Written By:

Mr. S. Ravi Shankar Advocate on Record Supreme Court of India

Senior Partner – Law Senate Law Firm President - Arbitration Bar of India

ARTICLE

Good Legislation:

Both International and domestic Arbitrations having India as the seat of arbitration are

governed by the Indian Arbitration and Conciliation Act, 1996. It is a very arbitration friendly

legislation, legislated in the lines of UNCITRAL Model law. The Part 1 of the above said Act

governs the domestic arbitrations in India and the International arbitrations having the seat

of arbitration in India. Part 2 of the said Act governs the enforcement of International

awards in India. Since India also realised the importance of speedy disposal of cases through

arbitration and also the difficulties in executing the Court judgments in different countries,

to get foreign direct investments, chose to legislate the above said law replacing the earlier

Arbitration Act. The said law really reduces the scope for interference by the Courts in India

in the Arbitration proceedings and also effectively restricts the grounds of appeal

challenging an award.

The Law settled by the Supreme Court in favour

of the independence of International arbitrations

having the seat outside India:

The Supreme Court of India is the final Court of Appeal in India. In two of its Judgments in

Bhatia International and Venture Global it took a view that Indian Courts have Jurisdiction

over the International arbitrations held in foreign countries on the basis of foreign seats of

arbitration chosen by the parties. These Judgments created a lot of complications in the

International arbitrations involving Indian parties. But later in the year 2012 a constitution

Bench of this Court while deciding BALCO case put an end to all the above said confusions

and settled the law and held that Indian Courts does not have jurisdiction to interfere in the

arbitrations having a foreign seat and also cannot entertain any appeal from those awards.

Hence now law in India with regard to International arbitrations is well settled.

Huge Pendency of cases in the Indian Courts:

Even though the author is an Indian lawyer he does not recommend India as the seat of the

International arbitration because even though the Act prescribes minimum interference by

courts, due to huge pendency of litigations in-case if one of the parties go to court the

arbitration may get delayed for years. Since The Courts in India does not have any power to

give preference to arbitration matters in the hearing process they are heard like other

criminal and civil cases, which further delays the arbitration. India has very less number of

Judges in the world to deal with cases of millions of people. India also has given two appeal

provisions in almost all proceedings, which also add to the delays. Hence if a party seeks

assistance of the Court for an interim order or for summoning witnesses or even for

appointment of arbitrator it may consume a minimum of one year to get concluded. Even

though there are directions by the Supreme Court of India and recommendations of law

Commission to increase the number of Judges from 10 to 50 per million people, none of the

governments are showing any interest in resolving the issue.

Handling of Arbitration Appeals by the Courts in

India:

Once parties decide to make India as the seat of arbitration, Indian Courts are empowered

to handle the Appeals under S.34 of the Arbitration and Conciliation Act, 1996. The appeals

can be filed in the High Court having original jurisdiction or in the District Courts on the basis

of the seat of arbitration. Even though the Act has very much restricted the grounds on

which arbitral awards can be challenged, the courts are liberal in admitting the appeals.

Once appeal is pending for years the execution of the award cannot be done. Hence India is

not a recommended by the author as a seat for International arbitrations.

Execution of International Arbitration awards in

India:

India being a signatory to New York Convention it recognises almost all the international

awards passed in the countries who are signatories to the New York convention. Even

though India reserves the right to recognise the awards passed from countries which are

notified by the government of India. But India has recognised almost all countries which

have signed the New York Convention. Recently India recognised China and Hong Kong

International arbitration awards also.

Why SIAC has become a favourable seat for

Indians:

In such a situation where even-though India has a good arbitration friendly legislation it is

not recommended by the author as a favourable seat of arbitration because of the possible

huge delays of the courts in handling arbitration related litigation. But when the seat is

chosen as Singapore, the arbitration related litigations are governed by Singapore laws and

Singapore Courts are very fast in handling arbitration related litigation including appeals and

hence most of the international arbitrations conducted in Singapore as per the SIAC Rules

come to an end before the end of six months, the time frame specified by SIAC.

S Ravi Shankar Advocate on Record Supreme Court of India

The author S. Ravi Shankar is a lawyer practising in the Supreme

Court of India, handling International arbitration matters, Senior

Partner of Lawsenate law firm and also the President of Arbitration

Bar of India. He can be contacted ravi@lawsenate.com