A California based SaaS company hires an Indian software development firm to build a core product module. The client owns the intellectual property, the engineering team works out of Bengaluru or Pune. Eighteen months in, a dispute erupts over source code ownership, repository access and outstanding payments. The Master Services Agreement says disputes "shall be resolved by arbitration." It does not say where the arbitration is seated, which law governs the contract, or how an award will eventually be enforced.

This is not a rare drafting failure. This is a recurring drafting problem in cross-border technology agreements. Most India-US technology agreements are negotiated around commercial terms such as pricing, deliverables, IP assignment and the dispute-resolution clause is copied from a template or added at the last stage. The result surfaces only when a dispute is already underway. This is when the clarity matters most and is hardest to negotiate.

The commercial question is straightforward to state and harder to answer, where should the dispute actually be resolved, and what should the contract have said before development began? Answering it requires separating five concepts that are routinely, and wrongly, treated as one.

Governing Law, Seat, Venue and Enforcement Are Not the Same Thing

Contract drafters frequently use "jurisdiction," "arbitration," and "governing law" as if they were interchangeable shorthand for "how we resolve disputes." They are not. Each term answers a distinct question, and a clause that resolves one does not automatically resolve the others.

A single clause can, in principle, mix jurisdictions across these five categories, Indian seat, California governing law, virtual hearings, US enforcement. Provided that each choice is made deliberately and drafted with precision. Confusion arises when parties assume that fixing one variable fixes the rest.

What Is International Commercial Arbitration Under Indian Law?

This question matters because Indian arbitration law treats India-seated arbitrations differently depending on the nationality of the parties. Section 2(1)(f) of the Arbitration and Conciliation Act, 1996 defines "international commercial arbitration" as an arbitration relating to disputes considered commercial under Indian law, where at least one party is a foreign national, a body corporate incorporated outside India, or a foreign government.

An arbitration between a US company and an Indian developer, seated in India, therefore qualifies as an international commercial arbitration even though one party is domestic. This classification is not academic. It changes which substantive law rules apply under Section 28, and it affects which forum handles applications to appoint an arbitrator: for international commercial arbitration seated in India, such an application under Section 11 is made to the Supreme Court, as against a High Court for a purely domestic arbitration between two Indian parties. Section 11(3A), inserted by the 2019 amendment, allows the Supreme Court and High Courts to designate graded arbitral institutions to make these appointments instead. This route remains inoperative, however, because the Arbitration Council of India, the body statutorily tasked with grading such institutions under Section 43-I has still not been constituted; courts therefore continue to exercise the appointment function directly. The currently operative position should always be checked before drafting.

Practitioners drafting India-US clauses should describe the transaction using this statutory term rather than the looser phrase "cross-border arbitration." The two are not synonymous, and only the former carries defined legal consequences under the Act.

Can the Agreement Be Governed by Both Indian and US Law?

This is one of the most common and most poorly resolved questions in India-US technology contracts. Clauses sometimes read: "This Agreement shall be governed by the laws of India and the United States." The intention is usually to reassure both parties. The effect is closer to the opposite.

A contract needs one substantive law to interpret its terms to decide, for instance, whether a termination notice was valid, whether a limitation-of-liability clause is enforceable, or whether an IP assignment took effect. Naming two national systems as simultaneously governing the same contract creates a genuine conflict-of-laws problem rather than solving one. If Indian contract law and California contract law diverge on a given issue as they frequently do on matters like penalty clauses, non-compete restrictions, or implied warranties. A tribunal or court has to decide which system actually controls, and the clause gives it no answer.

There is a second layer of imprecision specific to the US side. "United States law" is not a single, self-contained body of law for most commercial matters. Contract formation, unfair competition, trade secrets and much of commercial regulation are governed at the state level, alongside a smaller but important layer of federal law export controls, certain IP statutes, and sector-specific regulation. A clause referring generically to "US law" leaves open which state's law applies, and state contract law can differ meaningfully between, say, California, Delaware and New York.

The cleaner architecture is to select one substantive governing law for the contract as a whole. A specific Indian statute-based framework, or a named US state's law while recognising that mandatory laws of another jurisdiction may still apply independently where they govern particular subject matter. Data protection obligations, export control restrictions, tax rules and certain IP registration requirements often apply regardless of what the parties choose as governing law, because those rules are mandatory in the jurisdiction where the relevant conduct, data or asset is located. Choosing one governing law does not switch off those separate regimes; it simply avoids creating an artificial conflict over the contract's core terms.

