Background

India has been consistently losing high-value international arbitration cases in the aviation sector to jurisdictions like Singapore, England, and France. Despite the rapid expansion of India’s aviation infrastructure and increasing global engagement, its arbitration landscape remains underutilized by global aviation players. This scenario raises critical concerns regarding India’s institutional and legislative preparedness to handle aviation-related disputes.

Problem Statement

The introduction of the Bhartiya Vayu Yan Adhiniyam, 2024, was anticipated to modernize and streamline India’s aviation governance. However, there is growing skepticism among legal experts about whether this legislation has gone far enough to create a conducive environment for aviation arbitration within the country.

Key Question:

Is the Bhartiya Vayu Yan Adhiniyam, 2024, adequately equipped to institutionalize India’s capacity to handle high-stakes aviation arbitrations domestically?

Key Observations

1. Lack of Arbitration Infrastructure in Aviation
   Despite India’s strides in becoming an aviation hub, dedicated arbitration frameworks and forums within the aviation sector remain absent. As a result, international stakeholders continue to prefer seats of arbitration in countries that offer better-established legal infrastructure and neutrality.
2. Inadequate Provisions in the New Legislation
   The Bhartiya Vayu Yan Adhiniyam does not explicitly promote or institutionalize alternative dispute resolution mechanisms, such as arbitration, within the aviation legal structure. It is largely focused on operational and regulatory aspects.
3. Absence of India-Centric Institutional Support
   Unlike nations with successful arbitration frameworks (e.g., Singapore International Arbitration Centre or London Court of International Arbitration), India lacks a specialized aviation arbitration institution or robust support mechanism that instills confidence among global entities.
4. Perception & Trust Deficit
   There is a prevailing perception of bias and inefficiency in India’s dispute resolution processes, making foreign investors hesitant to select India as the seat of arbitration.

Implications

• Economic Loss: Loss of arbitration to foreign jurisdictions means significant outflow of legal business and costs.
• Strategic Weakness: India’s inability to retain arbitration disputes weakens its strategic control over aviation contracts and legal precedents.
• Legislative Gaps: The current form of the Bhartiya Vayu Yan Adhiniyam, 2024, does not bridge these gaps or address arbitration explicitly.

Recommendations

1. Establish a National Aviation Arbitration Forum
   Setting up a specialized, independent arbitration body for aviation law disputes would foster confidence in India’s dispute resolution capabilities.
2. Legislative Reforms
   Amend the Bhartiya Vayu Yan Adhiniyam to include explicit provisions for arbitration and mediation, modeled after global best practices.
3. International Collaborations
   Collaborate with international arbitration centers for knowledge exchange and to align India’s arbitration practices with global standards.
4. Training & Capacity Building
   Invest in training arbitrators and legal professionals with expertise in aviation law and arbitration.

Conclusion

The case of India’s aviation arbitration landscape reveals a critical gap between economic ambition and legal preparedness. The Bhartiya Vayu Yan Adhiniyam, 2024, while progressive in some respects, does not currently provide the institutional backbone needed to shift high-value aviation arbitrations to India. Without swift reform, India risks continuing as a bystander in a sector where it seeks to be a global leader.

Also read:

NLIU-CRIL Article Writing Competition by Centre for Research in International Law (March 10, 2025)
Legal Internship Opportunity at JRTC Intern (Feb 10, 2025)
Master’s Programme in Public Policy by NLSIU