Intellectual Property Rights and their Nature
Intellectual Property Rights- This paper identifies some of the issues that exist in institutional arbitration in India and outlines areas for reform in Indian arbitration, strengthening existing arbitration mechanisms, as well as setting focus areas for strengthening institutional arbitration in India.
Intellectual property rights and their nature: the concept of institutional arbitration – the need for the hour
Indian legislators have an agenda to promote India as a centre for arbitration to resolve disputes. Next, they have made specific changes to the Arbitration and Conciliation Act, 1996 by amending the Arbitration and Conciliation Act (Amendment), 2015 (“the 2015 amendments”) that aims to achieve this goal by facilitating Rapid and effective settlement of disputes through arbitration. It is widely accepted that India prefers ad hoc arbitration over institutional arbitration. Although various arbitral institutions have been established in India, particularly in the last five years, ad hoc arbitration remains the preferred method of arbitration. Moreover, a large number of international arbitration proceedings involving Indian parties are seated abroad and are run by foreign arbitral institutions. In order to promote institutional arbitration in India, it is imperative that: (a) Indian parties participating in domestic and international arbitration encourage a shift to institutionally managed arbitration rather than recourse to ad hoc arbitration; (B) India shall become a preferred seat of arbitration in international arbitration, at least in matters relating to Indian parties. With this background, this paper outlines some of the issues that exist in institutional arbitration in India, and outlines areas for reform in Indian arbitration, strengthening existing arbitration mechanisms, as well as setting focus areas for strengthening institutional arbitration in India. Intellectual Property Rights
The arbitration may be defined as “the process in which a dispute or difference between two or more parties is referred to in relation to mutual legal rights and liabilities and is determined judicially with a binding effect on the application of the law by one or more persons instead of the court of law.” 1 The purpose of arbitration is to provide a fair and impartial settlement of disputes at a rapid rate by minimizing expenditures and at the same time allowing the parties to freely agree on the manner in which their disputes should be settled, subject to guarantees imposed for the public good.
In India, arbitration came as a means of resolving disputes adopted from the Middle Ages when trade and commerce between traders in India and abroad began to grow. 2 Before 1996, the laws governing arbitration in India included three pieces of legislation; the 1940 arbitration law contained general provisions on arbitration; the arbitration law (protocol and convention), 1937, and the Compensation and Enforcement Act issued by foreigners, 1961, covered enforcement of foreign arbitration decisions. This factor and the explanatory interaction between three different legislations have ensured that simplicity, speed and efficiency will not be present.
Following a lot of persuasion from various commercial bodies, 1996 1996 1996 Arbitration and Conciliation Act was issued. It is commendable that the law is based on the United Nations Commission on International Trade Law Model Law, recommended by the United Nations General Assembly to all countries. The impact of the UNCITRAL Model Law ensured some uniformity in law with arbitration worldwide, which was not fully welcomed because the Indian economy was undergoing a sea change after the 1991 crisis.
Today, arbitration is a very popular way to settle alternative disputes in the commercial world, and one can find the arbitration clause included in most commercial contracts. The parties have the right to choose the form of arbitration they deem appropriate in the facts and circumstances of their dispute. This necessarily involves looking at the various features of arbitration forms and evaluating them, and this can be a daunting task, as both forms have advantages and disadvantages. Intellectual Property Rights
Types of arbitration 
As mentioned above, arbitration can be divided into two basic forms, ad hoc arbitration and institutional arbitration.
