Raising fundamental concerns over the direction of dispute resolution in the country, Justice Sanjay Karol questioned whether India’s arbitration framework genuinely reflects domestic needs, calling for a deeper structural rethink. Speaking at a law conclave hosted by the National Law Institute University, the Supreme Court judge emphasised that without certainty and efficiency, arbitration risks failing the very purpose it was designed to serve in a rapidly growing economy.
Addressing the theme of strengthening India’s arbitration regime, Justice Karol traced the evolution of arbitration law from the 1940 legislation to the Arbitration and Conciliation Act, 1996, noting its alignment with global models aimed at attracting foreign investment. He suggested that the framework, largely influenced by international standards, may not have organically adapted to Indian conditions. Highlighting judicial developments over the years, he pointed to inconsistencies emerging from key rulings and successive amendments, raising concerns that the system has struggled to deliver predictability.
Drawing from his own experience in public contracts, he remarked that arbitration clauses, particularly in government dealings, have at times created uncertainty rather than resolving disputes, signalling the need for a more context-specific approach.
Emphasising the core objectives of arbitration, Justice Karol stressed that certainty and timeliness must remain central to the framework. He observed, “There cannot be any situation of uncertainty,” linking investor confidence directly to the reliability of dispute resolution. Referring to global trends, he noted that jurisdictions like Singapore attract arbitration not merely due to legal sophistication but because of assured enforcement outcomes. Calling for a re-evaluation of India’s approach, he suggested that reform must go beyond incremental amendments and address foundational design issues to ensure consistency and credibility.
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