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Vaishnavi Agrawal [1]   Introduction As India attracts greater investment and aspires to establish itself as a leading global economy, a surge in cross-border transactions is inevitable. This mandates the existence of an efficacious cross-border dispute resolution mechanism. A direct result of this was the emergence of International Commercial Arbitration as the most commonly opted machinery. In such a scenario, the need for an economy to be pro-arbitration or arbitration-friendly becomes indispensable.   Against this backdrop, India has certainly evolved into a pro-arbitration jurisdiction with numerous judicial decisions and legislative actions. However, in light of the recent events, such as the ‘copy-paste’ judgement, Public Works Department (‘PWD’) of Delhi’s removal of the arbitration clause from all future contracts, the Gayatri Balasamy judgement wherein interference with arbitral awards was allowed though with caution and care eventually casting uncertainty over the finality of an arbitral award, and others, the perception of India as an arbitration-friendly jurisdiction stands tarnished. These developments necessitate a closer examination of whether the label of a ‘pro-arbitration’ jurisdiction is merely a strategic narrative to attract investors and global influence, or whether it genuinely withstands the test of time and practice. In light of these recent trends, this article aims to examine the trajectory of arbitration in the Indian judicial landscape. It suggests that these events not only deviate from global norms but also occur at a time when India is trying to establish itself as a global arbitration hub. This article provides an overview of the events that transpired, analyses their impacts on India’s ambitions and highlights the persistent concerns.   The events in question and their implications With the onset of 2025, not one but several such incidents that question India’s sanctity as a pro-arbitration jurisdiction have come into light, most of these being in and around April 2025. In this section, the author aims to delve into the implications of these events on the Indian arbitration landscape.   The first in question is the annulment while deciding the case of DJO v DJP by the Singapore Court of Appeal on 8 th April, 2025, of an international arbitral award made by a former CJI, Deepak Misra , on discovering that almost half the decision was copied verbatim from earlier awards he had authored in separate but related disputes. The dispute arose from a contract involving a special-purpose vehicle tasked with managing freight corridors in India and a consortium of three infrastructure companies. The core issue was the interpretation of a 2017 notification issued by the Indian government regarding revised minimum wages, which the consortium argued entitled them to higher payments. After negotiations failed, the matter proceeded to arbitration in Singapore under the International Chamber of Commerce (ICC) Rules . In November 2023, the Arbitral Tribunal, led by Justice Misra and including co-arbitrators Justices Krishn Kumar Lahoti and Gita Mittal, ruled in favour of the consortium. However, this ruling was subsequently contested before the Singapore International Commercial Court, which found that significant sections of the award were closely derived from two earlier arbitration decisions authored by Justice Misra in similar cases. The Court of Appeal has since affirmed this finding. Such incidents cast doubt on the credibility and competence of Indian arbitrators, particularly given that many are retired judges. Their authority and impartiality as arbitrators come under scrutiny, raising broader concerns about the standards of arbitration practice in India. Such an award was seen as a compromise of fairness and integrity and therefore a violation of the ‘principles of natural justice’. This is not only a question of individual reputation, but also raises apprehensions about the procedural fairness and quality of Indian-seated arbitrations, effectively deterring parties from choosing India for the resolution of their conflicts or from opting for Indian arbitrators.   The second event in line is the notification issued on 21 st April, 2025, by the PWD of Delhi, eliminating arbitration as a dispute resolution method for all future contracts. This decision aligned with a 2024 guidance from the Ministry of Finance, which outlines the drawbacks of arbitration, though the latter only restricted arbitration for disputes valued up to INR 10 crores. In contrast, the PWD’s notification imposes a comprehensive ban on arbitration, amending clause 25 of the General Conditions of Contract to require that all disputes be resolved through the courts. This move portrays a lack of trust in arbitral institutions and the arbitration framework in India. Further, such a decision dissuades parties from engaging in contractual relations with the public sector enterprises or state instrumentalities, where the sanctity of the contract is not preserved and creates tensions in the pre-existing contractual relations, while also undermining trust, which is the very foundation of any investment. In light of this notification, it appears that the pro-arbitration narrative is merely a catchy phrase, whilst the reality portrays a completely contrary picture.   Lastly, on 30 th April, 2025 in the landmark decision in the case of Gayatri Balasamy v ISG Novasoft Technologies Limited , t he Hon’ble Supreme Court in a 4:1 majority held that courts have a limited power to modify an arbitral award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 and listed instances wherein such power of modification could be exercised in certain circumstances the most relevant here being ‘ by exercising great care and caution while utilising the powers under Article 142 of the Constitution, within its constitutional limits .’ The judgment essentially allowed interference with arbitral awards if the same is deemed fit under Art. 142 , thereby undermining the sanctity and finality of the arbitral award. The same stands contrary to legislative reforms in 2015, 2018 and 2021 , which had systematically narrowed the judicial interference with arbitral awards, providing procedural clarity and creating a predictable dispute resolution landscape, restoring investor confidence. The decision highlights the need for immediate legislative intervention to fill the statutory void.   Deviation from global norms India with its aspirations of emerging as a global arbitration hub by virtue of Draft Arbitration And Conciliation (Amendment) Bill, 2024 , several other judicial and legislative reforms seek to harmonise its domestic arbitration practices with international best practices in line with frameworks like the New York Convention and the Geneva Convention , both of which facilitate the enforcement of arbitral awards, thereby creating investor confidence and boosting its commercial relationships. The development of strong institutional arbitration, such as the Delhi International Arbitration Centre (DIAC) and the Mumbai Centre for International Arbitration (MCIA), similar to Singapore and London, has further enhanced India’s credibility as an arbitration-friendly jurisdiction. However, these recent events reveal a more uncertain future in terms of the Indian arbitration landscape. These events not only deviate from the established global norms but also trigger the need for a more synchronised pro-arbitration framework.   Firstly, for instance,   the New York Convention’s harmonization of arbitral enforcement  reinforces investor confidence in cross-border transactions. Weakening the arbitration framework by either introducing a lack of finality of the arbitral award or ‘copy-pasting’ arbitral awards from parallel awards without due regard to the difference in the factual scenarios or by removing arbitration as a means of dispute resolution by the state machinery not only affects the domestic commercial transactions, but also repulses the investors from viewing India as a prospective jurisdiction to invest and trusting it with the resolution of their dispute. Such development, therefore, is at divergence with India’s aspirations of emerging as the global arbitration hub.   Secondly, the legislative reforms of   2015, 2018 ,  2021 and even the latest Draft Arbitration And Conciliation (Amendment) Bill, 2024 , aim to confine judicial interference in arbitral awards and introduce procedural clarity, introducing predictability in India’s arbitration landscape. However, the Gayatri Balasamy judgement allows for cautious yet undefined interference with the arbitral awards, thereby introducing an element of unpredictability, which might act as a repellent for investors and is contrary to international practices in jurisdictions like Singapore and the United Kingdom, wherein stringent provisions exist for timely and effective enforcement of arbitral awards.   In contrast to the above-mentioned events,  India’s recent amendment  to its bilateral investment treaty with the UAE reveals a notable reduction in the time period for exhausting local remedies, indicating an intention to expedite access to international arbitration. However, it is hard to shield investor confidence in a scenario where arbitration as a means to resolve disputes is banned despite a contractual agreement, or where, despite obtaining an award, the same may be subjected to litigation. An incident such as this stands in deep contrast with the progressive Indian practices, exposing inconsistency with its international practices.   Conclusion The author contends that India’s aspiration to emerge as a pro-arbitration jurisdiction is undermined by its recent actions that reveal a disconnect between policy intentions and actual practices, and is ultimately likely to deter foreign investment and foster uncertainty in its dispute resolution mechanisms. To align with international standards, India must establish consistency between its legislative framework and judicial behaviour, which can primarily be achieved by way of legislative intervention in reinforcing the finality of arbitral awards and implementing capacity-building initiatives for arbitrators, particularly ones with judicial backgrounds. Furthermore, ensuring that public sector entities adhere to arbitral commitments is vital for rebuilding confidence. A credible and principled commitment to arbitration is essential for India to reshape its image into a genuinely arbitration-friendly jurisdiction in the global legal landscape. [1] Final year law student at the Institute of Law, Nirma University.

*Vaibhav Yadav This article discusses the interrelationship between investment arbitration and environmental issues. The subject of environmental protection in arbitration has been overlooked. However, with time, it has become evident that examining the link between environmental protection and arbitration is significant. Initially, arbitral tribunals ignored environmental concerns in arbitration, but recently, tribunals have started considering these issues more seriously. Environmental matters in investment matters are raised either through a claim or a counterclaim. The integration of environmental concern into arbitration is complex and lacks flexibility. It is crucial that environmental issues are no longer ignored in matters related to investment arbitration. This article examines how arbitral tribunals address the integration of environmental concerns and investment arbitration, drawing on the landmark case of Perenco v. Ecuador. It emphasises the need to strike a balance between investment arbitration and environmental protection. It also explains how the tribunal awarded compensation to the investor while at the same time holding the investor accountable for environmental harm. Introduction The issue of investment arbitration and the environment is emerging as an important concern at the global level. Environmental concerns were ignored in most bilateral investment treaties which were signed before 2000. Most treaties from that period lack provisions for environmental protection. However, bilateral treaties signed after 2000 have included provisions for environmental protection, granting the host state the right to make the rules for protecting the environment. For example, the Morocco and Nigeria Bilateral Investment Treaty includes provisions for environmental preservation. The definition of investment now expressly includes sustainable development. Environmental principles are gradually becoming a responsibility for investors in bilateral investment treaties. [1] For instance, the Brazil-Malawi Bilateral Investment Treaty imposes responsibilities on investors to protect the environment. Tribunals are increasingly prioritising sustainable development in cases where conflicts arise between investment arbitration and environmental concerns. For example, in the case of Chemtura v. Canada, the tribunal ruled that the investor must adhere to sustainability principles and avoid harming the host state's environmental resources. Perenco v. Ecuador  is a landmark case which addresses the conflict between environmental protection and investment arbitration. [2]   Background Perenco, a French oil company, and Burlington, another foreign oil company, had contracts with Petroecuador, Ecuador's national oil company controlled by the Ecuadorian government. Perenco oil company operated two oil blocks and began earning substantial profits due to the oil prices. However, subsequently, Ecuador enacted Law No. 42, imposing a 99 per cent tax on Perenco earnings. Perenco initially paid the tax but later opposed it. The Ecuador Government terminated Perenco's contract and sought to negotiate a new one.  The Ecuadorian government wanted to formulate a new contract with Perenco. Petroeuador took control of the oil block previously operated by Perenco. The Ecuador Government also filed a case in a local court to recover taxes from Perenco. [3] Main Issue Perenco alleged that the Ecuadorian government had violated the France-Ecuador Bilateral Investment Treaty by imposing a disproportionate tax of 99 per cent on its earnings and committed illegal expropriation. Perenco had made allegations against Ecuador that it had committed illegal expropriation. Consequently, Perenco had filed a claim with ICSID for arbitration. Ecuador countered, alleging that Perenco caused environmental damage and polluted the oil block sites. Accordingly, Ecuador had filed a counterclaim against Perenco in ICSID for arbitration. [4] Proceedings of  the Tribunal An arbitral tribunal consisting of three arbitrators was established. The tribunal granted an interim measure to Perenco, directing Ecuador to halt the local court case against Perenco. In 2011, the tribunal confirmed its competence to hear the matter. In 2014, the tribunal determined that Ecuador was held liable for disproportionate treatment. [5] According to the Tribunal, Ecuador violated provisions of the bilateral investment treaty by imposing an unreasonable tax on Perenco's earnings. The Tribunal also found Ecuador liable for Expropriation due to the cancellation of the Perenco contract. The Arbitral Tribunal held Perenco liable for the environmental damage caused by its operations, which disturbed the natural resources of the Amazon region. [6] Award by Arbitral Tribunal Perenco had sought $ 1.5 billion in damages from the Ecuadorian government for breaching the bilateral investment treaty.  However, the tribunal awarded $ 449 million to Perenco for disproportionate treatment by the Ecuadorian government and illegal expropriation. An important factor for higher compensation was Ecuador's failure to adhere to the interim measures of the tribunal, and Ecuador had continued legal proceedings against Perenco in its local courts. [7] The Tribunal awarded Ecuador $54 million for its counterclaim against Perenco. In the related Burlington case, Ecuador had already been awarded $ 39 million. The Burlington case is connected to the Perenco case, which is why the tribunal granted Ecuador an award of $54 million in the Perenco case. [8] Ecuador had also filed a counterclaim for damage to the oil block, but the tribunal denied it, stating that an award for damages to the oil block had already been granted in the Burlington case. The Burlington and Perenco cases are connected with each other because both companies operated similar oil blocks and faced similar issues. [9] Appointment of Expert by the Tribunal The Tribunal appointed an independent expert to determine environmental damages. The tribunal appointed an independent expert for a fair assessment of the environmental damages, without any prejudice or partiality. Both Perenco and the Ecuador government had appointed their expert for the assessment. The tribunal awarded environmental damages based on evidence provided by its appointed expert. The Tribunal also referenced Ecuador’s constitution and local law, which emphasised strict liability for environmental damage, highlighting the priority given to environmental conservation in Ecuador. [10]   Counterclaim in ICSID Article 46 of the ICSID Convention states that a counterclaim can be filed in a matter which is connected with a substantial issue of a case. It means that if parties agree to ICSID arbitration, then a counterclaim can be filed only if it is connected with a substantial issue of the case. In the case of Perenco v. Ecuador , the environmental counterclaim was allowed because it was directly related to the investment issues raised in the arbitration. [11] A. Issue of Environmental Counterclaim in Perenco v. Ecuador The case of Perenco v. Ecuador is unique for addressing an environmental counterclaim. This case is a rare example where an environmental counterclaim has been held in favour of the host state. The Tribunal has given various reasons for the imposition of environmental damage. The tribunal observed that states have significant freedom to formulate and amend environmental rules to conserve their environment. [12] The Tribunal highlighted the impact of the 1992 Rio Declaration on Ecuador’s domestic environmental laws. In the Burlington case, the tribunal observed that there is a stronger environmental rule in the local law of Ecuador. In the Burlington case, the tribunal awarded $93 million for environmental damage and also granted damages for harm caused to the oil block sites. The Burlington and Perenco cases were interconnected to their issues and operations, resulting in awards of $ 54 million and $ 39 million, respectively, for environmental damages. [13] B. Approach of the Tribunals Regarding Environmental Counterclaim Tribunal adopted various approaches to deal with environmental counterclaims. In the Burlington case, the tribunal ordered an inspection of the damaged oil block areas to determine the impact of the oil company's operations on the soil and land. On the other hand, in the Perenco case, the tribunal was actively involved in environmental matters. [14] In the case of  David   Aven et al v. Costa Rica , the issue of environmental counterclaim was raised. In this case Costa Rica had filed a counterclaim against the foreign investor's claim for damage caused to the environment. In this case, the tribunal refused to deal with the matter of the environmental counterclaim due to procedural errors and the counterclaim was not presented within a reasonable period of time. All the above cases prove that there has been an evolution of tribunals for dealing with matters of environmental counterclaims. Now, tribunals are imposing liability on foreign investors for causing damage to the environment and this can also deter foreign investors from causing damage to the environment. [15] C. Environmental Restoration Fund When the tribunal awarded Ecuador damages for environmental harm, Perenco suggested the creation of an environmental restoration fund to restore the damaged Amazon sites. Ecuador agreed to the suggestion of Perenco. The tribunal had not agreed to the suggestion and said that it is competent only to award environmental damage. The tribunal said it is not competent to give direction for the creation of the environmental restoration fund. [16] Although both parties agreed to the creation of an environmental redemption fund, the tribunal should have considered issuing an order for the establishment of an environmental restoration fund. If there is a proper check of the tribunal, then it could ensure that an environmental restoration fund could be effectively used for the restoration of damaged Amazon sites. Without oversight, awarded damages may not be used for restoring damaged Amazon sites. It would be commendable that tribunals award environmental damages and provide further guidance on their enforcement and utilisation in order to enhance their effectiveness. [17] Conclusion The determination of Perenco v. Ecuador exhibits that environmental issues are significant to investment arbitration. Previously, when issues were related to environmental damage, the tribunals generally ruled in favour of the foreign investor. But the recent approach of tribunals is showing that they are increasing support for host states when environmental damage is caused. The Perenco case emphasised that there can be a complex interplay between investment arbitration and environmental protection. Bilateral investment treaties should expressly include sustainability provisions, such as environmental impact assessment, responsibility of the investor for the protection of the environment etc. Provisions related to sustainability should be favourable for the host state and the foreign investor. Foreign investors should be actively involved in discussions about sustainability rules to be included in treaties. [18]   The Tribunals should adopt a uniform approach in connection with matters related to environmental counterclaims. There should not be contradictory approaches of tribunals while dealing with matters of environmental counterclaim. The tribunals should address environmental damage in investment arbitration after properly examining the evidence provided by the parties to the case. [19] *Vaibhav Yadav is an LLM student at NLU Delhi. [1]  Nikolaos Voutyrakos ‘Investment Arbitration and Environmental Protection: A Critical Look?’’ Arbitration Academy [2]  Id., [3]  Jason Rudall, ‘The Tribunal with a Toolbox: On Perenco v. Ecuador, Black Gold and Shades of Green’(2020) 11 Journal of International Dispute Settlement 485-500. [4]  Id., [5]  Id., [6]  Id, [7]  Id., [8]  Id., [9]  Id., [10]  Id., [11]  ICSID Convention, art 46. [12]  Id., [13]  Id., [14]  Supra at 13. [15]  Id., [16]  Id., [17]  Id., [18]  Id., [19]  Kirtin Bahaguna and Likshika Sahni, ‘Harmonising Profit and Planet:Rethinking Environmental Counterclaims in Investor- State Arbitrations’ ( Cambridge International law Journal, November 23, 2023).

