Capital controls undermine arbitration potential

The recent Delhi High Court judgment in the Tata-DoCoMo case has provided much-needed respite to the Indian arbitration bar. By allowing enforcement of the foreign arbitration award in India, the court has reinstated India’s image as an arbitration-friendly jurisdiction. However, this judgment also underscores the fact that improving arbitration law alone will not help improve the Indian arbitration ecosystem. If India has to boost investor confidence in its arbitration framework, the current Indian capital controls regime has to be streamlined. 
 
Arbitration awards often require the losing party to pay the winning party. In international arbitration, such payment could amount