Establish Arbitration Council, monitor enforcement of arbitral awards: Justice PS Narasimha

Supreme Court judge Justice PS Narasimha on Saturday batted for the establishment of an Arbitration Council of India as recommended by Justice BN Srikrishna Committee's report on institutionalising arbitration in India.

The Srikrishna Committee report had suggested the establishment of an Arbitration Promotion Council of India as an autonomous body having representation from various stakeholders for grading arbitral institutions in India.

Justice Narasimha opined that while the arbitration bar in the country is one of the best in the world, the shortcoming in the Indian arbitration landscape is the lack of a mechanism to monitor the enforcement of arbitral awards.

"We have excellent talent in Arbitration Bar of India, at par with the best in the world. We will look at contribution of legislature, judiciary and third which I will speak about is need for institutionalisation that is needed to nurture and develop arbitration guidelines for institutional integrity. Courts (elsewhere in the world) have adopted this third limb, which is completely absent from our arbitration culture and is necessary for efficiency. Where have we faltered on the third limb? No monitoring is happening as to enforcement of arbitral awards and adoption of best practices," Justice Narasimha highlighted.

An arbitration culture that prioritises adherence to timelines is extremely important, he added.

The Arbitration and Conciliation Act of 1996 has mandated a set of rules but there is no regulating body to monitor the enforcement and implementation of such rules, he further lamented.

He drew a comparison to the United Kingdom, where 80 per cent of arbitration is institutional. However, the judge clarified that merely making a transition to institutional arbitration will do no good unless there is a regulatory body.

"After Srikrishna committee report and having seen its working and adoption in our country, I think it is not merely transition to institutional arbitration that will be a problem solver but we need a guiding body for institutional memory to ensure arbitration culture develops in the country. There are several problems in the absence of such a body - most arbitrations are ad hoc, there are not enough guidelines. Arbitration council has to be put in place. Institutional memory and introduction of the culture and accreditation and timelines are extremely important," Justice Narasimha said.

The judge was delivering the keynote address at the 15th Nani Palkhivala Arbitration Centre (NPAC) Conference on the theme 'India and Global Arbitration: Opportunities and Challenges for 2025–2030.' Senior Advocate Aravind Datar also spoke at the event.

While emphasising that the 1996 Arbitration Act is by itself not enough for the procedural growth of arbitration, Justice Narasimha also referred to his 2023 judgment in the NTPC Limited case to highlight how courts have time and again laid down the procedure for dealing with provisions under the model law for arbitration.

In NTPC, the top court had commented on the approach to be adopted while dealing with cases under Section 11(6) (appointment of arbitrators) of the Arbitration Act and held that court cannot act mechanically in such matters.

[Live Coverage of the NPAC event]