INTRODUCTION
India’s objective of becoming a leading centre for international commercial arbitration has progressed significantly because of recent reform legislation by the Government of India that allows less interference by the judiciary, so as to expedite dispute resolution and provide a sense of certainty in contract performance for international investors through a consistent legal framework. A jurisdiction is generally considered “pro-arbitration” where its courts respect party autonomy, exercise minimal curial intervention in the arbitral process, and enforce arbitral awards in a predictable and timely manner. However, despite this development, the Indian judiciary has exhibited an uncertain and often conflicting philosophy regarding its attitude towards arbitration; in certain instances, the Indian judiciary has expressed its support for arbitration, but then interferes in the tribunal’s abilities to resolve disputes, thereby continuing to undermine the very objective the reforms were meant to achieve.
THE LEGISLATIVE JOURNEY: A PRO-ARBITRATION TRAJECTORY
The Arbitration and Conciliation Act of 1996 (Act) was India’s first statute dealing with arbitration (domestically and internationally) and was based on the UNCITRAL Model Law, which demonstrated India’s early commitment to international best practices in arbitration. Unfortunately, the law itself was undermined by extensive judicial intervention into arbitration through the courts’ ability to interfere with arbitral processes and awards based on the widely construed grounds of “public policy” and “patent illegality,” resulting in much uncertainty regarding the enforceability of arbitral awards in India.[1]
The 2015 amendment was designed to create clarity as to the enforceability of arbitral awards and to create an easier path to arbitral enforcement by creating clearly defined statutory grounds for challenging awards, imposing stringent timelines for ruling on such challenges, establishing the district courts as the exclusive forum in which such challenges would proceed, and creating an expedited timeframe for the appointment of arbitrators.[2]
The public policy ground for challenging awards has been further clarified by the 2019 amendment through the enactment of the Empowerment Act that establishes the Arbitration Council of India and creates an expedited process for arbitration.[3]
The Draft Arbitration & Conciliation (Amendment) Bill, 2024, introduced in October 2024, will be another major step forward as a result of the recommendations made by an Expert Committee, headed by former Law Secretary, Dr T.K. Viswanathan, for improving arbitration processes. Among the proposals made in this draft legislation are: limiting the use of Section 9 to pre-arbitration and post-award; formal recognition of emergency arbitration; establishment of an Appellate Arbitral Tribunal (AAT) in a new Section 34A; and finding ways to eliminate jurisdictional confusion surrounding the terms “place” and “seat” for arbitration proceedings.[4]
JUDICIAL RESTRAINT: THE PRO-ARBITRATION SIGNALS
The ruling of the S.V. Samudram v. State of Karnataka by the Supreme Court further emphasised that Judicial Review of Awards governed by sections 34 and 37 of the Act is to be undertaken only to the extent permitted by statutory parameters, and that the courts will not have jurisdiction to amend or alter any award. This again reinforces the finality of arbitral awards, limits continuing post-award litigation, and provides comfort to investors that they will not have an ongoing forum for recourse after an award is made.[5]
The most recent significant judicial development has been the decision dated April 25, 2025 in Gayatri Balasamy v. ISG Novasoft Technologies. In that case, the Five-Judge Constitution Bench found by a 4:1 majority that the power of the Indian Courts to amend an arbitral award is very limited and can only be exercised in the limited circumstances set out in the decision. This ruling clarified the parameters within which courts may intervene, thus reducing uncertainty of enforcement, and signalling to prospective international investors that the Indian judiciary is adopting a more measured and predictable approach consistent with global arbitration practices.[6]
THE OTHER SIDE: WHERE JUDICIAL OVERREACH PERSISTS
The Supreme Court, exercising curative jurisdiction in DMRC Ltd. v Delhi Airport Metro Express (P) Ltd., is an example. In that case, the Court referred to its exceptional curative authority granted under the Constitution to annul an arbitral award that had already been rendered more than seven years before the decision (i.e. five rounds of proceedings challenging the award) and conducted an extensive review of the merits and a reexamination of evidence in what could be interpreted as an appellate-level review of the arbitrators’ findings. The Court advised that the curative jurisdiction should not be used as a general rule; however, the very fact that it was invoked sends a troubling message to users of arbitration.[7]
