The Indian government is poised to introduce significant reforms to its arbitration framework, with plans to amend the Arbitration and Conciliation Act, 1996 during the upcoming winter session of Parliament. The proposed changes are designed to dramatically speed up the resolution of commercial disputes in the country.
Key Features of the Proposed Amendment
The Arbitration and Conciliation (Amendment) Bill is expected to formally provide for emergency arbitration, a mechanism that allows parties to seek immediate interim relief even before a full arbitral tribunal is constituted. This move aims to bridge a critical legislative gap that has long hindered the enforcement of such urgent measures.
According to two people familiar with the development, the bill will also expand the definition of arbitration to explicitly include proceedings conducted through electronic and audio-video means. This technological update, which was part of a draft bill circulated for comments in October 2024, is set to legitimize and encourage technology-enabled dispute resolution across India.
The Driving Force Behind Emergency Arbitration
The push for emergency arbitration gained significant momentum after the Supreme Court's 2021 ruling in the landmark case of Amazon.com NV Investment Holdings LLC vs Future Retail Ltd & others. In this case, which involved emergency arbitration at the Singapore International Arbitration Centre (SIAC), the apex court ruled that an emergency arbitrator qualifies as an arbitrator and that their awards are enforceable.
A high-level committee for arbitration reforms, chaired by former law secretary T.K. Viswanathan, had recommended in 2024 that emergency arbitration provisions be added to India's arbitration law. The committee noted that while various Indian arbitral institutions already permit the use of emergency arbitrators, the awards they issue currently lack explicit statutory recognition, creating significant enforcement challenges.
Implementation Challenges and Global Ambitions
The proposed legislation states that the powers and duties of emergency arbitrators will be governed by the Arbitration Council of India (ACI). However, the ACI itself, which was legislated into existence in the 2019 amendment, has yet to be formed, potentially creating implementation hurdles for the new system.
These changes represent India's strategic shift away from ad-hoc arbitration processes toward strengthening institutional arbitration. The country aims to establish itself as a competitive global arbitration hub, following the successful model of Singapore's SIAC, which attracts a substantial share of international arbitration matters.
Domain experts have welcomed the proposed changes. Divya Swamy, partner at D&Y Law Chambers, noted that recognizing emergency arbitration expedites dispute resolution by ensuring that urgent interim relief is accessible within the arbitral framework itself, without diverting parties to overburdened court processes.
This will be the fourth amendment to the 1996 Arbitration & Conciliation Act, reflecting the government's ongoing efforts to improve India's ease of doing business and create a more efficient legal environment for commercial disputes.
