Need for changes in the Indian arbitration system

According to retired Justice AP Shah, Chairman of Law Commission of India, in India, advocates and judges do not understand the difference between an arbitration proceeding and a traditional litigation. He said that the core idea behind arbitration is speedy redressal which has not yet been understood. During a lecture that he delivered in the Madras High Court premises and organised by Indian Law Institute, he stated that the way ad hoc arbitration is conducted saddens him.

Justice Shah also mentioned that 246 recommendations have been made to the Central Govt. by the Law Commission in this regard and that the Indian arbitration system should be corrected.

He mentioned that various steps have already been taken to improve the arbitration system in the country. The Union Govt. decided to increase the number of High Court judges by twenty five percent in an attempt to improve the judicial infrastructure which would help in having keen arbitration benches in all high courts. This would help in avoiding the delay in proceedings.

International parties find Indian arbitration to be costly. Also due to frequent intervention by courts, they do not prefer it as a redressal option.

Justice Shah was of the opinion that the arbitration system can be improved only by setting up arbitration institutions throughout the nation.

During his speech he mentioned that he had recommended forming of separate commercial benches in the High Courts and separate commercial courts to try trade disputes. This was important as according to him the century old Civil Procedural Code could not be made workable for trade related disputes.