Chief Justice of India Surya Kant expressed serious concern over the continued non-constitution of the Arbitration Council of India (ACI), pointing out that although Parliament created the statutory body through the Arbitration and Conciliation (Amendment) Act, 2019, it has still not been established more than six years later. Addressing a gathering at an arbitration conference, the Chief Justice observed that the gap between legislative intent and actual implementation has created a "credibility deficit" that undermines India's aspiration to become a preferred global seat for arbitration. He emphasized that enacting progressive legislation alone is insufficient unless the institutions contemplated by those laws are established and made operational without undue delay.
The Chief Justice noted that India has made substantial progress in reforming its arbitration framework over the past decade through successive legislative amendments and judicial interventions aimed at making arbitration faster, more efficient, and internationally competitive. Amendments to the Arbitration and Conciliation Act have sought to reduce excessive court interference, streamline arbitral proceedings, promote institutional arbitration, and improve the enforceability of arbitral awards. Despite these reforms, he observed that important institutional gaps continue to hinder India's emergence as a globally trusted arbitration destination.
A central focus of the Chief Justice's remarks was the Arbitration Council of India, a statutory body envisioned by Parliament to regulate and strengthen the country's arbitration ecosystem. Under the 2019 amendment, the Council was expected to grade arbitral institutions, develop standards for accreditation of arbitrators, promote institutional arbitration, encourage professional training, formulate best practices, and improve the overall quality of arbitration in India. However, despite these statutory objectives, the Council has yet to be constituted, leaving a significant institutional vacuum within India's arbitration framework.
Justice Surya Kant observed that this prolonged delay sends an undesirable message to both domestic and international investors. He remarked that if India seeks to position itself as a preferred jurisdiction for resolving commercial disputes, there must be confidence not only in its laws but also in its ability to implement those laws effectively. According to him, credibility in international commerce depends upon certainty, predictability, and institutional reliability. A statutory body remaining non-functional for years after its creation weakens confidence in the country's commitment to arbitration reform.
The Chief Justice specifically pointed out that many Indian parties continue to choose Singapore and other foreign jurisdictions as the seat of arbitration despite the significant improvements made to India's arbitration legislation. He suggested that this preference cannot be explained merely by legislative provisions but is also influenced by the strength of institutional infrastructure, administrative efficiency, and confidence in arbitration institutions. Building comparable institutional capacity within India, he said, remains an essential requirement if the country is to compete effectively with established international arbitration centres.
Referring to further proposed reforms, the Chief Justice noted that a Draft Arbitration and Conciliation (Amendment) Bill, prepared on the basis of the recommendations of the Expert Committee chaired by Dr. T.K. Viswanathan, was released for public consultation in October 2024. However, he observed that the draft legislation has not yet been enacted. Expressing optimism, he said he hoped that the revised Bill would soon be introduced and considered by Parliament so that the next phase of arbitration reforms could move forward without further delay.
Justice Surya Kant emphasized that India's ambition of becoming a leading international arbitration hub requires much more than periodic statutory amendments. According to him, an effective arbitration ecosystem depends upon the combined strength of legislation, professional institutions, trained arbitrators, efficient administrative mechanisms, technological innovation, and consistent judicial support. Unless these components function together, legislative reforms alone may not be sufficient to attract high-value international commercial disputes to India.
The Chief Justice also highlighted the importance of institutional arbitration over ad hoc arbitration. Well-functioning arbitral institutions provide administrative support, standardised procedures, transparent appointment mechanisms, trained personnel, and greater confidence for commercial parties. Strong institutions also contribute to consistency, efficiency, and credibility in arbitral proceedings, making dispute resolution more predictable for businesses and investors. The proposed Arbitration Council was intended to strengthen precisely these institutional foundations.
Another important theme of the address was India's growing economic role in global commerce. The Chief Justice observed that as India continues to expand international trade, attract foreign investment, and enter major commercial partnerships, the demand for reliable and efficient dispute resolution mechanisms will increase substantially. A modern economy requires an equally modern arbitration system capable of resolving complex commercial disputes quickly, fairly, and at internationally accepted standards. Arbitration therefore plays an important role in improving the country's ease of doing business and investment climate.
The Chief Justice further observed that arbitration was originally conceived as an alternative to traditional court litigation because it promised speed, flexibility, confidentiality, party autonomy, and commercial expertise. However, he cautioned that arbitration must guard against developing the very shortcomings it was intended to replace, including procedural complexity, delays, excessive costs, and unnecessary judicial intervention. Continuous institutional reform and professional development remain essential to preserve arbitration's core objectives.
The continued absence of the Arbitration Council of India, according to the Chief Justice, illustrates the importance of ensuring that statutory reforms are implemented in practice. He stressed that governments, regulators, professional institutions, arbitrators, lawyers, and courts must work together to create a comprehensive dispute resolution ecosystem capable of meeting international expectations. Institutional credibility is earned through consistent implementation rather than legislative declarations alone.
The observations also highlight the judiciary's broader commitment to promoting institutional arbitration in India. Over the past several years, the Supreme Court has consistently delivered judgments favouring minimal judicial interference, speedy enforcement of arbitral awards, party autonomy, and international best practices. The Chief Justice's remarks complement these judicial developments by drawing attention to the equally important need for robust statutory institutions that can support arbitration beyond the courtroom.
In conclusion, Chief Justice Surya Kant's remarks serve as a significant reminder that India's ambition to become a leading global arbitration hub depends not merely upon progressive legislation but upon timely implementation of the institutions created by law. By expressing concern over the six-year delay in constituting the Arbitration Council of India, he underscored that credibility in international dispute resolution is built through effective institutions, consistent policy implementation, and sustained commitment to reform. The observations reinforce the need to operationalise the Arbitration Council and advance pending legislative reforms so that India's arbitration framework can fully realise its potential as a trusted destination for domestic and international commercial dispute resolution.
0 Comments
Thank you for your response. It will help us to improve in the future.