In India, international arbitration is the preferred method of resolving commercial disputes where at least one party is from outside India. In fact, an arbitration is only considered an ‘international arbitration’ under Indian law when at least one of the parties to the dispute is:

• an individual who is a citizen of, or is habitually resident in, a country other than India;
• a company that is incorporated in a country other than India;
• an association or body of individuals whose central management and control is exercised outside India; or
• a foreign government.

As such, international arbitrations in India usually relate to cross-border transactions of some kind.

A growing number of arbitrations in India are arising out of acquisitions or investments that turn sour in the fullness of time. Parties are bringing claims under the share purchase and subscription agreements that had initially enabled those transactions. This growth in disputes is attributable in large part to an increase in foreign investment into India in the last two decades.

Oil and gas disputes remain common, especially those involving exploration contracts. These disputes usually involve a foreign company and the Government of India.

Other industries experiencing substantial international arbitration activity include telecoms, IP licensing and construction.

Domestically, increased investment in infrastructure in the last decade has led to a significant rise in construction disputes. It is not uncommon for a government company to be one of the parties involved in these cases.

By some distance, the Singapore International Arbitration Centre (SIAC) is the most used arbitral institution for international arbitrations involving Indian parties. Data published by SIAC suggests that 160 new arbitrations involving parties from India were instituted before it in 2023. Further, on 24 occasions, Indian nationals were appointed arbitrators in SIAC arbitrations.

SIAC’s success is not surprising. The institution has made a great deal of effort marketing itself in India. Indian parties prefer SIAC owing to its professionalism, the impeccable reputation of Singapore’s judiciary, and Singapore’s geographical proximity to and deep cultural ties with India. It is necessary to bear in mind that many of these arbitrations are in fact seated in India and involve contracts governed by Indian law.

The International Chamber of Commerce, Paris (ICC) is another institution favoured for international arbitrations involving Indian parties. Fifty-two Indian parties were involved in ICC arbitrations instituted in 2023.

The LCIA, HKIAC and DIAC are also used for international commercial arbitrations involving parties from India, while the services of the PCA are frequently availed of in investor-state arbitrations.

As far as homegrown arbitral institutions are concerned, it is encouraging that a number of respectable institutions have been established in India in the past decade. These include the Mumbai Centre for International Arbitration (Mumbai), the Delhi International Arbitration Centre (New Delhi), the International Arbitration and Mediation Centre (Hyderabad) and the India International Arbitration Centre (New Delhi). These institutions are rising in popularity domestically and we can safely expect them to be involved in a growing number of international arbitrations in the years to come.

India has a three-tiered judiciary that comprises the Supreme Court, the High Courts and the Subordinate Courts.

The Supreme Court of India has exclusive jurisdiction to appoint arbitrators in international commercial arbitrations seated in India should the appointment procedure chosen by the parties fail. All other applications involving international commercial arbitrations are heard exclusively by the High Courts.

The High Courts also have exclusive jurisdiction to appoint arbitrators in domestic arbitrations following a failure in the appointment procedure chosen by the parties. Other applications in relation to domestic arbitrations may be made in a court determined in accordance with their pecuniary value.

The Arbitration and Conciliation Act, 1996 (ACA) governs all arbitrations in India. The ACA is divided into four Parts. Broadly, Part I covers all arbitrations seated in India, including international commercial arbitrations. Part II deals with the enforcement of foreign awards under the New York and Geneva Conventions. Part III originally dealt with conciliation though, as is discussed in 2.2 Changes to National Law, its provisions have been radically altered. Finally, Part IV provides for certain supplementary matters.

The ACA is based on the UNCITRAL Model Law on International Commercial Arbitration. In fact, its Preamble expressly recognises the Model Law and the need for India to make an arbitration law taking the Model Law into account. The ACA does, however, depart from the Model Law in certain key respects. Some notable departures are listed below:

