The Arbitration Council of India (ACI), a statutory body established by the Indian government under the Arbitration and Conciliation Act (ACA) of 1996 and governed by sections 43A, 43B, 43D, 43L and 43 M, signifies a pivotal shift in India's arbitration landscape. The Arbitration Council of India (ACI) was introduced through the 2019 amendment to the Arbitration and Conciliation Act, 1996. Tasked with regulating, developing, and overseeing Alternative Dispute Resolution (ADR) methods like mediation, arbitration, and conciliation, the ACI, as a legally incorporated entity with perpetual succession, aims to enhance the reliability, effectiveness, and consistency of ADR practices.

Headquartered in Delhi with the ability to establish offices throughout India with central government approval, the ACI is crucial for encouraging and developing institutional arbitration, ultimately addressing issues such as unstructured processes and a lack of standardized procedures to position India as a leading global arbitration hub.

With the increasing number of commercial deals and international disputes, a strong arbitration structure is vital for attracting foreign investment and ensuring prompt and equitable resolutions. The ACI's formation contributes to a solid institutional base that reinforces arbitration practices and cultivates trust among businesses and parties involved in resolving disputes in India.

Despite the widespread adoption of arbitration, conciliation, and other ADR methods in India, there remains considerable scope for growth and improvement. The ACI seeks to advance and standardize arbitration practices with the intention of bolstering user trust and confidence in these processes.

The Arbitration Council of India (ACI) was established under the Arbitration and Conciliation Act (ACA) to enhance the efficiency and credibility of arbitration in India. As per Section 43D of the Act, ACI plays a pivotal role in promoting institutional arbitration by setting benchmarks for arbitral institutions and ensuring adherence to ethical and professional standards. One of its key responsibilities includes formulating policies and guidelines that foster a uniform arbitration framework across the country. By accrediting arbitrators and institutions, ACI aims to instil confidence in alternative dispute resolution mechanisms, ultimately reducing the burden on the judiciary.

In addition to policy-making, ACI is responsible for grading arbitral institutions based on their performance and compliance with established standards. This ensures that parties opting for arbitration can make informed choices about institutions handling their disputes. The council also undertakes research and studies to improve arbitration practices and recommends legislative or procedural changes when necessary. By promoting transparency, efficiency, and fairness in arbitration, ACI strives to position India as a global hub for dispute resolution.

Arbitration in India operates on the principle of party autonomy, granting disputing parties substantial control over the arbitration process, including rules, procedures, and other relevant aspects.
Therefore, the Arbitration Council of India does not directly oversee individual arbitration proceedings. Its role is confined to policy development, setting professional standards, and advocating for ADR mechanisms.

While the ACI exerts influence on the broader arbitration framework within India, it cannot intervene in:

• The specific rules and procedures adopted in any particular arbitration.
• The outcomes of individual arbitration cases.
• The arbitration process for specific disputes.

Accordingly, the ACI is not authorized to intervene in ongoing arbitration proceedings. However, the ACI plays a pivotal role in upholding the integrity and efficiency of the arbitration system in India. Currently, India lacks standardized qualifications, experience benchmarks, or accreditation processes for arbitrators. Parties are generally free to select arbitrators of their choosing. However, the Arbitration and Conciliation Act (ACA) provides a foundation for potentially establishing future requirements for arbitrator qualifications, experience, and accreditation under the guidance of Sections 43D, 43J of ACA. While not formally required, arbitrators should ideally possess:

• Significant experience in arbitration proceedings.
• Knowledge of applicable arbitration laws.
• Familiarity with relevant domestic and international arbitration rules and procedures, based on the dispute's context.

The ACI is essential for bolstering India's arbitration landscape through:

• Facilitating Knowledge Sharing: Serving as a central hub for disseminating arbitration insights, techniques, and international best practices.
• Improving India's Arbitration Infrastructure: Advocating for policies and reforms to establish India as a leading centre for both domestic and international arbitration.
• Government Advisory: Advising the central government on strategies to simplify commercial dispute resolution.
• Maintaining a Central Database: Curating a database of arbitral awards from India and globally to support ADR research and policy formulation.

Through these initiatives, the ACI (Section 43D) seeks to establish India as a prominent, efficient, and effective arbitration jurisdiction.

India's arbitration landscape is largely characterized by ad hoc proceedings, a contrast to the globally favoured approach of institutional arbitration. This prevalence of ad hoc arbitration, lacking a structured framework and standardized procedures, often contributes to delays in resolving disputes. Recognizing these shortcomings, the Indian government formed a High-Level Committee, led by retired Supreme Court Justice B.N. Srikrishna, to propose improvements.

The committee's key recommendations included: establishing an independent body for arbitrator accreditation, and implementing a grading system for arbitral institutions to elevate standards across the country. The Arbitration Council of India (ACI) was subsequently established to implement these recommendations and guide India towards a greater reliance on institutional arbitration (Sections 43D, 43J, and 43K).

