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Dispute Resolution In India


Court system

What is the structure of the civil court system?

The Supreme Court of India is the apex court exercising original, appellate and advisory jurisdiction, followed by the high courts established in different states and union territories of India.

All high courts exercise appellate jurisdiction over subordinate courts established in different districts with the exception of five high courts (being the high courts at Mumbai, Delhi, Kolkata, Chennai and Himachal Pradesh) which are the first courts of instance in addition to their appellate jurisdiction.

Jurisdiction of the courts is mainly based on subject matter, territory and value of claim. Specialised courts and tribunals have been constituted under certain laws that have jurisdiction to decide matters pertaining to specific subject matters. For example, consumer forums have been established at various levels to entertain complaints under the Consumer Protection Act 1986; the National Company Law Tribunal and the Appellate Tribunal have been constituted to adjudicate on all cases arising out of the Companies Act, 2013 as well as the Insolvency and Bankruptcy Code, 2016.

Ordinarily, appeals from district courts lie before the high court in the same state and appeals from the high courts lie before the Supreme Court of India.

A Supreme Court bench usually comprises two judges in ordinary cases and larger benches are constituted for identified cases. In the high courts, the bench usually comprises a single judge or two judges. All lower court benches comprise a single judge except in the case of the Presidency Small Causes Court, where the division bench hears the appeal from a trial court’s orders.

In 1993, specialised Debt Recovery Tribunals were established for speedy disposal of the recovery cases filed by lenders against borrowers under the Recovery of Debts and the Bankruptcy Act, 1993.

In 2015, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 was enacted, under which commercial courts in district and high courts were constituted to adjudicate disputes classified as ‘commercial disputes’.

Alternately, parties to a dispute can opt for lok adalat, which is a formal alternative dispute resolution mechanism in India. It is a forum where parties to the dispute pending before a court can settle the dispute by compromise. Awards pronounced by such forum are deemed to be decrees of the court and are binding on parties.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

Judges in Indian courts play an inquisitorial role in deciding cases as they conduct civil and criminal proceedings, consider arguments, appreciate evidence, apply applicable law and pass judgments. The jury system is not in practice in India except to adjudicate matrimonial disputes in the Parsi community.

There has been a marked increase in diversity on the bench since India’s independence. The judiciary has seen improvement in terms of gender and regional diversity, the judicial system is still grappling with the problem of a shortage of judges and the low number of female judges across courts in India.

Judges of the Supreme Court of India and high courts are appointed by the President of India under articles 124(2) and 217 of the Constitution of India. The President must hold consultations with the judges of the Supreme Court of India and of the high courts as he or she may deem necessary for this purpose.

All appointments of judges to courts lower than the high court are carried out under the provisions of articles 233 to 237 of the Constitution of India. The high court of a state may recommend an individual to be appointed as a judge of a district court. Alternatively, judges of the district and subordinate courts may also be appointed from the lower judiciary.

Limitation issues

What are the time limits for bringing civil claims?

The time limits for bringing civil claims are prescribed under the Limitation Act, 1963. Parties are not at liberty to suspend time limits prescribed under this act.

Depending on the nature of relief being sought, different periods of limitation are prescribed for different kinds of civil actions. For example, the period of limitation for instituting recovery suits is three years from the date when the amount became due. Besides providing a comprehensive schedule for the different periods of limitation prescribed for various civil actions, the Limitation Act, 1963 also contains specific provisions for when a certain period can be excluded for calculating the period of limitation, such as the time spent in pursuing proceedings in the wrong court or admission of liability giving rise to a fresh period of limitation.

Additionally, specialised statutes and procedural laws provide for the period of limitation for preferring an appeal or filing applications for review, revision, etc. Ordinarily, any delay in bringing an action under these statutes is condonable on sufficient cause being shown. However, any delay under the Limitation Act, 1963 in respect of suits is not condonable.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

Prior to instituting a claim, it must be ascertained whether the claim is barred by time or any other law in force. Further, based on the territorial and pecuniary jurisdiction of the courts and cause of action, claims can be instituted before an appropriate forum.

