Written by the Delhi Legal Company India Entry & FDI Advisory team · Last updated August 2026 · Reviewed against the Arbitration and Conciliation Act, 1996 and current authority
Introduction
Choosing London or Singapore as the seat feels like the safe, sophisticated choice. If your counterparty’s assets are all in India, it may be the wrong one.
That is the strategic point at the centre of this subject, and it is routinely treated as a question of prestige rather than of asset location. A foreign seat gives you a clean award that Indian courts cannot annul. An Indian seat gives you something different and often more useful: interim measures granted by India-seated tribunals are automatically enforceable in India under Section 17(2) of the Act.
If the dispute you actually fear is your Indian distributor dissipating assets or your Indian licensee continuing to use your brand, an order you can enforce next week matters more than an award you can enforce in two years.
There is a second problem, and it is a drafting one. Most arbitration clauses in cross-border contracts specify one governing law. Three are in play — the law of the contract, the law of the arbitration agreement, and the law of the seat — and the one nobody specifies is the one that decides whether the clause works at all.
And a third, which is the most avoidable: parties to foreign-seated arbitrations can obtain interim relief from Indian courts, unless there is an agreement excluding such remedy. Clauses that exclude it by accident are common.
This guide covers the seat decision, the three laws, how Section 9 gets lost, and the elements a clause needs to survive an Indian counterparty.
About this guide
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. The arbitration clause is the most consequential provision in any India contract and usually the least considered — agreed in the last hour of a negotiation from a template nobody has revisited.
Where a rule is settled we state it. Where the law is developing — and on emergency arbitration for foreign seats it is — we say so.
Primary sources: the Arbitration and Conciliation Act, 1996, and Supreme Court and High Court authority including BALCO, BGS SGS Soma, PASL Wind Solutions, Perkins Eastman and Amazon v. Future Retail.
1. Seat and venue are not the same word
The seat is the legal home of the arbitration: it fixes the procedural law and the supervisory court, for interim relief, appointment and set-aside. The venue is only the physical place where hearings are held. They can differ.
Indian courts treat the seat as effectively an exclusive jurisdiction clause, following BALCO and BGS SGS Soma, so name the seat expressly and do not use “venue” loosely.
1.1 Why the loose usage causes litigation
A clause saying “arbitration shall be held in Singapore” is ambiguous. Does it fix Singapore as the seat, with Singapore courts supervising and Singapore law governing the procedure? Or does it merely say the hearings happen there while the seat is somewhere else?
Indian courts have decided this question repeatedly, which tells you how often it is drafted badly. The fix costs nothing: use the word “seat” and name a city.
1.2 What the seat actually determines
| The seat fixes | Consequence |
|---|---|
| The procedural law of the arbitration | How the arbitration is conducted, beyond the institutional rules |
| The supervisory court | Which court appoints arbitrators, hears challenges and grants relief in support |
| Where the award can be set aside | An award made in a foreign country can only be set aside by the courts of that foreign seat |
| Whether Part I of the Indian Act applies | An Indian seat triggers the supervisory jurisdiction of Indian courts, including Section 9 interim measures and Section 34 set-aside |
2. Three laws, not one
This is the drafting gap in most cross-border contracts.
| Law | Governs | Usually specified? |
|---|---|---|
| Law of the contract | The substantive rights and obligations | Yes |
| Law of the arbitration agreement | Validity, scope and interpretation of the clause itself | Rarely |
| Law of the seat | The procedure and the supervisory court | Implied by naming the seat |
Specify the governing law separately for the contract and the arbitration agreement.
2.1 Why the middle one matters
The arbitration agreement is separable from the contract it sits in. When a party argues the contract is void, the arbitration clause survives — and the law governing that clause decides whether it is valid, what disputes it covers and who it binds.
Where it is unspecified, that becomes a preliminary fight before anyone reaches the merits. On a contract governed by English law with a Singapore seat and an Indian counterparty, three candidates are available and the answer is not obvious.
Specify it. One sentence removes a category of dispute.