- Ad-Hoc Arbitration
Ad hoc arbitration refers to ‘arbitration’ when the parties and the arbitral tribunal conduct the arbitration in accordance with the procedures to be agreed upon by the parties or, in the event of default in the agreement, determined by the arbitral tribunal at the first meeting once the arbitration has commenced. However, there are different sets of rules available to parties considering arbitration, including the rules for their trade associations. 4
Among the peculiarities that have emerged is that in arbitration consisting of three arbitrators, each party appoints one arbitrator and the two arbitrators together appoint the main arbitrator. According to custom, the arbitrators will only appoint the chief arbitrator who was great to both of them and would prefer to appoint the retired chief judge in India. In most cases, the parties prefer to appoint retired judges in the Supreme Court or the Supreme Court, depending on, inter alia, the amount of the claim. At present, given the huge demand for these limited senior judges, the parties often face a scenario in which the dates between hearings can be up to one year, eliminating the entire concept of arbitration as a fast and effective mechanism for dispute resolution. 5
Merits of Ad-Hoc Arbitration
Abolishing the merits of ad hoc arbitration
- Increase control over the arbitration process
Flexibility in determining the procedure
- Cost-effective, where administrative fees charged by an arbitral institution constitute a significant portion of the total costs
- Tend to belong and expensive in some cases in the absence of monitoring
- Effective only when both parties are willing to cooperate with each other
- Institutional Arbitration
Institutional arbitration refers to ‘the management of arbitration by its founder in accordance with its rules of procedure’. The Foundation provides appointment of arbitrators, and case management services, including oversight of the arbitration process, places for holding hearings, etc. Many well-known and internationally recognized institutional arbitration centres, such as the International Chamber of Commerce, the London Court of International Arbitration and the Permanent Court of Arbitration, have opened centres in India. There are currently more than 35 arbitration institutions in India, both domestic and international arbitration institutions, and arbitration facilities by National Arbitration Societies, Commerce, Trade Associations, and City Chambers of Commerce and Industry. Many have their own rules, and some follow the UNCITRAL arbitration rules. Intellectual Property Rights
In institutional arbitration, the arbitration agreement appoints an arbitration institution to administer the arbitration. The parties shall then submit their disputes to the institution that interferes in and administers the arbitration process as stipulated in the rules of that institution. The institution does not arbitrate the dispute. The arbitral tribunal shall determine the dispute. 7
Not all arbitration institutions provide the same services. Some reputable institutions simply offer a set of rules and guidelines, and no other arbitration services, one such is the London Maritime Arbitrators Association (LMAA), etc. There are other institutions that provide rules and a list of qualified arbitrators but do not participate in the appointment of arbitrators, for example, the Association of Maritime Arbitrators in New York.
Certain groups of institutions oversee the entire arbitration process from notifying the defending party with the request for arbitration submitted by the claimant to the parties, including notifying the arbitration award. For example, the International Court of Arbitration of the International Chamber of Commerce. 8
|Merits of Institutional Arbitration||De-Merits of Institutional Arbitration|
|# A clear set of arbitration rules
# Timeline for the conduct of an arbitration
# Support from trained staff
# A panel of arbitrators to choose from
# Supervision in the form of scrutiny of awards
# If the parties are not sophisticated and do not have sufficient knowledge regarding arbitral proceedings, institutional arbitration is preferable
# Resolve disputes efficiently and follow guidelines when conducting arbitrations
|# Lack of credible arbitral institutions
# Misconceptions relating to institutional arbitration related to costs
# Lack of governmental support for institutional arbitration
# Lack of legislative support for institutional arbitration
# Judicial attitudes towards arbitration in general.
# The rules and practices followed are often outdated and inadequate
# Fails to upgrade their administrative and working style as only provide hearing venues with basic facilities and lack more advanced facilities such as multi-screen video conferencing, sound-proof caucus rooms, audio/video recording, court recorders, etc.
# Inflexible as it takes away the exclusive autonomy of the parties over arbitration proceedings
# Delays in Indian courts and excessive judicial involvement in arbitral proceedings contributed to discouraging foreign parties to arbitrate in India.
# Parties often delay arbitration proceedings by initiating court proceedings before or during arbitral proceedings, or at the enforcement stage of the arbitral award.
Challenges Faced By Institutional Arbitration In India
It is widely accepted that India prefers ad hoc arbitration over institutional arbitration. Although various arbitral institutions have been established in India, particularly in the last five years, ad hoc arbitration remains the preferred method of arbitration. Moreover, a large number of international arbitration proceedings involving Indian parties are seated abroad and are run by foreign arbitral institutions. 9 Challenges facing institutional arbitration in India examines the reasons why institutional arbitration is not the preferred method of arbitration in India, with particular emphasis on: Intellectual Property Rights
(1) Misconceptions regarding institutional arbitration;
(2) The lack of government support for institutional arbitration;
(3) Lack of legal support for institutional arbitration; and
(4) Problems related to delays and excessive judicial participation in arbitral proceedings.
- Misconceptions regarding Institutional Arbitration – There are many misconceptions related to institutional arbitration between parties. One relates to costs. The parties consider that institutional arbitration is much more expensive than ad hoc arbitration, mainly because of the administrative fees payable to arbitral institutions. 10
This evaluation has been greatly misunderstood because:
(A) Many arbitration institutions charge very reasonable fees;
(B) The use of an arbitral institution helps to avoid disputes over procedural issues leading to cost savings; and
(C) The costs of ad hoc arbitration can easily exceed the costs of institutional arbitration in the case of additional procedural hearings, postponement, use of pre-trial fees, litigation arising from procedural flaws in ad hoc arbitration suits, etc.