The most common pre-action consideration found in several laws in India is issuance of statutory notices as a requirement prior to initiating proceedings. For example, under the Insolvency and Bankruptcy Code, 2016, an operational creditor must serve a demand notice to the debtor as a precondition before filing an application for insolvency.

As such, there is no mechanism in place for pre-action exchange of documents, pre-action disclosure orders, etc.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Ordinarily, civil proceedings commence on the day when claim documents are filed before a court or tribunal. An adverse party is required to be notified of the action either by service of the claim documents prior to lodging the claim or after lodging the claim but before a hearing. In certain circumstances, courts or tribunals also conduct ex parte hearings to consider applications for ad interim or interim reliefs.

Regarding the capacity to handle cases and timely listing of disputes, although various courts and tribunals have been set up to handle the ever-increasing caseload, the Indian judiciary continues to grapple with the problem of a high number of pending cases.

The government has attempted to enact several laws to ease the capacity issues being faced by courts in India, including encouraging alternate dispute resolution mechanisms, increasing the appointment of judges, the constitution of specialised tribunals and implementing fast-track mechanisms. By a recent amendment to the Commercial Courts Act, 2015, commercial disputes must necessarily be referred to mediation prior to instituting the claim.


What is the typical procedure and timetable for a civil claim?

Under the Code of Civil Procedure, 1908, the following procedure is applicable to all civil suits:

  • A suit is instituted by filing of a plaint.
  • Thereafter, summons are issued to the defendants. On receipt of summons, if a defendant desires to defend the suit, the defendant files its written statement within 30+90 days of receipt of summons. In commercial suits, delay beyond 120 days in filing a written statement cannot be condoned, unlike all other civil suits.
  • After the written statement is filed, the parties enter into discovery and inspection of documents. On completion of discovery, the court frames points for determination.
  • After framing of issues, trial in the suit commences where, inter alia, evidence, by way of documents and witnesses, is presented and witnesses are cross-examined.
  • Thereafter, a final hearing of the suit is conducted before the court, which then passes a judgment.
  • A party aggrieved by the judgment of the court can challenge the same in appeal before a higher court.

In addition to the above, the Civil Procedure Code, 1908 also provides for suits where summary judgments can be delivered by the court based on documents. Additionally, in the case of commercial suits, the relevant rules provide for much shorter and rigid timelines.

At the time of institution of the suit or any time thereafter, a party can also file an interim application seeking interim protection from the court. Such interim protections can be in the form of injunctions, attachment of property, and deposit of amounts in court, etc. The adverse party is entitled to file its reply to that interim application. After the pleadings are complete, the court hears the interim application and subsequently passes an order. Interim orders passed by courts are typically appealable.

Case management

Can the parties control the procedure and the timetable?

The procedure and timetable as provided under the relevant laws cannot be changed and controlled by the parties.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

Yes, while the trial is pending the parties must preserve documentary and other evidence that they intend to rely on. A party that intends to rely upon a document is bound to produce the same, share a copy with the adverse party and make the original available for inspection.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Indian law primarily stipulates that no barrister, attorney or pleader must (without his or her client’s express consent) disclose any communications made to him or her over the course of, or for the purpose of, his or her appointment. That obligation is also applicable in respect of the contents and conditions of the document that are shared by the client. These obligations continue even after the appointment has ceased. The Bar Council of India Rules also specifically prohibit an advocate from breaching obligations of legal privilege, as contained in the Indian Evidence Act.

The only exception to this obligation is in respect of communication made in furtherance of an illegal purpose or in respect of any communication pertaining to a fact noticed after commencement of appointment that shows that any crime or fraud has been committed since the commencement of the appointment of the attorney, pleader, etc.

The necessary corollary of this obligation of an advocate can be found in section 129 of the Evidence Act, which protects a client from being compelled to disclose to court any confidential communication with his or her legal adviser, unless the client offers to act as a witness.

However, advice from in-house lawyers (whether local or foreign) or any communication exchanged is not privileged under the applicable provisions of Bar Council of India Rules.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

Yes, parties exchange written evidence from witnesses and experts prior to trial. That evidence is typically in the form of affidavits.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Evidence in the trial can be presented in both oral and documentary (including electronic) form. Witnesses and experts do give oral evidence. Documentary evidence can also be presented during cross-examination of a witness or expert.

