In recent years, arbitration has gained prominence as a favoured alternative dispute resolution mechanism in India, providing disputing parties with a more expedient and cost-effective means of resolving conflicts as opposed to conventional litigation. The emergence of multi-party arbitrations, stemming from multiple agreements involving numerous parties and distinct arbitration clauses, has given rise to intricate issues that necessitate resolution by arbitral tribunals and courts. During the negotiation of agreements, parties seldom contemplate the ramifications on the dispute resolution process due to subsequent agreements involving additional parties. In the context of multi-party and multi-agreement situations, parties frequently advocate for a unified reference encompassing all disputes ostensibly arising from a singular transaction. The Arbitration and Conciliation Act of 1996 (henceforth referred to as “the Act”) presides over the arbitration proceedings in India and has undergone numerous amendments to align with the dynamic requirements of the business sector and international best practices. Nevertheless, the Act has yet to address the matter of consolidating arbitral proceedings. Although courts across the globe have acknowledged the principle of consolidation, it remains devoid of statutory recognition in India. This article endeavours to scrutinise the necessity for amending the Act to incorporate provisions for the consolidation of arbitral proceedings, while also examining the potential advantages and challenges concomitant with such a legislative reform.
Streamlining Complexities: Exploring the Need for Consolidation of Arbitral Proceedings
Multi-contract and multi-party arbitrations often give rise to intricate and convoluted procedural challenges. Although institutional rules have increasingly begun to offer solutions by facilitating the consolidation of arbitration proceedings, parties engaged in ad-hoc proceedings frequently find themselves grappling with uncertainty. Consolidation in arbitration is characterised as “a procedural device which denotes the process whereby two or more claims are united into one single procedure concerning all parties and all disputes,” thereby preventing conflicting awards and conserving time and resources. Parties involved in long-term commercial relationships may encounter multiple disputes over an extended period. Numerous arbitration proceedings may transpire concurrently, particularly when the governing agreement mandates arbitration for all disputes. If these disputes are interconnected, the result can be a complex entanglement of overlapping proceedings. In certain instances, streamlining dispute resolution by consolidating multiple arbitrations into a single proceeding may prove advantageous.
Multiple arbitrated disputes may result from ongoing contractual relationships, such as leases, service contracts, or joint ventures, or from the combination of distinct yet related contracts. If these disputes include the same parties, are related in some way (e.g., arising out of a single transaction or dealing with equivalent factual assertions or contractual provisions), and are at roughly the same stage, consolidation could be advantageous to eliminate duplication and benefit all parties.
Indian Judiciary’s Perspective and the Call for Clarity in Arbitral Proceedings
The Indian judiciary, through numerous judgments, has acknowledged and supported the principle of consolidating arbitrations when arbitration clauses are present in separate contracts involving three distinct parties. In the case of PR Shah, Shares and Stockbrokers Private Limited v. B.H.H. Securities Private Limited, the Supreme Court of India observed that when “Party A has separate arbitration agreements with two distinct parties, B and C, and Party A needs to bring two separate claims against them, there is no prohibition on consolidating the two claims and referring them to the same arbitral tribunal. The court emphasised that consolidation averts the multiplicity of proceedings, conflicting decisions, and injustice. In certain instances, courts have applied this principle to compel non-signatories to arbitrate when it was determined that such non-signatories were the alter ego of signatories.”
Moreover, the Delhi High Court in Gammon India Ltd. v. National Highways Authority “maintained that the principles of res judicata enshrined in Order II Rule 2 of the Civil Procedure Code, 1908 (“CPC”), as well as Sections 10 and 11 of the CPC, are applicable to arbitral proceedings. Consequently, courts must consistently strive to consolidate arbitrations to circumvent multiple proceedings”. The court, relying on the judgment of the Supreme Court of India in Dolphin Drilling Ltd. v. ONGC, “observed that although multiple arbitrations are permissible, allowing parties to raise claims at their discretion would be entirely contrary to public policy.”
Despite the potential advantages of consolidation, the Act does not currently provide for the consolidation of arbitral proceedings. This omission has resulted in uncertainty and inconsistency in the approach adopted by Indian courts when confronted with requests for consolidation.
Exploring Consolidation Provisions in Comparative Jurisdictions
Several common law jurisdictions have incorporated specific statutory provisions in their legislation that facilitate the consolidation of arbitral proceedings or a single arbitration that arises from multiple contracts. This is done to avoid any difficulties that may arise from multiple arbitrations and awards. The English Arbitration Act of 1996, as applicable in the United Kingdom, provides for the possibility of consolidating multiple arbitral proceedings upon the agreement of the involved parties. Nevertheless, the tribunal lacks the jurisdiction to autonomously merge proceedings. The consolidation of arbitration is addressed in the Commercial Arbitration Act of 2017 in Australia. As per the provisions of the Act, the court has the authority to merge “related arbitral proceedings” upon request by the concerned parties, subject to the fulfilment of specific criteria. The Arbitration Act [SBC 2020] in British Columbia, Canada confers authority to the Supreme Court to mandate the consolidation of proceedings, subject to the condition that the parties involved have given their consent to such consolidation. Similarly, the province of Ontario in Canada has established the Arbitration Act of 1991, which allows for the merging of arbitral proceedings upon the request of the involved parties. Furthermore, it should be noted that under the provisions of the Arbitration Act of 2001 in Singapore, the arbitral tribunal is empowered to order consolidation solely on the condition that the parties have mutually agreed to confer such authority upon the tribunal. As per the Hong Kong Arbitration Ordinance (Cap 609), Article 2 under Schedule 2, it is stated that the court has the authority to consolidate arbitral proceedings upon the request of a party. This consolidation is based on grounds that are similar to those mentioned in the Australian Commercial Arbitration Act of 2017.
 ADRIC, ‘Consolidation of Arbitration Proceedings’ (ADR Institute of Canada, 8 June 2020) accessed 8 June 2023
 2012 (1) SCC 594
 2020 SCC OnLine Del 659
 2010 (3) SCC 267