• Under Article 8 of the Model Law, courts seized of a matter in respect of which an arbitration agreement exists are required, if a party to the arbitration agreement appropriately requests, to refer the parties to arbitration. However, no such reference is to be made if the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed. Section 8 of the ACA as originally enacted proceeded along the same lines. However, following various amendments, a court in India can only decline to refer the parties to arbitration if it finds that prima facie no valid arbitration agreement exists between them. Evidently, there is scope for greater judicial intervention under the Model Law. The ACA contemplates a limited inquiry, one that is restricted to determining whether a valid arbitration agreement exists.
• The ACA imposes a wider duty of disclosure on persons who are approached regarding their possible appointment as an arbitrator. In addition to disclosures regarding circumstances that will likely give rise to justifiable doubts as to their impartiality, disclosures must be made of all circumstances that are likely to affect the person’s ability to devote sufficient time to an arbitration and to complete it within a period of 12 months. This requirement is absent in the Model Law.
• Several provisions relating to interim measures by arbitral tribunals were added to the Model Law by amendments adopted in 2006. These include provisions regarding a specific regime for preliminary orders, costs and damages relating to interim measures and preliminary orders, requirements concerning security to be provided by those requesting interim measures, and grounds on which the enforcement of interim measures may be refused, among others. None of these amendments have been incorporated in the ACA.
• Unlike the Model Law, the ACA imposes a time limit for the completion of proceedings in domestic arbitrations. Awards must be made within 12 months from the date pleadings are completed. This period can be extended by an additional six months with the parties’ consent. Further extensions require the leave of a court. The ACA does not impose time limits on tribunals in international arbitrations.
• The grounds on which an award can be challenged under the ACA mirror those listed in the Model Law. However, the ACA also permits awards made in domestic arbitrations to be challenged if they are vitiated by patent illegality appearing on the face of the award.

India’s Parliament passed the Mediation Act, 2023 last year to promote the settlement of disputes through mediation. This Act also made amendments to the ACA. Previously, Part III of the ACA made elaborate provision for the settlement of disputes through conciliation. These provisions have now been replaced in their entirety, and references in all enactments to conciliation under the ACA are to be construed as references to mediation under the Mediation Act, 2023.

Crucially, however, these amendments have no significant impact on provisions in the ACA that deal with arbitration.

For arbitration agreements to be enforceable in India, they must be in writing and must clearly demonstrate the intention of the parties to refer their disputes to a private tribunal for adjudication.

Arbitration agreements must also be valid under generally applicable principles of contract law. They must be between persons who are above 18 years of age, of sound mind, and not disqualified from contracting by any law to which they are subject. They must be based on free consent and must not be void for uncertainty.

In keeping with their pro-arbitration stance, Indian courts construe arbitration agreements liberally. For instance, in Visa International Ltd. v Continental Resources (USA) Ltd. (2008), the parties had agreed that disputes between them that were not amicably resolved “shall be finally settled in accordance with the Arbitration and Conciliation Act, 1996”. While this agreement made no specific mention of arbitration, the Supreme Court concluded that it amounted to a valid arbitration agreement.

The ACA does not provide a list of matters that are non-arbitrable, nor does it provide any guidance on how questions of arbitrability are to be decided. Thus, the law concerning the arbitrability of disputes in India has been developed by courts.

Generally, cases of the following kind are not capable of settlement by arbitration:

• disputes concerning actions in rem, where the nature or status of a thing (such as property) can be determined or altered;
• disputes that affect third-party rights or have an erga omnes effect. Such disputes require centralised adjudication;
• disputes concerning the sovereign and public interest functions of the State; and
• disputes that are rendered non-arbitrable by a statute, either expressly or by necessary implication.

Courts have, over a series of judgments, found various disputes to be non-arbitrable in India. These include:

• disputes involving constitutional remedies;
• criminal offences;
• matrimonial disputes;
• cases concerning Wills and Testaments;
• cases of insolvency;
• trust disputes;
• tenancy disputes under specific rent control legislation;
• disputes involving the right to own intellectual property; and
• cases that require a declaration of title to immoveable property.

Indian law recognises that parties are free to choose the law that will govern their arbitration agreement. Guidance on how the law governing the arbitration agreement is to be determined should the parties to fail to do so was provided by the Supreme Court in NTPC v Singer (1992). The Court noted that where the parties had expressly chosen the proper law of the contract, that law would also govern the arbitration agreement “in the absence of an unmistakable intention to the contrary”. The Court went on to observe that in cases where the parties had not expressly chosen the proper law of the contract and the law governing the arbitration agreement, there would arise a presumption that they intended both the proper law and the governing law to be the law of the seat.

Indian courts construe arbitration agreements liberally, favouring interpretations that render them enforceable.

Broadly, there are two circumstances under which Indian courts are called upon to enforce arbitration agreements:

• they may be called upon to appoint arbitrators should the procedure chosen by the parties fail; or
• when seized of a dispute which is the subject of an arbitration agreement, they may be asked by a party to that agreement to refer the matter to arbitration.

In each instance, the scope for judicial intervention is limited and the possibility that enforcement will be rejected is remote. Courts may only refuse to enforce an arbitration agreement if they find prima facie that no arbitration agreement exists between the parties, or if they conclude prima facie that the dispute sought to be referred to arbitration is ex facie non-arbitrable. In determining these issues, courts are not expected to conduct a thorough investigation into the parties’ contentions. Unless it is plain to them that no arbitration agreement exists between the parties or that the dispute is non-arbitrable, they must refer the parties to arbitration.

