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National Law School of India Review




With around 47 million pending cases at various stages of Indian judiciary and one of the lowest levels of judges per million of population in the world, India’s arbitration regime presents a ray of hope for millions of Indians who face the prospect of justice being denied to them due to inordinate delays caused by a clogged judicial pipeline. The enactment of the Arbitration and Conciliation Act, 1996 was presented as a viable alternative to resolve commercial disputes in a timely manner. This paper uses a case study to discuss how arbitration in India has not fulfilled the timeliness promise and in turn, has detrimentally affected trade and investments, making the system an inefficient alternative to the contentious and long drawn litigations.

The study of the DMRC dispute is distinguished because it involves a public-private partnership and is exceptional for two reasons. First, being the first public-private partnership project in metro rail infrastructure in the country, the extraordinary delay in execution of the arbitral award alone highlights the need to create a level-playing field when government is involved as a party. Second, the case showcases glaring loopholes in India’s existing arbitration regime which has allowed courts to unduly intrude and cause inordinate delays at every stage of the process, as a result of which, the amount of interest accumulatedeventually outstripped the principal sum initially claimed by DMRC’s private partner in the project. For instance, it took ten months to constitute an arbitration panel, 68 hearings to pass an arbitral award which culminated in 4.5 years from the date of invocation of arbitration clause by DMRC, several layers of appeal, most of which favored one party, and the execution of the award is still pending!! The paper concludes by recommending plausible solutions to strengthen India’s arbitration laws, so that the DMRC fiasco does not get repeated in future at perilous costs borne by foreign and Indian private investors.

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National Law School of India University

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