ECTA Has A Dispute Architecture Problem. CECA Should Fix It

The India–Australia Economic Cooperation and Trade Agreement is now three and a half years in force. Trade has roughly doubled. The four declared thrust sectors like critical minerals, green and renewable energy, oil and natural gas, and pharmaceutical are where the commercial action is, and where the disputes will be. The Comprehensive Economic Cooperation Agreement, the ECTA's successor, is being negotiated tranche by tranche. Almost nobody is talking about the dispute settlement architecture. Almost everybody should be.

The reason is straightforward. Chapter 13 of the ECTA, which is the agreement's dispute settlement chapter, does what dispute settlement chapters in India's free trade agreements have generally done. It establishes a state-to-state consultation and panel mechanism modelled on the WTO Dispute Settlement Understanding, sets out rules of procedure, and provides for compliance review. It is, on the page, competent but almost certain never to be used.

That is not a criticism of the drafters. State-to-state dispute settlement chapters in bilateral free trade agreements have remained largely unutilised across India's FTA portfolio. The political cost of invoking them is high; the alternative remedies are usually more attractive; and the disputes the corridor will actually generate are not between New Delhi and Canberra. They are likely to be between an Indian PSU and an Australian listed major, or between a private Indian supplier and an Australian project sponsor, or between an Indian generic manufacturer and an Australian regulatory authority. None of those disputes falls within Chapter 13.

So where do the disputes go? They go where corridor commercial disputes have always gone: to international commercial arbitration. SIAC in Singapore. ACICA in Sydney. The LCIA in London. The ICC and the occasional ad hoc UNCITRAL proceeding. The arbitration architecture is competent. The awards are enforceable under the New York Convention. The seats are sophisticated; the rules are recently revised; the rosters are deep. The system works, after a fashion.

What it does not do is suit the disputes the corridor actually produces. International commercial arbitration is generalist by design. It disposes of dispute-specific technical questions a critical mineral assay, a green hydrogen specification, a tailings reclamation methodology, a pharmaceutical bioequivalence finding through expert evidence filtered through arbitrators whose competence is in commercial law and whose technical reasoning is at one or two removes from the underlying engineering. Anyone who has appeared in a complex resources arbitration knows what this looks like. It is expensive, it is slow, and the technically correct answer and the legally awarded answer do not always converge.

Arbitration is also, by temperament, adversarial. The Indo-Australian corridor is a small-world commercial environment: a few dozen state-owned enterprises and listed majors, a regulatory apparatus on each side that knows itself, and a professional class whose members will be doing business with each other for the next thirty years. The architecture that suits that environment is mediation, not arbitration. The literature on mediation in commercial trade disputes Cho and Choi in the World Trade Review, the AAA-ICDR work on cross-border mediation in Africa, the broader scholarship around the Singapore Convention converges on this point with unusual unanimity. Long-relationship disputes want a relationship-preserving forum. Arbitration is not that forum.

The case for a bespoke corridor dispute settlement institution is therefore not a case for institutional novelty for its own sake. It is a case for matching architecture to caseload. What the ECTA / CECA corridor needs, and what the CECA negotiations should now be used to deliver, is a tier of mediation infrastructure between the contractual dispute resolution clause and the eventual arbitration backstop.

There is one dimension that no serious corridor dispute architecture can ignore. Chapter 9 of the ECTA and the comparable provisions in every other Indian and Australian trade agreement facilitates the temporary movement of natural persons across four categories: business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals. Add to these the artisans, sub-contractors, FIFO workers, domestic and care workers under labour-supply arrangements, and the rapidly growing class of remote and platform professionals who deliver services across the corridor without ever crossing it. The agreements that facilitate this movement contain no dispute settlement architecture for the persons who actually move. A contractual service supplier in Sydney whose engagement is terminated in breach, a Pune software professional unpaid for three months of work delivered online, a Pilbara contract welder injured on site, a domestic worker with wages withheld none has a usable forum under the ECTA, and none is large enough to arbitrate. The corridor's quiet equity deficit is, in fact, not so quiet.

Functionally, the tier should have four features that distinguish it from the present generic mediation practice.

First, sectoral specialisation. The mediators should sit on panels organised around the corridor's thrust sectors, with technical assessors drawn from the relevant engineering, metallurgical, or pharmaceutical disciplines. The model is not new: WIPO has been running sectoral panels in intellectual property and technology for thirty years; the Court of Arbitration for Sport has done the same in its narrower domain since 1984. What is novel is applying the architecture to a bilateral trade corridor.