Indian law recognises the doctrine of separability. This means that if an arbitration agreement forms part of a contract, it is to be treated as an independent contract. Resultantly, a decision declaring the main contract null and void does not automatically affect the validity of the arbitration agreement.

Indian law allows parties to select arbitrators of their choice subject only to certain restrictions intended to ensure the tribunal’s independence and impartiality. Following amendments adopted in 2015, the ACA now lists a series of relationships a person may have with the parties, counsel or subject matter of a dispute. These relationships are, in large part, based on those in the Red List of the IBA Guidelines on Conflict of Interest in International Arbitration. Persons who enjoy any of these relationships are ineligible to be appointed as arbitrators. This statutory prohibition overrides any existing agreement to the contrary. Thus, for example, a person who is a lawyer at the same law firm that represents one of the parties to the dispute is ineligible to be made an arbitrator even if he or she had been named in the arbitration agreement.

Parties may, however, waive the applicability of this prohibition after disputes between them have arisen. They must do so by an express agreement in writing.

If the parties’ chosen method for selecting arbitrators fails, arbitrators are to be appointed by the courts. In international commercial arbitrations, this function is performed by the Supreme Court, while High Courts perform it in domestic arbitrations. Notably, amendments made to the ACA in 2019 seek to delegate this function to arbitral institutions. However, these amendments are yet to come into force.

The default procedure of appointment commences on the request of a party to an arbitration agreement where:

• a party fails to act as required under the agreed appointment procedure;
• the parties or the two appointed arbitrators fail to reach an agreement expected of them under the agreed appointment procedure; or
• a person, including an arbitral institution, fails to perform any function entrusted to them under that procedure.

Outside of the default procedure described in 4.2 Default Procedures, courts in India do not intervene in the selection of arbitrators.

Challenges to Arbitrators

Under the ACA, arbitrators may only be challenged in two situations:

• first, where circumstances exist that give rise to justifiable doubts as to their impartiality; or
• second, where they do not possess the qualifications agreed upon by the parties. 

Any party can challenge an arbitrator, but a party that appoints an arbitrator or participates in his or her appointment can only do so for reasons it becomes aware of after the appointment has been made.

Parties have the freedom to choose a procedure for challenging arbitrators. If they do not do so, a default procedure applies. This requires challenges to be made within 15 days after the challenging party receives knowledge of (i) the constitution of the tribunal, or (ii) the existence of circumstances that constitute a ground for challenging an arbitrator.

Should a party’s challenge fail, the tribunal must continue proceedings and make an award. It will be open to the unsuccessful party to apply to set aside an award so made.

Removal of Arbitrators

The ACA provides that an arbitrator’s mandate terminates when:

(i) he (or she) becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and

(ii) he withdraws from his office or the parties agree to the termination of his mandate.

If doubts exist as to whether the conditions in (i) above have been satisfied, a party may apply to a court to decide the issue.

Disclosure

Robust disclosure requirements are placed by the ACA to ensure that arbitrations are conducted fairly and swiftly.

When persons are approached regarding their possible appointment as arbitrators, they must make a written disclosure of the following:

• circumstances that are likely to give rise to justifiable doubts as to their independence and impartiality. These circumstances include a direct or indirect interest in, or a past or present relationship with, the parties or the subject matter of the dispute; and
• circumstances that will likely affect their ability to devote sufficient time to an arbitration and complete it within 12 months.

The duty of disclosure commences before an arbitrator’s appointment and continues throughout the arbitral proceedings.

See 3.2 Arbitrability.

The principle of Kompetenz-Kompetenz finds express recognition in Section 16 of the ACA. In all arbitrations seated in India, arbitral tribunals are empowered to rule on their own jurisdiction. They may also make rulings in respect of the existence or validity of the arbitration agreement itself.

Courts in India do not make conclusive or binding pronouncements on the jurisdiction of arbitral tribunals before the latter have had their say. Respecting the principle of Kompetenz-Kompetenz, they leave the issue to be determined by the arbitrators. Therefore, it is before the arbitral tribunal that issues of jurisdiction are first fully addressed.

Courts are, however, empowered to review decisions of tribunals on matters of jurisdiction. If the arbitral tribunal concludes that it lacks jurisdiction to hear a dispute, the aggrieved party may appeal the tribunal’s decision before a court under Section 37(2)(a) of the ACA. However, if the tribunal finds that it has jurisdiction over a dispute, it must proceed with the arbitration and make an award. The aggrieved party may apply for this award to be set aside under Section 34 of the ACA.

As noted in 5.2 Challenges to Jurisdiction, parties first challenge the jurisdiction of the arbitral tribunal before that tribunal. A party that wishes to make such a challenge must do so no later than the filing of the statement of defence, though the tribunal may permit a delay that it considers justified.

