Financial institutions have traditionally opted for litigation instead of arbitration. Courts offered interim measures, summary judgments and the public pressure of open proceedings. That paradigm has changed. Complex financial transactions and a need for confidentiality have pushed banks toward arbitration. In 2019, 32% of LCIA arbitrations and 58% of AAA arbitrations involved financial institutions.
The 2008–09 financial crisis made clear the need for adjudicators who understand finance, and for private forums that do not move listed stocks through public distress. Awards are also typically easier to enforce than judgments that can be appealed repeatedly.
Specialist infrastructure has followed: P.R.I.M.E. Finance in The Hague, ISDA model clauses, FINRA in the United States, CIETAC’s Financial Disputes Arbitration Rules, and summary procedures at SIAC, SCC, HKIAC and the ICC.
India remains different. Financial disputes of scale continue to be heard largely by generalist retired judges. No dedicated financial arbitration body exists. The article recommends a panel in consultation with ICAI, and rule reform at Indian institutions, if India is to attract such work as an arbitration-friendly seat.