A new arbitration centre in India is opening in the Indian city of Gurugram, located just southwest from New Delhi.
The initiative for this new arbitration centre came from the Punjab and Harayana High Court. Although due to lengthy administrative procedures and government approvals it might take a few years for it to become operative, it is a positive development for the arbitration climate in India.
The initiative for the new centre came after the recent opening of the Mumbai Center for International Arbitration (MCIA) in October last year.
Many are not aware of the fact that India has many other arbitration institutions which have been operating for many years. The oldest is the Indian Council of Arbitration (ICA), established in 1965, with offices in New Delhi, which administrates both domestic and international arbitrations.
A second well-known arbitration centre is the Nani Palkhivala Arbitration Center, established in 2005, with offices in Chennai (Madras). A third, and less known institution, is the International and Domestic Arbitration Centre (IDAC), with registered office in Vardadara, but also with offices in Mumbai, New Delhi and Chennai.
Despite a positive arbitration climate and a number of operating arbitral institutions, data suggests that Indian parties still seem to prefer international arbitration centres located in Singapore, London and Paris.
The Indian Government is trying to make India an attractive destination for international arbitration and to make India itself a more compelling destination for business by bringing more reliable adjudication to India’s corporate sector.
This is a worthy goal, as it is well known that India’s court system is badly backlogged, with thousands of cases per judge in many States. In Gujarat, for example, about one in four cases is reportedly delayed by over a decade. Until the Indian Government manages to fix its court system, arbitration is the best alternative for resolving disputes concerning time-sensitive business matters.
Whether the Government will manage to make India itself a true international arbitration hub will depend on the willingness of companies operating in India to seek redress under tribunals administrated by local arbitration institutions.
In any event, the opening of each new arbitration centre in India is a positive development when considering India’s overburdened court system.