INDIA Trends and Developments Contributed by: Amit Mishra and Mitakshara Goyal, Svarniti Law Offices
• it replaces the term “place” with “seat”, to clarify the distinction between the juridical seat and the physical venue of arbitration; • it aims to reduce judicial intervention, and pro - poses limiting the scope of Section 9 interim relief to pre-arbitration and post-award stages, thereby stopping courts from intervening when arbitration proceedings are ongoing; • it formally recognises emergency arbitration, allow - ing institutions to appoint emergency arbitrators and enforcing their orders as binding; • it introduces appellate arbitral tribunals through a new Section 34A, which would allow parties to challenge arbitration; • it introduces strict timelines such as a 60-day window in which to file specific appeals, and man - dates expedited decisions on preliminary issues like jurisdiction and referral to arbitration; and • it updates definitions to explicitly accommodate electronic and online arbitration proceedings. Permanent Court of Arbitration (PCA) The PCA opened its representative office in New Delhi in September 2024. This is the PCA’s first office in India and marks a pivotal step in reinforcing India’s arbitration infrastructure, reflecting the government’s broader agenda to promote institutional mechanisms over ad hoc dispute resolution. The presence of the PCA is expected to facilitate investor-state dispute settlement cases, such as those under the new India– UAE bilateral investment treaty, by providing neutral ground for administering arbitrations. It also signals international confidence in India’s legal environment and reduces the need for cross-border parties to con - duct proceedings abroad, thereby elevating India’s status as a global arbitration hub. Arbitration Bar of India (ABI) The ABI is a professional association of arbitration lawyers and experts, which was formally inaugurated on 11 May 2024 in New Delhi, and has launched a major initiative to address critical gaps in the arbitral ecosystem. It has constituted five focused task forces, each dedicated to a core area of reform: • Task Force I: Conduct of Arbitration – Code of Eth - ics; • Task Force II: Construction Arbitration Protocol;
• Task Force III: Reforms in Investment Treaty Arbi - tration; • Task Force IV: Inclusion and Diversity in Arbitrator Appointments; and • Task Force V: Use of Artificial Intelligence and Technology in Arbitration. This initiative represents a systematic effort to address structural gaps within India’s arbitral framework. The ABI’s efforts lay the groundwork for measurable, domain-specific reforms within the arbitral process. New government guidelines may undermine arbitration in public contracts The Supreme Court used its curative jurisdiction in DMRC v DAMEPL and set aside a INR3,000 crore arbitral award over a public-private partnership (PPP) dispute. This triggered widespread backlash. The ruling has introduced a protectionist bias that treats payouts from public entities to private parties with suspicion, even when legally mandated. It estab - lishes a public sector-specific ground to resist arbitral enforcement. If sustained, it could destabilise PPPs, discouraging private investment in infrastructure pro - jects and weakening confidence in India’s arbitration regime. In response, the Ministry of Finance issued a noti - fication discouraging arbitration in large public pro - curement contracts, and instead promoting mediation under the Mediation Act, 2023. The following two key recommendations stand out. • Arbitration should not be the default clause in pub - lic procurement contracts, especially large ones. For disputes above IR10 crore (approximately USD1.1 million), arbitration can only proceed with prior approval from competent authorities. • Government entities are encouraged to resolve disputes through mediation under the Mediation Act, 2023. While this could discourage private sector investment in key infrastructure projects involving the govern - ment, its effect on foreign investors is yet to be seen.
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