Gargi Bindal [1] Introduction The Indian jurisprudence has taken commendable steps to establish a pro-arbitration stance . However, the deviation from this pro-arbitration stance has been displayed in SC’s recent judgment, Delhi Metro Rail Corporation v. Delhi Airport Metro Express Private Limited [“ DMRC v. DAMEPL ”]. This judgment has raised concerns as an arbitral award was set aside at the fifth level of scrutiny by invoking curative jurisdiction. . This concern has become more pronounced following the ruling in Gayatri Balasamy v. ISG Novasoft , where the Supreme Court held that courts possess limited powers to modify arbitral awards under Sections 34 and 37 of the Indian Arbitration and Conciliation Act, 1996. In Gayatri Balaswamy , while the majority recognised instances like severability, clerical errors, and post-award interest modifications, the dissent by Justice Viswanathan strongly cautioned against merit-based intervention, echoing the very apprehensions that surfaced in DMRC v. DAMEPL . This judgment, therefore, both reaffirms and restricts the contours of court involvement, providing new interpretive clarity to the phrase ‘judicial interference’. Background In 2008, DMRC awarded the Airport Metro contract to DAMEPL, but disputes led to arbitration. In 2017, INR 3000 crore award was passed in DAMEPL’s favour, eventually set aside by the SC in its curative jurisdiction.   Stage Timeline Description Stage 1 March 2018 Challenge to the arbitral award Under Section 34 of the Arbitration Act, 1996 [" the Act "], DMRC contested the award before a single judge of the Hon’ble High Court of Delhi [" DHC "]. The DHC rejected the challenge and upheld the arbitral award observing that the award was reasonable and no intervention was necessary. Stage 2 Jan 2019 Appeal under Section 37 The award passed in favour of DMRC was partially set aside by the Ld. Division Bench of DHC due to patent illegality after DMRC challenged the Judgment passed by the Ld. Single Bench of the DHC under Section 37 of the Act. Stage 3 September 2021 Special Leave Petition [“SLP”] before SC DAMEPL, aggrieved with the order passed by Ld. Division Bench exercising its jurisdiction under Section 37 of the Act, filed a SLP. The SC upheld the DMRC award, stating that it was neither blatantly unlawful nor perverse. Stage 4 November 2021 Review Petition before SC DMRC filed a Review Petition which was dismissed. Stage 5 April 2024 Curative Petition before SC SC allowed the Curative Petition [“CP”] filed by DMRC and set aside the award on the ground of patent illegality. At the stage of CP, the SC conducted a merit-based evaluation of the award, finding the Tribunal had ignored key evidence and contractual terms. After seven years, it set aside the award, directing DAMEPL to return INR 2800 crores received from DMRC during execution. Deconstructing the matter In the DMRC case , the judgment debtor managed to get the award set aside by SC in the exercise of the CP on the grounds of miscarriage of justice and perverse illegality. However, this interpretation overlooks several essential factors being:- 3.1 Jurisdictional Overreach The CP should not have been allowed in the instant case to overturn the arbitral award, which was upheld after three rounds of litigation. The judgment in Rupa Hurra v. Ashok Hurra outlined two exhaustive grounds for allowing a CP: a breach of natural justice principles or the presence of bias on the part of the judge.  It also introduced the test of ‘manifest injustice’, emphasizing that a CP should only be entertained in rare cases. In this context, the reasons cited by DMRC for contesting the award in the CP, such as assertions that the defects did not significantly impact obligations under the Agreement and that DMRC had taken practical steps to address the deficiencies, were purely factual in nature and thus outside the inherent power of SC . However, the SC allowed the CP by analysing the facts afresh to conduct a factual analysis, ultimately reaching a conclusion that could be viewed as an alternative perspective. In doing so, the Court exceeded its restricted jurisdiction and overlooked its established precedents , which have consistently upheld that contract interpretation is solely the responsibility of the arbitrator. Further, by applying the test of manifest injustice, the court intervened and deviated from the principles of Rupa judgment. 3.2 Delay in Enforcement The fifth round of review in the DMRC case contradicts the principle of prompt enforcement of arbitral awards. The parties chose arbitration with the expectation that their case would be resolved quickly . However, the present case compounds the challenges faced by the decree-holder, who remains entangled in multiple rounds of litigation despite receiving a favourable award. The SC, while considering the SLP in the DMRC case , underscored the significance of prompt enforcement of arbitral awards. It duly noted that under Article 136 , the interference must be spare and only when exceptional circumstances exist. However, it went against that principle while considering the CP. This brings India back to the position of the White Industries case , whereby despite having the ICC award in favour of White Industries and against Coal India, the award could not be enforced for approximately 10 years. More recently, the Antrix- Devas dispute has similarly highlighted persistent challenge in the enforcement of foreign arbitral awards in India. 3.3  Impact on Business Climate The DMRC judgment would negatively impact the cost of doing business in India. The SC's observation of not burdening the public utility with significant financial liability is exceptionally flawed because if the public exchequer argument were applied to commercial disputes, private companies would lose trust in Arbitration Such an approach effectively adopts a differential standard of enforcement for public sector undertakings, compromising the neutrality and finality that arbitration is designed to provide. This not only distorts the level playing field between public and private parties but also compromises investor confidence in India’s arbitration framework, as private firms might view arbitration against government entities as inherently biased. This ruling may also deter foreign investors from selecting arbitration seated in India, leading them to prefer arbitration in other jurisdictions in their contracts with Indian Government companies, with the hope of limiting the interference of Indian Courts. Pro enforcement approach of SC India has sought to establish itself as a pro-arbitration jurisdiction by reversing infamous decisions such as Venture Global ,   Phulchand Exports , and Bhati Case . To emphasise judicial non-interference, several judgments have been delivered- such as Vijay Karia , where the principle of non-interference with foreign awards was upheld. In Vedanta , it was reiterated that minimal judicial intervention should be the objective, while Avitel reaffirmed India’s pro arbitration stance, emphasising the need for limited judicial interference in the enforcement of foreign arbitral awards. The Court set a high threshold for challenging awards based on alleged arbitrator bias and underscored the importance of timely objections and robust enforcement mechanisms in international arbitration. Despite these efforts, the DMRC judgment deviates from India’s pro-enforcement trajectory. The rationale behind such deviation was that the Court concluded that the Tribunal had not properly given due consideration to contractual provisions and important evidence under the concession agreement. This extensive merits review and intervention deviated from contemplated minimal judicial intervention under the Act departed from the prevailing pro- arbitration approach. By allowing such intervention and delay, the judgment risks setting a precedent that undermines the finality of awards, thereby weakening the confidence of investors in India’s arbitration framework. Comparative analysis with other jurisdictions While Indian Courts have made significant strides towards a pro-arbitration approach, their practice is still inconsistent, particularly in the case of public policy or claims of procedural infirmity. A comparative analysis helps illustrate the spectrum of judicial mindsets around the world and provides benchmarks for assessing India’s arbitration regime. 5.1  Singapore The Singapore Courts adopt a narrow and rigorous interpretation of the statutory grounds for setting aside awards. The Pacific Richfield Marine case , encapsulates Singapore's stance by stating that the power to set aside awards should be exercised rarely.  Further, enforcement policy in Singapore is so vigorous that in cases like CHY v. CIA , the Singapore Courts rejected the application to set aside any award even when the award was contrary to Singapore’s Public Policy. This approach reflects the prevailing judicial philosophy of minimal intervention in arbitral awards. However, Indian Courts have shown inconsistent approach with judicial intervention still being a huge concern. 5.2  China In recent years, China’s arbitration has experienced rapid growth, accompanied by significant efforts to foster a more arbitration-friendly judicial environment. A report analyzing data from 2012 to 2022 indicates that over the past decade, the courts in the People's Republic of China have fully recognized and enforced more than 90% of foreign awards presented to them, with nearly half of these cases being resolved within six months. Compared to India, China has shown a more structure approach towards enforcement of award. 5.3  United Kingdom The Commercial Court in the United Kingdom generally adopts a non-interference approach to arbitration whenever possible. The Court recognises that the primary aim of the Arbitration Act 1996 is to "significantly reduce the extent of court intervention in the arbitral process." Excessive court involvement undermines the finality of arbitral awards and reduces the effectiveness of international arbitration as a reliable dispute resolution mechanism. As a result, the success rate for applications challenging awards with a seat in London is relatively low, standing at approximately 11% for applications filed in 2019-2020. Judicial Intervention in India is more frequent compared to the UK, impacting its reputation as an arbitration hub. Conclusion The SC, by exercising its inherent power under the CP, has defeated the ends of pro-arbitration jurisprudence. The extreme interference of the court in conducting a merit-based analysis of an arbitral award defies the stance of the hands-off approach taken by the court in the last 10 years. Excessive judicial intervention and strict enforcement undermine the efficiency of arbitration and make it into unpredictable traditional litigation. Thereby reducing the trust of private parties and foreign investors in doing business in India. The judiciary has been promoting the culture of commercial arbitration and ought to take inspiration from countries such as Singapore, China, Hong Kong and the United Kingdom to adopt a hands-off approach with minimal judicial intervention. This would help prevent delays like those observed in the DMRC case and ensure the smooth enforcement of arbitral awards. [1] Gargi Bindal is a final-year law student at the Institute of Law, Nirma University. She has a keen interest in arbitration law, constitutional law, and commercial law. Gargi has honed her legal research and advocacy skills through participation in prestigious national and international moot court competitions, including the Willem C. Vis International Commercial Arbitration Moot (Vienna), the Herbert Smith Freehills Moot, and the B.R. Sawhney Memorial Moot etc. She can be reached at  gargibindal05@gmail.com .

- Arnav Doshi & Jugaad Singh I. Introduction The much awaited Draft Arbitration and Conciliation (Amendment) Bill, 2024 (‘ Draft Amendment ’) carried with it high expectations to bolster the pro-arbitration regime in India. The enforcement of interim measures by foreign-seated tribunals in India has been one such issue which was expected to be rectified by the Expert Committee – as it remained unaddressed in earlier amendments and discussions.   The current framework suffers from a disparity between interim measures passed by arbitral tribunals governed under Part I of the Arbitration and Conciliation Act, 1996 (‘ Act ’) (Indian-seated tribunals) and those passed by arbitral tribunals governed under Part II of the Act (Foreign-seated tribunals). While interim measures by Indian-seated tribunals can be directly enforced under Section 17(2) of the Act, to the extent that it has been deemed to be an order of the Court under the Code Of Civil Procedure, 1908 (‘ CPC ’), there exists a legislative vacuum for the enforcement mechanism exists for interim measures by foreign-seated tribunals. This has been acknowledged by the Delhi HC in Raffles Designs International India v Educomp Professional Education (para 98).   The Bombay HC judgment in HSBC PI Holdings (Mauritius) Limited v Avitel Post Studioz Limited   had provided much needed respite by allowing parties to a foreign-seated arbitration to seek relief for such interim measures before the courts under Section 9 of the Act. Alas, cases such as Bharat Aluminum Co. v. Kaiser Aluminum Technical Services (‘ BALCO ’) ensured that Section 9 would apply only to arbitrations under Part I of the Act. The 246th Law Commission Report took cognizance of this vacuum and a proviso was inserted to Section 2(2) by the Arbitration and Conciliation (Amendment) Act, 2015, making Section 9 the established route for enforcement of interim measures by foreign-seated tribunals.   Unfortunately, in a bid to minimize recourse to the courts in arbitration matters, the Draft Amendment completely obviates any recourse for the enforcement of interim measures passed by a foreign-seated tribunal, by limiting the parties from filing an application under Section 9 during the pendency of an arbitral proceeding. The authors seek to examine the existing framework (II) in contrast with the proposed amendment and its potential consequences on India’s reputation as an arbitration hub (III). The authors shall further examine the existing methods of enforcement in other jurisdictions and propose solutions to prevent a remediless situation for parties seeking the enforcement of interim measures (IV). II. Existing Framework on Interim Measures in Foreign-Seated Arbitration Within the existing framework under the Act, Section 17, akin to Section 9, empowers the arbitral tribunal to issue interim reliefs. However, the reliefs granted under Section 17 are confined to Part I of the Act, and thus, to Indian-seated arbitrations. As previously mentioned, prior to the 2015 Amendment, the challenges to the enforcement of interim measures by foreign-seated tribunals originated from the decision of the Constitutional Bench in BALCO . However, in deciding that the application of Section 9 would be circumscribed to Part I of the Act, the bench addressed the grievance that the exclusion of the application of Section 9 to foreign seated arbitrations, would result in great hardship to parties who were in need of interim measures – by tellingly observing that it was an issue to be redressed by the legislature.  The Delhi High Court in Shanghai Electric Group Company Limited v. Reliance Infrastructure Limited (‘ Shanghai Electric ’) succinctly encapsulated the issue at hand - “ Unlike Section 17, there is no corresponding provision under the Act for enforcement of interim orders passed by a foreign tribunal. The Act only contemplates enforcement of foreign awards (and not foreign interim orders). ”   Pertinently, Section 17H of the UNCITRAL Model Law on International Commercial Arbitration (‘ UNCITRAL Model Law ’) states that, “ An interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal… ”. In the wake of BALCO , the 246th Report by the Law Commission of India proposed an amendment to Section 2(2) of the Act which was subsequently enacted vide the Arbitration and Conciliation (Amendment) Act, 2015 by way of a proviso to Section 2(2). The proviso allowed the provisions of Section 9 to apply to international commercial arbitration, even if the place of arbitration is outside of India (foreign-seated tribunals). Such application was subject to the underlying agreement, i.e., whether the agreement allowed recourse to Indian courts under Section 9. This amendment led to ambiguity regarding whether such an agreement must be implied or express and has resulted in multiple judgements by courts. However, a discussion on such exclusions is outside the scope of this discussion, which pertains to foreign seated arbitrations where the agreement does not exclude the applicability of Part I of the Act.   The Supreme Court in Mankastu Impex Private Limited v. Airvisual Limited  reaffirmed the intent of the newly amended Section 2(2) to allow for the application of Section 9 from Part I to international commercial arbitration. Thereby, resolving the “remediless” vacuum of enforcement of interim measures by foreign-seated tribunals by establishing Section 9 as the appropriate route for grievance redressal.   In a similar vein, the Division Bench in Ashwani Minda and Another v. U-Shin Limited and Another ruled that the principles of Section 9 of the Act are “ equally applicable when interim measures are sought in the Indian courts in connection with a foreign-seated arbitration .” The  Delhi HC too, in Shanghai Electric clarified that the import of Section 2(2) proviso of the Act specifically makes the provision of Section 9 applicable to foreign-seated arbitral tribunals. Therefore, in view of the ineffective remedy under Section 17 of the Act, Section 9 permits parties seeking interim relief before or during the arbitration. III. Analysis of the Proposed Amendment to Section 9 of the Act In the Draft Amendment, the proposed amendment to Section 9 of the Act (‘ Proposed Amendment ’) replaces the words “or during” with the words “the commencement of”. In doing so, it allows the courts to entertain an application under Section 9 of the Act only prior to the constitution of the arbitral tribunal and after the making of an arbitral award prior to its enforcement under the provisions of the Act. Therefore, parties would be restricted from approaching the court under Section 9 during the pendency of the arbitral proceedings. As discussed in the previous sections, this Proposed Amendment does not affect Indian-seated arbitrations as the Act deems an interim measure by an arbitral tribunal to be akin to an order by a court under the CPC in terms of its enforcement. However, for foreign-seated tribunals, which do not enjoy the benefit of direct enforceability of interim orders and had to rely on Section 9 of the Act, the change stymies enforcement of interim measures during the pendency of the arbitral proceedings. If the subject matter of the dispute or the concerned assets are located within India, there would be no recourse for the affected party to safeguard the same till after the arbitral proceedings are completed. While the intention behind this change might have been to streamline the arbitration process in India , it has come into conflict with practical challenges, leaving parties involved in foreign seated arbitration vulnerable and without recourse to Indian courts.   In light of these developments, a question arises whether such an amendment would be in line with India’s obligations under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (‘ New York Convention ’).  