Context:
The Arbitration Council of India (ACI), proposed under the Arbitration and Conciliation (Amendment) Act, 2019, has not yet been constituted, raising questions about India’s push toward institutional arbitration reforms.
Key Highlights:
- Legislative Background
- Based on recommendations of the Justice B.N. Srikrishna Committee (2017).
- Intended to promote institutional arbitration.
- Part of reforms to make India a global arbitration hub.
- Functions of ACI (Proposed)
- Grading arbitral institutions.
- Recognizing professional arbitrator bodies.
- Maintaining a repository of arbitral awards.
- Standard-setting and capacity building.
- 2024 Amendment Bill
- Redefines “arbitral institution.”
- Expands role of institutions.
- Reduces scope for judicial intervention.
- Enhances powers of emergency arbitrators for interim relief.
- Concerns
- Perceived lack of institutional independence due to government role in appointments.
- Delay undermines reform credibility.
- Exclusion of foreign legal professionals may reduce global competitiveness.
- Significance
- Impacts India’s attractiveness as a seat of arbitration.
- Crucial for improving ease of doing business.
Relevant Prelims Points:
- Arbitration – Alternative Dispute Resolution (ADR) mechanism.
• Institutional vs Ad hoc Arbitration.
• Arbitration and Conciliation Act, 1996.
• Role of emergency arbitrators.
Relevant Mains Points:
- GS 2 – Polity & Governance
- Need for independent regulatory institutions.
- Judicial reforms and dispute resolution efficiency.
- Reducing court backlog through ADR.
- GS 3 – Economy
- Investor confidence and contract enforcement.
- Arbitration as tool for commercial dispute resolution.
- Way Forward
- Expedite constitution of ACI.
- Ensure autonomy and professional credibility.
- Encourage international best practices.
- Allow broader global participation.
UPSC Relevance:
Prelims – ADR mechanisms, Arbitration Act provisions.
Mains – Judicial reforms, institutional independence, ease of doing business.