Is arbitration actually faster than litigation in India?

It can be, and the statute is designed to make it so. Section 29A of the Arbitration and Conciliation Act, 1996 requires a domestic award within twelve months of completion of pleadings, extendable by six months with the consent of the parties and thereafter only by a court for sufficient cause. Delay generally enters at two points outside that window: before the reference, where appointment is contested and an application under Section 11 becomes necessary, and after the award, where a challenge under Section 34 and an appeal under Section 37 are pursued. A well-drafted clause compresses the first; nothing in the clause can eliminate the second.

Does filing a challenge under Section 34 stop the award from being enforced?

No. Since the 2015 amendment, an application under Section 34 of the Arbitration and Conciliation Act, 1996 does not operate as an automatic stay. The award-debtor must apply separately under Section 36(2), and under Section 36(3) the court has regard to the principles governing stay of a money decree, which commonly results in a conditional stay requiring deposit or security. A proviso introduced in 2021 requires an unconditional stay where the court is prima facie satisfied that the agreement, the contract or the making of the award was induced by fraud or corruption.

Is a mediated settlement agreement binding?

A settlement reached in mediation binds the parties as an agreement. Section 27 of the Mediation Act, 2023 provides for enforcement as a judgment or decree of a court, and Section 28 permits a challenge only on narrow grounds within a limited period. However, the Act's provisions were brought into force in stages, and the commencement position of the operative provisions should be confirmed before relying on them. Where they are not available, a settlement is enforced as a contract, or recorded before the court as a consent decree — which remains the more certain route in a pending matter.

What is the time limit for making an arbitral award in India?

Under Section 29A of the Arbitration and Conciliation Act, 1996, a domestic award must be made within twelve months of the date on which pleadings are completed. Section 23(4) of that Act requires pleadings to be completed within six months of the arbitrators receiving written notice of their appointment. The parties may extend the twelve-month period by consent by up to six months. After that, only a court may extend, for sufficient cause, and it may reduce the tribunal's fees where the delay is attributable to the tribunal. For international commercial arbitration, the proviso to Section 29A(1) frames the twelve months as an endeavour rather than a mandate.

How is a foreign arbitral award enforced in India?

Under Part II of the Arbitration and Conciliation Act, 1996. Two threshold conditions apply under Section 44: the award must have been made in a territory notified by the Central Government as a Convention country, and it must arise from a legal relationship treated as commercial under Indian law. Section 47 lists the documents to be produced. Section 48 sets out the limited grounds on which enforcement may be refused, including invalidity of the agreement, want of proper notice, excess of jurisdiction, non-arbitrability under Indian law, and conflict with the public policy of India. Once the court is satisfied the award is enforceable, Section 49 deems it a decree of that court.

What is the limitation period for challenging an arbitral award?

Under Section 34(3) of the Arbitration and Conciliation Act, 1996, an application to set aside an award must be made within three months of the date on which the applicant received the award. A court may entertain an application within a further thirty days if satisfied that the applicant was prevented by sufficient cause, but not thereafter. The outer limit is therefore three months and thirty days, and it is strict.

Can we approach a court for interim relief after the arbitral tribunal is constituted?

Only in limited circumstances. Section 9(3) of the Arbitration and Conciliation Act, 1996 provides that once the tribunal is constituted, a court shall not entertain an application under Section 9 unless it finds that circumstances exist which may render the remedy before the tribunal under Section 17 inefficacious. In Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd., the Supreme Court construed "entertain" as taking the matter up for consideration by application of mind, so the bar did not apply to an application the court had already entertained before the tribunal was constituted. The practical lesson is that a party needing urgent protection should move before the tribunal is in place.

What should a dispute resolution clause in an Indian commercial contract contain?

At a minimum: whether disputes go to arbitration or to a named court; the seat of the arbitration, stated expressly and separately from any venue for hearings; the governing law of the contract and, separately, the law governing the arbitration agreement; the number of arbitrators and the mechanism for appointing them; whether the arbitration is institutional and if so under which rules; the language; and the position on interim relief, including whether the parties preserve the right to approach a court. Any pre-arbitration steps such as negotiation or mediation should carry a defined trigger, a defined duration and an automatic right to proceed on expiry.

