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Changing face of arbitration in India - EY - India

Changing face of arbitration in India

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This report provides a snapshot of the current scenario of arbitration in India, its advantages and disadvantages, perception of known personalities and the suggested way forward for long-term sustainability.

In India, we have witnessed a noticeable progress in the area of arbitration, particularly after the enactment of "The Arbitration and Conciliation Act, 1996."

Rise in arbitration cases in India

Today, due to new liberal policies and continuous efforts by the Government, India has opened up to foreign investments in varied industries and sectors, but this has been accompanied by a considerable increase in the number of commercial disputes.

The scenario is further complicated with the use of technology in all aspects of business. There is pressure from international companies and various Governments as they are making it mandatory to enforce arbitration clauses in the contract.

All these factors coupled with delays in the traditional Indian litigation system, have led to a considerable increase in the number of arbitration cases.

Leaderspeak: "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." 
---- Arpinder Singh, Partner & National Director - FIDS, EY India

EY survey on arbitration trend in India

Considering the changing trend around arbitration in India, we conducted a survey, where 68 respondents including general counsels at large companies, attorneys of various organizations in India and senior partners of domestic and international law firms participated. We also interviewed some of the key lawyers and eminent personalities in this field to gain their perspective on arbitration in India.

Significant findings of the survey:

The main objective of this study was to understand the perspectives of general counsels and law firms on the need for arbitration in India, its drawbacks, regulatory system and steps that would be required to make India a preferred arbitration destination. Download this report for more.

Significant findings of the survey:

  • Arbitration clause: 74% of the survey respondents highlighted that the arbitration clause is an essential part of their legal contract.
  • Type of arbitration: The survey highlighted the mixed usage of the arbitration mechanism. Out of the total respondents, 24% of the respondents have undertaken Indian ad hoc arbitration, whereas 20% of the respondents have undertaken international commercial arbitration. 27% of the respondents have undertaken both Indian ad hoc arbitration and international commercial arbitration.
  • Arbitration institutes: During the selection of institutes outside India, 60% of the respondents preferred the Singapore International Arbitration Centre (SIAC), and while selecting institutes within India, 34% of the respondents preferred the London Court of International Arbitration (LCIA), India.
  • Indian regulations: The survey highlighted the importance given by the Government of India to the improvement of the arbitration mechanism. More than 50% of the respondents said that the ministry's recent steps to develop dispute resolution mechanism are in the right direction.
  • Enforcement of the arbitral award: 78% of the respondents revealed that they were satisfied with the arbitral award.
  • Cost and time disadvantage: Around 50% of the respondents said that arbitration in India is expensive and does not provide timely resolutions, which highlights the need for radical changes in procedural aspects.
  • Arbitrator selection: 68% respondents believed that subject matter experts should be appointed as arbitrators, as against 22% who believed that retired judges should play this role.
  • Role of experts: The survey highlighted the growing importance of experts such as forensic accountants in the arbitration process as more than 50% of the respondents said that they have used expert services and they believe that experts advice make difference in their arbitration process.


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