Guest Post: Transparency in Functioning of Arbitral Institutions: Global Best Practices v. Indian Institutions

[This guest post by Mr. Pascal Sasil R, School of Law, CHRIST University, looks at how arbitral institutions in India compare with their global counterparts on the issue of publication of statistics of the  cases that those institutions have handled. Publication of statistics enable users take an objective view over the performance of such institutions and also compare them.] 

Transparency in Functioning of Arbitral Institutions:

Global Best Practices v. Indian Institutions

-Pascal Sasil R, School of Law, CHRIST University, Bangalore.

Arbitration in India has indeed come as a welcome change, in the past three decades or so, owing to the immense impetus it brings in as an alternative to the immensely burdened conventional judicial system, i.e., the courts of the land. The 2012 Bharat Aluminium Co v. Kaiser Aluminium Technical Services judgement proved to be the watershed moment for Arbitration in India. This being said, institutional arbitration has proven to be a damp squib on the Indian front and has indeed contributed to India being branded arbitration unfriendly. While various intrinsic and extrinsic factors have contributed to this notion, this article aims at providing an inkling as to the functioning of arbitral institutions in India.

Towards this end, this article mainly looks at the transparency angle: how far arbitral institutions in India are transparent in their functioning so as to provide its users, both current and prospective, as to their functioning. Transparency in functioning enables parties to make an informed choice of arbitral institutions. It also fosters a sense of competition among arbitral institutions. Effective competition fosters party autonomy. An empirical metric of the level of transparency is the data published by arbitral institutions on the cases handled by them. Such  data includes

This article compares data published by six prominent arbitral institutions in the world^[1] on the one hand and well-known arbitral institutions in India. 

Name of the Global Arbitral Institution	No. of Cases Filed/ Refrred. (Intl. Arbn.)*	Nationality/ Geographical origin of the Cases	Disputed Amount Value	Awards Delivered/ Approved
International Chamber of Commerce International Court of Arbitration[2]	869 (75%)	Latin America & Caribbean- 15.5% Central & West Asia-10.8% North America (USA & Canada)- 9.1% Central & East Europe- 8.2% Sub Saharan Africa-5.2% North Africa- 2.3% North and West Europe- 29.5% South and East Asia and the Pacific- 19.4%	US $ 45.18 Billion	586 awards, (145 partial awards, 397 final awards and 44 awards by consent)
London Court of International Arbitration[3]	395 (95%)	United Kingdom- 18.6% North America- 3.1% Caribbean- 4.1% Central and South America- 4.8% MENA- 13.1% Africa- 10.2% Oceania- 1.5% Asia- 10% CIS- 8.2% Central and Eastern Europe- 2.2% Northern Europe 0.2% Western Europe 23.8%	N/A	N/A
Arbitration Institute of the Stockholm Chamber of Commerce[4]	175 (50%)	Parties from 44 different countries appeared in disputes before the SCC in 2019. Russia, Germany, and the USA were the most common party nationalities in SCC proceedings, outside Sweden.	1.6 Billion Euros	Half of the awards rendered under the SCC Arbitration Rules in 2019, was rendered between six to twelve months from when the case was referred to the arbitrator or tribunal. Another 27% of the awards were rendered within 6 months from the date of referral.
Vienna International Arbitral Centre[5]	45 (N/A)	Austria – 26 U.S.A. – 6 Poland – 4 Russia – 4 Azerbaijan – 3 Germany – 3 United Kingdom – 3 Hungary – 3 Luxembourg – 3 Romania – 3 Slovakia – 3 Albania – 2 Switzerland – 2	450 Million Euros	N/A (51 pending cases at the end of the Calendar Year)
Singapore International Arbitration Centre[6]	479 (87%)	416 International cases and 63 Domestic cases.	SG $ 10.91 Billion	169 Awards were issued in 2019.
Hong Kong International Arbitration Centre[7]	308 (80.9%)	Top 10 Nations : 1.  Hong Kong 2.  Mainland China 3.  British Virgin Islands 4.  United States 5.  Cayman Islands 6.  Singapore 7.  South Korea 8.  United Kingdom 9.  Switzerland 10. Macau	US $ 4.7 Billion	48 arbitrations administered by HKIAC were concluded by Final Award.

   *Percentage/Number of International Cases among the total number of cases referred to the Respective

     Arbitral Institution in the Calendar Year       

The data provided by the Indian counterparts, i.e., renowned arbitral institutions in India

Name of the Indian Arbitral Institution	Number of Cases Filed (International Arbitrations)*	Nationality/ Geographical origin of the Cases	Disputed Amount Value	Awards Delivered/Approved
Mumbai Centre for International Arbitration[8]	8 (N/A)	Mumbai, Delhi, Jaipur, Chandigarh, and Africa.	US $ 18,242,000	Two
Indian Council of Arbitration	N/A (N/A)	N/A	N/A	N/A
Delhi International Arbitration Centre[9]	2328(in the year 2018) (N/A)	N/A	N/A	303 (in the year 2018)
Nani Palkhivala Arbitration Centre	N/A (N/A)	N/A	N/A	N/A
Indian Institute of Arbitration & Mediation	N/A (N/A)	N/A	N/A	N/A

       

*Percentage/Number of International Cases among the total number of cases referred to the

          Respective Arbitral Institution in the Calendar Year                                         

It is clear from the above data that Indian arbitral institutions are reluctant in presenting data pertaining to the arbitrations handled by them. While almost every other global arbitral institutions present annual reports and statistics, we are met with little to no data on the Indian front.