What is the difference between institutional and ad hoc arbitration?

In an institutional arbitration, an arbitral institution administers the proceedings under its own published rules — appointing or confirming the tribunal where the parties do not, fixing fees under a published schedule, and providing a secretariat. In an ad hoc arbitration the parties and the tribunal run the process themselves. Institutional arbitration costs more at the outset and fewer things go wrong; ad hoc arbitration is cheaper to start and more exposed to a party that wishes to obstruct. India's statutory institution is the India International Arbitration Centre, established under the India International Arbitration Centre Act, 2019 — originally enacted as the New Delhi International Arbitration Centre Act, 2019 and renamed by amendment.

Legal Analysis & Regulatory Commentary · Arbitration & Dispute Resolution

Commercial Arbitration and Mediation in India: Enforceability, Cost and the Clauses That Decide Both

18 October 2026 · Sagar & Sagar Law Offices · 16 min read

Last reviewed: 18 October 2026

Executive summary

A dispute resolution clause is not boilerplate. It is the only part of a commercial contract that operates after the relationship has broken down, and the choices made in it — seat, institution, number of arbitrators, interim relief, pre-litigation steps — determine how long a dispute takes, what it costs, and whether the eventual award can be executed. Indian arbitration law has moved substantially since 2023: a seven-Judge Bench has settled the position on unstamped arbitration agreements, a Constitution Bench has confirmed a limited judicial power to modify awards, and the Supreme Court has restated how the seat of arbitration is identified. The Mediation Act, 2023 adds a further layer, though its operative provisions and its commencement position need to be checked before any clause relies on them.

Key takeaways

Under Section 36 of the Arbitration and Conciliation Act, 1996, an award is enforced as if it were a decree of a civil court, and a challenge under Section 34 no longer stays enforcement automatically. The award-debtor must apply separately for a stay.
Under Section 29A of the Arbitration and Conciliation Act, 1996, a domestic award must be made within twelve months of completion of pleadings, extendable by six months with party consent and thereafter only by a court.
For a commercial suit of Specified Value, Section 12A of the Commercial Courts Act, 2015 requires pre-institution mediation unless the suit contemplates urgent interim relief. The Supreme Court has held this requirement mandatory.
A venue named in the clause will usually be treated as the seat unless there are significant contrary indications — which makes a loosely drafted clause a jurisdictional risk, not merely an untidy one.

Why the dispute resolution clause is negotiated last and matters most

In most commercial negotiations the dispute resolution clause is settled in the final hour, often by reference to a precedent nobody has re-read. The commercial team has moved on to closing. The clause is treated as machinery.

The difficulty is that every other clause in the contract assumes performance. The dispute resolution clause assumes failure. It is the one provision drafted for a state of affairs in which the counterparty is no longer cooperating, may be dissipating assets, and has every incentive to delay. By the time it is read in earnest, it cannot be amended except by agreement with the party it is being used against.

Litigation before the civil courts remains available and, for some disputes — shareholder and oppression claims among them, as noted in our piece on founders' and shareholders' agreements — remains correct. But for commercial contracts of any size, the practical question is rarely "arbitration or court". It is a series of narrower questions: what the parties must do before either, who decides, where, under whose rules, and what happens on the day the award is handed down. Those questions are answered in the clause or they are answered later, expensively, by a court.

Arbitration, mediation and litigation compared

The three routes are not substitutes. They sit at different points on a scale running from party control to judicial determination, and a well-constructed contract frequently uses more than one.

