DIAC Arbitration: Questions and Answers

You haven't been sued in court. You're the respondent in a formal arbitration, though, and the award that comes out of it can be enforced like a court decree. The Request has been filed at the Delhi International Arbitration Centre under its 2023 Rules. Normally you've got 30 days to file your Response, object to jurisdiction if you need to and nominate arbitrators from the DIAC panel. Don't sit on it. If you stay quiet, the case can carry on without you. Note today's date as the date you got it. Our defence and counter claim guide covers the reply.

Neither. DIAC is an arbitration institution the Delhi High Court set up, running since 2009 from the High Court premises, but it doesn't decide cases itself. Arbitrators from its panel do. That panel has retired judges, senior advocates and technical experts on it. Not serving judges. The Centre's secretariat registers the case, collects fees, handles communications and checks the draft award for form. Its link with the High Court brings a degree of oversight. Your case still stays a private arbitration under the Arbitration and Conciliation Act, 1996.

Not automatically. A clause naming a place but no institution is an ad hoc clause. Your case goes to DIAC only if both sides now agree, or if the Delhi High Court appoints the arbitrator under Section 11 of the Arbitration Act and directs the arbitration to run under DIAC. It often does exactly that. Until then, you're both expected to try and agree on an arbitrator. If the other side appoints one on its own, object straight away. Unilateral appointments aren't permitted any more. Our Section 11 reference guide explains the route.

Move an application under Section 8 of the Arbitration Act asking the court to send the dispute to arbitration. Do it before you file any defence on the merits. Section 8 wants the application no later than your first statement on the substance of the dispute, along with the original arbitration agreement or a certified copy. File a full written statement first and you may be taken to have accepted the court's jurisdiction. Meanwhile, in a commercial suit, the written statement clock doesn't pause. It keeps running. If you've been served with a suit like this, send the papers to Advocate B.K. Singh's team through the contact page. Don't wait for the next date.

Begin with the signed contract that has the arbitration clause, plus every amendment or purchase order issued under it. Then pull together invoices, proof of delivery or completion, your ledger or statement of account, the emails and WhatsApp messages about the dispute, any written acknowledgment of the debt, and your notice invoking arbitration with proof it was delivered. A company also needs a board resolution or authority letter for whoever will sign. When Advocate B.K. Singh opens a DIAC file, he reads the clause and the dates side by side. The clause decides the forum. The dates decide if the claim's still in time.

Not in the way the Rs 3 lakh specified value works for commercial courts. DIAC handles claims of all sizes, and its fee scale climbs with the amount in dispute. What really matters is proportion. On a small claim, the administrative charges, arbitrators' fees and your lawyers' costs can swallow a big chunk of whatever you recover. Ask whether the other side will agree to fast track arbitration under Section 29B. And if you're a registered micro or small supplier, compare the MSME Facilitation Council. Look at DIAC's current fee schedule before you decide.

You can, if you both agree to DIAC, whether in the contract or later on. Nobody needs a Delhi connection to use the Centre. With New Delhi as the seat, the Delhi courts supervise the arbitration for interim relief and challenges. That suits a Noida business. The Chennai party should factor in the cost. Preliminary hearings at DIAC are generally by video, and the tribunal settles the mode of evidence hearings after hearing both sides, so travel can be kept down. Write the seat clearly into the clause. Otherwise you may end up fighting later over which court has jurisdiction.

It can. Once one side is a foreign company, or someone habitually resident outside India, Section 2(1)(f) of the Arbitration Act makes it an international commercial arbitration, and DIAC is free to administer it. That changes two things. Where a court has to step in and appoint the arbitrator under Section 11, the petition goes to the Supreme Court rather than the High Court. And you can't attack an award in an international commercial arbitration seated in India for patent illegality on its face. That ground isn't open. The parties are also free to pick the language and the law that'll govern the contract.

It can, if its contract provides for DIAC, if both sides agree, or if a court refers the matter there. Government and PSU contracts usually carry their own arbitration clauses, and many used to let the department pick the arbitrator. That changed with the Constitution Bench ruling in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (2024). Clauses letting one side alone choose the arbitrator are now treated as offending equality between the parties. So when a department won't agree on a neutral arbitrator, a Section 11 reference to DIAC has become a common route.

Some can't go to arbitration at all, no matter how the clause reads. The Supreme Court listed examples in Vidya Drolia v. Durga Trading Corporation (2020): disputes that bind everyone and not just the two parties, insolvency and winding up, crimes, matrimonial matters, probate, and tenancies covered by rent control statutes. Most commercial fights are fine. Money claims, supply and service contracts, partnership and shareholder quarrels, and leases under the Transfer of Property Act can all be arbitrated. So can fraud allegations between the parties, unless the fraud goes to the arbitration clause itself or there's a public side to it.