This does not mean Indian law should always be selected, or that US law should always prevail. The right choice depends on where the greater legal exposure sits, which party has more negotiating leverage, and which system's contract doctrine better serves the transaction. A services agreement weighted toward US commercial risk may sensibly choose California or Delaware law even with an Indian seat. The point is precision, not a fixed preference for either jurisdiction.

Can an India-Seated Arbitration Apply US Substantive Law?

Yes, and this surprises many drafters who assume that an Indian seat automatically means Indian substantive law applies to the merits.

Section 28(1)(b)(i) of the Arbitration and Conciliation Act, 1996 provides that in an international commercial arbitration, the tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute. This is distinct from Section 28(1)(a), which mandates Indian substantive law only for arbitrations that are not international commercial arbitrations. Where a foreign party is involved and the parties have chosen a different governing law, an India-seated tribunal is bound to apply that chosen law to the merits, not Indian contract law by default.

In practical terms, an India-US technology contract can validly designate California substantive law while seating the arbitration in India. The tribunal will decide questions of contract interpretation and liability under California law, while Indian procedural law and Indian courts retain supervisory functions over the arbitration itself, such as interim relief and any challenge to the award.

Legal permissibility, however, is not the same as commercial desirability. Applying foreign substantive law in an India-seated arbitration may require the parties to establish the content and application of that foreign law, potentially including through expert evidence, which can increase cost and complexity. For a mid-sized technology dispute, this can be disproportionate. The structure is worth considering where the governing-law choice is driven by genuine substantive concerns for example, a US party insisting on its home state's contractual IP-allocation, liability or other state-law consideration but it should be adopted deliberately, with the added cost and complexity priced into the decision, not as an accidental by-product of mismatched drafting.

Seat Versus Venue: Why the Distinction Is Commercially Useful

The Supreme Court's Constitution Bench in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 ("BALCO"), established that the "seat" of arbitration is a legal concept, not merely a geographic one. The seat fixes the curial law and the courts with supervisory jurisdiction over the arbitration, regardless of where hearings physically occur.

This was reinforced in BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234, where the Supreme Court held that the terminology used by the parties is not, by itself, conclusive. Where an arbitration agreement designates a 'venue' and there is no significant indication to the contrary, courts may treat that venue as the juridical seat. The outcome turns on the specific wording of the clause, not on an automatic rule. The Court also confirmed the broader principle from Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678: choosing a seat is akin to conferring exclusive jurisdiction on the courts of that seat, even where no party has any physical connection to it.

For India-US contracts, this has a practical upside that is often overlooked. Choosing India as the juridical seat does not require every hearing to happen in India. Parties can, and routinely do provide for virtual hearings, or hearings at a neutral third location while the seat remains India for legal purposes. A well-drafted clause can therefore preserve the certainty of an Indian seat (Indian supervisory courts, Indian procedural framework under Part I of the Act) while accommodating the practical reality that a US client's counsel and witnesses are thousands of miles away. The clause should state expressly that the seat is fixed regardless of where hearings are conducted, to avoid the venue being read as displacing the seat under the BGS SGS Soma test.

Why the Counterparty's Location and Assets Matter More Than Nationality

The instinctive assumption in many US-drafted contracts is that the seat should be in the United States "because we are the American company." This is a natural but incomplete way to think about forum selection. Choosing a seat, and by extension a governing framework, is fundamentally a risk-management decision, not a nationality-based default.