Interim remedies

What interim remedies are available?

Interim remedies in the form of prohibitory or mandatory injunctions, attachment of property, appointment of receiver, etc, are available. Orders of interim freezing injunctions are very common in disputes relating to immovable property or intellectual property. Search and seizure orders are also passed in certain cases.

While enforcing foreign decrees, the party seeking enforcement can also seek interim remedies in the form of prohibitory or mandatory injunctions, attachment of property, appointment of receiver, furnishing of security, etc to ensure enforcement of the foreign decree. Foreign decrees of the country not having reciprocal arrangement cannot be enforced in India and the party must file a fresh suit in India against the defendant where the foreign decree will be considered in evidence while deciding the claims on merits.


What substantive remedies are available?

Substantive remedies available under Indian law in civil cases include damages or specific performance of a contract, recession of contracts, cancellation of instruments, declarations and perpetual injunctions. Although grant of punitive damages is within the power of civil courts in India, in practice they are rarely awarded.

The Indian courts have the power to award interest at a reasonable rate, varying from 8 to 18 per cent per annum.


What means of enforcement are available?

In India, a decree is enforced by execution proceedings. The modes of execution of a decree depend upon the subject matter of the decree and can range from attachment or sale of immovable property, delivery of movable property, injunctions and, in very rare cases, civil imprisonment.

In addition to this, wilful disobedience of an order of the court is punishable under the Contempt of Courts Act, 1971, for which separate proceedings must be initiated.

Public access

Are court hearings held in public? Are court documents available to the public?

Hearings in court are generally held in public except when there is cause to hold such proceedings in camera. Further, while court orders or judgments are part of the public record, pleadings, documents relied upon by the parties to a proceeding, witness statements, etc. are not made available to the public.


Does the court have power to order costs?

Yes, courts have the power to award costs and the amount is left to the discretion of the courts. Costs awarded are usually on the lower side. However, there has been a change in this trend in recent times, as courts in India have been seen to award exemplary costs, particularly in cases of repeated breach by a party.

As, generally, the courts do not award costs for defending an action, there is also no security for costs awarded.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

The Bar Council of India Rules prohibit an advocate from accepting fees on the contingency or success.

As far as third-party funding of litigation is concerned, the Bar Council of India Rules prohibit an advocate from funding his or her client’s litigation. However, there does not appear to exist any such prohibition for third-party litigation funding by a non-lawyer. This has been recognised by the Supreme Court of India in the case of Bar Council of India v AK Balaji & Ors. (Civil Appeal No. 7875-7879 of 2015, Judgment delivered on 13 March 2018).


Is insurance available to cover all or part of a party’s legal costs?

The cost of litigation may be covered wholly or in part as per the terms of the policy availed by a party.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The law of civil procedure makes provision for representative suits wherein various persons having a similar interest can institute a single suit. Class action suits can also be instituted by shareholders in respect of disputes pertaining to the management of the affairs of a company. Additionally, the Supreme Court or a high court may be moved by a class of persons seeking writ remedies against the state or instrumentality of the state.


On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

In respect of orders passed by a civil court, the civil law of procedure in India provides for specific orders that are appealable. Except those provided for specifically, all other orders of the court are not appealable. As far as a decree of a civil court is concerned, the same is appealable by way of a first appeal unless barred by a specific statute. For a second appeal to lie, a substantial question of law should be involved. Additionally, under article 136 of the Constitution of India, the Supreme Court may grant special leave to appeal against any order, decree or judgment passed by any court or tribunal in India. There are provisions for statutory appeals to the Supreme Court under certain statutes.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

The Indian Code of Civil Procedure, 1908, under section 44A read with section 13, provides for enforcement of a foreign judgment. Accordingly, only those judgments or decrees passed by a foreign court of a country having a reciprocal arrangement with India are enforceable as a decree of an India court. Execution of a foreign judgment for reciprocating territories can be refused on the grounds that such judgment:

  • has not been pronounced by a court of competent jurisdiction;
  • has not been pronounced on the merits of the case;
  • appears on the face of the proceedings to be founded on an incorrect view of international law or refusal to recognise the law of India in cases in which such law is applicable;
  • is passed in proceedings opposed to natural justice;
  • has been obtained by fraud; or
  • sustains a claim founded on breach of any law in force in India.