Both, doing different jobs. The arbitrator, or a three-member tribunal, controls anything touching the dispute itself: the timetable, applications, evidence, hearings and the award. The DIAC secretariat, headed by the Coordinator, runs the administration. It registers the case, assesses and collects fee deposits, sends out communications, books hearing rooms and keeps the record. Want a date moved or an application decided? Address the tribunal through the Centre. Fee queries and deposit deadlines go to the secretariat. People mix the two up, and that's a common way deadlines get missed.

The tribunal lays out the roadmap. It usually confirms the parties and who represents them, records the arbitrators' disclosures, and fixes dates for the statement of claim, defence, counter claim, rejoinder and admission or denial of documents. It decides how evidence will be taken. Fee deposits and any pending urgent applications come up too. These hearings are commonly held by video. Bring dates you can genuinely meet. Section 23(4) expects pleadings to be finished within six months of the tribunal's appointment. Our DIAC process guide shows where this fits.

It can, as long as the parties agree. Under Section 22 of the Arbitration Act the parties pick the language, and if they can't agree, the tribunal does. Hindi's a sensible choice when both sides, the witnesses and most of the paperwork are in Hindi anyway. You see that a lot in trade disputes around Delhi NCR and north India. Documents in other languages can be translated on the tribunal's direction. Bring it up at the first procedural hearing. And make sure the arbitrators are happy to run the hearings, and write the award, in Hindi.

Not strictly. Section 19 of the Arbitration Act says the tribunal isn't bound by the Code of Civil Procedure or the evidence law, which is now the Bharatiya Sakshya Adhiniyam, 2023. The parties can agree on procedure. If they don't, the tribunal decides it within the DIAC Rules. Fairness is the one thing nobody can drop: Section 18 demands equal treatment and a full opportunity for each side to present its case. Tribunals do borrow plenty of CPC habits, such as admission and denial of documents. But they're less fussy about form, which helps businesses whose paperwork isn't perfect.

Usually both. Examination in chief normally comes in as the witness's affidavit, with documents exhibited. Then the other side cross-examines the witness before the tribunal, in person or on video, and that's where a lot of cases turn. Pick witnesses who actually handled the transaction. The sales manager who took the orders, say, or the site engineer, not just whoever has signing authority. Prepare them on the documents. And don't let an affidavit claim more than the witness can defend under questioning.

Usually, with the tribunal's permission. Section 19 of the Arbitration Act gives the tribunal room to decide how evidence is taken, and remote evidence is routine in many DIAC matters now. Expect conditions. A room with nobody else in it, a camera showing both the witness and the room, document bundles sent ahead, and sometimes a neutral observer sitting at the witness's end. Apply early, at the procedural hearing stage, not a few days before cross-examination. DIAC's current practice direction on virtual hearings sets out the technical requirements, so check it.

Yes. The tribunal can direct a party to produce specified documents. If that party refuses without good reason, the tribunal can draw an adverse inference, which means assuming the document would have hurt it. Documents held by outsiders, such as a bank or a transporter, need the court's help. The tribunal, or a party with its approval, can apply under Section 27 of the Arbitration Act, and the court can issue summons as it would in a suit. Ask for specific documents or narrow categories, and give your reasons. Requests to 'produce everything' usually get turned down.

It can, if both parties want that. Under Section 24 of the Arbitration Act, the tribunal chooses between oral hearings and deciding on documents and written submissions. But if either side asks for an oral hearing, it has to hold one, unless the parties agreed otherwise. Paper-only suits invoice disputes where everything's already in writing. Where it's about oral promises, quality complaints or who told whom what, cross-examination usually earns its time. Fast track arbitration under Section 29B is built to be decided on written pleadings and submissions.

Largely, yes. Section 42A of the Arbitration Act, added in 2019, requires the arbitrator, the arbitral institution and the parties to keep all arbitral proceedings confidential. The only carve-out is the award, where disclosure is needed to implement and enforce it. It's one reason businesses like arbitration for disputes with customers, distributors or partners. You lose some of that privacy if the award is challenged or enforced in court, because court records are generally open. Mark sensitive commercial documents confidential when you file them. If the other side's a competitor, ask the tribunal for directions.

Sometimes. A Constitution Bench of the Supreme Court accepted the group of companies doctrine in Cox and Kings Ltd v. SAP India Pvt Ltd (2023). So a company that never signed can still be held to the arbitration agreement if the facts show that's what everyone intended, say because it negotiated the deal, carried it out or enjoyed its benefits. Shared shareholders alone won't get you there. Directors are a different story. A director usually isn't personally bound unless he signed in that capacity, as a guarantor for example. The tribunal decides it on evidence, often as a preliminary issue.

Not yet. Under Section 16 of the Arbitration Act, if the tribunal rejects a plea that it lacks jurisdiction or is going beyond its authority, it carries on and makes the award. You raise the objection again in a Section 34 petition once the award is out. There's an immediate appeal under Section 37(2)(a) only when the tribunal accepts the plea and drops the claim. So record your objection clearly and keep taking part. Make sure the point shows up in the order sheet and in the award. Walking out just costs you your defence on the merits.

