Rishabh Gandhi
The year 2024 marks a transformative period for India’s arbitration framework, reflecting a blend of ambition and pragmatism. With each passing year, arbitration has steadily gained prominence as an effective tool for resolving commercial disputes. In 2024, the emphasis on reforming laws, delivering landmark judgments, and addressing systemic challenges showcases India’s determination to establish itself as a global arbitration hub. However, this journey is not without its hurdles. From legislative advancements to judicial interventions, the year highlights a dynamic interplay of legal rigour and practical adaptability. As we navigate through these developments, it is vital to critically assess their implications for the future of arbitration in India, ensuring that the process not only aligns with global standards but also remains rooted in fairness and efficiency. This article explores the major reforms, significant judgments, and the persistent challenges that define the state of arbitration in India in 2024.
Key reforms: Redefining arbitration in India
In 2024, significant reforms have been introduced to modernise and refine India’s arbitration framework. Among these, the Draft Arbitration and Conciliation (Amendment) Bill, 20241, stands out as a pivotal development:
1. Draft Arbitration and Conciliation (Amendment) Bill, 2024: October 2024 marked a watershed moment with the introduction of the Draft Arbitration and Conciliation (Amendment) Bill. This Bill seeks to promote institutional arbitration over ad hoc practices, a much-needed shift for India’s arbitration ecosystem. By defining “arbitral institution” and empowering them to extend time-limits or substitute arbitrators, the Bill underscores a commitment to efficiency and professionalism. The Bill also proposes reducing judicial intervention by imposing strict timelines for courts to dispose of applications under Sections 8 and 11.2 The introduction of time-bound appeals under Section 373 signals a concerted effort to expedite arbitration proceedings. However, as Alexander Pope once remarked, “Hope springs eternal”. While these reforms are promising, their success depends on robust implementation and stakeholder collaboration.
2. Guidelines on arbitration in public procurement: Another transformative development is the Government’s move to limit arbitration’s role in public procurement disputes, except in low-value cases. This shift aims to enhance efficiency but raises questions about arbitration’s diminished presence in public-sector contracts. A balanced approach is essential to ensure that arbitration remains a trusted mechanism for resolving disputes.
Landmark judgments: Shaping precedent and policy
Indian courts continued their vital role in shaping arbitration jurisprudence in 2024. Several judgments have not only clarified contentious issues but also reinforced the principles underlying arbitration:
1. DMRC Ltd. v. Delhi Airport Metro Express (P) Ltd.4: In this landmark case, the Supreme Court set aside an arbitral award on the grounds of patent illegality. The judgment emphasised that awards violating contractual terms or ignoring evidence cannot withstand judicial scrutiny. This case highlights the judiciary’s balancing act between minimising interference and ensuring justice.
2. S.V. Samudram v. State of Karnataka5: The Supreme Court reaffirmed the principle of limited judicial interference under Sections 346 and 377 of the Arbitration and Conciliation Act, 19968. This judgment reinforced arbitral autonomy by emphasising that courts cannot modify awards but only set them aside under specific statutory grounds.
3. Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd.9: The Court upheld India’s pro-enforcement stance on foreign arbitral awards, limiting the grounds for refusal to those that align with international standards. The judgment underscored the necessity of minimal judicial intervention in enforcing foreign awards.
4. Kalpataru Projects International Ltd. v. Municipal Corpn. of Greater Mumbai10: This case emphasised the need for clarity in arbitration agreements, ruling that ambiguous clauses cannot be interpreted as arbitration agreements under the Arbitration and Conciliation Act, 1996. It serves as a reminder for precise drafting.
Emerging challenges: The roadblocks ahead
Despite these advancements, challenges persist, posing hurdles to India’s ambition of becoming a global arbitration hub:
1. Institutional arbitration versus Ad hoc practices: While institutional arbitration is gaining traction, transitioning from entrenched ad hoc practices remains a significant challenge. The arbitration ecosystem requires sustained support in terms of infrastructure, awareness, and qualified personnel.
2. Enforcement of arbitral awards: Enforcement delays continue to undermine arbitration’s promise of expediency. Frequent challenges under Section 34, coupled with procedural delays, dilute arbitration’s efficacy. As the adage goes, “Justice delayed is justice denied”.
