Delhi and Mumbai are two very different experiments in how to build an arbitration hub in India - one driven by judges and specialist senior counsel, the other overshadowed by a steep stamp duty on arbitral awards. 

In Delhi, that shift is showing up in the composition of the Bench. On February 12 last year, the Union government appointed Tejas Karia, partner and head of arbitration at Shardul Amarchand Mangaldas, as a judge of the Delhi High Court. 

The Supreme Court Collegium described him as a specialist in arbitration law and noted that the Court’s busy arbitration docket needs judges with that kind of focused experience.

In Delhi’s legal ecosystem, lawyers are increasingly encouraged to develop robust arbitration practices.

Several senior advocates designated by the Delhi High Court maintain a strong focus on arbitration and frequently appear in arbitral proceedings, both as counsel and as arbitrators.

For many lawyers, the message is clear: arbitration-heavy careers are no longer seen as second best when it comes to Senior designation or even judgeship.

Meanwhile, Mumbai, the commercial hub of the country, is under scrutiny for the cost of enforcement of arbitral awards.

Through the Maharashtra Stamp (Amendment) Act, 2024, the State has moved from a flat ₹500 rupee duty on arbitral awards to a steep ad valorem regime under a rewritten Article 12 of Schedule I to the Maharashtra Stamp Act, 1958. 

The amendment, which took effect on October 14, 2024, now charges 0.75 per cent on monetary awards up to ₹50 lakh; ₹37,500 plus 0.5 per cent for awards between ₹50 lakh and ₹5 crore; and ₹2,62,500 plus 0.25 per cent for awards above ₹5 crore, with no clear upper cap. 

Awards relating to immovable property are treated like conveyances, subjecting them to much higher rates.

The numbers sharpen that concern. Bombay High Court Advocate Vyapak Desai gives an example.

For an award of ₹1,00,00,000, stamp duty in Delhi is ₹10,000, while in Maharashtra, under the new slabs, it would be ₹87,500. 

He says this leaves Maharashtra among the highest duty states, in contrast to jurisdictions like Delhi, Tamil Nadu and Gujarat, which either impose nominal duties or cap them. 

For foreign parties already hesitant to accept an Indian seat, these figures now sit alongside questions about court efficiency.

“It’s an exorbitant increase in the stamp duty payable on an award made or sought to be enforced in Maharashtra, placing Maharashtra as one of the states with the highest rate of stamp duty,” says Shaneen Parikh, partner and international arbitration head at Cyril Amarchand Mangaldas. 

For clients who have already paid duty on the underlying agreements, the award duty looks like double taxation, Parikh opines. She notes that when international clients are forced to choose an Indian seat, they usually gravitate to Mumbai or Delhi, but they are now reconsidering the former due to the stamp duty regime.

“Serious conversations are now being had over whether it is worth arbitrating in Mumbai, or it would be better to choose Delhi, with a lower stamp duty regime and efficient courts. The irony is bitter; Maharashtra may end up shooting itself in the foot for short-term revenue gain,” she says.

Lawyers representing the State of Maharashtra pointed out that the logic behind the move did not emerge in a vacuum: court fees in Delhi are already on an ad valorem basis, unlike in Mumbai, they said. 

The Maharashtra Court Fees Act uses a progressive slab where fees increase in fixed jumps for every ₹10,000 or part thereof, often capping around ₹3,00,000 even for very high-value suits. 

Delhi, by contrast, under the Court Fees Act, 1870, relies on a pure percentage-based ad valorem system, with fees calculated as a percentage of the claim (for instance, 5% on the first ₹10,000, 4% on the next ₹10,000, and so on) without any upper cap. 

For Maharashtra, bringing ad valorem logic into stamp duty on arbitral awards was, in part, an attempt to align award enforcement with how revenue is already collected on civil claims elsewhere, particularly in Delhi. 

Even so, lawyers within government circles accept that tying award enforceability to such a regime will inevitably influence how arbitration clauses are drafted and seats are selected going forward.

The amendment applies to every award made after October 14, 2024, including awards in arbitration that were already pending when it came into force. 

A significant pipeline of Mumbai-seated cases reaching the award and enforcement stage would encounter the higher duty regime in real, high-value matters for the first time. At the same time, dispute resolution clauses in fresh contracts are being negotiated around this risk. As Parikh puts it,

“The cost of stamping an award may well be a factor to be taken into account while choosing, or not choosing, the seat of arbitration.”

Raj Panchmatia, partner at Khaitan and Co, predicted,

“This will show up first in contract drafting, long before we see it in reported cases.” 

Other practitioners echo this view. 

While Delhi is investing in arbitration specialist judges and seniors and in treating arbitration as a standalone field, Mumbai’s decisions are already shaping the standard arbitration clauses that parties write into their contracts.

For now, lawyers do not expect Mumbai to empty out as an arbitration centre. As the financial capital with deep-rooted law firms and a strong pool of arbitrators, the city is still seen as a natural venue for mid-value disputes. 

But for the highest-value, most complex commercial arbitration, senior practitioners predict that behaviour will change.

“If the amendment continues in its present form, I expect a clear flight to efficiency for higher value disputes,” says Panchmatia.

He says infrastructure and property-related disputes are especially vulnerable, because shifting from a token duty to an open-ended, value-based duty can make enforcement costs hard to justify for businesses. 

Panchmatia said that in contract clauses, parties are already careful to distinguish between the seat and venue of arbitration. 

“Mumbai risks becoming the venue of choice rather than the seat of choice for certain segments. I expect more clauses that keep Mumbai as the hearing venue for convenience, but select a different seat to avoid unintended cost exposure at the award or enforcement stage, particularly for high-value monetary claims and disputes that relate to immovable property. You will also see more careful thought around where enforcement is realistically going to happen, and whether the counterparty’s assets are in Maharashtra,” he said.

Beneath the rate debate is a deeper worry about how the system functions. Practitioners argue that tying enforcement to a high and, sometimes, unclear fiscal threshold undermines arbitration’s core appeal - speed, predictability and finality. 

Desai points to several grey areas. In declaratory or complex awards, it may be hard to pin down the amount awarded, making duty calculations contentious. 

There are also open questions on when duty must be paid, who has to pay it first and what happens if an award is varied or set aside. 

“If a procedural fiscal requirement can stall or derail enforcement, it strikes at the very essence of arbitration as an effective dispute resolution mechanism,” Desai said. 

From the Bar’s perspective, the course correction required in Maharashtra is straightforward, even if politically difficult. 

“If Maharashtra hopes to continue to have Mumbai as a favoured seat of arbitration, it should make it easier and more cost-effective for parties to arbitrate or to enforce their awards within the State. An additional and exorbitant levy militates against a pro-arbitration and facilitative seat,” Parikh says.

At the same time, lawyers emphasise that stamp duty is only one part of the picture. A genuinely arbitration-friendly jurisdiction depends on consistent and timely court support - tighter pleadings, realistic timetables, fewer adjournments and real cost consequences for delay, as Panchmatia puts it. 

Desai’s test is simple. According to him,

“An arbitration-friendly jurisdiction is ultimately judged not by how awards are written, but by how quickly money changes hands.” 

One possible answer, he suggests, is to borrow from insolvency practice by creating court-appointed panels of private execution professionals who specialise in asset tracing, attachment and realisation under judicial supervision. 

That could ease the burden on execution courts and help ensure that, be it Delhi or Mumbai, the real promise of arbitration, which is turning paper awards into actual payments, does not get lost in translation.