Govt needs to create an enabling framework for institutional arbitration in India: Pranab Mukherjee

New Delhi, Oct 22 (KNN) Deliberating upon the role of the government in developing the arbitration ecosystem in India, President Pranab Mukherjee said State intervention in a market economy should be limited to situations of market failure - where the market left to itself cannot work out a solution.

He was giving an opening address for the 2016 Global Conference on National Initiative towards Strengthening Arbitration and Enforcement in India.

“Private commercial disputes are not market failures by themselves. They can be resolved by the private parties on their own and businesses will continue,” he said.

If the cost of private dispute resolution is willingly absorbed by businesses through private innovation, such innovations should always be encouraged instead of exhausting the judiciary’s resources. Therefore, the government needs to create an enabling framework for institutional arbitration in India, President Mukherjee opined.

Stating the advantages that India has for a good arbitration ecosystem, he said, “The first of these is that English language is frequently used in courts and in arbitration matters which enables us to engage with the international commercial world of arbitration centred around London, New York and Singapore.”

Secondly, India has a diverse and rich pool of human resource, in law as well as in other disciplines. This human resource can help support and sustain the arbitration ecosystem in India.

Thirdly, major Indian cities have the necessary infrastructure - airports with international connectivity, world-class hotels etc - to facilitate international arbitration, he said.

While India quite clearly has the basic legal and physical infrastructure to support international arbitration, we would, going ahead, need basic institutional reforms to strengthen our arbitration framework. Good laws themselves cannot substitute the need for good institutions. Three institutions are particularly critical for strengthening arbitration in India - arbitral institutions, judiciary and the government, President Mukherjee said.