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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.

- Neha Bhambhani* INTRODUCTION: UNVEILING THIRD PARTY FUNDING Third-party funding (hereinafter referred as “TPF”), also known as “Litigation Financing”, is the creation of an agreement between parties involved in legal proceedings and a stranger party funder. It is an arrangement where the third party not involved in the proceedings funds the whole or part of the litigation process on the pretext of financial benefit if the funded party wins the dispute. Generally, third-party funders are profit-driven entities, such as banks, investment firms, insurance companies, hedge funds, or individuals. These entities carefully engaged in assessing the case merits and likelihood of victory before granting the funds because, if the funded party loses, the funder cannot retrieve their investment, thus bearing the funding risk themselves. Although TPF has been a major consideration globally among countries including the United States, the United Kingdom, and Canada, there lies no specific legislation for India to regulate it. Only two nations, Hong Kong and Singapore have recently taken the initiative to regulate TPF through enacted legislation and amendments. In order to set the qualifications and ensuring compliance with public policy, Singapore amended its Civil Law Act and formed Civil Law (TPF) Regulations. Similarly, the Hong Kong Legislative Council passed the Arbitration and Mediation Legislation (TPF) (Amendment) Ordinance 2017 ( hereinafter referred as “Ordinance”) and Code of Practice for TPF of Arbitration 2018 (hereinafter referred as the “HK Code”)  allowing TPF in Hong Kong.   THIRD-PARTY FUNDING IN INDIA: CURRENT STATUS AND JUDICIAL PERSPECTIVE In India, TPF remains valid even though there is no statutory recognition to regulate it. The Indian Judiciary has demonstrated, through its prevailing judgments, the need to regulate and facilitate the smooth functioning of TPF. In the case of Ram Coomar Coondoo v. Chunder Canto Mookerjee , the Privy Council held that the old concept of Maintenance and Champerty is not considered an offence as long as the TPF agreement is not against public policy. Maintenance is a condition where a third party often persuades a person to initiate litigation proceedings and may or may not have an interest in those proceedings. Champerty becomes a more specific arrangement, as the third party funder provides financial support to the party in arbitration proceedings with an intent for profit. In the recent intra-court appeal case of Tomorrow Sales v SBS Holdings , the Division bench of Delhi High Court ruled that third party funder Tomorrow Sales Agency (TSA) cannot be held financially liable for the cost incurred by funded party SBS Transpole Logistics Pvt. Ltd. as funder is not a party to the arbitration agreement or arbitral proceedings. Therefore, the arbitral award cannot be enforced against Tomorrow Sales Agency. Additionally, the TPF is recognised under Order XXV rule 3 of the Code of Civil Procedure 1908 for civil suits in states like Maharashtra, Gujarat, Uttar Pradesh, and Madhya Pradesh acknowledging the possibility of TPF applicable to their states. The court exercises discretion to add the third party funder as a party in the proceedings who is bearing the litigation cost of the plaintiff. In Maharashtra, the court may direct a third-party funder along with the plaintiff to furnish security for the costs of the proceedings to avoid frivolous litigation. Moreover, the Indian landscape has evolved where some of the funders such as Legal Pay had already announced plans for launching the first third-party litigation funding platform with an estimated return of 20-25%.   HONG KONG TPF FRAMEWORK: A MODEL FOR INDIA? In order to legalize TPF in Arbitration proceedings, Hong Kong has passed an Ordinance and HK Code for third-party funders to follow during arbitration proceedings. These provisions ensure consistency and protection for the funder and the funded party in the proceedings. It establishes a comprehensive and mandatory legal framework to safeguard funded party interests and emphasises the disclosure requirement by the funder to ensure transparency in the proceedings. India could consider adopting similar ideas from the Hong Kong ordinance and code for implementing its legislation by incorporating a clear definition of a third-party funder. (Section 98J Ordinance). It is crucial to establish the meaning of the third party by identifying their rights and liabilities and excluding individuals and entities with no other special interest beyond funding the proceedings. The Content Code of Practice outlines terms, features, and risks that should be set out in the funding agreement. This includes reasons for terminating the agreement or for third-party funders to withhold funding (Section 98Q Ordinance). The agreement must also specify the degree of control the third-party funder will have in arbitration proceedings. (Section 98Q(1)(b)(i) Ordinance). The ordinance of Hong Kong requires disclosure of third-party funding in arbitration proceedings. (Section 98U Ordinance). It includes a written notice of the funding agreement and the name of the third party funder provided to each party involved in the arbitration and to the arbitration body. This is significant to ensure the neutrality of the arbitrator and for parties to assess the involvement of a third party funder in the proceedings. Additionally, the ordinance authorizes the Hong Kong Secretary for Justice to appoint an advisory body and an authorized body to observe and implement the operation of the ordinance and the code. (Section 98X Arbitration Ordinance).   THE DEGREE OF CONTROL The Ordinance obligated parties to set out the degree of control of the funders in relation to arbitration. This is essential to safeguard the autonomy of the funded party as the funding process involves inherent risk for the investor, with no guarantee of regaining their invested capital . In such situations, the funder gets the leverage in controlling and influencing the decision-making rights of the funded party. If a funder is not content with the outcome of the proceedings, he can force the funded party to renegotiate the award for their benefit. In this way, the entire TPF process has the potential to become a power game where the funded party, being financially unstable relies on the funder to provide financial resources and legal expertise. India could benefit by incorporating such provisions to ensure the independence of the funded party in decision-making, especially in cases where the party is unable to make informed decisions.   TERMINATION OF FUNDING AGREEMENT The TPF agreement should be formed to balance the rights of both the funded party and the funder. It should unambiguously stipulate circumstances and reasons for third party funders to withhold funding in the arbitration proceedings (Section 98Q(1)(b)(iii) Ordinance). The HK Code specifies certain conditions under which funders are allowed to terminate a funding agreement during the proceedings to prevent funders from arbitrarily terminating the agreement. (Paragraph 2.13 HK Code). This becomes important because arbitration proceedings are unpredictable which may prompt funders to terminate funding for their benefit. For example, a funder decides to invest elsewhere to maximize their profits or to avoid any potential risk arising from a conflict of interest. Therefore, it is imperative to include clear reasons in the agreement to eliminate the burden on the funded party to search for substitute sources for funding to withstand proceedings. India can adopt similar provisions in its legislation to protect funded parties from the consequences of withholding funding. The agreement should contain specific situations and reasons where the funder is unable to continue funding or decides to withdraw a percentage of their investment. In these cases, the funder must obtain the consent of the appropriate authority to ensure that the funded party remains informed and prepared for such situations.  However, specifying the conditions of withdrawal in the termination clause does not exempt the third party funder from honouring the rights of the funded party. They must secure the latter’s position which could be compromised due to such termination or withdrawal of funding agreement.   ENSURING ACCOUNTABILITY:  ENFORCEMENT MECHANISMS The Hong Kong ordinance has adopted a soft law approach as there is no imposition of civil or criminal proceedings for non-compliance with the HK Code (Section 98S(1) Ordinance).  Whereas, in the Indian context, it is vital to incorporate regulatory measures by implementing TPF legislation that include the imposition of compensation, proportionate fines for non-compliance, and constraining the funder from participating in future TPF agreements. These measures can prevent funders from participating in corrupt practices, such as exerting financial means to influence the decision of the Arbitrator or concealing illicit gain from unlawful activities by funding arbitration proceedings. In addition, this ensures that funders adhere to the terms of the agreement and avoid superfluous reasons to withhold funding. The legislation should consider the exercise of jurisdiction of the arbitral tribunal in situations like imposing orders in cases of conflicting of substantial interest of the funders in the outcome of proceedings, and preventing interference with decision making right of the funded party that impacts the outcome of the proceedings. This ensures the balance between the autonomy and fairness in the proceedings. Similar to Hong Kong, the Indian legislature can establish an oversight body responsible for the implementation and suggesting changes in the legislation. This preserves the authority of the legislature to modify, alter, or improve any procedure based on changing circumstances thereby guaranteeing continuous scrutiny.   CONCLUSION The use of the TPF in India in arbitration proceedings reflects the necessity for establishing a clear and strong statutory framework drawing from Hong Kong legislation. India requires a nuanced approach for forming legislation to ensure smooth functioning and fairness between the parties involved. The judicial decisions also show willingness to accept TPF, but the absence of clear guidelines leaves room for different interpretations that lead to uncertainty. While Hong Kong provides flexibility to third party funders by implementing a soft law approach, India can include penalties for non-compliance and also establish authorities to monitor the whole process. By tailoring international practices, India can pave the way for a just and transparent TPF process. *Fourth-year Student, B.A. LLB. (Hons.), Institute of Law, Nirma University.

Akul Mishra [1] I.  Introduction Arbitration is fundamentally designed to provide an alternative to court proceedings, focusing on resolving disputes outside the judicial system.  However, in India, there remains a significant reliance across various areas of law, to preserve the essence of arbitration, such interventions must be minimised wherever possible. Yet, the amendment that brought Section 36(3)6 of the Arbitration and Conciliation Act, 1996 (“A&C Act, 1996”) brings a new open-ended question, which affects the overall enforcement and finality of arbitral awards. Furthermore, the concern persists over how much this may undermine the benefits of arbitration as a non-judicial dispute resolution mechanism. The potential harm appears magnified in light , of the recent Supreme Court case of Delhi Metro Rail Corporation Ltd. v. Delhi Airport Metro Express Ltd. ,  where an arbitral award was set aside on grounds of blatant illegality. This case was finally settled by a curative petition. While the extended timeline in this instance may be an exception, Section 36 interventions raise fears that prolonged timelines for , setting aside arbitral awards could become more common in India, eroding the core purpose of Arbitration. In this blog post, the author would like to propose a solution that avoids any apparent delay in Indian domestic arbitration through Section 36(3). First, the contradiction that Section 36(3) with Section 34 is analysed, alongside the precariously confusing situation it stipulates. Second, the author aims to introduce a positivist solution to the contradiction, with an intention to maintain the true nature of why Arbitration remains a quick dispute resolution mechanism.   II. Issues regarding contradictory legal interplays with Sections 34 and 36(3) Section 36(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: [Provided further that where the Court is satisfied that a Prima facie case is made out that,-- (a) the arbitration agreement or contract which is the basis of the award; or (b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award. As seen above, Section 36(3) provides for an unconditional stay on the arbitral award. These conditions include a prima facie fraud assesment or corruption regarding the arbitral award framing and/or the arbitration agreement/ parent contract. To assess whether this amendment is a step in the right direction, we must first examine the language of the interconnected Section 34 . While Section 34 allows Indian courts to set aside awards, it raises the question of whether Section 34 is equivalent to an appellate jurisdiction of the High Court and the Supreme Court. Section 34 already accounts for fraud allegations and corruption in petitions to set aside arbitral awards. But, Section 36(3) has now introduced a wider, more overarching jurisdiction of Indian courts, which directly goes against the strict approach of the Supreme Court, emphasising Section 5. The Supreme Court’s minority opinion has stated that Section 34 is not an appellate jurisdiction . The narrow sine-qua-non considerations were emphasised over subjective interpretation . The considerations it should note are narrow in light of the unequivocal importance in Section 5 of the Arbitration Act. The Supreme Court’s analysis is strict, it has stated that an arbitral award cannot be set aside on merits . Thus, from all the aforementioned cases, we see a clear, consistent approach to Indian courts’ jurisdiction in setting aside arbitral awards. This narrow approach is a clear paradox against the amendment of Section 36(3), which is wider, allows courts to intervene regardless of party autonomy, and finally, breaks the res integra approach that courts had envisaged concerning the reading of Section 34 and Section 5. The proviso of Section 36 does not survive without Section 34, and an unconditional stay will continue until a Section 34 application has been heard and decided upon. But, suppose an unconditional stay has been granted, the court deciding on the Section 34 application will reference the stay granted under Section 36. Thus, this increases the court’s jurisdiction by a very wide margin and places a contradiction to the narrow interpretation often taken behind Section 34. This proves to be the biggest issue regarding the proviso from the amendment. The only material qualifier is that the courts must find prima facie evidence of what constitutes fraud/corruption to grant an unconditional stay. However, this qualifier itself is an over-dependence on courts over arbitral tribunals. If there is a high evidentiary value of fraud/corruption, which one may assume is the intention behind the use of ' prima facie ,' then the courts will acknowledge and use the same to set aside the award through its narrow powers under Section 34. Thus, it does not seem necessary to have additional power of the court when the power of the court is, ideally, enough under Section 34. Additionally, a Delhi High Court judgement of Italian Thai Development vs Ntpc Ltd did take a very narrow approach in adjudicating through Section 36(3) , where it ascertained that only a prima facie case of fraud would allow an unconditional stay of the award. Yet, this does not answer the question of why this process was necessary when any application under Section 34 would have also successfully answered this question by an application of judicial mind, in consistency with jurisprudence, which guarantees minimum interference with Arbitral awards and the process as a whole. In the factual matrix of Italian Thai Development the petitioner had made an application under Section 34. Thus, the rationale defending two different outcomes, one under Section 36, which is pending disposal of one under Section 34, seems to show a massive waste of resources and case pendency, which affects why out-of-court proceedings like arbitration, must be considered in the first place. This hurts the overall image and use of arbitration. III. A Proposed Objective Solution The solution that the author proposes may be considered radical. There is some belief in the lack of defence behind the logic of why we need two separate court-related findings, one under Section 36(3) and one under Section 34. Thus, the entire intention behind the amendment was, from what the author believes, extremely unnecessary unless there has been a pattern of unfair arbitral awards being upheld by Indian courts. The cost-benefit analysis is that the intention behind arbitration must be upheld, and when there was a recourse available under Section 34, there may not be any requirement under Section 36(3). An unconditional stay depends upon the questions that will be acknowledged and adjudicated under an application under Section 34. Thus, the first and most radical solution is to stop and repeal the amendment to prevent any new jurisprudence that could severely affect the scope of arbitration in the country and hurt the entire process of arbitration while simultaneously overwhelming courts with increasing yet unnecessary jurisdiction under the A&C Act, 1996. Repealing amendments itself is a big task . So if the solution is to repeal the amendment, it is too exceptional. Thus, the solution needs to be less extreme. A new less extreme solution could be to make the considerations under Section 36(3) as objective as possible. This also comes out of the fact that the definition of what ‘ prima facie ’ means in Indian law is unclear, vague, inconsistent and highly contested. Prima facie has very high evidentiary value and must be, on a more accurate definition, on the face of it, present a case of fraud or corruption, to ensure that an unconditional stay is granted under Section 36(3). Interestingly, the Delhi High Court, in the case of MTNL V Canara Bank , had to answer the question of what prima facie is and how much the court can investigate/assert that there is fraud or corruption in any or all conditions under Section 36(3). There was a distinction on what prima facie means, as envisaged by the court, the court did not go into the nuances of what part of the transaction in question came off as fraud. This was adjudicated upon by the arbitrator and formed the reason why the Delhi High Court asserted that there is no prima facie case of fraud. Fraud does not mean that the court will delve into Reserve Bank of India/ Securities and Exchange Board of India’s guidelines, then assert that the transaction was fraudulent, then assert the award was fraudulent and finally grant an unconditional stay. The narrow approach was also defended by stating that the parties can resubmit such allegations under a Section 34 petition. This reasserts my argument that if the same allegations considered under Section 34, the necessity of a Section 36(3) process will fail. However, it brings in the reason why the author believes that there should be guidelines under Section 36(3), which can include some proposals that may be delved into by the legislative or as guidelines by the apex court themselves. These can be included in a very non-exhaustive manner, A)  The court shall only acknowledge, use and adjudicate the evidence presented at hand to determine if there is, prima facie , a case of fraud/corruption to grant an unconditional stay. B) The court shall abstain from going into the depth of the transaction or the arbitral award itself but only stick to the allegations submitted by both parties to assert a prima facie case. C) The court shall not question the judicial mind, conduct, credentials, decision, application/implementation of law by the esteemed arbitrator, and shall not question the decision taken by the arbitrator even if there is a prima facie case of fraud and corruption.   IV.  Conclusion A reader may notice that the solution is quite objective, meant to be followed step by step. In Part III for example, there is a clear-cut distinction between finding a prima facie corruption or fraud case and questioning the arbitrator’s decision and application of mind. Thus, this distinction is objective, and the proposed solution suggests that the courts should delve into what prima facie is, but follow objective criteria and decide on the unconditional stay. Even if new evidence is suddenly revealed, it can be used in a Section 34 application, but Section 36(3) should be extremely narrow and restrictive to ensure that it meets jurisprudence. It is in line with the courts’ logic, notwithstanding the strict jurisprudence in Section 34. Current jurisprudence has seen that The Calcutta High Court has dismissed Section 36(3) petitions if no strict prima facie case is made out for an unconditional stay in the cases of WBSIDC Vs. Kaushalya Infrastructure Development Corporation and RMB Srijan Limited v. Great Eastern Energy Corporation Limited . The threshold is considered to be very high and Questions of fact do not meet this threshold. Thus, the objective criteria will not clash with jurisprudence but rather support the strict perspective and logic taken up by Indian courts. It makes their job easier and removes the burden of defining the term prima facie. The Courts have taken a high standard of proof for defining prima facie , with evidence at hand and a clear distinction of cases. Thus, it will be imperative if the evidence considerations are included in the objective criteria, meeting the high standard of proof asked out of Section 36(3) petitions. [1] Akul Mishra is a fourth year law student at Jindal Global Law School, interested in corporate and commercial laws.

