Finance disputes suited to arbitration include disagreements over facility agreement interpretation, covenant breaches, and disputes between lenders in a syndicated facility. Cross-border and derivative agreements frequently carry arbitration clauses as a matter of market standard.
Certain matters are carved out by statute or by consistent judicial interpretation — proceedings under the SARFAESI Act for enforcement of security interests, and matters within the jurisdiction of the Debts Recovery Tribunal, are generally treated as falling outside the scope of private arbitration and must proceed through those dedicated statutory forums instead.
For the disputes that remain arbitrable, speed and confidentiality are usually the deciding factors — lenders in particular prefer resolving covenant and interpretation disputes without the reputational signal of public litigation against a borrower.