Mar 03, 2023

Dispute Resolution 2023

This reference guide provides an overview of the existing dispute resolution framework in India, the court procedures and practices, various alternatives to litigation, relevant documents and the protection of privilege.

India Chapter authored by Zia Mody, Aditya Vikram Bhat and Priyanka Shetty [1]

As with most common law countries, Indian law may broadly be classified as substantive or procedural law. While substantive laws determine rights and liabilities of parties, confer legal status, or impose and define the nature and extent of legal duties, procedural laws prescribe the practice, procedure and machinery for the enforcement or recognition of rights and liabilities.2 To put it another way, substantive laws are those that are enforced, while procedural laws pertain to the rules through which the substantive laws are enforced.3

Dispute resolution in India may be through courts, specialised tribunals (such as those for recovery of debt by banks or company disputes, among others) or alternative dispute resolution (ADR) mechanisms that include arbitration, mediation and conciliation. The amendment to the Commercial Courts Act, 2015 (Commercial Courts Act) provides for the constitution of commercial courts at a district level, except in areas where the High Court exercises ordinary civil jurisdiction and provides for commercial divisions (in all High Courts having ordinary civil jurisdiction) and commercial appellate divisions in each High Court for the adjudication and speedy disposal of commercial disputes4 of a specified value of not less than 10 million rupees or such other notified value within the limits of the relevant territorial jurisdiction.5 The amendment mandates pre-institution mediation in all cases except in suits or applications in which urgent relief is sought and further prescribes a maximum period of three months for the completion of the process of mediation.6

The primary laws codifying court procedure in India are the Code of Civil Procedure 1908 (CPC) and the Code of Criminal Procedure 1973 (CrPC). Charter High Courts such as the High Courts of Bombay, Calcutta, Delhi and Madras may also apply Letters Patent Rules, which, when applicable, may override the provisions of the CPC. The procedure to be applied by tribunals is often governed by the statute that establishes the tribunal (and rules framed thereunder). Courts have held that the fundamental principles contained in the CPC and Indian Evidence Act, 1872 (Evidence Act) would continue to apply to tribunals, even if they are not bound to follow the specific provisions.7

While the legislative and executive branches of the government follow a federal structure, the Indian judicial system comprises a unified three-tier structure with the Supreme Court of India (the Supreme Court) holding the position of the apex court. Below the Supreme Court are the High Courts, functioning (in most cases) in each state. Lower in the hierarchy are the subordinate courts, which include courts at the district level and other lower courts.

Law declared by the Supreme Court is binding on all other courts in India.8 By acceptance of the doctrine of stare decisis, law declared by High Courts binds subordinate courts9 and may have persuasive value over High Courts of other states.10 The Supreme Court and the High Courts are charged with original,11 appellate and writ jurisdiction. Under the writ jurisdiction, they have the power to review administrative actions, including for the purposes of the enforcement of constitutional and fundamental rights granted under Part III of the Constitution of India.12

The Arbitration and Conciliation Act, 1996 (the Arbitration Act) governs the law related to arbitration in India. Part I of the Arbitration Act governs the arbitrations seated in India, both domestic and international, and Part II incorporates the provisions of the Convention on the Recognition and Enforcement of Foreign Awards (the New York Convention). The Arbitration Act is based on the Model Law on International Commercial Arbitration, 1985 (the Model Law), as adopted by the United Nations Commission on International Trade Law on 21 June 1985. Conciliation has also been given statutory recognition through Part III of the Arbitration Act.

As a recent trend, even courts often promote ADR. This was discussed in great detail in the case of Afcons Infrastructure Limited v. Cherian Varkey Construction,13 where the Supreme Court laid down guidelines for courts to follow for the effective implementation of Section 89 of the CPC. Courts encourage parties to settle their disputes by means of ADR. The Supreme Court in Perry Kansagra v. Smriti Madan Kansagra14 identified various kinds of disputes where ADR may be a better alternative than litigation, such as cases relating to trade, commerce and contracts including, inter alia, money claims arising out of contracts. Disputes relating to specific performance or disputes between insurer and insured, bankers and customers were also considered to be better resolved through an ADR mechanism rather than litigation.

The year in review

The year 2022 witnessed a series of legislative developments aimed at introducing greater ease of doing business in India and bringing the current law in line with the global technological advancement and rapid economic growth in the country.

To promote resolution of intra-company disputes in publicly listed companies, the Securities and Exchange Board of India issued a standard operating procedure for a stock exchange arbitration mechanism.15

The Ministry of Electronics and Information Technology issued the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2022. The rules amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (the Intermediary Guidelines) to, inter alia:

  1. require the intermediaries to ‘make reasonable efforts to cause’ its users not to publish or process certain information;16
  2. remove ‘defamatory’ and ‘libellous’ from the ambit of such prohibited information and add ‘misinformation’ to this category;17 and
  3. provide for the establishment of a Grievance Appellate Committee.18

The Finance Act, 2022 brought virtual digital assets within the ambit of the Income Tax Act, 1961 (ITA) and made them taxable at a flat rate of 30 per cent.19

In view of the resurgence of covid-19 cases in India, the Supreme Court by its order dated 10 January 2022 has restored the order of 23 March 2020 and issued the following directions:

In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15 March 2020 until 28 February 2022 shall stand excluded. The balance period of limitation remaining as on 3 October 2021, if any, shall become available with effect from 1 March 2022.

In cases where the limitation period would have expired between 15 March 2020 and 28 February 2022, all persons shall have a limitation period of 90 days from 1 March 2022, notwithstanding the actual balance period of limitation remaining. In such case, if the actual balance period of limitation with effect from 1 March 2022 is greater than 90 days, that longer period of limitation shall apply.

Furthermore, the following are significant court judgments in 2022.

In Vidarbha Industries Power Ltd. v. Axis Bank Ltd,20 the Supreme Court held that the National Company Law Tribunal (NCLT) has the discretion to not direct initiation of the corporate insolvency resolution process (CIRP) of a company pursuant to a petition filed on behalf of a financial creditor under Insolvency and Bankruptcy Code, 2016 (IBC), despite the existence of default. On 22 September 2022, the Supreme Court dismissed the review petition against the judgment.21

On the issue of treatment of statutory dues in a resolution plan under the IBC, the Supreme Court in State Tax Officer (1) v. Rainbow Papers Limited 22 held that, in view of Section 43 of the Gujarat Value Added Tax Act, 2003, which provided that the ‘government shall be a ‘first charge on the property of the dealer’, state tax authority was a ‘secured creditor’ under the IBC and, thus, must be treated on par with other secured creditors while distributing monies under the resolution plan.

In Indian Oil Corporation v. NCC Limited,23 the Supreme Court held that that the courts’ scope of inquiry when deciding an application for appointment of arbitrator under Section 11(6) of the Arbitration Act can include determining whether a dispute is non-arbitrable or falls within the excepted clause, or both, if ‘the facts are very clear and glaring’ and ‘in view of specific clauses in the agreement’.24

In Oil and Natural Gas Corporation v. Afcons Gunanusa JV,25 the Supreme Court held, inter alia, that arbitrators do not possess an absolute or unilateral power to determine their own fees and agreement between the parties in this regard is paramount. In absence of such agreement, the arbitrators are accorded with the power to determine their own fee under some national arbitration laws, which is subject to review by courts.26 In this context, the Court held that the application of the Fourth Schedule of the Arbitration Act (applicable to domestic arbitrations) is mandatory for stipulating the fees for arbitrators appointed by arbitral institutions designated for such purpose, but not for court-appointed arbitrators in the absence of rules framed by the concerned High Court.27 The Court also distinguished the concepts of fees and costs, holding that Sections 31(8), 31A or 38(1) of the Arbitration Act, which deal with the latter, cannot be used by arbitrators to issue orders regarding their own remuneration.28 Furthermore, in exercise of its plenary powers, the Court directed the adoption of the certain guidelines for the conduct of ad hoc arbitrations in India.29