3. The seat decision: where are the assets?
This is the analysis that should drive the choice, and it usually does not.
3.1 What a foreign seat gives you
A foreign seat, such as Singapore or London, limits Indian court involvement to enforcement proceedings under Part II of the Act.
By virtue of the territorial principle affirmed in BALCO and embodied in Section 34, an arbitral award made in a foreign country can only be set aside by the courts of that foreign seat. Indian courts cannot entertain substantive challenges to awards rendered in a foreign-seated arbitration.
That is a real advantage. Your award cannot be attacked on the merits in India; the Indian counterparty’s only route is to resist enforcement on the narrow Part II grounds.
3.2 What an Indian seat gives you
Interim measures granted by India-seated tribunals are automatically enforceable in India under Section 17(2) of the Act.
An Indian seat triggers the supervisory jurisdiction of Indian courts under the Act, including the power to grant interim measures under Section 9 and the power to set aside awards under Section 34.
The trade is visible: you accept Indian set-aside jurisdiction, and in exchange your tribunal’s interim orders are directly enforceable against assets in India without a separate court process.
3.3 How to decide
| Choose a foreign seat where | Consider an Indian seat where |
|---|---|
| The counterparty has assets outside India you can reach | All the assets are in India |
| The dispute you fear is a damages claim | The dispute you fear needs urgent injunctive relief |
| Neutrality is commercially important to both sides | Speed of enforcement matters more than neutrality |
| You have the budget for a foreign-seated arbitration | Cost is a live constraint |
| You want to avoid Section 34 challenges entirely | You want Section 17(2) automatic enforceability |
The honest answer for many foreign companies contracting with Indian suppliers, distributors or licensees is that a well-run Indian institutional arbitration is the better instrument — because the enemy is delay in getting an enforceable order, not the risk of an unfair Indian tribunal.
4. Section 9: available for foreign seats, and easy to lose
This is the most avoidable drafting error in the whole area.
4.1 The position
In 2012 the Supreme Court in BALCO held that interim relief applications could not be filed before Indian courts in support of foreign-seated arbitrations. It was only when the Act was amended in 2015 that the position was settled: parties to foreign-seated arbitrations can also obtain interim relief from Indian courts, unless there is an agreement excluding such remedy.
Choosing a foreign seat allows global vendors to apply non-Indian procedural laws, though Indian courts can still grant interim relief unless specifically excluded.
4.2 The words that matter
Unless there is an agreement excluding such remedy.
Clauses routinely contain language like “the parties irrevocably agree that all disputes shall be finally resolved by arbitration and waive any right to approach any court”. That is drafted to sound strong. It can be read as excluding Section 9.
For a foreign party whose counterparty’s assets are all in India, Section 9 is the whole remedy. Excluding it by accident, in pursuit of a robust-sounding clause, is a serious own goal.
4.3 The fix
Include an interim-relief carve-out preserving the right to approach courts.
Say expressly that nothing in the clause prevents either party from applying to any court of competent jurisdiction, including the courts of India, for interim or conservatory relief in support of the arbitration.
It is one sentence and it preserves the remedy you are most likely to need.
4.4 It works even between two Indian parties
The Supreme Court in PASL Wind Solutions v. GE Power observed that two Indian parties choosing a foreign seat constitutes an international commercial arbitration for the purpose of enforcement, and affirmed that interim relief under Section 9 would be available to them in India. Even purely domestic parties are not left remediless when arbitrating abroad, so long as they have not expressly opted out.
Relevant where a foreign group’s Indian subsidiary contracts with another Indian company and the group wants a foreign seat.
4.5 Section 9 survives the enforcement petition
The Bombay High Court confirmed in March 2026 that Section 9 relief remains available to a foreign award-creditor even after an enforcement petition is filed.
Useful to know at the enforcement stage: obtaining the award does not close off protective relief while enforcement runs.
5. Emergency arbitration
A developing area, and the position differs by seat.
While the Act does not explicitly define “emergency arbitrator”, the Supreme Court has held in Amazon v. Future Retail that emergency awards issued under institutional rules are enforceable in India for domestic seats. For foreign seats, they are often enforced via a Section 9 interim relief application.
