India’s ADR Institutionalization: The Great Wait Continues

Introduction:

Over the last decade, with the hope to rival the established international ADR centers such as Singapore and Hong Kong, there have been frequent proclamation of India’s ambition to transform into a global hub for alternative dispute resolution (ADR). Judicial leaders and policymakers have championed legislative repairs with fanfare, promising investors and litigants’ efficient routes out of the labyrinth of Indian courts.  But the reality is completely different, as of early 2026, more than five crore cases remain to be pending in the Indian Courts and one of the cornerstones of ADR institutionalization i.e. the Arbitration Council of India (ACI) and the Mediation Council of India (MCI) exist only on paper. 

This divide between promise and practice can be traced back to the 2017 report of Justice B.N. Srikrishna, which envisioned a roadmap to modernize India’s arbitration ecosystem by institutionalizing it through establishment of autonomous bodies such as the ACI and subsequently the MCI under the Mediation Act, 2023. It was a moment filled with hope to position India as an “arbitration friendly” jurisdiction and strengthen its place globally.

Yet, nearly a decade later these aspirations remain largely unfulfilled. Although there have been enthusiastic policy announcements, several budgetary allocations and formal legislative amendments, the government has yet to operationalize the councils intended to drive ADR reforms. Political expediency, bureaucratic inertia and lack of sustained institutional commitment have prioritized rhetoric over genuine reform reflects stagnation which seems to be symptomatic of deeper governance failures. 

Timeline Analysis: From Vision to Stagnation:

The foundation for legislative action was laid down by a comprehensive report which was submitted after the constitution of a high-level committee under Justice B.N. Srikrishna in 2017, an Arbitration Promotion Council of India (later renamed the Arbitration Council of India) to “grade arbitral institutions and evolve minimum standards”, was envisioned by this report.  As a result of which, in 2019 an amendment was made in Arbitration and Conciliation Act, Sections 43A-43M under which ACI framework was introduced by defining it functions including grading arbitral institutions and creating a repository of awards. Soon after, in 2023 Mediation Act was passed thus requiring the creation of Mediation Council of India under Section 31.

However, despite presidential assent, neither body has been formally notified or operationalized. In March 2025 the Law Minister confirmed that while “requisite steps are underway” for the MCI, yet it remains unestablished. There has been disruption in momentum due to the COVID-19 pandemic and political variations, including the 2019 and 2024 general elections. Therefore, as of early 2026, both councils exist only in statute, without secretariats, rules or appointed members. 

Political Economy and Systemic Failures:

The changes in the office bearers of the law ministry i.e. form Ravi Shankar Prasad (2019-2021) to Kiren Rijiju (2021-2024), and now Arjun Ram Meghwal (2024-present) have also played their part in disrupting the policy continuity and as confirmed by the parliamentary admissions the momentum to operationalize these councils has waned. And the pandemic has caused further halt, because ADR developments were sidelined as priorities shifted toward health and economic stimulus. A pattern of assurances without action is being demonstrated by the official records, also, when questioned about arbitration proceedings in the Parliament, the government stated no comprehensive data is maintained. 

Moreover, Law Ministers last year August 1, 2025 written reply to a question in the Lok Sabha candidly revealed that “apart from India International Arbitration Centre, no other arbitration or mediation centre has been established by the Central Government.” This denotes profound inertia despite statutory requirements. Coming to the financial allocations which in itself illustrate another paradox. The budgets of 2024-25 & 2025-26 have allocated ₹0.50-0.51 crores each for ACI and MCI, but funds remaining unused due to non-notification and lack of infrastructure. But what draws the gaze is that the India International Arbitration Centre (IIAC) during the span of 3 fiscal years i.e. 2022-25 have received a total of ₹7.5 crores which includes ₹2.25 crore in 2022-23, followed by ₹3 crore & ₹2.25 crore in the following years, and in the year 2025-26 the budgetary allocation was at its peak i.e. 3.56 crores. This showcase that unlike the dormant ACI and MCI, the IIAC is already managing live arbitrations, which aptly reflects the impact generated by sustained political will. Also, the presence of judicial inefficiency compounds the institutional gaps, as most of the High Courts have failed to designate arbitration institutions as mandated under Section 11(3A) of the Arbitration Act, perpetuating reliance on court-appointed arbitrators and increasing delays. Statistics show that some High Courts may require up to a century to clear backlogs without reform and coupled with the government’s refusal to consider establishing district-level arbitration centres further highlights this dissonance.

