Enforcement Hurdles To Global Ambitions: Shankh Sengupta On India’s Evolving Arbitration Landscape

Partner: Shankh Sengupta

This is a link-enhanced version of an article that first appeared in BW LegalWorld

At the policy level, the government has been proactive in promoting alternative dispute resolution mechanisms. Further, we are seeing a clear shift from ad hoc arbitration toward institutional arbitration which can be evidenced by establishment of multiple arbitration institutes.

In exclusive conversation with BW Legal World, Shankh Sengupta, Partner in the Dispute Resolution and Arbitration Practice at Trilegal, unpacks the evolution of international arbitration for Indian businesses and the legal sector’s growing alignment with global standards. Sengupta delves into the impact of landmark judicial rulings, emerging best practices in drafting arbitration clauses, and the nuanced interpretation of shareholder rights in cross-border disputes.  

Q1. How has the international arbitration landscape evolved for Indian companies in the past few years, and what’s driving this shift?

Ans. Over the past few years, the international arbitration landscape for Indian companies has undergone a noticeable transformation. This shift has been driven by a mix of legislative reforms, important court decisions, and the changing nature of global business. The Arbitration and Conciliation (Amendment) Act, 2015 (‘2015 Amendment’) was a welcome step that introduced certain key provisions aimed at making international arbitration more accessible for Indian entities and strengthening the enforcement regime. This legislative intent was further reinforced by landmark judicial decisions, most notably the Supreme Court’s ruling in PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd. (2021). The Court upheld party autonomy, affirming that Indian parties are free to choose a foreign seat of arbitration.

At the policy level, the government has been proactive in promoting alternative dispute resolution mechanisms. Further, we are seeing a clear shift from ad hoc arbitration toward institutional arbitration which can be evidenced by establishment of multiple arbitration institutes.

India’s growing role in the global economy has also fuelled this transformation. Greater foreign investment and increased participation of Indian companies in cross-border trade have consequently led to a rise in international disputes. As a result of these cumulative developments, India is now recognized as a more arbitration-conducive jurisdiction, not just for domestic entities but also for foreign companies doing business in the region. This paradigm shift from a historically litigation-heavy environment to one that prioritizes arbitration highlights India’s commitment to a world-class dispute resolution framework.

Q2. What are the most common challenges faced when enforcing foreign arbitral awards in India, especially around the ‘public policy’ exception?

Ans. Enforcing a foreign arbitral award in India often feels like a Sisyphean task, not because the Indian laws are hostile towards enforcement, but procedural uncertainty. Despite the Supreme Court’s guidelines to streamline the execution process for decrees, the procedural delays and tactical manoeuvres by parties often hinder efficient and timely enforcement of foreign arbitral awards. Parties often deploy endless interlocutory applications challenging stamping, disputing jurisdiction, or dragging their feet on service which could stretch the execution of the award into years of litigation.

The open-ended nature of the ‘public policy’ exception is frequently mis-used, creating procedural hurdles that delay the enforcement of arbitral awards. For instance, the White Industries case was a cautionary tale for India that highlighted the prolonged delays in asserting legal rights before Indian courts. The unsettled ‘settled’ principles of the ‘public policy’ exception are weaponized by parties to tactically stall arbitration proceedings, and thereby, delay the enforcement of a foreign arbitral award.

However, changing trends suggest a pro-arbitration stance taken by Indian courts in dealing with the ‘public policy’ exception. In Vijay Karia v. Pysmian Cavi E Sistemi SRL (2020), the Supreme Court refused to entertain a challenge to a foreign arbitral award premised on the award being in contravention of ‘public policy’. In view of the growing tendency of adopting a non-interference approach, the courts have encouraged a narrow interpretation of the exception to avoid undermining the competence of the arbitral tribunal.

Another growing issue has been the resistance to enforcement of the foreign arbitral award by a non-signatory to the arbitration agreement. Recently, the Apex Court in Gemini Bay Transcription (P) Ltd. v. Integrated Sales Services Ltd. (2022) dealt with the objections of a non-signatory to the arbitration agreement with reference to Section 48 of the Arbitration and Conciliation Act, 1996 (‘Act’) wherein the Court clarified that the word “parties” as contemplated under Section 48(1)(a) of the Act cannot be extended to non-signatories.

