Surveying a Decade of the 'New' Law of Arbitration In India

Abstract

The main objective of India's Arbitration and Conciliation Act, 1996 Act was to modernise the arbitration regime in India for both domestic and international arbitration. It also reflected the increased acceptance of party autonomy, and the Parliament's will to keep judicial intervention to a minimum has manifested itself in a number of provisions of the Act. Just as the proof of the pudding lies in the eating, the efficacy of any legislation must be judged by its implementation. Unfortunately, insofar as the 1996 Act is concerned, the reality has been far removed from the ideals professed by the legislation. Arbitration in India, and the regime governing it have been subjected to criticism for the lack of expedition in the arbitration process, thereby escalating costs. The problems have been exacerbated by judicial intervention where the Indian Supreme Court enjoys a mixed track record in the appropriateness of getting involved when it perhaps should have not, and in its efforts at striking a balance between fair trial and party autonomy. The current practice is certainly a far cry from that envisaged by the objectives of the Act and the UNCITRAL Model Law. Many factors have inhibited the growth of an efficient culture of arbitration in India. The lack of standards in conducting arbitration in India has driven parties to opt for arbitration outside the country, or even choose litigation in Indian courts as an alternative to having an arbitration clause in their contracts. In the context of the tenth anniversary of the Act, this paper seeks to examine whether the Act has kept its ‘tryst with destiny’ as an efficient Charter for arbitration in the country. It traces the main features of the Act along with the key themes that emerged during the working of the Act over the last decade. It also seeks to review the proposals made for the amendment of the Act, especially in the light of the 176th Report of the Law Commission of India, which has recommended major changes to the Act, and the introduction of a Bill in Parliament to amend the Act.