Where the seat is abroad, the enforceability of emergency measures in India remains an evolving area of law.
5.1 The practical consequence
Another point in favour of an Indian seat where urgent relief is the real concern: emergency relief under institutional rules is enforceable directly, rather than requiring a separate Section 9 application that re-argues the merits of the relief.
Where the seat is foreign, treat Section 9 as the primary route to urgent relief in India and make sure the clause preserves it.
5.2 The rules have to provide for it
Emergency arbitration exists because institutional rules create it. An ad hoc clause with no institutional rules has no emergency arbitrator, and the only urgent route is a court.
Reference the institutional rules that activate emergency arbitration.
6. Institutional or ad hoc
Institutional arbitration, for example SIAC or MCIA, is highly recommended over ad hoc arbitration to ensure predictable timelines and professional administration.
Ad hoc arbitration can be just as slow as the court system. Only institutional arbitration with strictly enforced timelines offers a genuine speed advantage.
6.1 Why ad hoc fails in practice
Ad hoc arbitration depends on the parties cooperating on procedure. In a dispute, one party usually has an interest in delay — and ad hoc gives them the tools: disputes about appointment, about timetable, about the tribunal’s constitution, each of which can become a court application.
Institutional rules remove those levers. The institution appoints when a party will not, sets the timetable, and administers the process.
6.2 Choosing the institution
| Institution | Typical fit |
|---|---|
| MCIA | Indian-seated arbitration with modern institutional administration |
| SIAC | Singapore seat; widely used for India-related disputes |
| ICC | High-value, complex, multi-party; scrutiny of awards |
| LCIA | London seat; common where the contract is English law |
Whichever is chosen, name it precisely and reference its rules. “Arbitration under the rules of a recognised international institution” is not a clause; it is the beginning of an argument.
7. The appointment mechanism
The single most common defect in Indian contracts, and it invalidates clauses that have been used for years.
The Perkins appointment rule forms part of the India enforceability stack.
The principle established in Perkins Eastman is that a person with an interest in the outcome of the dispute cannot unilaterally appoint the sole arbitrator. A clause giving one party — typically the stronger commercial party — the right to nominate the sole arbitrator is liable to be struck down.
7.1 Which clauses this kills
Standard Indian commercial templates frequently provide that disputes shall be referred to a sole arbitrator appointed by one named party, or by an officer of one party.
Those clauses are a problem, and a foreign company signing an Indian counterparty’s standard form may be inheriting one.
7.2 What works instead
- Appointment by the institution under its rules — the cleanest solution
- A three-member tribunal with one nominee each and a chair chosen by the two nominees or the institution
- Appointment by an agreed neutral third party
The institutional route removes the question entirely, which is another reason to prefer it.
8. The reciprocating territory trap
This one catches foreign parties who assume the New York Convention does all the work.
India is a signatory to the New York Convention, making foreign arbitral awards enforceable in Indian courts provided they are from a “reciprocating territory”.
8.1 What that means
India enforces foreign awards under Part II where the award is made in a territory the Central Government has notified as one to which the Convention applies. It is a notified list, not automatic Convention membership.
An award from a seat that is not on the notified list falls outside the Part II enforcement machinery, whatever the Convention says.
8.2 The check
Before agreeing a foreign seat in a contract with an Indian counterparty, confirm the seat country is a notified reciprocating territory.
The major seats used for India-related work — Singapore, the United Kingdom, Hong Kong, the United States, France — are well established. A less common seat proposed by a counterparty deserves the check before signature rather than after the award.
9. Stamping
Stamping forms part of the India enforceability stack.
The stamping of the underlying contract has been extensively litigated in India, and an inadequately stamped instrument can generate a preliminary objection that delays the arbitration before it starts.
The practical response is simple and it belongs with the contract rather than the clause: ensure the agreement is stamped at the correct value under the applicable state legislation, at or before execution. See commercial lease agreements in India for the wider stamping position.
