On Friday(13th Sept), Chief Justice D.Y. Chandrachud urged India to foster a global international arbitration culture, calling for a fair dispute resolution platform both domestically and internationally. He emphasized that a strong legal framework is essential for economic stability and investor confidence.
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NEW DELHI: On Friday(13th Sept), Chief Justice of India (CJI) D Y Chandrachud has called for India to foster a global international arbitration culture. Speaking at a high-profile conference on international arbitration and the rule of law, the CJI emphasized that the time has come for India to provide a level playing field for dispute resolution in domestic courts and on the global stage.
Justice Chandrachud highlighted the crucial role that the rule of law plays in promoting economic stability, growth, and competitiveness. According to him, a robust legal framework that enforces contracts and ensures the protection of rights creates an environment where both domestic and foreign investors feel confident and secure.
“Adherence to the rule of law ensures fairness, stability, and predictability, fostering an environment where economic growth thrives as investors benefit from protected rights, enforced contracts, and efficient dispute resolution.”
-he stated.
He stressed that a strong adherence to the rule of law fosters economic growth by ensuring that disputes are resolved quickly and effectively. This, in turn, helps investors feel more confident about entering and investing in a country where such systems are in place. Justice Chandrachud explained that such a framework is not only essential for foreign investment but also for improving the living standards of the country’s citizens.
“The rule of law is essential for creating an environment that supports economic stability and growth, acting as the fundamental framework for our digital era’s development.”
– Chandrachud added, elaborating on how the rule of law plays a pivotal role in today’s globalized and digital economy.
The CJI also pointed out the optimistic economic outlook for India, citing predictions from leading international organizations.
“The International Monetary Fund (IMF) has predicted a 7% growth in GDP for India for 2024-25, making the country rank at the virtual top of the ladder,”
– he noted.
He further added that the World Bank has also projected similar growth, reinforcing India’s potential as an economic powerhouse.
Given this backdrop, Chandrachud stressed that India is in a prime position to lead the global shift toward international arbitration.
“The time has come for India to take the lead in fostering a culture of international arbitration, providing a level playing field for dispute resolution beyond domestic courts,”
– he asserted.
By building a solid institutional framework, India can position itself as a leader in international arbitration, especially in the global South. This, he said, would contribute to a more equitable, efficient, and reliable system for resolving commercial disputes globally.
CJI Chandrachud also shed light on ongoing legislative efforts aimed at strengthening India’s arbitration landscape. He mentioned that Parliament has initiated steps to revamp the Arbitration and Conciliation Act of 1996, an act that currently governs arbitration in India.
“To this end, the Ministry of Law and Justice has set up a committee to assess the Act’s effectiveness and recommend amendments. The committee’s report is now under review by the ministry, setting the stage for potential reforms.”
-the Chief Justice revealed.
These amendments are expected to further align India’s arbitration processes with global best practices, positioning the country as a preferred destination for resolving disputes.
Justice Chandrachud reflected on the evolution of India’s stance toward investor-state arbitration, a mechanism used to resolve disputes between investors and states. He noted that in the past, there was hesitation and concern about engaging in this type of arbitration due to a lack of expertise in handling such complex cases.
“We once feared investor-state arbitration due to our lack of professionalism in handling disputes between states and investors.”
-he said.
However, the situation has now changed, thanks to the growing expertise and professionalization in the field of arbitration in India.
“That environment has changed with the growing professionalization of arbitration in India,”
-he added, indicating that the country is now more prepared to handle such cases effectively.
Justice Chandrachud also pointed out the increasing number of arbitration-related cases reaching Indian courts. He acknowledged the importance of having judges with specialized knowledge in arbitration matters to efficiently handle these disputes.
“As arbitration becomes a favored method for resolving disputes, related litigation is rising in courts, necessitating judges with specialized expertise.”
-he remarked.
In recent years, many members of the bar with substantial experience in arbitration cases have been appointed as high court judges, ensuring that India’s judiciary is better equipped to handle complex arbitration matters.
The theme of the conference, international arbitration and the rule of law, was particularly significant given the global emphasis on improving commercial efficiency. The Chief Justice remarked that the values of ease of doing business and commercial efficiency are deeply tied to the rule of law.
“While the global arbitration community values commercial efficiency and ease of business, these are deeply connected to a strong respect for the rule of law, which ultimately leads to better economic and commercial outcomes.”
– Chandrachud explained.
Several other notable figures also addressed the conference. Justice Sanjiv Khanna, another judge of the Supreme Court, highlighted India’s efforts to become an arbitration-friendly jurisdiction.
“Arbitration is a prominent method for resolving commercial and international disputes. Reflecting global trends, India has introduced reforms to become an arbitration-friendly jurisdiction, leading to significant enhancements in contract enforcement and business ease.”
– Justice Khanna said.
Attorney General R. Venkataramani, Supreme Court Bar Association President Kapil Sibal, and Secretary-General of the Permanent Court of Arbitration (PCA) Marcin Czepelak were also among the dignitaries who contributed to the discussions.