In lieu of the writ petition filed by the Anil Kalyandas Thanvi, the Supreme Court of India has sought a response from the Central Government regarding the establishment of an Arbitration Council of India (ACI). Although the provision for the establishment of said Council is provided for by the 2019 Amendment to the Arbitration and Conciliation Act, 1996, six years have passed without any affirmative action in this direction. The petition draws our attention to the lapses and issues that exist within the arbitration landscape in India, furthering the necessity for acceleration and development of this body. This lacunae between the implementation of the legislature was highlighted as a “credibility gap” by the CJI Surya Kant in his inaugural address at the Silver Jubilee celebrations of the Indian Institute of Arbitration and Mediation (IIAM) in New Delhi. Citing the pendency of more than 50 million cases as well as an increasing dependence on the foreign institutions for arbitration, the need for the Council is pertinent now more than ever.

In India, one of the most significant concern in the arbitration landscape is the overwhelming inclination of the parties to opt for ad-hoc arbitration over institutional arbitration. The high-level committee chaired by Justice B.N. Srikrishna published a report in 2017 which analysed such problems in depth. The report submits that although ad-hoc arbitration is an effective method for parties who seek to cooperate with each other, such is rarely the case in Indian arbitration disputes. Consequently, this culminates in delays, additional costs and an ineffective systems of dispute resolution. Ad-hoc proceedings become bottlenecks and tend to be protracted due to frequent adjournments and absence of procedural disciplines. This strikes at the very core of what arbitration as a redressal mechanism promises us –speed and efficiency.

Over the past years, there have been instances of persistent delays in awarding arbitral awards. In the case of M/s Lancor Holdings Ltd. v. Prem Kumar Menon, the learned arbitrator has pronounced the arbitral award nearly three years and eight months later after reservation, without any explanation regarding the delay. An instance such as this creates a vicious cycle with the courts now having to go into the validity of the award, leaving the parties without any relief or timely redressal. The recent data shows that there is a large delay in disposal of cases in both High Court as well as district courts with average timelines stretching 18.69 months and 30.56 months respectively. Moreover, there are misconceptions around domestic arbitration institutes based on scepticism around procedural neutrality, doubts about inflexibility etc. This highlights the ironic nature of the arbitration landscape in our country –while the institutions which have adequate expertise and infrastructure are treated with scepticism on the contrary, the smaller ad-hoc ones are burdened with complex commercial disputes. This fragmentation also impedes the development of coherent mechanisms that ensure accountability across institutions.

These factors when coupled with other structural deficiencies such as lack of a uniform system of accreditation, regulation and arbitrariness in choosing the arbitrator add up to undermine the overall trust of India as an arbitration hub. Most significantly, the non-uniformity of rules and processes with respect to appointment of arbitrator and mechanisms for scrutiny of awards have deepened the distrust. These concerns have once again been highlighted in the current writ petition before the Apex Court. The plea raises concerns against the arbitrary, unregulated and coercive methods adopted by trade associations in their arbitration clauses. The petitioner challenged the validity of such rules particularly of the Cotton Association of India (CAI) as being violative of his fundamental rights under Article 14 as well as Article 19 (1)(g). The plea highlights that the farmers must reluctantly agree to these arbitrary rules to continue their business, a consequence of which is undermining party autonomy. The omission of Eighth Schedule, which provided for qualifications for arbitrators has also been omitted, thereby further creating a lacunae.

Therefore, situated within this context is the pertinent necessity for the establishment of the Arbitration Council of India. The ideation of this council was for the first time proposed by the High-Level Committee as the Arbitration Promotion Council of India (ACPI), to resolve these core issues and promote India as an arbitration friendly country. It was conceptualised as body that was to be established at the national level by the central government by statute through separate Part I-A in the Arbitration & Conciliation Act, 1996. Sections 43-A and 43-B provide for the definition, establishment and incorporation of the Arbitration Council of India (ACI) respectively while sections 43-C and 43-D posit the composition and the duties of the council. The council is envisioned as a body corporate to carry the function of promoting arbitration, mediation and conciliation. The council for the purpose of promotion of ADR, is tasked with hosting workshops and training on arbitration in collaboration with multiple stakeholders such as law firms, law universities and arbitration institutions.

