Should the Setting Aside of International Commercial Arbitral Awards be Abolished in India?

Abstract

After years of uncertainty, India has recently adopted a decidedly pro-arbitration stance through legal and infrastructural changes geared towards making it a global international arbitration hub. Despite these changes, Indian Courts’ perceived lack of commercial sophistication and judicial delays have dissuaded foreign parties from choosing to seat international commercial arbitrations in India. Among other reasons, this is because they see erroneous annulments of India-seated tribunals’ awards, which would render them virtually unenforceable in most jurisdictions party to the New York Convention, as extremely likely. In order to assuage these concerns, this paper presents a mechanism that will allow foreign parties to restrict the scope of Indian Courts’ interference with India-seated arbitrations at the post-Award stage. This would allow parties to either completely exclude any annulment proceedings before Indian Courts by contract, or give these Courts the limited jurisdiction to issue a declaration that the Award complies with Indian law (as the lex arbitri) to aid enforcement in other jurisdictions. In allowing foreign parties to restrict the risk posed by Indian Courts to India-seated arbitrations, this may provide the spark necessary to attract foreign parties to start arbitrating in India.