Q3. Are you seeing a trend where Indian parties are becoming more strategic and forward-looking in drafting arbitration clauses to ensure enforceability?

Ans. Yes, Indian parties are increasingly adopting a strategic, forward-looking approach to drafting arbitration clauses, aligning with international best practices and guided by judicial pronouncements that emphasize on party autonomy.

Rather than relying on generic, one-size-fits-all clauses, parties are now increasingly turning to well-established institutions such as International Chamber of Commerce, Singapore International Arbitration Centre, Delhi International Arbitration Centre, Indian Council of Arbitration etc., for International Arbitration to reduce procedural uncertainty and ensure greater clarity and certainty in the arbitration process.

Parties are now approaching arbitration clauses with far greater care and scrutiny, particularly when it comes to selecting the seat of arbitration and governing laws. There is a clear preference for jurisdictions known for their well-established procedural frameworks and limited judicial interference. Additionally, dispute resolution provisions are increasingly being drafted with a tiered structure starting with negotiations, progressing to mediation, and commencing arbitration if earlier steps fail. This layered approach not only streamlines the resolution process but also reflects a genuine intent by the parties to resolve disputes amicably, rather than being drawn into prolonged and adversarial proceedings.

To safeguard parties’ interests and mitigate the risk of dissipation of assets during arbitral proceedings, the agreements now increasingly include provisions for emergency arbitration (where permitted) and clear ways to get interim relief. This approach lessens the need to go to domestic courts for urgent matters and reinforces party autonomy and efficiency.

Q4. How are courts currently interpreting shareholder or minority investor rights in cross-border disputes has that evolved?

Ans. India’s legal system has been steadily adapting to the changing dynamics of shareholder rights, especially with the rise in cross-border investments and the need to protect minority investors.

As more foreign capital flows into the Indian economy, shareholder disputes have become increasingly common. These often revolve around issues of control and management, corporate governance, or decision-making, and typically stem from shareholders’ agreements (‘SHAs’). These agreements usually include clauses on share transfers, board appointments, veto rights, and exit terms, which may go beyond what is found in the company’s Articles of Association.

The situation becomes complex when protections for minority shareholders come into play under the Companies Act, 2013. In cases involving oppression or mismanagement, minority shareholders are allowed to seek remedies from the NCLT, such as changes in company affairs or removal of directors. Since these matters involve statutory rights and often touch on public interest, courts generally consider them non-arbitrable.

Even so, courts are becoming more nuanced in their approach. If a dispute is purely contractual, such as a breach of terms under an SHA without any statutory implications, arbitration might still be permitted. However, when the allegations involve broader issues of oppression or mismanagement, the NCLT usually retains exclusive jurisdiction.

For foreign investors, this creates a somewhat complex legal environment. Arbitration continues to be the preferred mechanism for resolving international commercial disputes due to its neutrality and easier enforceability across jurisdictions. But in India, its use is limited when disputes involve statutory rights designed to protect shareholders.

Ultimately, Indian courts are working to strike a balance between respecting the autonomy of contracting parties and upholding the statutory protections that safeguard shareholders and public interest.

Q5. Do you see India making meaningful progress towards becoming a preferred arbitration hub? What key reforms are still needed to get there?

Ans. India has made remarkable progress in recent years to position itself as a credible, attractive international arbitration hub. This progress is evident across judicial pronouncements, legislative reforms, and policy initiatives. However, several key reforms are still needed to make India a more attractive arbitration hub.

The Indian judiciary has consistently demonstrated a commitment to minimal intervention and respect for arbitral awards. The 2015 and 2019 amendments to the Act enforced stricter timelines for arbitral proceedings and discouraged frivolous appeals. Landmark judgments like Vidya Drolia v. Durga Trading Corp. (2021)underscored that judicial interference should be minimal.  Perhaps the most important recent development, though, is the Supreme Court’s reinterpretation of Section 34 of the Arbitration Act in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025) A five-judge bench (with 4:1 majority) has held that arbitral awards can now be modified but only to a limited extent.

