Has Arbitration Becomes Litigation by another name?, ETLegalWorld
Arbitration in India was designed to be faster, cheaper, and more credible than litigation. Instead, it has become nearly as expensive and time-consuming as court proceedings, according to a candid debate among top general counsels and commercial arbitration experts at the Commercial Disputes Conclave 2025, hosted by ET LegalWorld.
The keynote panel, “Arbitration at a Crossroads – Navigating Enforcement, Costs, and Credibility in India’s Commercial Disputes,” moderated by Amit Meharia, Managing Partner, MCO Legals, set the stage for a clear-eyed discussion of what ails India’s arbitration ecosystem — and how businesses can push for practical fixes.
When Arbitration Becomes “Litigation by Another Name”
Sameer Chugh, general counsel and chief legal officer at Games 24×7, was blunt in his assessment: “The 1996 Act was a welcome change, but arbitration has only been partially successful. Costs are no different from litigation, and arbitrators — often retired judges — simply replicate courtroom procedures. We are back to square one.”
Chugh pointed to hearings that stretch years despite statutory deadlines, saying his own matters routinely extend a year and a half beyond the mandated two-year cap due to the unavailability of counsel or arbitrators. “A litigation outcome might take three to three-and-a-half years anyway. Where is the real advantage?” he asked.
Meharia agreed that arbitration too often mirrors litigation culture, noting hearings beginning late in the evening and extensions under Section 29A being granted almost automatically. He argued for stricter case management: “Fix the final date of hearing on day one, and work backwards.”
Uncertainty Undermines Business Decisions
For corporate counsel, the lack of predictability is as damaging as the delays. Prarabdha R. Jaipuriar, general counsel – Indian subcontinent at SUEZ, invoked Lord Curzon’s words on bureaucracy to describe arbitration in India: “stately, solemn, slow and sure.”“Our businesses need certainty of cost, outcome, and timeline,” he said. “While outcomes can never be guaranteed, I cannot even give reasonable visibility on cost and duration.” The result, he added, is that companies often prefer to “take a haircut” and settle rather than endure protracted proceedings.
Jaipuriar, who oversees complex infrastructure disputes, highlighted the difficulty of explaining to CEOs and CFOs why hearings are routinely deferred. “How do you tell management that a matter listed today could not be heard and is now adjourned by three months? For business leaders, this is incomprehensible.”
Fixing What Lies Within Control
Sonal Kumar Singh, managing partner at AKS Partners, urged parties to focus on what they can control. “The arbitrator is the captain of the ship,” he said, stressing careful selection based on expertise, availability, and commitment to finish within timelines. He advised parties to agree early on procedures and dates with opposing counsel and present them to the tribunal.
Singh also recommended institutional arbitration clauses to reduce ad hoc uncertainty. But Meharia pushed back, pointing out that 90% of Indian disputes involve the government, where Section 11 proceedings limit party discretion. Singh responded that parties can still stipulate qualifications — including disqualifying retired judges — when approaching the courts.
If delays plague arbitration itself, enforcement is an even bigger hurdle. Gunita Pahwa, joint managing partner at S&A Law Offices, said bluntly: “Once an award is passed, a new story starts.” She estimated it takes four to six years for an award to translate into money due to challenges that snake through the single bench, division bench, and Supreme Court.
She welcomed innovations like conditional stays, where the losing party must deposit funds or provide security. “For clients, receiving even 75 percent of the award against a bank guarantee is a huge relief for cash flow management,” Pahwa said. But she warned that despite statutory mandates, challenges often drag far beyond the one-year limit, leaving companies holding “paper degrees.”
Jaipuriar added a sharp metaphor: “Without enforcement, it’s like operation successful but patient is dead.” He called for stricter controls on admitting challenges under Section 34 and insisted they be time-bound to conclude within six months.
While Singh pressed for diversifying the pool of arbitrators, Pahwa injected a dose of realism: “In 21 years of practice, I have not seen a single arbitration in India where a client chose a non-judicial arbitrator. Businesses still overwhelmingly prefer retired judges.”
Her remark underscored the cultural inertia around arbitration — a reliance on judicial figures that perpetuates courtroom-style rigidity. Until companies themselves embrace alternatives, reforms may remain more theoretical than real.
The Road Ahead
Despite the frustrations, panelists agreed that the system is not beyond repair. Institutional arbitration, stricter case management, better arbitrator selection, and tighter enforcement windows were all floated as achievable steps.
For businesses, the takeaway was clear: until arbitration delivers predictable costs, timelines, and outcomes, its credibility will remain under strain. As Meharia summed up, “We have to move beyond extensions and excuses. Arbitration must serve commerce, not mirror litigation.”
