India's Rise as an Arbitration-Friendly Jurisdiction
Over the past decade, India has undergone a significant transformation in its approach to arbitration. What was once perceived as a jurisdiction hostile to international arbitration — marked by excessive judicial interference, lengthy enforcement delays, and unpredictable outcomes — has evolved into a jurisdiction that actively supports arbitration as the preferred mechanism for resolving commercial disputes. This shift reflects deliberate legislative reforms, pro-arbitration judicial attitudes, and concerted government initiatives to position India as a competitive arbitration hub in Asia.
The foundation of this transformation lies in successive amendments to the Arbitration and Conciliation Act, 1996. The 2015 amendments introduced strict timelines for arbitral proceedings, limited the scope of judicial intervention at the pre-award stage, and curtailed the grounds on which courts could set aside domestic awards. The 2019 amendments went further, abolishing automatic stays on enforcement of arbitral awards and establishing a dedicated Arbitration Council of India to promote institutional arbitration. These reforms signal a legislative intent to align India with international best practices and restore party autonomy as the guiding principle of arbitration.
India's judiciary has reinforced this legislative shift through a series of landmark decisions that have clarified ambiguities and narrowed the scope for court interference. The Supreme Court's judgment in PASL Wind Solutions (2021) reaffirmed that the threshold for setting aside an arbitral award is extremely high, limited to cases of patent illegality or violation of public policy. In Amazon v. Future Retail (2022), the Court upheld an emergency arbitrator's interim order issued under Singapore-seated arbitration, signalling India's willingness to enforce foreign-seated awards even at the interim stage. And in Vidya Drolia v. Durga Trading (2021), the Court clarified the test for arbitrability, expanding the categories of disputes that can be referred to arbitration and limiting judicial interference at the reference stage.
Beyond legislative and judicial reform, the Indian government has taken active steps to promote India as a seat of international arbitration. The establishment of the Mumbai Centre for International Arbitration (MCIA) and the Delhi International Arbitration Centre (DIAC) provides parties with world-class institutional infrastructure and case management services. The government has also set up specialised arbitration centres in Gujarat International Finance Tec-City (GIFT City), offering tax incentives and streamlined regulatory frameworks for international arbitration. These institutions are designed to compete directly with established arbitration hubs such as Singapore, Hong Kong, and London.
The impact of these reforms is already visible. India now regularly features in the top jurisdictions for international arbitration filings, and there has been a measurable decline in the time taken to enforce awards. Institutional arbitration is gaining traction among Indian corporates, and foreign parties are increasingly willing to accept India as a neutral seat for cross-border disputes. For litigation funders, this environment is particularly favourable: arbitration offers faster resolution timelines, lower counterparty risk through interim measures, and greater predictability in outcomes — all of which improve the risk-return profile of funded claims.
While challenges remain — including continued backlog in Indian courts and inconsistency across lower judicial forums — the overall trajectory is clear. India is positioning itself not merely as a jurisdiction that tolerates arbitration, but as one that actively facilitates it. For commercial parties and institutional investors alike, this represents a material improvement in the dispute resolution landscape and enhances India's attractiveness as a destination for cross-border investment and trade.