In ONGC Ltd. v. Discovery Enterprises (P) Ltd,30 the Supreme Court dealt with the issue relating to an application for discovery and inspection filed against a non-signatory even before it was successfully joined in the arbitration. It was contended that the said application was necessary to make a case for such joinder. As the tribunal refused to decide the said application due to lack of evidence to show that the non-signatory had any role in the contract between the parties, the Court set aside an interim award refusing to join the non-signatory. The Court held that the tribunal did not evaluate the legal foundation of the group of companies doctrine on facts or law and made a ‘fundamental error of law’ in not deciding the application for inspection and discovery.31

In Cox & Kings Ltd v. SAP India (P) Ltd,32 the Supreme Court held that the doctrinal ingredients concerning the group of companies doctrine needs to be relooked. The Court observed that the law laid down in Chloro Controls India Private Limited v. Severn Trent Water Purification Inc,33 and the cases following it, appear to have been based, ‘more on economics and convenience rather than law’ and commented that this may not be the correct approach. The Court took note of the inconsistencies among the earlier judicial pronouncements regarding the basis for the doctrine. While expressing doubts on the correctness of the law, the Court referred the following questions to a larger bench:34

  1. Whether the doctrine should be read into Section 8 of the Arbitration Act or whether it can exist independent of any statutory provision?
  2. Whether it should be invoked based on the principle of ‘single economic reality’?
  3. Whether it should be used to interpret implied consent or parties’ intent to arbitrate?
  4. Whether the principles of alter ego or piercing the corporate veil, or both, can alone justify its application even without implied consent?

In Intercontinental Hotels Group (India) (P) Ltd v. Waterline Hotels (P) Ltd,35 a three-judge bench of the Supreme Court affirmed the view adopted by a previous three-judge bench in NN Global Mercantile (P) Ltd v. Indo Unique Flame Ltd 36 and held that at the stage of appointment of an arbitrator under Section 11 of the Arbitration Act, a court cannot ascertain whether the agreement is insufficiently or not appropriately stamped. The Court took notice of the fact that the issue of the effect of non-stamping of the main contract on the enforceability of the arbitration agreement has been referred to a constitution bench, and observed that, during the pendency of the issue, courts must ‘ensure that arbitrations are carried on, unless the issue before the Court patently indicates existence of deadwood’.37 This position was recently re-affirmed by the Supreme Court in Weatherford Oil Tool Middle East Ltd v. Baker Hughes Singapore PTE.38

In Patil Automation (P) Ltd v. Rakheja Engineers (P) Ltd,39 the Supreme Court held that pre-litigation mediation under Section 12A of the Commercial Courts Act is mandatory, and any suit instituted in contravention thereof would be liable to be rejected under Order VII, Rule 11 of CPC (rejection of plaint). The Court made this declaration prospective, that is, applicable to suits filed after 20 August 2022.40


1 Zia Mody is the founder and managing partner, Aditya Vikram Bhat is a senior partner and Priyanka Shetty is a partner at AZB & Partners. The authors would like to acknowledge Parimal Kashyap and Aditya Singh Chauhan, who are associates at AZB & Partners, for their assistance in the preparation of this chapter.

2 Glanville Williams, Learning the Law (Sweet & Maxwell, 1982) p. 19; Law Commission of India, 54th Report, p. 8.

3 Bharat Barrel and Drum Manufacturing Company Private Limited v. Employees State Insurance Corporation, AIR 1972 SC 1935.

4 Section 2(c) of the Commercial Courts Act.

5 Sections 3, 4 and 2(i) of the Commercial Courts Act.

6 Section 12A of the Commercial Courts Act; Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd, 2022 SCC Online SC 1028.

7 See, e.g., Groz Beckert Sabool Ltd v. Jupiter General Insurance Co Ltd, AIR 1965 P&H 477; Sri Ramdas Motor Transport Limited v. Karedla Suryanarayana, 110 ComCas 193 (Andhra Pradesh); Maharashtra State Electricity Board v. Datar Switchgear Ltd, (2002) SCC Online Bom 983.

8 Article 141 of the Constitution of India.

9 Baradakanta Misra v. Bhimsen Dixit, (1973) 1 SCC 446.

10 Pradip J Mehta v. CIT, (2008) 14 SCC 283.

11 The Supreme Court of India, High Courts of Delhi, Bombay, Calcutta, Madras and Himachal Pradesh.

12 Article 226 of the Constitution of India

13 Afcons Infrastructure Limited v. Cherian Varkey Construction, (2010) 8 SCC 24.

14 Perry Kansagra v. Smriti Madan Kansagra, I, (2019) DMC 568 SC.

15 SEBI Circular No. SEBI/HOO/MIRSD_RTAMB/P/CIR/2022/76 dated 30 May 2022; SEBI Circular No. SEBI/HO/CFD/SSEP/CIR/P/2022/48 dated 8 April 2022.

16 Section 3(1)(b) of the Intermediary Guidelines (as amended in 2022).

17 Section 3(1)(b)(v) of the Intermediary Guidelines (as amended in 2022).

18 Section 3A of the Intermediary Guidelines (as amended in 2022).

19 Section 115BBH of the ITA.

20 Vidarbha Industries Power Ltd. v. Axis Bank Ltd, (2022) 8 SCC 352.

21 Axis Bank Ltd. v. Vidarbha Industries Power Ltd, 2022 SCC Online SC 1339.

22 State Tax Officer (1) v. Rainbow Papers Ltd, 2022 SCC OnLine SC 1162.

23 Indian Oil Corporation v. NCC Limited, 2022 SCC Online SC 896, paragraph 89.

24 id.

25 Oil and Natural Gas Corporation v. Afcons Gunanusa JV, 2022 SCC OnLine SC 1122, paragraphs 68–69.

26 id. paragraph 68.

27 id. paragraph 85.

28 id. paragraph 119.

29 id. paragraph 124.

30 ONGC Ltd. v. Discovery Enterprises (P) Ltd, (2022) 8 SCC 42, paragraph 2.

31 id. paragraphs 72–73.

32 Cox & Kings Ltd v. SAP India (P) Ltd, (2022) 8 SCC 1, paragraphs 39–42.

33 Chloro Controls India Private Ltd v. Severn Trent Water Purification Inc, (2013) 1 SCC 641.

34 Cox & Kings Ltd v. SAP India (P) Ltd, (2022) 8 SCC 1, paragraph 54.

35 Intercontinental Hotels Group (India) (P) Ltd v. Waterline Hotels (P) Ltd, (2022) 7 SCC 662.

36 See NN Global Mercantile (P) Ltd v. Indo Unique Flame Ltd, (2021) 4 SCC 379, paragraphs 57–58.

37 Intercontinental Hotels Group (India) (P) Ltd v. Waterline Hotels (P) Ltd, paragraph 25.

38 Weatherford Oil Tool Middle East Ltd v. Baker Hughes Singapore PTE, 2022 SCC OnLine SC 1464, paragraph 16.

39 Patil Automation (P) Ltd v. Rakheja Engineers (P) Ltd, 2022 SCC OnLine SC 1028, paragraph 92.

40 id.

i Overview of court procedure

It can be seen in connection with the Indian legal system (as a criticism more than a compliment) that ‘there is ample – sometimes excessive – due process; and one has to be patient and persevering’.41 Broadly, court procedure in India is governed by the CPC for civil matters and the CrPC for criminal matters. As discussed above, even where statutes create specialised tribunals and courts to deal with particular disputes, it is generally recognised that the principles contained in the CPC and CrPC would apply. This is often so because such provisions in the CPC and CrPC are recognised as the embodiments of the principles of fair play, natural justice and due process.

ii Procedures and time frames

The primary statute governing limitation is the Limitation Act, 1963. As a general rule, most suits, especially those relating to contracts and accounts, have a limitation period of three years for filing. Some suits relating to immovable property may fall within a longer limitation ranging from three to 30 years.42 The periods prescribed under the Limitation Act may not apply in the event a specific statute prescribes a period of limitation.43

Where a plaintiff approaches a court for injunctive relief, especially at an interlocutory stage, the court may require the plaintiff to demonstrate (quite aside from being within limitation) that the plaintiff has acted in a timely manner and has not acquiesced to the infringement of its rights.44

The Supreme Court, in Wockhardt Limited v. Torrent Pharmaceuticals Limited,45 clarified this position by stating that acquiescence cannot be equated with delay. There should not be mere silence or inaction on the part of the plaintiff but a refusal or failure to act despite knowledge of invasion and opportunity to stop it.