Anti-arbitration injunctions are yet another source of problems for users of an arbitration process. For example, in Engineering Projects (India) Ltd. v MSA Global LLC, the Delhi High Court imposed an injunction prohibiting a Singapore-seated ICC arbitration, exercising supervisory jurisdiction over a foreign-seated arbitration proceeding already on challenge before the arbitrators, the ICC court and the supervisory court at the seat.[8]
Delays in disposing of Section 34 petitions present a structural problem that the legislative reforms have yet to adequately address. As of September 2023, over 2,106 Section 34 petitions were pending before the Delhi High Court alone, with the average disposal time exceeding 1,327 days, roughly 3.5 years.[9]
THE 2024 DRAFT BILL: PROMISES AND PITFALLS
Concerns have been raised about many aspects of the Draft Arbitration and Conciliation (Amendment) Bill, 2024, despite it being an ambitious piece of legislation. The proposed Appellate Arbitral Tribunal (“AAT”) is one example where its innovation as an appeal mechanism from arbitration has drawn criticism. Allowing parties to appeal before seeking recourse from a court, and providing them with two options for doing so via Section 34, with either the court or the AAT, may complicate matters by adding yet another layer of delay through two possible venues for failed arbitration, potentially resulting in further delays to resolution.[10]
The proposed reduction in the limitation period for appointing an arbitrator from three years (currently provided under Article 137 of the Limitation Act) to a maximum of 60 days raises concerns about the feasibility of such a timeframe for complex multi-party disputes.
It is encouraging to see some institutional progress in support of ADR practices and institutions in India. For example, the establishment of a professional association for arbitration practitioners with the launch of the Arbitration Bar of India in May 2024, along with the opening of the newly created office of the Permanent Court of Arbitration (PCA) in New Delhi in September 2024, are two notable examples of increased institutional development of arbitration within India. However, the issuance of guidelines prohibiting arbitration and promoting mediation in June 2024 by the Indian Ministry of Finance for all domestic public procurement dispute resolutions demonstrates that supportive institutional support for arbitration does not appear to be consistent throughout the government.[11]
IS INDIA REALLY PRO-ARBITRATION?
The overall trend is that India is headed toward being pro-arbitration; however, the progress is inconsistent. The legislative mandate is clear and commendable, as illustrated by the 2015 reforms, the amendments made to the 2019 legislation, and now the introduction of the Draft Bill (2024), all signalling sustained effort by the political branches of the government to reduce judicial interference, promote institutional arbitration, and be consistent with the international standards for arbitration law. However, the implementation of this desire to support arbitration has not been uniformly applied.
The problem of long backlogs at court locations is one reason why there continue to exist serious challenges related to granting Section 34 relief for many years. There must be a comprehensive transformation of the Indian judiciary, where the approach to granting injunctions restraining pending proceedings is the expected, or default, position, rather than one that occurs due to unusual circumstances. In addition to changing the judicial culture for adopting restraint during the arbitration process, the Indian arbitration system requires enhanced credibility, which will rely on improved abilities by arbitral institutions to manage cases effectively and for arbitrators to adopt internationally recognised best practice standards.
CONCLUSION
India stands at a crossroads in its arbitration history. The legislative foundation for a pro-arbitration system exists, and the Supreme Court has recently issued several opinions that uphold the finality of arbitral awards. As a consequence, however, there is significant inconsistency in how courts respond to arbitration, including the availability of both curative and anti-arbitration relief, to the point where many believe that India has yet to fully change from aspirations about arbitration to actual assurance that arbitration will be utilised. Ultimately, the success of arbitration practice in India will be contingent on the ability of the country’s courts, legislatures, and arbitral institutions working together to establish a level of trust that is necessary for it to be considered a successful international arbitration jurisdiction.