The ACI comprises a total of seven members. The Chairperson must be either a sitting or retired Supreme Court Justice, a Chief Justice of a High Court, or a distinguished expert in the field of arbitration. In addition to the Chairperson, there are six other members with expertise drawn from various sectors, including prominent arbitration practitioners, academics with relevant expertise, senior government officials from the Department of Legal Affairs and the Ministry of Finance, and a representative from a recognized industry chamber of commerce.

The ACI's administrative functions are managed by a Chief Executive Officer (CEO), appointed by the government. The central government makes all ACI member and CEO appointments, subject to established rules and requirements. However, some appointments require consultation with the Chief Justice of India or other judicial authorities.

The Arbitration Council of India (ACI) can appoint experts and create specialized committees to aid in its functions, as permitted by Section 43H of the Arbitration and Conciliation Act (ACA).
The ACI, established as an independent statutory body under the ACA, operates autonomously, free from direct control by either the judiciary or the central government. However, the central government appoints all seven ACI members, including the CEO, sometimes in consultation with the judiciary or government bureaucracy.

The central government's involvement with the ACI extends beyond its establishment to include: appointing and removing council members; and setting the compensation and service terms for the Chairperson, an eminent arbitration practitioner, and a distinguished academic. This ensures a structured framework for the ACI's operations while preserving its independence. However, while the central government appoints ACI members, the actual grading of arbitral institutions is expected to be done in a professional and independent manner.

The establishment of the Arbitration Council of India (ACI) by the government, as detailed in ACA Sections 43B, 43D, 43G, 43L, and 43M, raises questions about potential governmental encroachment on party autonomy, a cornerstone of arbitration. While the ACI aims to improve arbitration standards, grading private arbitral institutions by a government agency could be viewed as undue influence, potentially compromising the independence of the arbitral process. The structure of the ACI, with significant government involvement in its operations, further fuels concerns about its neutrality.

According to ACA Section 43G, the central government holds sole authority to remove a member of the Arbitration Council of India, and only under specific conditions: adjudicated insolvency; acceptance of paid employment during their term (excluding part-time appointees); conviction of a crime involving moral turpitude (as determined by the central government); or acquisition of financial or other conflicting interests that could impede impartial performance of their duties (ACA Sections 43C and 43M).

To effectively grade arbitral institutions and recognize professional institutes for arbitrator accreditation, the Arbitration Council of India (ACI) must remain current on arbitration trends both domestically and internationally. This requires the ACI to evolve into a central national repository for arbitration knowledge, facilitating the sharing of research, best practices, and insights across the entire arbitration landscape, from students to seasoned practitioners. Establishing independent chairs focused on arbitration practice within leading law schools and central universities will further bolster research capabilities, provide expert perspectives, and ensure curricula reflect the latest advancements in the field (ACA Section 43D).

For India to become a prominent global arbitration centre, it must project an image of independence, prioritize party autonomy, and minimize governmental intervention. Any perceived control by the government over the arbitration process could compromise this objective. Therefore, ensuring neutrality, transparency, and efficiency within the arbitration framework, particularly through the ACI's efforts, is vital for India to achieve its ambition of becoming a leading arbitration hub.

Amendments to the Arbitration and Conciliation Act (ACA), 1996 have significantly reduced excessive judicial interference, a key factor hindering India's arbitration reputation. To solidify India's position as a global arbitration hub, the ACI should adopt a minimalist, advisory role. This hands-off approach will cultivate confidence in India's arbitration ecosystem and align it with international standards.

While India has taken steps to reduce judicial interference, concerns remain about court interventions in arbitration under Sections 34 and 37 of the ACA. The amendments to the ACA in 2015 and 2019 aimed at minimizing court intervention but have not eliminated it entirely. India's arbitration landscape is still dominated by ad hoc arbitration, which lacks uniformity. The ACI's grading system is an effort to shift towards institutional arbitration, but it is not yet clear how effective this transition will be.

Conclusion:
The establishment of the Arbitration Council of India (ACI) represents a pivotal step in India's ambition to create a leading global arbitration environment. Its objectives include harmonizing arbitration procedures, popularizing Alternative Dispute Resolution (ADR) methods, and bolstering institutional arbitration within the country. However, achieving true global prominence as an arbitration hub requires careful consideration. Concerns persist regarding potential government influence and the need to safeguard the autonomy of parties involved in arbitration.

For the ACI to succeed, it must operate with impartiality, openness, and limited governmental intervention. Essential elements include strengthening India's arbitration framework, embracing international best practices, and ensuring an independent, expert-led approach. By adhering to these principles, the ACI can revolutionize India's arbitration scene, positioning the nation as a favoured location for resolving disputes both domestically and internationally. However, it's important to recognize that the ACI's role is complex, and its success will depend on its ability to navigate the challenges of balancing regulation and autonomy.

Written By: Md.Imran Wahab, IPS, IGP, Provisioning, West Bengal
Email: imranwahab216@gmail.com, Ph no: 9836576565