A former attorney general and now partner at an international law firm has urged India’s government to delay controversial amendments to the country’s arbitration law, arguing that the proposals ‘appear to prohibit foreign lawyers’.

In a speech in New Delhi, Lord Goldsmith QC (Peter Goldsmith) said changes contained in The Arbitration and Conciliation (Amendment) Bill 2018 could ‘set back the cause of Indian arbitration by many years, perhaps a generation.’ Goldsmith also took aim at India’s ‘notorious’ conservatism in opening its legal market.

Lord goldsmith qc

Lord Goldsmith QC: Not too late for New Delhi to delay reform

Delivering the inaugural address at the 11th Annual International Arbitration Conclave in New Delhi on Saturday, Goldsmith said previous progress, including the Supreme Court ruling of March last year, had given hope that India could establish itself as a ‘leading hub’ for international arbitration.

But the drafting of the 2018 bill has put that under threat, he warned.

The relevant passage of the bill states: ‘A person shall not be qualified to be an arbitrator unless—(i) is an advocate within the meaning of the Advocates Act, 1961 having 10 years of practice experience as an advocate…’

The wording, according to Goldsmith, would ‘appear at a stroke to prohibit the appointment of foreign lawyers as arbitrators in Indian seated arbitrations. Because you would have to be an Indian advocate to qualify.’ Not only would this restrict foreign lawyers, it would also prohibit the appointment of many ‘experienced and able arbitrators’ including ships' masters, architects and doctors, he warned.

The bill has passed the Lower House, the Lok Sabha, but has yet to be considered by the Rajya Sabha (Upper House).

Turning to the proposed relaxation of India’s legal market he added: ‘Why should anyone believe that will happen?

‘The conservatism of the Indian legal regulatory bodies in not allowing foreign legal professionals in is notorious. I first came to India nearly 25 years ago as chairman of the English Bar to argue for a relaxation of the rules on foreign lawyers practicing in India. Due to the opposition of some Indian professional legal bodies we are still waiting. So I do not hold my breath for the monopoly of arbitration appointments to Indian lawyers once given by statute to be easily given up.’

The bill also proposes that the Arbitration Council of India will regulate the practice of arbitration in the country. According to Goldsmith: ‘the idea that a government appointed body should regulate arbitration and arbitrators is anathema to the idea of free and autonomous arbitration.’

’Having pushed the Sisyphean rock of Indian arbitration painfully step by step up the steep slope of international acceptability it [the amended bill] will release that boulder to plummet in free fall back down again.’

However he said: 'It is not too late. There is a good chance that this bill will not pass before the election. It should be delayed so better advice can prevail and these pernicious elements removed.’

Goldsmith, a former chair of the Bar Council, is now chair of Asian and European litigation at international firm Debevoise & Plimpton.