10. What the clause has to contain
A workable clause carries: the agreement to arbitrate and the scope of disputes, the seat and separately the venue, the governing law, the number of arbitrators and the appointment mechanism, the choice of institutional or ad hoc arbitration with the applicable rules, and the supporting terms — language, finality, interim relief, costs, confidentiality, severability and survival.
| Element | What to say |
|---|---|
| Agreement to arbitrate | Mandatory language — “shall”, not “may” |
| Scope | Broad — disputes arising out of or in connection with the contract, including its existence, validity and termination |
| Seat | Named city, using the word “seat” |
| Venue | Separately, if hearings will be elsewhere |
| Law of the contract | Specified |
| Law of the arbitration agreement | Specified separately |
| Institution and rules | Named precisely |
| Number of arbitrators | One or three, decided by value and complexity |
| Appointment | Institutional, or a mechanism that survives Perkins |
| Interim relief carve-out | Express preservation of the right to approach courts, including in India |
| Language | Usually English |
| Confidentiality, costs, finality, severability, survival | Standard supporting terms |
10.1 The scope wording
“Arising out of” alone has been read narrowly in some jurisdictions. “Arising out of or in connection with, including any question regarding its existence, validity or termination” covers the ground and is standard.
A narrow scope produces the worst outcome available: parallel proceedings, some in arbitration and some in court.
11. Two situations, worked through
Scenario A — The clean award nobody could use quickly
A European licensor’s distribution agreement with an Indian distributor provides for arbitration seated in London under LCIA rules, with a clause stating that the parties waive any right to approach any court.
The dispute. The distributor continues using the brand after termination and is moving inventory. The licensor needs an injunction in India, urgently.
The problem. The waiver language is arguable as an exclusion of Section 9. The licensor faces a preliminary fight about whether it can approach an Indian court at all — on the very application that was time-critical.
What would have worked. An express interim-relief carve-out. And, on these facts, a serious look at an Indian seat, since the assets, the inventory and the infringing conduct were all in India.
Scenario B — The counterparty’s standard form
A foreign group signs an Indian supplier’s standard terms. The arbitration clause refers disputes to a sole arbitrator appointed by the supplier’s managing director, seated in a city named only as the “venue”, with no institution named.
Three defects. The unilateral appointment is liable to be struck down under Perkins. “Venue” without “seat” creates ambiguity about the supervisory court. And an ad hoc arbitration with no rules means every procedural step is contestable.
The consequence. A dispute about the clause before any dispute about the contract.
The lesson. The arbitration clause in a counterparty’s standard form is worth the fifteen minutes it takes to read, and it is one of the few provisions most Indian counterparties will amend without much resistance.
12. Twelve mistakes
- Using “venue” where you mean “seat”. Indian courts treat the seat as effectively an exclusive jurisdiction clause.
- Choosing the seat on prestige rather than asset location.
- Specifying one governing law when three are in play, and omitting the one that governs the arbitration agreement.
- Excluding Section 9 by accident with robust-sounding waiver language.
- Assuming a foreign seat means Indian courts are irrelevant. They are where enforcement happens.
- Choosing ad hoc for cost reasons, when ad hoc can be as slow as court and gives a delaying party the tools.
- Naming no institution, or naming one imprecisely.
- Accepting a unilateral appointment clause, which Perkins makes vulnerable.
- Not checking that the seat country is a notified reciprocating territory.
- Drafting a narrow scope, producing parallel court and arbitral proceedings.
- Ignoring stamping, which generates a preliminary objection before the merits.
- Signing the counterparty’s standard clause unread, when it is among the easiest provisions to amend.
13. Checklist
Before choosing the seat
- Where are the counterparty’s assets? If entirely in India, weigh an Indian seat seriously
- What dispute do you actually fear — damages, or urgent injunctive relief?
