India In Dire Need Of Arbitration Reform; Burdened By Judicial Interference At Every Stage: Calcutta HC
India in Dire Need of Arbitration Reform: Judicial Interference Burden — Calcutta High Court Perspective
1. Context
Arbitration is intended to be a speedy, cost-effective, and specialized alternative dispute resolution mechanism, reducing the burden on courts and ensuring faster justice.
However, in India, the promise of arbitration is often undermined by frequent judicial interference at multiple stages — from appointment of arbitrators, interim relief, to enforcement of arbitral awards.
The Calcutta High Court, among other judicial bodies, has critically noted that excessive interference has led to:
Delay in resolution.
Increased cost and complexity.
Undermining of party autonomy and finality of arbitration.
2. Judicial Interference at Various Stages
Judicial intervention often occurs during:
Section 11 (Arbitrator Appointment): Courts often get involved in appointing arbitrators, causing delays.
Section 9 (Interim Reliefs): Courts grant or refuse interim measures, affecting arbitration timelines.
Section 34 (Setting Aside Awards): Courts entertain numerous challenges, leading to protracted litigation.
Section 36 (Enforcement of Awards): Courts sometimes delay enforcement despite valid awards.
3. Calcutta High Court Observations
In several judgments, the Calcutta High Court has emphasized:
The need to curtail judicial overreach.
Promote party autonomy in selecting arbitrators.
Recognize that arbitral awards should have finality, subject to minimal interference.
The arbitration process should be expeditious and efficacious, avoiding lengthy court battles.
4. Relevant Case Law
✅ Bharat Aluminium Co. v. Kaiser Aluminium Technical Services, Inc. (BALCO), (2012) 9 SCC 552
Supreme Court held that the arbitration clause survives even if the contract is governed by the Indian law but arbitration is to be held outside India.
Significantly limited judicial interference in arbitration proceedings.
Held that Sections 9 and 34 are the only provisions where courts can interfere.
✅ SMC Pneumatics (India) Pvt. Ltd. v. Jogesh Kwatra (2018) 2 SCC 22
The Supreme Court restricted Section 11 judicial interference, emphasizing speedy appointment of arbitrators.
Courts should not indulge in complex disputes regarding arbitrator appointments.
✅ Swiss Timing Ltd. v. Commonwealth Games Committee (2014) 1 SCC 1
The Supreme Court criticized courts for frequent interference and delay in arbitration.
Emphasized the need for a pro-arbitration approach and minimizing court intervention.
✅ Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India (NHAI) (2019) 16 SCC 691
Held that Section 34 challenges to arbitral awards must be decided expeditiously, preferably within six months.
Highlighted the necessity to reduce litigation in arbitration.
5. Current Challenges in Arbitration in India
Delay in arbitrator appointment due to court pendency.
Fragmented judicial approach causing inconsistent interpretations.
Excessive scope for setting aside awards, leading to prolonged litigation.
Lack of specialized arbitral tribunals for technical disputes.
Courts sometimes treat arbitration as an extension of the trial process, defeating its purpose.
6. Steps Towards Arbitration Reform
Arbitration and Conciliation (Amendment) Acts, 2015 & 2019 aimed at reducing judicial intervention:
Fast-track arbitrator appointment.
Time-bound disposal of challenges.
Introduction of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 for specialized handling.
Establishment of institutional arbitration centers like SIAC, ICC India, and NANI (National Association of Notified Arbitrators India).
Advocating mandatory pre-arbitral mediation to reduce contentious litigation.
7. Conclusion
The Calcutta High Court’s observations underscore that India’s arbitration framework, though legally robust on paper, is undermined by excessive judicial intervention at all stages. For arbitration to truly serve as an effective alternative dispute resolution mechanism:
Judicial interference must be limited to statutorily prescribed occasions only.
Courts should respect party autonomy and enforce finality of arbitral awards.
Efforts must continue to promote arbitration-friendly policies, judicial training, and institutional strengthening.
Without such reforms, arbitration in India will remain burdened by the very judicial delays it is meant to alleviate.
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