Relevant factors include:

1. Location of the counterparty and its operations. If the Indian developer's personnel, servers and business operations are in India, disputes over access, control and conduct may be easier to address through relief obtained in India.
2. Location of enforceable assets. An award is only valuable if it can be executed against something. If the Indian counterparty holds no meaningful assets outside India, a US-seated award may need to travel back to India for enforcement in any case.
3. Likely nature of disputes. Disputes over source-code access or IP infringement often require urgent, on-the-ground relief rather than a distant proceeding concluding months later.
4. Need for interim relief. Emergency measures are usually faster and more effective where courts are close to the relevant systems, data and personnel.
5. Cost and practical burden. US-seated proceedings, US counsel rates and cross-border travel for an Indian respondent can make proceedings disproportionately expensive relative to the dispute value.
6. Governing law and access to evidence. Witnesses, technical logs and documentation are often easier to marshal near where the work was actually performed.
7. Enforceability of the eventual award. India is a signatory to the 1958 New York Convention, and under Section 44(b) of the Arbitration and Conciliation Act, 1996, a foreign award is enforceable in India only where it is made in a territory the Central Government has notified, on grounds of reciprocity, in the Official Gazette. The United States has been notified as such a reciprocating territory. This means a US-seated award satisfying Section 44's conditions is, in principle, enforceable in India, and an India-seated award is enforceable in the United States under the US Federal Arbitration Act's implementation of the same Convention but enforcement still requires a separate court proceeding and is not automatic.
8. Commercial bargaining power. In practice, the party with greater negotiating leverage often secures its preferred seat, regardless of which structure would minimise overall dispute costs.

The underlying insight is that a US company should choose its seat and governing law by asking where a dispute is most likely to arise and where an eventual award will need to be enforced not by defaulting to a "home advantage" that may not exist once the developer, the code and the relevant assets are all in India.

Technology Disputes Need Different Interim-Relief Thinking

Generic arbitration clauses are usually written with commercial supply or services disputes in mind, disputes about delayed delivery or quality defects. Technology development disputes carry a distinct risk profile because control over digital assets can be exercised, or withdrawn, instantly and often irreversibly.

Realistic scenarios include a developer locking a client out of the source-code repository during a payment dispute, administrator credentials being changed without notice, production or database access being disabled, confidential code being threatened with disclosure to a competitor, client IP being reused for another customer's project, or project assets being deleted or encrypted.

Alongside continued access to source code and credentials, the clause should also address preservation of relevant project records once a dispute arises. Depending on the project, this may include Git or repository history, version history, issue-tracking records such as Jira, deployment logs, cloud or system access logs, and relevant project emails or messages. The objective is straightforward: prevent deliberate deletion or alteration of records either party may need later, without turning the clause into a detailed e-discovery protocol.

None of these situations can wait for a final arbitral award, which may take a year or more to issue. A well-drafted clause should expressly preserve access to interim, conservatory or protective relief both through the arbitral tribunal under Section 17 of the Act (once constituted) and through courts under Section 9, which allows a party to seek interim measures before, during, or after arbitral proceedings but before enforcement of the award. Notably, the proviso to Section 2(2) extends Sections 9, 27(1)(a) and 37(1)(a)/37(3) to international commercial arbitrations seated outside India, provided the resulting award would be enforceable and recognised under Part II of the Act, and subject to an agreement to the contrary between the parties. Where these conditions are met, Indian courts can grant interim relief connected to a foreign-seated arbitration involving an Indian party. This is a conditional statutory extension, not a general rule. This is a technical point worth confirming with counsel at the drafting stage, but it illustrates why interim-relief drafting should not be treated as boilerplate in a technology contract. The clause should specify that repository access, credentials and data integrity are to be preserved during the dispute, and should not leave interim relief to be improvised after the lock-out has already happened.

Does Choosing a Seat Decide Every Question of Court Jurisdiction?

Not automatically, and this is an area where oversimplified drafting causes real problems. The seat does determine which courts have supervisory jurisdiction over the arbitration as a general matter that much is settled by BALCO, Indus Mobile and BGS SGS Soma. But the statutory forum for specific applications still needs to be checked against the current text of the Act. For instance, an application to appoint an arbitrator in an international commercial arbitration under Section 11 is currently made to the Supreme Court, not a local court at the seat, regardless of which city is named as the seat though Section 11(3A) permits this function to be delegated to a designated arbitral institution, a route that remains inoperative pending constitution of the Arbitration Council of India.  Assuming that naming "Mumbai" as the seat automatically means every arbitration-related application goes to a Mumbai court, without checking which forum the Act actually assigns to that type of application, is a drafting and litigation risk in its own right.

Enforcement Is Not the Same as the Seat

Winning an arbitration is not the end of the story. Counsel should ask, at the drafting stage, a forward looking question. If the claim succeeds, where are the counterparty and its assets located, and where will the award actually need to be enforced?