Courts in India have adopted the principle of minimal intervention in the decisions of arbitral tribunals. This means that they only interfere with awards in a limited set of circumstances, including if the award is made in complete disregard of the law. Awards made in domestic arbitrations may also be set aside if the tribunal’s decision on matters of jurisdiction or admissibility is found to be patently illegal, ie, if it is so irrational that that no reasonable person could have arrived at it, or if it is based on no evidence, or if it is made in complete disregard of the parties’ contract.

Courts do not look favourably upon proceedings commenced in breach of an arbitration agreement. When a court is seized of a matter in respect of which an arbitration agreement exists, a party to that agreement may apply to the court seeking a reference to arbitration.

If such an application is filed in respect of an arbitration that will be seated in India, the court must refer the parties to arbitration unless it finds prima facie that no valid arbitration agreement exists or that the dispute is ex facie non-arbitrable.

Where such an application is filed in respect of an arbitration that will be seated outside India, the court must refer the parties to arbitration unless it finds prima facie that the arbitration agreement is null and void, inoperative or incapable of being performed, or that the dispute is ex facie non-arbitrable.

The scope of judicial inquiry is thus larger in the case of arbitrations that will be held outside India. The court must not only see that an arbitration agreement exists, but also find prima facie that it is not null and void, inoperative or incapable of being performed. This wider inquiry conforms to the one envisaged in Article II(3) of the New York Convention.

Indian law recognises that consent is foundational to the arbitral process. Consequently, an arbitral tribunal cannot assume jurisdiction over individuals or entities that are neither a party to an arbitration agreement nor signatories to the contract containing that agreement.

Indian law does, however, recognise the Group of Companies doctrine. The doctrine allows parties that have not signed an arbitration agreement to be joined to an arbitration if, following the consideration of various factors, it becomes clear that all parties had intended that the non-signatory be bound by the arbitration agreement. This subject is discussed in 13.5 Binding of Third Parties.

Arbitral tribunals in India are empowered to grant interim relief during the arbitral proceedings. The tribunal’s interim orders are binding on the parties. They are deemed to be orders of the court and are enforceable as such. Consequently, contempt proceedings can be initiated against parties that violate them.

Arbitral tribunals enjoy the same power to make orders as courts have for the purpose of proceedings before them. They can make any interim order of protection that appears to them to be just and convenient, including:

• orders appointing a guardian for a minor or a person of unsound mind for the purpose of the arbitration;
• orders requiring the preservation, interim custody or sale of goods that are the subject matter of the arbitration agreement;
• orders to secure the amount in dispute in the arbitration;
• orders requiring the detention, preservation or inspection of any property or thing which is the subject matter of the dispute;
• interim injunctions; and
• orders appointing receivers.

The ACA empowers Indian courts to grant interim relief before and during arbitral proceedings. They may also do so after the award is made but before it is enforced. In practice, however, courts are reluctant to grant interim relief once the tribunal has been constituted as the latter is equally empowered to redress the parties’ grievances.

The courts’ power to grant interim relief also extends to foreign-seated arbitrations unless the parties have agreed otherwise.

Like arbitral tribunals, courts in India can make any interim order of protection that appears to them to be just and convenient, including:

• orders appointing a guardian for a minor or a person of unsound mind for the purpose of the arbitration;
• orders requiring the preservation, interim custody or sale of goods that are the subject matter of the arbitration agreement;
• orders to secure the amount in dispute in the arbitration;
• orders requiring the detention, preservation or inspection of any property or thing which is the subject matter of the dispute;
• interim injunctions; and
• orders appointing receivers.

Emergency Arbitration

The ACA does not expressly recognise emergency arbitration. However, in the recent case of Amazon.com NV Investment Holdings LLC v Future Retail Ltd. (2021), the Supreme Court held that awards made in emergency arbitrations seated in India would be enforceable in Indian courts under the ACA. The case concerned an award made by an emergency arbitrator under the SIAC Rules. This award was found to be enforceable in the same manner as an interim order passed by an arbitral tribunal under the ACA.

The ACA does not expressly enable courts or arbitral tribunals to order security for costs.

Indian law grants parties the freedom to decide the procedure to be followed by the tribunal in conducting its proceedings. This freedom is subject only to certain mandatory/non-derogable provisions in Part I of the ACA. If parties fail to reach an agreement on procedure, the tribunal may conduct proceedings in a manner it considers appropriate, again, subject only to certain mandatory/non-derogable provisions in Part I of the ACA.

It may also be noted that arbitral tribunals in India are not bound to follow national laws governing matters of evidence and civil procedure.

The ACA requires the completion of several procedural steps in each arbitration. Many of these requirements are contained in non-mandatory/derogable provisions, leaving parties the freedom to opt for a different procedure instead. If the parties opt, for instance, for the ICC or SIAC Rules to apply, the derogable provisions of the ACA will give way to those Rules.

