Strengthening Arbitration: an Initiative of Government of India

“Creation of ‘a vibrant ecosystem for institutional arbitration’ one of the ‘foremost priorities’ of our government, as it will not only add to investors' comfort level but also ease the burden on courts; there is a need to promote India globally as an arbitration hub"- Prime Minister Narendra Modi

All developed countries are adopting private dispute resolution mechanism and 95% of civil & commercial disputes are resolved through Arbitration globally. Now, India is also diverting towards arbitration and day by day environment of non-litigation practice is evolving. The Government of India has laid emphasis on making arbitration as a preferred mode for settlement of commercial/civil disputes in the country.

The Government of India has taken many step towards strengthening arbitration, a time line of such major steps is as follows:

2015: In an attempt to make arbitration a preferred mode of settlement of civil/commercial disputes and making India a hub of arbitration, the Government of India brought major amendments in the Arbitration & Conciliation Act, 1996. Such amendments were to facilitate quick enforcement of contracts, easy recovery of monetary claims, reduce the pendency of cases in courts and hasten the process of dispute resolution through arbitration.

2016: In October, the Government of India through its think tank NITI Aayog organised a three-day Global Conference on “National Initiative towards Strengthening Arbitration and Enforcement in India” The aim of government behind this conference was to develop a domestic and international arbitration mechanism in India and promote the country as Global Arbitration Hub. The conference was addressed by Hon’ble President of India, Prime Minister of India, Chief Justice of India and many other national and international dignitaries from legal fraternity.

In December, in order to ensure speedy resolution of commercial disputes and to facilitate effective conduct of international and domestic arbitrations raised under various agreements, it has been considered necessary to go into various factors to accelerate arbitration mechanism and strengthen the arbitration ecosystem in the country.  It is also important to examine specific issues and roadmap required to make India a robust centre for international and domestic arbitration. With the above end in view, the Government has decided to constitute a High Level Committee (HLC) in the Ministry of Law and Justice, chaired by Mr. Justice B N Srikrishna, Retired Judge, Supreme Court. The committee submitted their report in August, 2017 with major suggestions.

2017: Presently there are more than 3 crore cases pending in various courts of the country and 46% of these involve Government Department or Government bodies. The Department of Justice under Law Ministry in India, suggested the Government departments and organisations to settle their disputes through alternate methods like mediation, arbitration, conciliation, online or otherwise, etc. so that the Government litigation is reduced and Government Departments / Organisations are encouraged not to go to court for their disputes. This step may help Courts to concentrate on access to justice to people in better manner.

In the month of September, the law ministry advised all departments and ministries to resolve their differences through arbitration, and not move courts, with the government making efforts to take off the tag of "biggest litigant".

In the month of November, the draft act for Indian Arbitration Council was made, The Indian Arbitration Council Act, 2017, aims at creating an independent and autonomous regime for arbitration in India. The Indian Arbitration Council will be declared an institution of ‘National Importance’.

The Arbitration and Conciliation Act, 1996 which was earlier amended in 2015, the government of India is again planning to amend it with better provisions. Experts say establishing an arbitration framework on the lines of Singapore will help India since it will also create a business – friendly environment.