Article III of the New York Convention provides that each contracting state shall recognize arbitral awards as binding and enforce them as per the domestic rules of procedure. Despite the New York Convention being silent on the issue of interim orders , it allows for enforcement of such interim awards which have the characteristic of ‘finality’.         Further, the Proposed Amendment does not align with the principles of comity of international law and the New York Convention, which thereby impacts India’s aspirations to be an arbitration friendly jurisdiction for international commercial arbitration. The absence of a clear recourse to Indian courts for the enforcement of interim orders could be perceived by potential foreign investors as a major drawback. Such a perception may discourage them from choosing India as a seat for arbitration or from engaging in commercial transactions governed by Indian law. Additionally, this concern is not limited to foreign investors alone—it could also deter other parties who might otherwise prefer arbitration as their preferred mode of dispute resolution for commercial contracts. The resulting chilling effect could ultimately hinder the development of arbitration as a robust and reliable mechanism for resolving cross-border disputes within the country.   IV. Proposed Solutions for Direct Enforceability of Interim Measures by Foreign Tribunals To incapsulate the problem at hand, the Proposed Amendment will effectively curtail access to the courts during the duration of the arbitral proceedings to obtain an interim measure in a foreign-seated arbitration. This would be the final straw towards the dismantling of an enforcement mechanism which already lacks direct enforceability and, in its stead, even an adequate standard for adjudication of reliefs.   The simplest method of rectification to the Proposed Amendment would be to introduce a ‘carve in’ provision in the amendment to Section 9(1) which would allow parties in foreign-seated arbitrations to approach courts for interim relief at any stage of the arbitration.   This would retain the intention of circumventing unnecessary recourse to the courts during the pendency of domestic arbitral proceedings when the relief sought after could be provided by a directly enforceable order by the tribunal under Section 17 of the Act. Meanwhile, a ‘carve-in’ would allow enforcement of interim measures by a foreign-seated tribunals, and consequently, prevent such interim reliefs from becoming an ‘inefficacious remedy’. The act of resolving inefficacious remedies through Section 9 of the Act is one which has been carried out before by the Delhi High Court in Bhubaneshwar Expressways v. National Highways Authority of India . In this case, the HC allowed the petitioner to file a Section 9 application for interim relief as the tribunal was non-functional due to the recusal of one of the arbitrators. The HC explained the principle that if the alternative remedy is inefficacious and a party is suffering hardships, the courts can extend the remedy available to the parties.  A carve-in would greatly reinforce the principle of providing an efficacious remedy.   Despite a carve-in being introduced, the problem of direct enforceability of interim measures by foreign-seated tribunals still persists. Section 17H of the UNCITRAL Model Law provides for direct enforcement of interim measures by foreign seated tribunals. Within national legislations, only Section 61 of the Hong Kong Arbitration Ordinance , 2011 and Section 17L of the New Zealand Arbitration Act, 1996 make arbitral orders and directions directly enforceable in the same way as judgment of court. In contrast, despite being pro-arbitration hubs, several nations such as Singapore, the UK, and the USA reject the concept of direct enforceability of interim measures by an arbitral tribunal. It is a perfectly understandable stance for a sovereign State to disallow the same owing to complex international relations and the possibility of such measures having unintended or ‘inappropriate’ effects which may go against national interests or public policy of the State.   Therefore, adopting a mechanism of direct enforceability of interim measures by foreign seated tribunals, like that of Hong Kong or New Zealand, may not be apposite in the Indian arbitration milieu. Hence, by way of the proposed solution, a standard of adjudication could be adopted thereafter to allow for effective and efficient recognition and enforcement of interim measures by foreign-seated tribunals.   V. Conclusion The Draft Amendment was aspired to resolve the conundrum concerning the enforcement of interim measures granted by foreign-seated tribunals. However, not only has the Proposed Amendment disturbed the parchment safeguard implemented by the courts but also in effect estops parties from enforcing interim reliefs granted by a foreign-seated tribunal. Thus, the intended purpose of an amendment to Section 9 of the Act has been further diluted.   As a relief measure, the Draft Amendment is at the stage of public consultation with the possibility of rectification of the Proposed Amendment. In view of same, the authors urge reconsideration of the Proposed Amendment basis the prejudice and hinderance caused to parties on account of a direct bar on the enforcement of interim awards once the arbitration proceedings have commenced. Considering the Indian courts have ex facie allowed the enforcement of interim awards rendered by foreign-seated tribunals, the ‘carve-in’ recommendation to Section 9 of the Act, as a welcome change, would entail parties to approach courts at any stage to enforce interim awards.

- Khyati Maurya [1] & Saransh Sood [2]   Introduction The new Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID) that came into force in July 2022, is a comprehensive revision of the 2006 Arbitration Rules brought with a view to bringing efficiency and cost-effectiveness in the investor-state resolution process. Major changes like mandating disclosure of third-party funding, providing different timelines to the tribunal to give its decision at various stages and expressly providing the power to grant security for costs align with broader concern for increasing transparency and efficiency in the system of investor-state dispute resolution. But particularly it is the purported omission of the provision allowing the investment tribunals to draw adverse inferences in the 2022 rules which raises questions. Adverse inference refers to an indirect conclusion drawn by a tribunal as a sanction against a party that refuses to provide direct evidence. Essentially, it assumes that the withheld evidence would have been unfavourable to the party's case. For example, in Feldman v. Mexico , the claimant accused Mexico of discriminatory tax treatment against foreign taxpayers. The tribunal ordered Mexico to produce evidence against discrimination between foreign and domestic taxpayers. However, Mexico failed to provide this evidence citing confidentiality concerns. As a result, the tribunal inferred that the withheld evidence likely demonstrated unfair treatment of domestic taxpayers, which would have supported the claimant’s allegations. Adverse Inferences are essential in international arbitration to ensure fairness and effectiveness by compensating for the tribunal's lack of coercive power, to compel evidence from sovereign states. For instance, unlike courts, tribunals cannot enforce contempt charges or impose penalties for failing to comply with orders for document production. Adverse inferences help address this limitation by drawing conclusions unfavourable to the non-complying party. 2022 Arbitration Rules & the Ensuing Conundrum In the erstwhile 2006 rules, Rule 34(3) allowed the parties to request the tribunal to ‘take a formal note of the parties refusal’ to produce evidence as ordered by the tribunal. However, these words, i.e. ‘take formal note of the parties refusal’ contained in Rule 34(3) of the 2006 Rules have been omitted from the Rule 2022 Rules without any explicit explanation as to its deletion in the working papers. The only reference to adverse inferences is found in the comments given by China and Armenia . While it was proposed by China that the power to take adverse inferences should be formally omitted, Armenia argued in favour of the formal inclusion of this power. However, no discussion was recorded on these proposals. It becomes even more intriguing to see a similar omission from Note 13 on Document Production of UNCITRAL Notes on Arbitral Proceedings wherein an explicit reference to the power to draw adverse inference has been deleted in 2016 notes that was earlier contained in the erstwhile 1996 notes. Although, there has long been a debate surrounding the potential risk of ‘false positives’ associated with reliance on such a mechanism, the recent revision prompts the question of whether the Tribunals still have the power to draw adverse inferences under Arbitration Rules 2022. To begin with, the general principle regarding use of inferences in international dispute resolution has been explained by ICJ in the Corfu Channel Case . In the said case, the ICJ was to decide upon the liability of Albania in laying the underwater mines. However, there was no direct evidence establishing that the mines were laid by Albania. Despite this, while holding Albania liable for the loss caused due to the mines, based on inferences, the court reasoned that when a state exercises exclusive control, the victim of an international law breach often lacks access to direct evidence to establish state responsibility. Therefore, the reliance of the victim on inferences and circumstantial evidence should be construed liberally, and the tribunal should be allowed to draw inferences when the party to the dispute fails to provide the required direct evidence (Page 18). This practice is now accepted across legal systems and is acknowledged by international courts and tribunals. For example, in the case of William J Levitt v. Islamic Republic of Iran , the Iran-US Claims Tribunal noted that it is free to draw inferences from the parties' non-compliance with its order to produce documents (¶ 61). However, since the ICSID Arbitration Rules 2022 omits the reference to the power of an arbitral tribunal to take formal note of the failure to produce documents, which was earlier expressly contained in Rule 34(3) of the ICSID Arbitration Rules 2006, the question as to whether or not the ICSID tribunals continue to possess this power becomes relevant. Although, in most instances, the tribunals have assumed the power to draw adverse inferences without any justification, it has sometimes referred to power in Rule 34(3) as the source of the power to draw adverse inferences. Illustratively, in the case of Rompetrol v. Romania , the tribunal ruled that the power to take formal note under Rule 34(3) is the source of the tribunal’s discretionary power to draw adverse inferences. In RSM v. Saint Lucia , the tribunal ruled that the “ Rule 34(3) reflects the common principle that a fact-finder can draw inferences from a failure to produce evidence” (¶ 56). Similarly, in the case of Feldman v. Mexico , the arbitral tribunal ruled that it is empowered to draw appropriate inferences from any party's failure to comply with the document production order (¶ 8). At this juncture, it is important to look at the source of the words ‘take formal note of the refusal’ as contained in the ICSID Arbitration Rules 2006 . A similar use of these words can be seen in the Statute of the International Court of Justice (ICJ), which, under Article 49 deals with the Evidence taking the power of the ICJ. It also uses the words ‘Formal note shall be taken of any refusal’ (to comply with the evidence production order), and commentators have interpreted this as the source of the power of ICJ to attach such consequences as it deems necessary for the non-compliance with the document production order.  In such a scenario, it can be argued that the omission of the power to take formal note of the refusal to comply with the document production order, is tantamount to the omission of the power to attach negative consequences to non-compliance with the document production order, thereby excluding the power of arbitral tribunal to draw adverse inferences from the non-production of documents.  A similar case against adverse inferences is also reflected in the UNCITRAL Notes on Arbitral Proceedings, wherein the explicit reference to the power to draw an adverse inference in its Note 13 on Document Production contained in the erstwhile 1996 notes has been deleted in the 2016 notes.  To the contrary, it can be argued that a tribunal possesses an inherent authority to draw adverse inferences from the non-production of the documents that is embedded in its power to determine the admissibility, relevance, and weight of the evidence presented. This view is also supported by Nathen D. O’ Malley, in his treatise “ Rules of Evidence in International  Arbitration .” Accordingly, it can be concluded that the power to draw adverse inferences remains intact despite the change in arbitration rules (¶ 7.37). A similar approach was also followed by the tribunal in the case of Sevilla Basheer B.V. v. The Kingdom of Spain , where the tribunal, while relying on the power to admit and weigh evidence, contained in Rule 34(1) of the 2006 Rules, concluded that it did possess the power to draw adverse inferences from the non-compliance with the document production order (¶ 550).  Under the 2022 Arbitration Rules, the tribunal continues to possess the power to admit and assign weight to the evidence under Rule 36 . Here, the tribunal is empowered to admit direct and indirect evidence as the provision does not specifically omit the indirect evidence. It is important to note that this distinction, between the direct and indirect evidence, pertains to the weight of the evidence rather than its admissibility , thus, both the direct and the indirect evidence can be admitted. Since, adverse inferences, are, by their very nature, indirect evidence only, they should be admissible under Rule 36(1) of the ICSID Arbitration Rules 2022, and the only question for the tribunal to decide is regarding the weight to be attached to it. Further, it is well-established that tribunals possess the authority to resolve procedural matters . Article 44 of the ICSID Convention grants tribunals the power to address any procedural issues not expressly covered by the ICSID Convention, Rules, or Regulations. This principle was reaffirmed in the case of Libananco Holdings Co. v. Republic of Turkey , wherein it was reiterated that the tribunal ‘must be regarded as endowed with the inherent powers required to preserve the integrity of its process – even if the remedies open to it are necessarily different from those that might be available to a domestic court of law.’ Additionally, this position is in consonance with the procedural laws of most legal regimes where courts can assess the value of any evidence. Even in international arbitration, arbitration clauses rarely address the issue of weighing evidence directly.  It can hence be argued that the inherent and unquestionable authority to draw adverse inferences unless otherwise agreed by the parties, stems from the arbitrator’s wide discretion in admitting and evaluating the relevance of evidence, as well as their power to establish and manage arbitration procedures. Further it cannot be argued that the power to draw adverse inferences results in a shifting of the burden of proof ( onus probandi ) since the request to draw adverse inference is often made by the opposing party, thereby violating the general principle in international arbitration of actori incumbit probatio . If an opposing party fails to provide evidence that challenges claimant’s case, then it will be a matter of procedural non-compliance and will not affect the burden of proof.   As Jeremy K. Sharpe explains, referencing the arbitral award in Feldman v. Mexico , once the party bearing the ultimate burden of proof establishes a prima facie case, the burden of production ( onus proponendi ) shifts to the responding party to counter that evidence. In other words, if the party with the burden of proof presents evidence sufficient to create a presumption of truth, the burden shifts to the opposing party, which must then produce adequate evidence to rebut the presumption. This approach, adopted in other cases as well, as Sharpe rightly notes, does not shift the burden of proof itself but rather the burden of production or evidentiary burden. Moreover, it is essential to recognise that the authority to draw adverse inferences has historically been a discretionary prerogative rather than a default sanction. Even IBA Rules present adverse inference as a possible sanction and subject this power to certain requirements that must be met under Article 3.3 and Article 4.10. Due to the discretionary nature of this power, it is drenched in subjectivity but applying such clear conditions and criteria can introduce greater objectivity. For example the standard of reasonableness, consistency with the facts in the record, logical nexus of inference and the missing evidence, which has been inspired by the scholarship of Jeremy Sharpe and Bin Cheng [3] and presently contained in IBA rules as well laid down by various tribunals like in Frederica Lincoln Riahi v. Government of the Islamic Republic of Iran . Arbitrators should explicitly show in their award that these criteria were followed and provide reasons for assigning or withholding weight to the adverse inference. They must also ensure that the defence rights are upheld throughout the process. Moreover, adverse inference as a form of indirect evidence in itself carries very limited evidentiary value. The Arbitral jurisprudence has developed several cautions before an adverse inference is taken. Therefore, in the opinion of the author, instead of omitting the said power itself, which has continued to be a tool balancing the subjective role of the tribunal in weighing evidence and the need for objective fairness in the process, the focus must be on better institutionalizing these safeguards. Conclusion   In the light of the foregoing discussion, it can be concluded that the omission of the power to take ‘formal note’ of the parties' refusal to comply with the document production order does not conclusively take away the power of arbitral tribunals to draw adverse inferences in case of non-compliance with the document production order. Since no arbitral award based on the 2022 rules has discussed the power of arbitral tribunals to draw adverse inferences, it remains to be seen how the tribunals interpret this omission. However, in the opinion of the authors, the tribunals must rule in favour of power to draw adverse inferences because it is the most potent arrow in the quiver of the arbitral tribunal to enforce its document production orders, especially when it lacks the other sanctions available with the domestic courts to compel the production of evidence. This power with ICSID tribunals becomes even more important because investor-state disputes always involve a much more powerful sovereign state that possesses various key evidence for the fair adjudication of the disputes, and it is seldom possible to marshall the evidence against the sovereign.  [1] Khyati is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at khyati22bal037@gnlu.ac.in [2] Saransh is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at saransh22bal069@gnlu.ac.in [3] Bin Chen, General Principles of Law as applied by International Courts and Tribunals p. 333-335 (Cambridge University Press 2006).

