Our India Yearbook 2024-25 contains an analysis of notable developments in international arbitration over the past year from India and across 40 jurisdictions.

It has been published in the Baker McKenzie International Arbitration Yearbook 2024-2025 here.  

A.         LEGISLATION AND RULES

A.1       Legislation

The Indian Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is the primary legislation governing arbitration in India. The Arbitration Act has undergone several amendments in recent years, primarily focusing on enhancing the commercial arbitration ecosystem in India and establishing an institutional arbitration framework beneficial for both domestic and international stakeholders.

In the past year, there have been no legislative amendments to the Arbitration Act. In 2023, the Indian government constituted a 16-member expert committee chaired by Dr. T.K. Viswanathan, former secretary of the Ministry of Law and Justice, to examine the working of arbitration law and propose reforms to the Arbitration Act (“Expert Committee”). Recognizing the imminent need to streamline the arbitration process and expedite the enforcement of arbitral awards, the Expert Committee’s objective is to strengthen India’s position as a favorable jurisdiction for foreign investments. In February 2024, the Expert Committee submitted its report to the Indian government.

Based on the recommendations of the Expert Committee, the Indian government, in October 2024, proposed a new round of amendments to the Arbitration Act through the draft Arbitration and Conciliation (Amendment) Bill, 2024 (“Draft Bill”). The Draft Bill seeks to inter alia promote institutional arbitration, reduce judicial intervention, and promote timely conclusion of arbitration proceedings. Key proposed amendments to the Arbitration Act include the following:

• Statutory recognition of emergency arbitration and enforcement of orders rendered by emergency arbitrators in India-seated arbitrations.
• Delegate of following powers, which are currently vested exclusively with the courts, to arbitral institutions: (a) extension of time-limit to issue an arbitral award; (b) reduction of arbitrators’ fees in cases where delay is on account of an arbitral tribunal; and (c) substitution of arbitrators where necessary.
• Substitution of the term “place” with “seat” to avoid ambiguity and uncertainty and to make the Arbitration Act consistent with the international usage of “seat of arbitration” as opposed to “place of arbitration”.
• Introduction of the concept of an “Appellate Arbitral Tribunal” for entertaining applications for setting aside an award, which are presently exclusively decided by courts.
• Statutory recognition to arbitration agreements executed through digital signature, and conducting arbitral proceedings by audio-visual electronic means.
• Delegation of supervisory and regulatory power to the Arbitration Council of India, an autonomous body, established with a view to promote institutional arbitration in India.
• Introduction of stringent timelines: (a) arbitral tribunals must resolve jurisdictional objections raised as preliminary issues within 30 days; (b) courts are required to decide applications for referral to arbitration within 60 days.

A.2       Institutions, rules, and infrastructure

India’s alternative financial services system is rapidly expanding, with its activities being governed by the International Financial Services Centres Authority (“IFSCA”). The IFSCA, vested with broad regulatory powers, oversees the operations of International Financial Services Centres (“IFSCs”). At present, there is one IFSC in India – Gujarat International Finance Tec-City (GIFT City). In May 2023, the Indian government, through the IFSCA, constituted a committee to design a specialized dispute resolution mechanism in the form of an arbitration center for the GIFT City (“GIFT Committee”). In July 2024, the GIFT Committee submitted its report inter alia recommending framework for an Alternative Dispute Resolution Centre (“ADRC”).

The GIFT Committee seeks to amend existing Indian legislations, such as the International Financial Services Centre Authority Act of 2019, the Arbitration Act, the Mediation Act of 2023, and Special Economic Zones Act of 2005, to provide for a special carveout for GIFT IFSC. The GIFT Committee has also recommended granting recognition to third-party funding to align with practices in established financial centers like Singapore, Hong Kong, and Dubai. Further, a three-phased transition of the existing court system for the ADRC has been proposed, including setting up an international court presided by international judges. Streamlining of visa and work pass facilitation for foreign dispute resolution professionals is also envisaged by the GIFT Committee. The ADRC aims to enhance dispute resolution efficiency within IFSCs, bolster India’s global competitiveness in financial services, and align the framework with international best practices.

Further, in September 2024, the Indian government entered into a memorandum of understanding with the India International Arbitration Centre to establish the India International Maritime Arbitration Centre, which is proposed to serve as a specialized platform to resolve maritime disputes efficiently.

