Why Foreign Companies Lose Arbitration in India — And How to Win Every Time

1- Poorly Drafted Arbitration Clauses
The majority of cross-border contracts use generic clauses that fail under Indian scrutiny. Common problems:

• • No clear seat of arbitration
• • Confusion between seat vs venue
• • Unclear tribunal appointment method
• • Missing emergency arbitrator reference
• • No language on interim relief enforceability

A precise clause is the single biggest risk reduction tool in India-facing contracts.

2. India-Specific Delay Tactics
Indian respondents frequently exploit

• • Jurisdiction objections
• • Service disputes
• • Challenges to appointment
• • Section 16 and Section 37 filings

Foreign companies lose months simply because they are unfamiliar with these tactics. Early case management and strict timelines neutralize these delays.

3.Emergency Arbitration Is Underused
Emergency relief can:

• • Freeze assets
• • Secure bank guarantees
• • Prevent termination of critical contracts

Most foreign parties wait until the situation worsens. Early emergency action often decides the outcome of the dispute .

4. Section 9 Relief in India Is Extremely Effective
Indian courts grant rapid interim relief:

• • Asset attachment
• • Injunctions
• • Security deposits

Protective orders Using foreign-seated arbitration with Section 9 support in India offers the fastest commercial protection.

5. Section 34 Challenges Fail Due to Technical Errors
Awards are often attacked on:

• • Improper notice
• • Procedural unfairness
• • Public policy concerns
• • Stamping defects
• • Incorrect tribunal constitution

The stamping requirement alone can delay enforcement for months. Foreign companies should audit stamping and execution requirements before a dispute arises.

6. Enforcing Foreign Awards Requires a Parallel Strategy
India is a New York Convention jurisdiction, but enforcement succeeds only when parties:

• • Identify assets in advance
• • Conduct Indian asset tracing
• • Prepare for Section 48 objections
• • Use commercial courts for execution
• File simultaneous Section 9 applications

A hybrid enforcement strategy significantly improves recovery outcomes

7. International vs Indian Arbitration: Strategic Choice Matters
Best model: International seat (Singapore/London) + Indian interim relief (Section 9) This combination gives speed, neutrality, and enforceability — crucial for disputes in EPC, tech, private equity and trade.

8 - Use Parallel Proceedings When Stakes Are High
For significant claims, arbitration alone is insufficient.
Effective strategy includes:

• • Arbitration
• • Commercial court suits
• • Insolvency petitions
• • Fraud proceedings (where relevant)
• • Parallel processes increase pressure and accelerate settlement.

9 - The Foreign-Party Checklist for India-Related Arbitrations
Before dispute:

• • Fix arbitration clause
• • Clarify governing law
• • Include emergency arbitration
• • Ensure stamping compliance
• • During dispute:
• • File Section 9 early
• • Use strict timelines
• • Appoint arbitrators experienced with India
• • Track respondent conduct
• • After award:
• • Immediate enforcement filing
• • Asset tracing
• • Pre-empt objections
• • Use insolvency routes if required

Conclusion
India today offers a pro-arbitration environment, fast-track commercial courts, and strong judicial support. Foreign companies win when they combine precise drafting, early interim relief, asset-focused strategy, and India-aware legal counsel.
Well-prepared parties resolve disputes faster, incur fewer costs, and enforce awards with significantly higher success.