A writ court may require a petitioner (although no limitation is prescribed for writs) to demonstrate that he or she has approached the court without delay, since a delay may disentitle a petitioner to relief.46

The CPC was amended by virtue of the Commercial Courts Act, 2015. According to the amended provisions of Order V Rule 1(1) and Order VIII Rules 1 and 10 of the CPC,47 a party is granted 30 days to file its written statement, and a grace period of 90 days is provided wherein a court can, after recording the reasons for the delay in filing and after imposing costs, allow a written statement to be taken on record. It was further held by the Supreme Court in the case of M/s SCG Contracts India Pvt Ltd v. KS Chamankar Infrastructure Pvt Ltd 48 that the failure to file written statements within the statutory time period of 120 days in a commercial suit will result in the forfeiture of the right of the defendant to file a written statement, and the court would not be able to use its inherent powers to avoid the consequences emanating from the aforesaid provision. The CPC also curtails the number of adjournments that may be sought and attempts to curtail practices that are often perceived as dilatory, such as belated amendments to pleadings49 and belated production of documents.50

Notably, the Arbitration Act, as amended by the Arbitration and Conciliation (Amendment) Act, 2019 (the 2019 Amendment Act), mandates time-bound procedure for domestic arbitrations seated in India.51 It now provides that the pleadings in a case shall be completed within six months from the appointment of the arbitrator,52 and an arbitral award is required to be made within 12 months of the date of completion of the pleadings under Subsection (4) of Section 23.53 Parties may also agree, in writing, to have their dispute resolved by fast-track procedures, which would require the award to be made within six months of the date of entry of the arbitral tribunal upon reference.54 If the court passes any interim measure under Section 9 of the Arbitration Act, the proceedings must commence within 90 days of the date of the order.55

Pursuant to the enactment of the Commercial Courts Act, there is a time limit of 30 days for the submission of the written statement (extendable to 120 days),56 and 90 days from the date of conclusion of arguments for the pronouncement of judgment.57 It further provides that the appellate court should endeavour to dispose of appeals within six months of the date of filing of such appeal.58 The Constitution Bench of the Supreme Court in New India Assurance Co Ltd v. Hilli Multipurpose Cold Storage Pvt Ltd 59 has clarified that there was no scope for extending the time for filing of written statements beyond the period of 120 days in commercial suits, as the provision with regard to such suits is mandatory. The Supreme Court in Shoraj Singh v. Charan Singh60 held that the timeline prescribed under Order VIII, Rule 1 of the CPC for filing the written statement is mandatory for the purposes of commercial cases filed before the commercial courts under the Commercial Courts Act.

The IBC provides a period of 330 days from the insolvency commencement date as the period of the insolvency resolution process that culminates with the submission of a resolution plan to the NCLT.61 However, the Supreme Court of India has observed that the timelines prescribed under IBC are not mandatory and the time spent on legal proceedings during the CIRP can be excluded by the NCLT.62 According to the Economic Survey of the Government of India for FY 2021–22, the resolution process took an average of 428 days, after omitting the time excluded by NCLT.63 Furthermore, owing to the covid-19 pandemic, the Insolvency and Bankruptcy Board of India on 29 March 2020 issued a notification directing that the period of lockdown imposed by the central government shall not be counted for the purposes of the timeline for any activity in relation to a CIRP.64 Despite these recent developments to reduce time frames, the time taken for the completion of a trial in civil and criminal proceedings may be several years.

iii Class actions

The CPC recognises that where there are numerous persons with the same interest in one suit, one or more of such persons may, with the permission of the court, sue or be sued, or may defend such suit on behalf of or for the benefit of all persons interested.65

The Companies Act, 1956 and the Companies Act, 2013 stipulate that a specified number of members or depositors may, if they are of the opinion that the management or control of the affairs of a company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the NCLT on behalf of the members or depositors.66

The Supreme Court and High Courts have, in exercise of their writ jurisdiction, long recognised the ability of an individual or a group of individuals to bring public interest litigations to espouse the cause of larger sections of society.67

The Consumer Protection Act, 2019 provides for the establishment of the Central Consumer Protection Authority, which is empowered to, inter alia, regulate matters relating to rights of consumers, and promote, protect and enforce the rights of consumers as a class.68 It further provides that a complaint with respect to goods or services, even where there are numerous consumers involved having the same interest, may be filed before a District Commission, with its permission, on behalf of or for the benefit of all interested consumers.69 IBC allows allottees under a real estate project to file an application for initiation of CIRP jointly either by not less than 100 allottees or 10 per cent of the allottees under the same real estate project.70

The Competition Act, 2002 also recognises class actions for seeking compensation for any loss or damage suffered on account of any anti-competitive practices in the relevant market.71 Under the Competition Act, 2002, class actions can be filed before the National Company Law Appellate Tribunal (NCLAT).72

iv Representation in proceedings

The Indian Constitution guarantees the right of a person accused of an offence to be represented by a legal practitioner of his or her choice.73 In other proceedings, while litigants are typically represented by advocates enrolled under the Advocates Act 1961, there may be exceptions to the rule. For instance, the Family Courts Act, 198474 stipulates that a party may be represented by an advocate only if the court thinks that it is necessary for a fair trial. This provision of the Family Courts Act has now been challenged before the Rajasthan High Court.75 The Advocates Act76 empowers a court to permit any person who has not been enrolled as an advocate to appear before it in any particular case.

v Service out of the jurisdiction

The CPC77 and the CrPC78 contain provisions for service out of the territory of India. India has also entered into bilateral treaties and multilateral conventions for these purposes, including the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965 (the Hague Convention).

Under the CPC, when a defendant resides outside India and no agent in India is empowered to accept service, summons or notice may be sent by courier or post service as approved by the appropriate High Court. This provision must, however, be read together with the procedure prescribed under the Hague Convention.79

The CrPC recognises bilateral arrangements and makes compliance with such an arrangement mandatory. It is prescribed that summons or warrants issued by a court in India should be served and executed in accordance with the bilateral arrangement, if any. In addition, the Ministry of Home Affairs in India has, by a circular dated 11 February 2009, clarified the procedure to be followed for the issuance of summons to a foreign resident (MHA Circular). Under the MHA Circular, all requests for service of summons, notices or judicial processes on persons residing abroad shall be addressed to the Under Secretary (Legal) of the Ministry of Home Affairs. The Ministry, after scrutinising the request, can forward it to the relevant foreign officer.

vi Enforcement of foreign judgments

A money decree obtained from a court of a jurisdiction notified by the Indian government as a reciprocating territory under the CPC can be enforced in India directly by filing an execution petition in a court of competent jurisdiction.80 As a result, judgments of courts not notified as reciprocating territories or decrees other than money decrees cannot be executed directly in India. A decree holder in such a case may file a fresh lawsuit in the Indian courts based on the foreign judgment. In both execution proceedings and fresh suits filed based on foreign judgments, parties may rely on Sections 13 and 14 of the CPC. In 2020, the central government issued an official gazette declaring the United Arab Emirates (UAE) a reciprocating territory for the purpose of Section 44-A of the CPC. The notification allows civil decrees and judgments passed by the specified courts of the UAE to be directly executed in India in a manner similar to a decree passed by a district court in India.

