The Current State of Arbitration in India–Recent Developments

By Arjan Bir Singh Sodhi

CPR’s Arbitration Committee conducted a Sept. 23 Zoom on recent India conflict resolution developments. The session also provided an update on the “CPR Corporate Counsel Manual for Cross-Border Dispute Resolution–India Supplement.” (See the new supplement on CPR’s website at https://bit.ly/3oR6y7l.)

Viren Mascarenhas, a partner in King & Spalding’s London and New York offices who is the India Supplement’s co-editor and CPR Arbitration Committee vice chair, moderated the discussion. The panel included:

  • Tapasi Sil, general counsel–South Asia, GE Renewable Energy, Dehli, India
  • Rishab Gupta, partner, Shardul Amarchand Mangaldas & Co., Mumbai
  • Shaneen Parikh, partner (head-international arbitration), Cyril Amarchand Mangaldas, Mumbai
  • Sanjeev K. Kapoor, partner, Khaitan & Co., New Dehli, India
  • Quentin Pak, director, Burford Capital, Singapore

For more on the panelists’ and the program’s background, see CPR’s website here.

Viren Mascarenhas kicked off the discussion, welcoming the panelists, and updating on the new version of the CPR Corporate Counsel Manual for Cross-Border Dispute Resolution–India Supplement.

Tapasi Sil provided a view on her international work as an in-house counsel, and how business sees the development of India arbitration from her position as GE Renewable Energy counsel. She acknowledged the positive impacts amendments to the Indian Arbitration and Conciliation Act of 1996, but she also noted that business might face strains in using arbitration over time and costs.

Sil also noted a lack of expertise in commercial and technical knowledge required by the current India arbitrators. She said she hoped that India would welcome diversity and inclusion in arbitration in the future, and increase the numbers of women arbitrators.

Panelist Rishab Gupta also addressed the Indian Arbitration and Conciliation Act of 1996, which he said is based on the UNCITRAL Model Law on International Commercial Arbitration (1985). While pointing out many similarities of the Indian arbitration law with other common law jurisdictions, he noted that the law still required multiple amendments due to cultural factors such as:

  • A long history of having only ad hoc arbitration and a lack of institutional arbitration;
  • The need for a more professional arbitration body that focuses on arbitration expertise emphasizing commercial and technical knowledge;
  • A lack of professional arbitrators, and more focus on litigation for dispute resolution;
  • A lack of trust in the arbitration process, which, according to Gupta, is a result of the above three factors, and
  • The frequent move to Singapore as an arbitration seat for most corporate and cross-border disputes.

Shaneen Parikh of Cyril Amarchand Mangaldas covered India’s current Arbitration and Conciliation Act of 1996 amendment. She spoke about the April pro-arbitration judgment from the Indian Supreme Court, citing Justice Rohinton Fali Nariman in PASL Wind Solutions v. GE Power Conversion India (available, after cutting and pasting, at https://bit.ly/2WZpll8), where it was concluded that two Indian parties could choose a foreign seat of arbitration.

The judgment, noted Parikh, upholds a fundamental ADR principle, party autonomy. She also spoke about the interim relief covered in Section 9 (available, after cutting and pasting, at https://indiankanoon.org/doc/1079220) of the Indian Arbitration and Conciliation Act of 1996.

Furthermore, in the PASL Wind Solutions case, India Supreme Court Justice Nariman referred to the Convention on the Recognition and Enforcement of Foreign Arbitral Award, better known as the New York Convention (see www.newyorkconvention.org), to rule that different international commercial arbitration and foreign awards are enforceable. In the decision, Parikh pointed out, Justice Nariman also held that awards considerations should involve the territory involved, not the parties’ nationality.

Parikh concluded her segment of the panel discussion by discussing the need for more institutional arbitration for domestic and foreign matters.

Khaitan’s Sanjeev Kapoor discussed the interim arbitration procedures and how they are being enforced in India. He said that there are three major issues often faced by the Indian courts:

1) interim orders by arbitration tribunals or domestic arbitration institutions;

2) interim orders by emergency arbitrators in India, and interim orders from foreign arbitration tribunals, and

3) challenges to foreign awards, though he added that there are not many challenges when it comes to enforcing domestic awards in India.

Kapoor said that interim relief involves getting the award from a domestic tribunal and then filing an application under Section 9 of the Indian Arbitration and Conciliation Act of 1996. He also discussed PASL Wind Solutions.

Burford’s Quentin Pak shared his thoughts on the Indian capital market and third-party funding. He pointed out three major factors he said he believes are the factors in the increase in the third-party funding of international arbitration proceedings:

1) Singapore and Hong Kong are passing legislation encouraging third-party funding of arbitration.

2) International companies prefer the Singapore International Arbitration Centre over domestic seats, and

3) The Covid-19 pandemic put pressure on corporations’ balance sheets, accelerating the use of third-party funding. 

Pak concluded by talking about the requirement of funding in India-seated arbitrations, and the monetization of India awards because of the size and growth of the Indian market to international investors.

* * *

The author, a CPR 2021 Fall Intern, is an LLM candidate at the Straus Institute for Dispute Resolution, at Malibu, Calif.’s Pepperdine University Caruso School of Law.

[END]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s