An Inch in the Right Direction: Analyzing the Draft Arbitration Rules 2023

[Dhruv is a student at Jindal Global Law School.]

Despite repeated proclamations, propagations and institutional reforms, the government's ambition to make India a global arbitration hub still suffers from procedural challenges.

Initiatives such as policy frameworks, high-level expert committees, law commission reports and international engagement aim to enhance India’s image in the global arbitration ecosystem. Yet, these efforts do not resolve the delays that continue to exist in the Indian arbitral process. The Baker McKenzie International Arbitration Yearbook 2024–2025 notes that arbitration proceedings in India can extend five to seven years, far exceeding the global average of 18 to 24 months. These delays are particularly visible in Delhi, where procedural bottlenecks and frequent court interventions often undermine efficiency of the process.  

Within this crisis of expeditiousness, the Draft Delhi High Court Arbitration Rules 2023 (Draft Rules) mark an important reform. By codifying filing requirements, disclosures, and submissions, the Draft Rules seek to introduce predictability and structure within the framework of the Arbitration and Conciliation Act 1996 (Act). Against this backdrop, this post analyses the key changes introduced by these Draft Rules, their potential to address procedural inefficiencies, and the gaps that remain in India’s pursuit of becoming an arbitration friendly jurisdiction. 

Analyzing the Proposed Reforms and their Effect on the Current Arbitral Regime

The Draft Rules, framed under the Act and the Delhi High Court Act 1966  represent a judicial effort to achieve the vision set out by the TS Vishwanathan Committee and the B N Srikrishna Committee. Their reforms go beyond mere procedural adjustments and target four main areas long plagued by inefficiencies: (A) filing requirements, (B) institutional arbitration, (C) digital reporting of arbitral records and (D) overall case management. Each of these changes and their implications are discussed below.  

Filing requirements: Resolving procedural ambiguity, frivolous litigation and inefficiency  

The Act has long suffered from inadequate filing standards. Applications before courts often lacked essential details like relevant subsections, party addresses and arbitrator’s information, resulting in incomplete filings, repeated defects and frequent adjournments to cure those defects.

A recurring example is the misuse of Section 34 proceedings where challenges are framed under allegations of ‘fraud’, ‘forgery’ or ‘patent illegality’. Vague and defective  challenges lead to avoidable court interventions and fuel interlocutory backlogs in arbitration-related litigation proceedings. 

In response, Rule 3 constitutes a direct and granular solution to this. It mandates comprehensive disclosures at the filing stage to include:

1. The precise subsections invoked; 

2. Arbitrator’s details and the Sixth Schedule Declaration;

3. And a detailed synopsis of pleadings for grounds of challenge. 

A similar problem arises during interim relief proceedings under Section 9. Parties frequently bypass the tribunal and rush to courts under Section 9, without adequately demonstrating why the tribunal cannot offer effective relief under Section 17. Rule 3 addresses this by requiring the parties to provide a reasonable justification for invoking the court’s jurisdiction within Section 9 applications themselves. 

This step brings into operation the restrictive grounds for challenge and court intervention as established in NHAI v. M Hakeem. It compels parties to provide complete disclosures and ensures that no unnecessary adjournments are requested during courtroom proceedings. 

The same disclosure requirements are also extended to the judicial proceedings of foreign awards through Rules 8 and 9 respectively. Specifically, they demand proof of nationality, award authentication, status, required translations and disclosures of pending challenges abroad. Along with minimizing procedural defects and streamlining the flow of proceedings, these also potentially deter frivolous challenges from hindering enforcement. After all, defaulting parties often induce interim encumbrances only to later challenge the award, delaying enforcement as much as possible. 

On the contrary, the court must also be mindful of extra time that it will require to examine these disclosures. These rules may also lead to procedural barriers for complex multi-party or multi-jurisdictional transactions. Excessive disclosure burdens also undermine the Act’s accessibility, especially in complex, multi-party disputes. However, at the very least, this standardization minimizes ambiguity, reduces preliminary objections and unnecessary adjournments for a smooth flow of arbitral matters in court. 

Promotion of institutional arbitration 

Despite the 2019 amendment following a pro-institutional arbitration stance, 95% of arbitration in India remains ad hoc. Indeed, ad hoc arbitration upholds party autonomy to the highest levels, but it also perpetuates procedural uncertainty in circumstances delineated above. 

In this regard, Rule 4 establishes a mandatory attempt of the court to refer parties to arbitral institutions when approached for appointments under Section 11 of the Act. It does not bind the parties, but acts as mere encouragement favoring the efficiency, standardization, and administrative support inherent in institutional frameworks. Now, instead of ascertaining seat, composition and even validity on mere conduct the court first shall attempt to refer matters to an institutional arbitral centre. 