Against this background, the following procedural steps may be noted:

• An arbitration proceeding under the ACA commences when a request for a dispute to be referred to arbitration is received by the respondent. This request usually takes the form of a ‘notice of arbitration’ and forms the first step in the arbitral process.

• Next, the parties attempt to constitute the tribunal according to their chosen procedure. If this procedure fails, the default appointment procedure under the ACA may be initiated wherein appointments are made by a court. It may be noted that if the parties have not reached an agreement regarding the strength of the tribunal, it shall consist of only one arbitrator.
• Persons who are approached in relation to their possible appointment as arbitrators must make necessary disclosures under the ACA. These include the disclosure of circumstances (i) that will likely give rise to justifiable doubts as to their independence and impartiality, and (ii) which are likely to affect their ability to devote sufficient time to the arbitration and to complete proceedings within 12 months.
• The process of completing pleadings commences once the tribunal has been constituted. The claimant must file its statement of claim within such time as is agreed by the parties or determined by the tribunal. Thereafter, the respondent must file its statement of defence, which may include a counterclaim or plead a set-off. Both statements may be accompanied by such documents as the parties consider necessary. The ACA requires that both statements be completed within six months from the date the arbitrator or all the arbitrators, as the case may be, receive a written notice of their appointment.

• Following the completion of pleadings, the tribunal proceeds to hold oral hearings for the presentation of evidence and for oral argument.
• In the case of domestic arbitrations, the tribunal must make an award within 12 months from the date pleadings were completed. The parties may agree to extend this period by an additional six months. Any further extension will require the leave of a court. No time limit applies in the case of international commercial arbitrations.

• The tribunal’s award must comply with various legal requirements (see 10.1 Legal Requirements).
• Arbitral proceedings are terminated by the final award and, resultantly, the mandate of the tribunal also terminates.

Powers of Arbitrators

• Arbitrators can rule on their own jurisdiction. They may also rule on objections with respect to the existence and validity of the arbitration agreement itself.
• Arbitrators can order interim measures of protection.
• In the absence of any agreement regarding the arbitral seat, arbitrators are empowered to determine the seat/place of arbitration.
• Parties enjoy the freedom to choose the procedure to be followed in the conduct of arbitral proceedings. If they fail to make a choice, arbitrators are empowered to conduct proceedings in a manner they consider appropriate.

• Unless the parties have agreed otherwise, arbitrators have the ability to determine the language to be used in the arbitral proceedings.
• Arbitrators are empowered to determine whether any evidence is admissible, relevant or material.

• Arbitrators have the power to seek the assistance of a court in taking evidence. They may also appoint experts to report on specific issues, unless the parties have agreed otherwise.
• Arbitrators can fix time limits for the conclusion of oral arguments provided they give the parties a fair opportunity to present their respective cases.
• Arbitrators may award both pre-award and post-award interest at rates they deem reasonable. The power to grant pre-award interest is, however, subject to any agreement between the parties.
• Arbitrators can award costs and have complete discretion to determine all matters relating to the costs of the arbitration.
• Within 30 days of making an award, arbitrators may correct any clerical, typographical or computational errors in that award.
• Arbitrators are empowered to withdraw from their office for any reason.
• If they find that the continuation of proceedings has become impossible or unnecessary, arbitrators have the power to terminate proceedings.

Duties of Arbitrators

• Arbitrators are under a continuing duty of disclosure. This duty commences when they are first approached regarding their possible appointment and continues until proceedings are terminated. The duty encompasses disclosures of two kinds: (i) of circumstances that are likely to give rise to justifiable doubts as to the arbitrator’s independence or impartiality, and (ii) of circumstances that are likely to affect the arbitrator’s ability to devote sufficient time to the arbitration and to complete proceedings within 12 months.
• Arbitrators are under a duty of fairness which requires them to treat all parties equally and give each of them a full opportunity to present their case.
• Arbitrators must conduct proceedings expeditiously.
• While conducting proceedings and making the award, arbitrators must take into account the terms of the contract between the parties. They must follow rules chosen by the parties, including laws that govern the contract and the arbitration agreement.

It is important to bear in mind that Indian law makes provision for the powers and duties of arbitrators only in respect of arbitrations seated in India.

Indian law does not prescribe any qualifications for persons to appear before arbitral tribunals and represent the parties. However, as most arbitrations seated in India involve elements of Indian law, parties are usually represented by qualified Advocates and Senior Advocates from India. In some instances, parties may also be represented by persons who have a particular expertise in the subject matter of the dispute.

Arbitral tribunals in India are not bound to follow statutes governing the law of evidence. Parties are free to agree on a procedure regarding the collection and submission of evidence. If they fail to do so, the tribunal may determine the admissibility, relevance, materiality and weight of any evidence in a manner it considers appropriate.