Parties also often believe that institutional arbitration is inelastic because arbitral institutions follow rules that take the parties’ exclusive independence in arbitral proceedings. However, most arbitration institutions in the international scenario have attempted to balance the institutionalization of the autonomy of the parties, leaving only matters that deal with their legitimacy and the integrity of the proceedings beyond the freedom of the parties.
These misconceptions can be attributed to the general lack of awareness regarding institutional arbitration and its advantages. This could also be attributed to the lack of initiative by arbitral institutions to strengthen their work and facilities as well as by lawyers to provide appropriate advice to parties on the advantages of institutional arbitration. Even when there is awareness of institutional arbitration as an option, there is often a misconception that this option is only available for larger business and/or high-value disputes. Intellectual Property Rights
2- Governmental support for institutional arbitration – One of the reasons for the weakness of the institutional arbitration framework in India is the lack of adequate government support for the same over the past two years. While the government is India’s most prolific litigant, it can do more in this capacity to encourage institutional arbitration. Often the general conditions for contracts used by the government and public sector projects include arbitration terms, but these conditions usually do not explicitly provide for institutional arbitration.
Moreover, government policy on arbitration requires a review of whether institutional arbitration will become the norm, especially for disputes whose value is valued at large sums. For example, if the government, as the largest litigant, would adopt institutional arbitration as a regular practice, the sheer volume of cases transferred to arbitral institutions would provide a strong impetus for institutional arbitration.
Discussions and initiatives have recently taken place by some state governments as well as to strengthen institutional arbitration, citing that it will be more structured and cost-effective.  One of the recommendations I made to the Law Commission of India  was that trade and commerce bodies should establish chambers with their own rules. However, the government has so far focused its attention effectively on arbitration in general. To encourage institutional arbitration, special measures are required to develop arbitral institutions. Intellectual Property Rights
- Lack of legal support for institutional arbitration – The law was not specific to arbitration, with no provisions specifically geared towards strengthening institutional arbitration. This contrasts with jurisdictions such as Singapore, where the Singapore International Arbitration Center (“SIAC”) is the default appointment authority for arbitrators under the 1994 International Arbitration Law (“International Academy of Arbitration”) that governs global arbitration.
Indeed, one of the provisions of this Act, Section 29A introduced by the 2015 Amendments, considers that arbitral institutions have warned against arbitration proceedings in India. Section 29A provides for strict timetables for completing the arbitration proceedings. This was criticized as an excessive restriction of arbitration institutions which stipulated timetables for the various stages of arbitration proceedings.  The merits of such an opinion require examination in the light of the endemic problem of arbitration delays in India.
- Problems relating to delays and excessive judicial participation in arbitration – Delays in Indian courts and excessive judicial participation in arbitral proceedings have resulted in India not favouring an arbitration seat, hindering the growth of international arbitration (including institutional arbitration) in India. The parties often delay the arbitral proceedings by initiating court proceedings before or during the arbitral proceedings, or at the stage of enforcement of the award. The great separation of cases before the Indian courts means that judicial procedures related to arbitration take a long time to get rid of them. The Commercial Courts Law seeks to remedy this situation by establishing commercial courts at the provincial or commercial level in the higher courts that have ordinary indigenous civil jurisdiction. These commercial courts/divisions deal with arbitration matters involving commercial disputes, among others.
However, examining the recent list of the Bombay High Court, for example, suggests that business judges often hear questions other than commercial matters, such as family law matters, juvenile justice matters, and so on. In addition, we have noted that the policy of rotation pursued by these higher courts also applies to the judges of the commercial people. Excessive rotation may be hampered by the establishment of arbitral judges who are well versed in arbitration laws and practices. The tendency of Indian courts to intervene heavily in arbitral proceedings has also contributed to India’s reputation as an “unfriendly arbitration” jurisdiction. Intellectual Property Rights
It is a well-known fact that courts in India generally enter when it comes to regulating arbitration procedures, whether in the initial stage of arbitration procedures (such as appointing arbitrators, referring disputes to arbitration or granting temporary relief) or in the enforcement stage.  They have, despite their good intentions and justifications, often misjudged the path to take, and to do justice to the issue at hand but setting a questionable precedent for the future.  Moreover, inconsistent case law on many critical cases  contributed to an uncertainty regarding the law, with severe consequences for India’s reputation as the seat of arbitration.Intellectual Property Rights
In addition to the above-mentioned negatives of institutional arbitration, below are the challenges of institutional arbitration in India. 18
- Matters relating to the management and organization of arbitral institutions.