Section 44 of the Arbitration Act prescribes that a foreign award that arises out of a commercial legal relationship and is made in one of the territories, in respect of which the Indian government declares that the New York Convention on the Recognition and Enforcement of Foreign Awards (New York Convention) applies on satisfaction that reciprocal provisions are being made, may be enforced in India. In this regard, the Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment Act) has clarified that a foreign award may be refused enforcement if it violates the public policy of India on the same grounds as described for setting aside awards that arise out of India-seated international commercial arbitrations. However, unlike domestic awards, foreign awards cannot be refused enforcement on the ground of patent illegality.

vii Assistance to foreign courts

Assistance may be given to foreign courts81 based on bilateral agreements with the reciprocating territories. In civil matters, the CPC provides for the service of foreign summons issued by certain specified courts only. In such cases, assistance is given when a defendant resides or works for gain or carries on trade or business within India and the summons itself may be a summons for the appearance of the defendant, production of documents or furnishing of information.82

Again, as discussed above, India is a signatory to the Hague Convention, key objective whereof is to improve the organisation of mutual judicial assistance by simplifying and expediting procedures.

viii Access to court files

Rules relating to access to court files may vary depending on the nature of the proceeding, who is seeking access and whether the proceeding is ongoing or concluded. In most cases, a person who is a party to the proceeding is allowed to search, inspect or have copies of all pleadings and other documents or records of the case. A third party seeking the information or record is not entitled to access court files as a matter of right and may need to apply to the court and show cause as to why it seeks such information or record.83

ix Litigation funding

Disinterested third-party funding is not common in India. While some courts have found that third-party funding may be permissible,84 other courts have often declined to uphold such agreements on the grounds of public policy or professional ethics.85 It has been held in a recent Supreme Court judgment that there appear to be no restrictions on a third party funding a litigation and getting repaid after the outcome of the litigation as long as they are not lawyers.86


41 Fali S Nariman, ‘India and International Arbitration’, 41 Geo Wash Intl L Rev 367.

42 Schedule I to the Limitation Act 1963.

43 For instance, the Consumer Protection Act 1986 sets out a period of limitation of two years from the date when the cause of action arose for filing a complaint. Or, for instance, under the Arbitration Act an application for setting aside a final award can be made within three months from the date of an award. A court at its discretion taking on record reasons for delay can grant an extension of 30 days.

44 Power Control Appliances v. Sumeet Machines Limited, (1994) 2 SCC 448.

45 Wockhardt Limited v. Torrent Pharmaceuticals Ltd, 2018 (18) SCC 346.

46 AP Steel RE Rolling Mill v. State of Kerala, (2007) 2 SCC 725.

47 Order V, Second Proviso to Rule 1 of the CPC; Order VIII, Proviso to Rule 1 of the CPC; Order VIII, Second Proviso to Rule 10 of the CPC.

48 M/s SCG Contracts India Pvt Ltd v. KS Chamankar Infrastructure Pvt Ltd, AIR 2019 SC 2691.

49 Order VI, Rule 17 of the CPC.

50 Order VII, Rule 14 of the CPC; Order XII Rule 2 of the CPC.

51 Section 29A(1) of the Arbitration Act.

52 Section 23(4) of the Arbitration Act.

53 Section 29A(1) of the 2019 Amendment Act.

54 Section 15 of the 2019 Amendment Act.

55 Section 5 of the 2019 Amendment Act.

56 Order V, Rule 1 of the CPC.

57 Order XX, Rule 1 of the CPC.

58 Section 14 of the Commercial Courts Act.

59 New India Assurance Co Ltd v. Hilli Multipurpose Cold Storage Pvt Ltd, (2020) 5 SCC 757.

60 Shoraj Singh v. Charan Singh, Civil Appeal No. 6304 of 2021.

61 Section 12 of the IBC.

62 Essar Steel India Ltd Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531, paragraph 127.

63 Government of India, Department of Legal Affairs, Economic Survey 2021–22, p. 153.

64 IBBI No. IBBI/PR/2020/06 dated 29 March 2020.

65 Order I, Rule 8 of the CPC.

66 Section 241 read with Section 244 and Section 245 of the Companies Act 2013. Sections 397, 398 and 399 of the Companies Act 1956.

67 People’s Union for Democratic Rights v. Union of India 1983 SCR (1) 456.

68 Section 10 of the Consumer Protection Act, 2019.

69 Section 35(1)(c) of the Consumer Protection Act, 2019.

70 Section 7(1) of the Insolvency and Bankruptcy Code, 2016.

71 Section 53-N(4) of the Competition Act, 2002.

72 id.

73 Article 22 of the Constitution of India.

74 Section 13 of the Family Courts Act 1984.

75 Ashish Davassar v. Union of India, civil writ petition No. 7216/2019.

76 Section 32 of the Advocates Act 1961.

77 Order V, Rule 25 of the CPC.

78 Section 105 of the CrPC.

79 Section 29 of the CPC; Articles 2 and 3 of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965.

80 Section 44A of the CPC.

81 See Section 2(5) of the CPC.

82 Section 29 of the CPC.

83 Chief Information Commissioner v. High Court of Gujarat, (2020) 4 SCC 702; Ila Vipin Pandya (3) v. Smita Ambalal Patel, (2008) 7 SCC 435.

84 Intertoll Ics Cecons O & M Co Private Limited v. National Highways Authority of India 129, (2006) DLT 146.

85 Re KL Gauba, AIR 1954 Bom 478; In Re: Mr ‘G’, A Senior Advocate of The Supreme Court, AIR 1954 SC 557.

86 Bar Council of India v. AK Balaji, AIR 2018 SC 1382.

i Conflicts of interest and Chinese walls

The Bar Council of India Rules (the BCI Rules), notified by the Bar Council of India under the Advocates Act 1961, impose standards on advocates to ensure avoidance of conflicts of interest. These include:

  1. a prohibition on appearing for opposite parties in the same matter and from taking instructions from anyone other than the client and the client’s authorised agent;
  2. a prohibition on lending to a client, converting funds in the advocate’s hands to a loan, or adjusting fees against personal liability owed by an advocate to the client;
  3. a prohibition on bidding for or acquiring an interest in property of actionable claim involved in litigation;
  4. a prohibition on appearing in matters where the advocate has a pecuniary interest;
  5. a prohibition on becoming a party to stir up or instigate litigation;
  6. a prohibition on representing establishments of which the advocate is a member;
  7. a prohibition to stand as a surety to the client or certify the soundness of a surety that his or her client requires for the purpose of any legal proceedings;
  8. a prohibition on appearing in matters where he or she is a witness;
  9. a prohibition to trade or agree to receive any share or interest in any actionable claim;
  10. a prohibition to bid in court auction or acquire by way of sale, gift, exchange or any other mode of transfer any property that is the subject matter of proceedings in which he or she is professionally engaged;
  11. a prohibition on appearing in matters in which he or she has reason to believe that he or she will be a witness;
  12. a prohibition on appearing before relatives who are judges;
  13. an obligation to make a full and frank disclosure to a client relating to his or her connection with the parties and any interest in or about the controversy likely to affect his or her client’s judgement in either engaging him or her, or continuing the engagement;
  14. an obligation not to disclose information or instructions provided by the client; and
  15. an obligation to fearlessly uphold the interests of his or her client by all fair and honourable means.

