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Seven-Year Delay in Constituting Threatens Goals
For nearly seven years, a key pillar of India's has remained a paper entity. The , created by the amendment to the , was designed to be the that would professionalise and build the trust needed for India to become a global . Yet, as the Government acknowledged in Parliament in , the Council has never been constituted. The admission was brief, but its implications are far-reaching for the legal community and the business world alike.
The Council was not an afterthought. It emerged from the
report of the
, which identified a critical weakness in Indian arbitration: the shortage of credible domestic institutions.
"The problem was not the law. It was the shortage of credible institutions,"
the report concluded. Parties routinely opted for
because they did not trust domestic institutions to manage a case well. To cure this, Parliament inserted a new
into the Act, comprising
, creating a seven-member body chaired by a former
judge or an arbitration expert, appointed in consultation with the Chief Justice of India. The Council was to
, recognise bodies that accredit arbitrators, run training programmes, maintain a
, and advise the Government on policy.
A That Never Sat
The Council's mandate was straightforward: to provide the infrastructure of trust that makes a seat attractive. A grade from the Council would tell a corporate choosing between two institutions which one meets a tested standard. An would give parties confidence about the qualifications of the arbitrator deciding their dispute. A public repository of awards would allow the entire system to learn from actual tribunal decisions. These are the ordinary furnishings of a trusted arbitral seat, and India legislated for all of them in . But none of them has materialised because the body meant to deliver them has never met.
The Government has repeatedly restated its ambition to make India a global . The Act was amended in 2015, , and , each time with shorter timelines, fewer court interventions, and a clear signal that India is open for business as a . Yet the one institution meant to carry reform from statute into practice was never switched on. This is the distance between legislating a hub and building one.
The selectiveness is telling. In the same season of reform, Parliament created the by statute, and the Government has since steered large public-sector enterprises to name it in their contracts. The State could stand up an arbitral institution when it chose to. What it did not stand up was the meant to hold every institution—including the IIAC—to a common standard. The hub was given a flagship but denied a rulemaker.
The Cost of Inaction
The consequences of this vacuum are not abstract. Take . The amendment had tied accreditation to a rigid , widely criticised for shutting out foreign-qualified arbitrators. The amendment removed the Schedule and rewrote to state that qualifications, experience, and accreditation norms would be specified by regulations. Those regulations, however, are the Council's to make. With no Council, there are no regulations, and therefore no at all. A reform meant to professionalise the pool of arbitrators has produced a blank. An arbitrator may call himself accredited, and no one can say by what standard, because the standard was left to a body that does not sit.
suffer similarly. While the Council waited to exist, grew without it. Some of that growth is healthy, as established centres wrote careful rules. Some is not, and the issue is now before the . In , the Court has issued notice on a petition arguing that a trade association administers arbitrations under its own rules, with no external body to test whether those rules meet any common standard. The petition asks the Court to direct the establishment of the Council. It puts the vacuum in concrete terms: when an institution writes rules that favour itself, there is at present no grader, no , and no short of a constitutional court. The is only the dispute that reached the Court; the same question—who checks the checker?—hangs over every institution that writes its own rules and then sits in judgment under them.
Judicial Attention and the
The Chief Justice of India has described the Council's continued non-constitution as part of a in India's arbitration project. His warning carried a hard number: Indian parties remain among the largest foreign users of the , taking their disputes to a seat they already trust. A seat that legislates institutions and then does not build them invites the very doubt a hub cannot afford.
The paradox deepens with the draft , released for public consultation. The Bill again hands functions to a working Council, yet in freeing arbitral institutions to run their own affairs, it steps back from the very grading role the Council was built to perform. Fresh reform is being drafted around a that has never been appointed, and around a mandate its own drafters seem no longer sure they want. This tension suggests a fundamental ambivalence about the Council's role.
The Way Forward: Constitute or Let Go
Two answers to the delay are usually offered, and both dodge the harder question. The first is that the Government has been slow and needs to appoint members. The second is that the ground has shifted so far since that the Council, as designed, may no longer be the right vehicle. There is force in the second. A central grader of institutions and of arbitrators sits at odds with a Bill that wants to empower institutions and keep courts at a distance. But the honest response to that tension is a decision, not a vacuum.
If the Council is still wanted, it should be constituted with a mandate rewritten for the arbitration landscape of : lighter on gatekeeping, firmer on grading, transparency, and the depository of awards, and independent enough to be believed. If it is not wanted, its functions should be moved, in plain terms, to a body that exists. What cannot be defended is the present state, in which the Council is real enough to be assigned work and unreal enough to do none of it.
India's case for being an
rests on a simple promise: that a party who chooses India will find a system that is quick, fair, and well run. Much of the legislative work behind that promise is done. The Act has been amended three times, institutions are improving, and courts speak more and more of arbitration as a first choice rather than a last resort. The seats India measures itself against are trusted because their institutions are trusted, and that trust is built, not announced. What is missing is the keystone the design placed at the centre and never set. As the source aptly puts it:
"Seven years is long enough to decide whether the
is to lead the reform or to be retired. Leaving the chair empty decides nothing, and it tells the world more about our seriousness than any amendment does."
The legal community now watches to see whether the Government will act—or whether the will widen further. For practitioners and parties alike, the message is clear: a hub cannot be proclaimed; it must be built, and built with the institutions that give it life.