However, it is important to note that most arbitrations in India are ad hoc. As such, procedures regarding evidence are usually agreed upon at the first or second meeting of the tribunal following deliberations between the parties and the arbitrators.

It is common for parties to file documentary evidence along with their statements of claim and defence. Witnesses are then called upon to prove or contest documentary evidence, or to answer questions regarding their role in the dispute or facts in their knowledge. Parties may also produce expert witnesses to provide evidence in respect of specific issues. Witnesses may be subject to three examinations: an examination-in-chief (usually through an affidavit in writing), a cross-examination (by the counsel of the opposing party) and a re-examination (by the counsel of the party producing the witness).

Parties seeking discovery or disclosures in ad hoc arbitrations may do so by filing separate applications before the tribunal.

As noted in 8.1 Collection and Submission of Evidence, arbitral tribunals in India are not bound by provisions of national legislation dealing with evidence. They are, nonetheless, expected to appreciate evidence objectively and dispassionately, and to ensure that witnesses are examined fairly and not put under undue strain.

The ACA allows court assistance to be sought in taking evidence. Such assistance can be sought either by the tribunal or by a party with the tribunal’s approval. When approached for assistance, courts are empowered to summon witnesses and seek the production of documents. In some cases, courts have also formed commissions for recording the evidence of witnesses who are outside India.

Subject to any agreement between the parties, the power to seek assistance in taking evidence from courts in India is also available to tribunals in foreign-seated arbitrations.

Following amendments made to the ACA in 2019, Indian law requires the arbitrator, the arbitral institution and the parties to the arbitration agreement to maintain confidentiality of all arbitral proceedings. The arbitral award, however, may be disclosed where such disclosure is necessary for the implementation and enforcement of the award.

The ACA does not punish or sanction breaches of the duty to maintain confidentiality.

Arbitral awards must comply with the following requirements in India:

• They must be in writing.
• They must be signed either by all members of the tribunal or by the majority of all members, provided reasons for any omitted signatures are given.
• They must state the reasons upon which they are based unless they are based on agreed terms, or unless the parties have agreed that no reasons are to be supplied.
• They must state the date on which they are made.
• They must record the place of arbitration (the seat) as agreed by the parties or as determined by the tribunal.
• Signed copies of the award are to be delivered to each party.

Additionally, arbitral awards are subject to stamp duty payable under the Indian Stamp Act, 1899. It is imperative that this duty be paid before the award is relied upon by the parties in any court proceedings.

Time Limits

All domestic arbitrations in India are to be completed within 12 months from the date on which pleadings are completed. This period may be extended by an additional six months with the consent of the parties. Any further extensions require the leave of a court.

There is no time limit in India for the completion of proceedings in international commercial arbitrations. The ACA only requires that an endeavour be made to complete proceedings within 12 months from the date parties complete their pleadings.

The ACA does not provide a complete list of the types of remedies that tribunals in India may award. However, courts have recognised the power of arbitrators to order:

• the payment of damages, interest and costs;
• specific performance of a contract; and
• temporary and permanent injunctive relief.

In addition, it is necessary to note that any remedy the tribunal grants can only extend to the parties to the arbitration. Arbitral awards are only binding upon the parties, and no relief may be granted against someone who is not a party to the arbitration agreement.

As far as punitive damages are concerned, it is unclear whether arbitrators have the power to award them. The law on punitive damages is at a very nascent stage in India. Courts have only awarded punitive damages on a handful of occasions, usually in cases involving IP infringement. Further, the Indian Contract Act, 1872 does not expressly recognise punitive damages for breach of contract. As such, it is possible that an award of punitive damages by a tribunal may not withstand judicial scrutiny.

Interest

Arbitral tribunals are empowered to order the payment both pre-award and post-award interest when an award is for the payment of money.

Pre-award interest: Parties are free to agree whether pre-award interest will be payable and, if so, at what rate. Failing any such agreement, the tribunal may order the payment of pre-award interest at a rate it deems reasonable. Pre-award interest may be awarded on the whole or any part of the money payable, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award was finally made.

Post-award interest: The tribunal is free to determine the rate of post-award interest, provided the same is not excessive and unreasonable. If the award does not provide for post-award interest, a default rate becomes payable. This default rate is 2% higher than the “current rate of interest” as defined in the Interest Act, 1978.

Notably, post-award interest under Indian law is payable on the sum of the awarded amount and pre-award interest, if any.

Costs

A regime for costs was inserted in Section 31A of the ACA by amendments made in 2015. This regime expressly recognises the tribunal’s power to award costs that cover, inter alia, the fees and expenses of the arbitrators, legal fees and administrative fees payable to arbitral institutions.

