Global Models And India's Arbitration Reform: Towards A Specialised Arbitration Division

India is projected to soon become the fourth largest economy in the world. A by-product of attaining this distinguished position is the increase in commercial contracts between Indian parties and rest of the world.  Last month, the Union Commerce and Industry Minister, Shri Piyush Goyal underscored the need to support India’s rapid growth via a strong legal and arbitration framework.

Over the past decade, the Government has undertaken several measures to streamline the dispute resolution process in the country to develop it as an arbitration hub. The consistent rise in number of arbitrations over the past few years is a testament to the same. Illustratively, the Mumbai Centre for International Arbitration, in 2024, reported that the new cases filed with it grew by 48% over the previous year. In another instance, the Delhi International Arbitration Centre, in 2013, had a total number of 528 cases, which increased to 7358 cases in 2023 (almost a 14-fold increase). In 2024, the Singapore International Arbitration Centre recognised India as the third largest top foreign user.

A direct corollary of the rapid rise in arbitration cases has been a rise in challenges to or appeal of arbitral awards, leading to an increase in pendency of cases before courts. In the report released on ‘Age wise pendency of arbitration cases in India’ for 2022, it concluded that around 48% of arbitration cases in India were pending for more than a year and around 23% of cases stay pending for 10 – 20 years. Regardless, arbitration still remains one of the most preferred ways of resolving disputes, and one that is evolving at a fast pace.

Thus, in order to promote India as an arbitration hub, legislators need to take further steps to tackle this high rate of pendency of arbitration cases. Legislators should meet the long-standing demand of the Bar to set up of specialised judiciary for arbitration to tackle the same in the form of (i) Specialised High Court Arbitration Division and (iii) Specialised Judicial Officers who can deal with arbitration cases in a swift and prompt manner.

Current Structure and Proposed Amendments

The Law Commission after an in-depth study on arbitration made its recommendations to the Act in its 176th Report. This formed the basis for introduction of the Arbitration and Conciliation (Amendment) Bill, 2003. The Bill contained a separate Chapter (Chapter IX A) on setting up of arbitration divisions within the High Courts and a scheme for appointment of judges as well as disposal of cases. However, it was referred to a government constituted Committee to analyse all aspects of the Bill and thereafter referred to the Standing Committee. Upon review, the Committee concluded that the provisions of the Bill were insufficient and contentious. Thus, the Bill was withdrawn and never saw light of the day.

A decade later, the Commercial Courts Act 2015 (Section 10) conferred Commercial Benches of the High Courts with jurisdiction in respect of arbitration matters. However, the primary drawback in the said provision is that other matters falling under the umbrella of commercial cases are also required to be heard by the same Benches. Hence, there is no specific priority afforded to arbitration matters and all matters are taken up in an unsystematic manner.

The need for creation of a specialist arbitration bench had been reiterated in the B. N. Srikrishna Committee Report (2017) as well. Once again in 2024, the T. K. Vishwanathan Committee in its Report on arbitration recognised that ‘there is a need for specialised arbitration benches as the Indian judiciary is burdened with mounting arrears of cases and exploding dockets’ and hence suggested that ‘dedicated benches exclusively for hearing arbitration matters must be set up in Courts across India and must consistently abide by the Act’s goal of minimal judicial interference.’

Intellectual Property Division in the Delhi High Court

Specialised judiciary would definitely reduce the docket explosion in arbitration matters. This conclusion stems from the performance of the Intellectual Property Division (IP Division) set up by the Delhi High Court in 2021 (which became functional in 2022) to deal with matters pertaining to intellectual property rights. This Division has helped streamline adjudication of IP suits.

In the first year of its working, a total of 628 fresh commercial IP suits were filed, more than 500 IP rights matters concerning other categories (e.g., cancellations or appeals) were started, more than 700 cases were disposed of cumulatively, and notably, only 60 appeals were filed against these decisions. The numbers are a positive sign to show that the Bench has been able to tackle the heavy case load and the extremely low appeals are a sign that the litigants are satisfied with the decisions of the IP Division.

Specialised Judicial Officers

It is plain as a pikestaff that arbitration specialists or experts, if appointed as judges, would foster improved decision-making by having experts decide complex cases and build confidence of litigants when they receive well-reasoned and cogent judgments. A direct corollary would be the decrease in appeals and docket explosion of higher judiciary.

