Introduction
We are gathered here today — before this August gathering to discuss two nations at the precipice. Economies that are poised at the end of the first quarter of the 21st Century to dominate the next 75 years. Two people — with a rich history, seeped in deep tradition, bolstered by faith — who are set to push the boundaries of technology, modern science, medicine, media, engineering, construction, economy towards the welfare of its people, towards elevation of the human spirit, towards strengthening of human society, towards alleviating the pains of the human condition by creating nations of purpose, of development, of striving, of commerce, of science, of excellence, and of global outreach. And the law stands as the most-important instrument towards that Goa — a conduit to regulate and propel our nations towards this dream. Prime Minister Modi and H.E. Salman bin Abdulaziz Al Saud steer us relentlessly in this pursuit.
The opening up of the Indian and Saudi Arabian economies to the world over the last decades has led to an extraordinary transformation for our people — and for the world.
India-Saudi relationship
During the G20 Summit held in New Delhi in 2023; India, European Union, Saudi Arabia, Italy, France, Germany, the United States (US) came together to sign a memorandum of understanding (MoU) committing to build a ship-to-rail-to-transit network also known as the India-Middle East Economic Corridor (IMEC). This corridor promises to advance trade, exchange of technology, economic collaboration and integration that is fast and cost-efficient. India and Saudi have entered into MoUs on renewable energy, hydrogen, electricity, grid interconnection, petroleum, natural gas, circular economy, combatting climate change through carbon capture, digital transformation and collaboration in artificial intelligence (AI) and cyber security, working on developing qualitative partnerships between the two countries to localise materials, products and services. Saudi’s direct investment in major Indian companies amounts to over United States dollar (USD) 4 billion dollars through Aramco, Saudi Basic Industries Corporation (Sabic), Zamil, Public Investment Fund (PIF), E-Holidays, Al Batterjee Group. In fact, some of India best-startups including On Your Own (OYO), Ola, Grofers, FirstCry, Delivery, Paytm and Policy Bar have received funding from Saudi investors. There are presently around 2782 Indian companies registered either as joint ventures or wholly owned entities of Saudi companies worth approximately USD 2 billion. Major Indian companies including Larsen & Toubro (L&T), TATA, Wipro, Tata Consultancy Services (TCS), Telecommunications Consultants India Limited (TCIL), Shapoorji and Pallonji have a strong presence here.
In Financial Year 2023-2024, Saudi was India’s 5th largest trading partner, with trade reaching nearly 43 billion dollars between us. India imports primarily crude oil and petrochemicals, with Saudi forming over 14% of India’s crude oil import. India on the other hand has been an exporter of textiles, goods, pharmaceutical products.
India-Saudi Arabia opportunities
India is ripe for business; Saudi is ripe for business — energy, mining, tourism, logistics, healthcare, manufacturing, financial services, there is an opportunity for collaboration. Saudi is showing the way with its Vision 2030 Program; building mega projects such as NEOM city and a tourist destination at the Red Sea. India is accelerating towards its 2047 Viksit Bharat mission.
It is time to build together and there is opportunity to galore.
We are 1.4 billion people and, on our way, to overcome Japan and Germany to become the 3rd largest economy by 2030 and 2nd largest by 2047 overtaking the United States. An observable trend that may be mapped in the last decade and that see carrying on for the next two — is the maturing of the Indian economy into a sophisticated, developed, self-reliant, prosperous financial leader.
But what comes with building; what is necessary for trade; what is essential for entrepreneurship — an instrument that allows our business to work towards transformation is a justice delivery system that ensures fairness, propriety, commercial efficiency. A robust arbitration regime permits companies to engage in global business bound by principles that promote business interests, ensures predictability, and proliferates fairness. Today we are gathered here to share knowledge, exchange best practices, and to build up that arbitration regime in our jurisdictions.
India is already engaged in working towards an international investment agreement with Gulf Cooperation Council (GCC) countries which will usher in the system necessary to boost investor confidence necessary to achieve our 2047 goals.
