On Friday(2nd August), Supreme Court judge Justice Hima Kohli highlighted India’s strengthened reputation for arbitration by upholding arbitral awards. She spoke at the ‘Recent Developments in Arbitration to Promote Business’ seminar organized by law firms and arbitration centers.
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NEW DELHI: India’s judiciary has reinforced the nation’s reputation as a premier destination for arbitration by upholding the sanctity of arbitral awards, stated Supreme Court judge Justice Hima Kohli. Speaking at the seminar “Recent Developments in Arbitration to Promote Business” organized by law firms Gibson Dunn Secretariat and UNUM Law, alongside the International Arbitration and Mediation Centre (IAMC) and the General Counsels’ Association of India, Justice Kohli emphasized India’s progress in the field of arbitration.
Justice Kohli highlighted that the complexity of dispute resolution has increased due to the growth of international trade. To tackle these challenges, Alternative Dispute Resolution (ADR), especially arbitration, has emerged as a critical tool for businesses.
“In recent years, India has advanced considerably in positioning itself as a trustworthy player in arbitration and mediation. The country’s evolution into a prominent commercial arbitration center has been fueled by the judiciary’s unwavering dedication to expediting cases under the Arbitration and Conciliation Act, 1996, and promoting a broadly supportive enforcement framework.”
-remarked Justice Kohli.
Justice Kohli noted that several landmark judgments demonstrate India’s dedication to upholding the integrity of arbitral awards.
“By curbing judicial intervention and upholding arbitral awards, the Indian courts have enhanced India’s standing as a favorable destination for dispute resolution. This judicial approach, in alignment with legislative reforms, underscores India’s goal of establishing itself as a global arbitration hub.”
– she said.
She stressed the necessity of developing a specialized arbitration bar consisting of experts and legal practitioners solely dedicated to arbitration, considering the rise of institutional arbitration in the country.
Justice Kohli underscored that seminars and training sessions are essential for refining every aspect of the arbitration process, from drafting to enforcing the award. This approach would not only enhance confidence in India as an arbitration hub but also ensure that arbitration does not lag behind traditional litigation.
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“This would also help ensure that arbitration gains prominence and does not fall behind litigation in the courts.”
-said the top court judge.
She further highlighted that recent amendments to the Arbitration and Conciliation Act align Indian laws with the best international practices and promote a pro-arbitration regime, instilling confidence in the resolution of commercial disputes.
“In 2021, the Act was revised with amendments designed to tackle emerging challenges and enhance its effectiveness. These updates focus on advancing institutional arbitration, acknowledging the role of specialized arbitration bodies, ensuring confidentiality throughout the process, and maintaining impartiality in the selection of arbitrators.”
-she said.
In March 2023, the Bar Council of India permitted the entry of foreign law firms into India, albeit in specific areas and on a reciprocal basis. This regulatory shift is set to provide a plethora of opportunities for young Indian legal talent to compete on a global stage, particularly with their Western counterparts. Justice Kohli has emphasized the positive impact of this development, noting that it will enable Indian law firms to adopt global best practices.
“Additionally, these regulations are set to address concerns related to Foreign Direct Investment (FDI) and position India as a central hub for international commercial arbitration.”
-she stated.
Justice Kohli highlighted India’s potential to become a preferred destination for international arbitration, especially in the commercial sector.
She pointed out the country’s strengths, saying-
“It features a forward-looking legislative framework, a supportive judiciary, and strong institutional backing. Through its rulings and administrative measures, the Indian judiciary has consistently shown its dedication to upholding the finality of arbitral awards, promoting mediation, and creating a pro-investment climate.”
The Indian judiciary’s efforts have not gone unnoticed, as they have played a crucial role in positioning the country as a formidable player in the international arbitration arena. The enforcement of arbitral awards and the promotion of mediation are pivotal aspects of this strategy.
“Undoubtedly, India is a reservoir of untapped potential, poised to rise as a leading destination for international commercial mediation.”
-Justice Kohli added.
The opening up of the Indian legal sector to foreign firms is expected to bring in a wave of changes, not just in terms of competition but also in the adoption of innovative legal practices. This move is anticipated to enhance the overall quality and efficiency of legal services in India. By aligning with international standards, Indian law firms can better serve their clients and contribute to the country’s economic growth.
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Moreover, the presence of foreign law firms is likely to encourage the inflow of FDI, further boosting India’s economic landscape. This influx of investment will not only strengthen the legal infrastructure but also support various sectors that rely on robust legal frameworks for their operations.