Ensuring the Success of Institutional Arbitration in India
Rapid integration with the global economyand the resulting increase in competition has led to an increase in commercial disputes in India. The rate of industrial growth, modernization, and improvement of socio-economic circumstances has, in many instances, outpaced the rate of growth of dispute resolution mechanisms. There are about3 crorecases clogging the arteries of the judicial system in India.1Alternative Dispute Resolution (ADR) mechanisms such as arbitration, mediation and conciliation provide somerespite from the costs -both temporal and financial-of regularlitigation. However, they too have beenplagued with inefficiency that hampers judicial process. Most arbitrators are retired judges who treat the proceedings much like regular court matters,thereforeeliminating any hope of matters being settled with some degree of celerity. The tide, however, seems to be turning in favour of a more robust ADR regime.
The legislature has understood that speedy dispute resolution is essential for economic growth. The recent amendment to the Arbitration and Conciliation Act 1996 (hereinafter referred to as ‘the Act’), promulgated as an ordinance,attests to this fact. The most noteworthy features of the ordinance include provisions for time limits on proceedings, limitations on the interference of courts to only very dire circumstances involving matters of public policy, and a procedure for fast track arbitration.2
India also seems to be on the cusp of a paradigm shift towards institutional arbitration from a regime of ad-hoc arbitration. Delhi was the first to get an arbitration centre with the setting up of the Delhi International Arbitration Centre (DAC) in 2009. Mumbai followed by setting up theIMC Suresh Kotak International ADR Centre in 2014. Another arbitration center has recently been set up in Vadodara, Gujarat. The International and Domestic Arbitration Centre has been setup along the lines of the Arbitration courts of London and Singapore. Though this is a step in the right direction, India is a long way off from reaching international arbitration benchmarks. A multi-pronged approach is required if institutional arbitration in India is to be successful. Suggestions to this effect are listed as follows:
Agglomeration: If the DAC, the IMC and the IDAC were to join forces, so to speak, it would be advantageous for them in a number of ways:
They would be able to handle a greater volume of arbitrations than any other country in the world.
Agglomeration would ensure consistency of procedure and rules in arbitration proceedings across the country.
Cohesioncould also be leveraged for recruiting industry experts and ensuring expansion. Resources can be pooled to achieve this purpose.
Another route could be to form a governing council for all arbitration institutions in the country under which separate arbitration entities can be set up as not for profit entities. The role of the council could be purely administrative in nature.
Competitive Ratesfor Service Delivery: Cost is the number one advantage an arbitration centers in India have over their international counterparts. Arbitration centers in India must ensure that their rates are globally competitive. This might mean putting a cap on session fees, as is the practice in London at the LCIA.
Sensitization of global and domestic stakeholders to the advantages of settling their disputes in India: It would also be prudent on the part of ADR institutions to organize international and domestic summits and symposiums to sensitize a multitude of stakeholders to the capabilities of the ADR regime in India and the advantages that would come with settling their disputes here.
Set up a youth program like the YSIAC or the YIAG: The importance of cultivating the next generation of arbitrators cannot be overstated. The youth are the key to building the foundations of a robust ADR regime. The aim of having a youth wing would be to promote the understanding and use of international arbitration law and practice by providingopportunities for its members toexchange views ontopical issues in international commercial arbitration. Other objectives of such a body could be as follows:
To be a forum for young professionals and students to exchange expertise, ideas and experience in international arbitration3
Provide a platform for young professionals interested in alternative dispute resolution in India, Asia and worldwide to network among like-minded peers and to build mentoring relationships between young professionals and experienced practitioners4
Promote the use of arbitration and other forms of alternative dispute resolution to young professionals and business advisers regionally3
Work with legal, business and educational organizations and other groups of young arbitrators to organize events3
Establish and maintain an affiliate blog on the Kluwer Arbitration Blog and exercising editorial control over the content of such blogs3
Offer six-month internships exclusively to members of its youth wing. This internship could be in the capacity of a Research Assistant with the promise of absorption at the end of the internship term, subject to vacancies and performance.4
The creation of a cohesive ADR regime supplemented by intensive youth involvement and global and domestic outreach programs and events will go a long way in making institutional arbitration a standout success in India.
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