India: 25 Not Out: A Tale Of Two Cities

Abstract: The enactment of the principal arbitration legislation in India, the Arbitration & Conciliation Act, 1996, notably coincided with the enactment of the United Kingdom's Arbitration Act, 1996. While both turned 25 years old in 2021, the two jurisdictions have seen distinct paths in the development and evolution of their respective arbitration landscapes. London, traditionally, has always been a significant seat of arbitration for parties around the world due to its consistent pro-arbitration outlook. India, on the other hand, had a questionable decade following the enactment of the Indian Arbitration Act, but is now gradually moving towards establishing itself as a preferable seat of arbitration. As India emerges as an economic power, it has taken significant strides to ensure a predictable, transparent, and reliable framework for the enforcement of contracts. In doing so, the legislative and judicial outlook in the country has been focused on building a strong arbitration culture, which emphasises giving effect to arbitration agreements and awards. There are several overlaps in the arbitration laws and practices of both India and the United Kingdom. This article discusses the comparative approach of Indian and English arbitration laws and practices. In doing so, it analyses the similarities and overlaps between the approach of courts in the two jurisdictions, particularly with respect to arbitral autonomy and the enforcement of arbitration agreements as well as foreign arbitral awards.

I. INTRODUCTION

International arbitration, being a transnational field, necessitates a global outlook and consistent interchange and reciprocation of ideas and judicial practices between jurisdictions. A smooth exchange of ideas and values between countries assumes importance because the arbitral practices and norms prevailing in one country naturally have a direct or indirect implication on the perspectives prevailing in other countries.

India and the United Kingdom ('U.K.') both adopted their primary arbitration legislations in 1996, which turned 25 years old in 2021. Both the Arbitration and Conciliation Act, 1996 ('Indian Arbitration Act') and the Arbitration Act, 1996 ('English Arbitration Act') are based on the UNCITRAL Model Law on International Commercial Arbitration, 1985.¹ Over time, however, both jurisdictions have experienced diverse and distinct paths in their quest to embrace pro-arbitration norms and practices.

With London, there is little doubt that it is not only a favourable seat but also a key market for arbitration. In fact, London is also one of the most preferred seats of arbitration for parties for their transnational contracts.² Traditionally, English courts have consistently and strongly supported both the practice and procedure of arbitration within their supervisory jurisdiction as well as awards rendered by tribunals. The English Arbitration Act has played a significant role to ensure that arbitration agreements are upheld and there is no undue interference with the arbitral process.³

India, on the other hand, has seen a more ambivalent trajectory in its approach to arbitration autonomy and process. Prior to 2010, India was often seen as an 'outlier' in international arbitration and Indian courts were infamous for adopting inconsistent standards to interfere with the arbitral process and deny enforcement of awards.⁴ In recent times, however, India has taken significant strides towards adopting a pro-arbitration culture and shredding the 'outlier' tag in the international arbitration community. The Indian Arbitration Act has undergone several amendments to adopt the best international practices and streamline the arbitration practice in India.⁵ New Delhi has recently grown into a seat of arbitration which can be trusted as a custodian of party autonomy and efficiency of the arbitral process. The decision in Amazon.com NV Investment Holdings LLC v. Future Retail Limited,⁶ wherein the Indian Supreme Court became the first apex court of any jurisdiction to expressly uphold enforceability of emergency awards, is a manifestation of India's prevailing pro-arbitration stance. In cricketing parlance, at 25 not-out, India is no more standing at the non-striker's end and is instead playing a more crucial role in shaping the contemporary scorecard of international arbitration.

Despite both India and the U.K. beginning their contemporary arbitral journeys in 1996, i.e., with the enactment of their principal arbitral legislations, the U.K. has traditionally been seen as a more favourable arbitral seat compared to India. India, however, continues to stride towards a more conducive environment for arbitration and bridge the gap between itself and other prominent arbitral seats, including London.

In this context, the underlying objective of this paper is to analyse the comparative journey of Indian and English arbitration laws and practices, and examine the distinctions and similarities between the two jurisdictions, with respect to enforcement of arbitration agreements as well as foreign arbitral awards. We also look at the attitude of courts in aid of arbitration, and the position with respect to binding non-signatories to arbitrations.

To read this article in full, please click here.

Footnotes

1. UNCITRAL Model Law on International Commercial Arbitration 1985 (amended in 2006), (https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09955_e_ebook.pdf) accessed 23 February 2023.

2. White & Case and Queen Mary University of London, 2021 International Arbitration Survey: Adapting arbitration to a changing world (2021) (https://arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf) accessed 23 February 2023.

3. Thomas E Carbonneau, 'A Comment on the 1996 United Kingdom Arbitration Act' (1998) 22 Tulane Maritime Law Journal 131.

4. Abhisar Vidyarthi and Sikander Hyaat Khan, 'India: a late opening to the notion of international public policy?' (2022) 38(4) Arbitration International 249; Bhatia Trading v Bulk Trading (2002) 4 SCC 105 (Supreme Court); Venture Global Engineering v Satyam Computer Services Ltd (2010) 8 SCC 660 (Supreme Court).

5. Vidyarthi and Khan (n 4).

6. (2022) 1 SCC 209 (Supreme Court).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.