Pointless to celebrate arbitration weeks if court verdicts, policies undermine arbitration: Justice Ujjal Bhuyan

Supreme Court Justice Ujjal Bhuyan has questioned the celebration of arbitration weeks and international conferences in India, given the undermining effect of erratic court verdicts and regressive government policies on arbitration. The judge highlighted that such actions create barriers to India's efforts to position itself as a global arbitration hub. He specifically criticized the Union Finance Ministry's recent office memorandum discouraging the inclusion of arbitration clauses in high-value public procurement contracts.

The celebration of arbitration weeks and international conferences in India has been called into question by Supreme Court Justice Ujjal Bhuyan. In a keynote address at The Law Forum event, Justice Bhuyan expressed his concerns about the undermining effect of erratic court verdicts and regressive government policies on arbitration. This development is significant as it highlights the challenges faced by India's efforts to establish itself as a global arbitration hub.

Arbitration has been gaining importance in India in recent years, with the country seeking to position itself as a preferred destination for international arbitration. However, the erratic court verdicts and regressive government policies have created barriers to this goal. The Union Finance Ministry's office memorandum in June 2024 is a notable example of such a policy shift. The memorandum discourages government departments and public sector undertakings from routinely including arbitration clauses in high-value public procurement contracts.

Justice Bhuyan's criticism of the Union Finance Ministry's office memorandum highlights the need for a more supportive regulatory environment for arbitration in India. The memorandum's suggestion to restrict arbitration to disputes involving less than ₹10 crore and encourage mediation or litigation for larger claims is seen as a step backward by many experts. This development raises questions about the effectiveness of arbitration in resolving commercial disputes in India.

The implications of Justice Bhuyan's comments are significant, particularly for practitioners who have been promoting arbitration as an alternative dispute resolution mechanism in India. The need for a more supportive regulatory environment and a clear policy framework is essential to promote arbitration in the country. As Justice Bhuyan pointed out, celebrating arbitration weeks and hosting international conferences without addressing the underlying issues will not be enough to establish India as a global arbitration hub.