Context

• India’s aviation story is one of tremendous transformation. From colonial-era restrictions to the modern-day vision of becoming a global aviation hub, the trajectory has been both inspiring and complicated.
• However, as India attempts to revamp its aviation infrastructure through legislative reform, most notably the Bharatiya Vayuyan Adhiniyam, 2024, one glaring gap remains: the country’s arbitration system continues to lag behind.
• Despite monumental progress, the unresolved issue of specialised arbitration in aviation could undermine India's aspirations of becoming an aviation powerhouse.

Legacy of the Aircraft Act, 1934

• The origins of India’s aviation legal framework lie in the colonial-era Aircraft Act of 1934, a statute that was more concerned with imperial control than with fostering an aviation ecosystem.
• Crafted during British rule, the Act served administrative and military objectives, not commercial or technological growth.
• As the decades passed and India’s aviation sector matured, the Act became increasingly outdated, failing to adapt to new technologies, rising passenger demand, and the entry of private airlines.
• The result was a regulatory bottleneck: cumbersome licensing processes, inefficient air traffic management, and insufficient passenger protection.

Bharatiya Vayuyan Adhiniyam, 2024: A New Dawn

• Recognising the need for a modern framework, the Bharatiya Vayuyan Adhiniyam, 2024 was introduced to replace the archaic 1934 law.
• This progressive legislation has streamlined licensing, improved air traffic regulation, and enhanced passenger rights.
• It symbolises India’s attempt to take full ownership of its skies and aims to position the country as a formidable player in global aviation.
• Yet, while these advancements represent a major leap forward, the reform stops short of addressing a critical issue, dispute resolution in aviation.
• The omission is significant. Without a reliable and specialised arbitration system, commercial disputes continue to be outsourced to foreign jurisdictions, undermining India’s legal and economic sovereignty in aviation.

The Missing Piece in Bharatiya Vayuyan Adhiniyam, 2024: Arbitration

• The current arbitration framework in India, governed by the Arbitration and Conciliation Act, 1996, provides a generic approach to dispute resolution.
• It lacks the specialisation required to handle complex aviation disputes, which often span technical concerns, cross-border regulations, airline leasing agreements, and international treaties.
• As a result, companies continue to favour well-established arbitration centres in Singapore, London, and Paris, places that offer the requisite expertise and neutrality.
• Even though India has launched institutions like the Delhi International Arbitration Centre and the Mumbai Centre for International Arbitration, they have not been able to compete globally.
• Data shows that nearly 90% of arbitration cases involving Indian aviation firms are handled in Singapore, a stark indicator of India's lack of institutional readiness.
• The issue, therefore, extends beyond legislation to include a broader infrastructure of experts, institutions, and trust.

The Importance of Specialised Arbitration

• Aviation disputes are highly specialised and they demand legal professionals who understand aeronautical engineering, international aviation treaties, and the nuances of airline operations.
• The absence of such expertise within India’s arbitration ecosystem means that foreign companies, often already wary of India’s bureaucratic inefficiencies, choose to resolve disputes elsewhere.
• This not only leads to loss of revenue for Indian law firms and arbitration professionals but also diminishes India's credibility in the global aviation market.
• Moreover, arbitration outcomes in India often suffer from judicial overreach, with courts interfering in matters that should ideally remain independent.
• Lengthy legal battles and inconsistent enforcement of arbitration awards further discourage international players.

Recommendations for Reform

• Specialised Institutions: Establish arbitration bodies specifically for aviation, staffed by experts in aviation law, technology, and international regulatory frameworks.
• Training and Education: Encourage Indian law schools to offer specialisation in aviation law and arbitration to build a pool of future-ready professionals.
• Institutional Neutrality: Create independent arbitration panels where arbitrators are selected by mutual consent or through a neutral third party—not by government decree.
• Judicial Restraint: Ensure courts adopt a non-interventionist approach, enabling faster, more predictable enforcement of arbitration awards.
• Global Alignment: Model arbitration structures on successful international frameworks such as those in Singapore and the United Kingdom, which have demonstrated effectiveness in handling sector-specific disputes.

Conclusion

• The Bharatiya Vayuyan Adhiniyam, 2024 is a bold and necessary leap into the future of Indian aviation, but without accompanying reform in arbitration, it remains a half-measure.
• A robust, neutral, and specialised arbitration framework is not a luxury, it is a necessity if India is to retain disputes, revenues, and investor confidence within its borders.
• India now stands at an inflection point, it has the vision, the ambition, and the legal momentum to reshape its aviation sector.
• But for this vision to truly take flight, dispute resolution must land at the heart of reform.