India’s arbitration landscape is confronting a significant structural challenge, characterized by a reliance on courts that paradoxically both drive and limit the effectiveness of arbitration, according to Senior Advocate Zal Andhyarujina. Speaking at a panel discussion organized by the Mumbai Centre for International Arbitration (MCIA) in collaboration with Fountain Court Chambers during the London International Disputes Week 2026, Andhyarujina elaborated on what he termed the ‘arbitration paradox’.
During the panel titled “Arbitration for Whom? Users, Reality and the Limits of the System”, Andhyarujina explained that while arbitration has become a preferred method for resolving commercial disputes in India due to court delays, it remains dependent on the court system for enforcement, which can result in further delays. “The arbitration paradox is simply this: slowdowns in commercial courts have promoted arbitration as the only real alternative, yet the execution of arbitration awards requires re-engagement with the court process,” he remarked.
The backdrop of persistent delays in court-based dispute resolution has catalyzed the rise of arbitration, Andhyarujina noted, but this development is not without its own issues. “Commercial dispute resolution through the courts in India stands considerably frustrated. The delays are very long, and the result is too far coming to have any practical impact,” he stated.
He further identified structural issues within the arbitration framework, highlighting the absence of a specialized arbitration bar and the tendency for arbitral awards to mirror judicial styles. “We don’t have a fully professionalized exclusive arbitration bar, and arbitration from the arbitrator’s side is being run largely by judges, with awards rendered in a judgment style,” Andhyarujina observed. He suggested that arbitrators should develop a more commercial style of delivering awards, emphasizing the distinct nature of arbitration compared to judicial rulings.
Abhishek Sharma, a Partner at Dentons Link Legal, also participated in the panel, pinpointing the primary challenges facing arbitration in India as cost, time, and access. “The three biggest challenges, particularly from an Indian arbitration context, are cost, time, and access,” Sharma said. He highlighted that arbitration, especially in cross-border disputes, has become prohibitively expensive. “A mid-size cross-border dispute often generates costs ranging from 20 to 25% of the total claim value, which is substantial,” Sharma stressed.
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Sharma further noted that even domestic arbitrations impose significant financial burdens on parties, with costs for claims between 20 and 30 crore rupees often reaching 3 to 5 crore in legal expenses. This financial reality, he argued, has influenced how parties engage with arbitration, turning it into a commercial decision rather than one based on case merits. “The effective cost of pursuing or defending an arbitration proceeding becomes a commercial decision in itself,” he remarked.
He also questioned whether arbitration continues to offer a time advantage over litigation, stating, “Arbitration was supposed to be faster than litigation. In many jurisdictions, that is simply not true anymore.” Sharma warned that if these issues persist, the system risks losing credibility, as it may appear to favor well-resourced parties.
Trilegal Partner Sushmita Gandhi contributed to the discussion by focusing on the procedural aspects of arbitration. She argued that the process has become excessively cumbersome, with excessive filings and procedural challenges causing delays. Gandhi emphasized that the focus should remain on the disputing parties rather than the procedural intricacies.
The panel, moderated by Lord Peter Goldsmith, included a reflection on past judicial approaches to arbitration. Goldsmith shared an anecdote involving former Attorney General KK Venugopal, who had initially sought a more interventionist role for courts in arbitration matters to address perceived delays. Goldsmith noted, “I don’t think he was promoting that as something that succeeded, and obviously the Supreme Court has rolled back on a lot of that, but I was very interested that that was the approach he had taken.”