B.       CASES

B.1       Distinction between ‘seat’ and ‘venue’ of arbitration and the importance of party autonomy

The Supreme Court of India (“Supreme Court”) in the case of Arif Azim Co. Ltd. v. Micromax Informatics FZE^[1] clarified the distinction between the ‘seat’ and ‘venue’ of arbitration and emphasized the importance of party autonomy in arbitration agreements. The Supreme Court inter alia held that when an arbitration agreement expressly designates a place of arbitration (e.g., Dubai) and the contract is governed by the laws of that place (e.g., UAE law), such place will be the ‘seat’ of arbitration, even if it is referred to as a ‘venue’ in the agreement. The Supreme Court observed, inter alia, as follows:

• Part I of the Arbitration Act is only applicable to those arbitration agreements where (a) the seat of arbitration is in India; (b) Indian law governs the arbitration agreement.
• The determination of seat of arbitration acts as an exclusive jurisdiction clause, conferring authority on the courts of the seat alone to supervise the arbitration proceedings.
• The court referred to its earlier decision in BGS SGS Soma JV v. NGPC LTD.^[2] and reiterated the three-condition test for determining whether a venue could be regarded as the seat of arbitration: (a) the arbitration agreement must designate a single place, (b) the arbitration proceedings must be anchored to that place without flexibility, and (c) there should be no contrary indica suggesting that the designated venue is not the seat. Thus, if these conditions are met, the designated place, even if designated as ‘venue’ in the arbitration agreement, will be regarded as the seat.
• When the arbitration agreement specifies the curial law of a place or a supranational body of rules, it strongly indicates that the designated place is the seat of arbitration. Typically, the law governing the arbitration agreement aligns with the curial law and the seat of arbitration.
• In case the arbitration agreement designates multiple places that could equally qualify as the seat, the conflict may be resolved using the doctrine of forum non conveniens. This doctrine allows courts to decline jurisdiction in favor of a more appropriate forum based on factors such as the nature of the agreement, the nature of the dispute, and the parties’ intentions.

B.2       Unilateral appointment of arbitrators violates principles of equality and impartiality in arbitration

A five-judge bench of the Supreme Court, in Central Organisation for Railway Electrification v. ECO-SPIC-SMO-MCML (JV) A Joint Venture Company,^[3] ruled that unilateral appointment of arbitrators – where one party curates a panel of arbitrators from which the counterparty must select or unilaterally chooses the arbitral tribunal – particularly in contracts involving public sector undertakings, violates the principles of equality and impartiality in arbitration as outlined in the Arbitration Act. The Supreme Court made inter alia the following observations:

• An arbitration clause allowing one party to unilaterally curate a panel of arbitrators and requiring the counterparty to select arbitrators from that panel violates the principle of fair and equal treatment under section 18 of the Arbitration Act.
• In public-private contracts, unilateral appointment of arbitrators or unilateral curation of a panel by government or quasi-government bodies violates the constitutional principles of equality under article 14 of the Constitution of India (“Constitution”).
• Government or quasi-government entities may suggest a panel of arbitrators, but the arbitration clause cannot mandate the counterparty to select arbitrators exclusively from that panel unless the counterparty explicitly waives its objection under section 12(5) of the Arbitration Act. Such waivers must be made only after the dispute has arisen and must be voluntary through an express agreement.
• Unilateral appointment of an arbitrator by a party with a financial interest in the outcome of the arbitration raises justifiable doubts about the arbitrator’s independence and impartiality. The test of “real likelihood of bias” is critical for maintaining the integrity of arbitration proceedings. Even the perception of bias can undermine the legitimacy and credibility of the arbitration process.