Topic	Arbitration	Mediation	Court litigation
Who decides	A tribunal the parties appoint or an institution appoints for them	No one — the mediator facilitates; the parties decide	The court
Speed	Governed by Section 29A of the Arbitration and Conciliation Act, 1996: twelve months from completion of pleadings, extendable by six months by consent	Governed by Section 18 of the Mediation Act, 2023 once notified: 120 days from the date fixed for the first appearance before the mediator, extendable by 60 days with party consent	Governed by the Code of Civil Procedure, 1908, as modified for commercial suits by the Commercial Courts Act, 2015; timelines vary by forum and docket
Confidentiality	Proceedings are private; awards are not published unless the parties or the institution permit	Section 22 of the Mediation Act, 2023 provides for confidentiality once notified	Proceedings and judgments are public
Cost structure	Parties bear tribunal and institutional fees in addition to counsel; costs are front-loaded	Lowest of the three; a single neutral and a compressed timetable	Court fees are modest; cost is driven by duration
Enforceability	Domestic awards are enforced as a decree under Section 36 of the Arbitration and Conciliation Act, 1996; foreign awards under Part II where the seat is in a notified Convention country	A mediated settlement agreement is enforceable as a judgment or decree under Section 27 of the Mediation Act, 2023 once notified; otherwise it is enforced as a contract or recorded in a consent decree	Decrees are executed under Order XXI of the Code of Civil Procedure, 1908
Control	High at the drafting stage, limited once the tribunal is constituted	Highest throughout; either party may withdraw	Lowest; procedure and outcome are the court's
Scope of appeal	Narrow: setting aside under Section 34 and appeal under Section 37 of the Arbitration and Conciliation Act, 1996	None; a settlement may be challenged only on the narrow grounds in Section 28 of the Mediation Act, 2023 once notified	Full appellate review on fact and law

The practical reading of this table is that arbitration buys a private determination by a tribunal the parties help choose, reviewable only on narrow grounds, at a higher unit cost; mediation buys the chance of a commercial outcome at a fraction of that cost but without compulsion; and litigation buys the full apparatus of appellate correction at the price of time and publicity.

The framework, as it currently stands

Arbitration

The governing statute is the Arbitration and Conciliation Act, 1996, amended in 2015, 2019 and 2021. Its architecture is familiar: Section 7 defines the arbitration agreement; Section 8 requires a judicial authority to refer parties to arbitration; Section 11 governs appointment; Section 16 gives the tribunal competence to rule on its own jurisdiction; Sections 9 and 17 provide for interim measures by the court and the tribunal respectively; Section 34 sets out the grounds for setting aside; and Sections 36 and 37 govern enforcement and appeal.

Four developments since 2023 have changed how that architecture operates in practice.

Stamping is no longer a gateway defence

In In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (2023 INSC 1066), a seven-Judge Bench held that an arbitration agreement contained in an unstamped or insufficiently stamped instrument is not void. Non-stamping is a curable defect: Section 35 of the Indian Stamp Act, 1899 bars admissibility until duty and penalty are paid, but does not render the instrument a nullity. At the referral stage the court examines only whether an arbitration agreement prima facie exists; questions of stamping are for the tribunal. The earlier decision in N.N. Global was overruled. For an award-creditor, this closes a line of attack that had been used to stall references for years.

Non-signatories can be brought in

In Cox and Kings Ltd. v. SAP India Pvt. Ltd. (2023 INSC 1051), a Constitution Bench confirmed that the group of companies doctrine has a place in Indian arbitration law, so that a non-signatory within a corporate group may in defined circumstances be bound by an arbitration agreement. In group structures where the contracting entity is thinly capitalised, this matters at the enforcement stage as much as at the reference stage.

Awards can be modified, but only within narrow limits

In Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd. (2025 INSC 605), a five-Judge Bench held by majority that a court exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 has a limited power to modify an award: where an invalid portion is severable from the rest; where there is a manifest clerical, computational or typographical error; in relation to post-award interest in defined circumstances; and, in the case of the Supreme Court, under Article 142 of the Constitution of India. The decision resolves a long-running divergence, but it is a narrow power and it is not a merits appeal.

Seat is determined by the clause, not by inference from the contract

In M/s Arif Azim Co. Ltd. v. M/s Micromax Informatics FZE (2024 INSC 850), the Supreme Court applied the Shashoua principle: where a clause designates a place as the venue of arbitration and there are no significant contrary indications, that place is the seat. On the facts, Dubai was held to be the seat, with the consequence that the courts of Dubai had supervisory jurisdiction and the Indian courts could not appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. A clause that names a city casually therefore selects a supervisory court.

