The Path to Global Legal Prominence: Exploring the case for an International Commercial Court in India

As one of the fastest-growing economies in the world, India is at a cusp where it faces both the challenge and potential opportunity of expanding its legal infrastructure and legal services market to keep pace with its increasing integration with global markets. In this context, this article explores the possibility of establishing an International Commercial Court (ICC) in India as a pivotal step towards addressing the complexities of cross-border commercial disputes, within India.

Over the years, there has been a legislative and policy push toward increasing India’s influence in international dispute resolution. Most of these steps have focused on positioning India as a hub for international arbitration through the promotion of institutional arbitration, setting up of new arbitral institutions modelled on international best practices, and a judicial trend toward minimal judicial intervention with international arbitral awards.

In India, international commercial disputes can currently be adjudicated through the judicial mechanism available under the Commercial Courts Act, 2015; or, where so chosen by parties, through institutional / ad-hoc arbitration. However, despite stricter timelines and a streamlined procedure under the Commercial Courts Act, 2015, the reduction in pecuniary jurisdiction, the need for capacity building and a high pendency have meant that cross-border disputes initiated in Indian courts are often not adjudicated with speed and efficiency. While international arbitration is the preferred alternative to adjudication through the traditional national court process, arbitration too presents certain challenges such as rapidly rising costs, lack of consistency and transparency in arbitral awards, lack of review mechanisms and lack of support in the form of speedy enforcement mechanisms.

In this context, establishing an ICC as an alternative forum offering the structure of a court alongside enhanced procedures and features focused on cross border dispute resolution and enforcement could be a strategic move that greatly enhances India’s position in the global legal landscape.

In recent years, there has been a steady proliferation of ICCs across the globe. As a result, in addition to traditionally preferred destinations for cross-border litigation like the Commercial Court of England and Wales, parties can now also choose to  litigate cross-border disputes at international commercial courts in Asia and Europe, such as the Singapore International Commercial Court (SICC), Dubai International Financial Centre Court (DIFC Court), and International and European Commercial Chamber of the Paris Court (ICCP).

International commercial courts play a crucial role in resolving disputes arising from international contracts, investments, and transactions. These specialised courts offer several advantages over traditional litigation, including expertise in international commercial law and streamlined procedures: focusing on resolving disputes efficiently, and exploring better enforcement mechanisms. They can also enhance legal certainty, which is essential for fostering international trade and investment.

Where some ICCs such as those at Dubai and Qatar are envisioned as judicial carve-outs;  or deal with specific kinds of disputes such as the China International Commercial Court (CICC) dealing with disputes arising in relation to the Belt and Road Initiative; others, such as the SICC and European international commercial courts like the ICCP aim to establish the host jurisdiction as a legal hub for cross-border dispute resolution. This article posits the establishment of an ICC of the latter nature in India; which would position India as an attractive destination for resolution of cross border disputes.

An ICC in India must be envisioned as a specialised forum for cross border dispute resolution offering novel procedural efficiencies and greater party autonomy than the traditional domestic court system. Such an ICC must complement international arbitration in India, potentially acting as a specialised supervisory court, when so chosen by parties.  Notably, the current frontrunner among ICCs in Asia, the SICC, is presented as a companion to arbitration and mediation, and its connections with the Singapore International Arbitration Centre (SIAC) and Singapore International Mediation Centre (SIMC) are significant contributors to the attractiveness of the SICC. In India as well, a successful ICC would have to be envisioned as one that actively complements ADR, to benefit from synergies and present India as a composite international dispute resolution centre.

ICCs employ a variety of innovations to boost their attractiveness as dispute resolution forums -  adopting flexible and simplified rules of procedure, confidentiality features more commonly found in arbitration, and importantly, panels of specialised judges well-versed with specialised commercial disputes. While ICCs share certain common characteristics, including being creations of the host state as opposed to international law - there is significant variation across ICCs.

