Ques: Firstly, can you tell us something about LCIA India in terms of its role and facilitation of arbitration in India?

Ans: LCIA India is the first independent office of the London Court of International Arbitration (LCIA) outside of London. Based at the World Trade Tower in the Connaught Place area of New Delhi, LCIA India will offer, here in India, all the services offered by the LCIA in the UK, with the same meticulous care to ensure the expeditious, cost effective and totally neutral administration of arbitrations conducted under its auspices. In the months and years to come, we hope to make a real contribution to the practice and conduct of international commercial arbitration in India and the larger Asian region, by providing end users of arbitration with a fresh new institutional option to resolve their disputes in a fair, expeditious and cost effective manner.

Ques: What made the LCIA chose India for opening up a subsidiary?

Ans: An economy that has grown consistently in excess of 8 % per annum over the past decade, a great demand for effective means for resolving international commercial disputes, a gradual shift by end users of arbitration from ad-hoc arbitration to institutional arbitration. Not to mention, a legal profession and judiciary of outstanding ability and reputation; and the convenience of the widespread use of the English language.

Ques: Recently, in April this year, the LCIA India launched its own set of arbitral rules. Can you tell us the impact of these rules on the attractiveness as a seat of arbitration for India-related commercial disputes?

Ans: The LCIA India Arbitration Rules are to a large extent based on the LCIA’s own tried and tested 1998 Arbitration Rules, but with changes in points of detail to reflect the interface with the Indian Arbitration & Conciliation Act, 1996. With the establishment of LCIA India and the launch of the LCIA India Arbitration Rules, best-of-class dispute resolution procedures would now be available locally in India. This, in my view, would definitely enhance the attractiveness of India as a seat and venue for international commercial arbitrations.

Ques: Have any key innovations been introduced by these rules and if any specific India adjustments have been made?

Ans: Given the Indian ground conditions, the Rules include a number of new provisions aimed at expediting proceedings, which provisions may provide a prototype for future rules published by the LCIA. These new provisions include an express requirement that all prospective arbitrators confirm their ability to devote sufficient time to ensure the expeditious conduct of the arbitration [Article 5.3(b)]. Further, Article 28.4(b), provides that the Tribunal may take into account the conduct and cooperation, or non-cooperation, of the parties during the arbitration when determining the allocation of costs. Article 10 of the Rules gives the power to the LCIA Court to revoke an arbitrators’ appointment in the event the arbitrator “does not conduct or participate in the arbitration proceedings with reasonable diligence, avoiding unnecessary delay or expense”. Articles 5.6 and 5.7 provide for the power of appointment of Presiding Arbitrators to be exercised solely by the LCIA Court.

LCIA India has also produced a set of “Notes for Arbitrators”, to provide guidance to arbitrators conducting arbitrations under the LCIA India Rules, on issues relating to independence, impartiality, confidentiality and the management of time and costs.

Ques: Prior to joining the LCIA, you were with the Singapore International Arbitration Centre. Can you tell us as to the difference in conducting arbitration proceedings in India as compared to holding them in Singapore which is now emerging as the legal hub for South-East Asia especially in terms of being cost effective and if India can emerge as an arbitration hub, five years from now?

Ans: Arbitration as is practised in India has not turned out to be the perfect alternative to court proceedings, as was intended. It is characterised by an almost slavish adherence to court procedures, the attitude of parties and their counsel to think of arbitration as a mere adjunct to litigation in a court of law, the tendency of parties to challenge awards almost indiscrimately has the effect of holding up enforcement of the awards, not to mention adding to the judicial logjam. Further, the efficiencies of institutional arbitration over ad-hoc arbitration are well proven. However, in India, anecdotal evidence seems to suggest that 95% of the arbitrations go the ad-hoc way. These problems notwithstanding, there is reason to be optimistic about the future.

As you might be aware, the Union Ministry of Law has initiated a number of steps to strengthen the arbitration framework in India. It is proposed to constitute Arbitration Divisions in the High Courts to deal exclusively with arbitration related cases. The Ministry of Law has recently released a Consultation Paper on the proposed amendments to the Arbitration Act and has started the process of consultation with stake holders in arbitration to fine tune the proposed amendments to the Arbitration Act. On 1 August, LCIA India in association with the Union Ministry of Law and ICADR organised a conference in Mumbai which was witness to leading arbitration practitioners, members of the bench of the bar, in-house counsel and representatives of Chambers of Commerce, coming together to discuss the proposed amendments to the arbitration act. It was encouraging to see the interest that this conference generated and the consensus that emerged at this conference was clear that for India to emerge as a more favourable arbitration destination a sea change must be brought in the attitude of the parties and legal counsel and also in the mind set of Courts.

Maximum judicial support of arbitration and minimum intervention is key to its success. Notwithstanding the stray aberrant decisions by our courts on arbitration (i.e. Saw Pipes, Satyam Computers), I would like to emphasise that the judiciary, over the past few years, has been making a conscious effort to be seen as arbitration friendly, as is reflected in the ‘pro-arbitration’ stance taken by the Supreme Court of India in the recent Sumitomo Heavy Industries v ONGC and by the Delhi High Court in Max India Ltd v General Binding Corporation. With the government serious about reform, and the judiciary making a conscious effort to be seen as pro-arbitration, the establishment of LCIA India should add traction to the current reform process, which should, in the years to come, see India emerge as a more arbitration-friendly jurisdiction.