India Losing Its Domestic Arbitration! The Need For Legislative Amendment

Of late, there has been the emergence of a disturbing trend whereby Indian contracting parties are choosing foreign jurisdictions to arbitrate their disputes. Resultantly, India is losing its larger domestic arbitrations, quite antithetical to the reasons for which the amendments to The Arbitration and Conciliation Act, 1996 ('the Act') were brought about.

The Act had been amended with a view to make India into the next arbitral destination and to enhance international arbitration. Unfortunately, and quite unintentionally, the interplay of certain amendments and judgments have caused large domestic arbitrations to leave the country. There is, therefore, the urgent and compelling need to plug the crevices to prevent any further percolation of domestic arbitration.