In the case of a foreign judgment by a court in non-reciprocating countries, there is no provision for its enforcement, and that foreign judgment can only be executed by filing a suit based on such foreign judgment.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

Order 26, Rule 19 of the Code of Civil Procedure, 1908 provides for cases when a high court of a particular state may issue commissions to examine witnesses at the instance of foreign courts. If the concerned high court is satisfied that the foreign court, situated in a foreign country, wishes to obtain the evidence of a witness in any proceeding before it, and that the proceeding is civil in nature and that the witness resides within the limits of the high court’s territorial jurisdiction, then the high court may issue a commission for examination of such witness.

The Code of Civil Procedure, 1908 further provides that a commission can be issued by a high court upon an application by a party to the proceeding before a foreign court or by an application by a law officer of the state government acting on the instructions of the state government.



Is the arbitration law based on the UNCITRAL Model Law?

Yes, the Indian arbitration law is based on the UNCITRAL Model Law.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The formal requirements of an enforceable arbitration agreement are contained in section 7 of the Arbitration and Conciliation Act, 1996, which provides that an arbitration agreement is an agreement to submit to arbitration all or certain disputes that arise under a contract. Pertinently, an arbitration agreement must be in writing, either as an arbitration clause in a contract or as a separate agreement.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

If an arbitration agreement and the relevant rules are silent on the matter, the arbitral tribunal would consist of a sole arbitrator to be appointed by mutual consent of the parties. On failure of consensus, the parties can approach the court having jurisdiction for constitution of the tribunal.

The right to challenge the appointment of an arbitrator is restricted, as it is available only in the following scenarios:

  • The appointment can only be challenged on the ground that there exists no arbitration agreement between the parties.
  • In the case of a challenge to the appointment to be made before the arbitrator so appointed, that challenge must be made within a period of 15 days from becoming aware of the appointment. The only grounds for that challenge are the existence of circumstances giving rise to justifiable doubts as to the independence and impartiality of the arbitrator, or the arbitrator not possessing the qualifications required by the parties.

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

In ad hoc arbitrations, retired judges of the Supreme Court or high courts are generally chosen as arbitrators. In some cases, particularly when the claim amount is small, practising counsel are appointed by parties. In arbitrations involving technical or complex subject matters, technical experts are often chosen to be part of the arbitral tribunal. In the case of institutional arbitrations, the tribunal comprises arbitrators from the panel of arbitrators of the respective institutions.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

Under Indian Arbitration Law, the parties are free to decide upon the procedure of arbitration, subject to the timelines prescribed thereunder. Although strict rules of evidence and civil procedure are not applicable, these principles are generally relied on when determining procedure.

Court intervention

On what grounds can the court intervene during an arbitration?

Arbitration law provides for specific situations where courts can intervene in arbitration proceedings, which include the appointment of an arbitrator; for grant of interim reliefs; summoning witnesses and production of documentary evidence; extension of the mandate of an arbitrator or the panel; appeals against the interim orders passed by arbitrators; and setting aside and enforcement of an arbitral award.

The parties to the arbitration agreement cannot contract to exclude the powers of the court.

Interim relief

Do arbitrators have powers to grant interim relief?

Yes, an arbitrator has powers akin to a civil court in India to grant interim relief in the nature of injunctions, attachment of assets, furnishing of securities and appointment of a receiver in respect of immovable properties.


When and in what form must the award be delivered?

After the amendment in 2019 to the Arbitration and Conciliation Act, 1996, an arbitral award must be passed within a period of 12 months from the date on which filing of pleadings (ie, the statement of claim and response) is completed in the case of matters other than international commercial arbitrations.

The period of 12 months is extendable by a further six months with the consent of the parties. For any further extension, an application must be made to the court.

The Indian Arbitration Law provides that an award must be in writing and signed by the members of the tribunal. Further, the award must state the reasons upon which it is based, unless otherwise agreed between the parties or the award itself is a settlement. The award must be printed on a non-judicial stamp paper of denomination of 500 rupees. The tribunal may also pass interim or partial awards.


