Introduction
In a recent panel during Singapore Convention Week, former Supreme Court Justice L Nageswara Rao addressed the limited visibility of the India International Arbitration Centre (IIAC) and its implications for institutional arbitration in India. The discussion was organized by the Singapore International Arbitration Centre (SIAC) and led by Aditya Singh, a partner at White & Case.
Parliamentary Findings and Trust Concerns
The Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice had conducted an evaluation of the IIAC, noting its limited visibility and usage compared to international arbitral institutions like SIAC, LCIA, and HKIAC. Justice Rao emphasized that the core issue is the lack of trust among legal practitioners and general counsel in Indian arbitral institutions. He stated, “Unless the law firms and the general counsel start improving institutions, suggesting to the parties that, instead of ad hoc arbitrations, we should go to institutional arbitration, things are not going to change.”
Panel Insights
The panel also included insights from former Supreme Court Justice S Ravindra Bhat, Lord Peter Goldsmith KC, Senior Advocate Rajshekhar Rao, and SIAC Director Shwetha Bidhuri. Bidhuri remarked on the challenges of building credibility for a new institution and highlighted the comprehensive efforts needed beyond formulating rules and fees. She noted that SIAC’s reputation was built over 35 years, emphasizing that trust must be earned gradually.
Senior Advocate Rajshekhar Rao critiqued the IIAC’s development strategy, arguing that providing infrastructure and funding without a clear strategy to compete with established centers was insufficient. He pointed out inconsistencies in judicial application of existing arbitration laws as a significant hurdle, rather than the need for new legal frameworks.
Judicial Intervention and Legal Framework
The Parliamentary Committee’s suggestion for clearer guidelines on judicial intervention in arbitration matters was met with skepticism by Senior Advocate Rao, who asserted that India already had a well-developed legal structure for arbitration. He argued that the problem lay in the application of these laws, especially concerning delays in adjudication and enforcement stages.
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Government’s Role in Arbitration Promotion
Lord Goldsmith expressed concerns over the Indian government’s reluctance to utilize arbitration in large public contracts, suggesting this could undermine efforts to establish India as a favorable arbitration hub. He remarked, “If the government genuinely wants to promote arbitration, it’s got to think hard about whether it’s prepared to submit itself to arbitration as well.”
Supreme Court Ruling Impact
The panel also discussed the implications of the Supreme Court’s decision in the Gayatri Balasamy case, which addressed courts’ powers to modify arbitral awards. Justice Bhat noted that the ruling’s impact extends beyond the Supreme Court and High Courts, affecting thousands of lower courts across India. He expressed concern about the potential for inconsistent application, which could affect the perception of arbitration in India.