Tushar Verma and Ayush Bajpai [1]   INTRODUCTION The core objective of commercial dispute resolution is to resolve business conflicts efficiently and fairly. However, the first line of defense against such disputes is a well-drafted contract i.e. clear, precise, and comprehensive. The fundamental principle in contract drafting is that no provision should be assumed, implied, or left to interpretation without explicit articulation. Disputes often arise when parties interpret the same clause in different ways, leading to conflicts that require formal resolution. This article critically examines the evolving application of the doctrine of implied terms within the framework of Indian commercial arbitration. Further, it analyses recent judicial developments and proposes a balanced approach that upholds the sanctity of contractual interpretation while preserving the autonomy of arbitral proceedings. Henceforth, it becomes essential to consider certain principles that form the basis of the interpretation of a commercial contract. This article seeks to examine the following key issues (a) the extent to which arbitral tribunals may imply terms into commercial contracts, (b) the legal standards governing such implication, and (c) whether judicial oversight is warranted where tribunals apply these standards incorrectly or arbitrarily. The answer to the above inquiry is rooted in a fundamental principle: courts and tribunals may only imply a term in a contract when the express terms are absent, ambiguous, or fail to align with commercial business sense. In such circumstances, tribunals and courts often invoke principles such as the Business Efficacy Test and the Officious Bystander Test to interpret contractual terms and imply provisions necessary to give effect to the intended commercial transaction between the parties. However, any interpretation by the courts or tribunals must remain consistent with the express terms of the contract, ensuring that no distortion or unintended modification occurs. Principle Surrounding Contractual Interpretation: A. Business Efficacy Doctrine: The Contracting Parties often mistakenly assume that the express terms of a contract will always prevail. However, even a well-drafted commercial contract may contain gaps or inconsistencies. Despite Even in the presence of such omissions, the courts and Tribunals proactively strive to achieve a business common sense that gives effect to the intended transaction envisioned at the outset of the contract. In such cases, courts and tribunals often endeavour to ensure that the contract operates effectively and aligns with the parties' commercial intent i.e. the principle for Business Efficacy. This principle allows the interpretation of unstated contractual terms that reasonable businesspersons would have intended to include from the outset, and the objective is to ensure that the contract functions effectively, without placing an undue burden on either party in unforeseen circumstances. Under this doctrine, the question is not what the actual parties subjectively intended but what a reasonable person in their position would have agreed upon at the time of contracting. A key precedent is The Moorcock (1889) 14 PD 64 , where Bowen L.J. held that courts may imply terms necessary for the effective execution of the contract . Further, recently Hon’ble Apex Court, in Nabha Power v. Punjab State Power Corporation & Satya Jain v. Anis Ahmed Rushdie , reaffirmed this principle , emphasizing “that commercial contracts should be interpreted in line with the presumed intent of rational businesspersons” . For e.g., a retailer contracts with a supplier to purchase perishable goods but the contract doesn’t specify refrigerated transport. The supplier delivers in a regular truck, causing spoilage and financial loss. The retailer argues for an implied term that goods must be transported properly. Applying business efficacy, a court may imply this term, as both parties must have intended the goods to arrive in a saleable condition. To uphold the presumed intention of the parties while ensuring that courts and tribunals do not imply terms in a manner that undermines the transaction's intended efficacy which the parties would have intended at all events, the Apex Court in Nabha Power (Supra) established a structured approach for implying contractual terms, known as the Five-Prong (Penta) Test . This test, later followed in Investors Compensation Scheme Ltd. v. West Bromwich Building Society and Attorney General of Belize v. Belize Telecom Ltd. , requires that an implied term: (1) be reasonable and equitable, (2) be necessary for business efficacy, (3) be one both parties would have agreed to (Officious Bystander Test), (4) be capable of clear expression, and (5) not contradict any express contract provision. B. The Officious Bystander Test Drafting a commercial contract is a complex and technical task that demands the expertise of skilled legal professionals from both sides. Given the intricacies involved, it is often impractical to explicitly include every possible term within the contract. However, certain terms are so inherently understood in the context of business transactions that courts and tribunals have the authority to imply them when necessary. These implied terms reflect what any reasonable third party would naturally assume to be part of the agreement, thereby ensuring fairness and practicality in the interpretation of the contract. Hence, another widely applied test in contractual interpretation is the Officious Bystander Test , first articulated in Shirlaw v Southern Foundries wherein LJ Mackinnon quoted “ If, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common ‘Oh, of course.”. Henceforth, the same was reinforced in Nabha Power (Supra) . The essence of this test is that if an uninvolved but knowledgeable third party were to suggest an omitted contractual term during negotiations, both parties would instinctively respond, "Oh, of course!" However, the principles governing the implication of terms in a contract must be carefully balanced against the principle of party autonomy. In some instances, such implied terms may conflict with the express provisions of the contract—particularly in cross-border arbitration. Cases such as Terre Neuve Sarl v Yewdale and Etihad Airways PJSC v Flother illustrate the complexities involved in determining commercial expectations and assessing business efficacy in international commercial agreements. For instance, consider a scenario where a chef leases a commercial kitchen from a landlord, but the contract does not explicitly mention a functioning ventilation system. After taking possession, the chef discovers that the ventilation is defective, rendering the space unsafe for cooking. The landlord refuses to make repairs, arguing that the contract contains no such obligation. In interpreting the agreement, a court would assess Firstly, whether the need for a ventilation system was foreseeable to both parties at the time of contracting. Secondly, whether the ventilation was so essential and obvious that its inclusion could be presumed i.e. officious bystander test (if, during negotiations, an outsider had asked, “Shouldn’t the kitchen have proper ventilation?”, both parties would likely have replied, “Of course!”), Lastly , the court would evaluate whether the absence of such a system defeats the commercial purpose of the contract—invoking the business efficacy test. If all these questions are answered in the affirmative, the court would likely imply the term and rule in favour of the chef. Furthermore, the Courts have applied this reasoning in cases such as Enercon (India) Ltd. v. Enercon GMBH wherein the tribunal implied terms to clarify the supply agreement’s functional intent, with the court subsequently upholding this interpretation under the narrow scope of judicial review to reinforce business efficacy and address contractual omissions.In the majority of cases, the two above-discussed principles operate in tandem, as the primary objective of implying a term is to reflect the true intent of the parties at the time of contracting and to uphold the efficiency & purpose of business transaction. Contractual Interpretation in Arbitration: Balancing Intent and Judicial Restraint: In arbitration proceedings, party autonomy is paramount. However, the question of whether arbitral tribunals can or should imply terms into a contract raises complex legal and doctrinal challenges. As discussed above, the interplay between the business efficacy principle and the officious bystander test plays a crucial role in interpreting commercial agreements. These principles help tribunals resolve ambiguities by identifying terms that reflect the parties’ shared intentions, thereby preserving commercial purpose without compromising the parties’ autonomy. In this context, the judiciary has consistently emphasized that arbitral tribunals must adhere to the contractual framework when resolving disputes. As in Associate Builders v. Delhi Development Authority it was held, that an arbitral tribunal must resolve disputes strictly within the terms of the contract. Failure to do so renders the award patently illegal. However, a tribunal’s reasonable interpretation of a contract cannot be overturned merely on the possibility of alternative view on facts and interpretation, and the courts can exercise their jurisdiction only to evaluate the tribunals reasoning on the ground of perversity and arbitrariness. Similarly, in Vestas Wind Technology India Pvt. Ltd. v. Inox Renewables Ltd. , the Bombay High Court upheld an arbitral award applying business efficacy principles to contractual interpretation. However, the doctrine of Error Within Jurisdiction limits judicial intervention in the Tribunal’s decisions. While the interpretation of contractual terms falls within the arbitrator’s domain, courts will not interfere unless the arbitrator exceeds their jurisdiction or interprets the contract in an unreasonable and arbitrary manner. This issue was examined by the Delhi High Court in Reliance Industries v. GAIL (India) Ltd. , where the court held that the principle of Business Efficacy Test cannot be applied by an appellate court u/s 37 of the Commercial Courts Act for interpretation of contractual terms. As the Hon’ble court emphasized that such proceedings have a very narrow scope and do not allow for reassessment of evidence or substitution of judicial opinion over the arbitral tribunal’s findings. Conclusion   This article establishes that whenever a dispute arises, courts and arbitral tribunals are empowered to interpret and, where necessary, imply terms to give effect to the true intent of the contract. Foundational principles such as the officious bystander test and the business efficacy doctrine serve as essential tools to ensure that such interpretations are both just and equitable. However, the exercise of this power demands careful judicial restraint and doctrinal precision to avoid encroaching upon party autonomy and the foundational principles of arbitration. Recent judicial trend, as seen in cases like Vestas Wind Technology India Pvt. Ltd. (Supra) , M/S Adani Power (Mundra) Ltd.  Vs.  Gujarat Electricity Regulatory Commission & Ors , & Nabha Power(Supra) highlights the judiciary’s increasing reliance on these doctrines to uphold commercial reasonableness. While the doctrine of “error within jurisdiction” limits judicial interference u/s 34 & 37 of the Act, courts can still set aside awards that are arbitrary or unreasonable. Further, as contracts are increasingly drafted using AI, interpretation becomes more complex. While AI reduces human error, it also obscures the human intent and reasonableness that traditionally guide contract formation. This makes the application of principles for interpretation more challenging. Additionally, varying arbitration frameworks such as those for cross border arbitration, MSMEs and PSUs require context-specific approaches, rather than a uniform standard. Thus, only a principled and restrained application of interpretative doctrines can ensure that arbitration remains an effective, party-centric method for resolving modern commercial disputes. [1] Tushar Verma and Ayush Bajpai are fourth-year B.A. LL.B. (Hons.) students at Dr. Ram Manohar Lohiya National Law University, Lucknow. They have a keen interest in commercial arbitration and contract law, actively engaging in research and writing on related topics. Their academic journey has involved contributing to legal research projects and participating in seminars and workshops focused on dispute resolution and contract interpretation.

- Raghav Agarwal [1]   In India, arbitration was initiated by the Arbitration Act of 1889, and further, the Arbitration Act, 1940 after that, in 1996, a significant amendment was incorporated in the Arbitration Act. The same followed through in the 2015 and 2019 Amendment Acts.  Amendments were made to the principal Act by introducing the 2021 (Amendment) Act to match the level of International Arbitration law. The recent draft of the Arbitration Bill, 2024 proposed a series of amendments to the Arbitration and Conciliation Act, 1996.   The Ministry of Law and Justice requested feedback from the public, including opinion pieces and general comments. Arbitration is favoured as a practical means of resolving disputes amicably due to its ability to save money, procedural time, and avoid sluggish court proceedings. However as per the recent PwC report [2] arbitration position is weaken due to the time taken in arbitrations which is mostly more than what has been mandated in the Arbitration and Conciliation Act, of 1996. It is unable to satisfy the main justification for parties to submit their disputes to arbitration which are arbitration expertise, neutrality on decision, cost and time inputs, and timely resolution of the matter. The main aim of the legislature is unclear. A few modifications strengthen arbitration's position as a mode of dispute settlement, while other amendments demotivate arbitration and do not meet the parties' needs. In this article, the amendments proposed in the draft bill, pros and cons of the amendments, and a general overview of the bill are extensively analysed. An expert committee is constituted to proposed reforms to the Arbitration and Conciliation Act, 1996 it suggested a series of amendment to the act.    Proposed amendments and personal comments – Table mentioned amendments to the act and discusses all of the bill's main positive and negative of the Bill.       Arbitration and Conciliation, 1996  Existing Provision      Arbitration and Conciliation (Amendments), 2024  Proposed Provision                                            Comments   Short title, extent, and commencement - Arbitration and Conciliation, 1996    The amended Act will be called Arbitration Act, 1996 as provisions related to conciliation have been incorporated in Mediation Act 2023. The removal of conciliation provisions could be seen as a step towards simplifying the Act and focusing on arbitration as the primary method of dispute resolution.        Section 2 (1) (a)"arbitration" means any arbitration whether or not administered by a permanent arbitral institution.         Section 2(1)(a) of the Act to expand the definition of arbitration to explicitly include arbitration conducted through “audio-video electronic means. Introduction of Section 2(1) (aa) to the Act defines “audio-video electronic means” as use of any communication device for videoconferencing, filing of pleadings, recording of evidence, transmission of electronic communication, for the purposes of conduct of arbitral proceedings. [3] A significant step towards the digital transformation of arbitration in India. arbitration in India has been taken with the proposed expansion of Section 2(1)(a) and the inclusion of Section 2(1) (aa). In particular, for cross-border disputes, the revisions improve accessibility and efficiency in arbitral procedures by specifically acknowledging "audio-video electronic means," such as videoconferencing and electronic files.   Section 7 - Arbitration agreement 4) An arbitration agreement is in writing if it is contained in   (a)    A document signed by the parties;   (b)   An exchange of letters, telex, telegrams or other means of telecommunication 1[including communication through electronic means] which provide a record of the agreement; or   (c)  An exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.                 The amendment also addresses the increasing use of digital platforms for commercial transactions by proposing an amendment to Section 7(4)(a) of the Act to recognize arbitration agreements executed via digital signatures. [4]                     This change acknowledges the growing importance of online dispute resolution, especially in the postpandemic era. It reflects the reality that virtual hearings can enhance accessibility, reduce costs, and increase efficiency in arbitration proceedings.   Section 2 - Definitions   Arbitration and Conciliation act, 1996   Used place interchangeably with "seat," leading to jurisdictional ambiguities. Introduction of new section -   2A. (1) In case of arbitration other than international commercial arbitration –  Where seat of arbitration has been agreed by the parties or determined by the arbitral tribunal as per Section 20, the court means the court having pecuniary and territorial jurisdiction over the seat of arbitration.   In all other cases, the court means the court having pecuniary and territorial jurisdiction to decide the disputes forming the subject matter of the arbitration if the same had been the subject-matter of a suit. [5]   (2) In case of international commercial arbitration –             It provides clear guidelines for determining which court has authority, aiming to reduce ambiguity and streamline the arbitration process.      Where the seat of arbitration has been agreed by the parties or determined by the arbitral tribunal as per Section 20, Court means the High Court having territorial jurisdiction over the seat.    In all other cases, the Court means the High Court having territorial jurisdiction to decide disputes forming the subject matter of arbitration.    Replaces "place" with "seat" throughout the Act and provides clear guidelines for determining the seat of arbitration.   