As a general rule, costs follow the event. This means that costs will be payable by the unsuccessful party to the successful party. An award that is at variance with this rule may also be made for reasons that must be recorded in writing.

The ACA also places limits on party autonomy in matters relating to costs. An agreement that requires a party to pay the whole or a part of the costs of the arbitration in any event will only be valid if it was made after the dispute in question had arisen.

Indian law offers only one remedy against an award made in an arbitration seated in India. A party aggrieved by an award may apply for such award to be set aside by a court.

The grounds on which courts may set aside awards are listed in Section 34 of the ACA, which mirror grounds listed in Article 34 of the Model Law. Courts may set aside arbitral awards only if:

• a party establishes that it was under some incapacity;
• the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under Indian law;
• the party that applies to the court to set aside the award had not been given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case;
• the arbitral award deals with a dispute not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of submission to arbitration;

• the composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties or with the provisions of Part I of the ACA, as the case may be;
• the subject matter of the dispute is not capable of settlement by arbitration in India, ie, the dispute is not arbitrable; or
• the arbitral award is in conflict with the public policy of India. The ACA offers limited scope of judicial interference when violations of public policy are alleged. An award is considered to be in conflict with the public policy of India only if (i) its making was induced by fraud or corruption, (ii) it is in conflict with the most basic notions of morality or justice, or (iii) it is against the fundamental policy of Indian law.

Awards made in domestic arbitrations may also be set aside if the court finds that they are vitiated by patent illegality appearing on the face of the award.

Provisions in the ACA dealing with applications to set aside arbitral awards are mandatory and non-derogable. Parties cannot contract out of them or reduce or expand their scope in any manner.

Courts in India are deferential to the tribunal’s view of the case and do not seek to supplant that view with their own. They do not conduct a de novo review of the case and refrain from re-appreciating evidence or re-evaluating the merits.

India was among the first nations to sign the New York Convention, doing so in June 1958. On 13 July 1960, India officially ratified the Convention with two reservations, namely:

• that India would only recognise and enforce arbitral awards made in a State that was also party to the Convention; and
• that India would apply the Convention only to differences arising out of legal relationships, whether contractual or not, that were considered commercial under Indian law.

Incidentally, India has also ratified the Geneva Convention on the Execution of Foreign Awards, 1927. Both the New York Convention and the Geneva Convention are reproduced in Schedules in the ACA, and thus form a part of it.

Awards Made in India

As noted in 11.1 Grounds for Appeal, awards made in domestic and international arbitrations seated in India can be set aside by a court. A court may also stay the enforcement of an award while it is hearing an application to set aside that award. Where an award has not been set aside or where no such stay has been granted, the award is enforced under the provisions of the Code of Civil Procedure, 1908 as if it were a decree of the court. Proceedings to enforce awards are commonly termed execution proceedings in India. The court enforcing/executing the award has no power to alter its terms.

Foreign Awards

Indian courts are empowered to refuse to enforce foreign awards, ie, awards made in international commercial arbitrations seated outside India. The grounds on which they may do so are listed in Section 48 of the ACA, which broadly mirrors Article V of the New York Convention.

One of the grounds on which the enforcement of a foreign award may be refused in India is if that award has been set aside by a court at the seat of the arbitration. While this is an important factor to be considered, Indian courts have discretion to enforce such awards nonetheless.

In cases where an application to set aside a foreign award is pending before a court at the arbitral seat, the ACA permits Indian courts to either adjourn their decision on enforcement or proceed with the matter. The case of Daiichi Sankyo Company Ltd. v Malvinder Mohan Singh & Ors. (2018) offers further guidance on this issue. This case concerned an ICC arbitration seated in Singapore in a dispute between a Japanese company and several Indian parties. The unsuccessful party moved the High Court of Singapore seeking that the award be set aside. Simultaneously, it objected to the award’s enforcement in India. While proceedings in Singapore were pending, the Delhi High Court proceeded to hear the case and ultimately declared that the award was enforceable in India.

Sovereign Immunity

Indian courts have recognised the difference between sovereign acts (acta jure imperi) and private acts of a commercial character (acta jure gestionis). Adopting the principle of restrictive immunity, Indian courts have held that there is no sovereign immunity against private acts of a commercial character. (See Ethiopian Airlines v Ganesh Narain Saboo, 2011 Supreme Court; Uttam Singh Duggal v United States of America, Agency of International Development, 1982 Delhi High Court.)

Recently, in KLA Const. Technologies Pvt. Ltd. v The Embassy of the Islamic Republic of Afghanistan (2011), the Delhi High Court held that a foreign State could not claim sovereign immunity against the enforcement of an arbitral award that arose out of a commercial transaction.

