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In April 2009, the London Court of International Arbitration (LCIA) launched its India centre in an attempt to plug this gap. 'LCIA India' seeks to provide world-class administration of arbitrations in India in an accessible manner and at competitive rates. Located in New Delhi, LCIA India is incorporated in India, and is staffed with a local registrar and counsel. The rates—both for arbitrators and administration—are not yet available, but are expected to be lower than those charged by the LCIA in London. Its opening is a positive development, not least because there has been an urgent need for arbitral institutions to play a greater role in expediting the conduct of arbitrations within India. The centre should help enhance the credibility of institutional arbitration in the eyes of the Indian judiciary and among arbitration users in India. Although not an immediate solution to all of the problems encountered when arbitrating within India, it is certainly a step in the right direction. Pitfalls associated with Indian arbitration Given the endemic delays associated with Indian courts, litigating in India has never been an attractive option for corporate entities seeking speedy resolution of their disputes. At present, there is a backlog of almost 30 million cases in the Indian judicial system. As a result, arbitration is increasingly seen as the preferred option for resolving disputes between Indian and foreign parties. That too, however, has been fraught with difficulty. First, most arbitrations in India are conducted on an ad hoc basis i.e., not administered by an arbitral institution. Such arbitrations tend to resemble the very Indian court proceedings which they are meant to substitute by being procedurally cumbersome and excessively time consuming. Second, Indian courts have adopted an interventionist approach towards the conduct of arbitration proceedings. In particular, Indian courts have assumed the power to set aside awards that they consider to be contrary to Indian law. All in all, as the Indian Law Minister himself succinctly acknowledged in his address at the launch of LCIA India, “arbitration in India is not done well.” How could LCIA India help? LCIA India will likely provide a direct solution to the first problem and, one hopes, over the longer term, go some way towards addressing the second problem. Ad hoc arbitrations are popular in India for two reasons: (i) the absence of a well-established and popular local arbitration institution; and (ii) the perception that they are generally less expensive than institutional arbitrations. By making an internationally recognised brand such as the LCIA available at the doorstep of Indian parties, and (presumably) at competitive rates, LCIA India should address the long-held concerns of Indian entities about institutional arbitration. With respect to intervention by Indian courts, LCIA India does not eliminate this problem. It could, however, provide a long-term solution. In the absence of a credible institutional framework within India, Indian courts have tended to view ad hoc arbitrations with some scepticism, often perceiving them to be unreliable or unfair. The hope is that LCIA India will enhance the credibility of institutional arbitration within India. A well-run, transparent, impartial and reliable administrative institution such as LCIA India could be the necessary catalyst in reviving the Indian judiciary’s confidence in the arbitral process, and encourage the courts to take a less interventionist approach towards arbitrations. A new dawn? It would be premature to suggest that the opening of LCIA India will, in and of itself, eradicate overnight all problems associated with arbitration in India. The current approach of the Indian courts means that losing parties in an arbitration can still obstruct the enforcement of awards by asserting spurious challenges in courts. Arbitral awards can still be overturned, and intervention by Indian courts in the arbitral process is more likely than not. It is therefore likely that parties wishing to minimise the scope for Indian judicial intervention (in particular, foreign investors) would continue to prefer to arbitrate outside India. What LCIA India does, however, is to offer a credible institutional alternative to parties who wish to arbitrate within India. It remains to be seen whether LCIA India can make the transition from this and become the arbitral institution of choice for India-related disputes. Much will depend upon its actual performance, and it is too early to make any predictions. Indian arbitration has seen many false dawns. The Arbitration and Conciliation Act 1996 based on the modern UNCITRAL Model Law and enacted with great expectations was one such example. For several reasons, the legislation did not deliver on its promise. It is hoped that LCIA India will buck the trend and provide a much needed fillip to Indian arbitration. The White & Case International Disputes Quarterly is prepared for the general information of our clients and other interested persons. It should not be acted upon in any specific situation without appropriate legal advice. This article may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website. 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