Overview
In a recent development, Attorney General R Venkataramani has indicated that the Indian government might re-evaluate its current norms governing participation in arbitration. Speaking at the Gujarat High Court Arbitration Centre (GHAC) Arbitration Week 2026, Venkataramani highlighted discussions with government officials aimed at revisiting these guidelines, which currently restrict government involvement in high-stakes arbitration cases.
Background
In June 2024, the Ministry of Finance issued an Office Memorandum (OM) that necessitated a re-examination of the government’s approach to arbitration. The memorandum pointed out that arbitration processes are often time-consuming and financially burdensome, leading to prolonged litigation even after awards are granted. Consequently, the OM mandated that only disputes exceeding ₹10 crore be considered for arbitration, encouraging the exploration of mediation and negotiation as alternative methods of dispute resolution.
Attorney General’s Remarks
Venkataramani emphasized that the OM is not a fixed statute and can be revised or rescinded by the government. “I have been talking to the government as to have a second look at it so that we have more potential and possibilities of making it more a relaxed set of norms for the government to follow,” he stated during his speech at the GHAC Arbitration Week. He further noted that the legal Bar should play a more significant role in enhancing India’s arbitration system.
The Role of the Bar
Venkataramani highlighted the crucial role of the arbitration Bar in transitioning from ad hoc arbitration to institutionalized dispute resolution. He criticized the legal community for not fully embracing this shift and urged lawyers to become more active participants in the Arbitration Bar of India. Such involvement could help cultivate a robust pool of specialized arbitration practitioners and eliminate barriers to institutional arbitration.
Judicial and Economic Considerations
The Attorney General remarked that the evolution of the arbitration landscape should not be limited to amendments in the Arbitration and Conciliation Act. Instead, it should encompass judicial processes, bar practices, institutional norms, and broader economic factors. He cited the Supreme Court’s expanding role in national governance, equating its influence to that of an alternative policy maker, thus underscoring the importance of judicial contributions to arbitration’s evolution.
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Future Outlook
Venkataramani advised against reducing judicial restraint and government litigation simply for the sake of minimizing disputes, asserting that ethics and accountability should not be compromised. He advocated for a comprehensive 20- to 30-year roadmap to guide India’s engagement with both domestic and international arbitration, aligning with its evolving status in the global economy.
He concluded by stressing that India’s arbitration regime must adapt to its growing role as an exporter of capital, which entails addressing international disputes arising from this shift.