Aparna Tiwari [1] Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act, 1996") empowers courts to grant interim relief in arbitration matters, providing a crucial mechanism for parties to secure their interests during the arbitration process. The 2015 amendments to the Act, 1996 significantly curtailed judicial intervention, particularly after the constitution of an arbitral tribunal, while still allowing courts to intervene if the tribunal's remedy would be ineffective. This evolving nature of judicial scrutiny under Section 9 raises critical questions about the boundaries of court intervention and its implications for the efficiency and effectiveness of arbitration as a dispute resolution mechanism. Before the amendments, courts exercised extensive powers under Section 9, allowing for significant judicial intervention in arbitration matters. This included a more thorough examination of the merits of claims and the validity of arbitration agreements. The 2015 amendments introduced Section 9(3), limiting court intervention once an arbitral tribunal is constituted unless the tribunal's remedy is found to be ineffective. However, how the term ineffective has to be interpreted has not been defined. The recent judgments by the Supreme Court and High Courts in India mark a significant evolution in arbitration jurisprudence. By clarifying the scope of judicial intervention under Sections 9 and 11 of the Act, 1996, these decisions reinforce the importance of arbitration as a preferred mechanism for resolving commercial disputes. Its scope is progressively expanding, reinforcing the notion that courts possess wide discretionary powers to grant interim measures in aid of arbitration. Prior to the recent judgment, Indian courts adopted a relatively cautious approach to granting interim measures under Section 9. The prevailing view was that the court's powers were akin to those under Order 38 Rule 5 of the Code of Civil Procedure ("CPC"), which governs attachment before judgment. This restrictive interpretation often led to the denial of interim relief on technical grounds, hindering the effective conduct of arbitration proceedings. A NEW DAWN: THE SUPREME COURT’S EXPANSIVE INTERPRETATION The Supreme Court, in the case of Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, articulated the essential criteria for granting interim relief under Section 9. The Court established that: Prima Facie Case : The applicant must demonstrate a good prima facie case for the relief sought. This standard requires the applicant to present sufficient evidence to support their claims, although it does not necessitate a conclusive determination of the merits. Balance of Convenience : The Court must assess whether the balance of convenience favours granting the interim relief. This involves evaluating the potential harm to the parties if the relief is granted or denied. Reasonable Expedition : The applicant should approach the Court with reasonable expedition, indicating that the request for interim measures is urgent and requires prompt attention. These criteria collectively underscore a shift towards a more pragmatic approach in granting interim relief, allowing for a broader interpretation of what constitutes sufficient grounds for intervention. Departure from Technicalities The Supreme Court has significantly expanded the contours of Section 9 of the Act, 1996, granting courts wider latitude in granting interim measures. The Court has decisively rejected the rigid application of procedural technicalities akin to those under Order 38 Rule 5 of the CPC. This liberal interpretation is rooted in the principle that procedural safeguards should not impede justice. By aligning with decisions from various High Courts, the Supreme Court has affirmed that the powers under Section 9 transcend those available under the CPC. Cases such as Saiyad Mohd. Bakar El-Edroos v. Abdulhabib Hasan Arab and Sardar Amarjit Singh Kalra v. Pramod Gupta underscore this judicial inclination to prioritise substantive justice over procedural formalities. Moreover, the Court has relaxed the evidentiary threshold for granting interim relief. A mere possibility of asset diminution, rather than an actual attempt to dissipate assets, is sufficient to warrant judicial intervention. This approach is in harmony with the overarching objective of the Act, 1996, to ensure the efficient and effective conduct of arbitral proceedings. The Supreme Court's decision marks a pivotal shift in the judicial approach to interim reliefs under Section 9. By dispensing with technical impediments and adopting a more flexible stance, the Court has empowered courts to play a proactive role in preserving the integrity of the arbitral process. Intervention by The Court Recent landmark judgments have explored the limitations imposed on courts at the pre-referral stage and their continued authority to grant interim relief during arbitration proceedings. Section 11(6) and the Limits of Pre-Referral Jurisdiction The Supreme Court's decision in NTPC Ltd. v. SPML Infra Ltd . circumscribed the scope of judicial intervention at the pre-referral stage. The Court has unequivocally stated that the role of a court is limited to determining the existence of a valid arbitration agreement and the arbitrability of the dispute. Any in-depth inquiry into the case's merits is premature at this stage and should be avoided. This ruling underscores the principle of party autonomy and the intent to expedite dispute resolution through arbitration. Section 9 and the Continuing Power of Courts In contrast, the Calcutta High Court's decision in   Jaya Industries v Mother Diary Calcutta and another has affirmed the ongoing power of courts to grant interim measures even after the commencement of arbitral proceedings. The Court has recognised the need for judicial oversight to safeguard the interests of parties involved in arbitration. This decision strikes a balance between the arbitral process's autonomy and the judiciary's protective role. Courts are now more active in safeguarding parties' rights through the liberal grant of interim relief. This shift and a streamlined pre-arbitration process have accelerated dispute resolution. These developments have positioned India as a more attractive destination for arbitration, fostering a business-friendly environment. However, this newfound efficiency must be balanced with caution. While the expanded powers of the courts are beneficial, there is a need for clear guidelines to prevent potential misuse. Striking the right balance between judicial intervention and arbitral autonomy is crucial to maintaining the integrity of the arbitration process. BALANCING JUDICIAL INTERVENTION AND ARBITRAL AUTONOMY IN INDIA The principle of  kompetenz-kompetenz , which allows arbitral tribunals to determine their own jurisdiction, is a cornerstone of arbitration law. In India, this principle is enshrined in Section 16 of the Act, 1996, empowering tribunals to rule on their jurisdiction, including objections regarding the validity of the arbitration agreement. However, the judiciary also plays a critical role in ensuring that arbitration proceedings are effective and not rendered futile. The Indian courts have navigated the delicate balance between respecting arbitral authority and exercising judicial oversight, particularly in the context of inefficacious arbitration proceedings. Understanding Inefficacious Arbitration Proceedings The term "inefficacious" in the context of arbitration refers to proceedings that are ineffective, unproductive, or incapable of achieving a resolution due to jurisdictional disputes or other procedural impediments. Courts have a responsibility to prevent such inefficacious proceedings, which can arise when parties challenge the validity of an arbitration agreement on grounds such as fraud, coercion, or lack of consent. In these scenarios, the courts must intervene to ensure that resources are not wasted on arbitration that may ultimately be deemed void. Judicial Intervention in Landmark Cases In  N.N. Global Mercantile Pvt. Ltd. v. M/S Indo Unique Flame Ltd. , the Supreme Court reaffirmed the  kompetenz-kompetenz  principle, emphasising that arbitral tribunals should be the first to address jurisdictional issues. This ruling reduces unnecessary court intervention and promotes efficiency in arbitration. However, the court also recognised its duty to prevent inefficacious proceedings. In  SBP & Co. v. Patel Engineering Ltd. , the Supreme Court held that courts could intervene when the arbitration agreement itself is in dispute. This ruling illustrates the judiciary's role in safeguarding the arbitration process from being initiated under flawed premises, thereby preventing inefficacious proceedings. The court's intervention in such cases ensures that parties do not expend time and resources on arbitration, which may not yield a valid resolution. The Role of Interim Relief under Section 9 The Supreme Court's ruling in  Jaya Industries v. Dalmia Cement (Bharat) Ltd.   further illustrates the balance between arbitral authority and judicial oversight. The court clarified that it could grant interim measures even when the arbitral tribunal has not yet been constituted, provided the applicant demonstrates a prima facie case, balance of convenience, and urgency. This ruling underscores that while the tribunal has the authority to rule on its jurisdiction, courts retain the power to intervene when necessary to prevent injustice or inefficacy in the arbitration process. The court's role is not to undermine the tribunal's authority but to complement it by ensuring that interim relief is available when parties face imminent harm. This approach fosters a cooperative relationship between the judiciary and arbitral tribunals, enhancing the overall effectiveness of the arbitration process. Defining Inefficacious Proceedings To further clarify what constitutes inefficacious proceedings, courts may consider several factors: Existence of a Valid Arbitration Agreement : Courts must assess whether the arbitration agreement is valid and enforceable. If the agreement is challenged on grounds such as fraud or coercion, the court's intervention is warranted to prevent initiating arbitration proceedings that may ultimately be deemed void. Potential for Resource Wastage : Courts should evaluate whether proceeding with arbitration would lead to the unnecessary expenditure of time and resources. Judicial intervention is justified if there is a significant likelihood that the arbitration will be rendered ineffective due to jurisdictional challenges. Urgency and Imminent Harm : In cases where parties face imminent harm, courts must act swiftly to provide interim relief, ensuring that the arbitration process does not exacerbate the situation. The reconciliation of  kompetenz-kompetenz  and judicial intervention in arbitration is a complex but essential aspect of the arbitration framework in India. The courts have demonstrated a commitment to respecting the authority of arbitral tribunals while also fulfilling their duty to prevent inefficacious proceedings. As the arbitration landscape in India continues to evolve, it is crucial to strike the right balance between judicial intervention and arbitral autonomy to maintain the integrity of the arbitration process. While the expanded powers of the courts are beneficial, clear guidelines are needed to prevent potential misuse. To prevent the misuse of judicial intervention, it is essential to establish clear guidelines that define the scope and limits of court involvement in the arbitration process. These guidelines should ensure that courts intervene only when necessary to protect the parties' rights or ensure the proceedings' fairness and efficiency. One key guideline should be that courts should not interfere with the arbitral tribunal's jurisdiction or decision-making powers unless there is a clear violation of the parties' rights or a serious procedural irregularity. Courts should also refrain from re-examining the merits of the dispute, as this undermines the finality and binding nature of arbitral awards. Some key recommendations could be as follows:- 1.  Limiting Judicial Intervention : - To expedite arbitration proceedings and respect the principle of party autonomy, judicial intervention should be restricted to a prima facie assessment of jurisdiction. This approach aligns with the competence-competence doctrine enshrined in Article 16 of the UNCITRAL Model Law , which grants arbitral tribunals the power to determine their jurisdiction. The English Arbitration Act of 1996 provides a similar framework by limiting court involvement to jurisdictional matters. 2. Clear Standards for Interim Relief : - Clear and objective standards must be established to prevent the misuse of interim relief and ensure its effective application. While arbitration rules like the International Chamber of Commerce (ICC)  and the London Court of International Arbitration (LCIA) offer general guidelines, more specific criteria are necessary. Courts can prevent delays by granting interim relief only in cases of demonstrable and irreparable harm and ensure that such measures are used judiciously. Courts should only grant interim measures when the arbitral tribunal cannot mitigate a demonstrable risk of harm. This principle is also reflected in the  Singapore International Arbitration Centre (SIAC) Rules , which require that any interim measures are proportionate and necessary. 3. Encouraging Comprehensive Disclosure and Case Presentation The Henderson doctrine , which prevents parties from raising claims that could have been previously asserted, is applicable in many common law jurisdictions. By mandating comprehensive disclosure, arbitrators can ensure that all relevant issues are addressed upfront, minimising the risk of subsequent claims that could disrupt the arbitration process. This approach aligns with the American Arbitration Association (AAA) rules , which emphasise the importance of presenting a complete case early in the proceedings. 4. Establishing Mechanisms to Prevent Abuse of Process The English Arbitration Act 1996 empowers courts to dismiss claims that are deemed to be an abuse of process. Similarly, the ICC Rules provide that the tribunal may dismiss claims that are manifestly inadmissible or abusive. Implementing mechanisms to prevent abuse of process can protect the integrity of arbitration. Courts should be vigilant in identifying and dismissing applications that lack merit or are intended to harass the opposing party. This proactive approach is crucial for maintaining the efficiency of arbitration as a dispute resolution mechanism. 5. Promoting Institutional Arbitration Institutional arbitration rules, such as those from the Hong Kong International Arbitration Centre (HKIAC) and Singapore International Arbitration Centre (SIAC), offer structured frameworks that guide the arbitration process. These rules often include provisions for the appointment of arbitrators, conduct of proceedings, and enforcement of awards. Promoting institutional arbitration can significantly reduce the need for judicial intervention. Institutional frameworks provide clear guidelines that help parties navigate the arbitration process effectively. For example, the Dubai International Arbitration Centre (DIAC) Rules explicitly outline the procedures for interim measures and the conduct of arbitrators, thereby minimising ambiguities that could lead to court involvement. 6. Training and Awareness for Judges and Arbitrators Many jurisdictions require ongoing training for judges and arbitrators to enhance their understanding of arbitration law and practice. For instance, the International Bar Association (IBA) provides resources and training programs on arbitration. Ensuring that judges and arbitrators are well-trained in arbitration principles reduces the likelihood of unnecessary court intervention. This training fosters a deeper understanding of arbitration and the importance of respecting arbitral autonomy. A delicate balance between judicial oversight and arbitral autonomy is crucial to optimise India's arbitration landscape. Clear guidelines, limiting judicial interference, establishing clear standards for interim relief, and promoting institutional arbitration are essential. This will enhance efficiency, predictability, and international appeal for India's arbitration regime. CONCLUSION The evolution of Section 9 of the Act, 1996 reflects India's journey towards establishing a robust and efficient arbitration regime. The judiciary's expansive interpretation of the section, coupled with the emphasis on judicial oversight, has significantly enhanced the efficacy of arbitration as a dispute resolution mechanism. By striking a balance between arbitral autonomy and judicial intervention, Indian courts have created a framework that promotes efficiency and fairness. However, the challenge lies in maintaining this delicate equilibrium. Clear guidelines and standardised procedures are essential to prevent the misuse of judicial intervention. By establishing clear standards for interim relief, encouraging comprehensive disclosure, and promoting institutional arbitration, India can solidify its position as a preferred arbitration hub. Ultimately, the success of arbitration depends on a collaborative approach involving the judiciary, arbitral institutions, and the legal community. By working together to refine the arbitration process, India can create a legal landscape that fosters trust, efficiency, and international recognition. The road ahead requires continuous refinement and adaptation. As the legal landscape evolves, the judiciary, legislature, and arbitration practitioners must remain vigilant in their pursuit of an arbitration regime that is both efficient and just. By embracing these principles, India can position itself as a global leader in arbitration, attracting domestic and international businesses to resolve their disputes through this effective and expeditious mechanism. [1] Aparna Tiwari is a 4th year student at Dr. Ram Manohar Lohiya National Law University, Lucknow.

