UPSC Mains Current Affairs for 18 January 2026

Arbitration Council Latest News

• Nearly six years after the Arbitration and Conciliation Act, 1996 was amended in 2019, the Union government has still not constituted the Arbitration Council of India (ACI). 
• The ACI was envisaged as a central body to regulate, grade, and promote institutional arbitration in India, but its absence has delayed reforms aimed at strengthening India’s arbitration ecosystem.

Mandate of the Arbitration Council of India

• The 2019 amendments to the Arbitration and Conciliation Act, 1996 proposed the creation of the Arbitration Council of India as a central body to promote, reform, and strengthen arbitration in India. 
• The framework was based on recommendations of the High-Level Committee on Arbitration chaired by B. N. Srikrishna, which submitted its report in July 2017.
• The proposed ACI was entrusted with key functions such as grading arbitral institutions, recognising professional bodies that accredit arbitrators, and maintaining a repository of arbitral awards made in India. 
• It was to be headed by a Chairperson appointed by the Union government in consultation with the Chief Justice of India, with eligibility extending to former Supreme Court judges, former High Court Chief Justices or judges, or eminent experts in arbitration. 
• The Council was also envisaged to include ex officio members from the executive, giving it a broad institutional and regulatory role.

Concerns Over Institutional Independence

• A key criticism of the Arbitration Council of India is its perceived lack of independence. 
• Since most members are appointed or nominated by the Union government—India’s largest litigant—experts fear undue executive influence over arbitration, undermining neutrality.

Government Dominance and Conflict Risks

• Critics argue that a government-heavy regulator empowered to grade arbitral institutions, accredit arbitrators, and advise on policy poses conflicts of interest. 
• Such a model has limited precedent in arbitration-friendly jurisdictions that prioritise institutional autonomy.

Accreditation Model: Quality and Capacity Issues

• While inspired by Singapore and Hong Kong, India’s approach differs significantly. 
• Those jurisdictions rely on a single, centralised arbitral institution, not a regulator overseeing many. 
• The 2019 amendments allow the ACI to accredit an unlimited number of institutions, risking diluted standards, heavy administrative burdens, and higher public costs.

Impact on Global Attractiveness

• Another concern is the exclusion of foreign legal professionals from the arbitrator pool. 
• This could reduce India’s appeal as an international arbitration seat, especially for foreign parties seeking globally familiar expertise.

Draft Arbitration Law Reform: Key Proposals

• In October 2024, the Union government released the draft Arbitration and Conciliation (Amendment) Bill, 2024, inviting public comments. 
• The Bill aims to revitalise institutional arbitration through structural reforms.

Redefining Arbitral Institutions

• The draft Bill introduces a revised definition of an “arbitral institution” as any body or organisation that conducts arbitration under its own procedural rules or as agreed by parties. 
• This departs from the 2019 framework, which required formal designation by the Supreme Court or High Courts.

Shifting Powers from Courts to Institutions

• To reduce judicial intervention, the Bill proposes granting arbitral institutions powers currently exercised by courts. 
• These include extending timelines for awards, reducing arbitrators’ fees where delays are attributable to tribunals, and substituting arbitrators.

Status of the Bill

• Despite these proposals, the Bill remains under consideration. 
• In March 2025, Arjun Ram Meghwal informed Parliament that the draft had not yet been finalised or introduced.

Recalibrating Courts’ Role in Arbitration

• Under the Arbitration and Conciliation Act, 1996, courts currently have wide powers to grant interim measures before, during, and even after arbitral proceedings (until enforcement). 
• The 2024 draft Bill seeks to narrow this role to reduce delays and judicial overreach.

Limiting Interim Relief by Courts

• The draft Bill proposes restricting courts’ power to grant interim measures to two stages only: before arbitration commences and after an arbitral award is rendered. 
• This change aims to minimise prolonged court involvement during ongoing arbitration.

Tweaking the 90-Day Rule

• A key amendment targets Section 9(2). 
• Presently, arbitration must commence within 90 days of a court granting pre-arbitral interim relief. 
• The draft Bill shifts this clock to start from the date the interim application is filed, discouraging parties from stalling arbitration through extended court proceedings.

Introducing Emergency Arbitration

• The Bill also proposes a new Section 9-A, allowing parties to seek interim relief from an emergency arbitrator once arbitration has begun but before the arbitral tribunal is constituted. 
• This move is designed to provide swift, arbitration-led remedies while keeping courts at arm’s length.

Objective: Fewer Delays, Less Intervention

• Collectively, these changes aim to curb pre-arbitral delays, strengthen institutional arbitration, and ensure courts play a supportive—not supervisory—role in the arbitral process.

The Way Forward for Institutional Arbitration in India

• The report of the B. N. Srikrishna–headed committee notes that ad hoc arbitration continues to dominate in India due to parties’ strong preference for procedural autonomy and lingering scepticism toward domestic arbitral institutions. 
• Concerns about institutional independence and administrative competence have eroded confidence. 
• Addressing this trust deficit—by strengthening autonomy, credibility, and governance of arbitral institutions—is essential if Indian centres are to compete with established global arbitration bodies.

Source: TH