New Delhi: Observing that international arbitration is increasingly facing procedural hurdles, Chief Justice of India Surya Kant said mediation is no longer an alternative but an essential tool for achieving timely and amicable resolution of disputes.
He was delivering a lecture on ‘Mediation, Arbitration and Courts: Converging trends in Indian and English approaches to resolving commercial disputes’ at the UK Supreme Court on Monday.
In calling for a fundamental shift in how companies and global legal systems deal with conflicts, the Institute of International Justice said: “The fundamental question for a modern corporation should no longer be where to litigate, but how to resolve it.”
He said that courts, arbitration and mediation should not be viewed as competing mechanisms but rather as complementary institutions that serve distinct functions within the broader justice system.
“We must reject the old narrative that pits alternative dispute resolution against the majesty of formal courts,” he said.
“Traditional courts must remain the ultimate guardians of public legal standard setting and constitutional accountability,” he said. “However, when the court provides the structure of certainty, mediation serves as an adaptive mechanism for private commercial harmony. The two systems do not diminish each other; they support each other.”
Initially, the ICJ treated arbitration, especially international arbitration, as an important alternative dispute resolution mechanism, and noted the difficulties faced by jurisdictions in resolving disputes through it.
“I strongly believe that as international arbitration increasingly reflects the procedural complexities it was designed to escape, it is mediation that now emerges as the true frontier of commercial agility,” he said.
“Over the past several decades, cross-jurisdictional arbitration has certainly come to be seen as a response to some of the perceived limitations of court-focused adjudication, particularly in matters involving speed, technical complexity, party independence and cross-border trade,” he said.
In India, the Arbitration and Conciliation Act came into being in 1996, and various judicial interpretations have provided a “pro-arbitration approach”, consistent with internationally accepted principles governing the resolution of commercial disputes, Kant said.
He said that Indian courts have repeatedly emphasized the principle of minimum judicial intervention to preserve the sanctity of arbitration procedures.
“Yet, despite its virtues, arbitration appears poised to inherit some of the very procedural burdens it originally sought to steer clear of. “At least within the Indian administration of justice system, arbitration proceedings have generated an expanding parallel layer of litigation, with virtually every stage of the arbitration process becoming vulnerable to judicial challenge between disputing parties,” he said.
The CJI said that arbitration proceedings are delayed by questions about the validity of the agreement, the appointment of arbitrators, the determination of the judicial seat, the distinction between seat and venue, jurisdiction issues, and challenges to interim or final awards that often move before the courts at multiple stages.
“This, of course, is by no means limited to the Indian judiciary alone. Jurisdictions around the world appear to face similar difficulties, whether in the context of domestic arbitration or complex cross-border commercial disputes,” he said.
The result is that disputes that were supposed to be resolved efficiently and quickly can sometimes turn into drawn-out procedural contests, he said, adding that even the UK sees such obstacles.
“I strongly believe that as international arbitration increasingly reflects the procedural complexities it was designed to escape, it is mediation that now emerges as the true frontier of commercial agility,” he said, stressing the necessity of resorting to mediation.
Referring to the steps taken by the Supreme Court to give institutional support to mediation in India, he said it encourages mediation in sectors such as insurance and motor accident compensation claims.
“The real paradigm shift has occurred with the enactment of the Mediation Act, 2023. This legislative enactment has established mediation as an independent and evolving pillar of commercial justice. The Act fundamentally elevates mediation by introducing a strong mandate for pre-litigation mediation, ensuring that parties must meaningfully explore compatibility before they can cross the commercial court barrier,” he said.
He said the Mediation Act also embraces the digital future, recognizes online mediation and allows parties from various jurisdictions to settle disputes effectively without the burden of travel or procedural formalities.
“What these developments unambiguously reflect is a shift in the legal landscape in India and the growing recognition that mediation is no longer an alternative, but an essential tool for reaching an amicable, durable and timely solution,” he said.
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