Vrinda Gaur [1] Introduction Special Economic Zones (‘ SEZs ’) play a crucial role in facilitating the flow of investment in the country and propels overall economic growth in a country. All around the globe, there is a massive flux in the establishment of such special economic zones to reap their economic benefits. A major attraction for players is the lucrative exemptions granted to parties under various financial and commercial statutes, whose obligations are otherwise quite burdensome to comply with. There are approximately 378 SEZs operational in India, amongst which the first of its kind was established in Gujarat, t, the Gujarat International Financial Tech City (‘ GIFT City ’). With multiple players entering such zones to accumulate the economic incentives that come along, disputes and conflicts are inevitable. To address such disputes, it is necessary to provide participants with a robust and speedy resolution mechanism to uphold their confidence during their operations within these zones. This article seeks to articulate the prospects of promoting arbitration as a dominant mode of dispute resolution mechanism in SEZs in juxtaposition with relevant provisions of the Special Economic Zones Act, 2005 (‘ SEZ Act ’).   Decoding the Relevant Provisions of the SEZ Act The SEZ Act promotes the establishment of areas with special privileges to attract foreign investments in the country and facilitate trade and economic development. It aims to set up Financial Service Centres in SEZs, which are often governed by distinct laws and rules from those ordinarily applicable in a recognized state or jurisdiction.    A salient feature of the SEZ Act is that it provides numerous lucrative incentives and concessions to investors in terms of legal exemption under numerous statutes. For instance, Section 26 enumerates certain exemptions from the Customs Act, 1962, Customs Tariff Act, 1975, Finance Act, 1994, and Central Sales Tax Act, 1956. Further, Section 27 provides for the applicability of the Income Tax Act, 1961 with certain modifications to facilitate investments within the region. Moreover, Section 56 of the Act, makes the applicability of the Banking Regulation Act, 1949, and the Insurance Act, 1938 subject to certain amendments and restrictions. The SEZ Act entails certain provisions for the adjudication of disputes by the designated courts and via arbitration. For instance, Section 23 empowers to State Government, to designate one or more courts to try all suits of a civil nature and notify offences committed with the SEZs.  Section 42 provides that if no court has been designated to refer the disputes that arise within the zone, then such disputes shall be referred to arbitration. Additionally, Section 42(2) and  Section 42(3) provide for the appointment of an arbitrator by the Central Government and the applicability of the Arbitration and Conciliation Act, 1996 (‘ 1996 Act ’) to all arbitration disputes within the zones respectively. However, extensive intervention by the central government in the appointment of arbitrators and the excessive reliance on procedural formalities and court dependency of the 1996 Act, has rendered arbitration proceedings inefficacious within SEZs. This concern was further aggravated by Ranganath Properties Private Limited v. Phoenix Tech Zone Private Limited, wherein the Telangana High Court held that the SEZ Act, being a special legislation, Section 42 of the SEZ Act would prevail over an arbitration agreement entered between the parties, thereby undermining the prerequisite of mutual consent to arbitrate. In light of this, it becomes imperative to explore the prospective avenues of growth of arbitration within SEZs and vouch for a comprehensive special regime.   Prospective Framework and Suggestions One must bear in mind that the SEZ Act, which is the dominant statute regulating SEZs is an inherently economic legislation facilitating the inflow of foreign direct investments. Unlike the 1996 Act, it does not provide for comprehensive rules for resolving disputes and little calibre was invested in framing provisions for dispute resolution via arbitration.   One major factor jeopardizing the growth of arbitration in SEZs is Section 42(1) of the SEZ Act. It restricts the reference of a dispute to arbitration on the designation of a court by the State Government under Section 23(1) and empowers these courts to try all civil disputes arising within the SEZs  The express use of the term “shall” in Section 42(1) , makes it incumbent upon the parties to seek adjudication by designated courts, even in cases where parties have an agreement that specifically conveys their intention to resolve disputes through arbitration.       Additionally, the aggravated intervention of the Central Government in appointing arbitrators when a dispute is referred to arbitration adds to the plight. Ideally, as the general principles of the 1996 Act, extend to the SEZ Act, the appointment of an arbitrator would be the discretion of the parties, mainly the developers and entrepreneurs. However,  the absolute power bestowed on the Central Government for designating an arbitrator goes against the \ arbitral principles of party autonomy and mutual consent.        In light of the above concerns, there are two possible ways out. First, we need to explore the avenues for fast-tracking the process of establishing arbitration institutions within such zones. Though in 2017, a representative office of the Singapore International Arbitration Centre was inaugurated in GIFT City, Gujarat, to promote International Commercial Arbitration within the zone, it still lacks a case management office of the SIAC that would facilitate the resolution of disputes via arbitration under defined SIAC rules. All flourishing jurisdictions such as Dubai and Singapore prefer to settle disputes within SEZs through an institutional mechanism having distinct rules with limited applicability to domestic law.   Though the Union Finance Minister in the 2022-23 budget speech announced the establishment of an International Arbitration Centre in GIFT City in line with the Singapore International Arbitration Centre, and the London Commercial Arbitration Centre, progress seems stagnant on this front.   Additionally, the government’s efforts seem sparse in facilitating the establishment of similar centres in multiple other SEZs spread across the country. Promoting arbitration through arbitral institutions, governed by its distinct rules especially when one party to the dispute is a foreign party, would ameliorate the burden of meddling within the intricacies of the 1996 Act. t.   While the government continues to scuffle to make state-of-the-arbitral institutions functional within the SEZs in India, exploring alternative avenues could bring much relief to the aggrieved investors for the time being.  For instance, Parties may resort to a framework prescribed within a Bilateral Investment Treaty(BIT) to which the Government and the country of which the investor is a national are parties.  Most BITs entail either resolution through consultation or give investors a prerogative to submit an investment dispute directly for International Arbitration under an Institution as agreed between the parties, guaranteeing a neutral and time-efficient resolution. Next, though the promotion of institutional arbitration is likely to accord speedier resolutions and evade the intricacies of the court-facilitated process, one issue that is likely to arise is the enforcement of an award. This can be addressed by establishing a special arbitration division, within the jurisdictions of the High Courts where the SEZ is operational. Their functions would entail assisting in the enforcement of awards and playing a supervisory role to the arbitral institutions established within the SEZs. Another aspect worth incorporating is a dual model of dispute resolution, i.e. mandatory mediation followed by arbitration. The present Indian regime has made mediation optional irrespective of express declaration regarding the same in the contract between the parties . A mandatory approach is beneficial, especially within SEZs for two common reasons. One, SEZs often involve multinational enterprises with diverse cultural backgrounds. Mediation allows for a more culturally sensitive approach than Arbitration, fostering better understanding between parties via adopting different negotiation tactics. Two, mediation offers a more collaborative and less adversarial outcome as compared to arbitration. In SEZs, where businesses often operate in close proximity and may have multiple ongoing dealings either within or outside the SEZs, maintaining cordial relationships is crucial to maintaining the flow of investments within such regions and beyond.   Key Takeaways from the Expert Committee Report The Expert Committee Report suggesting reforms to the 1996 Act, entails certain recommendations for promoting arbitration within SEZs. The report suggests that with the promotion of institutional arbitration and adopting investor-friendly tactics for settlement show great prospects of emerging as neutral seats for International commercial arbitration. This would not only benefit the Indian lawyers in expanding professional opportunities but also encourage foreign lawyers/firms to arbitrate and expand their firm offices in the special zones, and subsequently in other parts of India.       An unfortunate aspect owing to which foreign lawyers are hesitant to practice in India is the painstaking practice of visa issuance as also expressed in the  Justice B.N. Krishna Report . On the other hand, jurisdictions such as Singapore, allow foreign lawyers involved in arbitration and mediation activities to get short-term visa passes at immigration checkpoints which are valid for a maximum duration of 60 days in addition to tax exceptions for non-resident arbitrators.   Conclusively, the report suggests that non-desirability of India as a seat for International commercial arbitration owing to its entangled arbitration regime. However, a special regime that enfeebles the applicability of the 1996 Act to some extent in addition to the proposed incentives of tax exemptions and visa relaxations to lawyers and arbitrators, SEZs will most likely act as icebreakers in attracting parties to India as desirable seats for international commercial arbitration in the future.   Looking Forward While the prospects discussed above are promising, they necessitate a certain degree of legal recognition. Currently, India lacks distinct guidelines and rules both within the SEZ Act and separately for efficiently conducting arbitration proceedings within SEZs. Recognising the need for a distinct arbitration regime within SEZs, as highlighted by the recently released arbitration report, it would be prudent for India to adopt a balanced approach similar to that of Dubai. Dubai ’s approach to framing such rules does not completely oust the applicability of general arbitration principles, such as the doctrine of party autonomy, fairness, and non-intervention by the courts. Further, it has recognized the intervention of DIFC courts in exceptional instances. Similar power could be bestowed upon the special arbitration divisions formed for facilitating arbitration within SEZs. Implementing similar reforms in GIFT City, to start with, would significantly enhance its appeal as an arbitration hub and reinforce the primary aim of attracting foreign investments by promoting confidence in the dispute settlement process. [1] Vrinda Gaur is a 4th Year law student from National Law University Lucknow.

Ishan Aryan and Gunjan Choudhary [1] INTRODUCTION The development of reputable and efficient alternate dispute resolution mechanisms is essential to the growth of global trade and commerce. This is directly responsible for the growing acceptance of international commercial arbitration. Given this, it should come as no surprise that arbitral rulings made in one nation are subject to enforcement by courts in another. Perhaps the foundation of the international arbitration structure is the simplicity of its enforcement. A jurisdiction’s appeal as a business destination is also greatly influenced by how simple it is to enforce arbitral rulings there. In the end, no company would want to do business with a party who owns property in a place where awards are difficult to enforce. In the dynamic world of commerce, disputes are inevitable. Efficient and reliable mechanisms for resolving such disputes are crucial for fostering the ease of doing business. In this context, arbitration emerges as a compelling alternative to traditional court systems. India, with its aspirations to become a global economic leader, has a strong incentive to be pro-arbitration and ensure minimal judicial intervention. Without a doubt, India has developed into a country that supports arbitration. This reputation has been enhanced by numerous court rulings and amendments to the Arbitration and Conciliation Act, 1996 (‘ The Act ’). However, the recent ruling in the case DMRC v. DAMEPL ( ‘DMRC case’ ) draws our attention to the dilemma of drawing a line between upholding valid arbitral awards ensuring minimum judicial intervention and disallowing enforceability of awards which blatantly the grounds set under the law. THE FIVE STAGES OF APPEAL The facts, briefly are that DMRC and DAMEPL were locked in a legal battle concerning the construction of an Airport Express line. DAMEPL blamed faulty construction by DMRC for operational issues and sought termination of the agreement. An arbitral tribunal ruled in favour of DAMEPL, awarding compensation. The arbitral award was eventually challenged at multiple stages mentioned below: First , the Single Judge Bench of the Delhi High Court ordered DMRC to deposit 75% of the award sum in an escrow account within a given time frame after they unsuccessfully contested the Award under Section 34 of the Act. Second , DMRC brought forth new, never-before-raised facts in an appeal filed under Section 37 of the Act at the Delhi High Court Division Bench. In 2019, twenty months after it was passed, the bench overturned the award on the basis that it violated Section 34(2A) of the Act due to patent illegality. In arriving at this decision, the Court interfered with the settled legal dispute, addressing novel facts and re-evaluating evidence and interpreting the contractual terms, which is contrary to the directive of Section 5 of the Act, which expressly prohibits such judicial interference. Third, DAMEPL filed a Special Leave Petition ( ‘SLP’ ) with the Supreme Court of India on behalf of the aggrieved party. Thirty-one months after the SLP petition was filed, the Supreme Court upheld the arbitral verdict in 2021. The Court cited Section 34 , coupled with Section 37 of the Act, which required a narrow scope for judicial action, in holding that arbitral decisions could not be interfered with and advocating for judicial caution when reviewing their legitimacy. Fourthly, this was followed by a review petition filed by DMRC which was dismissed and later at the Fifth stage, a curative petition filed under Article 142 of the Constitution of India wherein the court set aside the arbitral award on the ground of gross miscarriage of justice and perversity. THE BLATANT MISUSE OF THE CURATIVE JURISDICTION The Supreme Court’s use of curative jurisdiction is a major point of contention. This power is meant for exceptional cases involving fundamental flaws in the legal process. The curative jurisdiction of the Hon’ble Supreme Court is meant to be exercised only in the rarest of rare circumstances. The DMRC case, did not meet this high threshold. The court intervened and interpreted the provisions of the contract and this undermines the expertise entrusted to arbitrators chosen for their specialized knowledge in the relevant field. It runs afoul of the very basic tenets of arbitration by involving greater court intervention and prolonging dispute resolution while increasing the cost. The primary goal of the Act is to reduce the function of courts as supervisors in the arbitral procedure. Except in cases specifically authorized, Section 5 of the Act prohibits judicial involvement with regard to Part I, regardless of any current laws that may be in effect. Only in compliance with the provisions outlined in Section 34 of the Act may an application be filed to set aside an arbitral ruling. The curative jurisdiction was recognised for the first time in ‘ Rupa Ashok Hurra v. Ashok Hurra ’ case (‘ Rupa Hurra case ’) and was further solidified in later cases including ‘ Vineet Narayan & Others v. Union of India ’ and ‘ Union of India v. Union Carbide ’. It is important to note that amongst the cases where the curative jurisdiction was upheld or solidified, none of them were a commercial matter. The curative jurisdiction is certainly a bliss for civil and criminal cases, but the same principles should not apply directly in commercial matters especially in arbitration matters where the finality of award and minimum court intervention are the fundamental principles. ERRONEOUS APPLICATION OF TWO-LAYER TEST Regretfully, in spite of 2023 being a year of promise that solidified India’s standing as a globally arbitration-friendly jurisdiction, the Supreme Court swiftly rejected its own directive about minimum judicial intervention in the DMRC case. This was made clear by the Supreme Court’s alleged use of an infrequently exercised power to overturn a final ruling in which it appeared to have distinguished itself from the Tribunal and from its own earlier rulings by considering merits. Even more unexpected is the fact that the Supreme Court denied the review motion and exercised its jurisdiction three years after issuing the prior ruling. In the DMRC case, the Supreme Court thoroughly reviewed an arbitral award that had been made in DAMEPL’s favour on the basis of merits. The Supreme Court exercised its extraordinary power to revoke the award on the grounds of a “grave miscarriage of justice” after conducting a thorough review. However, the court disregarded its own guidelines, which were established in the Rupa Hurra case. Even though the decisions of the Supreme Court are not infallible, they are nonetheless final and should not be easily overturned. The Supreme Court ignored the two-layer test as laid down in Rupa Hurra case that supported the use of such authority. Initially, there has to be a a)     gross miscarriage of justice or b)    an abuse of process Secondly, the first test’s selected basis should be interpreted through the narrow prism of whether a)     natural justice principles have been broken or b)    if the bench was prejudiced The two-layer test immunized the decision-making process from consistently and mechanically exercising an extremely rare jurisdiction. The Supreme Court solely utilized the initial standard and subsequently exercised its curative authority, citing a severe injustice in light of ‘the extraordinary circumstances of this case where the arbitral tribunal has perverted the process of arbitration to provide an undeserved windfall to DAMEPL.’ By adopting this stance, the court neglected to conduct the second and equally crucial test, which asked if the previous ruling was prejudiced or violated natural justice principles. It is important to note that unless the conditions laid down in Rupa Hurra case was fulfilled, the court had no role in interfering with the award.  The execution proceedings of the award already were in place and as a result of the judgment, not only was the award set aside and the Supreme Court’s own judgment set aside, but DAMEPL was also ordered to reimburse the amount that had been paid to it during the execution of the award, including after the Supreme Court’s previous ruling. PATENT ILLEGALITY OR LATENT ILLEGALITY? A comprehensive interpretation of the UNCITRAL Model Law and Rules, the legislative intention behind the 1996 Act, Section 5 , and Section 34 of the 1996 Act would demonstrate that the grounds in Section 34 are the only ones that warrant judicial intervention in arbitral awards. It is settled principle of law that courts must rigorously adhere to and stay within the parameters of Section 34 of the Act when addressing petitions submitted under that section, abstaining from the appreciation or re-appreciation of factual or legal issues. There are various meanings for “patently illegal,” “blatant illegality,” or “error on the face of the record,” including: fundamental legal error; breach of a statute or the constitution; or inconsistency with common law. Patent illegality means - testing if there has been an abuse of the process of law or not. If the illegality is such that it requires scrutiny into the evidence, it is no more patent and it becomes latent. When a court sits for review of the award under Section 34 , this review is not an appeal . All the subsequent review stages under Section 37 , Articles 136 , 137 and 142 of the Constitution, are all limited to the grounds as laid down under Section 34 . This implies that even in subsequent review stages, re-appreciation of evidence or facts is not allowed. Unfortunately, in the DMRC case, the apex court has delved extensively into the facts and reconsidered evidence. The court relied on the case of Associate Builders v. Delhi Development Authority and held that the arbitral tribunal has ignored vital evidence and interpreted certain clauses of the contract in a manner that no fair minded or reasonable persons would arrive at. It is important to note that when the parties agree to submit their disputes to arbitration, they consciously make a decision not to avail the rights as provided for under court litigation. Party autonomy is a fundamental principle in arbitration and the parties voluntarily appoint arbitrators to adjudicate upon their dispute. The award shows that the arbitrators did consider the CMRS certificate but did not find it to be of much relevance in deciding the dispute. It is within the domain of the arbitrators to give more weightage to one piece of evidence over the other. Further, it is difficult to accept that a tribunal comprising of three technical members was not fair minded at all in their interpretation of the contract. The award delivered by the tribunal is final and binding and cannot be challenged just because the parties are not satisfied with the award. The grounds for challenge are very limited. In foreign jurisdictions including countries like France , Spain and Switzerland , the courts do not look at the merits of the award at all. The grounds in these countries relate to procedural review. The courts only look at the process by which the award was made, if it is erroneous then award may be set aside or referred back to the arbitrator. DISPUTE IN A PUBLIC-PRIVATE PARTNERSHIP: A NIGHTMARE The most compelling example of how the arbitration regime in India has fallen short of its primary goal of expeditiously resolving disputes is the torturous journey taken by a private party seeking enforcement of the arbitral ruling in a public-private partnership agreement. The delays can deter foreign private investors and paint India as a business-unfriendly state. In fact, the case would still proceed since the judgment passed by the Supreme Court would have to be executed. The arbitration proceeding has not attained finality almost ten years after the arbitration was called and more than six years after the award was made. Third parties perceive that when the government is a party, the system’s delays—both judicial and arbitral—seem to be made worse. Across the board, when the government is a party to a dispute, the project is usually very valuable and requires funds from taxpayers in the form of interest, time, or, frequently, investment. Interest accrued from public-private partnership delays entails tax payer funds and weakens and disincentives private investors from participating in significant Public Private Partnerships that can support the development of the country. Therefore, it is heavily on the system to make sure that disagreements between government parties—especially in public-private partnerships—are settled amicably and without appearing to indicate that the government is abusing its power. Courts should be aware that investors around the world are keeping a careful eye on high-value disputes. The effectiveness and legitimacy of the court procedures in India may be called into question if one ventures into unfamiliar legal territory while ignoring issues of res judicata or engages in factual inquiries on appeal.  The dilatory tactics being played by the government is also apparent from the amendment to Section 89 of the Metro Railways (Operation and Maintenance) Act, 2002, that was proposed by the Ministry of Housing. It is unacceptable for DMRC to have treated DAMEPL unfairly, as the company has been paying interest costs on a constant basis. Losses have also been incurred, and this has caused annoyance for vendors, lenders, and any subcontractors who may be involved in the project. The taxpayers, whom DMRC claims to serve, are, of course, the worst affected party. In the middle of all of this, the Government’s decision to modify the Metro Act is remarkable for the Indian democracy. In any case, the dispute settlement mechanism by itself gives the G-20 leaders a disincentive to consider rethinking their investment in India. The fact that international suppliers successfully sued DAMEPL for payment delays, fed up with the delays, shows how the issue can discourage foreign investments. For example, Siemens Aktiengesellschaft of Germany, a vendor of power supply, signalling, and train control systems, and Construcciones Y Auxiliar De Ferrocarriles , S.A. of Spain, a supplier of rolling stock to DAMEPL, both sued DAMEPL to recover amounts owed to them under the respective sub-contracts. They were awarded sums totalling INR 62 crores and INR 44 crores, respectively.  For temporary relief prior to execution, both vendors filed a case with the Delhi High Court. Following the SLP ruling, the High Court in both cases ordered DAMEPL to deduct the award amount owed to its international suppliers from the termination payment collected from DMRC. Unfortunately, despite repeated orders from the Delhi High Court, DMRC’s delay tactics—using dubious and repetitive petitions—have prevented DAMEPL from fulfilling its obligations in both cases. While discussing the government’s anti-arbitration moves, it is also relevant to mention the recent Guidelines issued by the Ministry of Finance. It is upsetting and confusing that the Ministry of Finance has directed government organizations, PSUs, and the like to forgo arbitration clauses in favour of mediation for disputes exceeding Rs.10 Cr. The arguments made in favour of the guidelines include lack of finality regarding delivery of the award and the long-time taken to resolve the dispute. It is interesting to observe such contradictory arguments made in favour of introducing the guidelines while in almost every case, it is the government that carelessly contests every award up to the Supreme Court due to their fear of ‘vigilance.’ HARMONIZING ARBITRAL AUTONOMY AND JUDICIAL OVERSIGHT The recent ruling by the Supreme Court in the DMRC case emphasizes the necessity of a formal framework controlling judicial intervention in arbitral verdicts. Therefore, a framework should be established to distinguish between situations that call for this kind of intervention and those that protect the integrity of the arbitration process. The framework needs to emphasize on the idea of “patent illegality” and should reaffirm that the only situations in which an arbitral award may be challenged are those in which there has been a breach of contract, the Act, or substantive Indian law. Guidelines should emphasize on the significance of respecting arbitral rulings unless they manifest blatant legal mistakes or transgress public policy. Guidelines should support the idea of minimal judicial intervention in arbitral awards, honoring the independence of arbitrators in construing the terms of contracts and the restricted role of courts in supervising arbitral rulings. Through various judgments, Courts have reiterated that there are only limited grounds which are available to challenge an arbitral award under Section 34 of the Act, and as far as the power of the subordinate courts are concerned, the Act does not allow them to ‘correct errors of the arbitrators’, but only to quash and set them aside leaving it to the parties to get the dispute resolved again by the arbitration tribunal or any other means. The same uniformity needs to be maintained in all the judgments and the intervention should only be done in the rarest of the rare cases. CONCLUSION The DMRC case sets a dangerous precedent. If courts can readily intervene based on their interpretation of contracts, parties unhappy with arbitral awards might increasingly seek judicial review. This could lead to protracted litigation, negating one of the key benefits of arbitration – swift resolution. It is noteworthy that in the DMRC case, the Supreme Court did issue a warning against routinely taking the curative path. Its re-appreciation of the reward based on merit, however, lessens the significance of its own caution. Even though a lot of the work gained in 2023 has been undone by this ruling, it will be interesting to observe how the Supreme Court handles its fallout. India aspires to be a global hub for commercial arbitration. This judgment, if not addressed, could damage that reputation. International businesses might become wary of entering into contracts with Indian entities if the finality of arbitral awards is uncertain. This dispute also highlights the need to stop government parties from abusing the system for expediting the due execution of arbitral awards in public-private partnerships, since DMRC is a joint venture between the State Government of Delhi and the Government of India, two of its principal shareholders. Indeed, excessive delays from judicial appeals possibilities give a perverse incentive for government parties to postpone implementation at the expense of public monies and infrastructure projects. Clear guidelines must be set to limit the extent of judicial interventions in order to prevent abusive appeals and ensure the timely execution of arbitral rulings. [1] Ishan Aryan and Gunjan Choudhary, both the authors are 4th year law students pursuing B.A.LL.B. from National Law University Odisha.