On what grounds can an award be appealed to the court?

The grounds on which the court may set aside an arbitral award are as follows:

  • a party to the arbitration was under some incapacity;
  • the arbitration agreement was not valid under the law to which the parties have subjected it or, failing any indication thereon, the law in force;
  • the applicant party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present his or her case;
  • the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration. If, however, the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award containing decisions on matters not submitted to arbitration may be set aside;
  • the composition of the tribunal or the procedure followed was different from that agreed by the parties or, in the absence of agreement, as per Part I of the Act;
  • the subject matter of the dispute was incapable of resolution or settlement by arbitration under law for the time being in force; or
  • the award conflicts with the public policy of India.

Any party aggrieved by the decision of the court may prefer an appeal under section 37 of the Indian Arbitration Act. An order passed under section 37 is not appealable. However, the same does not restrict the right of a party to approach the Supreme Court of India by way of a special leave to appeal under article 136 of the Indian Constitution.


What procedures exist for enforcement of foreign and domestic awards?

A domestic arbitral award is enforceable in the same manner as if it were a decree of a civil court in India. Therefore, all modes of execution, including attachment, sale delivery of property, furnishing of security, etc, are available.

Subject to the conditions for enforcement prescribed under section 48 of the Indian Arbitration Act, a foreign arbitral award (only of the signatory countries to the New York Convention) is enforceable as a decree of an Indian court.


Can a successful party recover its costs?

Legal costs in full are often awarded in favour of the successful party. The court or the arbitral tribunal has the discretion to determine whether costs are payable by one party to another; the amount of those costs; and when those costs are to be paid.

As per section 31-A of the Indian Arbitration Act, a successful party can generally recover reasonable costs relating to:

  • fees and expenses of the arbitrators, courts and witnesses;
  • legal fees and expenses;
  • any administration fees of the institution supervising the arbitration; and
  • any other expense incurred in connection with the arbitral or the court proceeding or arbitral award.

As third-party funding of litigation and arbitration is not a common occurrence in India, the issue of whether third-party funding costs can be recovered as costs of arbitration remains undecided.

Alternative dispute resolution

Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

The common forms of ADR recognised in India are arbitration, conciliation and mediation.

Arbitration is one of the most commonly used ADR processes in India and the recent trend is that all commercial contracts provide for this form of ADR.

Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

There is no requirement under Indian law for parties to consider ADR before or during proceedings. Further, courts in India, as such, do not have the power to compel parties to participate in an ADR process. However, where it appears to the court that there exists a prospect of amicable settlement of disputes, the court can formulate the terms of that settlement and after receiving observations of the parties on such terms, the court may refer the same for arbitration, mediation, conciliation or judicial settlement, including settlement by lok adalat.

If a suit falls under the category of a ‘commercial suit’ and the plaintiff has not sought any interim reliefs, then the parties must mandatorily resort to mediation before instituting that suit. The pre-litigation mediation is a time-sensitive process to be completed within 90 days from commencement of the mediation process. In the event of failure of the mediation process, the parties may institute court proceedings.


Interesting features

Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

The Commercial Courts Act, 2015 and the amendment of the Indian Arbitration Act provide for strict timelines to conclude the proceedings expeditiously, including summary judgment and a fast track arbitral process respectively.

Update and trends

Recent developments

Are there any proposals for dispute resolution reform? When will any reforms take effect?

The Supreme Court has allowed summons and notices to be served on adverse parties through instant messaging applications, email and fax in the light of the global covid-19 pandemic [Suo Motu (C) No. 3/2020].

Landlord-tenant disputes have also been held to be arbitrable if the tenancy is not governed by any special law [2020 SCC OnLine SC 1018].

The Arbitration and Conciliation (Amendment) Act, 2021 came into existence on 11 March 2021 with retrospective effect from 4 November 2020 as per which, if the court is satisfied that the arbitration agreement or the underlying contract, or the making of the award, was induced or effected by fraud or corruption, then it will stay the award unconditionally.

Foreign Direct Investment in insurance was also increased to 74 per cent from 49 per cent through the Insurance (Amendment) Bill, 2021.


Dhiraj Mhetre


Sakate Khaitan

Senior Partner
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