Delhi, Mumbai And GIFT City ; India's Search For A Credible Institutional Arbitration Seat?

India's oft-stated ambition is to emerge as a global arbitration hub, competing with Singapore and Hong Kong in the Asian market. To that end, India's arbitration policy has clearly shifted from ad hoc to institutional arbitration.A High-Level Committee, chaired by Justice (Retd) B.N. Srikrishna, was constituted to review the institutionalisation of arbitration in India and to make it a robust centre domestic and international arbitration. The recommendation in the Committee's 2017 report focused on strengthening and grading arbitral institutions, accrediting arbitrators, creating a specialist arbitration bar and bench, and providing governmental support for institutional arbitration.The push for institutional arbitration continued with the Draft Arbitration and Conciliation (Amendment) Bill, 2024. While it is yet to become law, the Bill proposes sweeping amendments to the Arbitration and Conciliation Act, 1996, to boost institutional arbitration further, reduce court intervention, and ensure the timely conclusion of arbitral proceedings. It proposes, among other things, recognition of emergency arbitrators, greater use of arbitral institutions in appointment and extension mechanisms, conducting proceedings electronically, and a clearer statutory framework around arbitral institutions.This pronounced policy shift from ad hoc to institutional arbitration raises an important question: which is the best seat of arbitration in India right now for institutional arbitration?The present contest to be India's leading institutional arbitration seat is primarily between Delhi and Mumbai. These two cities combine commercial relevance, institutional presence and capacity, and judicial infrastructure in a way that no other Indian city presently does.Delhi's Case:Delhi's case to be called India's premier arbitration seat for institutional arbitration rests on the strength of court and legislation-backed arbitral institutions.The Delhi International Arbitration Centre is annexed to the Delhi High Court and offers institutional rules, hearing infrastructure, administrative facilities, and a high-quality, diverse panel of arbitrators. In terms of infrastructure, the DIAC has hearing rooms, consultation rooms, and video-conferencing facilities, while its rules provide mechanisms such as fast-track arbitration, emergency arbitration, and interim relief. A High Court-annexed arbitration institution provides Delhi with a concrete link between the institution and the supervisory court.The India International Arbitration Centre (IIAC) further strengthens Delhi's claim to being India's first-choice seat for institutional arbitration, particularly post the India International Arbitration Centre Act, 2019, which declared the IIAC as an institution of national importance.In institutional arbitration, parties want a supportive ecosystem. With High Court-linked and Central Government-backed arbitration institutions, Delhi offers that ecosystem.Mumbai's the centre of India's commercial ecosystem with strong links to almost every major industry such as banking and finance, e-commerce, infrastructure, information technology, manufacturing, shipping, and more. This matters because arbitration clauses are drafted at the transaction stage. In high-value commercial contracts, the seat is often determined by where the transaction is negotiated and executed which, in many cases, is and will continue to be Mumbai.While it does not have a High Court-linked arbitration institution, Mumbai boasts significant strength when it comes to arbitration institutions. The Mumbai Centre for International Arbitration has emerged as one of India's important arbitral institutions. Its rules provide for administered arbitration and include mechanisms aimed at efficiency, such as emergency arbitration and expedited procedures. Alongside institutions such as the Bombay Chamber of Commerce and Industry and the IMC Chamber of Commerce and Industry, Mumbai offers parties access to strong arbitration institutions, a sophisticated bar, and commercial courts. For many contracts with a strong Mumbai connection, Mumbai will remain the natural choice for the seat of arbitration.Why Delhi Presently Edges MumbaiThe reason Delhi presently has the edge is not that Mumbai lacks institutional capacity, quality, or judicial capability. It is because of a recent change in legislation, namely an amendment to the Maharashtra Stamp Act.Under Article 12 of the Maharashtra Stamp Act, arbitral awards are now subject to ad valorem stamp duty. For awards pertaining to immovable property, the stamp duty is the same as would be levied on a conveyance in respect of the same property. For awards concerning movable property, the duty is a percentage of the award amount. Previously, the stamp duty on an arbitral award in Maharashtra was Rs. 500.Stamp duty comes into play at the very stage when the successful party expects to enjoy the fruits of the arbitration process. By the time a party...

Delhi, Mumbai And GIFT City ; India's Search For A Credible Institutional Arbitration Seat?

Dushyant Krishnan

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Delhi, Mumbai And GIFT City ; India's Search For A Credible Institutional Arbitration Seat?

Dushyant Krishnan

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