Appellate Arbitral Tribunal (AAT): Section 34 applications heard only by courts Section 34 -   New Body - Establishing an Appellate Arbitral Tribunal : To draft called for establishing an appellant body for adjudication of the matters. [6] Creating an Appellate Arbitral Tribunal has its pros and cons. On the plus side, it would offer a specialized place for handling arbitration appeals, which could lead to better and more consistent decisions. This could make the process faster and take some pressure off regular courts, making arbitration outcomes more predictable. However, there are downsides too. Setting up and running a new tribunal could be costly. Adding another layer of appeal might make the process more complicated and take longer. There could also be issues with figuring out the new tribunal's authority compared to existing courts. So, while this move could improve efficiency and specialization, it also brings concerns about cost, complexity, and jurisdictional conflicts Section 9 of the Arbitration and Conciliation Act. Codifying emergency arbitration provision -    Section 2(1)(a) to the Act, which provides a formal definition of an emergency arbitrator under the newly proposed Section 9-A   Section 9-A (1) of the Act, an arbitral institution may appoint an emergency arbitrator before the constitution of the Arbitral Tribunal, specifically for the purpose of granting interim measures as provided under Section 9 of the Act. This provision grants parties the ability to seek urgent relief without waiting for the formation of the Arbitral Tribunal, providing them with an expedited process for securing interim measures, especially in cases requiring immediate intervention. Order passed have same enforceability as passed by a tribunal [7] . This change aims to provide a faster, more efficient way to secure interim measures, especially in situations needing immediate action. Section 2 e) "Court" means--   (i) In the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in the exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject- Matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes Court means section 2 a   2A. (1) In case of arbitration other than international commercial arbitration –  where seat of arbitration has been agreed by the parties or determined by the arbitral tribunal as per Section 20, the court means the court having pecuniary and territorial jurisdiction over the seat of arbitration. [8]       Section 2 e)  -   (ii) in the case of international commercial arbitration, the High Court in the exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court. In all other cases, the court means the court having pecuniary and territorial jurisdiction to decide the disputes forming the subject matter of the arbitration if the same had been the subject-matter of a suit.    (2) In case of international commercial arbitration –    Where the seat of arbitration has been agreed by the parties or determined by the arbitral tribunal as per Section 20, Court means the [9] High Court having territorial jurisdiction over the seat.    In all other cases, Court means the High Court having territorial jurisdiction to decide disputes forming the subject matter of arbitration.   Amendment to Section 9(1) of the Act  Section 9(1) - A party may, before, or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court for interim measure. Earlier provision allows courts to grant interim relief during arbitration proceedings Changes proposed -  Limits recourse to Section 9 once arbitration proceedings have commenced, even for interim relief.   In cases where a tribunal is seated outside India (foreign tribunal), any interim relief granted by such a tribunal regarding assets located within India, does not have direct enforceability under the Act.10 In such a case, a party has an option to approach the Court under Section 9 of the Act to seek an enforceable interim measure       The lack of direct enforceability for interim relief granted by foreign tribunals concerning assets in India could complicate matters for international parties, requiring them to seek court intervention under Section 9. Deletion of Fourth schedule  Schedule 4 Model fee - Up to Rs.5,00,000      Rs.45,000 2. Above Rs.5,00,000 and up to Rs. 20,00,000- Rs. 45,000 plus 3.5 per cent. of the claim amount over and above Rs.5,00,000. 3. Above Rs.20,00,000 and up to Rs. 1,00,00,000 -  Rs.97,500 plus 3 per cent. of the claim amount over and above Rs.20,00,000. 4. Above Rs.1,00,00,000 and up to Rs. 10,00,00,000-  Rs.3,37,500 plus 1 per cent. of the claim amount over and above Rs.1,00,00,000. 5. Above Rs.10,00,00,000 and up to Rs. 20,00,00,000 Rs.12,37,500 plus 0.75 per cent. of the claim amount over and above Rs.10,00,00,000. 6. Above Rs. 20,00,00,000  Rs.19,87,500 plus 0.5 per cent. of the claim amount over and above Rs.20,00,00,000 with a ceiling of Rs.30,00,000. Draft Amendment introduces changes to Sections 11(14) and 11-A of the Act noting that in cases of institutional arbitration, arbitrator fees would continue to be determined by the respective institution’s rules. Where no such rules exist, or in ad hoc arbitrations, the fees will be specified by the Council.iii [10] Removing the Fourth Schedule, which set a model fee structure for arbitrators, makes the fee determination process simpler. With the new changes to Sections 11(14) and 11-A, fees in institutional arbitration will now follow the institution's rules. For ad hoc arbitrations or where no rules exist, the Council will decide the fees. This update aims to make fee determination more flexible and clearer, ensuring that costs are transparent. Earlier under the act appeal under Section 37 of the Act is allowed against orders refusing to refer parties to arbitration under Section 8 of the Act, but no similar provision exists for orders refusing to appoint arbitrators under Section 11 of the Act Section 11 - It proposed Parties will have the right to appeal against order of the court refusing the appointment of arbitrators. [11] Appeal against refusing to appointment of arbitrators under section- 11. If court refuses the appointment now parties have the right to appeal earlier there was no remedy defined under the act. Sub-section (4) to Section 8 of the Act,  section 8 (4) –  Refer parties to arbitration when there is an express clause provided in the contract.  No time limit for deciding on application   New introduction under section 8 – Mandates a 60-day timeline for deciding applications under Section 8 of the Act. Previously, there was no statutory time-limit, often leading to delays. By introducing such a timeline, the amendment ensures that the referral process is expedited [12] The new rule sets a 60-day deadline for deciding applications under Section 8 of the Act. Before this, there was no set time limit, which often caused delays. By adding this timeline, the amendment aims to speed up the referral process and make it more efficient   Section 34 of Arbitration and Conciliation Act Section 34 - Patent Illegality Test: Limited to domestic arbitration.   Extends patent illegality test to international commercial arbitration (ICA). [13]       Increases the effectiveness of setting aside of arbitral award. Section 9 of the arbitration and conciliation act -     Section 9, provides the formation of a tribunal from the date of the court’s order as is the case currently. Amendment to section 9 -  Provides timeline - the 90-day period for constituting an Arbitral Tribunal from the date of the application for interim relief [14] The change to Section 9 of the Arbitration and Conciliation Act introduces a 90-day deadline for forming an Arbitral Tribunal from the date of the application for interim relief. Previously, the tribunal was formed from the date of the court's order, which could lead to delays. This new timeline aims to speed up the process, ensuring that the tribunal is constituted more quickly and that arbitration proceedings can begin without unnecessary delays Section 16 – Competence of arbitral tribunal to rule on its own jurisdiction   It does not provide for timeline for jurisdictional challenge     The Draft Amendment introduces a 30-day period to decide jurisdictional challenges under Section 16(5) of the Act by the Arbitral Tribunal, ensuring that objections to an Arbitral Tribunal’s jurisdiction are resolved promptly. Introducing a 30-day period for the Arbitral Tribunal to decide on jurisdictional challenges under Section 16(5) is a positive change. It ensures that these challenges are resolved quickly, preventing unnecessary delays and allowing the arbitration process to proceed more smoothly. Section 37 – Appeals-      Introduces Section 37(1-A) to the Act, mandating a 60-day period for filing an appeal under Section 37(1) of the Act ensuring minimal delays in appellate proceedings and allowing the parties to move forward efficiently. It aims to minimize delays in appellate proceedings, ensuring that appeals are handled promptly. This change helps parties move forward, reducing the overall time spent in the arbitration process which is main motive of arbitration Section 2(1)(ca) of the Act.   (ca) "arbitral institution" means an arbitral institution designated by the Supreme Court or a High Court under this Act Definition - As a body or organisation that provides for the conduct of arbitration proceedings under its aegis, by an Arbitral Tribunal as per its own rules of procedure or as otherwise agreed by the parties.   Broadens the definition of arbitral institutions and confers additional powers to them, including the authority to extend Tribunal mandates and reduce fees for delays. [15] Broadens the definition of arbitral institutions and confers additional powers to them, including the authority to extend Tribunal mandates and reduce fees for delays. Section 29 of Arbitration act  Relevant Provision –  Sub-section 5 - The extension of the period referred to in subsection (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.     The proposed change is to extend the mandate of the Arbitral Tribunal, reduce arbitrators’ fees for delays, and substitute arbitrators whenever necessary. [16]       Overall, this step will Reduce delay in the proceedings Section 11 - Appointment of arbitrators Adding of new proviso to Sections 11(4), (5) and (6) of the Act,    Adding of new proviso to Sections 11(4), (5) and (6) of the Act – It will require the applicant to disclose the number of pending arbitration proceedings and awards passed in disputes between the parties to the court [17] This disclosure helps the court get a clearer picture of the ongoing disputes and the previous arbitration between the parties. It can aid in making more informed decisions regarding the appointment of arbitrators by providing this information upfront, the process becomes more transparent and efficient, potentially reducing delays and misunderstandings                              No requirement for the stamping of arbitral awards under the Stamping Act,1899. Requires arbitral awards to be stamped as per the Stamp Act, 1899. [18]  Introduction of a new layer of formality and compliance. Section 31 - Forms and contents of arbitral award Insert new Section 31(2-A) to the Act -  Which outlines a procedural checklist for arbitral awards. This checklist requires arbitrators to confirm essential elements — such as party capacity, validity of the arbitration agreement, and notice of arbitration. [19] It Promotes greater consistency and confidence in the arbitration process Section 31 Forms and Contents of arbitral award  - (7)     (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.   1 [(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two percent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.   Explanation-The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of 1978). Section 31 Forms and Contents of Arbitral Award -    The interest rate would be calculated at 3% above the repo rate, replacing the existing mechanism of 2% above the general rate of interest. [20]         Increasing the rate for fastening the payment is a positive step. Section 34 – Application for setting aside an arbitral award    Insertion of Section 34(7) provides that when an award is set aside in part, the Tribunal, on the direction of the Court or the Appellate Arbitral Tribunal, will only decide the issues on which the award was set aside, while the non-offending portions remain binding. It specifically clarifies that tribunal will decide the said issues based on the existing records of the original arbitral award, unless the Court or Appellate Arbitral Tribunal directs to the contrary [21] The Tribunal will only re-examine the specific issues that were problematic, while the rest of the award remains binding. This approach maintains the integrity of the original award and avoids unnecessary re-litigation of settled matters. Only courts adjudicate challenges to arbitral awards under Section 34 Introduces an Appellate Arbitral Tribunal to hear challenges to arbitral awards, alongside courts. [22] It also helps reduce the burden on traditional courts, potentially speeding up the resolution of disputes. By offering an alternative to court adjudication Section 34 2 (a) An arbitral award arising out of arbitration other than international commercial arbitration may also be set aside By the court, if the court finds that the award is vitiated by patent illegality appearing on the face of the award Section 34 2 (a) An arbitral award arising out of international commercial arbitration may also be set aside by the court if the court finds that the award is vitiated by patent illegality appearing on the face of the award   The new amendment Removes the distinction between domestic and international commercial arbitration regarding the grounds of patent illegality (Section 34(2-A)) Now International commercial arbitration award can also be set aside if found on the grounds of patent illegality. [23] This change will ensure that all arbitral awards, regardless of their origin, are subject to the same scrutiny for patent illegality. This could potentially enhance the credibility and reliability of arbitration as a dispute resolution mechanism   Advantage and Drawbacks - The Bill provides for the guidelines that the dispute can only be referred to arbitration where the value of the claim is below Rs. 10000 which showcases doubt posed by the government on the efficiency of the arbitration. The Bill downside India as a seat for arbitration the proposed bill extends grounds for challenging the award patent illegality under section 34. The parties cannot get interim relief once the tribunal is constituted and can now only seek relief under section 17 it is beneficial as it lowers strain on the court which is the very objective of arbitration. However, if a question is raised on the appointment, interest bias, or ineligible arbitrator then it is needed that option of approaching the court should be available to the parties under section 9 of the act. In Amazon vs Future Retail [24] court held that the award of emergency arbitrator is enforceable under section 17(2). The recent bill proposed a provision for the appointment of emergency arbitrators which enhances the position of India's seat for arbitration globally. Enforcement of timelines by the bill 60 days for filling application of appointment of arbitrator and appeal section 37 aims to minimize delays in appellate proceedings, ensuring that overall time spent in the arbitration is reduced. [25] Conclusion The Draft bill aims to bring India's arbitration system up to date with global norms and fix long-standing inefficiencies, the Draft Arbitration Bill, 2024, is a major step in that direction. Although the proposed reforms, which include integrating digital procedures, addressing jurisdictional issues, and codifying emergency arbitration, have the potential to streamline arbitration, they also add complexity. For example, the creation of an Appellate Arbitral Tribunal as already adopt by the American Arbitration Association and the European Court of Arbitration which may lower the strain on conventional courts, but it might also result in additional expenses and levels of procedure.   Overall, the draft law takes an active approach, seeking to enhance India's standing as a major centre for international arbitration. However, careful execution, support from all parties involved, and resolving practical obstacles are necessary for its success.  [1] Raghav Agarwal is a 8th SEM | B.B.A. LL. B student at Bharati Vidyapeeth New Law College. [2] http://corporate-attributes-and-practices-towards-arbitration-in-india.pdf/ & Arbitration vs. Mediation: Understanding What We Want vs. What We Need | SCC Times [3] https://www.whitecase.com/insight-alert/keeping-times-government-india-proposes-new-arbitration-lawreforms.Final_Public_Notice.pdf M inistry of legal affair Draft arbitration bill. [4] https://www.whitecase.com/insight-alert/keeping-times-government-india-proposes-new-arbitration-lawreforms . [5] Government of India invites comments on draft Arbitration and Conciliation (Amendment) Bill, 2024 | Current Affairs | Vision IAS . Final _Public_Notice.pdf [6] Final_Public_Notice.pdf M inistry of legal affair Draft arbitration bill. [7] Final_Public_Notice.pdf M inistry of legal affair Draft arbitration bill. [8] Final_Public_Notice.pdf M inistry of legal affair Draft arbitration bill. [9] Final_Public_Notice.pdf M inistry of legal affair Draft arbitration bill. [10] Draft Arbitration And Conciliation (Amendment) Bill, 2024: Comments Invited [11] Draft Arbitration And Conciliation (Amendment) Bill, 2024: Comments Invited [12] Future of Arbitration in India: Decoding the Draft Arbitration and Conciliation (Amendment) Bill, 2024 | SCC Times [13] Future of Arbitration in India: Decoding the Draft Arbitration and Conciliation (Amendment) Bill, 2024 | SCC Times & Draft Arbitration And Conciliation (Amendment) Bill, 2024: Comments Invited [15] Final_Public_Notice.pdf [16] Final_Public_Notice.pdf [17] Final_Public_Notice.pdf [18] Final_Public_Notice.pdf [19] Final_Public_Notice.pdf [20] Final_Public_Notice.pdf [21] Final_Public_Notice.pdf [22] Final_Public_Notice.pdf [23] Final_Public_Notice.pdf [24] ('MANU/SC/0187/2022'); [25] Final_Public_Notice.pdf & https://www.barandbench.com/columns/the-draft-arbitration-and-conciliation-amendment-bill-2024-an-analysis & https://www.scconline.com/blog/post/2024/12/10/future-of-arbitration-in-india-decoding-the-draft-arbitration-and-conciliation-amendment-bill-2024/

