India can become a preferred arbitration destination with a better focus on improving cost and time efficiencies in dispute resolution:
Mumbai: The rapidly changing arbitration environment in India is making the role & involvement of law firms and domain experts increasingly important. In the backdrop of recent efforts undertaken by the Law Minister towards updating the Arbitration Act, EY Fraud Investigation and Dispute Services (FIDS) team conducted a survey to understand the current perspective of general counsels, Indian and International law firms and key members of the legal fraternity on Arbitration in India.
The survey report titled ‘Changing face of arbitration in India’ revealed that about half of the total survey respondents felt that arbitration procedure in India is expensive and does not provide timely resolutions. The main objective of this study was to assess the ground realities of arbitration and gather perspective of general counsels & law firms on the need for Arbitration in India, its drawbacks, regulatory system and steps that are required to make India a preferred Arbitration destination.
Speaking on the survey, Arpinder Singh, Partner & National Leader, Fraud Investigation and Dispute Services (FIDS), EY India said, "Arbitration is gaining rapid importance in India primarily because of the challenges of the existing litigation system and the pressure from global companies to enforce Arbitration clauses present in their contract's with Indian entities"
Further Mr. Singh adds that "the entry of international institutes has benefitted the country in developing the alternate dispute resolution infrastructure"
With a majority of respondents of the opinion that a subject matter expert should be appointed as arbitrator, the result clearly indicated that there is a need for technical experts as arbitrators in India. The effectiveness of arbitration as a legal institution also depends upon efficiency and efficacy of its award enforcement regime. The survey provides a positive outlook over satisfaction of arbitral award with 75% of the respondents having confirmed their satisfaction with arbitral awards.
Survey revealed that 27% of the respondents have undertaken both Indian ad hoc arbitration and international commercial arbitration. This pattern of mixed usage of arbitration mechanism in India shows that India is still at a nascent stage as far as Arbitration is concerned.
"Key factors such as entry of global Institutions & law firms, strengthening of regulatory environment and building up of expertise in technical aspects would be essential for the future of arbitration. In spite of several challenges, consolidated efforts by all stakeholders in this direction can result in a robust arbitration mechanism in India that will attract faith of global companies as well," added Arpinder Singh.
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