[Answered] Critically evaluate the argument that the efficacy of the Bharatiya Vayuyan Adhiniyam, 2024 is contingent upon substantive reforms within India’s arbitration framework, specifically concerning the aviation sector.

Introduction

The Bharatiya Vayuyan Adhiniyam (BVA), 2024 marks a significant upgrade from the archaic Aircraft Act, 1934, addressing licensing, passenger rights, and air traffic management. However, its efficacy remains contingent on substantive arbitration reforms, as India’s aviation sector continues to rely on foreign arbitration hubs like Singapore and London for dispute resolution.

Why Arbitration Reforms Are Critical

1. Specialized Nature of Aviation Disputes: Aviation conflicts involve technical issues (e.g., WTO compliance, lessor-lessee agreements) that generic arbitrators under India’s Arbitration Act, 1996 lack expertise to resolve. For instance, the Kingfisher Airlines dispute was settled in London, while Go First’s lessors opted for Singapore—highlighting India’s incapacity to handle complex cases.
2. Economic and Strategic Costs: $1.2 billion/year is lost to overseas arbitration fees (FICCI 2023). Investor confidence erodes when disputes are outsourced, signaling weak institutional support.
3. Judicial Delays and Interference: Section 34 of the Arbitration Act allows excessive court appeals, delaying enforcement. In contrast, Singapore’s SIAC resolves cases within 12 months, making it the preferred choice for 90% of India-linked aviation arbitrations.

BVA 2024’s Limitations

1. Absence of sector-specific arbitration: The Arbitration and Conciliation Act, 1996 lacks provisions tailored for aviation disputes. Unlike Singapore or London, India does not have dedicated aviation arbitration panels or legal expertise in this domain.
2. Arbitration exodus: Over 90% of Indian corporate arbitration cases are handled by international centres like SIAC. This results in a loss of legal revenue, trust deficit among foreign investors, and impacts India’s arbitration sovereignty.
3. Lack of institutional credibility: Institutions like MCIA and DIAC exist but lack global trust and sectoral specialization. Judicial overreach and government-appointed arbitrators hamper perceptions of neutrality and fairness.
4. No integration with aviation policy: The 2024 Act does not create dispute resolution mechanisms or link arbitration reform with aviation regulatory changes.

Way Forward

To make BVA 2024 effective, India must:

1. Establish a specialized aviation arbitration tribunal with technical experts.
2. Amend the Arbitration Act to exclude aviation disputes from protracted litigation.
3. Align with global standards (e.g., Cape Town Convention) to attract lessors and airlines.

Conclusion: Without arbitration reforms, BVA 2024’s transformative potential will remain unrealized. India must prioritize legal infrastructure to complement regulatory upgrades, ensuring disputes—and economic benefits—are retained domestically.