Back
Ex- Justice : IIAC's Reflects
Former judge and senior advocate has delivered a scathing critique of the , arguing that its in the global arbitration landscape is a symptom of a deeper plaguing in the country. Speaking at a legal forum, Rao rejected the notion that India needs further statutory guidance, insisting that the existing legal framework is sufficiently robust. Instead, he pinpointed the real difficulty to be the inconsistent and often arbitrary application of the law by the judiciary, particularly at the stages of arbitral awards.
Rao’s remarks come at a time when India is actively positioning itself as a hub for international arbitration, with the IIAC—established under the —serving as the flagship institution. Yet, despite government backing and substantial investment in infrastructure, the centre has struggled to attract significant caseloads, especially from international arbitration users. The senior advocate’s diagnosis shifts the focus from legislative gaps to judicial practice, a perspective that has resonated deeply within the legal community.
The in
Rao did not mince words when describing the foundational problem with IIAC’s development. “The problem began with an approach that involved providing an institution with infrastructure and a corpus, renaming it and then expecting it to compete with established global centres,” he said. This critique echoes longstanding concerns that merely creating an institution with government funds is insufficient to build the credibility and track record that users demand in international arbitration. Trust, Rao implied, cannot be purchased; it must be earned through consistent, predictable, and efficient dispute resolution processes.
The senior advocate’s reference to “” is particularly telling. IIAC, despite its official status, remains relatively unknown outside domestic circles. In contrast, institutions like the and the command global recognition through decades of reliable service. Rao’s analysis suggests that India’s institutional deficit is not about infrastructure or legal texts, but about the confidence of the arbitration community—a confidence that is eroded when the enforcement of awards becomes a battleground.
Under Section 34
Central to Rao’s criticism was the manner in which courts handle applications to under . He highlighted a stark disparity in judicial behaviour: “You have judges who can decide the same 34 in 15 minutes. And then there are judges who give you 15 dates for the same 34. So it’s really a question of application.” This observation encapsulates the unpredictability that plagues Indian arbitration practice. While the law provides a —essentially confined to , , and —some judges treat Section 34 petitions as a , and delaying resolution for months.
Rao’s point is that this inconsistency undermines the entire arbitration architecture. Parties choose arbitration precisely because they seek a , with . When the enforcement stage becomes a , the plummets. The senior advocate noted that India already has a “reasonably developed body of law governing interference with domestic and international awards.” The real difficulty, he reiterated, is how that law is applied.
Failure of the Regime
At the heart of the is the from challenge to enforcement. Rao did not propose new legislation or additional layers of regulation. Instead, he called for a . This is a significant departure from the common refrain that India’s arbitration law is inadequate. The , as amended in and , already limits judicial intervention and mandates of Section 34 petitions. Yet, in practice, these provisions are often ignored. Courts grant repeated adjournments, conduct , and sometimes without applying the stringent tests laid down in precedents.
Rao’s critique also implicitly targets the lack of in many high courts. While the has a dedicated arbitration division, high courts with significant commercial jurisdictions often rotate judges arbitrarily, leading to the “15 minutes vs. 15 dates” phenomenon. The solution, according to Rao, lies not in creating more tribunals or layers of appeal, but in judicial education and strict adherence to the statutory mandate.
Implications for Legal Practice and International Perception
The legal community has noted that Rao’s observations, coming from a former judge, carry substantial weight. They reinforce the view that India’s cannot thrive without a cultural shift in how judges approach arbitration matters. For law firms and corporate counsel advising clients on India-seated arbitrations, the unpredictability of enforcement remains a major risk factor. Many opt for foreign seats even when the underlying contract is governed by Indian law, simply to avoid the Indian courts’ surveillance.
Rao’s call for better application of existing law also suggests that the judiciary itself must take corrective steps. Some high courts have started forming dedicated arbitration benches, but adoption is uneven. The senior advocate’s remarks may spur further introspection and possibly the issuance of practice directions by Chief Justices to ensure uniformity.
Conclusion: A Question of Judicial Attitude
The underlying message of ’s address is clear: India’s arbitration reform efforts must move beyond building institutions and enacting laws. The next frontier is judicial behaviour. The IIAC’s is not a failure of the institution alone but a reflection of the legal environment in which it operates. Until parties can have confidence that a valid award will be enforced swiftly and with minimal interference, India will struggle to compete with established centres like Singapore, London, or Paris. The solution, as Rao succinctly put it, lies in the application of the law—not in creating more laws.
