India needs skilled arbitrators for global leadership

Source: The post India needs skilled arbitrators for global leadership has been created, based on the article “The real Indian arbitrator needs” published in “The Hindu” on 28 April 2025. India needs skilled arbitrators for global leadership.

UPSC Syllabus Topic: GS Paper3– Effects of Liberalization on the Economy and GS Paper-2– Statutory, Regulatory and various Quasi-judicial Bodies.

Context: India’s rapid economic growth has led to increased domestic and cross-border commerce, making disputes more frequent. With court systems overburdened and slow, arbitration has emerged as a preferred alternative. However, concerns remain whether India’s arbitration framework, especially the role of arbitrators, is ready for global leadership.

For detailed information on The globalization of the Indian legal industry read this article here

The Central Role of Arbitrators in Indian Arbitration

1. Human Capital Defines Arbitration Success: The success of arbitration depends on its human capital. Arbitrators, even more than arbitration lawyers, shape the efficiency and credibility of the process.
2. Arbitrators as Controllers of Proceedings: Arbitrators set procedures, finalise timelines, settle disputes, and impose penalties. Their conduct determines the speed, fairness, and legitimacy of the proceedings.
3. Awards as the Face of Indian Arbitration: Arbitrators’ awards can be challenged in courts. Their quality directly influences the reputation of Indian arbitration at national and international levels.

The Unique Demands of Arbitration Skills

1. Need for Skills Beyond Judicial Experience: Judicial experience alone is insufficient. Arbitrators must manage disputes flexibly, blending procedural certainty with innovation, unlike rigid court processes.
2. Importance of Soft Skills and Cultural Sensitivity: International arbitration demands collaboration with diverse tribunal members. Arbitrators must develop negotiation, persuasion, and cross-cultural communication skills, which require special training.
3. Different Nature of Award Writing: Arbitral awards need careful analysis of complex documents, testimonies, and financial data. Writing such awards demands a different skillset from traditional judicial judgments.

Persistent Gaps in Developing Elite Indian Arbitrators

1. Neglected Focus on Arbitrator Development: While efforts to strengthen arbitration lawyers are common, little attention is paid to developing skilled arbitrators. This weakens the arbitration ecosystem.
2. Limited Global Presence of Indian Arbitrators: Justice D.Y. Chandrachud recently noted the absence of Indian arbitrators in international disputes without Indian elements. This shows India’s weak integration into global arbitration networks.
3. Dependence on Retired Judges: Indian appointments favour retired judges, assuming judicial training ensures arbitration quality. However, recent Ministry of Finance guidelines revealed delays, high costs, and poorly reasoned awards mimicking court processes.

Pathways for Strengthening Indian Arbitration

1. Diversification of Arbitrator Pool: The arbitrator pool must expand beyond advocates and judges. Specialists from fields like finance, engineering, and international trade should be included for richer decision-making.
2. Mandatory Training and Accreditation: All arbitrators must undergo formal training through certification, workshops, and professional memberships. Such measures would raise arbitration standards and shift perceptions away from litigation bias.

Conclusion

India must focus on building a diverse and highly skilled pool of arbitrators. Only then can it realise its aspiration of becoming a global arbitration hub and gain lasting credibility in international dispute resolution.

Question for practice:

Discuss how the quality and development of arbitrators impact India’s ambition to become a global arbitration hub.