Due to lack of operational accreditation combined with limited judicial training, constrains ADR growth. As, compared to the high autonomy and expertise in jurisdictions like Singapore and Hong Kong, India’s ADR framework remains paralyzed by bureaucracy.

Contemporary Relevance: Unresolved Issues in 2026 and Beyond

 The hon’ble law minister’s admission and reports of severe human resource shortages have led to growing cynicism among investors and litigants, many of whom now prefer international venues such as Singapore and Dubai which offers predictable & efficient ADR mechanisms.  The sluggish implementation of the mediation structure is also being illustrated by the remarks made by the learned Attorney General R. Venkataramani, as he cited a serious shortage of human resources as the main bottleneck and also the fact that two years have been passed since the Parliament passed the Mediation Act, the challenge of identifying the right personnel has thwarted the functional birth of the Council. The top law officer said “we don’t get the kind of person who ought to be there. We also face this problem with judicial appointments” and there is a problem today in many such statutes becoming functional.  

 Additionally, with the surge in e-commerce disputes and climate-related litigation further amplifies the need for robust institutional ADR frameworks. As frustration mounts, India risks losing relevance without swift reform.

Why Are Seats Like Singapore Succeeding? – SIAC Rules & Lessons for India:

Since, its establishment in 1991, the success of Singapore International Arbitration Centre (SIAC) serves as a prime case study, where this institution has flourished by maintaining a balance between proactive state backing and strong institutional autonomy.  In early 2025, the seventh edition of the Singapore International Arbitration Centre (“SIAC Rules”) came into force on January 1st 2025 replacing the 6th edition, these new rules intend to promote efficiency through streamline procedures, digital case management, preliminary determination, enhancement to the emergency arbitrator procedure and introduction of protective preliminary order applications, coordinator proceedings, administrative conference, active promotion of the use of mediation, provision in respect of third party funding arrangements and a broad diverse roster of arbitrators. Also to further bolster its credibility there have been collaborations with private entities and academic institutions. 

The Hong Kong International Arbitration Centre (HKIAC) is also another example which not only thrives due to proactive policy updates but credit must also be given to cross border dispute facilitation and financial self-sustainability. As a result of which both these international arbitration centres serve as an example of how digital innovation and regulatory freedom can support global leadership.

The Indian approach is very different from these international models because with excessive executive interference and sluggish implementation things take too long to happen. Also, there lies a great need of reforms to be introduced, so as to enable India to truly compete with these models and such reforms must focus not only on minimizing government intervention but also enhancing autonomy and integrating technology, thereby resulting in nurturing confidence and market trust.

Conclusion:

Political delays and underutilization of the budget and many other systematic flows hampers India’s ambition to become a global centre for ADR which eventually serves as a warning about an unrealised potential and erosion of an ambitious legislation. The framework which was supposed to reduce court burdens and boost investor confidence remain largely dormant, thus it has given way to proactive international centres.

Strong legal provisions and rising demand for ADR coupled with judicial recognition of efficiency advantages, though provide the groundwork for change but in order to fulfil this commitment, ACI and MCI must be operationalised and notified right away and also, there must be independent supervision and extensive stakeholder participation. As India’s future to become a front-runner in dispute settlement depends more on institutional commitment and political determination, rather than on empty rhetoric. And despite the long wait, if will and action now coincide, India can take the lead in international ADR.