Two further points of practical weight. First, since the 2015 amendment, an application under Section 34 of the Arbitration and Conciliation Act, 1996 does not operate as an automatic stay of enforcement; the award-debtor must apply under Section 36(2) of that Act, and under Section 36(3) the court applies the principles governing stay of a money decree, which in practice usually means a deposit or security. The attempt to reverse this by inserting Section 87 into the same Act in 2019 was struck down in Hindustan Construction Company Ltd. v. Union of India. The 2021 amendment added a proviso requiring an unconditional stay where the court is prima facie satisfied that the agreement, the contract or the making of the award was induced by fraud or corruption. Second, Section 9(3) bars a court from entertaining an application for interim measures once the tribunal is constituted, unless the remedy under Section 17 would not be efficacious — a provision that rewards a party which moves early and penalises one that waits.

A draft Arbitration and Conciliation (Amendment) Bill was circulated for public consultation in 2024. Proposals under consultation are not law, and nothing in a contract should be drafted on the assumption that they will be enacted in any particular form.

Mediation

The Mediation Act, 2023 (Act 32 of 2023) received assent on 14 September 2023. It establishes a statutory framework for mediation: Section 5 provides for pre-litigation mediation on a voluntary basis with mutual consent; Section 6 read with the First Schedule identifies disputes not fit for mediation; Section 18 sets a 120-day timetable extendable by 60 days; Section 19 deals with the mediated settlement agreement; Section 27 makes such an agreement enforceable as a judgment or decree; and Section 28 permits a challenge only on the grounds of fraud, corruption, impersonation, or that the dispute was not fit for mediation, within 90 days extendable by a further 90 days.

A point that is frequently stated incorrectly. The Act's commencement was staged. Notification S.O. 4384(E) dated 9 October 2023 brought into force Section 1, Section 3, Section 26, Sections 31 to 38, Sections 45 to 47, Sections 50 to 54 and Sections 56 to 57 — that is, the definitions, the provisions establishing the Mediation Council of India, the Mediation Fund, the rule-making powers and the transitional provisions. The operative provisions on pre-litigation mediation, timelines, settlement agreements, enforcement and challenge were not in that notification. Before relying on any provision of the Mediation Act, 2023 in a clause or in a pleading, the commencement position should be confirmed against the current gazette. A contract that routes disputes to "mediation under the Mediation Act, 2023" without alternative machinery may route them nowhere.

What does govern commercial disputes now is Section 12A of the Commercial Courts Act, 2015, inserted by the 2018 amendment. A suit of Specified Value — not less than ₹3,00,000 under Section 2(1)(i) of that Act — that does not contemplate urgent interim relief cannot be instituted unless the plaintiff has exhausted pre-institution mediation under the Pre-Institution Mediation and Settlement Rules, 2018. In M/s Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., the Supreme Court held this requirement mandatory, with non-compliance attracting rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908. The urgent-interim-relief carve-out is the pressure point, and it is litigated: a plaint that claims urgency to bypass mediation invites a challenge on that very ground.

Five drafting failures that surface only in a dispute

One: the clause that does not say where

Naming a city as the "venue" without addressing the seat leaves the supervisory court to be determined by construction. Following Arif Azim, a named venue will usually be read as the seat, but "usually" is not a basis on which to plan. State the seat expressly, state the venue separately if hearings are to be held elsewhere, and state the governing law of the arbitration agreement as distinct from the governing law of the contract.

Two: the clause that cannot be operated

Clauses referring to institutions that have been renamed, merged or never existed; clauses requiring an appointing authority that has no power to appoint; clauses prescribing three arbitrators for a contract worth less than the cost of three arbitrators. These are pathological clauses, and each one converts a reference into an application under Section 11 of the Arbitration and Conciliation Act, 1996 before the dispute has begun. The same discipline applies to every operative clause in a commercial contract, as discussed in our note on the Indian Contract Act framework and enforceability.