Digital reporting of arbitral records

Another recurring cause of delay stems from poor maintenance of arbitral records. Inadequate documentation, missing filings, or disorganised records often force courts to grant adjournments during enforcement or challenge proceedings. To resolve this, Rule 7 imposes mandatory standardised record keeping obligations on tribunals within the Delhi High Court’s jurisdiction. They require chronologically indexed digital copies for record keeping. This addresses the persistent issue about poor maintainability of arbitral pleadings and awards, required for Section 36 enforcement, Section 34 challenges or Section 37 appeals. 

In the absence of proper standardized digital systems, tribunals often relied on disorganized or inaccessible physical records, making post-award proceedings cumbersome. While it must be carefully balanced with party confidentiality under Section 42A, mandatory digital recordkeeping resolves the persistent issue of poor maintainability of records. 

Overall case management 

A prominent source of delay and inconsistency in arbitral proceedings stems from fragmented disputes, especially in multi-party and multi-jurisdictional arbitrations. 

Resolving this, Rule 5 promotes procedural efficiency by mandating referral of disputes arising from the same transaction to an already constituted tribunal. This reduces the risk of inefficient fragmented proceedings by combining them within one tribunal only. 

Furthermore, fee-related uncertainty has also been a persistent source of friction, often escalating costs. In this regard, Rule 6’s fee guidelines standardize the application of the Fourth Schedule of the Act in Delhi arbitrations. Unless the court directs otherwise or the parties agree, this rule ensures a consistent fee structure, reducing uncertainty over arbitral costs. This further resolves a source of conflict regarding fee disputes within ad hoc tribunals. 

Other changes 

Recognizing that procedural inefficiencies often originate from defects at the filing stage itself, Rules 10-14 akin to Rule 3 introduce filing-centric reforms aimed at minimizing defects and streamlining submissions. They mandate an advance copy service (Rule 10), consolidated filing similar to writ petitions (Rule 11), and verified pleadings via affidavits or statements of truth (Rule 12). Furthermore, Rule 14 directs the listing of all connected matters before a single bench to improve judicial economy and consistency and reduce the risk of conflicting interim orders by simultaneous proceedings. 

Empirical Issues

Theoretically, these rules exhibit a promising procedural framework which finally attempts to achieve the procedural efficiency to tackle the plethora of pending litigation in India, however, in reality their success hinges on judicial application. It is also important to recognize that the heavy requirements of Rules 3, 8 and 9 while promoting thoroughness, also risks becoming a new ground for preliminary disclosure objections by opposing parties. If this becomes the case, then the rules would be counter-productive to their objectives. 

These rules represent a procedural framework designed to catalyze the shift from ad hoc to institutional arbitration, in tandem with the objectives of the TS Vishawanathan Report to make India ‘a global hub of international commercial arbitration.’ The issue remains whether domestic institutions possess the capacity, credibility, and resources to meet international standards to compete with Singapore and London.

Furthermore, Rule 4’s institutional preference, requires a meticulous judicial examination to respect party autonomy under Section 11(2) and to avoid under-resourced and unreliable arbitration institutions. To resolve this, the Court should have instituted a approved list of institutional arbitration centres with clear standards for qualification.

Maintaining such lists mirrors the 2019 Amendment’s effort to establish a panel of arbitrators. Yet, without accessible information, parties lacked trust in these mechanisms, often returning to courts and defeating the amendment’s purpose. Similarly, a bare minimum nudge to promote institutional arbitration seems insufficient, the disputed parties need recommendations and information on institutional centres depending upon the amount of claim and the nature of the dispute whether corporate, commercial or merely contractual. 

Overall, the rules mark a landmark institutional advancement, especially against the backdrop of procedural ambiguity and doctrinal inconsistencies crawling in arbitration on grounds of appeal, modification, setting aside and challenge. Crucially, they signal a shift from an informal, party-driven model to a court-supervised framework aiming to meet international standards.

Conclusion 

The Draft Rules promise an efficient procedural framework, but they operate within the broader ecosystem of arbitration with several other considerations involved. They are available for objections and consultations till 5 July 2025. However, like other public administrative consultations, the effectiveness of this process remains opaque. The rules’ potential to expedite proceedings, reduce frivolous court interventions, and enhance India’s standing as an arbitration hub depends on several other factors such as the development of arbitral institutions, court’s interventionist tendencies and a truly arbitration-friendly culture emerging from the state. 

Recent changes such as the Public Works Departments in Delhi deleting arbitration clauses from their standard contracts and tenders, signal the state’s waning confidence in the arbitral process. While the CJI on one hand extols arbitration to attract foreign capital and restore the private sector’s confidence, the state simultaneously retreats from arbitral mechanisms in its own public procurement processes. Regardless, against the backdrop of all this, the Draft Rules offer an admirable step into streamlining the entire process. They present a more structured, transparent, and streamlined model which is noticeably sharper than the procedural ambiguity prevailing in other parts of India.