Riddhi Agarwal [1]   Introduction   Arbitration agreements in contemporary times incorporate pre-arbitral procedures to refer the said dispute to Conciliation, negotiation, and mediation . The latter has a flexible structure as compared to arbitration and allow parties to deliberate more freely and amicably in an informal setting. Arbitration clauses are also known as  “ mandatory arbitration ” since these are contractual provisions that guide parties to settle disputes through other methods before taking up arbitration. The position of MDR in India is ambiguous since High courts all over the country have different interpretations of the same. From an international perspective, the position of India is similar to that of English law as has been depicted in the case of Halsey , which opined that mediation or other dispute redressal methods should be encouraged but not forced. On the other hand, Australia , Hong Kong , and Singapore have a rigid stand that encourages strict adherence to Multi-tiered dispute resolution clauses before proceeding to arbitration or Litigation. Through this article, the author will explore the scope of Escalation clause in India by taking into consideration of judicial developments and changes brought in through the Mediation Act, of 2023. The author also suggests the Med-Arb approach as a legitimate and more efficient Alternate Dispute Resolution approach.   Legal stand on Multi-tiered dispute resolution clauses: Scope of good faith negotiations and mediations.   The position of escalation clause or MDR Clause has been ambiguous in India which gives great flexibility for its application but also creates confusion. In plenty of cases, courts nationwide have upheld the mandatory nature of multi-tiered dispute resolution clauses.   In the case of Nirman Sindia v. Indal Electromelts Ltd. , the Kerala High Court held that pre-conditions to arbitration are mandatory and parties cannot skip the prescribed mode of dispute resolution and jump to the second step without exhausting the first step. The Delhi High Court upheld this position in the case of Sushil Kumar Bhardwaj v. UOI .   It was held in Simpark Infrastructure (P) Ltd. v. Jaipur Municipal Corporation , that if an agreement prescribes a pre-condition or a multi-tiered dispute resolution clause, the requirements need to be fulfilled before approaching arbitration since if the steps are not being followed, the action will classify as pre-mature action, in a significant precedent set by the Bombay High Court in Tulip Hotels (P) Ltd. v. Trade Wings Ltd , the court acknowledged that pre-conditions to arbitration are mandatory. Parties must adhere to the procedure agreed on before approaching arbitration. Still, this condition depends upon the parties' intention and nature of such conditions.   However, in many recent judgments, the courts have taken a different stand and interpreted the escalation clause as discretionary. In the case of Demerara Distilleries Private Limited v. Demerara Distillers Limited , the agreement required a ‘mutual discussion’ before arbitration but this requirement was flouted by the other party and the application for arbitration was made without following pre-conditions to arbitration. The court in this case thought that the contention was not pre-mature and that mutual discussion or mediation before arbitration is discretionary. Therefore, based on facts the requirement was held to be discretionary. The courts have often interpreted escalation clauses as discretionary or empty formality. In the case of Quick Heal Technologies Limited v. NCS Computech Private Limited and M/S IMZ Corporate Private Limited v. MSD Telematics Private Limited ,  the court after looking into the circumstances and facts of the case held that the condition to arbitration is just an empty formality or unnecessary.   This position is being upheld by the Delhi High Court in the recent case of M/s Oasis Projects Ltd. v. the Managing Director, National Highway, and Infrastructure Development Corporation Ltd . In this case, Oasis Projects entered into a contract with NHIDCL and when disputes arose between both parties, Oasis Projects chose to invoke arbitration proceedings without adhering to pre-conditions to resolve the dispute. The counsel on behalf of NHIDCL relied upon the case of Sushil Kumar Bhardwaj v. UOI and Iron & Steel Co. Ltd v. Tiwari Road Lines , it was held in these cases that fulfillment of pre-conditions to arbitral proceedings is necessary, and if the procedure is not followed, a petition for arbitration would not be sustained.   According to the principle of ‘ The parallel consultation exception ’ established in Rajiv Vyas v. Johnwin , if the pre-arbitral consultation is not completed, it should not stop the parties from starting arbitration. Instead, they should be directed to continue negotiating at the same time as the arbitration procedure, even after it has started. This is because it would be irrational for a court to decline a referral to arbitration in the event of unsuccessful discussions, only to have the parties start the arbitration procedure anew. Another exception recognized by Indian courts is the Interim Relief Exception in which Indian courts have ruled that failing to conduct pre-arbitration consultation cannot be used to hinder a party from exercising their substantive rights by denying them access to urgent interim relief or thwart a party’s claim and make any future arbitration futile.   On the other hand, Oasis Projects relied upon section 77 of the Arbitration and Conciliation Act, 1996 (hereinafter, the Act of 1996), and stated that the conciliation process is not mandatory and does not bar petitioners from invoking an arbitration agreement. The court held that a conciliation clause cannot bind the parties since it is a voluntary process and hence indirectly escalation clause was declared as discretionary. It was also decided that any party could end the mediation process at any time. So, the Court agreed to hear the petition under Section 11 of the Act and chose a single arbitrator to settle the disagreement between the two sides.   Mandatory pre-litigation Mediation in light of The Mediation Act, 2023   One of the major features of the Mediation Bill, 2023 (hereinafter, the Act of 2023) was that it mandated ‘pre-litigation mediation’ under section 6 of the draft. However, this mandate as per the wording of section 5 (1) was done away with and introduced as a voluntary process under the Act of 2023. The purpose of mandated 'pre-litigation mediation' is for parties to acquire knowledge about the mediation process through sessions before initiating a lawsuit. Following the compulsory 'information sessions', either party is allowed to terminate and exit the procedure. Alternatively, if they like, individuals can choose to participate 'voluntarily'. If the intention is to provide required mediation, it may be more appropriate to refer to it as a mandatory pre-litigation information session on mediation.   Indian Courts have observed that mandating parties to engage in mediation will not impact the inherently voluntary nature of the process. In Afcons Infrastructure Ltd v. Cherian Varkey Constructions Co. (P) Ltd , the Supreme Court of India decided that if a judge finds there is a possibility of settling a lawsuit, except in certain cases, the parties involved may be required to engage in mediation. By virtue of Section 89 and Order 10 Rule 1A of the Civil Procedure Code.   Italy has been using required pre-litigation mediation as an experimental approach since 2011. Only the 'information sessions' are mandatory. Statistics show that since its establishment, the number of lawsuits filed has decreased, the rate of settlements has increased, and the usage of mediation has increased when compared to other European countries. India is currently confronting a crisis similar to the one that Italy encountered in 2013. Italy utilized a technique known as 'opt-out' mandatory mediation to handle its high number of pending cases. In 2010 and 2013, a law was enacted that compelled mandatory pre-litigation mediation for particular problems, such as those involving property partition and joint ownership, before filing a lawsuit. According to their opt-out approach, plaintiffs are not entitled to appear in Italian courts unless they can demonstrate that they participated in an initial mediation session that was unsuccessful. This Italian law has shown to be quite effective over time. But the same is not the case in India since s.24(c) of the Act of 2023 provides for termination of mediation by written consent of both the parties or even one party and there is no model that compels pre-litigation mediation in certain categories of cases, rendering MDR clause ineffective. Legal Framework for Med-Arb in India: A possible way out   Med-Arb is an amalgamation of the best features of both arbitration and mediation. In this, the parties first try to overcome their issues through mediation with the help of a third party who is neutral to both parties known as a mediator. If the mediation achieves desirable results then a settlement is being signed but if mediation fails in whole or relating to any particular issue then parties can further resolve it through arbitration wherein the arbitrator can same person who mediated the parties or any other person.   There is yet no legal framework that governs Med-Arb but many existing legislations such as the Act of 1996, the Act of 2023, and the Commercial Courts Act, of 2015 encourage Med-Arb in India.   There is yet no legal framework that governs Med-Arb but many existing legislations such as the Act of 1996, the Act of 2023, and the Commercial Courts Act, of 2015 encourage Med-Arb in India. In the case of Haresh Dayaram v. State of Maharashtra , it was observed by the Supreme Court that Med-Arb is a novel ADR technique that can be utilized to resolve complex commercial disputes. The Court further stated that Med-Arb can be conducted by retired judges who are experienced and knowledgeable in both mediation and arbitration. Recently Gujrat High Court on the occasion of 78thIndependence day inaugurated Med-Arb centre which would comprise of specially trained official trained by Gujrat State Legal  Services Authority (GSLSA). In the case of DMRC v. DAMPEl , the importance of shifting from traditional approach towards Med-arb was encourage since the Indian government's most current recommendations for arbitration and mediation in domestic public procurement contracts, announced in June 2024, reflect the country's changing dispute resolution landscape. These rules address the specific issues that government organisations encounter while emphasising the value of arbitration's speed, convenience, and finality. They also indirectly discourage the government from using arbitration to resolve public procurement disputes. Med-Arb is a potentially effective and increasingly popular ADR method in India. Its suitability depends on the parties' consent and the dispute's specific characteristics.    Conclusion The position of pre-arbitral procedures in India is open to wide judicial interpretation with pros and cons on a case-to-case basis. Making mediation and conciliation has benefits since parties would have more flexibility and can retain their relationship with each other. A legal framework to regulate matters related to the mandatory or directory nature of escalation clauses would be a step to de-clog the judiciary and facilitate a smooth process. [1] Riddhi Agarwal is a third-year student currently pursuing B.A LL.B (Hons.) programme at Rajiv Gandhi National University of Law, Patiala.

