On 30 July 2017, Justice B.N. Srikrishna, Retired Judge, Supreme Court of India, Chairperson of the HighLevel Committee to Review the Institutionalisation of Arbitration Mechanism in India, submitted his report on the need to institutionalise arbitration mechanisms in India. The Government of India took prompt notice of the report and made the necessary amendments to the Arbitration and Conciliation Act, 1996, which have yet to be notified in order to become operational.

With the amendments to the Arbitration and Conciliation Act 1996 in 2019 and 2022, the Government of India ushered in a new era in India’s arbitration system, which was previously limited to courts and individual choices. Historically, disputes within families and communities have been resolved by elders. In feudal societies, only a few cases were resolved by monarchs or other formal dispute resolution systems. Formal judicial systems, or today’s courts, evolved alongside the development of democracies and other widely accepted forms of government. India is not exempt from this rule. As the rights-based approach to justice delivery gains traction on a global scale, bureaucratic processes stifle access to justice.

The growing burden of over 4.9 crore pending cases in Indian courts has prompted policymakers to consider strengthening alternative dispute resolution (ADR) mechanisms. The institutionalisation of arbitration was expected to bring about a paradigm shift in Indian arbitration jurisprudence, allowing arbitration centres to professionally manage arbitration cases directly from disputants without interference or reference by courts. The only requirement for these institutions to arbitrate a dispute is the existence of an arbitration clause in the disputants’ contracts or their mutual agreement to arbitrate. The Justice Srikrishna committee examined the operations of the International Centre for Alternative Dispute Resolution (ICADR), India’s only international arbitration centre overseen by the Government of India and the Supreme Court of India. This was India’s first International Arbitration Centre, with headquarters in New Delhi and regional centres in Bengaluru and Hyderabad.

The ICADR was established in 1995 under the Ministry of Law and Justice, Government of India, with the goal of promoting alternative dispute resolution methods and providing facilities for them. This was part of a larger agenda to facilitate quick dispute resolution and reduce the burden on courts. The ICADR is a Society registered with the SRA that operates autonomously. No one is aware of ICADR’s presence anywhere in the country, and it is unclear whether it died naturally or was suffocated by private institutions. Arbitration, and more specifically Institutional Arbitration, provides an opportunity for parties to dispute the performance or non-performance of agreed-upon activities under any contract that binds them. Property disputes, financial disputes, partnership disputes, franchise disputes, construction disputes, and any other commercial or business disputes may be arbitrated if a contract includes arbitration as a dispute resolution mechanism.

The arbitration institutions maintain complete confidentiality throughout the procedure. Small and medium-sized businesses, the construction industry, civil contractors, families seeking property division among siblings, and others with arbitrable cases can walk into the offices of Arbitration Institutions and file their cases for arbitration without the assistance of lawyers or advocates, as opposed to litigating. Arbitration preserves time, money, and relationships. Despite much talk about institutionalising arbitration through seminars, workshops, and arbitration weeks, as well as comments from none other than India’s honourable vicepresident that it was becoming an “old boys club,” the speed with which the Act was amended is not evident in its implementation. Section 11(3A) of the Act requests that the High Courts and Supreme Court designate Arbitration Institutions, which remains a nonstarter, and the Arbitration Institutions’ applications are pending with the High Courts for unknown reasons.

Four years after the law was passed, the promised Arbitration Council of India, which would authorise and regulate arbitration institutions, is yet to be fully operational. Except for a small number of Arbitration Institutions founded and funded by well-known law firms, state governments do not provide support for other professionally established Arbitration institutions. Thus, there is an urgent need for the Centre and all High Courts in the country to take note of the Arbitration Institutions operating in each state and designate them as Arbitration Institutions in order to alleviate the much-discussed burden on courts and make India a hub for Alternative Dispute Resolution.

(The writer is former Senior Advisor, United Nations Development Programme.