- Abhay Raj & Shruti Avinash [1]   INTRODUCTION Blockchain technology and cryptocurrencies, with their decentralised structures and global reach, have reshaped economic interactions but also introduced complex legal challenges that demand tailored dispute resolution mechanisms. Arbitration, valued for its flexibility and confidentiality, has emerged as a preferred method for resolving blockchain-related disputes, yet it often struggles with enforcement and regulatory inconsistencies. This article critically examines the effectiveness of arbitration in addressing crypto and blockchain disputes, focusing on India while drawing insights from jurisdictions that have developed structured approaches, including the United Arab Emirates, Singapore, the United Kingdom, and the United States. By analysing regulatory frameworks such as the UAE’s Virtual Asset Regulatory Authority, Singapore’s Payment Services Act, the UK’s Financial Conduct Authority guidelines, and U.S. case law on digital assets, this article highlights key lessons for India. Additionally, it explores hybrid dispute resolution models that blend arbitration with litigation and online dispute resolution (“ ODR ”), aiming to develop more robust mechanisms that align with the evolving complexities of blockchain governance.   CHALLENGES IN BLOCKCHAIN DISPUTE RESOLUTION Unique Attributes of Blockchain Transactions Blockchain transactions present unique challenges for traditional arbitration, primarily due to the pseudonymous nature of participants and the decentralised structure of cryptocurrencies. The anonymity of parties makes it difficult to identify responsible entities, while the lack of clarity on jurisdictional boundaries complicates the application of legal frameworks. Platforms like Binance and Bybit , with their complex corporate structures, often blur lines of responsibility between different entities, further entrenching these issues.   Additionally, the rise of smart contracts, which execute autonomously based on pre-programmed code, introduces complexities in interpreting, executing, and enforcing agreements. The extreme volatility of crypto assets means that arbitration awards can quickly become irrelevant or outdated, undermining their effectiveness. With many arbitrators and judicial bodies unfamiliar with blockchain technology, traditional dispute resolution mechanisms struggle to adapt, highlighting the urgent need for more tailored approaches in the crypto space.   Arbitration – A Failed Method for Dispute Resolution Theoretically, arbitration is well-suited for resolving blockchain disputes due to its inherent flexibility, confidentiality, and the cross-border enforceability of awards under international frameworks. The ability to appoint arbitrators with expertise in blockchain technology and smart contracts ensures that complex technical issues are addressed by informed professionals.   However, as noted by practitioners like Panchamiya , these theoretical strengths often falter in practice. They argue that the pseudonymous nature of blockchain participants creates significant enforcement challenges , particularly in cases involving fraudsters or decentralised autonomous organisations, where identifying and holding responsible parties accountable is exceedingly difficult. This challenge is further compounded by the varying regulatory landscapes across jurisdictions, with some countries imposing strict regulations or outright bans on crypto assets. Such regulatory disparities add complexity to legal actions and the enforcement of arbitration awards, particularly when damages are ordered in cryptocurrency or fiat currency.   ODR Platforms - A Failed Method for Dispute Resolution  Emerging ODR platforms like Kleros and Aragon Court seek to overcome the limitations of traditional arbitration by harnessing blockchain technology and decentralised principles. These platforms use juror pools incentivised through game-theoretic mechanisms, where participants stake tokens to serve as decision-makers. Outcomes are rewarded or penalised based on alignment with majority rulings, providing a decentralised yet structured method for resolving disputes.   Although these systems have shown promise in resolving small-scale disputes, they face significant drawbacks . One major concern is the lack of legal expertise among jurors, which can lead to inconsistent and unpredictable outcomes, particularly in cases involving intricate contractual or technical issues. Moreover, ODR platforms typically incentivise jurors based on majority decisions, which undermines impartiality by encouraging jurors to align with the majority view rather than issuing an independent, fair verdict. This creates a situation where jurors may prioritise consensus over justice, especially in more complex cases.    For high-value or complex disputes, the absence of procedural rigor, institutional oversight, and enforceability significantly limits the practical utility of these platforms. Critics like Panchamiya , Chevalier and Schmitz argue that while ODR may align with blockchain’s decentralised ethos, it falls short of providing the institutional strength and reliability necessary to handle larger, more complex disputes effectively. These concerns highlight the need for a more balanced approach that incorporates the strengths of traditional dispute resolution mechanisms, such as arbitration and litigation, alongside the innovative potential of ODR.          Litigation – A Failed Method for Dispute Resolution Given the shortcomings of both arbitration and ODR platforms, scholars may advocate for litigation as the preferable option for resolving blockchain disputes. Litigation offers complementary strengths, especially in jurisdictions that recognise crypto assets as "property." Courts possess powerful tools for asset recovery, such as freezing orders and proprietary injunctions. This was exemplified in Fetch.ai Ltd v Persons Unknown , where the English courts granted injunctions to trace misappropriated crypto assets. Similarly, the Singapore High Court’s ruling in CLM v CLN and others highlighted the critical role of interim measures in preventing asset dissipation.    However, litigation is not without its challenges. Its public nature may deter parties seeking confidentiality, and cross-border enforcement remains a persistent issue . In India, for instance, the lack of specific procedural rules for crypto-related cases has led to inconsistent judicial outcomes, further discouraging stakeholders from viewing litigation as a reliable and effective option.   PROPOSING A HYBRID APPROACH TO BLOCKCHAIN DISPUTE RESOLUTION  The limitations of arbitration, ODR, and litigation as standalone solutions highlight the need for a hybrid approach to effectively resolve blockchain-related disputes. Arbitration, while flexible and confidential, often struggles with enforcement challenges and jurisdictional ambiguities. Similarly, ODR platforms, though aligned with blockchain’s decentralised ethos, frequently lack the expertise and procedural safeguards needed for complex disputes. Litigation, despite offering powerful tools like freezing orders and proprietary injunctions, is hindered by its public nature and inconsistent cross-border enforcement.    To address these gaps, a hybrid model must integrate the strengths of arbitration, courts, and online dispute resolution (ODR) while mitigating their weaknesses. Arbitration clauses should be drafted with greater clarity, explicitly defining governing laws, counterparties, and enforcement mechanisms to provide certainty in blockchain-related disputes, particularly in India, where regulatory uncertainty adds complexity. A well-crafted clause could specify that disputes be resolved under the rules of an institution like the Mumbai Centre for International Arbitration (MCIA), with the seat of arbitration in India and governing law aligned with the Information Technology Act, 2000, and relevant RBI or SEBI regulations. Given the technical nature of blockchain, arbitrators should have expertise in digital assets, and proceedings should allow blockchain-based evidence and smart contract executions as admissible proof. At the same time, ODR platforms must evolve with expert panels and procedural safeguards to ensure neutrality and competence, while courts refine tools for fraud prevention and cross-border asset recovery, enabling them to effectively tackle crypto-related enforcement challenges.   Harmonised international standards are essential to ensure the recognition and enforcement of blockchain-related decisions across jurisdictions. A promising innovation lies in embedding arbitration agreements directly within smart contracts. By enabling automated enforcement of awards, this approach can bridge the gap between traditional dispute resolution mechanisms and blockchain technology, streamlining processes and offering a tailored solution for the crypto space.    The Future of Blockchain Arbitration: Balancing Innovation with Practicality The future of blockchain arbitration depends on innovations that address its inherent limitations. Dincer’s concept of  Lex Cryptographia —a self-contained legal framework rooted in blockchain principles—presents a compelling vision for resolving disputes within the ecosystem. Embedding arbitration mechanisms directly into smart contracts could automate dispute resolution processes, offering unprecedented efficiency. For instance, a smart contract governing a token sale could include coded arbitration clauses that activate in the event of a breach, automatically appointing pre-selected arbitrators and executing their decisions without human intervention.   However, as scholars such as Chevalier and Schmitz have cautioned, this technological efficiency must not come at the expense of fairness. Procedural safeguards must remain integral to ensure transparency and equitable outcomes. Moreover, Lex Cryptographia's reliance on decentralised enforcement mechanisms raises potential conflicts with traditional judicial systems, particularly regarding enforceability. These challenges highlight the need for a harmonised approach that blends the innovative potential of blockchain technology with the procedural integrity of established legal systems.   Towards a Cohesive Regulatory and Arbitration Framework for Blockchain Disputes Globally, jurisdictions have begun adapting to the unique challenges posed by crypto disputes, providing valuable lessons for India. The United Arab Emirates, emerging as a global hub for cryptocurrencies, demonstrates a forward-thinking approach. Regulatory bodies like the Virtual Asset Regulatory Authority have introduced guidelines that seamlessly incorporate arbitration into crypto governance frameworks. Additionally, the Abu Dhabi Global Market and the Dubai International Financial Centre have established mechanisms that facilitate blockchain arbitration, showcasing how proactive and robust regulatory infrastructures can effectively address the complexities of emerging technologies.    Additionally, Vietnam offers further lessons: while cryptocurrencies are not recognised as legal tender, disputes involving blockchain transactions are addressed through arbitration and litigation. Notable cases like  Case No. 22/2017/HC-ST  underline the importance of clear regulatory definitions, offering a potential roadmap for India to clarify the legal status of cryptocurrencies and establish effective dispute-resolution mechanisms.   Arbitration’s adaptability is particularly crucial in addressing cross-border disputes, where jurisdictional conflicts are common. Binance, for example, currently relies on arbitration clauses ( Clause 32.1, Terms of Use, 03 June 2024 ) through the Hong Kong International Arbitration Centre, showcasing how arbitration can provide a neutral forum for resolving disputes involving global stakeholders. This approach allows for a streamlined process and ensures that parties from different jurisdictions can resolve their disputes in an impartial and structured environment. However, these clauses also reveal the limitations of arbitration, particularly in enforcing awards against pseudonymous or non-cooperative parties. The challenge becomes even more pronounced when assets are held in jurisdictions that do not recognise or enforce the arbitral process, raising concerns about the practical efficacy of arbitration in certain cross-border contexts. This underscores the need for innovative solutions to enhance the enforceability and reach of arbitration in the evolving landscape of international disputes.   INDIA’S REGULATORY LANDSCAPE FOR CRYPTOCURRENCIES  India’s regulatory framework for cryptocurrencies is marked by uncertainty and an evolving legal landscape. Initially, the Reserve Bank of India imposed a blanket ban on cryptocurrency transactions in 2018. This ban, however, was overturned by the Supreme Court in the landmark case of Internet and Mobile Association of India v Reserve Bank of India , providing temporary relief to crypto stakeholders. Despite this significant ruling, subsequent regulatory measures have failed to establish a comprehensive framework for cryptocurrency governance.   The Finance Act, 2022 introduced taxation for virtual digital assets, signalling the government’s recognition of the crypto market’s existence, but it stopped short of clarifying their legal status. This piecemeal approach has left crypto businesses and users navigating an ambiguous regulatory environment, impacting investor confidence and long-term growth prospects in the sector.   The interplay between public policy and arbitration is equally significant, particularly in India, where landmark cases like Renusagar Power Co. Ltd. v General Electric Co. and ONGC Ltd. v Saw Pipes Ltd. have shaped the concept of public policy. When it comes to cryptocurrencies, public policy considerations can influence the enforceability of arbitration awards. For example, if cryptocurrencies are deemed illegal under Indian law, awards involving such transactions risk being set aside for violating public policy. To address these challenges, arbitration agreements must explicitly account for potential conflicts with local laws, ensuring awards remain enforceable while navigating the evolving legal landscape of blockchain technology.    India’s fragmented regulatory landscape highlights the urgent need for integrative approaches to foster trust and stability in its rapidly growing cryptocurrency sector. Hybrid dispute resolution models can play a pivotal role in bridging regulatory gaps. For instance, regulators could adopt frameworks that blend arbitration with court oversight, ensuring enforceable outcomes while retaining the flexibility required by blockchain stakeholders. Collaborative efforts between the Securities and Exchange Board of India and the Reserve Bank of India could further support the establishment of specialised tribunals for crypto disputes, harmonising financial regulations with modern arbitration practices.   In India's cryptocurrency market, dispute resolution mechanisms vary across platforms, with exchanges like WazirX implementing specific processes to address user conflicts. WazirX, for instance, has established a Peer-to-Peer (P2P) dispute resolution system designed to ensure secure and transparent transactions. This system employs an escrow mechanism where WazirX holds the seller's USDT (Tether) until the transaction is successfully completed and payment is confirmed by both parties. In cases where disputes arise, either party can raise a dispute after a specified period, prompting WazirX's dispute team to intervene. The team swiftly verifies proofs of payment from both the buyer and seller, following a multi-check process to ensure accuracy. This approach aims to provide a fair and final decision to settle disputes, typically within 48 hours. Additionally, in July 2022, WazirX introduced a Payment Proof Collection feature to streamline the process of collecting evidence from buyers and sellers in case of disputes. This enhancement mandates both parties to submit proof when raising a dispute, thereby reducing the time required for resolution and enhancing the overall efficiency of the P2P transaction process.   However, the Indian cryptocurrency landscape has faced significant challenges, as exemplified by the 2024 cyberattack on WazirX, which resulted in the loss of approximately $234 million. In response, WazirX proposed a Scheme of Arrangement under the Singapore Companies Act to restructure its liabilities and provide users with a clear path to optimised recoveries. The scheme includes rebalancing remaining cryptocurrency assets to match liabilities associated with the platform and aims to distribute assets efficiently to affected users.   This regulatory ambiguity also extends to the arbitrability of crypto-related disputes under the Arbitration and Conciliation Act, 1996 . As per the principles outlined in Vidya Drolia v Durga Trading Corporation , disputes that involve public interest or are classified as actions in rem are non-arbitrable. The unresolved classification of cryptocurrencies under Indian law—as property, securities, or commodities—further complicates this issue. Without clear legislative definitions, disputes involving crypto assets risk being categorised as non-arbitrable, undermining arbitration’s efficacy as a mechanism for resolving such disputes.   To address these challenges, India needs a clear regulatory framework that defines the legal status of cryptocurrencies, establishes governance guidelines, and ensures enforceability in dispute resolution. Collaboration between the RBI and SEBI is essential to classify cryptocurrencies and delineate regulatory oversight. Inspired by models like Singapore’s Payment Services Act, India could introduce licensing requirements, AML/KYC compliance, and consumer protection measures. Additionally, specialised crypto dispute resolution tribunals, integrated with arbitration and court oversight, could streamline enforcement. Incorporating blockchain-based mechanisms like smart contract arbitration could further enhance efficiency. A cohesive approach will foster trust, stability, and India’s leadership in the global crypto ecosystem.   CONCLUSION Blockchain’s decentralised nature fundamentally reshapes the way disputes are addressed, exposing limitations in traditional dispute resolution methods. While arbitration offers flexibility and neutrality, it must evolve to address procedural and enforcement challenges inherent in the crypto ecosystem. Technological advancements, such as blockchain’s transparency and immutability, present promising avenues for enhancing arbitration, but these innovations must ensure fairness and procedural rigour to gain widespread acceptance.   The integration of arbitration, litigation, and ODR into a hybrid model represents the most viable path forward, combining the strengths of each approach to address the complexities of blockchain-related disputes. India’s evolving regulatory landscape, supported by international examples and technological innovations, can serve as a foundation for creating robust and harmonised dispute resolution frameworks. As blockchain adoption accelerates, the legal community must prioritise the development of dynamic, hybrid solutions that balance efficiency, fairness, and enforceability. By embracing these innovations, stakeholders can ensure sustainable growth and legal certainty in the rapidly expanding digital economy. [1] Abhay Raj, an Associate at TLP Advisors and Senior Staff Editor at The Arbitration Workshop, can be reached at rajabhayuk@gmail.com . Shruti Avinash, a final-year student at NALSAR University of Law Hyderabad and Junior Editor at The Arbitration Workshop, can be contacted at shrutiavinash7@gmail.com .

