Diwan Advocates

Arbitration Practice

A joint venture agreement between an Indian company and a foreign investor provides for ICC arbitration seated in Singapore. A dispute arises about the valuation methodology used to calculate the buy-out price. The Indian party wants to obtain interim protection in India while the arbitration proceeds offshore.

A construction company and a government undertaking are in dispute about cost escalations and delay penalties under a long-term infrastructure contract. The contract provides for arbitration. The government undertaking wants to raise a preliminary objection that the dispute is not arbitrable because it involves public law issues.

Arbitration is the primary dispute resolution mechanism in commercial contracts in India. The legal framework has been substantially reformed over the past decade. At Diwan Advocates, we represent parties in domestic and international arbitration, advise on arbitration clauses, and appear in court in support of and against arbitral proceedings.

The Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 governs both domestic arbitration (Part I) and international commercial arbitration where the seat is in India (also Part I), as well as the recognition and enforcement of foreign awards under the New York Convention (Part II). The Act has been amended significantly in 2015, 2019, and 2021 to reduce court intervention, introduce timeframes, and create the Arbitration Council of India. The objective across all reforms has been the same: to make India a credible seat for international arbitration and to ensure that domestic arbitration delivers timely awards.

Jurisdiction and Arbitrability

An arbitral tribunal has jurisdiction over a dispute only if there is a valid arbitration agreement covering that dispute. Matters that are not arbitrable under Indian law include criminal offences, matrimonial disputes, and matters of probate. There is an ongoing debate about the arbitrability of disputes involving allegations of fraud and of disputes where a statutory remedy is provided. The Supreme Court has progressively expanded the scope of arbitrability. Whether a specific dispute falls within a given arbitration clause is a question that often determines the outcome of the entire proceeding.

Interim Relief: Section 9 and Section 17

A party to an arbitration agreement may apply to the court under Section 9 for interim measures before, during, or after the arbitration. Section 9 is used to obtain injunctions, asset preservation orders, and the appointment of receivers in support of arbitration. Where the tribunal has been constituted, Section 17 gives the tribunal similar powers. Courts have consistently held that they will not interfere with the commercial wisdom of arbitrators or substitute their own view for that of the tribunal on questions of fact.

Challenging and Enforcing Awards

A domestic award can be challenged before the court under Section 34 on limited grounds: incapacity of a party, invalidity of the agreement, breach of natural justice, the award being beyond the scope of submission, or the award being contrary to public policy. The public policy ground has been narrowed by successive amendments and court decisions. A party challenging an award must do so within three months of receiving it. A foreign award is enforced under Section 48 on similarly limited grounds.

Why Diwan Advocates for Arbitration?

Legislative Reference Index

Arbitration disputes move on the tribunal's timeline. Section 9 applications for interim relief must be filed before the other side moves first.

Diwan Advocates is ready.

Diwan Advocates  |  Delhi, India