When you accept your first appointment as an arbitrator, you carry with you the romance of the institution. The Arbitration and Conciliation Act, 1996, in its amended form, reads like a clean and efficient piece of legislation. Six months for pleadings under Section 23(4). Twelve months for the award after pleadings under Section 29A. A confined challenge regime under Section 34. A power to award costs under Section 31A. You believe, at the first procedural meeting, that you will conduct the matter the way the statute imagines. By the third or fourth sitting, you discover the gap between the statute and the courtroom.
Let me set down, honestly, the practical difficulties that arbitrators in India encounter every day. These are rarely written about, because arbitrators are expected to show a certain restraint about their own troubles. The silence has produced a misleading impression that the trouble with our arbitration practice is a tribunal problem, when in fact it is a culture problem that the tribunal is asked to absorb.
Take the question of timelines first. Section 23(4) requires that the statement of claim and defence be completed within six months from the date the tribunal receives notice of its appointment. I am yet to see this provision met in a seriously contested matter. The statement of claim is filed late, with an application seeking condonation. The respondent asks for time, citing volume of documents. A counter-claim is then filed, requiring a reply from the claimant. The reply provokes a sur-rejoinder. Each step is accompanied by an extension application. A tribunal that insists on the six month outer limit is told, with feeling, that it is being unjust. A tribunal that grants indulgence finds that pleadings drag into the eighteenth or twentieth month. Section 29A then begins its twelve month run from the completion of pleadings we have ourselves allowed to slip.
The adjournment culture compounds the problem. Counsel of stature appear in arbitrations, but they also appear in everything else. A senior counsel will have a Supreme Court matter at half past two, a Delhi High Court matter at four, and an arbitration sitting at five, with the implicit expectation that the arbitration will yield. The two months between sittings becomes three. The discipline of a hearing block, the only real way to conclude a heavy commercial reference, dissolves the moment one side requests a break. Section 24(1) speaks of sufficient cause and costs, but the tribunal that imposes meaningful costs is rare. The token five thousand rupees does not deter anyone. There is a quiet feeling in our bar that an arbitrator who keeps the matter moving on time is somehow being difficult. That feeling does real damage, and someone needs to say so.
Then there is the tactical jurisdiction challenge. Section 16 was conceived as a safeguard. It has become a delay tool. The respondent files an exhaustive application alleging the matter is non-arbitrable, the agreement is non est, the dispute is excluded, the cause of action is outside the scope. The tribunal must hear it, take written submissions, and pass a reasoned order running to thirty pages, all before pleadings on merits even begin. If the order goes against the respondent, the matter limps to evidence. If it goes against the claimant, a writ petition is filed, the matter is parked in the High Court for months, and the Section 29A calendar blissfully ticks on. The challenge to the tribunal under Section 13, on independence or impartiality, is invoked with growing creativity, sometimes on the basis of a single procedural ruling that the party did not like. The challenge is withdrawn after two sittings are lost, with no consequence whatever for the party that filed it.
Parallel proceedings in court are now routine. A party will run to the commercial court under Section 9 for interim relief even after the tribunal is fully seized, claiming that the tribunal cannot grant adequate protection. The court hears the petition on affidavits, often at considerable length over several dates, and sometimes grants interim relief that the tribunal could itself have granted under Section 17. Applications under Section 27 for assistance with witnesses take a year to be heard. Execution of interim orders requires a fresh proceeding before the commercial court. Each detour weakens the tribunal's authority over a matter it is supposed to be conducting.
Discovery and document production have become another front in their own right. A party makes a sweeping production request and the other side produces five thousand pages, most of them irrelevant. A targeted request meets a stonewall. Privilege is claimed without basis. The tribunal asks for inspection, fixes dates, and the inspection is then postponed because counsel is unavailable. When evidence finally begins, witnesses are produced who cannot speak to the documents in their own affidavit. Cross-examination, when it does happen, is rarely about the case. It turns into a long parade of formal proof objections, technical questions on documents, and the ritual of "I put it to you" suggestions that lead nowhere.
Underlying much of this is what I would call the Section 34 shadow. Every ruling the tribunal makes tends to be recorded with one eye on the possible setting aside petition. The decision to close evidence becomes a question of risk. The decision to refuse one more adjournment is weighed against the worry that the party will later complain of denial of opportunity. Plain common sense, which used to be the arbitrator's most useful tool, is sometimes set aside in favour of a defensive approach. Given the way Section 34 has been read in recent years, with its widening ideas of patent illegality and fundamental policy of Indian law, a degree of caution from the tribunal is perhaps understandable. But the result is that a tribunal which conducts the matter firmly often finds itself facing a harder challenge at the end than a tribunal which simply went along.
I should mention fees, briefly, since they are part of the picture even if the least dignified part of it. In institutional arbitration, when a party defaults on its share of the deposit, the institution writes to the other party to make good both halves, failing which the proceedings are kept in abeyance. The position in an ad hoc reference is worse, with the tribunal itself raising the fee, fixing it under Section 38 and pursuing deposits from parties who treat the arbitrator like a vendor sending invoices. The point is not that arbitrators want more money. The point is that when fee enforcement is uncertain, the seriousness with which the arbitrator is taken by the parties is also uncertain.
What needs to change is not mysterious. Section 23(4) has to be treated as a serious provision, with the burden on the party seeking extension to establish good cause. Adjournment costs must be real, of the order of a lakh or two in a commercial reference, recoverable summarily. Section 16 applications should be decided on the documents in a single sitting, not litigated over months. Section 9 petitions ought to be returned to the tribunal once it is constituted, as the proviso to Section 9(3) already contemplates. Courts must treat Section 34 with the discipline that Ssangyong and Renusagar attempted to impose, and not as an appellate forum in different language. Institutions should hold the line on deposits.
We talk a great deal about making India a hub for arbitration. That ambition will not be reached while arbitrators are left to absorb the strategic delays of parties who have learnt that the cost of obstruction is small. The frustrations I have described are quiet ones. They do not make headlines. They sit in procedural orders, in adjournment slips, in unanswered emails about deposits, in the slow drift of a matter from its first sitting to its hundredth.
The view from the chair, on most days, is of a system that asks a great deal of its arbitrators and very little of the parties before them. Until that balance shifts, the chair will remain what it has quietly become, one of the more thankless seats in our profession.
About the author: Saurabh Seth is a Senior Panel Standing Counsel for the High Court of Delhi and an empanelled Arbitrator on the Domestic and International Panels of the Delhi International Arbitration Centre (DIAC) and the India International Arbitration Centre (IIAC).
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