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Most institutional arbitration in India is not up to scratch: AP Shah

India, lacking the requisite culture for developing a strong arbitration system, has over 95 percent of arbitration turning out to be “ad hoc”, it was revealed in a conference here.

This is despite a situation where 80 percent of Indians consider arbitration as the preferred system for dispute resolution, as revealed by a survey, the conference co-organisers Jindal Global Law School and the International Centre for Alternative Dispute Resolution said in a release on Friday.

“The culture of arbitration is missing in the country and the attitude towards arbitration is step-motherly. It is treated as part-time practice wherein frequent adjournments, long dates and wasted hearings are common and endemic,” said Justice (retd.) AP Shah, who headed the committee that recommended exempting foreign funds from the vexed minimum alternate tax (MAT).

“Any domestic award is readily set aside by a court and over 95 percent of arbitration in India is ad hoc. The existing arbitration institutions, I am sorry to say, are not up to international standards,” Shah said in his special address to a conference where many legal luminaries were present.

Supreme Court Justice AK Sikri, referring to a survey that indicated that 80 percent of individuals still consider arbitration as the preferred system, said: “People have immense faith in arbitration as dispute resolution system.”

“There is need for a neutral forum of arbitration and India should aspire to become a hub of neutral arbitration,” he said.

Former union law minister HR Bhardwaj said: “It is time for India to join the international high table in arbitration, conciliation and mediation. The world is changing and it would not wait for you.”

“Recent report by the Law Commission will help in setting up a good adjudicatory system in the country, otherwise I may frankly tell you no investment will come to the country,” he added.

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