Whilst arbitrating across borders several key problems hamper our growth. First, cross-border projects, joint ventures are in their very nature fraught with jurisdictional challenges of acceding to a tribunal towards enforcement of an award and the countries exercising sovereign powers to deny enforcement of awards. Towards this end I have the following suggestions:
A fundamental problem with cross-border arbitration is restrictions in joinder of non-signatory parties to an arbitration agreement. Which in turn renders any award inapplicable to the non-signatory party which may defeat the very purpose of arbitration in certain cases. To illustrate this problem, an Indian construction company undertaking a project enters into an arbitration agreement with a Saudi company. Now in this dispute, the Indian company that has entered into the agreement is a special purpose vehicle (SPV) and is therefore limited in liability it imposes on the parent company. Now for the purposes of arbitration it is necessary that the parent company of the SPV is impleaded, and an award is enforced against it. How do we resolve this conundrum. Arbitration at its core is reliant on the concept of party autonomy and the choice to bind itself with the proceedings.
I believe the Indian Supreme Court has led the way by incorporating the group of companies doctrine into our jurisprudence and it is my suggestion that all arbitral institutions incorporate into their model-arbitration clauses and States amend into their arbitral regime the rule that a non-signatory to an arbitral proceeding could be impleaded not the arbitration in exceptional circumstances without their being express consent thereof on the non-signatory fulfilling four determinative factors:
(1) First, there is a direct relationship between a signatory party and a non-signatory party.
(2) A direct commonality of subject-matter and the agreement between the party being a composite transaction.
(3) The transaction being of a composite nature where performance of the mother agreement may not be feasible without aid, execution, and performance of supplementary or ancillary agreements for achieving the common object and collectively having a bearing on the dispute.
(4) A composite reference of such parties will serve the ends of justice.
Incorporating this doctrine into arbitration rules and empowering arbitrators and courts to implead non-signatories into arbitrations and bringing them under the jurisdiction of the Tribunal will serve as an excellent tool in increasing the efficacy of arbitration especially with respect to cross-border business transaction disputes. This doctrine will assist in ensuring that companies are not able to defraud their commitments using corporate structures that defeat the ends of justice leading to multiplicity of proceedings and defeating the very purpose of arbitration which is to deliver quick and effective commercial justice.
Second, the perennial struggle with arbitration that spans across-borders — which is common in the spaces of construction, energy and infrastructure is the logjam of justice in which these awards get stuck in. The process of enforcing a foreign award is painful, often runs through multiple tiers of judicial interference and is antithetical to the ends of arbitration. This is true even in investor-State disputes where the process is plagued with delays, international politics is at play.
A solution may lie in creating an “ease of doing investment arbitration” rankings akin to credit ratings and scores or akin to “ease of doing business” rankings. The benefit of this ranking is multifold. For example, this will promote arbitration-friendly legal regimes, promote accountability, incentive to make the arbitration funnel and user experience far more efficient and effective. It allows companies to make more informed decisions, enhances transparency and predictability because it allows them to measure their risk and decide upon the terms based on such risk and its mitigation.
To that effect, we need to establish a Ranking Committee which measures nations on factors inter alia; legal framework, access to arbitration institutions, consistency and clarity of laws and procedures, experience and expertise of arbitral pool, judicial support in enforceability and limiting appeals that frustrate arbitral goals, arbitration costs, etc. Arbitration as an industry is gaining priority for Governments. To that end, having an index for arbitration will inform companies as to where to “seat” the arbitration in the agreement and where conducting business is conducive to commercial ends.
To my friends that head the top corporates in the world and colleagues from Kingdom of Saudi Arabia, I would like to take this opportunity to introduce you to the reforms being brough in India to strengthen are arbitral regime and plug the gaps that will make India an arbitration hub in the coming years and decades.
Draft Arbitration and Conciliation (Amendment) Bill, 2024
The Indian Government in 2024 has proposed a Draft Arbitration and Conciliation (Amendment) Bill, 2024 — that is solidified by best practices and experiences we have taken from our contemporaries that is tailored by our indigenous experiences, that is solidified by the expertise of our Government.
The amendment proposes: statutory recognition of an emergency arbitrator who shall have the power to pass interim measures requiring immediate intervention prior to constitution a full tribunal. We now have a court appeal against refusal to appoint an arbitrator under Section 112 of the Arbitration and Conciliation Act, 19963. Time-limits that have been introduced; 60-day mandate for deciding Section 84 application; 90-day timeline for constituting an Arbitral Tribunal from the day of application under Section 95; 30-day timeline for filing a Section 376; a challenge against the jurisdiction of a tribunal must be decided by the Tribunal in pursuance of the principle of kompetenz-kompetenz within 30 days.