Foreign awards are enforced in India under Part II of the Arbitration and Conciliation Act, 1996, which gives effect to the New York Convention. Under Section 44, an award qualifies as a 'foreign award' if it arises from a commercial legal relationship, is made under a written arbitration agreement, and is rendered in a territory the Central Government has notified in the Official Gazette, on grounds of reciprocity, as a territory to which the Convention applies. The United States has been so notified. Sections 47 to 49 set out the procedure: the award is filed before the relevant High Court, and once the court is satisfied that none of the narrow grounds for refusal under Section 48 applies, the award is treated as a decree of that court and becomes executable. Section 48 confines the grounds for resisting enforcement to matters such as incapacity, invalid arbitration agreements, lack of proper notice, awards exceeding the scope of the arbitration agreement, and narrowly construed public policy and the burden of establishing any of these lies with the party resisting enforcement.

The reverse route is enforcing an India-seated award in the United States. It proceeds under the US Federal Arbitration Act's implementation of the New York Convention, before US federal courts, subject to a similarly narrow set of defences.

The point for drafting purposes is this: enforcement should influence the choice of seat and governing law, but it should not mechanically dictate it. A US-seated award against an Indian company with no US assets still has to be enforced in India in the end. Building the enforcement pathway into the initial drafting conversation avoids a second, unplanned negotiation after the award is already in hand.

What Should a Well-Drafted India-US Arbitration Clause Address?

A dispute-resolution clause for this kind of contract should cover, at minimum:

1. The governing law of the substantive contract, stated with precision (a specific US state, or Indian law, not both undifferentiated);
2. The scope of disputes covered by the arbitration agreement;
3. A negotiation or escalation period before arbitration is triggered;
4. The arbitration rules or institution administering the process;
5. Whether disputes go to a sole arbitrator or a three-member tribunal;
6. The appointment mechanism and a fallback procedure if the parties cannot agree on an arbitrator;
7. The juridical seat, stated expressly and separately from any venue provision;
8. The language of the arbitration;
9. Provision for virtual or hybrid hearings, where appropriate, without disturbing the seat;
10. Confirmation of which courts hold supervisory jurisdiction;
11. Express preservation of interim and protective relief, including access to source code, credentials and project data during the dispute;
12. Confidentiality obligations covering source code, technical documentation, credentials, customer information, trade secrets, pleadings and evidence, and, where appropriate, the arbitration proceedings and award themselves. It is subject to disclosures required by law, enforcement proceedings, or the applicable arbitral rules;
13. An obligation to preserve project assets and continued limited access pending resolution; and
14. Preservation of relevant digital evidence and project records (repository history, logs, issue-tracking records) once a dispute arises;
15. An enforcement strategy informed by where the counterparty's assets are actually located.

Common Mistakes in India-US Arbitration Clauses

The recurring drafting errors in this category of contract include:

1. Leaving the arbitral seat blank or unspecified, forcing a court or tribunal to infer it later;
2. Treating the hearing venue and the legal seat as the same thing, without stating which is intended;
3. Naming both India and the USA as governing law without explaining how the two relate to each other;
4. Providing for arbitration while also granting courts unrestricted jurisdiction over the same disputes, creating parallel and conflicting fora.
5. Omitting a fallback mechanism for appointing an arbitrator if the parties cannot agree;
6. Leaving out interim-relief provisions in a technology contract where source code and data access are central to the relationship;
7. Assuming that fixing the seat automatically resolves every enforcement question; and
8. Copying an arbitration clause from an unrelated template contract without adapting it to the specific transaction.

Each of these is avoidable at the drafting stage. None of them is easily fixed once a dispute has already begun.

Conclusion

A cross-border arbitration clause should be designed backwards, starting from the dispute that may eventually arise and the award that may eventually need to be enforced, and working back to the drafting choices that make that outcome achievable. Governing law, seat, venue, supervisory jurisdiction and enforcement strategy are related concepts, but they are not one decision. Treating them as interchangeable, or as boilerplate to be resolved with a single generic sentence, is what turns a manageable cross-border dispute into a jurisdictional tangle. For India-US technology contracts in particular, where disputes frequently involve source code, repository access and time-sensitive technical control, that coordination has to happen before development begins not after the lock-out notice arrives.

