In April 2010, the LCIA India launched its India specific arbitration rules (India Rules) (see Legal update, LCIA India launches its arbitration rules). The India Rules, although based on the LCIA Arbitration Rules, have differences that will assist in resolving some of the nuances of arbitration in India. The primary differences relate to the speedy conduct of arbitral proceedings - for example, when allocating costs the tribunal can take the conduct of the parties into account, and the Rules also allow the LCIA to determine the seat of arbitration where the parties cannot decide.

The Indian government launched a consultation paper in 2010 recommending changes to the Arbitration and Conciliation Act 1996 (1996 Act). The paper effectively states that, over a period of time, the Indian courts have interpreted the provisions in such a way as to defeat the object of the 1996 Act. Further, certain provisions of the 1996 Act require clarification. Some of the notable proposals are:

In June 2010, Law and Justice Minister, Dr. Veerappa Moily announced the National Litigation Policy Document which is formulated to reduce the average length of proceedings from 15 years to 3 years. The policy recommends the use of arbitration as a cost effective and expeditious way to resolve disputes. It points out that arbitration has become an alternative to litigation but warns that poor drafting of arbitration agreements has become a cause for delay in arbitration proceedings and advises that these issues must be addressed.

2010 has also witnessed the handing down of judgments at various levels that reflect a positive change in the attitudes of the Indian courts towards arbitration. Many rulings have demonstrated a renewed reluctance of the Indian courts to interfere when a valid arbitration agreement exists:

The Indian government, while embarking on a Mission Mode Programme for Delivery of Justice and Legal Reforms, has stated that it wants to bring about comprehensive amendments to the 1996 Act to make India a hub for international arbitration and to overcome hurdles caused by certain decisions of the courts in India. The Bill is expected to be tabled in 2011 and there is a possibility that the Bill will be enacted and enter into force in 2011.

In January 2011, the Delhi High Court refused to interfere in the enforcement of a foreign arbitral award while narrowly interpreting public policy as a ground for refusing such enforcement in Penn Racquet Sports v. Mayor International Ltd, EX.P. 386/08 & E.A. Nos.451/2010, 704-705/2009 & 77/2010 (see Legal update, Delhi High Court: The public policy ground for resisting enforcement of foreign awards must be interpreted narrowly). Further case law interpreting public policy grounds is likely in 2011.

Finally, the symposium on International Commercial Arbitration hosted by LCIA Asia Pacific Users' Council and LCIA India, in February of 2011, and the implementation of measures such as the consultation paper and the National Litigation Policy should provide a major boost for arbitration in India in 2011.