Shirin Sarkar * Introduction: Setting Sail The maritime industry, much like the vast oceans it sails upon, is no stranger to turbulent waters, especially when financial disputes surface. Such disputes can leave ships stranded in a storm of legal complexities, with no clear direction in sight. However, in India, the convergence of two powerful legal forces – the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, and the Arbitration and Conciliation Act, 1996 – offers a navigational chart to guide the way through these rough seas. This blog embarks on a voyage through the intersection of these two vital laws, uncovering how they work in tandem to resolve maritime claims and facilitate arbitration. The Admiralty Act serves as a beacon, providing a specialized legal framework for addressing disputes related to ships, freight, ownership, and damages. Meanwhile, the Arbitration Act acts as a lifeboat, offering parties an alternative, quicker, and often more cost-effective route to resolution, away from the heavy anchor of traditional court proceedings. The Admiralty Act - Enforcing Maritime Claims The  Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017  serves as a crucial legal framework for addressing maritime disputes in India. This Act consolidates various existing laws and empowers admiralty courts to protect the rights and interests of claimants, akin to a crew navigating through turbulent waters in search of justice. Notably, these courts possess the authority to arrest vessels, a significant legal mechanism that enables claimants to secure their claims by immobilizing a ship's operations. This tool is particularly vital in cases involving unpaid wages or damages, where prompt intervention is essential to prevent further losses. Under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 , admiralty jurisdiction is vested in several High Courts across India, extending to their respective territorial waters. This expansion allows for comprehensive oversight and enforcement of maritime claims. For instance, if a shipping company defaults on cargo payments or fails to address damages during transit, the aggrieved party can petition an admiralty court for an arrest order. Such action not only provides a strategic negotiating advantage but also ensures that the vessel remains under the court’s jurisdiction until the dispute is resolved. The Act clarifies the conditions under which courts can exercise this authority, encompassing claims related to vessel ownership, mortgages, and other maritime liabilities, thereby streamlining the legal process for addressing maritime disputes effectively. The Arbitration Act - Alternative Resolution at Sea In contrast, the Arbitration and Conciliation Act, 1996 offers an efficient and confidential alternative dispute resolution mechanism favoured by businesses, particularly in shipping contracts. These contracts often include arbitration clauses, allowing parties to resolve disputes outside of traditional litigation. The Act promotes finality and expedience, essential for the fast-paced nature of international trade. It governs both domestic and international arbitration, enabling Indian businesses to engage confidently in global markets. However, the interaction between arbitration and admiralty law raises important questions, especially when disputes occur simultaneously with arbitration proceedings. The Maritime Arbitration Rules further clarify the framework for resolving maritime disputes under the Arbitration Act. While Indian courts increasingly support arbitration agreements and foreign arbitral awards, challenges remain in enforcing these agreements amid ongoing admiralty proceedings. Striking a balance between judicial independence and a pro-arbitration environment is crucial for fostering confidence among international stakeholders. The Collision Course: When Admiralty Meets Arbitration The intersection of ship arrests and arbitration clauses creates a complex legal landscape. A key scenario arises when parties seek to freeze a vessel while engaging in arbitration negotiations. Although it is permissible to arrest a ship even during ongoing arbitration, this can lead to jurisdictional conflicts and procedural challenges. Claimants often view ship arrests as a form of legal insurance, ensuring that assets remain available should they prevail in arbitration or litigation. The International Convention on Arrest of Ships allows for such arrests specifically for maritime claims, reinforcing the notion that a ship may be arrested to obtain security even if the merits of the claim are to be adjudicated elsewhere due to an arbitration clause. This mechanism becomes particularly critical in international contexts where vessels are often registered under different flags, complicating enforcement. However, the arrest can complicate arbitration proceedings , as courts must balance the interests of both parties while navigating overlapping jurisdictions. Judicial decisions play a pivotal role in this dynamic; courts act as mediators, striving to ensure that neither party is left adrift amid conflicting legal obligations. Recent rulings have clarified that while courts can uphold arbitration agreements, they also retain the authority to grant arrest orders when justified by maritime claims. This duality emphasizes the necessity for careful consideration of both admiralty principles and arbitration agreements, ensuring that the rights of claimants are protected without undermining the arbitration process. Case Studies: Tales from the Courtroom Seas Two notable cases illustrate the complexities at the intersection of admiralty law and arbitration: 1. In Raj Shipping Agencies v. Barge Madhwa [ Raj Shipping Agencies v. Barge Madhwa, 2020 SCC OnLine Bom 651 ], the Bombay High Court addressed the interplay between the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and arbitration principles within the context of insolvency proceedings. The court ruled that an Action-in-rem could be initiated even during a winding-up order or moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC) , clarifying that no leave under Section 446(1) of the Companies Act, 1956 , is required to commence or continue admiralty actions. The court emphasized that actions in rem target the vessel itself, allowing claimants to secure their rights independently of a corporate debtor's insolvency status. This ruling affirms that the Admiralty Act operates as a special law governing maritime claims, coexisting with the IBC. Ultimately, the judgment safeguards maritime claimants' interests while ensuring that admiralty courts retain exclusive jurisdiction over maritime matters, even amid insolvency proceedings. 2.     The Bombay High Court's judgment in Altus Uber v. Siem Offshore Rederi AS [Altus Uber v. Siem Offshore Rederi AS, 2019 SCC OnLine Bom 1327] sheds light on the compatibility of admiralty jurisdiction with arbitration proceedings under Indian law. The court clarified that the presence of an arbitration agreement does not preclude the institution of an admiralty suit for securing claims through mechanisms like ship arrests. It emphasized that any security obtained in an admiralty action could be retained, even if the suit is stayed in favor of arbitration. Furthermore, the court highlighted the broader scope of Section 5(2) of the Admiralty Act, 2017, which permits the arrest of a ship owned or demise-chartered by the liable party, diverging from the 1999 Arrest Convention's limitations. This decision underscores a pragmatic approach that balances the needs of maritime commerce with the principles of arbitration, ensuring claimants can effectively safeguard their interests while resolving disputes through arbitration. These two cases emphasize the nuanced relationship between admiralty law and arbitration, demonstrating that both legal frameworks can coexist while serving distinct yet complementary purposes. Raj Shipping Agencies v. Barge Madhwa underscores the autonomy of admiralty courts to address maritime claims as actions in rem, even amidst insolvency proceedings, safeguarding claimants’ rights to secure their interests irrespective of the debtor's financial status. Meanwhile, Altus Uber v. Siem Offshore Rederi AS highlights the flexibility of admiralty jurisdiction to coexist with arbitration, enabling the arrest of ships to secure claims without undermining the arbitration process. Together, these cases showcase the adaptability of Indian maritime law in balancing the interests of claimants, creditors, and international commerce, while fostering confidence in India’s legal system as a reliable forum for resolving maritime disputes. Challenges: Stormy Waters Ahead Despite advancements in maritime law, several challenges persist, particularly regarding jurisdictional ambiguity, which often leads to confusion in maritime arbitration. This ambiguity complicates efforts to resolve disputes efficiently, as different jurisdictions may interpret laws and arbitration agreements differently. Additionally, legal bottlenecks can arise when ship arrests delay arbitration proceedings, further complicating the resolution process for all parties involved. As global trade continues to evolve, it is imperative for India’s maritime laws to adapt to international standards. Aligning Indian practices with UNCLOS will effectively clarify most jurisdictional ambiguities in maritime disputes. UNCLOS can potentially clarify maritime boundaries in a significant way, as in the case of the arbitral award over the maritime boundary in the Bay of Bengal between Bangladesh and India . Under Annex VII of UNCLOS, the award for and against the two war parties established simple legal frameworks that assign specific entitlements for each country for about 406,833 square kms of maritime territory. Based on the tribunal's decision, Bangladesh received about 106,613 square kms and India around 300,220 square kms, which is a good case in proving how effective UNCLOS can be in delimiting boundaries and reducing conflicts. By allowing for the structured disposition of any maritime claims, UNCLOS also enables India to exercise its sovereign right over the control of its resources and work with cooperating neighbouring states. Such an alignment would reaffirm India's sovereignty regarding its territorial waters and EEZ and regain its credibility among the other nations, thereby promoting regional goodwill and default stability in maritime governance. The interaction between admiralty courts and arbitration forums must be streamlined to ensure that legal proceedings do not become protracted due to jurisdictional disputes. Legislative reforms are urgently needed to harmonize domestic regulations with global benchmarks. This alignment will not only enhance the efficiency of dispute resolution but also ensure that India maintains its position as a competitive and attractive hub for maritime commerce. By addressing these challenges, India can better facilitate international trade and protect the interests of stakeholders in the maritime industry. Charting a New Course: Recommendations To address the challenges and improve the interplay between admiralty law and arbitration in India, several recommendations emerge: ·  Clearer Maps: Legislative amendments should be made to align the Admiralty Act and Arbitration Act more closely. Amendments could clarify admiralty court jurisdiction with arbitration clauses, streamline ship arrest procedures to align with arbitral outcomes, enhance foreign award enforcement, and adopt international best practices for maritime arbitration, ensuring efficiency and consistency. This alignment would provide clearer guidelines on how these laws interact in practice, reducing jurisdictional ambiguity that currently complicates dispute resolution. · Smoother Sailing: Implementing comprehensive training programs for maritime lawyers and arbitrators would enhance their understanding of both areas of law. Such education could lead to improved dispute resolution outcomes and foster a more cohesive legal environment for maritime arbitration. · Learning from Lighthouses: Insights from jurisdictions like Singapore and the UK can inform best practices in navigating maritime disputes effectively. Singapore’s SCMA offers a specialized, flexible framework for maritime disputes, supported by courts that enforce arbitration awards with minimal interference. Similarly, the UK’s LMAA emphasizes procedural efficiency, confidentiality, and enforcement under the New York Convention, showcasing arbitration-friendly environments that integrate seamlessly with maritime laws. By studying these models, India can adopt strategies that streamline arbitration processes, enhance enforcement of awards, and ensure that maritime claims are handled efficiently. This proactive approach will not only strengthen India's legal framework but also bolster its position as a competitive hub for international maritime commerce.  By implementing these recommendations, India can better navigate the complexities of maritime law and arbitration, ensuring a more robust framework for resolving disputes in the shipping industry. Conclusion: Anchoring Clarity In conclusion, the successful harmonization of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, with the Arbitration and Conciliation Act, 1996 is crucial for bolstering India's legal framework in resolving maritime disputes. The interplay between these two laws plays a pivotal role in facilitating timely, efficient, and equitable dispute resolution in the maritime sector. However, jurisdictional ambiguity and procedural challenges continue to pose significant obstacles. To address these issues and improve the current system, legislative amendments are essential. By aligning the Admiralty Act more clearly with the Arbitration Act and establishing uniform guidelines for handling ship arrests during arbitration proceedings, India can eliminate jurisdictional conflicts and streamline the legal process. Furthermore, enhancing the training of maritime lawyers and arbitrators will ensure a deeper understanding of both legal systems, promoting more effective dispute resolution. Drawing lessons from global jurisdictions such as Singapore and the UK will enable India to adopt best practices, enhancing both the enforcement of arbitration awards and the overall efficiency of maritime dispute resolution. These steps will not only safeguard the interests of maritime claimants but will also strengthen India's position as a reliable and competitive hub for global trade. Ultimately, implementing these reforms will ensure that India’s maritime legal system remains dynamic, responsive, and in harmony with international standards, paving the way for smoother sailing in resolving maritime disputes. *Shirin Sarkar is a 2nd Year student at Maharashtra National Law University, Aurangabad.

Ishant S. Joshi and Vatsala Tyagi* Introduction The inclusion of Appellate Arbitral Tribunals (hereinafter: “ AAT ”) under Section 34A of the Draft Arbitration and Conciliation Amendment Bill, 2024 (hereinafter: “ Draft Bill ”) marks a transformative step in India’s arbitration regime. By allowing arbitral institutions to establish AATs to entertain applications for setting aside arbitral awards under Section 34 of the Arbitration and Conciliation Act , 1996 (hereinafter: “ Act ”), the draft bill introduces a two-tiered arbitration mechanism. While this possible insertion has the potential to enhance arbitration practices and reduce judicial intervention, it also brings significant challenges and ambiguities that require careful examination before the draft bill is brought before the parliament. The AAT, as envisioned in the draft bill, will derive its authority from the parties' consent. If parties opt for this mechanism, they effectively transfer the power of setting aside awards from the courts to the AAT. Furthermore, the provision retains the right to appeal under Section 37 of the Act. Codifying Two-Tier Arbitration Section 34A of the draft bill (hereinafter: “ Section 34A ”) has in essence, codified the judgment in M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd . . The Supreme Court, in this case, upheld the validity of two-tier arbitration clauses, affirming the parties’ right to an appellate mechanism. By codifying this right through Section 34A, the draft bill can eliminate ambiguity regarding two-tier arbitration. By offering an appellate platform, the draft bill enhances India’s attractiveness as an arbitration-friendly jurisdiction, particularly for international commercial disputes. Impartiality and Composition of AAT A question may arise as to what is going to be the composition of the AAT? Some might be sceptical of the AAT because the same institution will decide on the award when it goes to appeal. For example, when an award is decided by DIAC, then if the parties opt for Section 34A, that same institution will decide on the validity of the award. These concerns can be mitigated by introducing a clause outlining the AAT's composition, which shall include both domain experts (e.g., specialists in fields like cement or medicine, depending on the case) and legal professionals like retired judges and lawyers. This dual composition ensures balanced decision-making, addressing both legal and technical conflicts effectively. In lieu of this, there are two approaches for the constitution of the appellate tribunal: (i) either the parties participate in choosing the arbitrators for the AAT, or (ii) the arbitral institutions alone are given this power. The latter ensures impartiality and independence, as the tribunal is constituted purely for review purposes. Although this may raise eyebrows in a party-oriented arbitration process, it aligns with the need for objectivity in appellate adjudication. Further, this approach will also preserve the institutions independence, reducing scope for conflict of interests. Moreover, Section 34(1B) of the draft bill further supports this approach by mandating the AAT to formulate specific grounds for appeals based on the award passed by the original tribunal, enabling skilled and focused adjudication. This seemingly limits party autonomy in so far as their right to challenge awards on other grounds. However, it is essential to sustain the valued traits of finality and time efficiency of arbitration. Addressing Limitation Periods Another challenge is posed by absence of a clear limitation period for invoking the AAT. The absence of a defined timeline for invoking the AAT could lead to procedural abuse and unnecessary delays. This shall undermine the paramount objective of streamlining the appellate process. The draft bill must also clarify the interplay of this limitation period with the enforcement of the original award. Inspiration can be drawn from international models such as the JAMS Optional Arbitration Appeal Procedure (hereinafter: “ JAMS ”)  and the AAA Optional Appellate Rules (hereinafter: “ AAA ”), which suspend enforcement of the initial award until the appellate process is concluded. The limitation period for the initiating enforcement shall only commence after the appellate award. The Bill must delineate such intricacies to prevent procedural inefficiencies. Applicability to Ad-Hoc Arbitrations Section 34A is not applicable to ad hoc arbitrations but only to institutional arbitrations. This exclusion risks fragmenting the arbitration landscape and undermining the uniformity of arbitration jurisprudence. Section 34A should be made applicable to ad hoc arbitrations, provided that parties adopt agreed-upon institutional rules or engage an arbitral institution, ensuring consistency with institutional arbitration practices. It could be mandated that parties engaging in ad hoc arbitration utilize the same arbitral institution or adopt identical arbitral rules if they wish to include an AAT clause under Section 34A. Extending Section 34A to ad hoc arbitrations, with appropriate safeguards, would ensure that all parties, irrespective of the arbitration’s nature, can benefit from the AAT framework. In light of this, it appears unnecessary for the AAT to be inapplicable to ad hoc arbitration proceedings. There appears no practical reason for this exclusion. Cross-Appeals: An Overlooked Necessity A critical oversight in the draft bill is its failure to address the need for a cross-appeal mechanism. A cross-appeal occurs when one party triggers the appellate arbitration clause (AAT), but the opposing party believes that the appeal is unlikely to yield meaningful results or that the issue at hand is too trivial compared to the cost and time involved in constituting an AAT and undergoing the appellate process, which is typically expensive. In such cases, as the draft bill currently stands, the opposing party would have no recourse but to be drawn into a lengthy and costly appellate process, with limited impact. To ensure fairness, the Draft Bill could incorporate a cross-appeal provision, allowing the opposing party a fixed period from the date an appeal is filed under Section 34A to submit a cross-appeal, thereby mitigating the risks of unnecessary escalation and ensuring a more balanced appellate process. Inspiration can be drawn from procedures such as the JAMS and AAA appeal procedures, both of which provide a seven-day window for filing a cross-appeal after an application for appeal is submitted to the appellate tribunal. Interaction with Time Limits for Awards The interaction between Section 34A and Section 29A of the Act, which governs time limits for arbitral awards, also warrants reconsideration. Under the current provision, in cases of domestic arbitration, the tribunal is required to deliver its award within 12 months from the date of completion of pleadings, with the possibility of an extension if both parties consent. Further extensions may be granted by the court. However, the inclusion of a two-tier arbitration process necessitates a revaluation of these timelines. A significant legal gap exists here as there is a lack of clarity on how the timelines for the arbitral award and the appellate process will interact. An appellate arbitration system is an additional procedural layer to the existing regime, which must be provided its exclusive time outlines. Drawing from international practices, the Draft Bill might better outline how the timelines should be adjusted in the context of a two-tier system. Without such provisions, the Draft Bill risks introducing more uncertainty and procedural delays, contrary to its intent of streamlining arbitration. The draft bill must account for the extended procedural framework that a two-tier arbitration system entails, ensuring that the prescribed time limits are both realistic and conducive to an efficient resolution of disputes. Enforcement Challenges Another significant issue pertains to the validity of enforcing the initial award while it is under challenge before the AAT. Leaving the matter of enforcement to the discretion of the AAT would unnecessarily prolong the arbitration process. Therefore, the statute must explicitly clarify the status of the initial award—rendered by the arbitral tribunal in the first instance—when a second-tier arbitration clause under Section 34A is invoked. Guidance can be drawn from international arbitral frameworks, such as JAMS and AAA appeal procedures both of which stipulate that the initial award cannot be enforced while an appeal is pending. This principle could be further expanded to include a provision stating that the initial award cannot be enforced until the expiration of the limitation period for filing an appeal before the AAT, a limitation period that should also be clearly defined in the bill. Financial Implications and Accessibility The financial implications of AAT proceedings also merit attention as the Draft Bill misses a crucial legal gap—how cost regulation mechanisms should be integrated into the Draft Bill. The resource intensive nature of such proceedings limits its accessibility for smaller parties or less complex disputes. Without such regulation, the Draft Bill risks skewing arbitration in favour of well-resourced parties, undermining the principle of equal access to justice. The current version does not offer any substantial protections for smaller or less-resourced parties in terms of capping the fees associated with the AAT process. Legal systems like the ICC have addressed this issue by capping costs for arbitration proceedings, ensuring broader accessibility and the Draft Bill can incorporate a legal framework similar to it to mitigate financial barriers.   Ensuring Exclusivity of the Appellate Arbitral Tribunal AATs can significantly ease the burden on the courts. However, the draft bill must explicitly state that under Section 34A, appeals must be made to the AAT rather than the court. The Draft Bill should include provisions that ensure exclusivity of the AAT as the first point of appeal, with judicial intervention allowed only in exceptional circumstances. Drawing from international arbitration practices where appeals are exclusively handled by specialized appellate bodies (e.g., ICC), the Draft Bill could propose incorporating a similar exclusivity clause to prevent redundant judicial oversight and ensure the AAT's intended role. Providing parties with an option to choose authority of appeal would be redundant and will make Section 34A superfluous. Impact of the Appellate Arbitral Tribunal on Grading of Arbitral Institutions Another concern is how the AAT interacts with the grading of arbitral institutions. The Arbitration Council of India (ACI) is tasked with grading arbitral institutions according to quality and overall performance. Additionally, arbitrators will need to familiarize themselves with this new statutory right available to parties. The impact of AAT on the grading process and overall quality of arbitration is yet to be observed. Moreover, the grading criteria must devise consistent and specific standards for appellate proceedings requiring arbitral institutions to meet specific standards for appellate processes, which would impact their grading. This will ensure India to become an arbitration friendly place for International Commercial Arbitration. . Ensuring Consistency in Interpretations Another critical shortcoming is the scope for varied  interpretations of Section 34(2) of the Act by different arbitral institutions. For instance, ground for public policy under Section 34 of the Act, could be construed differently by AATs of different arbitral institutions. Hence, it is essential to ensure that various AATs do not end up creating their own interpretations of established law.  This divergence affects the predictability of arbitration outcomes as parties may not know what to expect when their dispute reaches an AAT. The said dilemma can be addressed by including clear guidelines on the standardization of grounds for setting aside awards across different arbitral institutions. The said grounds can be developed by following legal precedents, such as M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. , to suggest how a uniform approach could be implemented. Without such clarity, the Draft Bill risks creating a fragmented arbitration system, where parties face uncertainty about how different AATs may apply the law. Conclusion In conclusion, the AAT as envisioned under Section 34A of the draft bill is an innovative step in India’s arbitration journey. By addressing the challenges of judicial overreach and promoting institutional arbitration, the draft bill paves way to position India as a global arbitration hub. The draft bill can reduce the burden on courts and prevent judicializing of arbitration. However, its success hinges on resolving key ambiguities, such as limitation periods, enforcement mechanisms, and interpretative consistency. By incorporating clear guidelines and stakeholder feedback, the draft bill can create a robust and efficient appellate mechanism. *The authors Ishant S. Joshi and Vatsala Tyagi are 4th year and 3rd year B.B.A L .L.B (Hons.) students at National Law University, Odisha.