- If a foreign seat: confirmed as a notified reciprocating territory
- Budget for a foreign-seated arbitration assessed against the contract value
The clause
- Mandatory language — “shall be referred to and finally resolved by arbitration”
- Broad scope, including existence, validity and termination
- Seat named as a city, using the word “seat”
- Venue stated separately if different
- Law of the contract specified
- Law of the arbitration agreement specified separately
- Institution named precisely, with its rules referenced
- Number of arbitrators fixed
- Appointment mechanism that survives Perkins — institutional appointment preferred
- Express interim-relief carve-out preserving recourse to courts, including Indian courts
- Institutional rules referenced that activate emergency arbitration
- Language, confidentiality, costs, finality, severability and survival
Around the clause
- Contract stamped at the correct value under the applicable state legislation, at or before execution
- Counterparty’s standard-form clause read and amended where it contains a unilateral appointment or loose seat wording
- Clause reviewed against the group’s other India contracts for consistency
Signing an India contract this quarter?
The arbitration clause is the provision most likely to decide whether you can do anything when the deal goes wrong, and it is usually the last one anyone reads. Send us the draft and tell us where your counterparty’s assets sit and we will tell you whether the seat is right, whether Section 9 has been preserved, and whether the appointment mechanism survives.
14. Frequently asked questions
Q1. What is the difference between the seat and the venue of arbitration?
The seat is the legal home of the arbitration — it fixes the procedural law and the supervisory court for interim relief, appointment and set-aside. The venue is only the physical place where hearings are held. They can differ, and Indian courts treat the seat as effectively an exclusive jurisdiction clause.
Q2. Why does using “venue” loosely cause problems?
Because a clause saying arbitration “shall be held in” a city is ambiguous about whether that city is the seat, with its courts supervising, or merely the hearing location. Indian courts have decided this question repeatedly, which tells you how often it is drafted badly. Use the word “seat” and name a city.
Q3. What does the seat determine?
The procedural law of the arbitration, the supervisory court that appoints arbitrators and grants relief in support, and where the award can be set aside. An Indian seat triggers Indian court jurisdiction including Section 9 interim measures and Section 34 set-aside; a foreign seat limits Indian involvement to enforcement under Part II.
Q4. How many governing laws should a clause specify?
Three are in play: the law of the contract, the law of the arbitration agreement, and the law of the seat. Most clauses specify only the first. The law of the arbitration agreement governs the clause’s validity, scope and interpretation, and should be specified separately.
Q5. Why does the law of the arbitration agreement matter?
Because the arbitration agreement is separable from the contract it sits in. When a party argues the contract is void, the clause survives, and the law governing that clause decides whether it is valid and what it covers. Where unspecified, that becomes a preliminary fight before anyone reaches the merits.
Q6. Should we choose a foreign seat or an Indian seat?
It should turn on asset location and the type of dispute you fear. A foreign seat gives an award Indian courts cannot annul on the merits. An Indian seat gives you tribunal interim measures that are automatically enforceable in India under Section 17(2). Where all the assets are in India and urgent relief is the concern, an Indian seat is often the better instrument.
Q7. Can Indian courts set aside a foreign-seated award?
No. By virtue of the territorial principle affirmed in BALCO and embodied in Section 34, an award made in a foreign country can only be set aside by the courts of that foreign seat. Indian courts cannot entertain substantive challenges to foreign-seated awards, only resist enforcement on the narrow Part II grounds.
Q8. Can we get interim relief from Indian courts for a foreign-seated arbitration?
Yes, since the 2015 amendment. BALCO had held in 2012 that such applications could not be filed, and the amendment settled the position that parties to foreign-seated arbitrations can obtain interim relief from Indian courts — unless there is an agreement excluding that remedy.
Q9. How is Section 9 excluded by accident?
Through robust-sounding waiver language. Clauses saying the parties “waive any right to approach any court” are drafted to sound strong and can be read as excluding Section 9. For a foreign party whose counterparty’s assets are all in India, that is the whole remedy, so excluding it inadvertently is a serious own goal.
Q10. How do we preserve Section 9?
With an express interim-relief carve-out stating that nothing in the clause prevents either party from applying to any court of competent jurisdiction, including the courts of India, for interim or conservatory relief in support of the arbitration. One sentence preserves the remedy you are most likely to need.
