Abstract
The realisation to strengthen the framework of International commercial arbitration in the nation, it has brought forth the standardise of the present Legislative enactment related to arbitration in India. The research paper undertakes an extensive analytical review of the legislative development of arbitration in India, spanning nearly 250 years in a codified manner. This historical-legal analysis examines the progression from early colonial enactments to the Arbitration and Conciliation Act, 1996, and its subsequent amendments. The study critically evaluates legislative intent, reform motivations, and the influence of the UNCITRAL Model Law in modernizing India’s arbitration framework. Particular attention is paid to various fundamental principles of Arbitration legislation. Through ‘Doctrinal’ and ‘comparative’ analysis the research reveals a pattern of legislative refinement aimed at minimizing court interference, promoting institutional arbitration, and enhancing enforceability of arbitral awards. This longitudinal perspective demonstrates that India’s arbitration law has evolved through cycles of experimentation, reform, and corrective jurisprudence, reflecting a gradual but determined shift toward global best practices. The analytical research has revealed that the current legislative framework for Arbitration in India is insufficient and inadequate to establish Arbitration as an independent industry for resolving international commercial disputes, thus hindering efforts to make India a global Arbitration seat.
Keywords: International commercial arbitration, historical-legal, UNCITRAL, Arbitration Law, India.
INTRODUCTION
“…whereas a defective legislation not only shatters the hope of legislators but also leads to chaos, miscarriage of justice and injustice to the victims of such law. The Arbitration and Conciliation Act, 1996 is one such defective law….”[1]
- Justice Basu Deo Agarwal
The legislation related to Arbitration in India is contained in the presently implemented ‘Arbitration & Conciliation Act, 1996’, which is based upon the ‘Model Law’ of UNCITRAL adopted in 1985. The intention behind the enactment of 1996 Act was to provide a speedy and efficacious method of disputes resolution between the parties with minimum Court intervention. Since 900 BCE Arbitration has evolved and gradually adopted in response to political, social and economic forces at work both domestically and globally.
The conceptual philosophy of Arbitration was first witnessed in our nation reportedly during the Vedic period. The most primitive recognised commentary is the ‘Brihadaranyaka Upanishad’ which stated about three principal bodies which collectively formed varying level of Panchayats:
- PUGA, which implies a body of persons belonging to different factions of society but residing in the same locality;
- KULA, which implies a body of persons connected by familial ties;
- SHRENI, that is a body of merchants and craftsmen connected by their profession.[2]
The disputes handled by these Panchayats were decided without being bound by the technicalities of the Law or procedural rules, especially since the adjudicator were members of the same society and had firsthand knowledge of the matters.
[1] Justice Basu Deo Agarwal, Legislative Flaws in Arbitration Law, SCC Online (Aug. 20, 2024), https://www.scconline.com/blog/post/2024/08/20/legislative-flaws-in-arbitration-law/
[2]N. N. Sircar, The Law of Arbitration in British India (Subodh Kumar De 1942).