B.3       Challenges to enforcement of foreign arbitral awards based on grounds of arbitrator bias are permissible only in exceptional cases

The Supreme Court, in Avitel Post Studioz Limited & Ors. v. HSBC PI Holdings (Mauritius) Limited ^[4] upheld the enforcement of a Singapore-seated foreign arbitral award, rejecting allegations of the arbitrator’s bias. The Supreme Court reaffirmed that challenges to enforcement based on an arbitrator’s bias are permissible only in exceptional cases, noting inter alia the following:

• The grounds for resisting the enforcement of foreign arbitral awards under section 48 of the Arbitration Act, are significantly narrower than those for challenging domestic awards under section 34 of the Arbitration Act.
• Enforcement of an arbitral award may be denied if the award is contrary to the public policy of India. However, the concept of “public policy” must be interpreted narrowly for foreign awards, unlike the broader interpretation sometimes applied to domestic awards.
• While an arbitrator’s bias may constitute a violation of public policy under the New York Convention, however, this ground can be invoked only in instances where the most basic notions of morality or justice are violated. The threshold for establishing bias in resisting the enforcement of a foreign arbitral award is significantly higher than for ordinary judicial review.
• Challenges to arbitral appointments have to be made in a timely fashion, and should not be used strategically to delay the enforcement of arbitral awards.
• Judicial interference in the enforcement of foreign awards should be minimal, and such interference is limited to the specific and exhaustive grounds provided under section 48(2) of the Arbitration Act, underscoring India’s pro-enforcement approach.

B.4       Supreme Court exercised its curative jurisdiction to set aside an arbitral award

A three-judge bench of the Supreme Court, in Delhi Metro Rail Corporation Limited v. Delhi Airport Metro Express Private Limited,^[5] in exercise of its curative jurisdiction, set aside an India-seated arbitral award on the ground that it violated public policy of India and was patently illegal under section 34(2A) of the Arbitration Act.

The Supreme Court inter alia held that the arbitral award was unreasoned on important aspects and overlooked vital evidence to arrive at a conclusion which was not possible for any reasonable body of persons to arrive at. The Supreme Court held that the upholding the arbitral award by courts in the earlier rounds of litigation, caused a grave miscarriage of justice, thereby warranting exercise of its curative jurisdiction.

The Supreme Court however cautioned that the exercise of curative jurisdiction should not be adopted as a matter of ordinary course and that it should not be used to open floodgates for judicial intervention against an arbitral award.

B.5       Courts cannot interfere with interpretation of contract terms at the stage of setting aside of arbitral awards, as they fall within the arbitrator’s domain

In National Highways Authority of India v. Hindustan Construction Company Limited,^[6] the Supreme Court held that the jurisdiction of courts at the stage of setting aside awards is limited. Courts may interfere with an arbitral award only if it conflicts with the “public policy of India.” Such conflict arises when the award contravenes: (a) the substantive law of India; (b) the provisions of the Arbitration Act; or (c) the terms of the contract. The court emphasized that the interpretation of contractual terms primarily falls within the arbitrator’s domain. The Supreme Court clarified that judicial interference is unwarranted unless the arbitrator’s interpretation is so unreasonable that no fair-minded or reasonable person could have arrived at the same conclusion. Errors of fact or judgment are not subject to correction, as the arbitrator is the ultimate authority on assessing the quantity and quality of evidence.

The Supreme Court further noted that the jurisdiction of courts under section 34 of the Arbitration Act is limited, while the scope of appellate review under section 37 of the Arbitration Act is even more restricted. Further, the Supreme Court clarified that where two plausible interpretations of a contract exist, an arbitral tribunal’s choice of one interpretation over the other cannot be a ground for setting aside the award.

B.6       Supreme Court refers the issue of whether courts have the power to modify arbitral awards to a larger bench

The Supreme Court in Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited,^[7] in view of conflicting decisions of various courts regarding the issue whether courts under the Arbitration Act are empowered to modify an arbitral award, referred the issue to a larger bench of the Supreme Court. The following issues have also been referred to the larger bench:

(a)   If courts have the power to modify arbitral awards, whether such power can be exercised only where the award is severable and a part thereof can be modified?

(b)   Whether the power to set aside an award, includes the power to modify it, and if so, to what extent?

B.7       Circumstances under which a non-signatory party may be considered a “veritable” party to an arbitration agreement

The Supreme Court in Ajay Madhusudan Patel and Ors. v. Jyotrindra S. Patel and Ors,^[8] examined the circumstances under which a non-signatory party may be considered a “veritable” party to an arbitration agreement. The Supreme Court held that the participation of a non-signatory in the performance of the underlying contract is a critical factor in determining their intention to be bound by the arbitration agreement. Specifically, when the conduct of a non-signatory is positive, direct, and substantial—rather than incidental—it may lead the court to draw a legitimate inference that the non-signatory intends to be bound by the arbitration agreement. In doing so, several factors were outlined, including the mutual intent of the parties, the relationship between non-signatory and a signatory, the commonality of subject matter, the composite nature of the transactions, and the performance of the contract, as well as the conduct of the non-signatory party along with other attending circumstances.

