India’s Arbitration System Faces Overwhelming Backlog with 75,000+ Cases Pending, ETLegalWorld
The Indian arbitration system, once designed to be the swift alternative to litigation, is collapsing under the weight of delayed proceedings, with district courts taking over five years to dispose of section 34 petitions challenging arbitral awards.
Data curated by Cubictree and analysed by ETLegalWorld shows that of the 38,973 cases filed in high courts, 11,239 remain pending with an average disposal timeline of 18.69 months. Data reveals that delay in district courts is even worse: of 157,864 cases, 63,012 remain pending, nearly 40 percent of the total caseload, with average timelines stretching to 30.56 months.
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The Judicial Mindset
Recently, the Apex Court has reiterated that an arbitral award cannot be set aside under Section 34, nor can it be interfered with in an appeal under Section 37, only because the arbitrator did not adopt an alternative interpretation of the contract. Despite strong precedents set in cases like Ssangyong Engineering v. NHAI and MMTC v. Vedanta which explicitly warn against merits-based review of arbitral awards, district judges continue to re-appreciate evidence.
“Orders are often judged by their apparent depth, the extent of reasoning displayed, and their defensibility if the matter is carried further under Section 37. In that setting, a brief dismissal which confines itself to jurisdictional limits can be perceived as perfunctory, even where it is legally sound,” said Sanjeev Gemawat, managing director and group GC Essar Group.
“For a District Judge, the strongest institutional pressure is not to be reversed by the High Court. Reversal carries reputational consequences within the judicial hierarchy and is often perceived as a reflection on a judge’s competence,” said Amit Saxena, president and general counsel at HCL infosystem.
Section 34 petitions, which challenge arbitral awards, high courts show 54.20 percent pendency across 6,982 cases, taking an average of 36.88 months to dispose of, three years against the statutory expectation of one year. In case of district courts there is 67.02 percent pendency across 42,082 cases, with average timelines of 53.79 months which is nearly four and a half years. Of these, 28,249 cases remain stuck in the system.
“The issue at place that district courts are still taking more than five years to dispose of Section 34 petitions is not one of implementation, however, one of infrastructure and training. The concerns raised reflect systemic and structural challenges rather than a disregard of settled legal principles,” noted Anand Shrivastava, partner at Sagus Legal.
The Ad-Hoc Arbitration Bottleneck
Ad-hoc arbitrations, which still dominate India’s arbitration landscape, are plagued by adjournments as retired judges routinely handle more than 30 cases simultaneously.
Even in supposedly expeditious section 9 interim measures matters, the system struggles. While High Courts maintain 17.15 percent pendency across 20,819 cases, district courts show 29.95 percent pendency across 114,990 cases. Section 11 appointments also show similar pendency rates with High Courts standing at 34.77 percent pendency and district courts at 40.40 percent.
“Past years of experience within our judicial system have shown that until a set of laws are mandated, their adoption rate is often ignorable. Pre-litigation mediation is one of the biggest examples. Prior to 2018, default was litigation and mediation was considered optional, which was usually not exercised. Choice preserves inertia. Structural change comes from compulsion, not optionality,” said Mehak Oberoi, legal head (Hydropower – APAC) at GE Vernova.
“Retired judges who dominate ad-hoc arbitration are not unfamiliar with procedure, evidence, or case management,” Saxena observes. “The problem is that arbitration demands a fundamentally different ethic: tight timelines, intolerance of adjournments, and proactive procedural discipline. The court system socialises judges into accommodating adjournments as a default feature of ‘fair hearing’.”
The backlog is growing five times faster than the disposal of cases. In Himachal Pradesh’s district courts, the Section 34 disposal ratio stands at 0.18, with 277 cases disposed against 1,580 pending. Bihar posts a similar 0.21 ratio, accumulating cases 4.8 times faster than resolution. At current rates, these states will take more than 10 years to clear existing backlogs.
District Courts increasingly invoke patent illegality to set aside awards, a ground intended for exceptional cases of fundamental legal error. However, experts argue this has become a vehicle for merits review.
“India is amongst a few countries globally to statutorily have the concept of ‘patent illegality’ as an independent ground to set aside awards. And what is rarer is the broad manner in which we choose to apply it. In practice, it has become a doctrinal entry point for judicial intervention on merits,” added Oberoi.
“The doctrine of patent illegality is increasingly being used as a substitute for appellate scrutiny. It often functions as a means to correct outcomes that sit uneasily with the court, rather than as a tool to police serious defects in the arbitral process,” noted Gemawat.
The 2024 Bill
The Draft Arbitration and Conciliation (Amendment) Bill, 2024, introduced in October, proposes shifting arbitrator appointments from courts to arbitral institutions designated by the Arbitral Council of India (ACI), recognising emergency arbitration, and imposing a strict 60-day deadline for filing appeals under Section 37. The 2019 Amendment created the ACI and envisaged institutional grading and arbitrator accreditation, yet six years later, much of this architecture remains dormant.
“India’s difficulties with arbitration do not stem from gaps in legislation. They arise from the absence of a functioning institutional framework. Courts, in practice, respond to incentives as much as they do to precedent,” noted Gemawat.
On whether institutions like SIAC or ICC can emerge in India, experts are blunt. “Global institutions like SIAC and ICC were not created by statutory designation or regulatory endorsement,” Saxena observes. “They earned legitimacy through decades of consistent case management, neutrality, administrative competence, and global enforceability.”
The 60-Day Deadline
The Bill’s proposed 60-day deadline for Section 37 appeals could be transformative, if enforced. Currently, no specific limitation period exists, allowing parties to argue by analogy and invoke residuary provisions, sometimes filing appeals months or years later.
“The introduction of a strict 60-day limitation period marks a conscious legislative attempt to address delays and procedural uncertainty. While courts may still be inclined to test the boundaries of this provision, the existence of an express statutory deadline materially narrows the scope for extensions,” said Shrivastava.
“The danger is not poor drafting but predictable judicial conduct. Courts’ ability to decide on such limitations would depend on whether they treat the limitation period as jurisdictional, rather than discretionary,” said Oberoi.
Time for urgent reform
In a recent judgment relying on the Supreme Court’s ruling in Gayatri Balasamy v ISG Novasoft Technologies Ltd (2025), the Court warned that uncertainty in arbitration law is “an anathema to business and commerce” and urged the Ministry of Law and Justice to expedite the proposed Arbitration and Conciliation Bill, 2024.
When the judiciary has to question the government asking why there is a six year delay in setting up the ACI and when the chief justice of the apex court calls arbitration a victim of protected timelines and excessive adjournments, there remains no doubt that some major systemic problems in the arbitration system exist which demand immediate redressal.
“Despite our track record, I would rather be hopeful than cynical. That said, legislative reform is only the first step. The 2024 Bill risks perpetuating the vicious cycle of 2019 if it chooses not to frontload enforcement. Timelines only matter when missing them has consequences. A deadline that bends with sympathy quickly ceases to exist,” said Oberoi.
