Supreme Court judge Justice Pankaj Mithal recently stated that arbitration in India has increasingly come to be seen as protracted, expensive and uncertain..Speaking at Rajiv Gandhi National University of Law (RGNUL), Patiala, Justice Mithal referred to the recent circular issued by the Public Works Department of Delhi on April 21, 2025 removing the arbitration clause from its general clauses of contract. The circular also mandates that any disputes arising under future contracts will be resolved exclusively through courts in Delhi..The judge opined that the circular was "emblematic of a broader and growing disillusionment with the arbitration mechanism in India"."The prolonged timelines, frequent judicial interventions, delays in enforcement of awards, and perceived procedural arbitrariness have collectively eroded confidence in the arbitral process. Government departments, instead of promoting institutional arbitration, are now opting out entirely, signaling a retreat from their own policy commitments," said Justice Mithal..Justice Mithal spoke about how alternative dispute resolution was not a new concept."Long before modern courts came into being, Indian traders had their own smart and effective ways of resolving disputes. For example, in Gujarat, when traders had a disagreement, they would often go to a committee of respected elders from their own community, who would settle the matter fairly and quickly. These were early forms of institutional arbitration, and people trusted them because they understood the trade, the customs, and the people involved.".However, the judge stressed that our current arbitration law does not reflect this rich history."It is too focused on copying foreign models and does not make enough room for Indian ways of doing business," stated Justice Mithal.
Supreme Court judge Justice Pankaj Mithal recently stated that arbitration in India has increasingly come to be seen as protracted, expensive and uncertain..Speaking at Rajiv Gandhi National University of Law (RGNUL), Patiala, Justice Mithal referred to the recent circular issued by the Public Works Department of Delhi on April 21, 2025 removing the arbitration clause from its general clauses of contract. The circular also mandates that any disputes arising under future contracts will be resolved exclusively through courts in Delhi..The judge opined that the circular was "emblematic of a broader and growing disillusionment with the arbitration mechanism in India"."The prolonged timelines, frequent judicial interventions, delays in enforcement of awards, and perceived procedural arbitrariness have collectively eroded confidence in the arbitral process. Government departments, instead of promoting institutional arbitration, are now opting out entirely, signaling a retreat from their own policy commitments," said Justice Mithal..Justice Mithal spoke about how alternative dispute resolution was not a new concept."Long before modern courts came into being, Indian traders had their own smart and effective ways of resolving disputes. For example, in Gujarat, when traders had a disagreement, they would often go to a committee of respected elders from their own community, who would settle the matter fairly and quickly. These were early forms of institutional arbitration, and people trusted them because they understood the trade, the customs, and the people involved.".However, the judge stressed that our current arbitration law does not reflect this rich history."It is too focused on copying foreign models and does not make enough room for Indian ways of doing business," stated Justice Mithal.