Second, dual-jurisdictional legal competence. The mediators should be required to demonstrate working familiarity with both Indian and Australian commercial law, the ECTA text, the relevant PSU governance frameworks, and the two foreign investment regimes. This is a higher bar than ordinary international arbitration practice imposes. It is also non-negotiable. Disputes in this corridor commonly involve clauses whose meaning shifts depending on whether they are read against an Indian or an Australian commercial-law backdrop. A mediator who can navigate only one of those systems is, in practice, of no use.

Third, an enforcement spine anchored in the Singapore Convention on Mediation, 2019. A mediated settlement is useful in proportion to its enforceability. The Singapore Convention provides for ratifying states a New York Convention-style enforcement framework for international mediated settlement agreements. India signed in 2019. So did Australia. Neither has ratified. Six and a half years on, that is no longer a technical lacuna. It is a policy choice that the corridor's growth makes increasingly untenable. The Mediation Act, 2023, has begun to give Indian mediation domestic statutory backbone, although commentators at the Singapore International Mediation Centre have noted its partial misalignment with the Convention's requirements. The misalignment is bridgeable. The ratification is overdue.

Fourth, light institutionalisation. The case is not for a new treaty body. Treaty secretariats for bilateral trade agreements have failed politically and financially for the better part of two decades, and the Cambridge volume on twenty-first-century preferential trade agreements is right to say so. What is required is a co-administered corridor mediation arrangement hosted by an existing institution on each side the International Centre for Alternative Dispute Resolution in New Delhi, the Australian Centre for International Commercial Arbitration in Sydney, perhaps the India International Arbitration Centre as a third leg operating under a common rule book, a common code of conduct, and a single rostered panel. The fixed cost is modest. The variable cost falls on the parties. The institutional footprint is small.

Besides efficiency and effective fit, the dispute-settlement mechanism also need to be oriented towards the Sustainable Development Goals which are not mere diplomatic furniture. Goal 8 commits both governments to protect the labour rights of all workers, including migrant workers and those in precarious employment. Goal 10 commits them to orderly, safe, and well-managed mobility. Goal 16 commits them to equal access to justice for all. These are not aspirational slogans; they are commitments both India and Australia have publicly made. A corridor dispute architecture that delivers enforceable settlements to mining majors but offers nothing to the contract welder, the domestic worker, or the unpaid remote professional is not consistent with those commitments. A corridor mediation arrangement of the kind sketched above can — at modest marginal cost — host a parallel low-value track for movement-of-persons claims, with remote participation, simplified pleadings, mediators drawn from a dedicated panel, and a cost structure calibrated to the realistic value of the disputes. The architectural precedent exists; the EU's Online Dispute Resolution platform has been operating in this form for over a decade. What is required is the institutional will to extend the corridor's procedural infrastructure to the persons whose labour makes the corridor work.

The CECA negotiations are the political window. Bilateral trade architectures of this kind are rarely revisited once concluded; the dispute settlement chapter, in particular, becomes politically frozen in the form in which it was first signed. The tranche-by-tranche structure of the CECA process gives both delegations the opportunity to do better. A corridor mediation arrangement of the kind sketched here including its movement-of-persons track does not require the renegotiation of Chapter 13. It requires an annex, a side letter, or a memorandum of cooperation between ICADR and ACICA. The technical work is modest. The political work has not yet begun.

The corridor's commercial maturity has outrun its institutional maturity. The arbitration backstop is competent but mis-calibrated; the state-to-state chapter is competent but unused; the mediation tier that ought to sit between them does not yet exist; and the natural persons whose movement the agreement was negotiated to facilitate have no procedural home at all. The CECA is the moment to build what is missing and to build it in a form consistent with the SDG commitments both governments have already made. The alternative is the continued resolution of corporate disputes through forums that are slow, expensive, and generalist, alongside the continued non-resolution of individual disputes through any forum at all.

It is unusual, in trade policy, to be presented with both the institutional gap and the political window at the same time. We have been so presented. It would be a pity to look away.

Author is a Senior Advocate at the Madras High Court and an International Energy Law Consultant. He advises Indian public sector undertakings and private entities on cross-border energy, critical minerals, and ECTA trade law, with offices in Chennai, New Delhi, and a FIFO venue in Sydney.

Views Are Personal.