Q11. Does Section 9 apply where both parties are Indian but the seat is foreign?
Yes. In PASL Wind Solutions v. GE Power the Supreme Court observed that two Indian parties choosing a foreign seat constitutes an international commercial arbitration for enforcement purposes, and affirmed that Section 9 relief is available to them — so long as they have not expressly opted out.
Q12. Is Section 9 relief available after an enforcement petition is filed?
Yes. The Bombay High Court confirmed in March 2026 that Section 9 relief remains available to a foreign award-creditor even after an enforcement petition is filed, so obtaining the award does not close off protective relief while enforcement runs.
Q13. Are emergency arbitrator awards enforceable in India?
For domestic seats, yes — the Supreme Court held in Amazon v. Future Retail that emergency awards issued under institutional rules are enforceable. For foreign seats they are often enforced via a Section 9 application, and enforceability of foreign emergency measures remains an evolving area.
Q14. Do we get an emergency arbitrator in an ad hoc arbitration?
No. Emergency arbitration exists because institutional rules create it. An ad hoc clause with no institutional rules has no emergency arbitrator, so the only urgent route is a court application.
Q15. Is institutional arbitration worth the cost over ad hoc?
Generally yes. Ad hoc arbitration can be as slow as the court system, and only institutional arbitration with strictly enforced timelines offers a genuine speed advantage. Ad hoc also gives a party interested in delay the tools to create it — disputes about appointment, timetable and constitution, each of which can become a court application.
Q16. Which institution should we name?
MCIA for Indian-seated arbitration with modern administration; SIAC for a Singapore seat, widely used for India-related disputes; ICC for high-value, complex or multi-party matters; LCIA where the contract is English law with a London seat. Whichever is chosen, name it precisely and reference its rules.
Q17. What is the Perkins appointment rule?
The principle that a person with an interest in the outcome of the dispute cannot unilaterally appoint the sole arbitrator. A clause giving one party — typically the stronger commercial party — the right to nominate the sole arbitrator is liable to be struck down.
Q18. Which clauses does Perkins invalidate?
Standard Indian commercial templates that refer disputes to a sole arbitrator appointed by one named party or by an officer of that party. A foreign company signing an Indian counterparty’s standard form may be inheriting one, so it is worth reading before signature.
Q19. What appointment mechanism works instead?
Appointment by the institution under its rules is the cleanest solution. Alternatives are a three-member tribunal with one nominee each and a chair chosen by the two nominees or the institution, or appointment by an agreed neutral third party.
Q20. Is every New York Convention country a valid seat for enforcement in India?
No. India enforces foreign awards under Part II where the award is made in a territory notified by the Central Government as a reciprocating territory. It is a notified list rather than automatic Convention membership, so a less common seat proposed by a counterparty deserves the check before signature.
Q21. Does stamping affect an arbitration clause?
It affects the enforceability stack. Inadequate stamping of the underlying contract has been extensively litigated in India and can generate a preliminary objection that delays the arbitration before it starts. Ensure the agreement is stamped at the correct value under the applicable state legislation at or before execution.
Q22. How broad should the scope of the clause be?
Broad. “Arising out of” alone has been read narrowly in some jurisdictions; “arising out of or in connection with, including any question regarding its existence, validity or termination” covers the ground. A narrow scope produces the worst available outcome — parallel proceedings, some in arbitration and some in court.
Related reading
- Best business structures in India for foreign companies — the contracting entity behind the clause
- Commercial lease agreements in India — stamping and registration in practice
- Related party transactions under Section 188 — the intercompany agreements that also need a dispute clause
- Drafting and vetting of agreements — reviewing a counterparty’s standard form
Talk to us before the clause is agreed
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. Arbitration clause drafting and review, seat and institution selection, interim relief strategy, enforcement of foreign awards in India, and the contract stamping that sits behind all of it — handled together, because the clause only works if everything around it does.
How we usually start. Send us the draft contract and tell us where your counterparty’s assets sit and what dispute you would actually fear. We come back with a marked-up clause, a view on the seat, and an honest assessment of what relief you could obtain and how quickly.