Arbitration Council of India Explained: Why the Regulator Envisaged in 2019 Still Doesn’t Exist

Nearly six years after Parliament amended the Arbitration and Conciliation Act, 1996 to create a dedicated regulatory body for arbitration, the Arbitration Council of India (ACI) remains on paper. On January 23, 2025, the “Supreme Court of India” asked the Union government to explain the prolonged delay in constituting the Council, while hearing a plea seeking its immediate establishment and the framing of uniform standards for arbitral institutions and arbitrators. The episode has brought back into focus deeper questions about institutional arbitration, regulatory independence, and India’s ambition to become a global arbitration hub.

What the 2019 amendments sought to achieve

The Arbitration and Conciliation (Amendment) Act, 2019 proposed the ACI as the central body to promote and regulate arbitration in India. The idea was to move India away from its heavy reliance on ad hoc arbitration and towards a more predictable, institution-led system.

This vision drew directly from the recommendations of the High-Level Committee on Arbitration chaired by “Justice B.N. Srikrishna”, which submitted its report in July 2017. The committee had identified weak institutions, inconsistent standards, and excessive court intervention as major reasons why India lagged behind global arbitration centres.

The proposed mandate of the Arbitration Council of India

Under the 2019 framework, the ACI was envisaged as a powerful body with wide-ranging responsibilities. These included grading arbitral institutions, recognising professional bodies that accredit arbitrators, and maintaining a repository of arbitral awards made in India.

The Council was to be headed by a Chairperson appointed by the Union government in consultation with the Chief Justice of India. Eligible candidates included former Supreme Court judges, former High Court Chief Justices, or eminent arbitration experts. Alongside this, the ACI’s composition included several ex officio members from the executive, giving the government a significant role in its functioning.

Why independence concerns emerged

Almost from the outset, the ACI attracted criticism over institutional impartiality. Since most members are appointed or nominated by the Union government, critics argue that the Council risks undermining arbitration’s core principle of independence — especially when the government itself is India’s largest litigant.

Experts have pointed out that a government-dominated regulator empowered to grade institutions, accredit arbitrators, and shape policy is unusual in arbitration-friendly jurisdictions. In leading centres such as Singapore and Hong Kong, arbitration is administered by strong, autonomous institutions rather than overseen by a central regulatory authority.

Questions around accreditation and global competitiveness

Another concern lies in the ACI’s power to accredit an unlimited number of arbitral institutions. Critics warn that this could dilute quality standards, strain administrative capacity, and increase costs for the public exchequer.

Additionally, the 2019 framework effectively excludes foreign legal professionals from being accredited as arbitrators in India. This, experts argue, weakens India’s appeal as a neutral seat for international arbitration, where parties often prefer diverse, globally recognised arbitrators.

What the 2024 draft amendment Bill changes

In October 2024, the Union government released the draft Arbitration and Conciliation (Amendment) Bill, 2024, signalling a rethink of the earlier approach. The draft redefines an “arbitral institution” as any body that conducts arbitration under its own rules or as agreed by parties, removing the earlier requirement of formal designation by the Supreme Court or High Courts.

More significantly, the Bill proposes transferring several powers from courts to arbitral institutions. These include extending timelines for awards, reducing arbitrators’ fees for delays attributable to tribunals, and substituting arbitrators — steps aimed at cutting judicial interference and speeding up proceedings.

However, in March 2025, Union Law Minister “Arjun Ram Meghwal” told Parliament that the Bill was still under consideration, leaving the reform process in limbo.

How the draft Bill curtails court intervention

The draft Bill seeks to narrow courts’ role in granting interim relief under Section 9 of the 1996 Act. At present, courts can intervene before arbitration begins, during proceedings, and after an award but before enforcement.

The proposed changes would confine court intervention largely to the pre-arbitration stage or post-award phase. It also alters the 90-day timeline for commencing arbitration after interim relief, counting it from the date of filing rather than the date of the court’s order — a move intended to reduce procedural delays.

A proposed new Section 9-A would allow parties to approach an emergency arbitrator for interim relief after arbitration has commenced but before the tribunal is fully constituted, further reducing dependence on courts.

The deeper challenge: trust in institutions

The Justice Srikrishna Committee had noted that ad hoc arbitration continues to dominate in India because parties value procedural autonomy and remain sceptical of domestic arbitral institutions’ independence and efficiency.

Bridging this trust deficit is crucial. Without credible, autonomous institutions — and clarity on the role of the proposed regulator — India’s ambition to rival global arbitration hubs will remain unrealised. The Supreme Court’s intervention has now revived pressure on the government to either operationalise the ACI or rethink the regulatory model altogether.