Global Vantage: India’s Disputes Dilemma? The Need to Accelerate Arbitration

India’s justice system is facing growing pressure to shift disputes away from overburdened courts towards more efficient dispute resolution mechanisms. In response, there has been a push to strengthen its arbitration framework, endorsed by the Arbitration and Conciliation Act 1996 and its recent speed-focussed amendments designed to streamline the procedure and reduce delay. However, meaningful progress will rely on consistent enforcement and the willingness of parties and tribunals to embrace stricter deadlines.

As of January 2025, a staggering 50 million cases were pending before India’s courts, according to the 2025 India Justice Report. With only around 15 judges per million people, the strain on the judicial infrastructure is evident. Yet, even more significant are the procedural inefficiencies, frequent adjournments and bottlenecks which drastically prolong litigation. Given the scale of this congestion, the effective use of arbitration is essential for relieving pressure on India’s judicial system.

Intent to utilise Arbitration

India has shown a clear intent to promote arbitration as a primary mode of dispute resolution, both domestically and internationally. The establishment of the Mumbai International Arbitration Centre (MIAC) in 2016 and the India International Arbitration Centre (IIAC) in 2019 marks a shift toward greater structure of arbitration practice. These centres provide structured frameworks that ensure greater procedural discipline and adherence to statutory timelines compared to ad hoc tribunals. By strengthening arbitration, India not only aims to ease judicial congestion but also enhance its credibility as an efficient arbitration hub.

Importance of Arbitration

Lack of Specialisation

India lacks a specialist construction court akin to the UK’s Technology and Construction Court (TCC). A few states, such as Uttar Pradesh, have attempted to establish courts to deal with civil proceedings concerning specific performance of construction contracts. However, without a dedicated construction court, disputes do not fall before specialist judges with technical expertise, making inconsistent decisions, procedural inefficiency, and prolonged timelines all the more likely.

Infrastructure Growth and Disputes

India’s construction industry now ranks behind only the United States and China as the third largest in the world, accounting for approximately 4.7 % of global value. However, rapid growth has brought a consequential rise in disputes. According to Ashwani Awasthi, Managing Director of RICS South Asia, around USD 9–10 billion is currently tied up in construction disputes. Mega-projects such as the Mumbai – Ahmedabad High-Speed Rail Corridor, India’s first high-speed rail line, illustrates technological ambition but could also introduce further contractual complexity that fuels disputes, reinforcing the importance of efficient ADR mechanisms, if parties want a speedy resolution.

The Arbitration and Conciliation Act 1996

Direct Speed up provisions

The Arbitration and Conciliation Act 1996 (“the Act”) was introduced to consolidate and amend India’s law governing domestic and international arbitration. A central objective of the Act, particularly following its 2015 and 2019 amendments, is to establish a legislative backbone to speed up the arbitration process.

• Section 23(4) introduces a six-month statutory deadline from the date the arbitrator receives notice of appointment for completion of statements of claim and defence. By imposing this statutory deadline, the Act directly targets one of the most common sources of delay and ensures proceedings do not stagnate at the preliminary stage.
• Section 29A complements this by requiring the arbitral award to be delivered within twelve months from the completion of pleadings. Failure to do so automatically terminates the arbitrator’s mandate, and courts may even reduce arbitrators’ fees for delay or replace the tribunal altogether.
• Section 29B establishes an optional fast-track arbitration procedure. Where parties agree, disputes may be decided by a sole arbitrator, typically on the basis of written submissions and provided the value of the dispute does not exceed USD 400,000. The award must be provided within six months of the tribunal’s reference, and if this timeline is breached, Section 29A’s consequences apply. Therefore, there is a clear aim to promote a fast, accessible route for arbitration, especially for straightforward disputes.

Indirect Speed Up Provisions

Several other provisions, while less explicit, also promote efficiency:

• Section 23(1) requires the claimant and respondent to submit their witness statements within a period agreed by the parties or determined by the tribunal. While flexible, it establishes timeframes as an expectation of arbitration.
• Section 23(3) grants arbitral tribunals discretion to refuse late amendments to statements of claim or defence if they would delay proceedings, discouraging common delay tactics.
• Section 29(2), subject to authorisation by the parties or all tribunal members, allows the presiding arbitrator to decide procedural questions alone, helping avoid unnecessary coordination delays.

Remaining Challenges

A major drawback in India’s arbitration framework is weak enforcement of awards, which continues to plague its efficiency. After an award is granted, the award-holder faces a statutory three-month waiting period, extendable by 30 days, during which the award may be challenged through an application to set aside under Section 34 of the Act. As a result, even after obtaining an award, parties must still engage with the same judicial system they sought to avoid through arbitration. While the Act imposes timelines for concluding proceedings, it sets no corresponding limit for enforcing awards. Bridging this enforcement gap is crucial if statutory timelines are to translate into real-world efficiency and credibility.

Key Takeaways

It is the combination of these realities – judicial backlog, lack of specialisation, and infrastructure growth – that has necessitated a legislative push to speed up arbitration in India. Traditional litigation is increasingly unattractive: courts are slow, adjournments common, and expertise limited.

While arbitration is not immune to delay, the timeframe reforms introduced by the Act represent vital steps towards breaking India’s cycle of congestion. Ultimately, however, the success of these provisions depends on the conduct of the parties and the arbitrators themselves. Whether they choose to embrace these statutory timelines and procedures, resist unnecessary extensions and commit to avoiding delays will determine the overarching success of modern arbitration in India.