The One Question Everyone Asks in Arbitration (and Why It’s So Hard to Answer)

Every second client who walks into a legal strategy call starts here: “What will this arbitration cost me… in the end?”

It’s a fair question. You wouldn’t buy a flight ticket if the airline said, “Depends on the turbulence.”

And yet, as arbitration counsel, our experience is that cost predictability in arbitration is rarely linear, but almost always optimisable.

Let’s unpack why.

Why Arbitration Costs Escalate:

1. Multiple Fronts: Many founder and infra disputes aren’t single-threaded. There’s:

• A Section 9 interim relief filing (urgent injunctions or asset freezes).

• Then the Section 11 appointment.

• Then the main arbitration.

• Sometimes followed by a Section 34 challenge to the award.

2. Delays Are Expensive: Every adjournment, poorly drafted notice, or unclear clause = 2x the bill.

3. False Economy at the Start: Parties pick counsel on price, not preparedness. Then switch mid-way. It’s like buying a cheaper diagnostic test… and having to retake it with a better lab.

4. Poor Paper Trails: When facts are disputed, and documentation is vague or inconsistent, legal hours multiply.

The Real Arbitration Math: A Case Reflection

In 2022, a mid-stage startup co-founder retained Priyam’s counsel when a deadlock turned ugly.

Here’s what helped them keep costs under control:

• They did a pre-litigation risk audit before issuing any notices. This helped avoid escalation on shaky grounds.

• They shared a complete email + WhatsApp communication dump, which saved at least 30 hours of affidavit drafting.

• They agreed on a milestone-based billing model, ensuring cost visibility at each stage.

Despite a 9-month arbitration, total legal expenditure was under Rs 12L, while the co-founder retained full control of IP and resolved the equity deadlock without a media blow-up.

Compare this with a similar matter in 2021, where the other party switched lawyers twice, tried a parallel suit in civil court, and paid nearly Rs 40L in legal costs.

Some Cost Predictability Principles:

1. Pre-arbitration audits are not a luxury: they’re cost-saving strategy tools.

2. If you’re issuing or receiving a legal notice, get clarity on end-game possibilities first.

3. Structure your billing model with your counsel in alignment: hourly is not always evil, but blind billing is.

4. Arbitration is flexible by design: make it work for your cash flow, not against it.

If you’re trying to predict your spend, don’t ask “What will it cost?” Ask instead: “What can I do now to avoid paying for chaos later?”

That’s a much better strategy.