3. Public procurement disputes: Excluding arbitration from public procurement disputes may inadvertently undermine its credibility as a dispute resolution mechanism. A nuanced approach is necessary to ensure that arbitration retains its relevance in this domain.
4. Technological integration: With the global arbitration landscape increasingly embracing technology, India must follow suit. Virtual hearings, AI-driven case management, and digital evidence handling are crucial. However, uniform adoption and digital literacy among practitioners remain barriers.
Arbitration Bar of India: Building a unified front
A significant development in the arbitration ecosystem is the establishment of the Arbitration Bar of India. This professional body aims to bring together arbitration practitioners, fostering collaboration, knowledge sharing, and professional development. By creating a platform for discourse, the Arbitration Bar of India seeks to elevate the standards of arbitration practice and advocate for necessary reforms. Its efforts to promote best practices and ethical standards are expected to strengthen India’s position as a credible arbitration hub. As the Arbitration Bar of India grows, its role in shaping policy and influencing arbitration’s future trajectory will be critical.
International highlights
The year 2024 has been pivotal for international arbitration, marked by significant shifts and innovations that reflect the evolving needs of global commerce and dispute resolution. Arbitral institutions worldwide unveiled rule updates, with the International Chamber of Commerce (ICC) emphasising sustainability in arbitration practices and Singapore International Arbitration Centre (SIAC) introducing enhanced measures for cost-efficient expedited proceedings. Technology continued to play a transformative role, with AI-powered tools for drafting, evidence management, and procedural analytics becoming more widely accepted. The push for greater inclusivity saw tangible results, with arbitral appointments reflecting a more diverse pool of professionals in terms of gender, geography, and expertise. Asia further cemented its position as a key arbitration hub, with Hong Kong and Singapore handling a record number of cases and focusing on regional collaboration. Meanwhile, geopolitical influences, such as the European Union (EU’s) post-Brexit reforms and the ongoing evolution of investment treaty frameworks, reshaped cross-border arbitration dynamics. These developments highlight arbitration’s responsiveness to modern challenges while maintaining its foundational principles of neutrality, efficiency, and flexibility.
My reflections and perspectives
Arbitration is more than a legal mechanism; it is a bridge to resolve human conflicts with dignity and efficiency. Reflecting on the developments of 2024, I am reminded of Kahlil Gibran’s words: “Out of suffering have emerged the strongest souls; the most massive characters are seared with scars”. India’s arbitration journey reflects this resilience, evolving, through challenges, towards a brighter future. As a lawyer, arbitrator, and former Judge, I have witnessed first-hand, the transformative power of arbitration. Yet, laws, however well-drafted, are only as effective as their implementation. The reforms of 2024 provide a roadmap, but their realisation demands a collective commitment from all stakeholders.
Conclusion: Towards a promising future
India’s arbitration ecosystem stands at the crossroads of opportunity and responsibility. As the nation aligns itself with global best practices, the emphasis must remain on fostering trust, ensuring efficiency, and embracing technological advancements. The reforms of 2024 represent a vital step forward, but their true impact will only be realised through sustained efforts from lawmakers, practitioners, and institutions alike. The promise of arbitration lies not just in resolving disputes but in creating a system that upholds justice, integrity, and fairness. As Robert Frost eloquently noted, “The woods are lovely, dark and deep, but I have promises to keep, and miles to go before I sleep”. India’s journey towards becoming a global arbitration hub is far from over, but the milestones achieved in 2024 offer hope and direction.
As we move forward, let us commit to building an arbitration framework that is robust, inclusive, and resilient. By doing so, India will not only strengthen its position on the global stage but also ensure that arbitration becomes a cornerstone of its judicial and commercial systems.
*Arbitration Lawyer and a Former Judge. He is also the Managing Partner of Rishabh Gandhi and Advocates, Pune.
1. Draft Arbitration and Conciliation (Amendment) Bill, 2024.
2. Arbitration and conciliation Act, 1996, Ss. 8, 11.
3. Arbitration and Conciliation Act, 1996, S. 37.
6. Arbitration and Conciliation Act, 1996, S. 34.
7. Arbitration and Conciliation Act, 1996, S. 37.