Will India Become Hub of International Arbitration in Coming Future

“We believe that big nations should not bully smaller nations and that the sovereignty of nations must be respected. And we have long urged that disputes be solved peacefully, including through mechanisms like international arbitration”. Barack Obama.

Arbitration is a procedure in which dispute is submitted by agreement of the parties, to one or more arbitrations who makes a binding decision on the dispute.

 Dispute resolving arbitration is not a new concept. References have “Brhadranayak Upanishad”, Where ancient sage Yajnavalkvas talks about Kula, Puga, Sreni which were similar to Present Day Panchayat. It is a practise where respected member of village solved disputes of family and farm through discussion and by settling disputes.

This decision was considered final and non-changeable.

In 1772 First Arbitration law was been observed under Bengal Regulation of 1772. Since then, India as witnessed following regulations and amendments: –

  1. Bengal Regulation of 1781
  2. Bengal Regulation of 1787-83-1795
  3. The Legislative Council of India 1834
  4. Indian Arbitration Act 1899
  5. Arbitration Act of 1940

All these regulations have made many changes in How arbitration functioned in India which was moreover inspired by British Government.

With Arbitration and conciliation (Amendment Act 2015, the Courts Interference in Business which had Arbitration Clause were asked not to consider in Court for trial.

With Arbitration and conciliation (Amendment Act 2019 Supreme Court had power to choose Arbitrator for International Matter and High Court May Designate Arbitral Institution for Indian parties who approach court for Appointment Arbitrators.

Advantages of Arbitration

  1. Companies choose Arbitration because it is less time consuming as compared to Court Procedure

2.In court where proceeding is transparent has glass, in arbitration the businesses have               advantages of Confidentiality in such extent that the information shared during arbitration proceeding, cannot be used has evidence in court if challenged.

3. The business have the freedom to choose this language in which they want the proceeding to happen.

Disadvantages of arbitration.

  1. No transparency confidentially in also a disadvantage as it is not public.
  2. Lack of examination as arbitration involves documented and not witnesses.
  3. Costly in business witnesses involve a minimal cost it may prove to be costly.
  4. Biased there is a chance of arbitration been raised because of lack of consistency. ‘
  5. In awareness many times party may not know they have agreed to arbitration clause.

In India specially it is considered as a part time job, where advocates many prefer to practise arbitration after their court hours.

India’s Strengths

Indian economy is fastest growing economy which rank 5th in the world with globalization and growing economy the trade and business increases and with increase of businesses the change of arbitration also increases.

  • India has seen many amends’s and changing rules which makes India flexible and adaptable to the changing business around the world.  India ahs never being foreigner bias, the advantages of other economy have many times included by India for betterment of the economy.
  • India has always contributed immensely in every field. The legal expertise is giving offering their knowledge to the world legal expert like Haris and many more.
  • The Diversity of India is a plus point of arbitration to grow and understand dispute in a better manner. In recent time it can be noticed that Indian court have been acting friendly to arbitration procedure.

Arbitration of legal services sector will make India free for foreign firms to move and eventually contribute to the growth of Indian market. Various step taken by the government to reduced government litigation and make better quality decision and also improve arbitration process.

Government Amendment to arbitration act of 2015,2019 has changed the face and made the arbitration process smoother Prime minister Narendra Modi said that “Creation of a vibrant ecosystem for institutional arbitration is one of the foremost priorities of our government.

With increase step taken by the government of improving arbitration, it is also important to study what are top arbitration centre in the world. For business may companies prefer Singapore London Hong Kong, Paris and Geneva

The reason for Singapore being many businesses choice are Singapore ahs a good court reputation as they are known for their integrity and impartiality.

Singapore government has given strong support for arbitration and helped it to be on top most position for arbitration.

Geographical Location and excellent connectivity to countries of south east Asia is something Singapore is blessed with.

The Progress of Singapore was gradual and continues which made them first choice for arbitration in the world has rightly said by Confucius “It does not matter how slowly you go; has long has you do not stop”.

The pending cases in courts and increased international businesses has made India to focus on Arbitration. India has taken many steps which has made the situation under control for example: -Lok Adalat, where disputes on grass level are solved so that more cases are not been registered in court.

Supreme court Legal Services Committee is also established to give legal Aid to parties related to the pending cases before the supreme court and shall organised Lok Adalat


India has seen various amendment and regulation. Government is taking various steps to improve arbitration. Becoming Hub for International Arbitration is a gradual process which is possible to achieve. Soon with support of government and various legal institutes, the fastest growing economy that is India will become hub for international arbitration.

Author: Shobha Khot

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