Explainer
India’s arbitration scene has been evolving of late but a large chunk of India-related disputes involving international companies are still being resolved overseas, including recently high-profiles ones featuring Amazon, Vodafone and Cairn Energy. For example, data shows that India is top of the list of countries using the Singapore International Arbitration Centre (SIAC). Lawyers feel that there are certain obstacles that domestic arbitration centres need to overcome before they can challenge their overseas counterparts. 

 

WHY DO FOREIGN VENUES REMAIN ATTRACTIVE?

While there is no specific answer as to why foreign venues are more attractive, Thriyambak Kannan, founding partner at Assentio Legal, says that as there is a tendency for Indian clients to nominate retired high court or Supreme Court judges as arbitrators, and this tends to limit the availability of arbitrators to resolve a dispute. “The availability of a larger pool of arbitrators, including retired judges, along with barristers and QC’s, some of whom take mandates to act only as arbitrators, including those who have experience and exposure to cross border foreign and international arbitrations, makes Singapore or London an attractive location,” he says.

He also believes that the Indian government needs to ensure that the Commercial Division of the respective High Courts and the Commercial Courts in the district courts are as efficient as the arbitration process itself. “There is no merit in having an arbitration completed in nine months only to wait for years to have a challenge to the award heard, which then travels through the appellate judicial process to reach finality for years together,” he notes.

WHAT CAN BE DONE TO MAKE INDIAN CENTRES MORE APPEALING?

Lawyers suggest a variety of measures that can be taken. Some recommend that the time taken in India to resolve cases can be shorter, while others propose that private matters and issues pertaining to the government should be dealt with differently.

One recommendation from Kannan is that institutions like DIAC and IDAC India should empanel arbitrators of calibre and diverse expertise, and have these empanelled lists made public. He adds, “The list cannot be generic to simply say, judges of various high courts and the Supreme Court of India and senior advocates, since that is as good as not having any list.”

He also notes that awareness needs to be imparted like a court, where the procedural law is well known and binding on the parties. For example, an administrative process which is undertaken by the court’s registry, and a cost that is certain and not open to fluctuations. Such points of certainty can come only with institutional arbitration over ad hoc arbitration, he claims.

Another factor that might help is the setting up of a national arbitration centre for India. In a place like Singapore, which is a city-state, SIAC has applicability on a national basis, while LCIA has established itself as the leader in England, with CIArb as another major alternative. But in India, “there is a likely scenario where DIAC, IDAC and MCIA, along with other institutions, would end up competing with each other before being able to stabilise the idea of an institutional arbitration,” Kannan notes. “While competition is welcome, it may also be a deterrent for a client to choose one institution over another.”

ARE THERE ANY OTHER BEST PRACTICES OF OVERSEAS ARBITRATION CENTRES THAT CAN BE EMULATED?

Kannan feels there are a few practices of international arbitration centres that can be emulated. Adherence to timelines, efficiency of procedure, and overall precision of the award are some procedures that Indian arbitration centres can learn from their counterparts.

 

To contact the editorial team, please email ALBEditor@thomsonreuters.com.

Related Articles

Rajah & Tann plans China expansion with arbitration partner hire

by Nimitt Dixit |

Leading Singapore law firm Rajah & Tann has added international arbitration attorney Hew Kian Heong as a partner in its China office, as the firm looks to deepen its China capabilities following the signing of an upgraded trade pact between PRC and Singapore.

Arbitration Ambitions

by Sarah Wong |

In recent years, the Japanese government has been enhancing the country's image as a preferred choice for international arbitration and dispute resolution. The latest steps include modernising the Arbitration Act to match international practice. Lawyers share how effective the legislation can be and what more the government should do to support Japan's arbitration ecosystem.      

CFA Framework to Give SG Another Arbitration Advantage

by Elizabeth Beattie |

In early November, the Singapore Parliament tabled a bill to allow for conditional fee arrangements (CFAs) in select legal proceedings. According to the Straits Times, the bill proposes amendments to the Legal Profession Act which will provide a framework for lawyers to enter into conditional fee agreements with their clients in certain proceedings.