The Supreme Court also discussed the scope of the jurisdiction of courts at the stage of the appointment of arbitrators. It emphasized that courts, at the stage of appointing arbitrators, have limited jurisdiction and should not conduct a ‘mini trial’ or delve into contested factual questions. Such matters are better suited for determination by the arbitral tribunal itself.

B.8       Date for determining the foreign exchange rate for converting the award amount to Indian rupees

In DLF Limited v. Koncar Generators and Motors Limited,^[9] the Supreme Court addressed the issue of what should be the date to determine the foreign exchange rate for converting the award amount expressed in foreign currency to Indian rupees. The Supreme Court clarified that under Part II of the Arbitration Act which governs the enforcement of certain foreign arbitral awards, a foreign arbitral award becomes binding between the parties when it is enforceable under section 46 of the Arbitration Act. Such enforceability arises once objections to the award are finally decided and dismissed. Thereafter, under section 49 of the Arbitration Act, once a foreign arbitral award becomes enforceable, it is deemed to be a decree of the court. Accordingly, the Supreme Court held that the relevant date for determining the exchange rate for converting the award amount into Indian rupees is the date on which objections to the award are finally resolved and dismissed.

The Supreme Court also addressed situations where the award debtor deposits a portion of the award amount with the court during the pendency of proceedings challenging the award. The Supreme Court held that the conversion of such deposited amounts should be based on the exchange rate prevailing on the date of such deposit, regardless of whether the award holder withdraws any portion of the deposited amount. The Supreme Court further ruled that the award debtor cannot be held liable to pay interest on the portion of the award amount that has already been deposited.

B.9       Courts have the power to grant anti-suit and / or anti-enforcement injunctions as interim measures of protection

The Delhi High Court in Honasa Consumer Ltd. v. RSM General Trading LLC,^[10] held that Indian courts have the power to grant anti-suit and anti-enforcement injunctions, as interim measures of protection. These injunctions can be issued when necessary to secure the ends of justice. It held that when a proceeding, decree, or an order of a foreign court threatens to undermine or derail the arbitral process initiated in India, the Indian courts can restrain the party initiating such foreign proceedings from continuing with them or enforcing the resulting order or decree.

The High Court also addressed the doctrine of comity of courts, noting that while this doctrine calls for caution in granting anti-suit or anti-enforcement injunctions, it does not bar such relief when the facts of the case justify it, and when foreign proceedings threaten to disrupt valid arbitration proceedings.

The High Court also cautioned that while Indian courts have the power to issue anti-suit injunctions against parties within their jurisdiction, this power must be exercised sparingly and with respect for the principle of comity, given that such injunctions—though directed at a party—effectively interfere with the jurisdiction of a foreign court.

[1] Arif Azim Co. Ltd. v. Micromax Informatics FZE, 2024 SCC OnLine SC 3212.

[2] BGS SGS SOMA JV v. NHPC LTD., (2020) 4 SCC 234.

[3] Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) A Joint Venture Company, 2024 SCC OnLine SC 3219.

[4] Avitel Post Studioz Limited and Ors. v. HSBC PI Holdings (Mauritius) Limited, 2024 SCC OnLine SC 345.

[5] Delhi Metro Rail Corporation Limited v. Delhi Airport Metro Express Private Limited, 2024 SCC OnLine SC 522.

[6] National Highways Authority of India v. Hindustan Construction Company Limited, (2024) 6 SCC 908.

[7] Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited, 2024 SCC OnLine SC 1681

[8] Ajay Madhusudan Patel and Ors. v. Jyotrindra S. Patel and Ors., 2024 SCC OnLine SC 2597

[9] DLF Ltd. (Formerly known as DLF Universal Ltd.) and Another v. Koncar Generators and Motors Ltd., 2024 SCC OnLine SC 19017.

[10] Honasa Consumer Limited v. RSM General Trading LLC, 2024 SCC OnLine Del 5631.