India’s arbitration framework is marked by a structural contradiction in which it is both widely used because courts are slow, but it still depends on those same courts to enforce decisions, which creates delays, Senior Advocate Zal Andhyarujina said on Monday.

Andhyarujina was speaking at a panel hosted by the Mumbai Centre for International Arbitration (MCIA) in collaboration with Fountain Court Chambers during London International Disputes Week 2026, in London.

Speaking at a panel titled “Arbitration for Whom? Users, Reality and the Limits of the System”, Andhyarujina described what he termed the “arbitration paradox”.

“Arbitration in India suffers from a paradoxical situation... referred to as the arbitration paradox,” he said.

Explaining this further, he said arbitration has emerged as the only viable route for commercial dispute resolution in India, due to systemic delays in courts. However, he observed this remains dependent on the same system at the enforcement stage.

“The arbitration paradox... is simply this that, whereas it is the slow down in the commercial courts which have promoted arbitration and which result in arbitration being the only real alternative, the limit is also paradoxically placed by the court system namely the execution process. Unfortunately to actually get the practical benefits of the award you have to dip once again into our court process and you have to go through the execution process,” explained Andhyarujina.

Pointing to persistent delays in court-based dispute resolution as the backdrop against which arbitration has grown, he said,

“Commercial dispute resolution through the courts in India stands considerably frustrated. The delays are very long and the result is too far coming to actually have any practical impact.”

At the same time, he flagged structural issues within arbitration itself, including the lack of a specialised arbitration bar and the continued influence of judicial styles in arbitral awards.

“We don't have a fully professionalized exclusive arbitration bar and arbitration from the arbitrator's side is being run largely by judges, the awards are in a judgment style,” noted Andhyarujina.

“They need to develop a more commercial style of delivering the arbitral award. They must remember that arbitration is different from a judgment," he added.

Also speaking on the panel, Dentons Link Legal Partner Abhishek Sharma identified what he described as the core challenges facing arbitration in India.

“The three biggest challenges are, particularly from an Indian (arbitration) context are cost, time, and access to arbitration,” said Sharma.

On costs, he said arbitration had become increasingly expensive, particularly in cross-border disputes.

“Cost... is the the elephant in every arbitration room. And and I am sure all of you who have experienced an arbitration will echo my feeling. A mid-size cross-border dispute is anything between 10 and 30 million dollars now, routinely generates costs which could vary between 20 and 25% of the total claim value, which to my mind is is substantial,” stressed Sharma.

He added that domestic arbitrations also impose significant financial burdens, saying,

“Even when you look at domestic disputes, unfortunately the the reality there is not quite rosy either... A party pursuing a claim between say 20 and 30 crore rupees will often spend between 3 and 5 crore in legal costs, which again is a substantial amount.”

According to Sharma, this has altered how parties approach arbitration.

“The effective cost of pursuing or defending an arbitration proceeding becomes a commercial decision in itself, divorced from the merits of your case,” he said.

He also questioned whether arbitration continues to offer a time advantage over litigation.

“Arbitration was supposed to be faster than litigation. In many jurisdictions that is simply not true anymore.”

Beyond cost and delay, Sharma highlighted access concerns, noting that arbitration tends to favour well-resourced parties. Summing up, he cautioned that the system risks losing credibility if these issues persist.

“The greatest competition to arbitration or greatest risk to arbitration is not mediation, is not litigation, is perhaps a growing sense that the system is designed to suit certain people and it doesn't work for others,” Sharma said.

Taking a different perspective, Trilegal Partner Sushmita Gandhi focused on how arbitration is conducted in practice, particularly the role of lawyers and procedural behaviour.

She argued that arbitration has increasingly become process-heavy, with lawyers and parties contributing to delays through excessive filings and challenges at multiple stages. Gandhi emphasised that arbitration must remain centred on the disputing parties rather than those conducting the process.

The panel was moderated by Lord Peter Goldsmith, who also shared an anecdote illustrating how perceptions of arbitration have shaped judicial approaches over time.

Recalling a past conversation with former Attorney General KK Venugopal, Goldsmith said he had asked why Venugopal had sought a more interventionist role for courts in an arbitration matter they were working on together.

"I asked him why? Why had you gone that way? And he said... because at the time he believed that arbitration was too slow. And that the way therefore to make it better was to get the court involved at an earlier stage," shared Goldsmith.

Reflecting on that approach, Goldsmith noted that it had since been reconsidered as courts rolled back from such intervention.

“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 that he had taken,” recalled Goldsmith.