CJI Surya Kant flags non-constitution of Arbitration Council of India six years after passage of law

Chief Justice of India (CJI) Surya Kant recently highlighted a significant "credibility deficit" in India's arbitration landscape, stemming from the prolonged non-constitution of the Arbitration Council of India (ACI). Established by the Arbitration and Conciliation (Amendment) Act, 2019, the ACI was envisioned to grade arbitral institutions and accredit arbitrators, crucial steps towards fostering a robust domestic arbitration ecosystem. Over six years since the enabling legislation, the ACI remains unformed, impeding India's ambition to become a preferred international arbitration hub. This delay, coupled with the continued high usage of foreign arbitration centres like the Singapore International Arbitration Centre by Indian parties, underscores the urgent need for legislative implementation and institutional strengthening to enhance the efficacy and appeal of arbitration within India.

India's journey towards establishing itself as a premier global hub for arbitration has been marked by ambitious legislative reforms, yet their implementation has often lagged. This critical gap was recently underscored by Chief Justice of India (CJI) Surya Kant, who expressed concern over the continued non-constitution of the Arbitration Council of India (ACI), more than six years after its statutory mandate. The ACI, a cornerstone of the Arbitration and Conciliation (Amendment) Act, 2019, was designed to bring structure and credibility to the nation's arbitral framework through the grading of institutions and accreditation of arbitrators.

CJI Kant's remarks, delivered at the Indian Institute of Arbitration and Mediation’s Silver Jubilee ADR Summit, highlighted a "credibility deficit" that he warned India could not simply legislate its way out of. This delay in operationalising a key regulatory body not only undermines the legislative intent but also impacts India's global standing in alternative dispute resolution. The persistent reliance of Indian parties on foreign arbitration centres, such as the Singapore International Arbitration Centre (SIAC), further illustrates the tangible consequences of this implementation gap, prompting a re-evaluation of India's strategic approach to arbitration reform.

The foundation of India's arbitration regime rests on the Arbitration and Conciliation Act, 1996, which was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards, largely based on the UNCITRAL Model Law. Over the years, the Act has undergone several amendments aimed at streamlining processes, reducing judicial intervention, and promoting institutional arbitration. A pivotal reform in this trajectory was the Arbitration and Conciliation (Amendment) Act, 2019, which came into force on August 9, 2019.

A key provision of the 2019 Amendment Act was the introduction of Part IA, specifically Sections 43A to 43M, providing for the establishment of the Arbitration Council of India (ACI). The ACI was conceived as a statutory body with a broad mandate to promote and encourage arbitration, mediation, and conciliation. Its core functions include framing policies for the grading of arbitral institutions, recognising professional institutes for arbitrator accreditation, maintaining a depository of arbitral awards, and ensuring uniform professional standards in the field. The intent was to create a robust regulatory framework that would enhance the quality and efficiency of arbitration in India. Following this, an Expert Committee led by Dr. T.K. Viswanathan was constituted in June 2023 to further examine the working of arbitration law and recommend reforms. This committee submitted its report in February 2024, leading to the Draft Arbitration and Conciliation (Amendment) Bill, 2024, which was released for public consultation in October 2024, aiming to further boost institutional arbitration and reduce court intervention.

The non-constitution of the Arbitration Council of India, despite the 2019 Amendment Act coming into force over six years ago, represents a significant impediment to India's aspirations of becoming a leading international arbitration hub. The CJI's observation of a "credibility deficit" is particularly pertinent, as the absence of a central regulatory body like the ACI leaves a vacuum in critical areas such as the grading of arbitral institutions and the accreditation of arbitrators. Without these standardised mechanisms, the quality and reliability of arbitration services within India can vary, making it challenging for parties to select credible institutions and arbitrators with confidence.

This lack of a structured domestic framework directly contributes to the continued preference for foreign arbitration centres by Indian parties. Statistics from the Singapore International Arbitration Centre (SIAC) reveal that Indian parties were the third-largest foreign users in both 2024 and 2025, highlighting a persistent trend where businesses seek dispute resolution outside India. This exodus is not merely a matter of convenience but often stems from perceptions of efficiency, neutrality, and enforceability offered by established international venues. The delay in constituting the ACI thus translates into lost opportunities for India to host and administer these disputes, undermining its economic and legal ambitions.

The Draft Arbitration and Conciliation (Amendment) Bill, 2024, which emerged from the recommendations of the Viswanathan Committee, attempts to address some of these systemic issues. While the original 2019 Act envisioned the ACI as a key regulatory and grading body, the 2024 Draft Bill proposes to refine the ACI's role, potentially refocusing it on the recognition of institutions and model rules rather than direct grading. This shift, if enacted, could streamline the ACI's functions, but the fundamental issue of its non-existence remains. The Bill also introduces other significant reforms, such as clarifying the distinction between 'seat' and 'venue' of arbitration, formalising emergency arbitration provisions, and recalibrating timelines for arbitral awards, all aimed at enhancing efficiency and reducing judicial intervention. However, the efficacy of these proposed amendments hinges on their timely enactment and, crucially, the operationalisation of the underlying institutional framework, including the ACI.

The Chief Justice of India's candid remarks serve as a stark reminder of the critical need to bridge the gap between legislative intent and practical implementation in India's arbitration landscape. The non-constitution of the Arbitration Council of India for over six years represents a significant missed opportunity to institutionalise quality and credibility within the domestic arbitration ecosystem. This delay not only impacts India's ability to attract and retain arbitration cases but also perpetuates the reliance of Indian businesses on foreign arbitral institutions, thereby hindering the nation's ambition to become a global arbitration hub.

For legal practitioners, the current scenario necessitates careful consideration of forum selection, often leading to recommendations for international arbitration to ensure predictability and efficient enforcement. Moving forward, the legal community will be closely watching for swift action from the government to constitute the ACI and enact the proposed reforms outlined in the Draft Arbitration and Conciliation (Amendment) Bill, 2024. The effective operationalisation of these measures is paramount to fostering an arbitration-friendly environment that instils confidence, reduces the "credibility deficit," and ultimately positions India as a competitive and preferred seat for both domestic and international commercial disputes.