Pratishtha Agarwal and Vidhi Chhabra [1] Introduction Arbitration hinges on party autonomy and flexibility, which enable parties to adjust the dispute settlement procedure to their requirements. The Group of Companies Doctrine ("GoCD") embodies these ideas by allowing arbitration terms approved by one party to bind all other parties engaged in the contract's life cycle. The recent case of Cox and Kings Ltd. v. SAP India Pvt. Ltd. broadened the scope of this theory, including more liberal interpretations of implicit consent in arbitration agreements. This article investigates the developing interpretation of the Group of Companies Doctrine (GoCD) in arbitration, focusing on its applicability in binding non-signatory persons authorised to act as representatives on behalf of the Company. It examines the ramifications of incorporating corporate representatives in arbitration processes, citing recent cases such as Cox & Kings Ltd. v. SAP India Pvt. Ltd . The article compares Indian arbitration methods to international norms from the ICC, SIAC, and LCIA, emphasising the differing conditions for joinder. It highlights the importance of a balanced approach that protects arbitration's integrity while maintaining accountability, fairness, and efficiency. Background As non-signatories can be bound to an existing arbitration agreement by their role and common intention, the scope of the GoCD can be further widened to interpret whether or not the company's directors can be made a party to the arbitration . The contention is based on the fact that the arbitration agreements containing the clause are signed by the directors acting as authorised representatives who also make decisions on behalf of the company. In Vingro Developers Pvt. Ltd. v. Nitya Shree Developers Pvt. Ltd ., one of the directors had also signed the Builder Buyer Agreement, which was contended to be construed as an express intention to be added as a party to the Arbitration Agreement. The term ‘parties’ under Section 2(1) , read with Section 7 of the Arbitration and Conciliation Act , includes both signatories and non-signatories. The Court observed that the relationship between the Company and its Directors is that of a Principal and Agent under Section 182 of the Indian Contract Act (“ICA”) . The company's Director signed the Arbitration Agreement on behalf of the respondent company, thereby establishing an Agency . A simple reading of Section 230 of the ICA clarifies that an agent cannot be personally bound by contracts entered into on behalf of its principal. Carving out an exception from the Principal-Agent Relationship The Group of Companies Doctrine can be applied to add different non-signatories as part ies to a contract. The principle of the corporate veil seeks to disregard the company's separate personality and attribute the company's acts to those in direct control of the operations of the company. In Lanuza, Jr. et al. v. BF Corporation , in the Philippines, it was laid down by the Arbitral Tribunal that if the requirements for ' piercing ' are present, the court may proceed to take jurisdiction over the directors and officers . In Amravati Peoples’ Co-operative Bank Ltd. v. Giltedege Management Services Ltd ., the Bombay High Court reiterated the same and held that the directors of a company would be liable for misappropriation of the company’s funds and other misfeasance but not for the ordinary contractual liability of the company . The Group of Companies Doctrine can be invoked to add other unconnected parties to the arbitration agreement. A fair inference to that effect would be to carve out an exception to the immunity under Section 230 of the ICA on account of negligence, misrepresentation, malice, or bad faith. Therefore, safeguards must be in place to restrict the creative use of the judgment in Cox and Kings and only bind parties, with the addition of which effective adjudication of disputes could be possible. Consequences of Impleading Corporative Representatives in Arbitration Proceedings Impleading corporate representatives such as directors, board members, general counsel or legal head, HR executives etc. can complicate arbitration by introducing new parties with conflicting interests. This may result in more complex legal arguments and procedural concerns. Claimants may sue directors or corporate representatives to hold them personally accountable for activities conducted on the corporation's behalf. This may broaden the possible scope of liability for those persons beyond the corporation itself and result in abuse of doctrines already set in place, such as the ‘doctrine of alter ego’ which is an equitable device used by the courts to prevent abuses by those improperly using the legal shield provided to a corporate entity. Directors and business officials involved in arbitration procedures would suffer personal financial liability or reputational harm, which may also have a bearing on the cost and efficiency of the arbitration proceedings. Impleading directors or corporate representatives may pose issues of conflict of interest, especially if the parties involved have fiduciary obligations to the company. This may limit their capacity to fully engage in the arbitration process without jeopardising their responsibilities to the business. Th e arbitration procedures involving directors or corporate representatives may influence settlement discussions. Impleading directors or corporate representatives in arbitration is a ‘necessary evil’. While their involvement may complicate proceedings, it also serves critical functions that justify the potential drawbacks. Arbitration has the potential to deter wrongdoing and promote improved governance practices by holding corporate representatives accountable. This process ensures that accountability is not unjustly shifted to the corporation alone, protecting shareholders and other stakeholders as well. Involving important decision-makers in arbitration also clarifies their legal responsibilities, promoting more open and moral business practices. The advantages of enhanced accountability and governance outweigh the difficulties, making this strategy crucial. Holding directors or corporate representatives accountable for their activities can encourage responsible decision-making inside the organisation . Impleading people can guarantee that accountability is properly dispersed, preventing the company from carrying the entire responsibility for improper conduct. The arbitration procedure can explain their duties and responsibilities by including directors or corporate representatives, allowing for better future governance. It may safeguard shareholders' interests by holding individuals accountable for company decisions.   Comparative View on Impleading Corporate Representatives as a Party in Arbitration Proceedings The contemporaneous stance in the Indian context on impleading corporate representatives is not attuned to the international standards of multifarious arbitral institutions. Article 7 of the ICC Arbitration Rules, 2021 (hereinafter referred to as: “ICC Rules” ) permits for the joinder of the additional parties subject to the provisions contained within Articles 6(3) - 6(7) and 9. An important caveat that shall be highlighted herein is that the ICC Rules for impleading ‘corporate representatives’ as ‘third parties’ shall only be applicable in case “ all parties , including the additional party , otherwise agree” and further provide that “no additional party may be joined after the confirmation or appointment of any arbitrator” .  It shall also be highlighted that even if a party at the commencement of the arbitration objects to the joinder of an additional party, the arbitral tribunal now has the power and discretion to permit the joinder where the conditions are met pursuant to the ICC Rules. Furthermore, Rule 7 of the Singapore International Arbitration Centre Arbitration Rules, 2016 (hereinafter referred to as: “SIAC Rules” ) provides that for an additional party to be impleaded in the arbitration party , the party shall either be ‘prima facie bound by the arbitration agreement’ or “all parties, including the additional party to be joined, shall have consented to the joinder of the additional party”.  Interestingly, the SIAC Rules do not lay impetus on the ‘express consent to joinder’. Article 22.1(x) of the London Court of International Rules, 2020 (hereinafter referred to as: “LCIA Rules” ) goes on a step further to stipulate that the consent of the applicant party and the additional party to joinder shall be ‘ expresslywritten in the arbitral agreement’.   Rather interestingly, Article 6(3) of the Swiss Rules, 2021 (hereinafter referred to as: “Swiss Rules”) states that , “a request for joinder shall be decided by the arbitral tribunal after consulting with all of the parties considering all relevant circumstances”.  The Swiss Rules pertinently only require ‘consultation with all the parties’ . In the absence of the requirement for express consent, the arbitral tribunal has the power to decide whether to allow a joinder based on its considerations after consulting all parties. While the ICC, SIAC, and LCIA Rules mandate the consent of the parties, after paying due consideration to the structuring of their provisions, it shall be highlighted that they reflect different standards for impleading corporate representatives as a ‘third-party’. The consent requirement of ‘ all the parties’ may seem sacrosanct considering the consent-driven nature of the arbitration proceedings . However, from a practical standpoint, the consent threshold is too high to trigger a joinder in practice. In contrast, Swiss Rules are more in line with the advent of impleading third parties since they only require consultation based on all relevant circumstances , which prevents arbitrariness in decision-making, and they have a lower threshold for the parties' consent .   Conclusion Impleading parties' changing criteria reflects a compromise between consent-driven processes and pragmatism in complicated arbitration cases involving corporate representatives. While international arbitration procedures such as the ICC, SIAC, and LCIA require explicit approval from all parties, which may impede such joinder , Swiss procedures take a more flexible approach by mandating consultation with parties, limiting arbitrariness. However, a significant concern among these variants is preserving the integrity of arbitration while guaranteeing justice and efficiency. Achieving this balance requires a sophisticated awareness of the repercussions of impleading business leaders while also realising the possible complications and the need to hold individuals accountable. There shall be an emphasis on continuously improving arbitration rules to strike a delicate balance between consent-based principles and practical application, thereby increasing the efficacy and legitimacy of the arbitration process. [1] Pratishtha Agarwal and Vidhi Chhabra are 4th Year Students pursuing B.A. LL.B (Hons.) and B.Com LL.B. (Hons.) at the Institute of  Law, Nirma University.

Utkarsh Routh [1] In recent years, the field of arbitration has undergone significant evolution propelled by technological advancements. Two transformative technologies, blockchain and smart contracts, have emerged as pivotal forces reshaping traditional dispute-resolution mechanisms. The increasing adoption of blockchain technology, particularly in commercial transactions and smart contracts, has introduced novel complexities and challenges in resolving disputes within this digital ecosystem. The concept of blockchain technology, once considered distant for developing countries like India, has now become a significant point of interest for the Indian government, as evidenced by the release of the "National Strategy on Blockchain" by the Ministry of Electronics and Information Technology in December 2021. This article delves into the intersection of blockchain technology and arbitration, exploring how smart contracts and blockchains are revolutionising dispute resolution within the legal framework of arbitration in India. This article begins by examining the fundamentals of blockchain technology and the workings of smart contracts to provide a comprehensive understanding of the topic. Subsequently, this article analyses the impact of smart contracts, their legal validity, and the incorporation of blockchain in arbitration processes from an Indian legal perspective, emphasising the need for a regulatory framework that can adapt to the unique characteristics of these technologies. Through these insights, this article aims to provide a comprehensive understanding of the evolving landscape of arbitration in the digital age and to propose a new and improved approach for adopting these technologies and capitalising on their benefits in dispute resolution within the permissible limits of the law. I. Understanding the concept of Block Chains Blockchains represent novel databases that facilitate the creation and distribution of ledgers or databases across multiple nodes or participating computers. The fundamental characteristic distinguishing blockchains is "disintermediation." Disintermediation entails various parties sharing a single database and achieving a unified perspective of the subject matter without any individual party assuming control over the data. This concept can be likened to a soccer game without a referee. In such a scenario, players collectively maintain the score and adjudicate fouls by reviewing replays and voting, replicating the decisions typically made by a referee. Consequently, blockchain obviates the need for a central authority and instead relies on the participating nodes, akin to the players in the soccer analogy. Blockchains “can efficiently record transactions between two parties in a verifiable and permanent way.” In simpler terms, a blockchain can be described as follows: ·  A Database : It operates like a ledger, constantly expanding as new entries or transactions are added. ·  Distributed : Copies of the entire database are stored on numerous computers across a network, ensuring synchronisation within minutes or even seconds. ·  Transparent: Records stored in the database can be made visible to relevant stakeholders without the risk of unauthorised alterations. ·  Secure: Unlike traditional databases, where malicious actors can target a single computer to tamper with records, blockchains provide heightened security measures. ·  Immutable: Thanks to complex mathematical algorithms, once data is recorded and accepted, it becomes practically impossible to alter or delete. II. Elucidating the functioning of Smart Contracts Blockchains facilitate the development of "smart contracts," which are characterised as self-executing contracts where the terms of the agreement between parties are directly encoded into lines of code. These contracts, along with the associated agreements, are distributed across a decentralised blockchain network. The code governs the execution of the contract, and transactions conducted through smart contracts are both traceable and irreversible. Smart contracts are essentially coded representations of agreements between parties. A smart contract is essentially a self-executing code that operates based on predetermined conditions agreed upon by the parties involved. In essence, they follow a deterministic logic: if the event "x" happens, then execute action "y." Consequently, the functions performed by smart contracts are relatively straightforward, typically involving tasks like automatically transferring a specified amount of money from one party's wallet to another once predetermined conditions are met. To illustrate, consider a basic example involving an insurance smart contract. Imagine purchasing insurance for a flight delay. In this scenario, the smart contract would contain data parameters to determine whether the flight was delayed and if you were onboard. If the conditions are met, such as the flight being late, the insurance payout will automatically be disbursed to you as the passenger. Let's revisit our analogy of the soccer game. In this scenario, the players opt not to manually update the database with each foul's consequence. Instead, they establish a system where certain actions trigger automatic consequences, therefore bringing the concept of smart contracts into the frame. For example, if a player commits a handball, it results in a foul and possession of the ball transfers to the opposing team. The players can configure the system to record these consequences automatically. For instance, if Player xyz prevents a goal by using their hand, Team B is awarded one point. Each time such an incident occurs, the system promptly credits Team B with a point. This mechanism, which identifies fouls and enforces their consequences, operates akin to a smart contract.  III. Deducing The Validity of Smart Contracts in The Indian Legal Paradigm In Indian legislation, contracts are governed by the Indian Contract Act of 1872, which establishes the legal framework for agreements. Section 10 of the Contract Act stipulates that all agreements are contracts if they are entered into by parties with free consent, for a lawful consideration, and with a lawful object. Put simply, for an agreement to be enforceable under this Act, it must involve an offer, acceptance, and consideration. Smart contracts, existing in a coded form, inherently include the elements of offer and acceptance. This can be demonstrated by drawing a parallel analysis between the Indian Contract Act of 1872 and smart contracts, as follows.  As per section 2(a) – “When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a "proposal”:” and therefore, in the context of smart contracts, the act of publishing the self-executing code represents the intention of one party to enter into a contract with another party, thereby constituting an offer. Moreover, according to section 2(b) - When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a "promise." Simultaneously, in smart contracts, it is a prerequisite that the other party performs specific pre- determined actions as outlined by the contract. Upon the completion of these prescribed actions, the offer is considered to be accepted. Furthermore, the Contract Act establishes a mandatory element of consensus ad idem (which means an agreement for the same thing) for a contract to be valid. In smart contracts, this is achieved when the parties mutually agree to the code and activate or initiate the contract. Therefore, activating/triggering the smart contract meets the consensus ad idem requirement, resulting in a valid contract. This typically involves agreeing to the terms and conditions of a specific service platform that facilitates the transaction. That being said, while the elements of offer and acceptance are easily met in smart contracts, the real challenge lies in establishing the element of consideration.   IV. Smart Contracts in Block Chain Arbitration: The Crypto Currency Conundrum As the majority of the transactions in the blockchain arbitration platforms take place in cryptocurrency, therefore, a question arises as to whether the Contract Act of 1872 would recognise a cryptocurrency such as Ethereum as a valid form of consideration, particularly in the absence of specific regulatory frameworks. This remains a contentious issue in India. However, an alternative to conventional consideration can be found in Section 2(d) of the Contract Act of 1872, which mandates a reciprocal promise or action by the promisee for consideration to be deemed valid. Nevertheless, the struggle for the proper recognition of cryptocurrencies as consideration persists. Complicating matters further and impeding the advancement of virtual currencies, the Reserve Bank of India (RBI) in 2018 imposed a ban on cryptocurrency trading in India. This presented significant challenges to the implementation of smart contracts that involve cryptocurrencies as a form of consideration within the Indian legal framework . However, a significant development occurred on March 4, 2020, when a three-judge bench of the Supreme Court overturned the ban, hinting at the potential recognition of cryptocurrencies as valid consideration under the law. The recent decision has set the stage for a more favourable environment for blockchain arbitration in India, as many decentralised dispute resolution platforms in the blockchain space use cryptocurrencies as a form of payment for their services. Therefore, this judgement opens up the possibility of using smart contracts and these decentralised dispute resolution platforms for any dispute arising out of such smart contracts in India. V. Legal Validity of Smart Contracts in International Regime -  Article 2.1.1 of the UNIDROIT Principles of International Commercial Contracts, 2016 covers contracts involving automated performance arrangements, where parties agree on self-executing electronic platforms without the involvement of a natural person to ensure performance. -  Article 11 of the UNCITRAL Model Law on E-Commerce, 1996, states that an offer and the acceptance of an offer may be expressed by means of data messages, which shall not be denied legal validity and enforceability.  Further, Article 2 clarifies that these “data messages” include not only communication exchanged electronically but also include computer-generated records that are not intended for communication. -  The UNCITRAL Model Law on Electronic Transferable Records, 2017, explicitly accommodated distributed ledger technology in its explanatory notes. -  The UNCITRAL Convention on Electronic Communications in International Contracts (2007 Convention) provides legal recognition to on-chain arbitrations. Articles 6 and 18 allow electronic data and transactions in arbitral proceedings. VI. Evaluating the scope of dispute resolution in Smart Contracts? Smart contracts possess the capability to incorporate preprogrammed actions for non-compliance and enforce automatic mechanisms. Some argue that these sophisticated contracts could potentially eliminate the necessity for third-party intermediaries like arbitrators or judges. However, this notion needs to be revised. Firstly, as previously discussed, a smart contract is not a legal contract but rather a piece of code, thus limiting its scope of action. Suggesting that a smart contract could serve as an automated remedy provider for contract breaches and supplant arbitrators or judges is simply implausible. Secondly, there is a misguided belief that parties can anticipate every conceivable outcome of a contract. In reality, this presumption is atrocious, as it would require the smart contract's code to encompass all possible scenarios and automatically trigger preprogrammed responses. The requirement for predictability as a precondition for smart contracts to replace dispute resolution mechanisms and judges highlights the limited applicability of replaceable contractual relationships. Smart contracts become ineffective when faced with uncertainty regarding the outcome of factual scenarios, such as the interpretation of events that happened outside the ambit of the contract. For example, suppose there is a force majeure clause in a contract that defines the happening of an event as force majeure based on three different criteria: Non-political events, indirect political events, and political events. For these events, a cost allocation clause was laid down below. a)   for a Non-Political event – the parties will bear their respective costs. b)  for an Indirect Political event – if the costs exceed the insurance cover for such an event, the concessionaire will bear the costs up to half of the excess, and the other half of the excess would be reimbursed by the authority; and c) for a political event – all costs attributable to political events will be reimbursed by the authority. Now, supposedly, In the wake of a global pandemic, many contracts are being examined for their force majeure clauses, which excuse parties from fulfilling obligations due to uncontrollable events. The pandemic has ignited debates on cost allocation and whether it is a political or non-political event. As most contracts likely did not anticipate a pandemic of this scale, disputes are expected over the interpretation and applicability of these clauses, resulting in the failure of the smart contract’s mechanism. Furthermore, contract law often involves broad legal concepts such as "good faith" and "reasonableness," necessitating flexibility, interpretation, and contextual analysis. The correct application of these concepts in fully automated smart contracts poses a challenge. While smart contracts excel in automatically executing programmed tasks, they are unable to render subjective judgments or incorporate external elements beyond the blockchain. For example, smart contracts can very well verify whether the goods under a contract were delivered by the seller to the buyer and, therefore, automatically make the payment for such goods. However, when it comes to disputes such as the quality of goods delivered, smart contracts render themselves useless, and therefore, implementing a dispute resolution mechanism is crucial. This leads to another important question: should we use litigation or blockchain arbitration as the suitable means for dispute resolution? VII. The Incompatibility of Traditional Litigation with Blockchain Disputes: A Call for Innovative Approaches The idea that litigation could effectively resolve disputes related to smart contracts or blockchain technologies seems far-fetched as the traditional legal frameworks, which particularly emphasise physical and territorial aspects, are ill-suited for the decentralised nature of blockchain. This mismatch arises because blockchain operates beyond physical boundaries, challenging the applicability of conventional legal principles. Upon examining alternatives to litigation, such as arbitration, it's clear that both routes encounter distinct challenges in the context of blockchain. However, a deeper comparative analysis reveals that litigation, in particular, might be less adept at addressing these disputes efficiently. This inefficiency arises not merely from the mismatch between the decentralised essence of blockchain and the localised nature of traditional legal processes but also from practical complications in litigation, such as the irreversible nature of smart contracts, which pose a significant challenge as court orders will not be effective on its terms. Moreover, litigation is burdened by issues such as time constraints, high costs, limited technological expertise, and challenges in international enforcement, rendering it ill-suited for resolving disputes related to smart contracts. The challenges extend to arbitration as well – a method that traditionally offers more flexibility than litigation. The concept of the seat of arbitration is a legal concept referring to the jurisdiction in which the arbitration is deemed to take place. Determining the seat of arbitration is pivotal because it influences the procedural conduct and can significantly affect the outcome, or the enforceability, of the arbitral award. In the realm of blockchain, where transactions and disputes inherently lack a physical or territorial anchor, pinpointing a seat of arbitration aligns poorly with the technology's borderless nature. Thus, while both litigation and arbitration face obstacles in effectively resolving blockchain-related disputes, the inadequacies of litigation are particularly pronounced. On the contrary, the arbitration framework offers a more robust approach and can provide practical solutions to the challenges encountered in litigation. However, traditional arbitration methods are often deemed overly formal, time-consuming, and costly, particularly in the context of low-value disputes. The decentralised, global essence of blockchain demands dispute resolution mechanisms that transcend traditional, geographically bound legal structures. This scenario underscores the need for innovative legal approaches that harmonise with the unique characteristics of blockchain technology, advocating for a rethink of how we handle such disputes in the new digital age. Hence, a novel segment of dispute resolution systems has emerged, exemplified by blockchain-based, crowd-sourced online dispute resolution systems. While bearing some resemblance to arbitration mechanisms, labelling them as a definitive method of arbitration would be inaccurate. VIII. Decoding Decentralised Justice – Crowd-Sourced Dispute Resolution System? Decentralised justice is a new approach to online dispute resolution that combines blockchain, crowdsourcing, and game theory to produce dispute resolution systems that are radically more efficient than existing methods. It refers to any blockchain-based, crowdsourced online dispute resolution system (Hereinafter referred to as CSDRS ) that resorts to many crowdsourced jurors to decide on cases. Decentralised justice systems incentivise jurors based on game theory principles. In this, once a smart contract has been formed between the parties, they can choose to register the transaction on any CSDRS platform, such as Kleros.  