The intent behind establishing ACI as a central regulatory authority, the legislature aims to address the vacuum in the arbitration ecosystem in India. This includes standardizing practices and enhancing institutional accountability which would result in a robust arbitration framework. For this purpose, the duties vested with the ACI is to frame policies governing grading of arbitral institutions. A key role that ACI would play involves grading arbitral institutions based on criterion such as infrastructure, procedure followed, transparency etc. This would ensure standardisation of arbitral practice in the country, helping parties make informed choices about what institute they opt for. The council is also tasked with accreditation of arbitrators to enhance their skills. The council is tasked with framing policies and developing uniform and model rules for arbitration. To ensure that the institutions are following these guidelines and policies, a supervisory role has been attributed to the council. The goal is to reduce the fragmentation across institutions and giving them a basis on which they can also form their rules in accordance with the guidelines published by the council. It is imperative to have a standard procedure to reduce unpredictability and augment India as an international arbitration hub. As per section 43-K, the ACI would also acts as an electronic depository for arbitral awards made in India, ensuring ease in accessing the records as well as transparency in procedure.

The establishment of the council would precisely solve the issues being highlighted in the writ petition before the Supreme Court. The concerns highlighted by the petition find their redress in the envisioned duties of the council such as uniformity in rules and transparency in procedure. The council, therefore, acts as a catalyst for the much-needed change towards institutional arbitration that our country is moving forward to adopt.

The reform to the arbitration ecosystem of India through the formation of ACI depends heavily on the design and powers being granted to the institute. To ensure that the institute is successful, there are already established institutes such as Singapore International Arbitration Centre (SIAC) and London Court of International Arbitration (LCIA) from which this institute seeks inspiration. A comparative analysis of the two helps us emulate and adopt practices which would help our country and avoid common mistakes that can hamper the development of arbitration.

In the 2025 International Arbitration Survey conducted by School of International Arbitration, Queen Mary University of London in collaboration with global law firm White & Case LLP, it was found that London and Singapore ranked the top two choices for arbitration globally. As brought out by the HLC report, India has failed to establish itself as a hub for international arbitration due to non-uniform institutional standards that lead to unpredictability of outcome. On the other hand, London derives its credibility from institutions practicing consistently under the procedural oversight of LCIA. Similarly, SIAC has also founded itself on user centric innovations and transparency in procedure. Although neither of them is backed by statutory authority, they command legitimacy due to the trust they have gained over the years. Therefore, a key takeaway for ACI is that effectiveness moves beyond statutory establishment and entails gaining user trust through transparency and uniformity.

To ensure neutrality and quality arbitration, the HLC as well as the 2019 Amendment grant the power of accreditation and grading to ACI. However, both LCAI and SIAC employ a more nuanced approach itself. LCIA ensures that there is non-partiality by having the final authority to appoint the arbitrators. If the parties have not nominated an arbitrator, then the court choses arbitrators from their internal database of approximately 2000 arbitrators based on experience, background, gender etc. Therefore, it is crucial that the criterion for accreditation and grading do not become overly restrictive barrier but rather operate as a sign of competence of the arbitrator. If it were to become an overtly restrictive barrier, it would be difficult for young arbitrators to enter the framework –a result which is contrary to the objective of ACI envisioned by the HLC.

Both LCIA and SIAC demonstrate that the judiciary can exercise restraint when there is mutual trust between institutions. The English Courts have exhibited a supervisory role in the arbitration background of London, intervening only when there are instances of serious procedural or jurisdictional error. This restraint has not developed overnight but rather reflects years of mutual institutional trust leading to judicial confidence. Singapore also represents a similar trajectory with the courts practicing minimal intervention due to the competence of procedure and case management by SIAC. This virtuous cycle of institutional credibility supporting judicial restraint ought to be emulated in India through the establishment of AIC. The High-Level Committee report has identified the interventionist nature of the Indian Courts as also resulting in India being viewed as an arbitration unfriendly country. To redress this, AIC would undertake developing policy guidelines resulting in institutional reliability consequently leading to judicial trust.

Therefore, the establishment of ACI would significantly enhance the credibility of India's arbitration framework. However, what is needed is not merely establishment but rather a disciplined implementation followed by the same. By creating policy guidelines and imposing accreditation standard, the council would ensure that the procedural integrity of institutions is maintained. This would gain partner trust while accreditation standards will also motivate the institutions to invest in better infrastructure. With better infrastructure, there would be better case management as well as procedural discipline would be ensured. Through this, the ACI would achieve reducing delays and promoting uniformity across institutions. Through these measures, the position of India as a destination of domestic as well as international arbitration can be established.

Views are personal.