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As commercial disputes increasingly bypass India’s overcrowded courts, there is growing disquiet over the efficiency of the arbitration process

There is little disputing the fact that only the very patient should knock on the doors of a court in India. But a 4 July ruling from Delhi High Court, in Ariba India Pvt Ltd v M/S Ispat Industries Ltd, suggests that the fate of those who use arbitration to resolve their disputes may not be much better.

Ariba India documents the travails of two Indian companies caught up in an arbitration that in four and a half years of sporadic hearings – one after an interval of 13 months – had only got as far as examining one witness. Terminating the mandate of the arbitration tribunal for failure to act “without undue delay”, Justice Vipin Sanghi noted in a 75-page judgment that the cost to the claimant had already reached 5.6% of the amount at stake.

The delays described in Ariba India, which the court said “makes a mockery of the institution of arbitration”, are certainly not unique. Precedents it cites include a case triggered by a dispute that went to arbitration, but remained unresolved even after nine years. The Arbitration and Conciliation Act, 1996 – unlike its predecessor, the Arbitration Act, 1940 – does not specify how long an arbitral tribunal can take to make an award.

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