International Commercial Arbitration at India
Here’s a detailed overview of International Commercial Arbitration in India:
1. Legal Framework
India’s arbitration is governed by the Arbitration and Conciliation Act, 1996, which is largely based on the UNCITRAL Model Law on International Commercial Arbitration (1985).
The Act covers both domestic and international arbitration.
India is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, ensuring enforcement of foreign awards.
The 2015 and 2019 amendments to the Act have significantly streamlined arbitration procedures and reduced court intervention.
2. Definition of International Commercial Arbitration
The Act defines international commercial arbitration as arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered commercial under Indian law, and where:
At least one party is foreign, or
The place of arbitration is outside India, or
The place of performance of the contract is outside India, or
The contract is governed by a foreign law.
3. Arbitration Agreement
Must be in writing and can be an arbitration clause within a contract or a separate agreement.
Indian law supports party autonomy to decide on procedural rules, venue, number of arbitrators, language, and governing law.
The Supreme Court of India strongly supports enforcement of arbitration agreements.
4. Arbitration Procedure
Parties may adopt institutional rules (e.g., ICC, SIAC, LCIA, NANI) or ad hoc procedures.
The Act prescribes timelines for appointment of arbitrators and completion of arbitration.
Courts have a limited role and are generally supportive of arbitration, including appointing arbitrators if parties fail to agree and enforcing interim measures.
5. Role of Indian Courts
Courts are supportive but intervene only when necessary, such as:
Granting interim relief.
Assisting in the appointment of arbitrators.
Enforcing arbitration agreements by staying court proceedings.
Reviewing arbitral awards only on limited grounds (e.g., procedural irregularity, public policy violation).
The Supreme Court has clarified that courts must minimize interference in arbitration.
6. Enforcement of Arbitral Awards
Both domestic and foreign arbitral awards are enforceable in India.
Enforcement of foreign awards follows the New York Convention.
Grounds for refusal to enforce awards are limited and strictly construed.
The 2015 amendments introduced fast-track arbitration and provisions for challenging awards within a limited scope.
7. Institutional Arbitration in India
Several arbitration institutions operate in India:
NANI (Nani Palkhivala Arbitration Centre), Mumbai.
Mumbai Centre for International Arbitration (MCIA).
Delhi International Arbitration Centre (DIAC).
International institutions like ICC, SIAC, and LCIA are also popular choices for parties.
8. Advantages of Arbitration in India
Increasing judicial support and pro-arbitration stance.
Modern and internationally harmonized arbitration law.
Growing institutional arbitration infrastructure.
India’s strategic location and cost advantages for arbitration.
Summary
India offers a robust, UNCITRAL-based legal framework for international commercial arbitration under the Arbitration and Conciliation Act, 1996, supported by progressive judicial interpretation and institutional growth. Enforcement of awards is reliable under the New York Convention, making India a preferred seat or applicable law for international arbitration in the region.
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