Three: the multi-tier clause with no exit

Escalation clauses — negotiation, then senior management, then mediation, then arbitration — are commercially sensible and frequently drafted as mandatory conditions precedent without any time limit. The result is that a party wishing to arbitrate must first prove it has exhausted steps the counterparty can prolong indefinitely. Each tier needs a defined trigger, a defined duration and an automatic right to proceed on expiry.

Four: silence on interim relief

Given Section 9(3) of the Arbitration and Conciliation Act, 1996, the window for court-ordered interim measures narrows once the tribunal is constituted. A clause that provides for emergency arbitration, or that expressly preserves the parties' right to approach a court for interim protection, is doing real work. A clause silent on the point leaves a party needing urgent protection to litigate the question of where it may ask.

Five: ignoring the enforcement endpoint

The purpose of the clause is an enforceable award. For a cross-border contract that means checking whether the chosen seat is in a country notified by the Central Government under Part II of the Arbitration and Conciliation Act, 1996, and whether the relationship is commercial under Indian law. A foreign award from an unnotified seat is not enforceable in India under Part II however impeccable the arbitration. For a domestic contract it means considering, at the drafting stage, where the counterparty's assets are and whether execution under Order XXI of the Code of Civil Procedure, 1908 will reach them.

How Sagar & Sagar approaches arbitration and dispute resolution

Sagar & Sagar Law Offices has advised and appeared in commercial disputes from New Delhi since 2000. The firm's Arbitration and Alternative Dispute Resolution practice is built around the proposition that arbitration work begins in the contract and ends in execution, and that the two ends are connected.

At the drafting stage, we review dispute resolution clauses in the context of the transaction rather than in isolation — the counterparty's corporate structure, where its assets sit, whether the contract forms part of a suite of related agreements with inconsistent clauses, and what interim protection is likely to matter if the relationship fails. For clients with a large contract population, that review is run as a portfolio exercise.

At the interim stage, we act in applications under Section 9 and Section 17 of the Arbitration and Conciliation Act, 1996, and in applications for appointment under Section 11, including where jurisdiction, stamping or the position of a non-signatory is contested at the referral stage.

During the reference, we conduct domestic and institutional arbitrations, with attention to the Section 29A timetable from the outset — because the twelve-month clock runs from completion of pleadings, and the procedural directions given at the first hearing largely determine whether the tribunal's mandate survives without a court extension.

After the award, we act both ways: in challenges and resistance to challenges under Section 34 of the Arbitration and Conciliation Act, 1996, in appeals under Section 37, and in enforcement and execution of domestic awards under Section 36 and of foreign awards under Part II of that Act. The firm's established practice in banking, debt recovery and insolvency means that execution work is handled with the same tools used to realise security — which is frequently what enforcement of a money award actually requires.

Adv. Rajeev Sagar, the firm's Founding and Managing Partner, leads its litigation and dispute resolution work across India, appearing before the Supreme Court of India, the High Courts and specialised tribunals in banking and recovery litigation, insolvency proceedings before the National Company Law Tribunal and the National Company Law Appellate Tribunal, and corporate-commercial matters. Clients also draw on the firm's legal process outsourcing capability for the document-intensive components of large arbitrations — disclosure review, chronology and bundle preparation, and contract population analysis — which allows the substantive advocacy to be run by a focused team.