-  Vighnesh Kumar Sharma [1]   Introduction Consent has been the cornerstone of arbitral proceedings, and any deviation from the practiced norm is likely to create a challenge in the proceedings as well as the dispute resolution process. As Arbitral proceedings are consensual, the parties to the dispute provide their consent to resolve the matter through arbitration rather than taking it to the courts. The core principle of mutual consensus is said to be undermined by one of the operating doctrines in the field of Arbitration law that is the ‘Group of Companies Doctrine’, which states that a non-signatory may be bound by the agreement if it is a member of the same group of companies, as that of the signatory and all the parties to the agreement must mutually agree to make the non-signatory a party to the agreement . The basis of arbitration proceedings is that there shall be consensus-ad-idem between the parties , and the doctrine has been criticized on this issue, as it blurs the line between consenting and non-consenting parties, thus changing the method in which arbitration is conducted. However, the Apex Court has accepted this doctrine in the Cox and King Judgement with open arms, as it held that the doctrine is a means of recognizing the common intention of parties to bind a non-signatory by analysing the corporate affiliation. The court emphasized the fact that in some situations the signatory does not perform the contractual obligations, and following the strict rule of making signatories liable would lead to the exclusion of non-signatories, which would be unjust to the signatory as well as the party that suffered. The Hon’ble court concluded that the definition of parties under Arbitration Act includes both signatory as well as non-signatories. The requirement of written arbitration agreement has been excluded and the actions of the non-signatory will be analysed to apply the doctrine. Party autonomy or party independence is required for a party to provide its consent to submit the dispute through arbitration. Phrase claiming through or under has neither been defined under the act nor been used. A person claiming through or under a party to agreement is merely standing at the spot of the original party.      Evolution of Group of Companies Doctrine The doctrine was first used in France in the case of Dow Chemicals vs. Isover Saint Gobian , in this case, the non-signatories did not raise an issue of being held accountable under the arbitration agreement. Hence, the group of companies’ doctrine was formed. In India, the Apex court in Chloro Controls Case recognized that the non-signatory can be made party to the arbitration clause if it can be recognized from the circumstances that the intent of the parties was to make the non-signatory a party to the agreement. The court summarized that the underlying basis for application of this doctrine rests on maintaining corporate separateness while determining the intention of parties to bind themselves. Before this, the judiciary followed a strict approach by ensuring that any claim that falls beyond the scope of the agreement and in which there are parties, who are not signatories to the agreement cannot be referred to arbitration. The Apex Court in Chloro Controls, recognized the need  to make the party subject to arbitration even without prior consent. This was based on different factors to examine the situations in composite transactions where multi-party agreements are involved; the nature and obligation of the task performed by the non-signatory needs to be considered. The courts can follow this approach if they feel that, ends of justice will be served, or if the courts by examining came to the conclusion that the work couldn’t have been completed without the aid and execution of the non-signatory party. Striking the Balance By acknowledging and applying this doctrine in arbitration cases, the defence of the corporate veil has been pulled off. Economic entities will be held liable for their actions even if they were not a part of the arbitration agreement between the parties. The doctrine ensures that a party that has played a role in the contract should not go unrecognized in case a dispute arises. The doctrine interprets the action and role played by the parties in order to make them liable. The courts apply this doctrine to check the interconnectedness of the work done between the parties, this helps in avoiding parallel proceedings in court. Doctrine plays an important role in international transactions, or cross-border contracts, as it helps in identifying the responsibility and due diligence between the parties. Critics have argued that by applying this doctrine, the intent behind the contract and arbitration agreement between the parties gets destroyed, as they explicitly choose to keep the third parties out of the agreement. However, this doctrine is being applied to widen the scope of arbitration agreements, by prioritizing the substantive commercial reality over formal structure of agreements, by not following the strict approach of excluding parties who are not a signatory. The doctrine recognizes the realistic approach of the corporate world, where the subsidiaries of a company can play an active role in the transaction as a whole. Doctrine in Foreign Jurisdictions In France, the courts have followed a liberal approach in applying this doctrine. The doctrine can be applied under certain conditions. Firstly, if the third party has played an active involvement in the transactions. Secondly, if the parties to the arbitration agreement have a mutual consent/interest in bringing in the third party in proceedings. An Arbitration agreement can be extended to a non-signatory if it can be established that all parties had common intention to be bound by the agreement. The US and UK are skeptical about the use of the doctrine, by following the age-old privity rule, believing that the old contract theory ensures consent between the parties. The English courts have laid down the rule that the non-signatories can be a party if they are claiming under the original party. As the privity principle is followed strictly, the arbitration agreement is extended to non parties on the basis of agency, assignment, novation etc. The US courts have recognized this doctrine. The US courts have also used non-consensual doctrines to extend arbitration agreement to a non-signatory, for example the courts have pierced corporate veil where the parent company exercised control over the subsidiary company. In India, the Supreme Court has held that piercing of the corporate veil or doctrine of alter ego cannot be the  foundation for applying Group of Company Doctrine. Piercing of corporate veil  is invoked on basis of two theories- Instrumentality theory which state that when a company is merely an instrument when the director or owner uses its corporate personality for benefit of owner and the theory of Alter ego which states that there exists a unity of interest between the company and its owner, and thus the separate legal existence feature of the company has ceased. The distinction between the two entities will be blurred and the company acts as a puppet to carry out illegal activities. Conclusion The acceptance of the doctrine marks a change from a strict rule-based approach to a more flexible and analytical approach. While the doctrine challenges the core principles of arbitral proceedings, it ensures that corporate entities cannot avoid the liabilities by exploiting their corporate structure in multiparty agreements/transactions. The adoption of the doctrine highlights the recognition of interconnected economic units in the society by the Indian Judiciary. However, there is still some grey area, regarding its applicability where the seat of the arbitral proceedings is India, and the law governing the proceeding is foreign law. Such clarity will be helpful in ensuring consistency and uniformity in cross-border disputes. The judgment has provided clarity on the validity and the requirements for the application of the doctrine. Parties can now be aware of the manner in which they want to proceed with the proceedings. Though the doctrine diverts from the traditional view of arbitration proceedings, it ensures that no party can escape the liability by being non-signatory. By emphasizing substantive intent, it underscores the intent of the judiciary to adapt frameworks according to the complexities of modern commerce. [1] Vighnesh Kumar Sharma is a third-year student at National Law University Odisha. He is interested in dispute resolution and is also actively exploring other others of law.

Ayushi Yelimineti [1] Introduction   The practice of selecting an arbitrator from a given pool of arbitrators gained much discourse after the judgement given in Voestalpine Schienen GmbH v. Delhi Metro Rail Corporation Ltd.   (“Voestalpine”) . This practice essentially looks like one party providing the other with a pool of arbitrators, followed by the other party nominating arbitrators to be appointed from this given pool. While there can be many variations and nuances to this practice, the guiding principles remain what was laid down in Voestalpine . The Court in Voestalpine upheld the practice but highlighted that the arbitrator panel should be broad so that the party choosing from this panel has enough flexibility to exercise its right to appoint an arbitrator. However, this left a lot of ambiguity, and since then, courts have expressed concerns regarding the possible ill effects of such a practice and taken conflicting stances. While such a practice does give some say to the party selecting the arbitrators from the pool chosen, it could still be unfair as this pool could be entirely comprised of arbitrators who would be inclined to rule in one party’s favour. In Perkins Eastman Architects DPC v. HSCC (India) Ltd .  The Apex Court exercised its powers under S. 11 of the Arbitration and Conciliation Act, 1996 (“ the Act”)  by appointing an independent arbitrator when the procedure laid down raised doubts on the independence and impartiality of the arbitrator to be nominated. Thus, the Apex Court reiterated the principles of equality and fairness and reiterated the invalidity of unilateral appointment of arbitrators. Equality and fairness are important principles to be kept in mind when appointing an arbitrator, but at the same time, party autonomy remains the brooding spirit of arbitration. In this article, we will first trace the Court’s different approaches to this practice, analyse it from the contours of arbitration and highlight the lingering grey area.   The Conflicting Approaches   In Voestalpine, the arbitration clause was such that it was laid down that the Respondent would choose a panel of five persons, and then both the parties would have to choose their nominee arbitrator from the said panel. The appointed arbitrators would then appoint the presiding arbitrator of the tribunal. The Apex Court reflected that a panel of five arbitrators is limited, and there should be a broader list. A fresh list, which contained thirty-one names, was then forwarded, and the Court observed that this gave the Petitioner a broader choice and a fair say in the appointment process. Thus, this point emerged to be crucial to keep in mind when dealing with similar situations. This was followed by another development in the judgement laid down in Central Organisation for Railway Electrification v ECI-SPIC-SMO-MCML (JV)  (“CORE”). In this case, the arbitration clause mandated that the Respondent nominate two arbitrators from a pool of four individuals. The general manager of CORE would choose one arbitrator from the two nominees and would also appoint the other two arbitrators. The Apex Court upheld this clause, noting that the Respondent’s power to choose two nominees from the given pool counter-balances the powers rested upon the petitioner, further highlighting that the choice of the parties must be given importance.   Following this, Courts echoed the ambiguity in the stance to be taken with regard to the selection of arbitrators from a select panel given. The Delhi High Court, in   Margo Networks Pvt. Ltd. and Another v Railtel Corporation of India Ltd . (“Margo”), faced a similar clause where the Railway Authority was to form a panel of ten persons comprising its former employees. The Court found the clause to be unliteral and ordered the formation of an independent panel. It noted that the factual conspectus involved in CORE was quite different from the one in the given case and is thus not applicable. Further, the Court noted that “counterbalancing" could not be said to have been achieved when one party is entitled to appoint 2/3rd of the arbitral tribunal unilaterally. The Delhi High Court in Taleda Square Pvt Ltd Vs. Rail Land Development Authority   again raised questions on the correctness of the judgement laid down in CORE and observed that the Petitioner should not be compelled to select its nominee arbitrator from a limited panel maintained by the Respondent. Finally, in Union of India v M/s. Tantia Constructions Limited  and JSW Steel Ltd. v. South Western Railway , the Apex Court referred CORE to a larger bench. It was announced that a new five-judge bench would hear this reference.   Analysis through the Contours of Arbitration   Section 11 (2) of the Act states that subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators, which means that parties are free to insert a clause that involves the selection of an arbitrator from a given pool of individuals. However, when the Court in Voestalpine upheld this practice, it reiterated strongly that there was a need for the panel to be broad to ensure equality in the process of appointment of arbitrators. It can then be argued that it is the duty of the Court to constitute an independent and impartial panel when the panel given is limited and restrictive. There arises a need to balance party autonomy and equality in such proceedings and Courts have made different interpretations of this balancing point. While party autonomy is said to be the backbone of arbitration, and minimal judicial interference is one of the most important principles of arbitration, the purpose of this efficient dispute resolution remains defeated if there is no fairness or equality in proceedings. Having an equal say in the appointment of arbitrators has a substantial impact on the fairness of proceedings, and a breach of this fairness warrants the protection given by Courts. Further, there is a possibility that such clauses would create apprehensions in the minds of parties and discourage them from pursuing arbitration.   The Grey Area remains   Discourse over the unilateral appointment of arbitrators has been ongoing for years, and it has been well-established that the unilateral appointment of arbitrators is invalid. However, can it be said that the appointment of an arbitrator from a given pool is a loophole in the above-mentioned saga? In CORE,  not only did the Respondent have the power to appoint 2/3rd of the panel but also to choose a restrictive list of four individuals from which the petitioner had to nominate one. The tribunal formed would consist solely of arbitrators suggested or chosen by the Respondent. Even the one arbitrator that is to be chosen based on the Petitioner’s nomination is to be selected from a limited pool of four individuals listed by the Respondent. It is hard to argue that such a clause provides for any counterbalancing or follows the guideline laid in Voestalpine, which provides for having a “broad panel”. There is no clarity as to what exactly can be construed to be counterbalancing and what number of individuals make a panel broad. These vague terms have not been coupled with any objective directions, and subsequently, there has been a cloud of ambiguity when dealing with such clauses. A dominant party could greatly benefit from such a clause and constitute an arbitral tribunal largely based on its selection, which could still be upheld. Thus, it can be argued that judicial protection given to parties in an arbitration proceeding against the unilateral appointment of arbitrators is flimsy, and the practice of unilateral appointment of arbitrators still remains, albeit with some scrutiny. Moreover, this ambiguity has prevailed for years, which has led to an unclear idea as to what such a clause should provide for. Two parties that mutually find it best to include the clause would still lack clarity as to what is valid, which could prevent them from including it altogether. Party autonomy then would also suffer in the midst of this grey area.   International Standards   Equality in appointment of arbitrators is a well-recognised principle internationally and different jurisdictions have set their own standards and norms. The French Cour de cassation’s ruling on appointment of arbitrators in Siemens AG and BKMIIndustrienlagen GmbH v. Dutco Consortium Construction Co.  ( “Ducto” )  served an important precedent for appointment of arbitrators. It held that parties cannot choose to waive their right of equality in appointment of arbitrators before a dispute arises and that the principle of equality in designation of arbitrators is a matter of public policy. Thus, according to the ruling any agreed method for appointing an arbitral tribunal that does not guarantee strict equality of all parties may not be applied against a party until all parties affirm their pre-agreed designation method after the dispute has arisen.   Moreover, Article 18 of the UNICTRAL Model Law on International Commercial Arbitration states that parties shall be treated with equality and each party shall be given a full opportunity of presenting his case. Article 34(2)(a)(iv) also provides that an arbitral award can be set aside if the arbitral tribunal is not in accordance with the agreement of the parties, unless such agreement was barred by law, and in the absence of such agreement, the tribunal constituted was not in accordance with this Law. Under the amended International Chamber of Commerce Arbitration Rules (“ ICA” ), 2021, Article 12(9) provides that notwithstanding any agreement between the parties on the method of the constitution of the arbitral tribunal, in exceptional circumstances the International Court of Arbitration ( “ICA” ) can appoint each member of the tribunal to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award.   It is undisputed that internationally, there has been a stern protection given to the principle of equality in the appointment of arbitrators. While different forums have also made allowance for the principle of party autonomy, it often comes secondary to the principle of equality in the appointment procedures. For example, as mentioned, Article 12(9) ICC Rules gives the ICA the discretion to appoint members of the tribunal no matter what the parties have agreed to if it grossly threatens the equality of the parties. Although, in Ducto , party autonomy was allowed to undermine the principle of equality if consented to after the dispute has arisen. Thus, if parties are allowed to waive their right, they must know what is it entirely that they are consenting to keeping the dispute in mind.   Way Forward   While finding a balance between fairness and upholding party autonomy can be tricky, it is the much-needed call of the hour. With increasing uncertainty about arbitration clauses mandating selection from a pool of arbitrators, there is a greater tendency to approach the courts, which hampers the efficiency and smooth functioning of arbitration proceedings. Such a situation also leaves scope for parties to abuse the proceedings and have an unfair advantage by means of a clause resting them with disproportionate power. An equal say in the appointment of arbitrators is an important part of fair arbitration proceedings, and a potentially biased arbitral panel goes against the fundamentals of justice. While arbitration is to be more flexible than the traditional proceedings in Courts, these fundamentals must not be bargained with. The author argues that by aligning with the global standards as discussed, the Judiciary can offer firm protection to the principle of equality. and if it is allowed to be waived completely, there must be the consent of the parties after the dispute has arisen as held in the Ducto case, so they have a holistic idea of the proceedings with context to the dispute at hand. There is much anticipation that CORE  being referred to a five-judge bench would provide answers to some crucial questions raised and clear the prevailing ambiguity. Meanwhile, the grey area in the practice of appointing arbitrators from a given pool continues to linger. [1]   Ayushi is a fourth-year student at Dr. Ram Manohar Lohiya National Law University, Lucknow. She is interested in dispute resolution and is also actively exploring other others of law.