Registering the transaction on Kleros’ Escrow Dapp involves registering the parties’ ETH address, the type of transaction (i.e., sale, freelancing, payroll, etc.), the contract amount in ETH (or applicable cryptocurrency), as well as the “Timeout Date” (i.e., the time and date by which the parties must have executed their contractual obligations, when the funds become due). The Escrow Dapp contains a feature that asks each party whether the other fully complied with the contract. If the parties answer in the affirmative, then Kleros releases the funds held in escrow to the receiving party. If, however, a party answers in the negative, then in order to trigger the arbitration mechanism and have the dispute referred to a Kleros jury, the parties need to pay the arbitration fee and the corresponding gas fee. The arbitration fee is the payment Kleros jurors receive for rendering a coherent (majority) decision in the dispute; it is reserved only for coherent jurors, and incoherent jurors receive no portion of it. Both parties must pay the arbitration fee by a certain deadline; otherwise, the non-paying party will automatically lose the dispute. While the arbitration fee is initially paid by both parties to trigger the arbitration process, the winning party is reimbursed their portion of the arbitration fee. Therefore, the arbitration fee is ultimately paid only by the losing party to the coherent jurors. One example of the same would be – • Escrow: To pay for an off-chain good or service, the funds can be put in a smart contract. After receiving the good or service, the buyer can unlock the funds to the seller. In case of dispute, Kleros can be used to have the smart contract either reimburse the buyer or pay the seller. Such a Kleros-based escrow system is already available For a much clear understanding, read (Kleros, a Decentralized Court System for the Internet) Within Kleros, arbitrators are referred to as "jurors." Each juror is mandated to stake a specific amount of PNK as an entry fee in a Kleros court. Each Kleros court has its own threshold for the minimum amount of PNK that must be staked to enter the pool. The platform based on the concept of game theory employs a proof of stake mechanism, where the likelihood of a juror being selected is determined by the quantity of PNK they stake. In essence, the more tokens a juror stakes, the higher their chances of being chosen. Decentralised justice systems typically maintain anonymity regarding the identity of jurors. This can be simplified as an online dispute resolution system, where parties present facts and evidence to anonymous jurors. These jurors base their decisions solely on the materials provided. Jurors must vote with the majority, or "coherent jurors," to retain their deposit tokens; otherwise, it get forfeited. The pool amount is then distributed among the coherent jurors as an award for their decision. This mechanism incentivises jurors to vote reasonably. IX. Decentralised Justice – Analogous To Traditional Arbitration? There are inherent challenges in categorising the decentralised justice system as a definitive form of arbitration. While it certainly serves as a notable alternative dispute resolution system, its similarities to traditional arbitration are subject to debate. To refer to decentralised justice as blockchain arbitration is misleading and confusing and should be avoided. In both contract law and the Arbitration Act, identifying the parties involved is crucial for contract enforcement, particularly in arbitration agreements. This is emphasised by the requirements of the Evidence Act, alongside sections 7(4)(a) And 8 of the Arbitration Act. However, in a system where parties are anonymous due to coding, determining the individuals or entities in a dispute, especially regarding breaches or terminations of smart contracts, becomes complex and poses challenges in adhering to specific sections of the Arbitration Act. Moreover, concerning the validity of arbitration agreements, the New York Convention on the Enforcement of Foreign Arbitral Awards , endorsed by 166 nations, mandates that such agreements must be in written form and signed by the parties. This criterion is also mirrored in the Arbitration Act of 1996. The question arises regarding whether digital code can be considered as documentation in court, particularly in cases where there is no valid written arbitration agreement, which remains a topic of contention. Although the UNCITRAL Model Law on International Commercial Arbitration permits electronic agreements, it does not explicitly address blockchain technology, leading to uncertainty in this area. Moreover, in the realm of international arbitration, the New York Convention only acknowledges the enforceability of foreign arbitral awards if they are rendered in a territory different from where their recognition and enforceability are sought. Since blockchain arbitration platforms operate as decentralised applications solely in a digital environment, they do not fall within the jurisdiction of any specific state territory. Consequently, their decisions lie outside the scope of the New York Convention and, by extension, the Arbitration and Conciliation Act 1996. Adding to the complexity, decisions rendered by platforms like Kleros, utilising crowd-sourcing dispute resolution systems, fail to meet the criteria of an arbitral award as defined in section 31 of the Arbitration Act of 1996. In simple terms, they lack the names and signatures of the parties or the arbitrators (jurors), are not documented in writing (as mentioned earlier), and crucially, do not designate a seat of arbitration. Finally, it's essential for parties to receive copies of awards signed by the arbitrators. However, in blockchain arbitration, jurors cannot sign the award due to their anonymity, resulting in parties being unable to receive signed copies of the awards. Furthermore, the post-arbitral proceedings, which are considered pivotal in arbitration as they afford parties the opportunity to challenge awards in court if they are deemed inadequately reasoned or arbitrary, do not apply to decisions rendered by platforms like Kleros. Attention is drawn to Sections 33 and 34 of the Arbitration Act, which addresses the correction and interpretation of arbitral awards, including the possibility of making additional awards and applications for setting aside such awards. Under the blockchain regime, once a decision is rendered, the smart contract triggers the actions it is programmed to perform. Importantly, this mechanism leaves no room for modifying, correcting, or interpreting such awards as outlined in Section 33 of the Arbitration Act, as the execution of the contract takes precedence over any challenges. Additionally, the automated execution of smart contracts concerning the arbitral award precludes the possibility of setting aside the award if either party wishes to contest it. X. Hybrid Awards – A Way Forward for Blockchain Arbitration in India? Amidst the pile of challenges faced by the notion of blockchain arbitration, a significant development occurred in September 2020 when a hybrid award was rendered by a Mexican Court . The court successfully integrated a decision rendered by the Kleros platform into an arbitral award, deeming it valid. However, it is pertinent to mention that in the Mexican Kleros case, the arbitration agreement in question was a formal, written agreement, and the agreement did not specify that Kleros should arbitrate the dispute; rather, it designated an arbitrator to arbitrate the dispute. The arbitrator was then tasked with drafting a procedural order containing relevant aspects of the controversy, parties' positions and arguments, and supporting evidence before referring the dispute to Kleros. Additionally, the agreement stipulated that the Kleros decision should be "incorporated" into the arbitrator's decision, emphasising that the award, not the decision, constituted the definitive resolution of the dispute. Consequently, the court did not consider the jurors as arbitrators, and the sole arbitrator's signature was deemed sufficient for the award's validity. Therefore, the decision formed part of the arbitration award, demonstrating that the conventional arbitration procedure addressed the flaws that were associated with the decentralised justice decision. As a result, the Mexican court did not validate decentralised justice proceedings but instead relied on the traditional award, which utilised jurors to make the final decision. This decision underscores the principle of parties' autonomy and their freedom to direct arbitrators in resolving their disputes. The approach taken in Mexico demonstrates a convergence between a domestic legal system and blockchain arbitration, ensuring adherence to the existing lex arbitri. In the Indian legal framework, we've discussed the potential hurdles regarding blockchain arbitration. However, to overcome these challenges and capitalise on platforms like Kleros, Hybrid Awards can offer a solution. It's important to note that the cornerstone of Arbitration, Party Autonomy, has been acknowledged by Indian Courts as "the brooding and guiding spirit of arbitration." it is also enshrined under section 19, which provides that it is for parties to decide what procedure will be followed by the arbitral tribunal.   Furthermore, this concept has been elevated to such an extent that in the Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2016) 4 SCC 126 judgment, the Supreme Court affirmed that parties are free to select the governing law for the substantive aspect of the dispute. In fact, parties can even opt to settle. Hencer dispute through unconventional means like a chess game or coin toss, with the arbitrator serving as a referee, as long as it doesn't violate national public policy. Hence, there's every reason for parties to opt for blockchain arbitration platforms to resolve disputes, with the arbitrator subsequently incorporating the outcome into the arbitral award. XI. Conclusion Upon thorough analysis, it can be argued that the integration of blockchain technology and smart contracts into the realm of arbitration is inevitable. It's only a matter of time before large corporations start including clauses for blockchain arbitration in their arbitration agreements. However, the current operational model of blockchain arbitration, such as decentralised justice or hybrid awards, fails to fully harness the true benefits of blockchain technology. Decentralised justice, as discussed above, is based on game theory principles and operates in a way that allows the juror who stakes the highest amount of money to adjudicate the matter. In the current landscape, there is a legitimate concern about the potential for companies to influence outcomes by purchasing jurors and tampering with the decisions rendered. The risk of companies paying off jurors to stake high amounts and secure the opportunity to judge a matter, thereby rendering biased judgments, poses a significant and plausible threat. Moreover, hybrid awards represent the primary method to integrate blockchain technology into the Indian legal framework, yet they come with their drawbacks. To begin with, courts are not obligated to uphold decisions made by platform jurors like Kleros, and they may reject the incorporation of such decisions. This rejection can result in wasted resources, including time and money. While this aspect serves to protect the rights of parties, it simultaneously undermines the advantages offered by platforms like Kleros, rendering them potentially redundant. XII.  Suggestion – A New Approach Integrating blockchain technology with arbitration presents challenges beyond the legal paradigm as well, such as issues of cost, time, and decision accuracy. While decentralised justice platforms offer enhanced security and relative efficiency in facilitating the arbitration processes, they do not fully address these residual concerns. Therefore, the amalgamation of artificial intelligence (AI) into blockchain arbitration presents a compelling opportunity to further enhance the efficiency, accuracy, and effectiveness of blockchain dispute resolution in the context of smart contracts. 1.  AI-Enhanced Smart Contracts – Reducing Cost: The author proposes integrating AI more comprehensively with smart contracts, extending beyond basic document analysis because AI systems like Kira can efficiently read contracts, highlight crucial terms, and perform rapid due diligence, significantly reducing the time spent on contract review . While not decision-making tools themselves, these AI systems excel in contract comprehension and analysis, establishing a foundation for more dynamic and responsive agreements. This integration has the potential to reduce ambiguities and significantly decrease the cost and time required for contract review as compared to manual methods. 2. AI Arbitration Assistants – Reducing Time and Increasing Accuracy: The author proposes developing AI arbitration assistants tailored for blockchain environments. These systems would identify critical issues within disputes, analyse relevant precedents from past blockchain transactions and arbitrations, and propose potential pathways based on previous case outcomes and legal principles. A pertinent example of such technology is ROSS Intelligence , a research platform for laws and jurisprudence that offers more intuitive and efficient searches compared to traditional platforms like Westlaw or LexisNexis, SCC Online & Manupatra. While ROSS cannot settle disputes autonomously, it excels at quickly finding relevant laws, cases, and responses to legal queries, providing explanations for its reasoning. By leveraging AI assistants like ROSS in blockchain arbitration, parties could significantly reduce research time for argument preparation. When provided with the right data, AI systems can quickly offer legal precedents to jurors, ensuring that all relevant information is available for the jurors to make their decisions. This could potentially improve the accuracy, integrity and efficiency of the arbitration process. 3. Predictive Analytics for Arbitration Outcomes: The author suggests developing an AI tool for blockchain arbitration modelled after existing systems that predict court decisions. This AI would analyse past arbitration decisions within the blockchain ecosystem to predict potential outcomes. Upon submission of a dispute, the AI would review the facts and evidence, search for similar cases in its database, and provide a reference award. Jurors of the blockchain space could then use this reference to guide their decisions, potentially reducing bias. A comparable AI model for U.S. Supreme Court predictions has achieved 70.2% accuracy in case outcomes and 71.9% accuracy in individual justice votes. [2] 4. Hybrid Human-AI Arbitration Model: To address concerns about the limitations of AI in understanding subjective intent and complex human factors, the author proposes a hybrid model that combines AI capabilities with human oversight. In this approach: a) AI systems would handle initial analysis, evidence gathering, and preliminary assessments; b) Human arbitrators would review the AI's findings, conduct further inquiries if necessary, and make the final decision; c) The AI system would continuously learn from human arbitrators' decisions, improving its accuracy over time. [1] He is a fifth-year student currently pursuing the B.A LL.B (Hons.) programme at Dr Ram Manohar Lohiya National Law University, Lucknow. [2] A General Approach for Predicting the Behavior of the Supreme Court of the United States, Daniel Martin Katz, Michael J. Bommarito, and Josh Blackman.

Aryaman Setia [i] Introduction The inauguration of the Arbitration Bar of India (“ABI”) on May 11, 2024 has raised significant expectations and is anticipated to enhance efforts toward establishing India as a global arbitration hub. The ABI aims to foster a dynamic community for learning, networking, and knowledge exchange among arbitration practitioners. Additionally, it seeks to address issues of gender diversity and advocate for legislative changes to streamline the arbitration process in India. Various distinguished legal professionals such as Mr. Fali S. Nariman and Hon’ble Justice Hima Kohli have emphasized the necessity of a specialized arbitration bar in India. The ABI is poised to play a crucial role in addressing existing gaps in institutional arbitration within the country. In view of this noteworthy development, this article aims to explore the specific lacuna in institutional arbitration of lack of full-time and dedicated arbitration lawyers and discusses the role of the ABI in addressing the issue. Lapse in Institutional Arbitration in India: Lack of full-time dedicated arbitration lawyers Institutional arbitration in India suffers some major lacunae which has hindered India’s progress in its aim of becoming a global Arbitration Hub and compete with institutions such as Singapore International Arbitration Centre (SIAC) and Hong Kong International Arbitration Centre (HKIAC). The primary factor contributing to the low adoption of institutional arbitration in India is the failure of domestic arbitral institutions to consistently deliver a reasonable standard of service to users. Users of institutional arbitration managed by domestic arbitral institutes have not experienced any significant benefits over ad-hoc arbitration . Justice B.N. Srikrishna committee also found a shortcoming in the domestic institutional arbitration framework of India in the form of lack of proper management and administration in arbitral institutes since they are not managed by people adequately trained in arbitration. The committee in its report observes that inadequate legal expertise and lack of exposure to best legal practices in arbitrations hurt the confidence of parties in arbitral institutes in India. One of the more glaring issues is the absence of dedicated full-time arbitration lawyers . Often, legal practitioners prioritize court matters over arbitration, scheduling arbitration sessions only after court hours. Additionally, they may request an adjournment when court hearings overlap with arbitration sessions, resulting in arbitrations being scheduled only when they have no court obligations. Similarly, some arbitrators, who are concurrently practicing lawyers, are unable to allocate adequate time to arbitration proceedings. This underscores the need for full-time arbitration lawyers and arbitrators, who can commit sufficient time to arbitration, thereby preventing delays in the process. Need for a Specialized Bar: Views The need for specialized bar for arbitration in India has been expressed by distinguished legal professionals at various occasions. Absence of an exclusive Arbitration Bar , as pointed out by Mr. Fali S. Nariman, was one of the significant reasons of the failure of Arbitration and Conciliation Act, 1996 to actualize. An exclusive arbitration bar consisting of set of lawyers and experts who regularly practice and plead before arbitrators will help speed up proceedings and avoid delays. This is does not, however, imply that the lawyers who appear before the courts are ineligible to become the members, instead, it implies that practitioners who have experience and an inclination towards the field of arbitration should form a specialized bar. In the light of this, membership of ABI is open to legal professionals, arbitration enthusiasts, independent experts, academics and other ADR service providers with relevant experience. The High-Level Committee headed by retired Supreme Court Justice B.N. Srikrishna also emphasized the need for creation of a specialized arbitration bar. Building upon the report, the latest report by the Expert Committee headed by T.K. Vishwanathan has also urged that arbitration would have to be supported by a dedicated bar comprising of professionals competent to proficiently conduct such arbitration. Further, in an event hosted by International Arbitration and Mediation Centre, Hyderabad (“IAMC”), Hon’ble Justice Hima Kohli emphasized the prominence of arbitration institutions in India as well as globally points towards the need for evolving a specialized arbitration bar which comprises of experts and legal practitioners dedicated to arbitration. She observed that arbitration will become the primary mode of dispute resolution when this specialized bar will work along with leading arbitration institutions. She further observed that it will attract fresh talent and call for changes in existing apparatus such as specialized Arbitral Tribunals at High Courts and District levels. Regular workshops and training sessions will streamline every facet of the arbitration process. At a different occasion, Justice Kohli stated : “A specialized arbitration bar, particularly in India, will promote a cultural shift in the legal community positioning arbitration as a niche field of expertise.”   Present context Commenting on the goals of a newly formed bar, Gourab Banerji, President of the ABI, listed its goals as to “ promote excellence, professionalism, ethics and promote arbitration nationally and internationally ”. Further goals include increasing the pool of young arbitrators and providing networking opportunities. This appears to be in consonance with views of Justice Kohli and Mr. Nariman. Further, Mr. Tushar Mehta, expressed his belief that ABI is a pivotal step towards standardizing the ever-growing practice of arbitration in India. He further expressed his hope that ABI will cultivate a dedicated cadre of professionals who are not only expertly trained in the substantive and procedural dimensions of arbitration, but are also deeply committed to principles of consistency, professionalism and ethics. ABI and potential impact on the specific lacuna in institutional arbitration The lack of full-time, dedicated practitioners specifically trained in arbitration hinders India's progress as a global arbitration hub. Recognizing the insights of distinguished legal professionals, including members of the ABI, the ABI aims to provide essential development opportunities in the form of training programs, seminars and conferences to promote continuous professional development among arbitration practitioners. This initiative seeks to attract and develop young legal talent in this specialized field. The members of ABI are further provided access to opportunities for networking, professional development programmes, etc. The role of ABI, as Gourab Banerji has articulated, is not to create or replace an arbitral institution but to enhance their operations by supplying qualified human capital . The development of an arbitration bar that is appropriately trained in the niche of arbitration and its aspects and who appear regularly before the arbitral tribunals is essential for the growth of institutional arbitration in India . With this perspective, it is evident that ABI is established to address the current gaps in institutional arbitration in India, thereby strengthening efforts to position India as a leading centre for arbitration globally. Advantageous measures to be taken by ABI The following measures, the author believes, would be advantageous for the ABI in its role as an incubator of arbitration lawyers: 1. Accreditation of arbitration lawyers: In order to bolster the institutional arbitration landscape in India, accreditation of arbitration lawyers would go a long way. Collaboration with institutes such as Chartered Institute of Arbitrators (“CIArb”) can be done by various arbitral institutes, law firms and law schools to provide training workshops and courses aimed at advocates with an interest in arbitration, which may be further complemented by conducting an examination upon completion of requisite training. While appearing for examination may not be mandatory for appearing in an arbitration matter, upon completion of such course and training, an advocate may be registered on a list of arbitration practitioners to be maintained by the ABI. This would serve as an assurance to the general public that the advocate possesses a minimum level of skills and knowledge in arbitration law and practice. To remain on the roll, the advocate may be required to fulfil Continuing Professional Development (CPD) requirements. In addition, a criterion can be formed, similar to competence framework maintained by CIArb , which would assess competences such as process and procedure competences, people and communication competences and outcome competences and accordingly grade the practitioners. This grading would promote excellence in the field. 2. Code of Ethics: ABI seeks to develop a code of ethics for arbitration lawyers. Such codes should be on lines of the Arbitration Committee of International Bar Association (“IBA”) and its ‘ Guidelines on Party Representation in International Arbitration (2013) ’. The Guidelines have been produced by IBA for counsel conduct in international arbitration. They are inspired by the principles that counsels and party representatives should act with integrity and honesty and should not engage in activities designed to produce unnecessary delay or expense, including “guerrilla” tactics aimed at obstructing the arbitral proceedings. It is suggested that ABI form its guidelines both in domestic and international spheres of arbitrations to bolster confidence in arbitration process in India. Conclusion The ABI is positioned to significantly transform India’s arbitration framework. By supplying well-trained human capital, ABI aims to address the current deficiency of practitioners specializing in arbitration and dedicated to its full-time practice. Moreover, initiatives such as the accreditation of practitioners and the establishment of a comprehensive code of ethics are expected to enhance the quality of arbitration professionals and mitigate unnecessary delays. Formation of ABI, along with adoption of the measures will collectively enhance the institutional arbitration landscape in India. [i] Aryaman Setia, a 2nd year student at UILS, Panjab University, Chandigarh. The author may be contact at aryamansetia1@gmail.com .