Arbitration institutions have been granted leeway for reduction of arbitrator fees, substitution and extension of the mandate of a tribunal. A checklist has been made requiring arbitrators to include within the award decisions on first-principles issue including party capacity, validity of arbitration agreement, and notice of arbitration. The Amendment Bill introduces a new Appellate Arbitral Tribunal to decide objections against an award which will introduce the necessary structural regime that will dispose of objections to awards with alacrity, efficiency, speed, and technical expertise.
India-Saudi Arabia proposed reciprocal enforcement of awards
I have had the opportunity to stress on the opportunity in India and Saudi Arabia. I have tried to make a case as to why our two counties should be working together towards the realisation of this opportunity. India and Saudi Arabia are signatories to the New York Convention of 19587. Yet, a Saudi award is not directly enforceable in India. Both India and Saudi are signatories to the New York Convention of 1958. Under the Arbitration and Conciliation Act of 1996, Section 448 requires a notification to be made by the Central Government, which upon being satisfied that reciprocal relations in direct enforcement exist may notify a country to have their awards directly enforceable. Towards this end, India has already notified 48 States out of 172 contracting convention countries.
Until such a notification is made, a longer route for enforcement has to be taken — a Saudi award will have to be enforced by a filing a civil suit in a court of competent jurisdiction within 3 years from when the right to apply accrues under Article 1379 of the Limitation Act, 196310.
This will permit a civil court to re-examine evidence and readjudicate the issue. This system is filled with delay and is contrary to the very foundational purpose for which arbitration was designed. It is thus necessary for India and Saudi Arabia to enter the reciprocal relationship in light of the growing trade between the countries and the need to have a faster, efficient and predictable dispute resolution mechanism.
For a notified country, the procedure for enforcement is fairly straightforward. The application for enforcement shall lie in case of money before the Commercial Division of any High Court in India where assets of the party lie shall have jurisdiction. The application shall be governed by the residuary provision in the Limitation Act, 1963 i.e. Article 137 which states that the enforcement shall be barred 3 years from the day the right to apply accrues. The courts will be bound by the limited scope of inquiry under Section 4811 of the Arbitration and Conciliation Act, 1996. An executing Court cannot re-examine the award apart from satisfying whether the award satisfies Section 48. This system is fast and efficient. In fact, under direct enforcement there is only one level of appeal under that is special leave petition under Article 13612 of the Constitution13 to the Supreme Court. Under the long-routed system by a filing suit, an appeal will lie to the High Court, in certain cases towards a Division Bench of the High Court and then finally to the Supreme Court. Notwithstanding powers to file for review, revision and appeals from the final and interlocutory orders. In my opinion, the recent trend of strengthening trade and geo-political relations, make for a strong case for India and Saudi to sit together and create a reciprocal system for direct enforcement — this will be of immense benefit to the trade and business relations between the two countries.
Conclusion
I started this speech by discussing two nations at the precipice, and I want to conclude with the same thought. The world is looking at India and the world is looking at Saudi Arabia — as the big things in business and the big things in geo-politics. As lawyers our role revolves around regulation of business and regulation of affairs of the State. Our people are briming with youth, our Governments are steady, poised with precision; in executing our vision, we are on a mission. It is said that this is the greatest period to be alive in all of human history. We have the best health, the best opportunity, there is freedom in travel, in innovation, in collective growth, in achieving higher human satisfaction and contentment and our two nations are going to lead the way forward, and in so doing, there is a need to build an environment that is conducive to this vision. That environment requires laws that understand the opportunity, that understand the challenges and fosters a regime that helps us achieve our fullest potential.
1. Chair of the Session Speech delivered by Prof. (Dr) Pinky Anand, Fellow of the Chartered Institute of Arbitrators (FCIArb), at the ICA Symposium at Riyadh International Disputes Week 2025 [23.2.25]
2. Arbitration and Conciliation Act, 1996, S. 11.
3. Arbitration and Conciliation Act, 1996.
4. Arbitration and Conciliation Act, 1996, S. 8.
5. Arbitration and Conciliation Act, 1996, S. 9.
6. Arbitration and Conciliation Act, 1996, S. 37.
7. Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
8. Arbitration and Conciliation Act, 1996, S. 44.
9. Limitation Act, 1963, Art. 137.
11. Arbitration and Conciliation Act, 1996, S. 48.