The non-availability of the said data presents multiple-fold problems. At the ground level, various types pertinent data such as number of cases, awards delivered, so on and so forth, kept away from the public view, creates a sense of faithlessness and ripples of doubt on the efficacy of the arbitration process in general apart from casting doubts on the efficacy of the said institution. Time concern is one of the major factors that pushes entities towards arbitration and when the said time efficiency or the number of awards passed in a said period is not published, it defeats the very purpose of alternative  dispute resolution.

 

Apart from party specific concerns, the lack of data in the public forum also poses significant constraints to users in choosing the better arbitral institution.  Further, lack of data has a chilling effect on a proper analysis of arbitral institutions in India.

Thus, comparatively, global institutions have continued to dominate as global leaders in transparency too. This lack of transparency indeed comes as an often less debated aspect but, a dangerous peril that might end up having serious repercussions on the growth of arbitration in India.

India’s first significant attempt at strengthening the roots of institutional arbitration came with the setting up of the International Centre for Alternative Dispute Resolution, way back in 1995. This being said, the Indian trend of ad-hoc arbitration over institutional arbitration continues to hold good till this day. This has been presented, based on a survey carried out by PWC on Corporate Attitudes and Practices towards Arbitration in India^[10]. The statistics showed a 47% to 40% preference to as hoc and institutional arbitration, respectively. Other such ground reports present an almost similar view too. While non-availability of the said vital, basic data might not be the only reason influencing this choice-making process, the same might indeed have a potentially greater than expected impact courtesy of credibility as a factor influencing the choice-making process of an average individual or entity.

Justice B.N. Srikrishna chaired Report of the High-Level Committee to Review the Institutionalisation of Arbitration Mechanism in India^[11], had proposed for a lot in fine print. The said report analysed the various common reasons for international arbitration institutions proving to be successful under the title, wherein various factors such as Arbitral Rules, Governance Structure, Case Management Services, amongst others. Along the same lines, the author believes that publication of annual data and transparency in the same is a common trend identified among the top six arbitration institutions, we have located and comparatively analysed.

While the report does not discuss about the same in detail, the author believes that the  proposed Arbitration Council of India, courtesy of the Arbitration and Conciliation (Amendment) Act of  2019^[12] will have to play a proactive role in setting up the balance between confidentiality of private data and fair publication of generalised data with nil prejudice to the interests of the parties and entities that make use of the services. Such a balance shall indeed boost institutional arbitration in India and play a significant role in influencing credibility and reducing those contemporary woes of institutionalised arbitration on the Indian front.

 

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[1] Aibek Ahmadov, Born’s Finest: 19 Leading Arbitral Institutions of the World, LINKED IN, (Mar. 18 2015), <https://www.linkedin.com/pulse/borns-finest-19-leading-arbitral-institutions-world-aibek-ahmedov/>, last accessed on 28^th July 2020.

[2] Full Report Available at: https://globalarbitrationnews.com/wp-content/uploads/2020/07/ICC-DR-2019-statistics.pdf

[3] Full Report Available at: https://www.lcia.org/LCIA/reports.aspx 

[4] Full Report Available at: https://sccinstitute.com/statistics/

[5] Full Report Available at: https://www.viac.eu/de/service/statistiken

[6] Full Report Available at: https://www.siac.org.sg/images/stories/articles/annual_report/SIAC%20AR_FA-Final-Online%20(30%20June%202020).pdf

 

[7]Full Report Available at: https://www.hkiac.org/about-us/statistics#:~:text=Total%20new%20cases%3A%20A%20total,disputes%20and%20one%20was%20adjudication.&text=35%25%20of%20all%20arbitrations%20submitted,3.6%25%20involved%20no%20Asian%20parties.

[8] Full Report Available at: https://mcia.org.in/wp-content/uploads/2016/05/MCIA-4th-Edition-Book-compressed.pdf

 

[9] Full Report Available at: http://dacdelhi.org/DataFiles/CMS/file/NEWS%20LETTER-FINAL%20PRINTING%20CURVE_Col%20change.pdf

[10] Corporate Attitudes & Practices towards Arbitration in India, PWC, available at: <https://www.pwc.in/assets/pdfs/publications/2013/corporate-attributes-and-practices-towards-arbitration-in-india.pdf>, last accessed on 28^th July, 2020.

 

[11] Justice B.N. Srikrishna, Report of the High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India, (30^th July, 2017), available at: < http://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf>, last accessed on 28^th July, 2020.

 

[12] Arbitration and Conciliation (Amendment) Act of  2019, (No. 33 Of 2019 dated 9^th of August, 2019).