India’s arbitration reforms over the past decade have been directed, in substantial part, towards a single objective, i.e., establishing India as a credible and preferred seat for domestic and international commercial arbitration.
The Arbitration and Conciliation (Amendment) Act, 2019 was intended to advance that objective by introducing a dedicated statutory body, the Arbitration Council of India (“ACI”), charged with promoting institutional arbitration, improving professional standards and strengthening the arbitration ecosystem as a whole.
More than five years after the amendment, the Council has not commenced functioning. The position is not merely one of an institution awaiting constitution. It illustrates a more general proposition regarding arbitration reform in India: statutory architecture, however well conceived, does not by itself produce institutional change.
The Statutory Mandate of the ACI
The 2019 Amendment inserted Part IA into the Arbitration and Conciliation Act, 1996, comprising Sections 43A to 43M. Part IA constitutes the ACI as a national-level body, consisting of a Chairperson, government representatives, nominees of arbitral institutions and experts in arbitration and commercial law.
The functions conferred on the Council extend well beyond the administration of individual disputes. Under Part IA, the ACI is, inter alia, charged with grading arbitral institutions on the basis of specified criteria, recognising professional institutes for the accreditation of arbitrators, promoting arbitration, mediation, conciliation and other forms of alternative dispute resolution, conducting training, workshops and professional development programmes for arbitrators, encouraging and facilitating research in arbitration and allied fields, and maintaining a depository of arbitral awards made in India and abroad.
The statutory design is aimed at introducing transparency, consistency and accountability into the institutional environment surrounding arbitration, rather than confining reform to the procedural conduct of individual references.
The absence of a functioning ACI has not prevented arbitration from continuing in India. Parties continue to constitute arbitral tribunals, courts continue to exercise supervisory jurisdiction under the Act and existing arbitral institutions continue to administer proceedings. That does not mean the non-constitution of the Council is without consequence.
Indian arbitration continues to contend with delay, procedural inconsistency, limited institutionalisation and uneven standards across arbitral institutions, the very concerns Part IA was designed to address.
In the absence of a statutory grading mechanism under Section 43I, there exists no uniform, publicly available framework by which arbitral institutions may be evaluated on objective criteria. Parties are consequently left to assess institutional competence and infrastructure on an ad hoc basis.
The accreditation framework for arbitrators contemplated under Section 43J has similarly not materialised. Party autonomy in the selection of arbitrators remains, and must remain, unaffected; a credible accreditation mechanism would nonetheless have assisted in identifying arbitrators possessing the requisite legal, technical or sectoral expertise for a given reference.
The absence of the award depository contemplated under Section 43K further limits the availability of organised institutional data. Nothing in that provision compromises the confidentiality of individual awards; properly anonymised data on award timelines and procedural outcomes would, however, have been of material assistance to policymakers and researchers in identifying systemic difficulties within the arbitration framework.
Part IA thus remains a statutory scheme without an operating institution, leaving a gap between the legislative conception of institutional arbitration and the mechanisms currently available to give effect to it.
The Way Forward
The Parliament has amended the Act on repeated occasions to address judicial intervention, statutory timelines, enforcement of awards, interim measures and the appointment of arbitrators. These amendments have contributed materially to the development of arbitration law in India. Legislative amendment, however, is not a substitute for institutional reform.
A mature arbitration jurisdiction requires, in addition to a sound statutory framework, functioning institutions, trained professionals, reliable administrative systems and the confidence of commercial parties in those systems. Part IA was intended to supply precisely this institutional infrastructure and to support the transition of Indian arbitration from a predominantly ad hoc practice towards a stronger institutional culture.
The continued non-constitution of the ACI demonstrates the limits of reform effected through legislative text alone. A statutory body that exists only on the statute book cannot grade institutions, accredit arbitrators, conduct training or promote consistent standards. The deficiency, on this analysis, does not lie in the legislative identification of what Indian arbitration requires institutionally; Part IA identifies the requirement with reasonable precision. The deficiency lies in the absence of any mechanism translating that legislative intent into an operating body.
The introduction of the ACI reflected a legislative recognition that the challenges confronting Indian arbitration could not be resolved through amendments to court-facing provisions and arbitral timelines alone. Part IA sought to address the institutional foundations of arbitration by establishing standards for arbitral institutions, arbitrators, training and research.
Those objectives remain unrealised because the body entrusted with their implementation has not become operational. The benefits contemplated under Part IA, like institutional grading, professional accreditation and a national depository of awards, accordingly remain unavailable in practice, notwithstanding their presence in the statute.
India’s ambition to be recognised as a leading arbitration jurisdiction will be assessed not only by reference to the reforms it enacts, but by the institutions it succeeds in building.
The Arbitration Council of India remains one such institution: constituted in law, but yet to be constituted in fact.