INTRODUCTION:

             The reforms in the field of trade, commerce and dispute resolution made India a global hub for International Commerce. This is because the New Economic Policy introduced in 1991 specializes in the features of Liberalization, Privatization and Globalization, as a result the foreign investment and international trade increases, which led to the growth of cross border commercial disputes. In this very outset, India decided to transform itself as a worldwide center for commercial dispute resolution. Hence, India came with a series of amendments in the Arbitration and Conciliation Act of 1966 in 2015, 2019 and 2020^[1].

BENEFITS OF ARBITRATION IN RESOLVING COMMERCIAL DISPUTES:

       Arbitration has been a game changer in resolving commercial disputes and remain advantageous to investors and businessmen in various aspects namely,

1. Confidentiality: The parties involved in trade and commerce with each other aim only to resolve the dispute arising in the contract or in its execution rather than repudiating the entire contract. They concentrate on smooth functioning and thus arbitration remains a way of resolving their disputes without any damages to the goodwill and reputation of the parties.
2. Cost effective and Expeditious: Since litigation in India involves many procedural hurdles, arbitration is considered cost effective and expeditious. Post amendment of the Act, 2019 prescribes the payment to arbitral tribunals under fourth schedule of the Act.
3. Party Autonomy: Arbitration is considered to be a party oriented dispute resolution system. This is because the parties of the contract are vested with the independence to choose the number and members of the arbitral tribunal, seat, venue and even language of the arbitration, the schedule for their arbitral proceedings. Thus facilitating the investors and businessmen to have their dispute resolved in their choice of proceedings.
4. Resolving cross border commercial disputes:  Generally every commercial dispute will cause a sort of distress, but cross border commercial disputes are even more stressful to deal with. To simplify and overcome these hurdles, the Act classifies commercial arbitration as International commercial arbitration seated in India and International commercial arbitration seated outside of India. Thus facilitating smooth dispute resolution.

RECENT TRENDS IN COMMERCIAL ARBITRATION:

1. Firstly, the party autonomy exercised by the parties to choose their seat of arbitration. As we all know the parties have the ability to choose seats for their international commercial arbitration whether in India or in foreign. However, the actual debate began when the domestic parties wanted to have their arbitration seated outside India. Now the court (PASL Wind Solutions (P) Ltd. v. GE Power Conversion (India)(P) Ltd^[2]) have recognised this freedom of parties in choosing the seat for their arbitrations.
2. Secondly, the parties’ ability to choose arbitrators has overcome tremendous changes. This is because, a few decades back only government retired employees would be appointed as arbitrators usually. Now, everything  has changed according to parties’ interests. We even have the method of arbitration selection which is most prevalent nowadays in engineering and training contracts. In this method, a party to the contract will give a list of arbitrators and the other party has to choose the arbitrators to form the arbitral tribunal.
3. Thirdly, the concept of emergency arbitration has been widespoken. Emergency arbitration can be defined as the process where urgent interim order can be obtained even before the formation of an arbitral tribunal. This system is not protected by the legislation, but by the court pronouncement in  the case Amazon vs. Future Group Dispute^[3]. Also the 246th Law Commission Report(2014) recommended the amendment of definition of the term arbitral tribunal to include emergency arbitration.
4. Fourthly, the court’s intervention in matters of arbitration is not only a notable trend but also a subject matter of debate. This is because, the Hon’ble Supreme Court is yet to decide the court’s power in modification of arbitral awards. The opposers claim that these intervention would affect the basic principles of arbitration and the supporters claim that such intervention is essential for protecting the interest of parties.
5. The other notable trends are; virtual arbitration without the requirement of physical appearance, time efficient, cost effective and the increased approach towards institutional arbitrations.

CHALLENGES OF COMMERCIAL ARBITRATION IN INDIA:

         Arbitration is an exemplary dispute resolution mechanism. However it is an evolving mechanism in India which requires noteworthy changes to be done.

1. Lack of statutory provision – The emerging concepts of arbitration such as emergency arbitration, power of court in modification of arbitral awards are supported by court’s judgment. However, it requires statutory support for better enforcement.
2. Increasing interventions of court – The judicial intervention is considered essential in  matters such as appointment of arbitrators, deciding arbitrability of matters, granting interim measures, enforcement of arbitral awards, challenging arbitral awards. This is considered a failure of the fundamental principle of arbitration.
3. Virtual arbitration – Though virtual arbitration is considered time efficient and cost effective, it becomes shortcoming in case of admission of witness and evidence.
4. Lack of procedures – In India, ad hoc ( non – institutional) arbitration is in wide practice which lacks proper procedure and structure of arbitral proceedings. This has adverse effects such as inordinate delay and expense.

CONCLUSION:

           “Time to build strong culture of Commercial Arbitration”

                                                      -Hon’ble Chief Justice of India Chandrachud

These words of Hon’ble Chief Justice highlights the importance of commercial arbitration and making India a global seat of commercial arbitrations. It is observed that this is possible only by promoting strong structural arbitration institutions, by preserving the unity among diversity. It is observed that the deliberation of benefits and shortcoming of commercial arbitration will ultimately amount to greater advancements in making arbitration, a primary dispute resolution mechanism.

^[1] Indian Law Offices LLP, https://www.indialawoffices.com/ (last visited June 6, 2024)

^[2] PASL Wind Solutions (P) Ltd. v. GE Power Conversion (India)(P) Ltd, AIR 2021 SUPREME COURT 2517

^[3] Amazon.Com Nv Investment Holdings Llc vs Future Retail Limited, AIR 2021 SUPREME COURT 3723