Author: Sudhiksha Vutukuri (Mahindra University, Hyderabad)
References:
- Arbitration and Conciliation Act, 1996.
- Baker McKenzie, ‘International Arbitration Yearbook 2024–2025: India’ (2025) https://www.globalarbitrationnews.com/2025/01/01/baker-mckenzie-international-arbitration-yearbook-2024-2025-india/
- ‘Balancing Efficiency and Fairness: A Critical Analysis of India’s 2024 Arbitration Reforms’ (IJIRL, February 2025) https://ijirl.com/wp-content/uploads/2025/02/BALANCING-EFFICIENCY-AND-FAIRNESS-A-CRITICAL-ANALYSIS-OF-INDIAS-2024-ARBITRATION-REFORMS.pdf
- Chambers and Partners, ‘International Arbitration 2025: India — Trends and Developments’ https://practiceguides.chambers.com/practice-guides/international-arbitration-2025/india/trends-and-developments
- Chambers Expert Focus, ‘Arbitration Law Overhaul: Key Hits and Misses’ (2024) https://chambers.com/legal-trends/indias-arbitration-law-overhaul
- Kluwer Arbitration Blog, ‘2024 Year in Review: Arbitration in India – Reset or Rewind?’ (15 February 2025) https://legalblogs.wolterskluwer.com/arbitration-blog/2024-year-in-review-arbitration-in-india-reset-or-rewind/
- Legal 500, ‘Indian Courts and Arbitration in 2025: Reinforcing Judicial Restraint in Arbitral Proceedings’ (2025) https://www.legal500.com/developments/thought-leadership/indian-courts-and-arbitration-in-2025-reinforcing-judicial-restraint-in-arbitral-proceedings/
- SCC Online Blog, ‘Indian Arbitration Laws in 2024: Key Reforms, Landmark Judgments, and Emerging Challenges’ (14 January 2025) https://www.scconline.com/blog/post/2025/01/14/indian-arbitration-laws-in-2024-key-reforms-landmark-judgments-and-emerging-challenges/
- Stewarts Law, ‘India’s Arbitration Landscape in 2024: A Timeline of Key Judgments and Insights’ (5 March 2025) https://www.stewartslaw.com/news/indias-arbitration-landscape-in-2024/
- White & Case LLP, ‘Keeping up with the times: The Government of India proposes new arbitration law reforms’ (18 November 2024) https://www.whitecase.com/insight-alert/keeping-times-government-india-proposes-new-arbitration-law-reforms
[1] Arbitration and Conciliation Act, 1996.
[2] White & Case LLP, ‘Keeping up with the times: The Government of India proposes new arbitration law reforms’ (18 November 2024).
[3] SCC Online Blog, ‘Indian Arbitration Laws in 2024: Key Reforms, Landmark Judgments, and Emerging Challenges’ (14 January 2025).
[4] White & Case LLP, ‘Keeping up with the times: The Government of India proposes new arbitration law reforms’ (18 November 2024).
[5] Legal 500, ‘Indian Courts and Arbitration in 2025: Reinforcing Judicial Restraint in Arbitral Proceedings’ (2025).
[6] Stewarts Law, ‘India’s Arbitration Landscape in 2024: A Timeline of Key Judgments and Insights’ (5 March 2025); Kluwer Arbitration Blog, ‘2024 Year in Review: Arbitration in India – Reset or Rewind?’ (15 February 2025).
[7] Chambers and Partners, ‘International Arbitration 2025: India — Trends and Developments’.
[8] Chambers Expert Focus, ‘Arbitration Law Overhaul: Key Hits and Misses’ (2024).
[9] Baker McKenzie, ‘International Arbitration Yearbook 2024–2025: India’ (2025).
[10] ‘Balancing Efficiency and Fairness: A Critical Analysis of India’s 2024 Arbitration Reforms’ (IJIRL, February 2025).
[11] Kluwer Arbitration Blog, ‘2024 Year in Review: Arbitration in India – Reset or Rewind?’ (15 February 2025).