ii Money laundering, proceeds of crime and funds related to terrorism

While there are no specific obligations on lawyers with respect to money laundering, India has a strong legislative framework, including the Prevention of Money Laundering Act 2002 (PMLA), the Income Tax Act 1961, the Foreign Exchange Management Act 1999, the Foreign Contribution Regulation Act 2010, the Companies Act, 2013, directions of the RBI and Securities and Exchange Board of India guidelines on Anti-Money laundering (AML) Standards and Combating Financing of Terrorism (CFT), which serve to detect and prevent money laundering and the proliferation of the proceeds of crime. The Supreme Court, in a recent judgment,87 upheld the constitutionality of various provisions of the PMLA, including Section 24, which departs from the general principle of presumption of innocence and places the burden of proving that the proceeds of crime are untainted property on the accused. The Court also upheld the constitutional validity of Sections 5, 17 and 19 of the PMLA relating to power of attachment, search and seizure by the Enforcement Directorate, and Section 45, which relates to conditions for grant of bail. The Court also held that the Enforcement Case Information Report maintained by the Enforcement Directorate is an internal document and its disclosure is not mandatory.

iii Data protection

The data protection regime in India involves certain provisions of Information Technology Act, 2000 (IT Act), and the rules framed thereunder. The IT Act was amended in 2008 to add Sections 43A and 72A, pertaining to sensitive personal data, and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (IT Rules) were introduced. These rules define sensitive personal data and information (SPDI)88 and prescribe the manner in which SPDI may be collected, processed, transferred, disclosed or stored. The IT Act provides for damages in the event that SPDI is not protected and wrongful loss is caused as a result. The introduction of the IT Rules has affected how lawyers may collect and use SPDI. To the extent that SPDI is collected directly from a data subject, the consent of the data subject is required for the purpose of using the SPDI or the transfer of the SPDI.

For due diligence and onward sharing of data with other law firms and legal process outsourcing companies, the levels of compliance appear higher inasmuch as data sharing agreements usually incorporate the requirements of the IT Rules. Furthermore, when dealing with information of EU citizens, law firms are required to comply with the General Data Protection Regulation (GDPR). However, compliance with the IT Rules by lawyers generally appear to be relatively lax when it comes to collection and use of data in the course of or for the purposes of litigation, especially as damages may be claimed only if wrongful loss can be proved.

Notably, India does not currently have a separate legislation exhaustively dealing with data protection, although a draft legislation is in circulation (see below). In Justice KS Puttaswamy (retd) v. Union of India,89 the Supreme Court identified nine types of privacy, including informational privacy, and established informational self-determination; that is, the right of an individual to control its information and determine whether and to what extend it should be disclosed, while giving primacy to individual consent. The Justice B.N. Srikrishna Committee was formed, which recommended a data protection framework suitable for India by extrapolating the European GDPR, OECD Core Privacy Principles and data protection laws of various jurisdictions. Accordingly, on 11 December 2019, the central government presented the Personal Data Protection Bill, 2019 (PDPB), which was tabled in Parliament based on the aforesaid recommendations. On 3 August 2022, the PDPB was withdrawn after deliberation by the Joint Committee of Parliament (JCP) after pushback from many stakeholders over aspects such as requiring data localisation and being too compliance-intensive. A revised bill, the Digital Personal Data Protection Bill, 2022, has been introduced on 18 November 2022 and is currently open for feedback from the public.

In the meantime, the legislature enacted the Criminal Procedure (Identification) Act, 2022 (the Identification Act), repealing the Identification of Prisoners Act, 1920. The Identification Act modernises the framework for collection of data of prisoners by allowing the police officers to collect biological samples and their analysis, behavioural attributes, DNA profiling, among other things, of the convicts and arrestees.90 The Identification Act empowers the National Crime Records Bureau to maintain the records of the collected data and allows it to share it with law enforcement agencies.91

In Karthick Theodre v. Registrar General, Madras High Court,92 the Madras High Court held that the right to privacy and, particularly, the right to be forgotten cannot be invoked to seek redaction of names of accused persons who are acquitted from criminal proceedings, as judgments of courts constitute public records. The Court observed that it would be appropriate to await the enactment of a legislation on protection of personal data to lay down an objective standard to enforce a ‘right to erasure’, similar to what has been provided under Article 17 of the GDPR. Similarly, the Gujarat High Court refused a request for removal of a judgment acquitting a person accused of kidnapping and murder, as no specific provisions of law had been violated.93 Nonetheless, the right to mask and prevent disclosure of identity, as a part of the right to privacy, has been recognised in India in the context of highly sensitive cases concerning women and children.94 In addition to the statutory prohibitions against the disclosure of the identity of the victim and witnesses,95 the aforesaid forms the exception where such a right is applied in the context of judgments delivered by courts.96

iv Other areas of interest

In CCI v. State of Mizoram,97 the Supreme Court dealt with the scope of the jurisdiction of the Competition Commission of India (CCI) regarding lottery business regulated by the Lotteries (Regulation) Act, 1988 (Lotteries Act). The Court held that any agreement that facilitates a dominant position and its abuse, or adversely affects competition, comes under the purview of the Competition Act, 2002 notwithstanding sectoral regulations,98 thereby expanding the jurisdiction of the CCI.99 Thus, the pretext of the lottery tickets being res extra commercium and being regulated by the Lotteries Act does not oust the jurisdiction of the CCI when anti-competition elements are present.100

In Knit Pro International v. State of NCT of Delhi,101 the Supreme Court held that an offence of infringement of copyright under Section 63 of the Copyright Act, 1957 is cognisable and non-bailable in nature. The Court observed that the punishment for an offence under Section 63 of the Copyright Act is ‘imprisonment for a term which shall not be less than six months but which may extend to three years and with fine’.102 Thus, the maximum punishment that can be imposed would be three years, thereby making an offence under Section 63 of the Copyright Act, 1957 non-bailable and cognisable in nature.103

In Devas Multimedia Pvt Ltd v. Antrix Corporation Ltd,104 the Supreme Court upheld an order of the NCLAT directing winding-up of a company under Section 271(c) of the Companies Act, 2013 on the ground of fraud. While doing so, the Court observed that ‘[i]f the seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas, every part of the plant that grew out of those seeds, such as the Agreement, the disputes, arbitral awards etc., are all infected with the poison of fraud’.105 It further observed that allowing an entity and its shareholders to reap the benefits of a fraudulent transaction sends a wrong message to the world.106


87 Vijay Madanlal Choudhary v. Union of India, Special Leave Petition (Criminal) No. 4634/2014.
88 Sensitive personal data and information are defined in the IT Rules as personal information that consists of (1) passwords; (2) financial information such as bank accounts, debit or credit cards; (3) physical, psychological and mental health conditions; (4) sexual orientation; (5) medical records and history; (6) biometric information; (7) any detail relating to the above as provided to the body corporate for providing a service; or (8) any of the information received under each of the heads by the body corporate for processing, or to be stored or processed under a lawful contract.

89 Justice KS Puttaswamy (retd) v. Union of India, (2017) 10 SCC 1.

90 Section 3 of the Criminal Procedure (Identification) Act, 2022

91 Section 4(1) of the Criminal Procedure (Identification) Act, 2022.

92 Karthick Theodre v. Registrar General, Madras High Court, 2021 SCC Online Mad 2755.

93 Dharamraj Bhanushankar Dave v. State of Gujarat, 2015 SCC OnLine Guj 2019.

94 See Nipun Saxena v. Union of India, (2019) 2 SCC 703, paragraph 12; Sri Vasunathan v. The Registrar General, 2017 SCC OnLine Kar 424, paragraphs 8 and 9.

95 See, e.g., Section 23 of Protection of Children from Sexual Offences Act, 2012; Section 327(3) of the CrPC; Section 228A of the IPC.

96 Karthick Theodre v. Registrar General, Madras High Court, 2021 SCC OnLine Mad 2755, paragraph 25.

97 CCI v. State of Mizoram, (2022) 7 SCC 73.

98 id. paragraphs 27 and 33.