Frequently asked questions

Is arbitration actually faster than litigation in India?: It can be, and the statute is designed to make it so. Section 29A of the Arbitration and Conciliation Act, 1996 requires a domestic award within twelve months of completion of pleadings, extendable by six months with the consent of the parties and thereafter only by a court for sufficient cause. Delay generally enters at two points outside that window: before the reference, where appointment is contested and an application under Section 11 becomes necessary, and after the award, where a challenge under Section 34 and an appeal under Section 37 are pursued. A well-drafted clause compresses the first; nothing in the clause can eliminate the second.
Does filing a challenge under Section 34 stop the award from being enforced?: No. Since the 2015 amendment, an application under Section 34 of the Arbitration and Conciliation Act, 1996 does not operate as an automatic stay. The award-debtor must apply separately under Section 36(2), and under Section 36(3) the court has regard to the principles governing stay of a money decree, which commonly results in a conditional stay requiring deposit or security. A proviso introduced in 2021 requires an unconditional stay where the court is prima facie satisfied that the agreement, the contract or the making of the award was induced by fraud or corruption.
Must we mediate before filing a commercial suit?: If the suit is of Specified Value and does not contemplate urgent interim relief, yes. Section 12A of the Commercial Courts Act, 2015 requires pre-institution mediation under the Pre-Institution Mediation and Settlement Rules, 2018, and the Supreme Court has held the requirement mandatory in M/s Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., with non-compliance attracting rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908. Whether a claim for urgent interim relief is genuine is itself capable of being challenged, so the carve-out should not be treated as a routine route around the requirement.
What is the difference between the seat and the venue of an arbitration, and why does it matter?: The seat fixes the legal home of the arbitration and determines which courts exercise supervisory jurisdiction — over appointment, interim measures and any challenge to the award. The venue is merely where hearings are physically held. In M/s Arif Azim Co. Ltd. v. M/s Micromax Informatics FZE (2024 INSC 850), the Supreme Court held that where a clause designates a place as the venue and there are no significant contrary indications, that place is the seat. Naming a foreign city loosely can therefore remove the Indian courts' jurisdiction altogether.
Is a mediated settlement agreement binding?: A settlement reached in mediation binds the parties as an agreement. Section 27 of the Mediation Act, 2023 provides for enforcement as a judgment or decree of a court, and Section 28 permits a challenge only on narrow grounds within a limited period. However, the Act's provisions were brought into force in stages, and the commencement position of the operative provisions should be confirmed before relying on them. Where they are not available, a settlement is enforced as a contract, or recorded before the court as a consent decree — which remains the more certain route in a pending matter.
What is the time limit for making an arbitral award in India?: Under Section 29A of the Arbitration and Conciliation Act, 1996, a domestic award must be made within twelve months of the date on which pleadings are completed. Section 23(4) of that Act requires pleadings to be completed within six months of the arbitrators receiving written notice of their appointment. The parties may extend the twelve-month period by consent by up to six months. After that, only a court may extend, for sufficient cause, and it may reduce the tribunal's fees where the delay is attributable to the tribunal. For international commercial arbitration, the proviso to Section 29A(1) frames the twelve months as an endeavour rather than a mandate.
Can an Indian court modify an arbitral award?: Only within narrow limits. In Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd. (2025 INSC 605), a five-Judge Bench of the Supreme Court held by majority that a court exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 may modify an award where an invalid portion is severable from the rest; where there is a manifest clerical, computational or typographical error; in relation to post-award interest in defined circumstances; and, in the case of the Supreme Court, under Article 142 of the Constitution of India. This is not a merits appeal, and it does not permit a court to substitute its own view of the dispute.
Is an unstamped arbitration agreement enforceable in India?: Yes. In In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (2023 INSC 1066), a seven-Judge Bench held that an arbitration agreement contained in an unstamped or insufficiently stamped instrument is not void. Section 35 of the Indian Stamp Act, 1899 bars admissibility until duty and penalty are paid, but does not render the instrument a nullity, and the defect is curable. At the referral stage the court examines only whether an arbitration agreement prima facie exists; stamping is for the tribunal. The earlier decision in N.N. Global was overruled.
