years, technology has been used to make arbitration more efficient and cost-effective. For example, online dispute resolution platforms have been developed, which provide parties with an online forum for dispute resolution.
In the case of Inox Renewables Limited v. Jayesh Electricals Limited, the Gujarat High Court allowed the use of video conferencing for arbitration proceedings. The court held that due to the ongoing COVID-19 pandemic, physical hearings were not feasible, and therefore, video conferencing was a practical and viable alternative. The court further observed that the use of technology was essential to ensure that the arbitration process continued uninterrupted and that justice was not delayed. This case underscores the importance of technology in arbitration and highlights the need to adapt to new methods of dispute resolution in challenging times.
- Increasing Awareness and Education: To promote institutional arbitration further, there is a need to create awareness about the benefits of institutional arbitration and educate people about the process. This can be achieved through workshops, seminars, and training programs aimed at lawyers, judges, and other stakeholders.
- Promotion of Mediation: Mediation is a form of alternative dispute resolution that has gained popularity in recent years. It is a voluntary process where a neutral third party assists the parties in reaching a settlement. The Indian government has been promoting mediation as an effective means of resolving disputes, and this trend is likely to continue in the future.
- Streamlining of Arbitration Procedures: To make arbitration more efficient, there is a need to streamline the arbitration process and make it more user-friendly. This can be achieved by simplifying the rules and procedures, reducing the time taken to appoint arbitrators, and ensuring that arbitrators are available to hear cases in a timely manner.
- Use of Technology: The use of technology in arbitration has already been recognized by Indian courts. However, there is scope for further improvement in this area. The use of video conferencing, electronic filings, and online case management systems can make the arbitration process more efficient and cost-effective.
- Strengthening the Enforcement Mechanism: The final step in any arbitration is the enforcement of the award. Therefore, it is essential to have a strong enforcement mechanism in place to ensure that the award is enforced promptly. This can be achieved by strengthening the existing legal framework and improving the enforcement process.
In conclusion, arbitration is an increasingly important method of dispute resolution in India, and there are several emerging trends in arbitration law that are shaping the future of arbitration in the country. The emphasis on institutional arbitration, the expansion of the scope of arbitrable disputes, the recognition and enforcement of foreign awards, and the use of technology in arbitration are all trends that are likely to have a significant impact on arbitration in India.
These trends are aligned with international arbitration standards, and they are expected to make arbitration in India more efficient, cost-effective, and credible. The Indian government has been taking steps to promote arbitration as a preferred mode of dispute resolution, and these trends are likely to further strengthen the arbitration system in the country.
However, it is essential to note that there are still some challenges that need to be addressed to make arbitration more effective in India. For example, the issue of delay in the appointment of arbitrators and the high fees charged by some arbitrators are still concerned that need to be addressed.
Overall, the emerging trends in arbitration law in India are positive developments that are likely to improve the efficiency and effectiveness of the arbitration system in the country. With the continued support of the Indian government and the judiciary, arbitration is likely to become an increasingly important method of dispute resolution in India in the coming years.
- Centrotrade Minerals & Metals Inc. v. Hindustan Copper Limited https://indiankanoon.org/doc/90056159/
- Bharat Aluminium Co. v. Kaiser Aluminium Technical Service Inc https://indiankanoon.org/doc/173015163/
- Vijay Karia & Ors v. Prysmian Cavi E Sistemi Srl & Ors https://indiankanoon.org/doc/52650140/
- Inox Renewables Limited v. Jayesh Electricals Limited https://indiankanoon.org/doc/6809742/
- The Arbitration and Conciliation (Amendment) Act, 2015 https://lawmin.gov.in/sites/default/files/ArbitrationandConciliation.pdf
- New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 https://www.newyorkconvention.org/english
- Cyril Amarchand Mangaldas Guide to Arbitration in India ( Cyril Amarchand Mangaldas, India, 2022) https://www.cyrilshroff.com/wp-content/uploads/2020/09/Guide-to-Arbitration-in-India.pdf