2- Perceptions related to arbitrators issues and experience related to government resources and support, lack of initial capital, weak and insufficient infrastructure, inadequate training of administrative staff, lack of qualified arbitrators, etc.
- Cases in developing India as an international arbitration seat.
High-Level Committee to Review the Institutionalization of the Arbitration Mechanism in India
To face the challenges and shortcomings of institutional arbitration, a high-level committee was formed to review the institutionalization of arbitration machinery in India by virtue of Mr Judge Bn Srikrishna in 2016. The committee submitted its report on 3 August 2017. 19 With regard to the institutional arbitration scene in India, The Committee provided the following views: 
- Establish an independent body, similar to the Arbitration Promotion Board of India, with representatives from all stakeholders to classify the arbitration institutions in India.
The APCI may
- of professional institutes that provide for accreditation of arbitrators.
- Hold training workshops and interact with law firms and law schools to train advocates interested in arbitration.
- Create a specialized arbitration bar consisting of an advocate dedicated to this field.
- A good arbitration tape can assist in the speedy and efficient functioning of arbitration proceedings.
- Establishing a specialized arbitration tribunal to deal with these commercial disputes in the field of courts. 21
- Proposed changes in the various provisions contained in the 2015 amendments to the Arbitration and Conciliation Act in order to make arbitration faster and more effective and incorporate international best practices (immunity of arbitrators, the confidentiality of arbitral proceedings, etc.).
- The committee also believes that the national litigation policy should encourage arbitration in government contracts.
Role of Government – The Central Government and various state governments may state in arbitration clauses/agreements in government contracts that only arbitrators accredited by any recognized professional institute may be appointed as arbitrators under these arbitration clauses/agreements.
work and functioning of the International Center for Alternative Dispute Resolution (ICADR) 
- International Center for Alternative Dispute Resolution was established in 1995 to promote and develop alternative dispute resolution facilities and techniques to facilitate early settlement of disputes and reduce the increasing burden of arrears in the courts.
- Committee recommended that the International Council of Institutions is declared an institution of national importance and that the institution be seized under a statute as the renovated centre has the potential to be a competitive institution globally.
The reasons for choosing ICADR as the arbitral institution to be developed are:
- Established in 1995 (under the auspices of the Ministry of Law and Justice) with the aim of promoting alternative development in India.
- The government has received substantial funding through grants and other benefits accruing from it.
- It has some benefits such as excellent location (headquarters in New Delhi and regional centres in Hyderabad and Bangalore), good infrastructure and facilities that make it ideal for development as an arbitration institution.
Bilateral Investment Treaty (Bit) Arbitrations Involving The Union of India
India is currently involved in 20 individual bits disputes. The committee’s recommendations on arbitration of bilateral investment treaties are:
1- Establish an inter-ministerial committee composed of officials from the ministries of finance, foreign affairs, and law.
- Recruitment of external attorneys with BIT experience.
3 – Fund allocated to fight claims related to bit.
4- Appointing lawyers who have experience in the field of deciding.
5- Enhancing the ability of central and state governments to better understand the implications of their policy decisions on India’s commitment to action.
- Establish an International Legal Adviser – responsible for the daily management of arbitration bits.
- Consider the possibility of establishing an appeal mechanism for a bilateral investment treaty and a multilateral investment court.
8 That the mechanism for settling disputes between investors and countries as mentioned in Article 15 of the Indian Model “BIT” is effective.
Comparative Analysis of Indian Arbitration Institutions and Other Successful Arbitration Institutions Across the Globe
- arbitration does not flourish in a country except when its arbitration institutions fulfil the basic requirements for a successful and effective arbitration process. These requirements include the following:
Degree of permanence – disputes often arise many years after the conclusion of the original trade agreement, especially in long-term contracts. It is important that the institutions mentioned in the arbitration clause remain in existence when the dispute arises. Otherwise, the arbitration agreement may prove to be “unenforceable or unable to do”, in the words of the New York agreement, that would be the only recourse for the National Court.
- Is easier to trust if the chosen institution or centre has a proven record or, if the establishment of the newly established, has some reasonable guarantees of permanence. The International Chamber of Commerce and the London Court of International Arbitration were established in 1923 and 1892, respectively, with a proven track record of successful arbitration over their long-term existence.
- Indian Arbitration Board was established in 1965. At the beginning of 2010, 574 arbitration cases were pending before the Board at various stages of the arbitration proceedings, but by the end of that year, 579 arbitration cases were being processed, including 20 outstanding cases In courts pursuant to litigation between the two parties. Thus, although it is not as successful as the ICC or LCIA, the coalition has demonstrated a reasonable assurance of permanence.
