Arbitration Council of India and arbitration reforms

Nearly six years after the 2019 amendments to the Arbitration and Conciliation Act, 1996, the Arbitration Council of India (ACI) has not yet been constituted by the Union government.

ACI envisaged as the central regulatory and promotional body for arbitration in India.

Based on recommendations of the High-Level Committee on Arbitration chaired by Justice B.N. Srikrishna (Report submitted in July 2017).

Grading arbitral institutions in India.

Recognising professional bodies that accredit arbitrators.

Maintaining a repository of arbitral awards made in India.

Advising the government on arbitration policy and reforms.

Chairperson appointed by the Union government in consultation with the Chief Justice of India.

Chairperson eligibility:

• Former Supreme Court judge

• Former Chief Justice or judge of a High Court

• Eminent arbitration expert

Includes ex officio members from the executive.

Majority of members are appointed or nominated by the Union government.

Raises concerns because:

• The government is India’s largest litigant.

• Regulatory control over arbitration may undermine neutrality and party autonomy.

Unlike Singapore and Hong Kong, where:

• Arbitration is managed by single, centralised arbitral institutions.

India proposes a government-led regulator overseeing multiple institutions, which:

• Has little precedent in arbitration-friendly jurisdictions.

Released on October 18, 2024 for public comments.

As of March 2025, the Bill is still under consideration, as stated by Arjun Ram Meghwal.

Defined as a body that:

• Conducts arbitration under its own procedural rules, or

• As agreed by parties.

Departure from 2019 framework, which required designation by the Supreme Court or High Courts.

Powers currently exercised by courts to be transferred to arbitral institutions:

• Extension of time for making arbitral awards

• Reduction of arbitrators’ fees for delay attributable to tribunal

• Substitution of arbitrators

Objective:

• Reduce judicial intervention

• Strengthen institutional arbitration

Courts’ power to grant interim relief to be limited to:

• Before arbitration commences, or

• After arbitral award is rendered

Excludes the period during arbitral proceedings.

Existing rule:

• Arbitration must commence within 90 days from court granting interim relief.

Proposed rule:

• 90-day period begins from date of filing application for interim relief.

Aim:

• Prevent delays caused by prolonged pre-arbitration court proceedings.

Introduces emergency arbitration.

Parties may seek interim measures from an emergency arbitrator:

• After commencement of arbitration

• Before constitution of the arbitral tribunal

India continues to be dominated by ad hoc arbitration, mainly due to:

• Preference for procedural autonomy

• Lack of trust in domestic arbitral institutions

Building institutional credibility and independence is essential for:

• Competing with global arbitration hubs

• Attracting international commercial disputes