The Supreme Court observed in Vijay Karia v Prysmian Cavi E Sistemi SRL (2020) that “awards must always be read supportively with an inclination to uphold rather than destroy, given the minimal interference possible with foreign awards”. These words are illustrative of the courts’ increasing reluctance to interfere with the enforcement of foreign awards.

The judicial policy of minimal interference with foreign awards extends to cases where violations of the public policy of India have been alleged. This is, in large part, owing to the restricted nature in which public policy is defined in the ACA. A foreign award is only considered to conflict with the public policy of India if:

• the making of the award is induced by fraud or corruption;
• it is in contravention of the fundamental policy of Indian law; or
• it is in conflict with the most basic notions of morality and justice.

The ACA also cautions that courts are not to review the merits of a dispute while determining whether an award contravenes the fundamental policy of Indian law.

In March this year, the Supreme Court recognised the importance of following an “internationalist approach” and adopting a narrow meaning of the expression “public policy of India” while dealing with foreign awards (see Avitel Post Studioz Ltd. v HSBC PI Holdings (Mauritius) Ltd. (2024)).

The ACA does not expressly recognise class action or group arbitration. It may, however, be possible for a group of claimants to bring claims against the same party before the same tribunal. For this to be permissible, each claimant must have a similar claim against the defendant and must also have entered an arbitration agreement with the defendant that is identical in all material respects. If these conditions are satisfied, it is likely that an Indian court will favour a single arbitration over multiple proceedings and the resultant prospect of conflicting awards. (See 13.4 Consolidation.)

All advocates in India are bound by the Rules of Professional Conduct and Etiquette prescribed by the Bar Council of India. The Rules list the duties of advocates towards courts, clients, opponents and colleagues. Advocates who are alleged to have violated these Rules can be subjected to disciplinary proceedings for professional misconduct. If found guilty, they may be reprimanded, suspended or barred from practice altogether.

There is no specific ethical code for arbitrators in India. Their duties are limited to those listed in 7.3 Powers and Duties of Arbitrators.

There is no legal regime in India dealing with third-party funding in arbitration. The field is unregulated.

Third-party funding has, however, recently received judicial recognition from the Delhi High Court in Tomorrow Sales Agency Pvt. Ltd. v SBS Holdings Inc. (2023). Here, the successful party in an arbitration sought disclosure orders and an asset-freezing injunction against a company that had funded the unsuccessful party in that arbitration. The obvious aim of this action was to recover sums owed under the award from the third-party funder. The High Court concluded that this could not be done as the third-party funder was not a party to the arbitration agreement, was not involved in the arbitration proceedings, and had not been made liable to make any payments under the award. The Court also acknowledged the important role third-party funders can play in ensuring access to justice.

It is important to note that under the Rules of Professional Conduct and Etiquette prescribed by the Bar Council of India, Indian advocates cannot fund legal proceedings for their clients.

The ACA makes no express provision for the consolidation of arbitral proceedings. However, it is not uncommon for disputes under two or more contracts between the same parties to be heard together by a common tribunal. Based on the parties’ wishes, this tribunal may deliver a single award or a separate one for each contract.

In fact, the Supreme Court upheld the consolidation of arbitral proceedings in P.R. Shah, Shares and Stock Brokers Pvt. Ltd. v B.H.H. Securities Pvt. Ltd. (2011). The Court held that if a party A had a claim against parties B and C, and had entered separate arbitration agreements with both, it could bring the claim in a single arbitration. Denying A the benefit of a single arbitration against B and C would, in the Court’s words, “lead to multiplicity of proceedings, conflicting decisions, and cause injustice”.

Indian law does not enable third parties to be bound by an arbitration agreement or an award.

In certain instances, a non-signatory to an arbitration agreement may be joined to an arbitration under that agreement. This position was recently confirmed in Cox & Kings Ltd. v SAP India Pvt. Ltd. (2023), where a five-Judge bench of the Supreme Court held that non-signatories can be bound to an arbitration agreement under the Group of Companies doctrine.

This doctrine applies to large corporate structures where one company in a group may sign an arbitration agreement while another may not. The doctrine proceeds on the basis that the non-signatory had impliedly agreed to be bound to the arbitration agreement and, as such, is a party thereto. In the facts of a given case, a clear intention to bind a non-signatory must emerge before a group company can be bound by an agreement it did not sign. The party seeking a joinder of a non-signatory must show how the mutual intention of the parties was to bind the non-signatory based on the factors listed below:

• the non-signatory’s relationship to a party that signed the arbitration agreement;
• the commonality of subject matter;
• the composite nature of the transaction in question; and
• the role the non-signatory plays in the performance of the contract.

It may be noted that the question of whether a non-signatory is a party to an arbitration agreement is usually answered by applying the law governing the arbitration agreement. Therefore, the benefit of the Group of Companies doctrine will only be available where an arbitration agreement is governed by Indian law.