Many jurisdictions appoint arbitration or subject matter experts as judicial officers to deal with cases. A few of them have been discussed in detail below. Recently, in a welcome move, the Supreme Court of India’s collegium recommended the name of a renowned arbitration expert to be appointed as a Delhi High Court Judge recognising him as a ‘domain specialist’. In the times to come, the result of this move is expected to be all positive.

UK Court Practice

One of the world’s leading centers for arbitration is London and over 40% of all global arbitrations choose English Law as the governing law. A significant part of the business of the UK’s Commercial Court involves arbitration matters, as approximately 25% of its claims issued are arbitration claims.

The High Court of England and Wales has a complex structure of courts. Under the King’s Bench Division, inter alia the Commercial Court and Technology and Construction Court (“TCC”) are an integral part for adjudication of arbitration disputes.

As is evident from the name, the Commercial Court specialises in adjudicating commercial disputes and also support arbitrations. As set up almost 25 years back, the TCC is a specialist court with six specialist High Court judges who deal with all types of construction, engineering and technology disputes both from within the UK and which arise internationally. It inter alia deals with ‘challenges to decisions of arbitrators in the construction, engineering and technology fields.’

A recent guide on TCC states that arbitration claims arising out of or connected with a construction or engineering arbitration should be started in the TCC, and only claims that must be started in the Commercial Court are those (increasingly rare) claims to which the old law (i.e. the pre-1996 Act) apply. Proceedings may also be transferred from any Division of the High Court or from any specialist list to the TCC or vice versa. This cross-over of jurisdiction is an important link for commercial parties to be satisfied with adjudication and has led to a positive growth of arbitration in the UK.

Singapore Court Practice

The High Court in Singapore consists of the ‘General Division of the High Court’ which inter alia deals with arbitration matters as part of one of its ‘specialised lists’ which comprise of 11 (specialist) docketed judges. These specialist judges in the General Division of the High Court of Singapore regularly hear arbitration related proceedings. The High Court also consists of the Singapore International Commercial Court (SICC) which hears and tries proceedings relating to international commercial arbitration. Cases may either commence from the SICC or be transferred from the General Division to the SICC.

Australian Court Practice

Commenting on the Australia’s court practice, Hon’ble Justice Angus Stewart (a sitting Judge of the Federal Court of Australia) stated that the Federal Court has a (i) specialist arbitration practice list (which has two commercial arbitration judges) and (ii) designated commercial arbitration national practice area judges. Once a commercial arbitration case is filed, the list Judge tries their best to conduct the first case management hearing within 14 days of filing. Efforts are made by the list judge to disposed of the case, otherwise the cases are docketed to one of the national practice area judges for case management and determination in the usual way.

The Australian practice has benefited from this implementation of specialised judges as such Judges are ‘aware of the developments and specific issues that can arise in the arbitration context, both from a legal and practical perspective, and who can ensure that a relatively consistent body of arbitration-related decisions is developed. This provides parties with a greater degree of confidence and certainty in how judicial intervention will be effected if required in a particular case.’

Upon analysis of a vast body of law and judicial practices around the world it can be concluded that without a doubt a specialised arbitration Bar and Bench would be instrumental in growth of arbitration.

Conclusion

The UNCITRAL Model Law 1986, which is the backbone of modern arbitration, had envisaged minimal court interference in arbitration proceedings. A specialised judiciary which is mindful of the arbitration process, and at the same time extends its support to the process wherever required, is a step in the right direction to achieve the abovementioned cornerstone of arbitration.

Jurisdictions around the world which have adopted a specialised approach in the form of specialised judicial forums and judicial officers to tackle factually/ legally complex arbitration matters have seen a positive impact of this change. It has inter alia led to reduction in backlog of cases in general courts, quicker disposal of cases, fewer appeals.

On home ground, the recent launch of the IP Division in the Delhi High Court is a testament that if arbitration courts or specialised benches are created, then they will go a long way in tackling the increasing pendency of arbitration matters. Keeping these factors in mind, if such a provision is incorporated and brought into force then it would be a game changer for arbitration matters in India.

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This article has been authored by Bhavana Chandak Dhoundiyal, Senior Associate with the Dispute Resolution team at Kachwaha & Partners, New Delhi. She has worked on many high stake arbitrations (on both ad hoc and institutional arbitrations conducted under the aegis of DIAC, ICA, ICC, SIAC). Her specialisation is in international arbitrations, commercial litigation, infrastructure projects. The author would like to thank Ms. Swastika, Associate Editor, RSRR, for her research assistance. This blog is part of the RSRR’s Excerpts from Experts series.