Can a company that did not sign the contract be made a party to the arbitration?: It can, in defined circumstances. In Cox and Kings Ltd. v. SAP India Pvt. Ltd. (2023 INSC 1051), a Constitution Bench of the Supreme Court confirmed that the group of companies doctrine has a place in Indian arbitration law, so that a non-signatory within a corporate group may be bound by an arbitration agreement where the facts support it. This matters most where the contracting entity is thinly capitalised and the assets sit elsewhere in the group.
How is a foreign arbitral award enforced in India?: Under Part II of the Arbitration and Conciliation Act, 1996. Two threshold conditions apply under Section 44: the award must have been made in a territory notified by the Central Government as a Convention country, and it must arise from a legal relationship treated as commercial under Indian law. Section 47 lists the documents to be produced. Section 48 sets out the limited grounds on which enforcement may be refused, including invalidity of the agreement, want of proper notice, excess of jurisdiction, non-arbitrability under Indian law, and conflict with the public policy of India. Once the court is satisfied the award is enforceable, Section 49 deems it a decree of that court.
What is the limitation period for challenging an arbitral award?: Under Section 34(3) of the Arbitration and Conciliation Act, 1996, an application to set aside an award must be made within three months of the date on which the applicant received the award. A court may entertain an application within a further thirty days if satisfied that the applicant was prevented by sufficient cause, but not thereafter. The outer limit is therefore three months and thirty days, and it is strict.
Can we approach a court for interim relief after the arbitral tribunal is constituted?: Only in limited circumstances. Section 9(3) of the Arbitration and Conciliation Act, 1996 provides that once the tribunal is constituted, a court shall not entertain an application under Section 9 unless it finds that circumstances exist which may render the remedy before the tribunal under Section 17 inefficacious. In Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd., the Supreme Court construed "entertain" as taking the matter up for consideration by application of mind, so the bar did not apply to an application the court had already entertained before the tribunal was constituted. The practical lesson is that a party needing urgent protection should move before the tribunal is in place.
What should a dispute resolution clause in an Indian commercial contract contain?: At a minimum: whether disputes go to arbitration or to a named court; the seat of the arbitration, stated expressly and separately from any venue for hearings; the governing law of the contract and, separately, the law governing the arbitration agreement; the number of arbitrators and the mechanism for appointing them; whether the arbitration is institutional and if so under which rules; the language; and the position on interim relief, including whether the parties preserve the right to approach a court. Any pre-arbitration steps such as negotiation or mediation should carry a defined trigger, a defined duration and an automatic right to proceed on expiry.
Is the Mediation Act, 2023 fully in force?: It was brought into force in stages. Notification S.O. 4384(E) dated 9 October 2023 commenced Section 1, Section 3, Section 26, Sections 31 to 38, Sections 45 to 47, Sections 50 to 54 and Sections 56 to 57 — the definitions, the provisions establishing the Mediation Council of India, the Mediation Fund, the rule-making powers and the transitional provisions. The operative provisions on pre-litigation mediation, timelines, mediated settlement agreements, enforcement and challenge were not in that notification. The current commencement position should be confirmed against the gazette before a contract or a pleading relies on them. For commercial suits of Specified Value, the operative requirement is Section 12A of the Commercial Courts Act, 2015.
What is the difference between institutional and ad hoc arbitration?: In an institutional arbitration, an arbitral institution administers the proceedings under its own published rules — appointing or confirming the tribunal where the parties do not, fixing fees under a published schedule, and providing a secretariat. In an ad hoc arbitration the parties and the tribunal run the process themselves. Institutional arbitration costs more at the outset and fewer things go wrong; ad hoc arbitration is cheaper to start and more exposed to a party that wishes to obstruct. India's statutory institution is the India International Arbitration Centre, established under the India International Arbitration Centre Act, 2019 — originally enacted as the New Delhi International Arbitration Centre Act, 2019 and renamed by amendment.

Speak to the practice

If you are reviewing the dispute resolution clauses in your contracts, considering whether to commence or resist an arbitration, or facing enforcement of an award, we are happy to discuss the position.

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+91 98100 21846

Email: info@sagarandsagar.in
Office: +91-11-47543981
Address: Sagar & Sagar Law Offices
18 Hargobind Enclave, IInd Floor, Bhartendu Harish Chandra Marg, New Delhi 110092

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This article is published for general information and professional commentary. It is not legal advice, does not create a lawyer-client relationship, and is not an advertisement or solicitation of work. Legal positions change; the position stated reflects the sources consulted at the date of publication. Readers should obtain advice on their own facts.