What India needs to do to become an arbitration hub

Atthe latest edition of the Delhi Arbitration Weekend (DAW), Union law minister Arjun Ram Meghwal remarked that “it is time to revisit Section 34 of the Arbitration and Conciliation Act, 1996”.

- Kumar Kartikeya

The observation could not be more timely. If India is serious about its ambition of becoming a global arbitration hub, the autonomy of arbitral proceedings must be reinforced and judicial interference curtailed.

The institutional framework already exists. The Delhi International Arbitration Centre (DIAC), the Mumbai Centre for International Arbitration (MCIA), and the GIFT City International Arbitration Centre have been established to provide modern facilities and align Indian arbitration with international standards. Yet India has not secured the confidence of the international business community. The problem lies not in infrastructure but in the interpretation and application of the Act, particularly Section 34.

Section 34 was conceived as a narrow safeguard. It empowers courts to set aside arbitral awards only in exceptional circumstances such as fraud, incapacity, or breaches of natural justice. The provision reflects the principle of minimal judicial intervention, which is central to the UNCITRAL Model Law. In practice, however, this principle has been diluted. Section 34 petitions have become routine and are often treated as disguised appeals. Proceedings stretch for years, undermining the speed and finality that arbitration promises.

The Supreme Court has on several occasions sought to rein in this trend. In