Doing Business in India For Dummies®

Settling Disputes through Court or Arbitration

You may be hard pressed to find a business or industry that doesn’t run into disputes at some point. Disputes can and will arise while you do business in India. You may even find that the contract you drafted as carefully as possible is being challenged if one of the involved parties can’t meet its obligations.

It’s always best to try and settle these problems amicably, and arbitration is one option for resolution, but should the time come when kindness and courtesy fail and you find yourself with no other option but to take legal recourse to solve a dispute, you need to know something about taking (and surviving) legal action in India. (If you’re interested in India’s broad legal framework, have a look at Chapter 8.)

This section gives you an overview of using the courts to resolve disputes and also presents arbitration as a viable alternative.

Settling disputes in India’s courts

India places much emphasis on the rule of law, and its courts are known for their just and equitable decisions. Very heartening, you may think. But there’s a downside. The legal process in India is excrutiatingly slow. There’s a constant and heavy backlog, and, like many of the country’s court buildings, the path to justice is old-fashioned and littered with piles of dusty case files.

If you resort to legal action to settle a contract dispute, you may have to wait. Even simple contractual issues can still take years just to be heard. Consequently, contracts ...