"Arbitration laws should not focus only on disputes after they have arisen, but how to avoid conflict situations" said Vice-President of ICC Court of Arbitration Lord Michael J Mustill.

The gray areas in enforcement of arbitration awards should be removed as India is going to become the hub of international arbitration, geographically and strategically as the country witnesses a boom in economic activities, Mustill said.

Many in the Indian legal community are also thinking on the same lines.

"The problem in enforcement of international arbitration is the time taken by the Indian courts to enforce it. Before enforcing, an Indian court is required to adjudicate and decide any objections of the losing party to the award. Invariably, the losing party attempts to make all kinds of objections to the award which then takes years for the court to decide and dispose of," said Diljeet Titus of Titus & Co.

The main hurdle in the enforcement is time, which normally takes another two to three years in court after two to three years of arbitration.

"Mere filing of an appeal against the award will render it unenforceable until the conclusion of the appeal. Therefore, the effective enforceability of an arbitral award is reduced," adds Sajan Poovayya, Solicitor in England & Wales of Poovayya & Co.

A common perception is that the local administration is not co-operative and has pre-fixed notions against the arbitration mechanism.

"They always act with a sense of protectionist attitude and lack practical experiences. Especially, the enforcing procedure is handled by the same setup which in-fact is sought to be replaced in an arbitration process," says Atul Dua of Seth Dua and Associates.

After economic liberalization in 1992, the Indian economy witnessed huge investments in all sectors of economy like infrastructure, pharma and software.

All these investment are governed by the foreign laws, mostly from the country of origin of investors. During its documentation, more often clauses are expressly inserted specifying that in the event of disputes, the governing law should be the law of their choice or a neutral arbitration tribunal having jurisdiction over it.

Even some Times venue of arbitration is fixed. Enron's Dhabol project was the classic example, in which London governed by British laws was the place of arbitration.

However, in 1996 India modified its arbitration laws by the new Indian arbitration and conciliation act, 1996 and recognised the "International Commercial Arbitration".

India is a signatory to the Geneva and New York conventions and now foreign Arbital award is equivalent to a decree of a court. After that any arbitration clause in the contract is treated as an agreement independent of the other terms of the contract.

However, some legal experts are not in favour of bringing in changes.

"It is a myth. The Indian administration gradually becoming pro-active in accepting international arbitration as a mode of settlement of dispute involving multilateral projects," said Shrikant Hathi of Lex Nexus a foreign firm having expertise in arbitration.

"Although, there exists a certain amount of lethargy in accepting arbitration as an alternative vehicle of resolution of dispute, this will dissipate as change is inevitable and irreversible with major FIIs and MNCs setting up shop in India," argues Hathi.

According to Praveen Anand of Anand & Anand, many high court judges are themselves encouraging parties to settle their disputes by arbitration as it is less cumbersome and time-consuming compared to litigation "organisations such as Indian Council of Arbitration (ICA) and International Centre for Alternative Dispute Resolution (ICADR) and FICCI are contributing in its promotion," Praveen added.

But every one agrees that foreign investment in the long-run could be affected if the procedural problems in arbitration are not phased out.

"From the perspective of the investor, the main disadvantage of arbitration is the time taken to enforce the arbitral award. The foreign investor is dissuaded from investing, as there is no assurance that he can enforce the terms of an arbitral award within the necessary time frame," Praveen said.

Almost all investments pertaining to the new technology industries, including software, now are made done under international contracts governed by English or US laws and enforcing them is as much a matter of strategy as it is of law.

"Enforcing foreign awards is as much a matter of strategy as it is of law.

Therefore, with the right strategy foreign arbitral awards can be effectively enforced," added Poovayya.