Has Arbitration in India Been Hijacked?
Justice Narasimha’s Provocative Reform Agenda
During the launch of The Equilibrium, the first annual publication of the India International Arbitration Centre (IIAC), on 9 December 2025, Supreme Court Judge Justice Pamidighantam Sri Narasimha posed a striking question.
“Has arbitration been hijacked for commercial purposes?”
Delivered at IIAC, New Delhi, the remark was far from ceremonial. Instead, it reflected a deeper institutional concern about the direction arbitration in India has taken, and whether it has drifted away from its foundational objective. Justice Narasimha’s observations invite a serious reassessment of the intent, scope, and accessibility of arbitration within India’s dispute resolution framework.
Arbitration has long been promoted as a mechanism to reduce court congestion and deliver timely, cost-effective justice, particularly in commercial disputes. However, Justice Narasimha’s question suggests a growing departure from this ideal. Rather than democratizing dispute resolution, arbitration increasingly appears exclusionary, serving primarily elite commercial litigants. His proposal to extend arbitration to everyday civil disputes—such as partition suits among family members or neighbourhood conflicts—raises important policy and structural questions that merit wider debate.
Institutional Arbitration in India: Ambition Versus Reality
The India International Arbitration Centre was established through an Act of Parliament as an institution of national importance. Its mandate is to foster a credible institutional arbitration regime, facilitate both domestic and international arbitration, and project India as a global arbitration hub.
Institutional arbitration is traditionally associated with clear procedural rules, experienced arbitral panels, neutrality, and expedited dispute resolution. These features are often cited as advantages over ad hoc arbitration and conventional court litigation.
However, in practice, the IIAC’s caseload and functional reach have fallen short of these ambitions. Reports indicate that, unlike older institutions such as the Delhi International Arbitration Centre, the IIAC has received minimal judicial referrals. This raises legitimate doubts about whether it has become an integral component of India’s dispute-resolution ecosystem. The resulting disconnect reinforces Justice Narasimha’s critique: without regular and meaningful use, institutional arbitration risks remaining symbolic rather than transformative.
Commercial Focus vs. Grassroots Accessibility
Over the past decade, India’s arbitration reforms have largely focused on establishing the country as a preferred seat for high-value commercial and international disputes. Amendments to the Arbitration and Conciliation Act, 1996 in 2015 and 2019 sought to reduce judicial interference and expedite proceedings, thereby enhancing global confidence in India’s arbitration framework.
While these reforms understandably catered to multinational contracts, infrastructure projects, and cross-border trade, they also produced an unintended consequence. For the ordinary litigant, arbitration often appears inaccessible, expensive, and procedurally complex. Justice Narasimha emphasized that arbitration should be embedded within civil court ecosystems and grassroots dispute-resolution mechanisms. According to him, arbitration ought to address small and uncomplicated disputes that routinely burden the judiciary.
This observation highlights a significant justice gap. Litigation remains slow, costly, and inaccessible for many citizens, while arbitration—if made inclusive—could offer speed, expertise, and efficiency. The challenge, therefore, is structural rather than merely procedural.
Integrity, Counsel, and Institutional Trust
A critical aspect of Justice Narasimha’s address was his emphasis on integrity, not only of arbitrators but also of legal counsel guiding parties through arbitration. He observed that without full and complete integrity, institutional credibility cannot be sustained.
This concern points to a deeper systemic issue. Infrastructure and statutory frameworks alone do not guarantee fair outcomes. Transparency in arbitrator appointments, robust conflict-of-interest safeguards, ethical conduct, and professional accountability are essential to sustaining public trust. These concerns echo broader critiques within the legal community that arbitration risks becoming a closed ecosystem dominated by repeat players and specialists.
Is Arbitration in India Becoming Too Elite?
A critical evaluation of India’s arbitration landscape reveals tension between international aspiration and domestic utility. On one hand, institutions like the IIAC aim to elevate India’s global arbitration standing. On the other, small businesses and individual litigants continue to rely on traditional courts for routine disputes.
Justice Narasimha’s remarks expose this dichotomy. Arbitration’s increasing association with elite commercial practice may paradoxically drive Indian parties toward foreign arbitral seats, undermining India’s ambition to become a global arbitration hub. International practitioners have frequently noted that Indian parties often prefer overseas forums, perceiving them as more neutral or efficient.
The Need for a More Inclusive Arbitration Framework
To expand arbitration beyond its traditional commercial confines, several structural reforms are necessary:
1. Integration with Civil Courts
Civil courts should develop systematic referral mechanisms to arbitration, particularly for low-value and routine disputes. This would normalize arbitration within everyday dispute resolution.
2. Standardised and Affordable Arbitration Rules
Simplified procedures and capped fees for low-value claims would make arbitration economically viable for average litigants.
3. Awareness, Legal Aid, and Education
Public awareness initiatives, legal aid support, and ADR education can help demystify arbitration and encourage broader participation.
4. Governance and Ethical Standards
Clear codes of conduct for arbitrators and counsel, along with transparent appointment processes, are essential to building public confidence.
Conclusion
Justice Narasimha’s question—whether arbitration in India has been overtaken by commercial interests—raises a broader issue of national policy and judicial philosophy. India’s aspiration to become a global arbitration hub must not come at the cost of arbitration’s foundational promise: accessible and equitable dispute resolution.
An exclusive, elite-driven arbitration model cannot unlock the full potential of arbitration in India. Justice Narasimha’s critique extends beyond statutory reform and serves as a reminder to policymakers, judges, practitioners, and institutions that justice must remain inclusive, ethical, and responsive to lived realities.
Article Written by
Radha Rajguru
5th Year B.A. LL.B
Savitribai Phule Pune University