Establishing an ICC in India could have various direct benefits, in so far as ICCs may attract a higher volume of cross-border disputes to host states, positively impacting the legal services sector, and attract foreign investment due to an improved legal environment. Indirectly, a specialised ICC could contribute greatly to commercial law and arbitration jurisprudence. ICCs may also pave the way for procedural innovations that are otherwise difficult to introduce to the domestic judicial system without being proven in practice.

While there are benefits, establishing an ICC in India would require careful planning and consideration. A proposal to establish an ICC must address fundamental and foundational questions such as the jurisdiction and composition of the ICC, the criteria for referability of disputes, the specific nature of its rules, its interplay with other forms of ADR, the manner of enforcement; as well as which procedural innovations could successfully be employed to set such an ICC apart. This would require an extensive process of deliberation and the aligning of objectives across stakeholders, including the government, judiciary, legal governing bodies and law firms, as well as businesses and trade bodies who would be the ultimate users of ICCs. Some key challenges will include ensuring the independence and expertise of the judges, streamlining procedural rules and building confidence in the enforceability of the ICC’s decisions.

As with most ICCs, an Indian ICC may be conceptualised as a court that is conferred jurisdiction through a choice of court clause agreed to by parties. Some jurisdictions, such as Singapore, ensure a steady caseload for their ICC by allowing referral of disputes to the SICC from the general division of the Singapore High Court. A similar feature may also be ideated upon in India. Questions as to the composition of the panel of judges of such an ICC, as well as the possibility of allowing foreign representation, would be broader policy considerations, requiring a careful assessment of relevant factors.

Naturally, the proposal to establish an ICC in India must consider potential caseload and anticipated litigants at the ICC. In this regard, an ICC to be established in India may allow referral of international commercial disputes from the State High Courts, apart from jurisdiction derived from parties' choice of court. In terms of potential litigants, it is likely that parties from countries with emerging economies, such as those in the BRICS, may consider an ICC in India a preferable forum; as parties from emerging economies are likely to want to avoid the delays and inefficiencies of resolving a cross-border dispute in the national court system of either of the contracting parties, while also avoiding the potentially high costs of international arbitration. Moreover, litigants from countries with less established court systems doing business in India may find an Indian ICC backed by the strength and expertise of the Indian judicial system appealing.

One of the main attractions of ICC’s should be that their judgments are enforceable within and outside the jurisdiction. For India, developing enforcement protocols for ICC judgments that align with international conventions (such as the New York Convention) will be critical. India could also explore entering into reciprocal enforcement agreements with other jurisdictions, to start with, to facilitate the enforcement of ICC judgments globally; and/or envision the ICC as a division of the Supreme Court of India to bring decisions of the ICC within existing reciprocal arrangements.

In a related development that indicates a growing appetite for ICC-like structures in India, the Report of the Expert Committee for drafting Institutional Rules for the proposed International Arbitration Centre at GIFT IFSC, 2024, has recommended a separate judicial framework for IFSCs in India, which takes cues from ICCs such as the SICC. Phase I of the proposed framework entails the establishment of a dedicated bench in the Gujarat High Court to act as the supervisory court for all ADR matters arising out of IFSC. Phase II proposes a separate High Court-level structure, the IFSC International Court, for all future IFSCs to be set up in the country. In the final phase, akin to several ICCs such as the SICC, the IFSC International Court may consist of international judges having experience of international commercial arbitrations.

As India continues to integrate into the global economy, the establishment of an ICC is not just a necessity but an opportunity to enhance its competitiveness and attractiveness as a business destination. Drawing inspiration from ICCs across jurisdictions, India can create a robust framework for resolving international disputes, contributing to its economic growth and development.

With governmental, legal and commercial entities beginning to tangibly consider broad based proposals including the restructuring of court systems, it is an opportune time for stakeholders to earnestly consider the transformative potential of establishing an ICC in India, which will make India’s bid to be a preferred destination for cross border dispute resolution even stronger.

About the authors: Raj Panchmatia is a Partner and Ishrita Bagchi is an Associate at Khaitan & Co.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

If you would like your Deals, Columns, Press Releases to be published on Bar & Bench, please fill in the form available here.