Time has come for India to take lead in fostering culture of international arbitration: CJI Chandrachud

Time has come for the country to take the lead in fostering a culture of international arbitration, providing a level playing field for dispute resolution beyond domestic courts, CJI DY Chandrachud has said.

“The rule of law shares a symbiotic relationship with the creation of an environment which fosters economic stability and growth. Rule of law principles are, in other words, the virtual semi-conductors of our digital era,” the CJI said at a conference on international arbitration and rule of law here last evening.

Noting that the International Monetary Fund (IMF) has predicted a 7% growth in GDP for India for 2024-25, making the country rank at the virtual top of the ladder, and the World Bank has followed the suit, the CJI said, “The time has come for India to take the lead in fostering a culture of international arbitration, providing a level playing field for dispute resolution beyond domestic courts.”

He also referred to figures about gross foreign direct investment inflows in India as well as the overseas direct investment.

The CJI said respect for the rule of law promotes fairness, stability and predictability which in turn creates a conducive environment for economic growth as investors thrive in a system where rights are protected, contracts are enforced and disputes are resolved efficiently.

A strong rule of law framework also encourages foreign investment, promotes trade and enhances a nation’s global competitiveness, ultimately driving sustainable economic development and improving living standards, Justice Chandrachud said.

“The arbitration community across the world often emphasises the importance of commercial efficiency and ease of business, but these values are inextricably linked to a deep respect for the rule of law. Put simply, the rule of law heralds better economic and commercial outcomes,” he said.

By establishing robust institutional frameworks, India can champion the growth of arbitration in the global South, promoting a fair, efficient and reliable means of resolving commercial disputes, he said.

The CJI said Parliament has initiated efforts to revamp the Arbitration and Conciliation Act of 1996. “To this end, the Ministry of Law and Justice has established a committee to review the effectiveness of the Act and suggest amendments. The committee has submitted its report, which is now being acted upon by the ministry, paving the way for potential reform,” he said.

Justice Chandrachud said as arbitration gains traction as a preferred mode of dispute resolution, related litigation is increasing before the courts requiring judges with specialised expertise.