THE CONCEPT OF INSTITUTIONAL ARBITRATION – NEED FOR THE HOUR

Abstract

The Indian lawmakers have an agenda to promote India as an Arbitration hub for solving disputes, thus, they brought about certain changes to the Arbitration and Conciliation Act, 1996 by way of an amendment namely, the Arbitration and Conciliation (Amendment) Act, 2015 (“2015 Amendments”) which aimed at achieving this goal by facilitating speedy and efficacious resolution of disputes through arbitration. It is widely accepted that India prefers ad hoc arbitration over institutional arbitration. Though various arbitral institutions have been set up in India, especially in the last five years, ad hoc arbitration continues to be the preferred mode of arbitration. Moreover, a large number of international arbitrations involving Indian parties are seated abroad and administered by foreign arbitral institutions. In order to promote institutional arbitration in India, it is imperative that: (a) Indian parties involved in domestic and international arbitrations are encouraged to shift to institutionally administered arbitrations rather than resort to ad hoc arbitrations; and (b) India becomes a favored seat of arbitration for international arbitrations, at the very least in matters involving Indian parties. With this background, this paper delineates certain issues that exist in the Institutional Arbitration in India and identifies areas for reform in the Indian arbitration, to strengthen the existing arbitration mechanisms, and also to put forward focus areas for promoting institutional arbitration in India.