*Aparna Tiwari Introduction Arbitration has emerged as a vital pillar in the modern landscape of dispute resolution, offering a sophisticated and effective alternative to litigation for resolving commercial disputes. With overburdened court systems and increasingly complex commercial disagreements, arbitration provides an efficient and fair means of achieving resolutions, ultimately lessening the burden on courts and fostering a more efficient business environment.  Justice B.N. Agrawal of the Supreme Court of India, aptly captured the essence of arbitration, that it is not only a speedy but also an inexpensive and efficacious mode of resolving disputes. [1] As artificial intelligence (AI) continues to revolutionize industries, its influence is reaching arbitration as well. The Supreme Court of India has been using the Supreme Court Vidhik Anuvaad Software ( SUVAS ), an AI-powered translation tool, to translate English legal documents into nine local languages and vice versa. SUVAS has proven to be an efficient tool in the Court's efforts to introduce AI into the legal domain and increase access to justice by making judgments available in regional languages. AI has the potential to streamline processes such as document review and analysis, contract analysis, and more. In India, while NITI Aayog's ODR report (Designing the Future of Dispute Resolution (the ODR Policy Plan for India) 2021)  acknowledges AI's potential, clear regulations for its use in arbitration are still lacking. This highlights the need for a balanced approach that harnesses AI's benefits while addressing legal and ethical concerns.   The Utilization of AI in the Arbitration Process The integration of Artificial Intelligence (AI) in the arbitral process represents a transformative leap, enhancing efficiency and accuracy through automated document review, predictive analytics, and online dispute resolution platforms. This confluence of technology and law has the potential to ensure more informed and objective decision-making. However, the current arbitral process can be influenced by human biases, while AI systems are not infallible and require transparency, fairness, and accountability measures. Successful integration of AI in arbitration necessitates clear regulations and guidelines, as well as a shared understanding among stakeholders. By harnessing the power of AI while addressing its challenges, the arbitration community can strive for more informed, fair, and effective dispute resolution. In this analysis, we will delve into these applications in detail to gain a better outlook and understanding of how AI is reshaping the arbitration landscape. AI tools like Relativity and Brainspace can streamline document review and production by automating the process, reducing the time and effort required for manual review and analysis. Additionally, AI-powered tools such as Lex Machina and Solomonic analyze can analyze vast amounts of historical arbitration data to predict potential case outcomes, optimize arbitrator selection, and provide accurate time and cost estimations. These advancements can help parties make more informed decisions, reduce uncertainty, and improve the overall efficiency and fairness of the arbitration process. AI can also assist in drafting arbitration awards by generating preliminary drafts based on the evidence and legal arguments presented. Tools like LexPredict use natural language processing (NLP) to summarize case facts, extract relevant legal principles, and suggest wording for the awards. This can save arbitrators significant time and ensure consistency in award drafting. AI can further enhance compliance and due diligence by ensuring adherence to regulations and identifying potential conflicts of interest. In data security, AI detects and prevents breaches, safeguarding sensitive information. Additionally, decision support systems analyze evidence and identify patterns to aid arbitrators. Natural language processing (NLP) improves document summarization and written communication, while virtual arbitrators assist in negotiations and fact-finding. The use of AI in arbitration can also reduce the risk of human error , which is a significant concern in the legal profession. AI can automate tedious tasks like analyzing vast amounts of documents, contracts, and other legal materials, reducing the likelihood of errors and improving the overall accuracy of the arbitration process. Moreover, AI can assist in the selection of arbitrators by analyzing their past decisions, tendencies, and expertise. This can help parties make more informed decisions about who to appoint as arbitrators, ensuring that the arbitration process is fair and impartial. The integration of AI in arbitration also presents opportunities for dispute prevention . AI can be used for contract management and execution, mapping out potential risks, and even flagging contract breaches. This can help parties avoid or mitigate delay and disruption claims, reducing the need for arbitration in the first place. The adoption of AI in arbitration marks a pivotal moment, revolutionizing the field by merging cutting-edge technology with established legal practices to deliver more enlightened and impartial outcomes. As the arbitration community embraces this transformative shift, it stands poised to navigate the challenges and capitalize on the opportunities presented by AI, ultimately ushering in a new era of enhanced efficiency, fairness, and effectiveness in dispute resolution. Legal and Ethical Challenges AI assisted arbitration introduces significant legal and ethical challenges that must be addressed to safeguard the fairness and integrity of the arbitration process. Algorithmic bias, the opaque nature of AI decision-making, and the potential displacement of human arbitrators amongst others are some of the critical concerns that require careful consideration. This section explores the above- mentioned challenges in depth, drawing on the Silicon Valley Arbitration & Mediation Center ( SVAMC ) and providing concrete examples to illustrate the complexities involved. Algorithmic Bias in AI-Driven Arbitration: - Significant concerns regarding algorithmic bias from the training data used to develop these systems. This data can embed existing biases prevalent in historical arbitration decisions, perpetuating discrimination based on factors such as gender, race, or nationality. AI models, when trained on past arbitration data, may inherit and amplify these biases, reflecting historical disparities in arbitrator selections, decision-making patterns, and outcomes. SVAMC Guidelines caution against the risk of AI tools inadvertently perpetuating stereotypes, highlighting concerns of characterizing arbitrators as "male, pale, and stale." For instance, if historical data reveals a trend of favorable rulings towards certain demographics, AI systems may learn and replicate these patterns, thus disadvantaging underrepresented groups. Parties and arbitrators must critically assess AI tools to identify and mitigate such biases, ensuring that AI-driven arbitration remains fair and impartial. This entails regular audits, bias detection mechanisms, and a diverse dataset to train AI models. Transparency and Explainability in AI-Driven Arbitration: - The opaque nature of many AI algorithms, often described as " black boxes ," presents significant challenges in maintaining transparency and explainability in arbitration. This opacity can obscure the reasoning behind AI-generated decisions, complicating efforts to evaluate the fairness and validity of outcomes. A lack of transparency threatens the fundamental principles of due process in arbitration, such as the right to be heard and the ability to contest decisions. For example, in an arbitration model where AI provides award recommendations but the final decision rests with a human arbitrator but the ai award is without a clear rationale, parties may find it challenging to understand the decision's basis or to identify potential errors. The SVAMC AI Guidelines emphasize the necessity for "appropriate disclosure of the use of AI and the ability to understand and assess the AI tool's decision-making process." Ensuring transparency involves not only disclosing the AI's role in decision-making but also providing comprehensible explanations of its processes and outcomes. This can be achieved through techniques like explainable AI (XAI), which aims to make AI's operations more interpretable to humans. Human Arbitrator Displacement in AI-Driven Arbitration: - The increasing reliance on AI in arbitration raises concerns about the potential displacement of human arbitrators. While AI can enhance efficiency and accuracy in tasks such as document review and preliminary analysis, it should not supplant human judgment and decision-making. Preserving human oversight is crucial to maintaining the integrity and fairness of the arbitration process. The SVAMC AI Guidelines advocate that AI should not be used as the sole basis for decision-making without human input or without assessing the AI tool's selection critically and independently. This principle underscores the importance of human arbitrators' ability to override AI-generated decisions when necessary. For example, in complex cases involving nuanced legal interpretation or ethical considerations, human arbitrators are indispensable for ensuring that decisions are just and equitable. Addressing these challenges is crucial to safeguarding the fairness and integrity of the arbitration process, ensuring that AI tools are used responsibly and justly in dispute resolution. The Regulatory Gap The Arbitration and Conciliation Act 1996, (“Arbitration Act”), which serves as the foundational legislation for arbitration in India, does not specifically address the utilization of AI technologies in arbitration processes. This omission creates uncertainty regarding the application and enforcement of AI-assisted arbitral awards under current legal provisions. Despite the efforts by India's apex public policy think tank, NITI Aayog, to release guidelines for the responsible development and deployment of AI, these guidelines lack the force of law and do not constitute binding regulations. Consequently, there exists a legislative void wherein AI-specific regulatory measures, including those governing arbitration, are yet to be formalized. This regulatory gap contributes to potential legal ambiguities and challenges, particularly concerning issues such as algorithmic bias, transparency in decision-making processes, and the appropriate role of human arbitrators in AI-assisted arbitrators as discussed above. The evolving regulatory landscape further exacerbates these challenges. While the NITI Aayog provides guidance, the absence of a comprehensive legal framework tailored to AI in arbitration leaves stakeholders vulnerable to inconsistencies and uncertainties due to inconsistent rules across countries.  The current legal framework's limitations become evident in scenarios involving cross-jurisdictional issues or interactions with other regulatory regimes, such as the Foreign Exchange Management Act (FEMA), which may impact the enforceability of arbitral awards influenced by AI technologies. Even helpful guidance isn't enough. Existing arbitration laws are outdated for AI, creating loopholes. Updating them and balancing strictness (like EU fines) with encouraging innovation are big hurdles. Regulatory competition between countries will make things even more confusing. Until clear and consistent regulations are established, AI's potential in arbitration will be limited. This requires significant effort from governments and institutions to bridge the gap between current laws and the realities of AI. Along with India, jurisdictions worldwide are in a regulatory tug-of-war with AI in arbitration. The EU's AI Act represents a firm stance with strict compliance measures, while the US takes a wait-and-see approach, leaving it to individual states. Meanwhile, UNCITRAL attempts to forge a global path with guidelines. Arbitral institutions, caught in the crossfire, cautiously leverage AI for tasks but shy away from AI adjudication due to enforceability concerns and potential conflicts with existing laws. Bridging the Regulatory Gap To navigate this complex landscape, a comprehensive legal framework is essential. This framework must address the validation and oversight of AI algorithms, ensure robust data protection, and mitigate algorithmic biases. By drawing on global best practices such as the EU GDPR and AI Act, and implementing stringent regulations and human oversight, India can establish a responsible and ethical approach to AI deployment in arbitration. Amendment of Arbitration Laws: - Amend the Arbitration Act, to explicitly incorporate provisions addressing the validation and oversight of AI algorithms used in arbitration. This includes mandates for transparency, explainability, and mechanisms for maintaining human oversight throughout the arbitral process. Regulate Algorithmic Bias and Fairness: - India should adopt regulations that mandate the testing of AI systems for biases, ensuring fairness and impartiality in arbitration outcomes. This can be achieved by integrating provisions similar to AAA Guidelines (AAA Guidelines for the Use of Artificial Intelligence in Arbitration, 2024), Section 3, and the SIAC AI Guidelines (Singapore International Arbitration Centre AI Guidelines), Guideline 3, which focus on addressing algorithmic bias in AI-assisted arbitration. They emphasize the importance of testing AI systems to identify and mitigate biases that could lead to unfair outcomes. Thereby upholding the principles of justice and equality in legal proceedings. Ensure Transparency and Explainability: - India should implement regulations that mandate transparency and explainability in AI-assisted arbitration, akin to the EU AI Act (Regulation (EU) 2021/XXX on Artificial Intelligence), Article 52, and the AAA Guidelines (AAA Guidelines for the Use of Artificial Intelligence in Arbitration, 2024), Section 5. This involves disclosing the use of AI in arbitration and ensuring that the decision-making process of AI systems is understandable to all parties involved. Such transparency is essential for procedural fairness and helps build trust in AI-driven arbitration. Maintain Human Oversight and Accountability: - India should emphasize human oversight in AI-assisted arbitration by adopting regulations similar to those in the Section 7 of AAA Guidelines , Guideline 7 of the   SIAC AI Guidelines (Singapore International Arbitration Centre AI Guidelines), Guideline 7. This involves ensuring that human arbitrators have the ultimate authority to intervene in AI-generated decisions. Additionally, adopting provisions from the EU AI Act (Regulation (EU) 2021/XXX on Artificial Intelligence), Article 9, which emphasize human oversight in high-risk AI systems, can further enhance accountability and safeguard the integrity of arbitration proceedings. Independent Review Mechanism: India is advised to create a special review system for AI-assisted arbitration. This independent body would have AI, legal, and ethics experts to assess fairness, transparency, and compliance with ethical guidelines. It could recommend remedies like re-hearings or award annulment, with its decisions being binding. This differs from existing mechanisms by focusing on AI, having specialized members, being independent, having stronger remedial powers, and prioritizing transparency, aligning with recommendations from the SVAMC guidelines . This mechanism would provide an essential layer of accountability and ensure that decisions made with AI assistance are fair and impartial. India can unlock the benefits of AI-powered arbitration by building a robust legal framework. This framework should prioritize responsible AI use through validation, data protection, and bias mitigation. Learning from global regulations like the EU's GDPR and AI Act, India can establish ethical guidelines for AI in arbitration. This can be achieved by amending existing laws, regulating bias, ensuring transparency, maintaining human oversight, and creating a specialized review body. These steps will ensure AI is used fairly and ethically, fostering trust and innovation in India's arbitration landscape. Conclusion The integration of artificial intelligence (AI) into arbitration processes holds the promise of significantly enhancing efficiency, expediency, and fairness in dispute resolution, thereby fulfilling the core objective of arbitration: to resolve disputes swiftly and effectively. By leveraging AI tools for document review, case prediction, and arbitrator selection, arbitration can streamline procedures and reduce the time and resources traditionally required. However, these advancements must be accompanied by robust regulatory frameworks that ensure transparency, mitigate algorithmic biases, and maintain human oversight. Drawing on global best practices, India has the opportunity to enact tailored legislation that not only facilitates responsible AI deployment in arbitration but also fosters confidence in the integrity of arbitration outcomes. Such proactive measures will not only modernize the arbitration landscape but also uphold justice by providing quicker and more efficient resolutions to disputes. *4th year law student at Dr. Ram Manohar Lohiya National Law University, Lucknow. [1] Bharat Aluminium Company vs Kaiser Aluminum Technical Services Inc, (2012) 9 SCC 552.