Frequently Asked Questions

1.      Is arbitration seated in India the same as choosing Indian law?

No. The arbitral seat decides which country's courts supervise the arbitration and which procedural law applies. It does not automatically decide the substantive law governing the contract. Parties can seat an arbitration in India while choosing US state law to govern the merits, under Section 28(1)(b) of the Arbitration and Conciliation Act, 1996.

2.      Can a contract be governed by both Indian and US law at the same time?

Naming two national systems as simultaneously governing the same contract usually creates uncertainty rather than removing it. The better approach is to select one substantive governing law and separately recognise that specific mandatory laws such as data protection or export control rules may still apply independently where they govern particular conduct or assets.

3.      What is the difference between the seat and the venue of arbitration?

The terminology used by the parties is not always conclusive. Where a place is designated as the venue of the arbitral proceedings and there are no significant contrary indications, Indian courts may treat that place as the juridical seat. The clause should therefore expressly identify the seat rather than leaving it to inference.

4.      Does an India-seated arbitration always mean hearings must happen in India?

No. Parties can fix India as the juridical seat while providing for hearings to take place virtually or at a convenient third location. The seat determines the governing legal framework; it does not dictate the physical location of every hearing.

5.      Should a US company always choose a US seat for arbitration with an Indian developer?

Not necessarily. Forum selection should be driven by the location of the counterparty's assets, the likely nature of disputes, the need for urgent interim relief, and where an eventual award will need enforcement, not by the nationality of either party.

6.      Is an arbitral award from India enforceable in the United States, and vice versa?

Yes, in principle. India is a signatory to the 1958 New York Convention, and under Section 44(b), a foreign award is enforceable in India only where made in a territory the Central Government has notified as a reciprocating territory. The United States is one such notified territory. In India, enforcement of a US-seated award proceeds under Part II (Sections 44-49) of the Arbitration and Conciliation Act, 1996. Enforcement still requires a separate court proceeding; it is not automatic.

7.      What is "international commercial arbitration" under Indian law?

It is a defined statutory term under Section 2(1)(f) of the Arbitration and Conciliation Act, 1996, covering arbitrations where at least one party is a foreign national, a foreign-incorporated company, or a foreign government. An India-seated arbitration between a US company and an Indian developer qualifies as international commercial arbitration even though one party is domestic.

8.      What should an India-US technology contract's arbitration clause specifically address?

At minimum: governing law, scope of disputes, an escalation period, the arbitration rules and institution, the number of arbitrators, an appointment fallback mechanism, the juridical seat, hearing logistics, supervisory jurisdiction, and express provisions for interim relief protecting source code and project access during a dispute.

9.      Why do technology disputes need special interim-relief provisions in the arbitration clause?

Because control over source code, repository access and credentials can be exercised or withdrawn instantly. A generic arbitration clause drafted for supply or services disputes often fails to preserve access to urgent relief under Section 9 or Section 17 of the Act, which can leave a client locked out of its own product for months while arbitration proceeds.

10.   Does choosing an arbitral seat automatically decide which specific court handles every arbitration-related application?

No. While the seat generally fixes supervisory jurisdiction, specific applications may be assigned to a particular forum by statute. For example, an application for appointment of an arbitrator in an international commercial arbitration is currently made to the Supreme Court under Section 11; regardless of which city is named. Though Section 11(3A) allows this function to be delegated to a designated arbitral institution, a route that remains inoperative because the Arbitration Council of India has not yet been constituted. The currently operative statutory forum should always be checked before drafting.

This blog was reviewed by Yashvardhan Singh, a legal professional with experience in arbitration and commercial dispute resolution research. His review focused on the accuracy of the statutory framework discussed in this article, including the Arbitration and Conciliation Act, 1996, and the case law cited on seat, venue and enforcement.

Disclaimer

This article is intended solely for general informational and educational purposes. It does not constitute legal advice, advertising, or solicitation. Legal requirements may vary depending on the specific contract, the arbitration rules and institution chosen, the seat and governing law selected, and individual transaction circumstances. Independent professional advice should be obtained before drafting or relying on any dispute-resolution clause.