99 id. paragraphs 27–28, 45–46.

100 id.

101 Knit Pro International v. State of NCT of Delhi, (2022) SCC OnLine SC 668.

102 id.

103 id. paragraph 16.

104 Devas Multimedia Private Ltd v. Antrix Corporation Ltd, 2022 SCC OnLine SC 46.

105 id. paragraph 167.

106 id. paragraph 168.

i Privilege

Subject to specified exceptions,107 Section 126 of the Evidence Act prohibits an attorney108 from disclosing any communication made to him in the course of and for the purpose of his employment as an attorney, without his client’s express consent. Recognising the role of interpreters, clerks and other support staff employed by attorneys, the privilege is extended by Section 127 of the Evidence Act to facts coming to their knowledge in the course of their employment. Section 129 protects a client from being compelled to disclose any confidential communication that has taken place with his or her legal professional adviser.

As discussed above, an advocate is also prohibited by the BCI Rules from disclosing client communications or advice given by him to the client.

A contemporary area of interest around this question is whether the protection of attorney–client communication extends to in-house counsel. The area is not free from doubt. While the Bombay High Court in its judgment in Municipal Corporation of Greater Bombay v. Vijay Metal Works 109 took the view that in-house counsel would be covered by privilege, this view was doubted by the same court in Larsen & Toubro Limited v. Prime Displays Private Limited,110 in light of the observations of the Supreme Court in Satish Kumar Sharma v. Bar Council of Himachal Pradesh 111 and Shiv Kumar Pankha v. Honourable High Court of Judicature at Allahabad.112

ii Production of documents

Under the CPC, the court can, at any time during the pendency of any suit, order the production (under oath) of such documents relating to any matter in question in such suit. Furthermore, the Evidence Act provides that a witness summoned to produce a document must, if it is in his or her possession, bring it to court regardless of any objection to its production or admissibility.113

If a party asserts privilege over a document that it is asked to produce, and this assertion is disputed by the opposite party or not accepted by the court, the court will likely review the claim for privilege and possibly the documents under seal and decide on whether the protection of privilege applies.114


107 There are two statutory exceptions to the rule of client–attorney privilege: (1) any communication made in furtherance of any illegal purpose is not protected; and (2) facts observed by the attorney during his employment, showing that any crime or fraud has been committed since the commencement of his employment, are not protected.

108 The Evidence Act predates the Advocates Act 1961. The expressions barrister, attorney, pleader and vakil refer to various categories of legal practitioners recognised when the Evidence Act was enacted. The Advocates Act 1961 now recognises a single category of legal practitioner qualified to practise law, and defines them as advocates.

109 Municipal Corporation of Greater Bombay v. Vijay Metal Works, AIR 1982 Bom 6.

110 Larsen & Toubro Limited v. Prime Displays Private Limited, (2003) 114 CompCas 141 (Bom).

111 Satish Kumar Sharma v. Bar Council of Himachal Pradesh, (2001) 2 SCC 365.

112 Shiv Kumar Pankha v. Honourable High Court of Judicature at Allahabad, (2001) 2 SCC 365.

113 Section 162 of the Indian Evidence Act 1872.

114 See, for example, Larsen & Toubro Limited v. Prime Displays Private Limited, (2003) 114 CompCas 141 (Bom).

i Overview of alternatives to litigation

Since India has permitted foreign investments in various industries and sectors through its new liberal policies, there has been a considerable increase in the number of commercial disputes. As a mechanism to deal with its heavy caseload, India has striven to encourage ADR mechanisms. In several areas, and even at the level of the High Courts and the Supreme Court, the law has allowed for parties to be directed towards ADR.115

ii Arbitration

Arbitration framework in India

The arbitration framework in India has been outlined in the Arbitration Act, a Model Law-based legislation, which provides for various matters such as:

  1. judicial non-interference; arbitration agreement;
  2. interim measures by courts and tribunals; appointment and termination of arbitrators; doctrines of competence-competence and severability;
  3. procedural autonomy;
  4. place and procedure for the arbitration;
  5. court’s assistance in taking of evidence; and
  6. recourse against arbitral awards.

India is also party to the New York Convention, provisions of which have been incorporated into Chapter I of Part I of the Arbitration Act.

The Arbitration Act is applicable both to India-seated and foreign-seated arbitrations. Part I covers the scope of India-seated domestic and international arbitrations, whereas Part II covers foreign-seated arbitrations and the enforcement of foreign awards.

Trends in relation to arbitration

The initial years of the implementation of the Arbitration Act saw a regressive interpretation that allowed frequent and wide-sweeping judicial intervention from Indian courts.116 The judgments of the Supreme Court and High Courts have, however, broken the trend and are serving to restore confidence in India as a potential arbitration destination. The 2015 Amendment has also introduced various provisions that promote arbitration by reducing the timelines and costs involved.

Furthermore, although statistically there are more ad hoc arbitrations conducted in India, the use of institutional arbitration is growing gradually.

While the ground of ‘patent illegality’ was accepted and codified, its application was limited to domestic arbitrations. After the 2015 Amendment Act, in the landmark judgment of Ssangyong Engineering & Construction Co Ltd v. National Highways Authority of India (Ssangyong),117 the Supreme Court, inter alia, clarified and narrowed the scope of the most misused ground for setting aside an award, namely, contravention of the public policy of India. It has also been clarified in the context of the ground of patent illegality appearing on the face of the award, that in interpreting a contract, an arbitral tribunal must be fair-minded and reasonable, that is, its view must be a possible one.118 The Supreme Court has recently held that even an erroneous interpretation of a contract, unless patently perverse and unreasonable, does not lead to setting aside of the award.119

Arbitration and Conciliation (Amendment) Act, 2019

The 2019 Amendment Act was aimed at institutionalisation of arbitration in India. It, inter alia, introduced Part IA to the Arbitration Act, which provides for the incorporation, constitution and functions of the Arbitration Council of India (ACI), a body established to oversee the grading of arbitral institutions and arbitrators, promote institutional arbitration and recommend policy changes.

Confidentiality has been formally recognised by the 2019 Amendment Act by inserting Section 42A to the Arbitration Act, by which the arbitrator, the arbitral institution and the parties to the arbitration agreement must maintain confidentiality of all arbitral proceedings, with the sole exception being where disclosure is necessary for the purpose of implementation and enforcement of award.120 Section 42A of the Arbitration Act also does not impose a duty of confidentiality expressly on witnesses and third-party service providers in arbitration, among other things.

Anyone can seek information pertaining to an arbitration, even if confidential, if the same is permitted under the Right to Information Act, 2005 (RTI Act). In RS Sravan Kumar v. Central Public Information Officer,121 information related to an international arbitration was sought by an application made under the RTI Act. As the information pertained to public expenditure, the application was allowed. Section 22 of the RTI Act gives it an overriding effect. This position has also been restated in Prakash Makhijani v. Central Public Information Officer Military Engineering Services.122

Notably, the 2019 Amendment Act also introduced Section 42B to the Arbitration Act, providing immunity to arbitrators acting in good faith. Previously, there was no immunity provided to arbitrators, unless the rules of certain arbitral institutions contained a provision to that effect. This provision was required to safeguard the arbitrators, especially when the majority of arbitrations in India are ad hoc, to allow them to discharge their duties independently and impartially, without the threat of facing any civil liability.

