What the missing Arbitration Council reveals

Chief Justice of India Surya Kant recently described the continued non-constitution of the Arbitration Council of India (ACI) as part of India's "credibility deficit" in becoming a preferred arbitral seat.

6 years after parliament enacted the statutory framework for the Council through the Arbitration and Conciliation (Amendment) Act, 2019, that criticism is difficult to dismiss. Parliament intended the ACI to serve as the institutional anchor of India's transition towards institutional arbitration and its ambition to become a preferred global arbitral seat. Despite that legislative ambition, the Council remains unconstituted.

The issue has recently returned to the forefront of India's arbitration discourse following a pending Supreme Court petition in Anil Kalyandas Thanvi v. Union of India, in which the Court has issued notice on a plea alleging a continued regulatory vacuum in trade-association arbitrations, a vacuum the ACI was designed to remedy. Most commentary has understandably focused on why the ACI has not yet been constituted. The more important question is no longer why the Council remains unconstituted, but what the 6-year delay reveals about the institutional design parliament enacted in 2019.

The ACI did not emerge in a vacuum. It was parliament's response to a diagnosis of India's arbitration landscape made by the High-Level Committee chaired by Justice BN Srikrishna in 2017. The Committee identified India's arbitration infrastructure as the principal obstacle to the growth of institutional arbitration. Institutional arbitration remained underdeveloped, quality standards varied across institutions and courts continued to perform functions that many mature arbitration jurisdictions had already entrusted to arbitral institutions. The ACI was conceived to strengthen confidence in institutional arbitration by providing a central coordinating body. It reflected parliament's assessment of what India's arbitration ecosystem required in 2019. Whether the ecosystem still requires the same institutional response is a different question.

The 6-year period matters not because it delayed the ACI, but because of what happened while the delay continued. Parliament expected the ACI to shape the development of institutional arbitration. Instead, institutional arbitration developed without it. The legislation continued to assume that the Council would eventually exist. The Draft Arbitration and Conciliation (Amendment) Bill, released for public consultation in October 2024 on the recommendations of the TK.Viswanathan Committee and still awaiting introduction when Chief Justice Surya Kant delivered his remarks in July 2026, continues to assign important functions to a Council that has never been constituted. Meanwhile, arbitral institutions continued to develop their own procedural frameworks and institutional practices without the coordinating body parliament had envisaged.

The pending petition in Anil Kalyandas illustrates the practical consequences of that arrangement. The petition alleges that the Cotton Association of India administers arbitrations under its own institutional rules, without any external body capable of evaluating whether those rules satisfy common standards. The Supreme Court has issued notice; the matter remains at that stage. The 6-year delay has exposed the practical consequences of building an arbitration framework around an institution that never came into existence.

The CJI's comparison deserves to be taken on its own terms rather than reduced to a generic call for India to "be more like Singapore". He noted that Indian parties were the third largest foreign users of the Singapore International Arbitration Centre (SIAC) in both 2024 and 2025. Further, he located Singapore's success not in any statute but in decades of consistent institutional practice rather than a single legislative moment. Singapore's credibility rests on repeat users, tested procedural rules and arbitrators whose judgment has been refined over decades of practice, not merely on the existence of an enabling statute. SIAC was not produced by one Act of the Singapore parliament. It was built over decades through institutions that earned trust, refined their procedures and attracted repeat users. A Council notified tomorrow inherits none of that history. If the CJI's credibility deficit is of institutional practice rather than legislative design, the missing notification looks less like the problem than one symptom of it.

The ACI's absence is perhaps most visible in the very Bill intended to modernise India's arbitration framework. The Draft Arbitration and Conciliation (Amendment) Bill proposes a new section 9A empowering arbitral institutions to appoint emergency arbitrators, but requires such proceedings to be conducted "in the manner as may be specified by the Council." Likewise, the proposed Section 34A, which introduces appellate arbitral tribunals, leaves their procedure to be prescribed by the Council. Both provisions delegate significant institutional functions to a body that has never been constituted. Parliament's next phase of reform still assumes the existence of an institution in its previous phase of reform never brought into existence.

Yet, India's arbitration ecosystem has not stood still. Courts have continued to facilitate institutional arbitration, while institutions such as the Mumbai Centre for International Arbitration (MCIA) have developed their own procedural rules and institutional practices without the benefit of any central coordinating body. The result is unusual. Legislative reform continues to depend upon an institution whose absence has itself become part of India's arbitration landscape.

That makes it difficult to explain the ACI's continued absence as a bureaucratic delay alone. Critics have questioned the Council's design since before the 2019 amendments were enacted. The central concern has been whether a government-dominated regulator can credibly grade institutions and accredit arbitrators when the government itself is India's largest litigant. Similar concerns were recently echoed by retired Justice Badar Durrez Ahmed, who has questioned the composition of the proposed Council given the government's own position as one of the country's largest litigants.

The composition problem is not abstract. Section 43C places the Union government at the centre of the Council's constitution. The chairperson is appointed by the Centre in consultation with the Chief Justice of India, while the arbitration practitioner and academician are also government nominees. Two Union secretaries serve as ex officio members and even the industry representative is chosen by the Central government. This helps explain why criticism of the Council's design has persisted regardless of when it is notified.

A different model already exists. SIAC's governance separates commercial oversight from adjudicative functions: a board of directors drawn from legal and business practitioners handles strategy, while a distinct court of arbitration - composed of experienced arbitration practitioners rather than government nominees - oversees arbitrator appointments and case administration. Neither body reserves seats for serving government officials as of right.  

The ACI concept parliament endorsed in 2019 can still be preserved through a different institutional design. This would require revisiting Section 43C to shift the balance away from government appointments and ex officio State representation towards greater representation from arbitral institutions, bar bodies and user constituencies, while retaining government representation as a minority safeguard rather than a structural default.

6 years of non-constitution have brought the underlying institutional disagreement into sharper focus: the legitimacy of the body now depends as much on who governs it as on the functions it performs.

The 6-year delay has done more than postpone Parliament's reforms. It has exposed a disagreement that predates the 2019 amendments themselves. Critics have consistently questioned whether a Council whose composition remains substantially influenced by the executive can credibly grade arbitral institutions and accredit arbitrators when the government itself is India's largest commercial litigant.

The delay looks less like administrative inertia than evidence of an unresolved disagreement over the institutional design parliament chose in 2019. The debate is no longer simply about constituting the Council. It is about whether the Council, in its present form, can command the confidence necessary to lead India's transition towards institutional arbitration.

Likhith Umesh is a 4th-year B.B.A., LL.B. student at MS Ramaiah College of Law, Bengaluru.