Recalibrating Indian Arbitration: Lessons from the UK’s Arbitration Act 2025

[Tarun and Anamika are students at National Law Institute University Bhopal.]

The UK’s Arbitration Act 2025 (UK Arbitration Act), which came into force on 1 August 2025, represents a significant legislative improvement over its 1996 predecessor, with a focus to improve arbitral efficiency and enforceability. While the original statute had served its purpose, the 2025 reforms reflect a timely acknowledgment of the need to modernize arbitration alongside the evolving commercial landscape. India’s arbitration regime finds itself at a similar juncture with the Arbitration and Conciliation Act 1996 (A&C Act). The increasing volume and complexity of commercial disputes have underscored the need to recalibrate the existing legislative framework through certain institutional revisions, such as the reduction of procedural delays and promotion of procedural fairness.  

This comes at a time when England has introduced specific key reforms through the UK Arbitration Act, such as: i) clarifying that the law of the seat governs the arbitration agreement; ii) enabling summary disposal of unmeritorious claims; and iii) limiting rehearing of jurisdictional claims. These measures are designed to enhance procedural efficiency and legal certainty in arbitration. India can be seen adopting a parallel reform structure, through the draft Arbitration and Conciliation (Amendment) Bill 2024 (Draft Amendment Bill), aimed at enhancing procedural efficiency and legal certainty. The bill introduces certain notable procedural reforms aimed at the same, such as granting powers to emergency arbitrator(s), regulating interim measure(s), and introducing appellate arbitral tribunal(s). As India seeks to strengthen its position as a global arbitration hub, , it stands to benefit from incorporating the three UK reforms alongside its own draft amendment bill to complement its current regime.

This blog examines how and why these three reforms could be meaningfully incorporated into the Indian arbitration framework.  

Clarifying Governing Law Presumptions

Section 6A of the UK Arbitration Act lays down that the law of the seat will govern the arbitration agreement unless the parties expressly agree otherwise. This provision, on the one hand, offers a clear default rule that reduces uncertainty where parties remain silent, and on the other, fully preserves party autonomy by allowing them to expressly opt for a different governing law. 

The Supreme Court of India (SC) first sought to establish a structured framework for the law governing an arbitration agreement (LGAA) in the case of NTPC v. Singer. It held that where parties have expressly chosen the governing law of the contract, that choice would generally extend to the arbitration agreement as well. However, the SC carved an exception for the non-application of such an express choice but never defined the exceptional circumstances that may lead to the same. Additionally, it observed that in the absence of an express choice of law, a rebuttable presumption would arise that the law of the seat acts as the LGAA. However, this formulation left considerable ambiguity, both because the term exceptional circumstances was left undefined and because the presumption test was never consistently applied in later jurisprudence.

Subsequent decisions departed from Singer’s framework and adopted divergent approaches. In Enercon (India) Limited v. Enercon GmbH, the SC reasoned that since the arbitration agreement is not independent of the contract, the proper law of the contract should govern the arbitration clause, and thus Indian law was applied despite London being the designated seat. Subsequently, in Union of India v. Hardy Exploration and Production (India) Inc, the SC relied on a distinction between venue and seat, holding that a mere reference to a venue cannot displace the need for an express designation of juridical seat. Thus, it was held that in the absence of such a designation, Indian law would apply. 

The aforementioned cases revolved around the same underlying question of how should courts determine the governing law of the arbitration agreement in the absence of an express choice? However, instead of establishing a uniform principle, the SC’s rationales diverged from relying on the law of the seat in some instances, contractual interpretation in others, and distinctions between venue and seat elsewhere. These diverging approaches resulted in distinct outcomes, thus creating uncertainty.

Such inconsistencies could be effectively addressed by the introduction of an explanatory provision clarifying the rules applicable to the substance of the dispute. Specifically, it should state that in the absence of an express choice by the parties, the law of the seat of arbitration shall apply. While the current framework distinguishes between domestic and international commercial arbitrations seated in India, it does not address the governing law of the arbitration agreement itself where parties remain silent. To resolve this gap, wherein parties have not expressly chosen the governing law of the arbitration agreement, the law of the seat of arbitration should apply by default. This would promote doctrinal consistency and reduce jurisdictional ambiguity. Moreover, this addition would not override party autonomy but rather operate as a default presumption, rendering the law governing arbitration agreements more comprehensive. 

Enabling Summary Disposal

The newly introduced Section 39A of the UK Arbitration Act permits arbitral tribunals to dispose of cases on a summary basis, where no real prospect of success exists. This reform provides tribunals with express procedural authority to dismiss frivolous or weak claims early on, without the need for full hearings. It strengthens the procedural efficacy and prevents the abuse of the arbitral process by parties seeking to delay or derail proceedings. 