Arbitration and Conciliation (Amendment) Act, 2021

On 4 November 2020, the Indian President promulgated the Arbitration and Conciliation (Amendment) Ordinance, 2020. Under the amended Section 36 of the Arbitration Act, which deals with an enforcement of awards arising out of India-seated arbitrations, the court is empowered stay on the award unconditionally pending annulment proceedings under Section 34, if it is prima facie satisfied that the arbitration agreement or the contract that is the basis of the award or the making of the award was induced or affected by fraud or corruption. The Ordinance also omits the Eighth Schedule of the Arbitration Act (which prescribed minimum qualifications and experience for arbitrators) and instead stipulates in Section 43 J that the qualifications, experience and norms for accreditation of arbitrators shall be prescribed by regulations, which will be framed by the ACI. Subsequently, the Arbitration and Conciliation (Amendment) Ordinance, 2020 was substituted by the Arbitration and Conciliation (Amendment) Act, 2021.

Recent judicial pronouncements by the Supreme Court of India have, inter alia, allowed enforcement of emergency awards arising out of India-seated arbitrations as court orders under Section 17(2) of the Arbitration Act,123 and disallowed unilateral appointment of arbitrators124 and modification of awards by courts.125

Treatment of foreign awards

India has been a signatory to the New York Convention since its very inception and ratified it in 1960. The Indian courts have recognised that the objections to enforcement under Section 48 of the Arbitration Act ought to be treated as a shield rather than a sword.126 While hearing objections to the enforcement of foreign awards, the Supreme Court has recognised the pro-enforcement bias in the New York Convention, placing the burden of proof on the parties objecting to enforcement.127 In the landmark judgment of Vijay Karia v. Prysmian Cavi E Sistemi Srl,128 the Supreme Court, inter alia, reiterated that the grounds for refusing enforcement have to be narrowly interpreted, upheld the pro-enforcement bias of the New York Convention and observed that contravention of the ‘fundamental policy of Indian law’ must entail a ‘breach of some legal principle or legislation which is so basic to Indian law that it is not susceptible of being compromised’.

Furthermore, the Court observed that even a breach of the Foreign Exchange Management Act, 1999 does not constitute contravention of the public policy of India.129 The Foreign Exchange Regulation Act, 1973, per contra, stands on a different footing, and a breach thereof may result in the award being refused enforcement,130 depending on the facts and circumstances of each case.131

The Supreme Court has also permitted two Indian parties to choose a foreign seat of arbitration.132 Furthermore, it has been settled by the Supreme Court that a foreign award against a non-signatory can be enforced under Part II of the Arbitration Act.133

Arbitral institutions

Although statistically there are more ad hoc arbitrations conducted in India, the use of institutional arbitration has steadily grown. Reputed arbitration institutions such as the Singapore International Arbitration Centre (SIAC) and International Chamber of Commerce (ICC) have set up establishments in India. Many Indian arbitral institutions have also been set up, including the Mumbai Centre for International Arbitration in 2016. The High Courts at Delhi, Karnataka, Punjab and Haryana, Madhya Pradesh, Madras and Odisha, inter alia, have also set up arbitration centres to provide recourse to credible yet affordable dispute resolution.

With a view to promote institutional arbitration, the Parliament enacted the New Delhi International Arbitration Centre Act, 2019 for creating an independent and autonomous centre for institutionalised arbitration. The New Delhi International Arbitration Centre (Amendment) Bill, 2022, passed by the Lok Sabha (lower house), intends to amend the name of the centre to ‘India International Arbitration Centre’. Notably, the International Arbitration and Mediation Centre (IAMC), Hyderabad has also been established, with its board of trustees comprising former judges and the Minister of Law, Telangana.

iii Mediation

The most important component of mediation is that it is the parties to a dispute who decide the terms of settlement. In conciliation, however, the conciliator makes proposals, and formulates and reformulates the terms of settlement. Mediation was first given statutory recognition in the Industrial Disputes Act 1947, where officers appointed under Section 4 of the Act are ‘charged with the duty of mediating in and promoting the settlement of industrial disputes’. Mediation, as a form of dispute resolution, has not obtained independent force in India but is mostly institutionally annexed to the courts through Section 89 of the Code of Civil Procedure Code 1809. To that extent, this might compromise the independence of mediations from court-related procedures and interference. Nevertheless, it gives mediations greater legitimacy and compatibility with the formal dispute resolution processes in society.

Another point to be noted is the growing importance of mediation clauses in commercial agreements. Both mediation and consultation form a mandatory aspect of the pre-arbitration procedure. It has also been held by courts that mediation and consultation are a substantial part of the agreement and are to be followed prior to any arbitration being initiated.134 In the event that a dispute is referred first to arbitration, the tribunal has the power to render the petition inadmissible on the grounds of the pre-arbitration procedure prescribed by the agreement being violated by the parties.

Akin to the Arbitration Rules 2006, the judges of the Salem bench also recommended the adoption of the Civil Procedure Mediation Rules 2006. These Rules govern almost the whole of the mediation process starting from the procedure for appointment of the mediator by both the parties from a panel of mediators that has already been formed for this purpose by the district courts. The qualifications and disqualifications for the panel, the venue of the mediation, the removal of a mediator from the panel, mediators’ impartiality and independence, the procedures during the mediation itself, confidentiality, privacy, the settlement agreement and many other aspects are governed by these Rules.

It is pertinent to note also the popularity of court-annexed mediation whereby mediation centres have been set up by various High Courts, including in Delhi, Madras, Gujarat, Calcutta, Kerala, Allahabad and Karnataka.

In July 2019, India signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention), by which India has formally recognised enforceable settlement agreements arising out of mediation in international commercial disputes.135 In January 2020, the Supreme Court constituted a special committee comprising of subject-matter experts to draft a legislation to give legal sanctity to disputes settled through mediation. In December 2021, the Mediation Bill, 2021 was introduced in the Rajya Sabha (upper house), containing provisions, inter alia, on its applicability, form and contents of a mediation agreement, mandatory mediation, interim reliefs from court or tribunal, appointment of a mediator, enforcement of mediation agreements and setting up of the Mediation Council of India.

On 13 July 2022, the Parliamentary Standing Committee on Law and Justice issued a report on the Mediation Bill, 2021, to provide certain recommendations with respect to its non-applicability to non-commercial disputes involving government and its agencies, definition of ‘international mediation’, potential misuse of mandatory mediation, lack of clarity on the provisions of ‘pre-litigation mediation’ and ‘court annexed mediation’, long timelines, lengthy provisions and lack of modalities in the provision on online mediation.136

In recent years, India has witnessed an unprecedented push towards mediation, which has also been reflected in its legislation. For example, under the Consumer Protection Act, 2019, the District Commission, at the first hearing or at any later stage, if satisfied that there exists an element of a settlement, may direct the parties to have their dispute settled by mediation. The Act prescribes a time limit of 30 days for the completion of mediation.137 As stated above, Section 12A of the Commercial Courts Act mandates pre-institution mediation in all cases except in suits or applications in which urgent relief is sought, and further prescribes a maximum period of three months for the completion of the process of mediation. Without complying with this requirement, a suit in a commercial dispute instituted after 20 August 2022, would be barred and visited with rejection of the plaint under Order VII Rule 11 of the CPC.138

iv Other forms of alternative dispute resolution

Conciliation has been inserted in Part III of the Arbitration Act and is less formal than arbitration, but more formal than mediation. To the extent that it requires only mutually consenting parties and not a formal written document executed to be able to conciliate,139 it proves to be an easier form of dispute resolution. The parties can appoint up to three conciliators.140 An important requirement of conciliation proceedings is the independence and impartiality of the conciliator and the attempt to ensure the appointment of a conciliator not having the nationality of either of the parties.141 The conciliators form a medium of communication between the parties inviting them for proceedings and helping them exchange documents and evidence. When the conciliators are of the opinion that elements of a settlement exist, they can draw up the terms of conciliation and, after being signed by the parties, they shall be final and binding on them to the same extent as an arbitral award.142