Generally you can't. Section 5 of the Arbitration Act limits court intervention to what the Act allows, and Section 37 permits appeals only against specified orders. Procedural orders can't be taken to court halfway through. If the refusal genuinely stopped you presenting your case, that can be a ground under Section 34(2)(a)(iii) after the award. For now, ask the tribunal to reconsider. A short application saying why the documents matter and why they came late is enough. Courts rarely set awards aside on such grounds, so treat the tribunal's deadlines as firm.

Quite a lot, actually. It can say no to adjournments and make the party asking pay costs. Section 25 of the Arbitration Act lets it proceed when a party doesn't appear or produce evidence without sufficient cause. And if the respondent's defence isn't in on time, the tribunal can carry on and may treat its right to file as forfeited. Section 29A works in your favour too. Each adjournment eats into the twelve months the tribunal has for the award. Keep a running note of every adjournment and who wanted it. The costs order under Section 31A can take that conduct into account.

You can claim both. Under Section 31A of the Arbitration Act, the tribunal's costs order can cover the arbitrators' fees, DIAC's charges, legal fees and other expenses, and as a general rule the loser pays. The tribunal can depart from that if, say, the winner inflated its claims or caused delay. Advocate B.K. Singh tells clients to start a costs file on the first day: DIAC receipts, lawyers' bills, travel and expert costs. Put in a statement of costs before the award. You won't always get the full figure. Without records, you'll get very little.

For most businesses, yes, under reverse charge. Services an arbitral tribunal supplies to a business entity appear in the GST reverse charge notification. So the business receiving the service pays the tax itself; the arbitrator doesn't charge it. The rate for these services has been 18 percent, but confirm the current rate. Business entities below the turnover threshold are exempt, and so are individuals not acting in the course of business. Input tax credit is usually available if the dispute relates to your business. DIAC's administrative charges are separate, so ask your chartered accountant how those are treated.

Not on DIAC's scale. Arbitrators there are paid according to the schedules in the DIAC (Administrative Costs and Arbitrators' Fees) Rules, 2018, which key the fee to the amount at stake. Hearings don't count. Hours don't either. So a case that drags won't lift the scheduled fee, but adding a counter claim or raising your claim will. Check the current schedule before you budget. Delay can even shrink the fee. Section 29A(4) lets a court, when it extends time and blames the tribunal for the delay, cut the arbitrators' fees by up to 5 percent for each month lost. Our DIAC fees guide explains the schedule.

Often, if the contracts allow it. When both contracts send disputes to DIAC on matching terms and the disputes come from linked deals, the parties can agree to put both before one tribunal, or ask DIAC and the tribunal to hear them together. It's harder when the clauses don't match. If one names DIAC and the other picks a different seat or a different number of arbitrators, you can't easily combine them without consent. Hearing them together usually saves fees. It also avoids two awards that contradict each other. Raise it early, before separate tribunals are in place. Unpicking two appointments later is much harder.

It stops, as far as your claim against that company goes. Once the NCLT admits the company into insolvency, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 halts the continuation of proceedings against it, arbitration included. You'd then file your claim with the resolution professional in the insolvency process. Claims the insolvent company brings against others generally aren't caught by the moratorium. Courts have differed, though, where its counter claim is tangled up with yours. If you see signs of financial distress, think about interim relief early to secure the amount.

You can, but not always on your own terms. Under Section 32(2)(a) of the Arbitration Act, the tribunal terminates the proceedings when the claimant withdraws. The exception is where the respondent objects and the tribunal sees a legitimate interest in getting the dispute finally settled, for example because a counter claim is pending. Withdrawing doesn't stop the limitation clock, so a fresh claim later may be time-barred. Depending on the stage, part of the fees may come back. If you're withdrawing because you've struck a deal, a consent award is usually safer. See our settlement guide.

Apply to the tribunal under Section 33 of the Arbitration Act within 30 days of receiving the award, and give the other side notice. The tribunal can fix computation, clerical or typographical errors. If both parties agree, it can also interpret a specific point. You can ask for an additional award too, on a claim that was presented but never decided. The tribunal has 30 days from the request to make a correction, or 60 days for an additional award. And the three-month window for a Section 34 challenge then runs from the date your request is disposed of.

Not to file. To hold off enforcement, usually yes. You don't need any pre-deposit to file a Section 34 petition against a DIAC award. That's unlike a buyer attacking an MSME Council award, who must first deposit 75 percent under Section 19 of the MSMED Act. But the petition on its own doesn't freeze the award. Section 36(3) lets the court stay a money award on terms, and the usual terms are depositing all or most of the amount, or giving security. No stay means the award holder's free to execute. Our Section 34 guide covers the grounds.

Often, yes. An Indian award is a foreign award once you take it abroad. If the country you're going to has signed the New York Convention, you can enforce it there under its local law, usually by producing the award and the arbitration agreement. Courts there can only refuse on narrow grounds. What actually slows you down is practical: cost, finding local lawyers, translation, and how long foreign courts take. So before you spend on any of it, check what the debtor really owns abroad. Its Indian assets may be easier to reach. Our enforcement guide covers the Indian side.