Shambhavi & Satyam* I. INTRODUCTION Party autonomy is one of the basic tenets of arbitration as an Alternate Dispute Resolution (“ ADR ”) mechanism. It fundamentally means the freedom of contract .  Along with the choice of the applicable law, it also incorporates the liberty to choose the presiding tribunal, the place, the language, and the procedure of the arbitration. This is to facilitate the smooth functioning of the tribunal and expedite the dispute resolution process.  The principle of party autonomy has its advantages and disadvantages. A lack of legal literacy among the parties and their appointed draftsmen might lead to the drafting of pathological arbitration clauses, which can lead to chaos and prolong arbitration proceedings. Pathological clauses are those with inherent defects that can impede the smooth advancement of arbitration proceedings .   They create an unnecessary burden for courts because they provide an easy avenue for appeals and challenges to arbitral awards and proceedings. However, pathology in the arbitration clause or agreement, will not render it invalid by itself. Courts tend to prefer an interpretation in favor of the arbitration proceedings. There have been many instances where courts have had a reconciliatory approach toward the interpretation of such inconsistent arbitration clauses. Examples would include the case of  Fiona Trust & Holding Corp v Privalov , which established the Fiona Trust doctrine, that has been used to construct conflicting arbitration clauses, based on the presumption that rational parties would want their disputes to be adjudicated under a single forum. This doctrine has been used to harmonize inconsistencies within dispute resolution clauses in cases such as Melford Capital Partners (Holdings) LLP l v Wingfield Digby , directing the parties to approach an arbitral tribunal. One kind of pathology that arises is “hybrid arbitration clauses (institutional)”. Hybrid institutional arbitration clauses are situations in which parties choose one arbitral institution to administer a case but under the rules of another arbitral institution . An example of the same would be– “The arbitration proceedings will be carried under the supervision of the Delhi Arbitration Centre, by the rules of the Singapore International Arbitration Centre (“ SIAC ”).” Hybrid clauses end up creating an adverse situation for the administering institution, wherein they have to abide by the rules of a different institution, for which they lack adequate machinery. As stated earlier, in most cases, courts have upheld the parties’ intent to arbitrate. Notable examples would be -  Insigma Technology Co Ltd. v. Alstom Technology Ltd ., Flashbird v. Compagnie de Sécurité Privée et Industrielle , and Value Advisory Services v. ZTE Corp , which will be discussed in the upcoming section. Although words of such clauses are constructed liberally to give way to arbitration, we cannot turn a blind eye to the problems caused in terms of certainty and litigiousness of the proceedings when they are implemented. While such clauses can be practically implemented, it has been held that there are manifest complications and disadvantages in doing so. Henceforth, the authors propose that the doctrine of kompetenz-kompetenz can mitigate the anomalous nature of such clauses and can benefit both the court and the arbitral institution, as it would allow the tribunal itself to decide which rules are best applicable to the proceedings. The powers of the arbitral tribunal go beyond deciding upon its jurisdiction . The Supreme Court in India has determined that when the existence of an arbitration agreement is not disputed, all jurisdictional issues are to be left under the tribunal’s authority. The article begins with the examination of landmark cases concerning hybrid arbitration clauses, and the ratio which has been upheld by courts of different jurisdictions ( Section II ). Thereafter, the authors will analyze the difficulties caused by such clauses, including the application of the doctrine of kompetenz-kompetenz ( Section III ), and end with concluding remarks ( Section IV ). The aim is to show how the doctrine of kompetenz-kompetenz can prove itself as an effective solution to the problems caused by such clauses and reduce the burden of courts and institutions. II. PRECEDENTIAL ASPECT OF HYBRID ARBITRATION CLAUSES The evolution of arbitral jurisprudence has given rise to jurisdictional disputes premised on hybrid arbitration clauses. Despite the obstacles arising in its arbitrability, courts and Tribunals have focused more on the operable and enforceable parts of the same. [i] The authors in this section aim to elaborate on the same with the help of domestic and international case-laws. The case of Insigma Technology Co. Ltd v. Alstom Technology Ltd (“ Insigma ”), followed a dispute between Insigma and Alstom Technologies that led to an objection to the arbitration clause in their agreement. Insigma challenged that the arbitration should have been filed with the International Chamber of Commerce (“ ICC ”) instead of SIAC. The court found that the parties had agreed to ad hoc arbitration by choosing a mix of regulations, and SIAC was able to supply the necessary actors to make the ICC rules workable. The case highlights the challenges of hybrid arbitration clauses, where parties try to benefit from the cost differences between different arbitration institutions, but end up spending more on jurisdictional disputes [ii] . The court's decision upholds the parties' agreement and the ability of SIAC to administer the arbitration under the ICC rules. In the case of Russian Federation v. I.M Badprim, SRL (“ Svea Appeal ”), Badprim, a Moldovan company, and the Russian Federation (Customs Office) agreed on the construction of a border crossing post. The arbitration clause designated the Arbitration Institute of the Stockholm Chamber of Commerce (“ SCC ”) to administer disputes under ICC rules. The Russian Federation contested jurisdiction due to the SCC's inability to fully comply with ICC rules. The Svea Court of Appeal upheld the clause, emphasizing the intent to resolve disputes at the SCC and the SCC's adaptation of ICC rules. The court prioritized dispute resolution over technicalities, demonstrating a pragmatic approach to enforceability and operability despite partial invalidity.  In the case of Top Gains Minerals Macao Commercial Offshore Limited v. TL Resources Pte Ltd (“ Top Gains ”), t he Hong Kong court upheld the kompetenz-kompetenz principle in a dispute between Top Gains and TL Resources over a hybrid arbitration clause in their iron ore supply agreement. Despite the defendant's argument that the clause's reference to SIAC administration under ICC rules deprived the arbitral panel of jurisdiction, the court ruled that it was the tribunal, and not the court, that must determine the jurisdiction. The court deferred to the ICC's decision to register the case and left the final jurisdictional determination to the arbitral tribunal, in line with the kompetenz-kompetenz principle.  In one of the recent cases (“ HCCI ”), the Budapest Metropolitan Court upheld an arbitral tribunal's decision to enforce a pathological arbitration clause that referred disputes to the HCCI Arbitration Court while specifying the application of the ICC Rules. Despite the respondents' challenge that the two institutions could not coherently administer the proceedings, the court reasoned that the parties' clear intent to arbitrate should be preserved by severing the invalid portions and enforcing the remainder to the extent possible, even when the clause contains technical defects. This case exemplifies the courts' pragmatic approach towards interpreting pathological arbitration clauses, prioritizing the parties' agreement to arbitrate over the clause's technical flaws. In Flashbird v. Compagnie de Sécurité Privée et Industrielle (“ Flashbird ”) , The Supreme Court of Mauritius dismissed an appeal by Flashbird against an arbitral award that was raised on the premise of the appointment of arbitrators under ICC Rules and that arbitral procedure has not been followed according to the agreement. The court and the Privy Council upon dismissing the appeal, discussed different spheres of the drafting of hybrid clauses. Their observations were that the major obstacles are jurisdictional disputes and applicability of laws. The privy council was not supposed to rule on jurisdiction but they suggested the draftsmen to avoid any contradiction that may arise like in this case regarding the appointment of arbitrators under ICC rules. The jurisprudence in India has been arbitration-friendly. One such case was   Value Advisory Services v. ZTE Corporation (“ Value Advisory ”) . There was an agreement that provided for the settlement of disputes under ICC rules at SIAC. This could not happen because SIAC declined the request stating it would not be able to administer an arbitration under ICC rules. ZTE challenged the arbitration administered under the Secretariat of the ICC Court (ICC Secretariat). The court following the doctrine of severability upheld the clause and its arbitrability, and observed that a contract cannot completely be rendered void if one part is impossible to perform rather, the impossible part shall be severed from the main contract, and the rest of it shall be enforced. The arbitration friendly approach of enforcing hybrid clauses was also observed in the case of Centrotrade Minerals and Metals Inc. v. Hindustan Copper  Ltd . The case involved a contractual dispute over copper concentrate supply. The contract included a two-tier arbitration mechanism. Two arbitral awards were passed, both mutually destructive. The Supreme Court of India enforced the second award, bringing an end to the long-standing litigation. The Court held that the respondent did not participate in the arbitral proceedings and the foreign award must be enforced under the Arbitration and Conciliation Act, 1996. It also observed that the court does not prevent a two-tier arbitration clause and upheld the arbitrability of such a clause. The kompetenz-kompetenz principle has been validated by our Supreme Court in Uttarakhand Purv Sainik Kalyan Ltd. V. Northern Coal Field Ltd . The Division Bench emphasized on the role of tribunals in deciding their jurisdiction and upheld that the autonomy granted to them under the principle of  kompetenz-kompetenz should be rightfully followed. It observed that the principle aims at minimizing the judicial intervention in the arbitration process which is the exact reason why the ADR mechanism came into existence. III. TRIBUNAL AUTHORITY AND HYBRID CLAUSES – AN ANALYSIS The term ‘pathological clauses’ was coined by Frédéric Eisemann , Secretary General of the ICC Court of Arbitration and a law theorist. Eisenmann has set out four elements essential for an arbitration clause. [iii] These elements are – “(1) The first, which is common to all agreements, is to produce mandatory consequences for the parties, (2) The second, is to exclude the intervention of state courts in the settlement of the disputes, at least before the issuance of the award, (3) The third, is to give powers to the arbitrators to resolve the disputes likely to arise between the parties, (4) The fourth, is to permit the putting in place of a procedure leading under the best conditions of efficiency and rapidity to the rendering of an award that is susceptible of judicial enforcement.” Hybrid arbitration clauses are antithetical to the second and fourth elements. A perusal of the preceding section of the article shows how they have warranted interference from courts multiple times, even before the passage of the arbitral award. They create disputes related to jurisdiction, and end up being detrimental to the efficacy and rapidity of the entire proceeding. While some might argue that hybrid arbitration clauses can prove accommodative of the parties’ intention to include multiple institutional jurisdictions, it is very apparent that the costs of incorporating hybrid clauses are more than any potential benefits. [iv] The question that arises is whether the tenet of party autonomy can supersede the efficacy of arbitration, as well as the set rules in place by these institutions. Implementing the rules of a different arbitration institution translates to increased costs, ultimately borne by the parties. On top of this, there is a multiplicity of suits due to jurisdiction-related disputes, which again aggravates the costs incurred. The ICC Rules were amended post Insigma case, which states that only ICC Courts are vested with the power to conduct arbitrations by ICC Rules and that the parties’ agreement to arbitrate under ICC Rules amounts to their acceptance of ICC being the administrating body. [v] Nevertheless, there have been multiple instances of a contradictory application in arbitration agreements, as seen in the Svea Appeal, Top Gains, and Flashbird cases. The general trend with judicial decisions is to not disrupt arbitration proceedings. Earlier, SIAC followed the trend of preferring party autonomy over everything and has administered arbitrations under ICC Rules, as was seen in Insigma and another case of HKL v Rizq International. However, in the Indian case of Value Advisory Services , we saw that it was the SIAC’s refusal to tend to arbitration under foreign rules that compelled the parties to approach the ICC. The Delhi HC upheld the tribunal’s mandate by applying the doctrine of severability. This shows that institutions nowadays are refusing to administer hybrid arbitrations. It is the arbitral tribunal that has the ultimate jurisdiction over the case , as per the principle of kompetenz-kompetenz. It states that an arbitral tribunal is competent to decide upon its jurisdiction. This, in turn, empowers the tribunal to decide upon which rules it considers fit to abide by. There are examples of cases where the tribunal’s mandate, whether in favor of a hybrid arbitration or against it, has been upheld by the courts. In the recent HCCI and Flashbird cases, the tribunal’s decision to accommodate foreign rules within its framework to serve the parties’ interests, was upheld. Meanwhile, in the Top Gains case, the High Court of Hong Kong upheld the ICC tribunal’s decision to administer the arbitration without applying SIAC rules, following the principle of kompetenz-kompetenz. This very well shows the court’s deference towards this doctrine. Neither SIAC nor ICC was compelled to face the dilemma of applying the rules of a foreign institution. In the Svea Appeal case, the hybrid arbitration was allowed, because the institution of SCC agreed to do so. The SCC Board of Directors wrongly observed that the institution has the jurisdiction to “resolve the dispute”. They conveniently ignored that the tribunal is vested with such power and not the institution.  This stand of the SCC Board has been subject to criticism for invalidating one of the basic jurisprudential doctrines of arbitration. The widely accepted principle better known as competence-competence, is incorporated under Section 16 of the Arbitration and Conciliation Act 1996. The principle of minimum judicial interference has been affirmed in cases like Bhaven Construction v. Executive Engineer   and Deep Industries v. ONGC .   The Apex Court has also held that court interference should just be limited to ascertaining the existence of an arbitration agreement. This would automatically imply that the rest of the jurisdictional disputes are to be decided by the arbitral tribunal.  Party autonomy allows the parties to exercise their discretion in a wide manner, and decide everything from the seat of arbitration to applicable laws . The intention of parties is prime, and the same manifested through contractual provisions would prevail. Yet, if the same autonomy acts as an obstacle to the smoothness and efficiency of the arbitration proceedings, the tribunal’s powers will have to step in. While we have already observed the courts’ endorsement of the tribunal mandate, it would also be practicable to apply the same strategy when a case is brought up before courts at the referral stage of the proceedings. Instead of leaving this question to the convenience of the institutions, or judicial interpretation, letting the tribunal decide might help provide a definite solution as to resolving the anomaly caused by hybrid arbitration clauses. Once a dispute has been referred to a certain institution, the tribunal constituted by such institution can very well decide. Whenever the courts have upheld the performance of hybrid arbitration agreements, the application of unfamiliar rules became the tribunal’s burden. Application of kompetenz-kompetenz would sustain the proceedings’ independence from conventional dispute resolution fora. A more practical solution to the problems created by hybrid arbitration agreements would simply be better drafting,drafting of arbitration clauses needs to be viewed from the perspective of the parties who want an easy and amicable settlement. The clarity in the words should be given paramount importance to eliminate any chances of misinterpretation of laws applicable and jurisdiction in such clauses. The Clause should precisely mention the institution that will arbitrate the dispute and the applicable laws. If proper guidelines are followed and precautions are incorporated, it will have a two-fold impact - one would be streamlining the arbitration process, and the other would be non-intervention of court which would turn save time and money for the parties in dispute. Parties and their draftsmen should refrain from getting adventurous with their arbitration agreements. They should properly deliberate upon the suitable forum for adjudication of disputes and attempt to stick to such applicable laws that would be more suitable to these forums. A good draftsman or counsel with adequate experience in arbitration can prove very helpful. When it comes to using a format for drafting the clause or agreement, it would be prudent to stick to model or standard arbitration clause formats. Major arbitration institutions like the ICC, SIAC, LCIA, etc have their standard clauses which can be used if the parties intend to submit their dispute under these respective forums.   In any event, one has to be prepared for scenarios where hybrid clauses are agreed upon, thus resulting in questions regarding jurisdiction.  Amendment of ICC Rules did not help mitigate the frequency of this pathology in arbitration agreements. Therefore, it is better to leave the question to tribunals, while simultaneously discouraging such pathology in arbitration clauses. IV.  CONCLUSION Hybrid arbitration clauses have brought up a plethora of jurisdictional disputes in recent times. Although the disputes are administered and are enforceable it has become a drawn-out process because oftentimes litigation is preferred to reach a focal point in such disputes. The long-drawn-out procedure of law is always antithetical to the core idea of alternative dispute resolution. Hence, this sparks a conversation on the doctrine of kompetenz-kompetenz which means the tribunal is competent on its own to decide the jurisdiction. The above principle has been much talked about and the same has been elaborated upon through case laws. This principle should be applied universally and can be included in this aspect. Hybrid arbitration clauses have a lot of implications such as financial loss, delay caused, court interference, etc. Hybrid arbitration clauses should be avoided at all costs as they create a deadlock on the question of jurisdiction. As suggested previously, it all comes down to the drafting of arbitration clauses. It would be helpful to have a universal model guideline on the framing of arbitration clauses. Institution-specific guidelines and model clauses should be used by the framers to their advantage. Framers of commercial agreements must have this inherent intent to facilitate arbitration, and properly frame arbitration clauses with clarity on the applicable rules and administering institution. *Shambhavi & Satyam are law students at Chanakya National Law University, Patna. [i] Insigma Technologies V Alstom Technology Ltd [2009] 1 SLR 23. [ii] Jennifer Kirby, 'Insigma Technology Co. Ltd v. Alstom Technology Ltd: SIAC Can Administer Cases under the ICC Rules?!?', in William W. Park (ed), Arbitration International (OUP 2009). [iii] Frédéric Eisemann, La clause d’arbitrage Pathologique , in Commercial Arbitration Essays in Memoriam Eugenio Minoli (Torino: Unione Tipografico-editrice Torinese 1974). [iv] Jennifer Kirby, Insigma Technology Co. Ltd v. Alstom Technology Ltd: SIAC Can Administer Cases under the ICC Rules?!? ,  25 (3) OUP 319, (2009). [v] ICC Rules of Arbitration – art. 6(2) (2021).