Reforms needed in Indian Arbitration



By Azeez Nazar Sabri 

The Amendment in Arbitration and Conciliation Act (2015) have made sea changes in the Arbitration as it has fixed time limit to for passing the award, fixed fee of Arbitrators, removed the practice of automatic, stay, reduced the interference of court, introduced fast track Arbitration, power to Arbitral Tribunal to grant interim relief, reduced misuse of stay under section 9. With the reduced interference of the courts, and removal of automatic stay, unnecessary challenges to the Arbitration Award will be reduced. Further, with the establishment of the Commercial Court the disposal rate of the Section 34 & 37 Petitions has been improved.  

However, Amendment Act 2015 made lots of changes in the Arbitration proceedings but still there are numbers of areas of concerns which need to be addressed to make India as an Arbitration hub.

  1. Institutional Arbitration – In India most of the Arbitrations are adhoc Arbitration and there is need to make the Arbitration Institutionalized.  However, in the proposed amendment 2018 establishment of Arbitration Council of India is proposed for strengthening the Institutional Arbitration, but until the same is setup the adhoc Arbitration will continue.  
  2. Arbitration Centers – The cost of the Arbitration venue is very high. There is need to establish Arbitration centers in the majors cities so that the venue can be arranged at the nominal cost to reduce the arbitration cost.
  3. Arbitration Bar- There should be a full time arbitration practice and Arbitration Bar should be established for the same. Normally the advocates who are in regular litigation practice appears in the Arbitration matters and they give priority to the court litigations and do arbitration practice as their part time job.  
  4. Full time hearings – Normally the arbitrators hear the arbitration matters only for 1-2 hours. This causes delay. The hearings should be full time and there should not be unnecessary hearings for the submission of pleading or exchange of the documents.
  5. Terms of Reference (TOR) and meeting schedule- Unlike International Arbitration there is no practice of finalizing the terms of reference (TOR) and meeting schedule in the Indian Arbitration. The terms of the reference help in reducing the issues of parties and meeting schedule strictly set the schedule of submissions of documents and hearings, which speeds up the arbitration proceedings.
  6. Appointment of Expert:  Many arbitrations including construction arbitration involves complex and technical issues. Normally the Arbitrators appointed by Court are retired judges who are not technical persons/ Engineers. In such cases there should be appointment of the expert who can help the tribunal to address the technical issues, which will help the Arbitral panel to determine the claims of parties and will reduce the time of arbitration.
  7. Cross Examination of the witnesses: Even after the amendment of the Arbitration Act,2015 there is no change in the procedure and practice of cross examination of the witnesses. It takes a long time to conclude the cross examination of the witnesses and sometime unnecessary questions are also asked by the lawyers to drag the matter. However, in International Arbitration a witness is cross examined in a day or two, but in India it take months or years.  

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