In India, the A&C Act does not currently contain any provision for summary disposal. Although tribunals are empowered under Section 19(3) and 19(4) to conduct proceedings in a manner that they deem appropriate. This discretionary power includes the power to weigh multiple factors to gauge whether a claim has genuine substance or is without merit, however the absence of a dedicated summary disposal mechanism limits the tribunal’s ability to effectively dismiss frivolous claims at an early stage. 

The need for dismissal of such frivolous, meritless claims is particularly concerning given the rising arbitration caseload. Over 61,000 arbitration cases are pending in district courts, nearly 14,000 before high courts, and several more before the SC. The Mumbai Centre for International Arbitration has reported a 48% surge in cases, reflecting growing dependence on institutional arbitration. This trend indicates a growing strain on tribunal resources and highlights the urgent need for tools that allow screening out of baseless claims at an early stage. 

In order to address this lacuna, a new section may be inserted to expressly empower arbitral tribunals to dispose of claims or issues that, in their assessment, lack any real prospect of success, provided both parties are given a reasonable opportunity to be heard. 

Furthermore, such grounds for determining a real prospect of success may include the following:

• The claim or defence prima facie lacks legal merit or contradicts settled law on the face of it. 

• Even if all facts are assumed true, it cannot result in an enforceable award.

• It suffers from a procedural defect, such as the failure to meet a mandatory precondition.

• It is vexatious, repetitive, or intended solely to delay the proceedings. 

  
  

Such a provision would ensure procedural fairness while enabling tribunals to manage caseloads more efficiently. It would align India’s arbitration framework with international best practices and strengthen institutional credibility by reducing costs, delays, and misuse of the process. 

Curbing Rehearing of Jurisdictional Challenges

The recent amendment to Section 67 of the UK Arbitration Act bars courts from conducting a complete factual rehearing wherein parties have challenged the tribunal’s jurisdiction. Under the new framework, the courts are now required to defer to the tribunal’s evidentiary findings, thereby streamlining the review process and upholding the tribunal’s autonomy. This shift addresses the long-standing problem of jurisdictional objections being used as a tactical delay device to frustrate enforcement. 

In contrast, India’s arbitration framework continues to allow full re-litigation of jurisdictional issues before the courts. Section 16 of the A&C Act rightly enshrines the doctrine of kompetenz-kompetenz, permitting arbitral tribunals to rule on their own jurisdiction. However, under Section 34(2)(a)(iv), such determinations remain open to judicial review at the enforcement stage. While this safeguard is designed to protect parties from erroneous jurisdictional rulings, its judicial treatment has given rise to a growing concern of repetitive rehearing. In the case of SBP & Co. v. Patel Engineering, the court held jurisdictional issues to be inherently judicial in nature, thus opening the door for courts to re-examine them under Section 34. Furthermore, this approach was reiterated in Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products, where a tribunal’s ruling on scope and authority was treated as reviewable. 

This concern was recently highlighted by the SC in NTPC v. SPML Infra, where it acknowledged the abuse of jurisdictional objections during enforcement and the procedural fatigue it generates. Parties often exploit this provision not to correct genuine jurisdictional errors, but to buy time and frustrate awards.  

In order to address this, a proviso may be added to clarify that findings of fact by an arbitral tribunal on jurisdictional matters shall be final and not subject to re-examination by the court, except where such findings are vitiated by elements like violation of the principles of natural justice or a patent error of law. This limited carve out preserves judicial oversight in exceptional cases while ensuring that courts do not conduct a de novo analysis that undermines the tribunal’s autonomy.  

Conclusion

The Draft Amendment Bill represents a decisive step towards strengthening India’s arbitration framework in line with the best global practices. By addressing procedural inefficiencies and clarifying the role of institutions, the Bill seeks to position India as a credible hub for dispute resolution. 

At the same time, the reforms contained in the UK’s Arbitration Act demonstrate the value of measures that give tribunals clearer procedural powers, minimize uncertainty over governing law, and limit excessive judicial review. A balanced regime that empowers tribunals to act decisively while preserving fairness will reduce delays, improve enforcement, and provide parties with greater confidence in the arbitral process. Such reforms can help India consolidate its growing reputation as a reliable arbitral jurisdiction. The UK’s recent amendments demonstrate how targeted legislative changes can resolve these issues without disrupting the core structure. 

Commercial parties today value jurisdictions that uphold party autonomy, offer enforceable outcomes, and minimise procedural friction. For India, the essence lies not in the replication of such reforms but in drawing on their spirit to shape rules that reflect its own legal and commercial realities. This is not a call to imitate but a call to prepare.