An interesting mechanism is found in the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act). Section 18 of the MSME Act stipulates that a company falling within the category of MSMEs can resolve its disputes, by mandatory conciliation and, if it fails, by arbitration, after making a reference to the MSME Facilitation Council. Recently, in Gujarat State Civil Supplies Corpn Ltd v. Mahakali Foods (P) Ltd,143 the Supreme Court has held that Chapter V of the MSME Act overrides the provisions of the Arbitration Act. The Facilitation Council initiating the conciliation can thus act as an arbitrator despite the bar under Section 80 of the Arbitration Act.144 Furthermore, the Court held that a party is not be precluded from making a reference to the Facilitation Council despite an independent arbitration agreement.145 During this process, the civil courts cannot entertain such matters and must refer them to the Facilitation Council for adjudication. The Supreme Court has also held that challenging an arbitral award mandatorily requires a pre-deposit of 75 per cent of the amount value in the civil court of appropriate jurisdiction in accordance with Section 19 of the MSME Act.146

Similarly, the Code on Industrial Relations, 2020, provides for the appointment of conciliation officers as one of the measures for the resolution of industrial disputes.147


115 Afcons Infrastructure Limited v. Cherian Varkey Construction (2010) 8 SCC 24, cited in Perry Kansagra v. Madan Kansagra, 2019 SCC OnLine SC 211.

116 See, for example, Oil & Natural Gas Corpn Ltd v. Saw Piptes Ltd, (2003) 5 SCC 705, paragraph 22; ONGC Ltd v. Western Geco International Ltd, (2014) 9 SCC 263.

117 Ssangyong Engineering & Construction Co Ltd v. National Highways Authority of India, 2019 SCC Online 677, paragraphs 35 and 76.

118 id. paragraph 40.

119 Indian Oil Corpn Ltd v. Shree Ganesh Petroleum, (2022) 4 SCC 463, paragraphs 44 and 45.

120 Section 42A of the Arbitration Act.

121 RS Sravan Jumar v. Central Public Information Officer, 2019 SCC Online CIC 9981, paragraph 11.

122 Prakash Makhijani v. Central Public Information Officer Military Engineering Services, 2022 SCC OnLine CIC 325, paragraph 5.

123 NV Investment Holdings LLC v. Future Retail Ltd, 2021 SCC OnLine SC 557, paragraphs 45 and 68.

124 Perkins Eastman Architects DPC v. HSCC (India) Ltd, (2020) 20 SCC 760, paragraph 21.

125 NHAI v. M. Hakeem, (2021) 9 SCC 1, paragraph 48.

126 Hindustan Petroleum Cor Ltd v. Videocon Industries Ltd, 2012 SCC OnLine Del 3610, paragraph 47.

127 Vijay Karia v. Prysmian Cavi E Sistemi Srl, 2020 SCC Online SC 177, paragraph 50.

128 id. paragraphs 50, 81 and 88.

129 id. paragraph 88.

130 Renusagar Power Co Ltd v. General Electric Co, 1994 Supp (1) SCC 644, paragraphs 75 and 76.

131 See National Agricultural Cooperative Marketing Federation of India v. Alimenta SA, 2020 Online SC 381, paragraph 58.

132 PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited, (2021) 7 SCC 1.

133 Gemini Bay Transcription Pvt Ltd v. Integrated Sales Service Ltd, 2021 SCC OnLine SC 572.

134 Thermax Limited v. Arasmeta, 2008 (1) ALT 788.

135 United Nations Convention on International Settlement Agreements Resulting from Mediation.

136 See Press release, Parliament of India, Rajya Sabha Secretariat, Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice (14 July 2022),

137 Section 37 of the Commercial Courts Act.

138 Patil Automation (P) Ltd v. Rakheja Engineers (P) Ltd, 2022 SCC OnLine SC 1028, paragraph 92.

139 Section 62 of the Arbitration Act.

140 Section 63 of the Arbitration Act.

141 Section 64(2) of the Arbitration Act.

142 Sections 73 and 74 of the Arbitration Act.

143 Gujarat State Civil Supplies Corpn Ltd v. Mahakali Foods (P) Ltd, 2022 SCC OnLine SC 1492, paragraph 34.

144 id.

145 id.

146 Tirupati Steels v. Shubh Industrial Component, (2022) 7 SCC 429, paragraph 8.

147 Sections 4(8) and 43 of the Code on Industrial Relations, 2020.

In India, the judge-to-population ratio is not adequate to meet the huge volume of litigation, effectively adding to the delay in redressal. This phenomenon is often referred to as the ‘docket explosion’. Considering the extensive legal framework and significant backlog of litigation, Indian arbitration has made strong attempts to bring about a dynamic change. The amendments are expected to reduce the many difficulties with regard to timing, cost, finality of awards and interim reliefs faced by both foreign and Indian parties wishing to arbitrate in India. The Indian courts have also attempted to reduce delay. For instance, recently, the Supreme Court, in Shree Vishnu Constructions v. The Engineer in Chief Military Engineering Service,148 requested the Chief Justices of High Courts to dispose of all applications for appointment or substitution of arbitrators, which were pending for more than one year, within six months from 19 May 2022, and directed the Registrar Generals of the respective High Courts to submit a compliance report at the end of the aforesaid period.

i Arbitration in India

In a practical scenario, a foreign investor will have the ability to approach a court for protective relief with respect to Indian shares and Indian assets and for other support, such as the recording of evidence in India. Previously, Indian courts, in exercise of jurisdiction under Section 34 of the Arbitration Act, had taken an expansive interpretation of the grounds for challenge of an award. Over the years, with the 2015 Amendment Act and subsequent judicial pronouncements, the scope of the grounds for challenging an award, including the interpretation of the term ‘public policy of India’, has been considerably narrowed. The courts do not sit as an appellate court over the decision of an arbitrator and cannot substitute its views for that of the arbitrator so long as the arbitrator has taken a possible view of a matter. Another reasonable interpretation or possible view is insufficient to allow for the interference of the Court.149 Mere erroneous application of law or appreciation of evidence also does not call for an interference with an award.150

Confidentiality, a cornerstone of arbitration proceedings, has been formally recognised by the 2019 Amendment by which the arbitrator, the arbitral institution and the parties to the arbitration agreement must maintain confidentiality of all arbitral proceedings except the award where its disclosure is necessary for the purpose of implementation and enforcement of award.151

ii Arbitration outside India

Unlike the previous regime, where parties to arbitrations seated outside India did not have recourse to Indian courts under Part I of the Arbitration Act, the Arbitration Amendment Act extends certain provisions of Part I (discussed above) to foreign-seated arbitrations, subject to an agreement to the contrary. Therefore, this enables a foreign investor, who thinks that an Indian party may dissipate its assets or transfer or devalue Indian shares, to approach Indian courts for an interim relief. Therefore, even if an Indian party does not have a presence or assets at the foreign location where the arbitration is seated, given the extension of certain provisions of Part I of the Arbitration Act to foreign-seated arbitrations,152 foreign investors can obtain protective orders in India. This interim relief from Indian courts, which reduces the risks attached to waiting until an award, is finally pronounced by the tribunal.

In this regard, an award of a foreign tribunal, if required to be enforced in India, needs to be presented for enforcement under Section 47 of the Arbitration Act. An Indian court can review the foreign award to the limited extent provided under Section 48 of the Arbitration Act to examine whether it may be enforced. In recent years, Indian courts have adopted a pro-enforcement approach in dealing with foreign awards.


149 NTPC Ltd v. Deconar Services Pvt Ltd, AIR 2021 SC 2588.

150 Delhi Airport Metro Express (P) Ltd v. DMRC, 2021 SCC OnLine SC 695; Oriental Insurance Co Ltd v. Diamond Product Ltd, 2021 SCC OnLine Del 4319.

151 See Section 42A of the Arbitration Act.

152 Section 2(2) of the Arbitration Act.





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