Modern Arbitration Rules – The practice of international commercial arbitration changes with the existence of new laws and procedures, both nationally and internationally. It is important that the rules of the arbitral institutions be amended to reflect these changes and not rest at some comfortable time. ICA rules, according to IACA, 1996. For example, the appointment of one or three arbitrators to the arbitral tribunal is consistent with Article 10 (1) of the 1996 First Arbitration.
Qualified Employees – One of the main objectives of the arbitration institution is to assist the arbitrators and the parties in conducting the arbitration. This assistance can extend not only to explaining the rules, ensuring that time limits are taken into account, collecting fees, arranging visas, and reserving residency, but also providing advice on appropriate procedures with reference to previous experience. It is a task that requires a mix of qualities, ingenuity and diplomacy as well as legal knowledge and experience.
- Is an area in which the ICC sets the standard, with each arbitration subject to the supervision of a specific “lawyer”, drawn from ICC staff from attorneys with expertise and multiple languages. Although the aforementioned coalition does not have such a lawyer appointed to oversee the arbitration, it does not boat a team of about 1500 arbitrators with a wide range of professional qualifications and experience (legal and illegal), and to ensure a court of the highest competence and mastery. The Alliance has access to distinguished and experienced arbitrators with the widest range of expertise from India, the UK, Singapore, France, USA, Malaysia, Germany and Belgium. Intellectual Property Rights
Reasonable fees – The arbitration process is effective if it is in addition to being fast and fair; it is also cost-effective. Some arbitration institutions, including the International Chamber of Commerce and the Indian Arbitration Board, are assessing their administrative fees and expenses, and fees payable to the arbitrator, with reference to a sliding table based on amounts in the dispute. This has the advantage of certainty, as the parties can discover in a reasonably early stage what the total cost of arbitration is likely to be. Other institutions, such as LCIA, evaluate their costs and administrative expenses, and the arbitrator’s fees, by referring to the time spent on the case.
- Arbitration Reconciliation Act, 2015, attempted to reach the rescue in this regard by setting the fees and timetable for the arbitration, but the thorn in Al-Zahra is that the courts intervene again to investigate the party to which responsibility for the delay in the fulfilment of the timeline will be attributed. Moreover, the Supreme Courts have been given the authority to set rules for fees, and the payment method that would once again lead to asymmetry as each Supreme Court in various states across India has its own rules. Therefore, one needs to strengthen institutional arbitration in India.
- Is universally recognized that the quality of the arbitration procedures depends on the quality and skill of the arbitrators chosen and that the courts may not have experience in appointing arbitrators who will be experts on the disputed issue. Moreover, in international commercial arbitration, the national court judge will have limited experience, expertise and resources to select the appropriate international arbitrators, especially if practitioners must be selected from other countries. While having an appointed arbitration institution would be more beneficial, it will be specifically organized to perform the task of selecting international arbitrators because of their daily participation in international arbitration and access to a group of highly qualified arbitrators.
- Institutional arbitration should be strengthened as arbitration takes place on a daily basis and says, for example, from 10 am to 4 pm so that there is no backlog of cases or delay in completing the arbitration proceedings. The issue of fees will also be considered through institutional arbitration because such institutions have a reform fee schedule that will negate the ambiguity space.
- Addition, steps may be taken to make the order issued by the arbitrator under institutional arbitration open to appeal or review only by the president/registrar (s) of the institution to deny the parties taking the arbitrary route and a decision which can make the above authority final and binding on both parties. Any right of appeal or review in respect of any decision of the above authority to any government court or any other judicial authority. In addition, court intervention in arbitration proceedings may only be permitted when specifically provided for in the arbitration agreement. Intellectual Property Rights
- Must make institutional arbitration an attractive centre for foreign parties and investors, and some things should be borne in mind as the forum is attractive as a seat only if it has the judiciary that supports arbitration. Moreover, institutions that conduct arbitrations in India should be provided with abundant resources and opportunities to participate in important international arbitration conferences and to host a major international arbitration conference in at least two years in order to invite global participation/interest and exposure that can enhance the international image of institutional arbitration in
- Institutional arbitration should give the green flag with patient expectations about its results rather than making any hasty decisions because one thing is trustworthy that if countries like Singapore and Hong Kong can become arbitration centres on the strength of institutional arbitration, so India can. India is on track to establish confidence in its legal system, which is the prerequisite for any country to become a place of international arbitration.