India now boasts a healthy mix of home-grown centres, such as the Mumbai Centre for International Arbitration, Delhi International Arbitration Centre and the India International Arbitration Centre in Delhi, which are gaining credibility and increasing their caseloads. Overseas institutions like SIAC are opening local offices, and parties are increasingly using these international institutions. The Permanent Court of Arbitration has also announced opening of an office in New Delhi, making international arbitration more accessible for businesses and individuals in India. Further, establishment of the Arbitration Bar of India symbolized a significant milestone in India’s pro-arbitration journey.

The proposed Arbitration and Conciliation (Amendment) Bill, 2024, aims to further promote institutional arbitration, reduce judicial intervention, and ensure timely conclusion of proceedings. Key proposals include statutory recognition of emergency arbitration and enforcement of emergency arbitrator orders and a much-needed clarification on the distinction between “seat” and “venue” to reduce ambiguity.

Despite these advancements, a few reforms would truly accelerate India’s progress and solidify its position as a preferred international arbitration hub. First, deadlines for challenging and enforcing awards should be rigid and non-extendable. Second, arbitral institutions should operate under a uniform, internationally aligned procedure pertaining to emergency arbitration, confidentiality and fees. Third, the arbitrator pool must expand beyond retired judges; the pool should include experts in engineering, finance, technology, maritime law and other fields to ensure subject-matter expertise. Finally, a clear statutory checklist for drafting arbitration clauses, coupled with penalties for boilerplate or ambiguous wording, should be introduced.

Q6. What are some sectors or dispute types where cross-border arbitration is rising most sharply—and why?

Ans. In recent years, we’ve seen a growth in cross-border arbitration across all sectors.

Technology and intellectual property disputes have become one of the fastest-growing areas in arbitration. As more of the global economy moves into the digital realm, companies are relying heavily on cloud services and tech-based agreements. This shift has led to a rise in arbitration cases involving things like software contracts, data protection, and tech licensing. We’re also seeing a surge in disputes related to cryptocurrency.

The energy sector remains a major source of arbitration, covering both traditional oil and gas projects and the growing alternative renewables space like solar and wind. The increase is largely fuelled by regulatory changes, climate-related reforms, and geopolitical upheavals. According to data from ICSID, the energy sector continued to dominate in 2024, with 28 per cent of new cases related to oil, gas, and mining, and another 17 per cent involving electric power and other energy sources. We’re also seeing steady growth in construction and infrastructure disputes, especially around large-scale projects in developing countries. These cases often involve issues like project delays, cost overruns, and scope changes.

We’re also seeing consistent growth in construction and infrastructure-related disputes, particularly with large-scale projects in developing regions. These often revolve around common challenges like delays, budget overruns, and changes to project scope.

Q7. Trilegal recently advised ICICI Securities in its Supreme Court-backed delisting. What were some of the legal complexities or strategic learnings from that case, especially from a disputes and enforcement perspective?

Ans. In a first-of-its-kind case, Trilegal successfully represented ICICI Bank Limited and ICICI Securities Limited in a scheme of arrangement under Regulation 37 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (‘Delisting Regulations’) between a holding company and its subsidiary (‘Scheme’). This matter set a precedent for schemes of arrangement under Securities and Exchange Board of India’s (‘SEBI’) novel delisting framework under Regulation 37, marking a milestone in Indian securities law.

The outreach program undertaken during the delisting process particularly involved liaising with shareholders, SEBI and other market regulators. The essence of the outreach program required us to explain the voting and the consequences of the Scheme to the shareholders. The complexities arose from intervention by SEBI, as the custodian of investor protection, opposing such an outreach program, particularly considering the lack of precedent. However, drawing from foreign jurisdictions and corporate practices, we justified the outreach program to SEBI basis corporate shareholder democracy which stood the test before the National Company Law Tribunal, National Company Law Appellate Tribunal and the Supreme Court.    

Further, the litigation concerning the Scheme noted legal questions on the interplay between various SEBI regulations and the Companies Act, 2013, particularly regarding determination of classes of shareholders, SEBI’s mandate to protect minority shareholder interests, the fairness of valuation mechanisms under schemes and eligibility of minority shareholders to object to a scheme of arrangement under the Companies Act, 2013.