Arbitration & Alternative Dispute Resolution in India: Issues & Challenges in International Commercial Arbitration

Abstract

Despite the increasing inflow of foreign capital in the Indian economy, India’s potential to attract to attract FDI from the world has not yet been fully trapped most probably due to the lack of an efficient dispute resolution system in the country. Due to the slow pace of the Indian Courts, Indian Arbitration and Conciliation Act 1996 was introduced as a solution to the international commercial settlement disputes in India.

Arbitration law in India is modeled on the UNCITRAL Model of arbitration which empowers the parties to resolve disputes without approaching the Court of Law which has made it the preferred mode of dispute resolution in international commercial transactions of India. The 1996 Act provides choices to the parties in international commercial arbitration for deciding the nature of arbitration like ad hoc arbitration, institutional arbitration, where retired judges of High Courts/ Supreme Courts acts as arbitrators. These dispute resolution methods lacks efficiency due to the lack of ability on part of retired judges to work efficiently, or the time consuming factor where it takes 3-5 years for settlement. Even low fees payable at institutional arbitration to arbitrators is a hindrance in the commercial arbitration, as it does not have good arbitrators working in it.

Furthermore, International arbitration outside India attracts disputing parties to enlist the services outside India. International arbitration outside India can be held under the auspices of institutions like London Court of International Arbitration (LCIA), the ICC International Court of Arbitration (ICC), the American Arbitration Association (AAA), the World Intellectual Property Arbitration (WIPO), the Stockholm Chamber of Commerce and the International Council for Settlement of Investment Disputes (ICSID) which provide procedural rules, fixed arbitration costs, and various support services which are is big issue/challenge for the dispute resolution for Indian contexts. The paper would provide suggestions with respect to Enforcement of Foreign Awards in India, lowering of bias or fraud in dispute resolution.

Keywords: UNCITRAL Model, ad hoc arbitration, institutional arbitration, enforcement of foreign awards