The Union Law Minister Shri Arjun Ram Meghwal, in the month of September 2025 made an attempt to alleviate the concerns especially regarding the delay in establishment of MCI by asserting that the progress was “moving fast” and that soon stakeholders could expect “good news”. Yet, the year has ended but the assurance had not been materialised. Also, while presiding over a national conference in Goa the current Chief Justice of India, Justice Surya Kant urged to champion “multi-door courthouse” concept and pointed-out the critical shortage of trained mediators, the government’s own year-end review painted a starker picture. Recently in December 2025, the Law Ministry conceded that while directives were issued to curb government litigation, the MCI “could not be set up”, leaving the statutory mandate of the Mediation Act, 2023, unfulfilled for yet another year. Er go as of early 2026, the gap between policy rhetoric and institutional reality still remains unbridged.

*Aarsh is a third year student from Gujarat National Law University.

Endnotes

1. High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India, Report (Ministry of Law and Justice, 2017) https://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf.
   
2. Arbitration and Conciliation (Amendment) Act 2019, No 33 of 2019, Acts of Parliament (India) https://legalaffairs.gov.in/sites/default/files/arbitration-and-conciliation%28amendment%29-act-2019.pdf.
   
3. The Mediation Act 2023, No 13 of 2023, Acts of Parliament (India) https://legalaffairs.gov.in/sites/default/files/MediationAct2023.pdf.
   
4. Government of India, Ministry of Law and Justice, ‘Rajya Sabha Unstarred Question No. 2358’ (20 March 2025) https://www.prsindia.org/parliamenttrack/vital-stats/rajya-sabha-questions.
   
5. ‘Over 5 Crore Cases Pending in Various Courts Across Country: Law Minister’ Business Standard (New Delhi, 3 July 2024) https://www.business-standard.com/india-news/over-5-crore-cases-pending-in-various-courts-across-country-law-minister-124070300527_1.html.
   
6. Press Information Bureau, ‘Strengthening Arbitration and Mediation Infrastructure in India’ (1 August 2025) https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2151246.
   
7. Union Budget 2025-26, Notes on Demands for Grants: Ministry of Law and Justice https://www.indiabudget.gov.in/doc/eb/sbe65.pdf.
   
8. Press Information Bureau, ‘Government Initiatives in the Realm of Alternative Dispute Resolution Mechanisms’ (13 December 2024) https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1987654.
   
9. Singapore International Arbitration Centre, SIAC Rules 2025 https://www.siac.org.sg/our-rules/rules/siac-rules-2025.
   
10. Arbitration and Conciliation Act 1996, s 11(3A) (as amended by Arbitration and Conciliation (Amendment) Act 2019) https://www.indiacode.nic.in/bitstream/123456789/13116/1/arbitration_and_conciliation_amendment_act_2019.pdf.
    
11. Ministry of Law and Justice, Notes on Demands for Grants 2024-25 & 2025-26 https://lawmin.gov.in/sites/default/files/DDG_2024-25.pdf; https://lawmin.gov.in/sites/default/files/DDG_2025-26.pdf.
    
12. ‘Where Are The ADR Councils?’ Deccan Herald (14 September 2024) https://www.deccanherald.com/india/where-are-the-adr-councils-3503552.  
13. ‘Mediation Council set up moving fast, says Arjun Ram Meghwal’ (The Economic Times, 22 September 2025) https://economictimes.indiatimes.com/news/india/mediation-council-set-up-moving-fast-says-arjun-ram-meghwal/articleshow/124032538.cms?from=mdr accessed 28 February 2026.
14. ‘Mediation is a successful, cost-effective tool, says CJI’ (The Hindu, 27 December 2025) https://www.thehindu.com/news/national/bar-council-of-indias-national-conference-and symposium-on-mediation-in-south-goa-cji-surya-kant/article70439364.ece accessed 28 February 2026.
15. ‘Law Ministry takes step to cut govt litigation tag, mediation efforts lag’ (Business Standard, 29 December 2025) https://www.business-standard.com/india-news/law-ministry-takes-step-to-cut-govt-litigation-tag-mediation-efforts-lag-125122900085_1.html accessed 28 February 2026.