India

Bombay Law Chambers (BLC) has announced its partner elevations for the year, elevating five counsels to the partnership. With these promotions, the partnership has grown to 14 partners across four locations.  Meet the new partners          Deepa Rai: Deepa’s practice areas include venture capital, private equity, M&A and W&I underwriting. She is a dedicated and sharp attorney who consistently balances the fine art of deal making and protecting clients’ interests. Fariza Ahmed: Fariza’s work centers around venture capital transactions, M&As, employment and general corporate matters. She consistently delivers high-quality work with astute professionalism. Manali Kakatkar: Manali focuses on financing transactions, regulatory advice and handling general corporate matters for a variety of clients. She is a committed lawyer who manages clients’ expectations with ease and specializes in getting deals done with agility and precision. Supratim Guha: Supratim’s expertise includes M&As, private equity transactions, W&I underwriting and regulatory advice. His depth of knowledge and meticulous approach have been an asset to BLC. Suhas Sagar: Suhas is a tax lawyer who specializes in international taxation and transfer pricing. His experience and nuanced approach to practice have been invaluable to the firm. Commenting on the promotions, BLC said, “We are delighted to congratulate our newly elevated partners on this well-deserved achievement. Their elevation underscores the depth of talent within the firm and our continued focus on nurturing leadership and deep-rooted value systems.”

India’s green hydrogen sector is no longer being discussed as a futuristic climate ambition. It is rapidly becoming one of the most commercially significant infrastructure and energy transition opportunities in the country. As governments and industries worldwide intensify decarbonisation efforts, green hydrogen is emerging as a strategic solution for sectors where electrification alone cannot achieve net-zero objectives. From steel manufacturing and fertilisers to shipping, refining and heavy industrial operations, businesses are increasingly exploring hydrogen-based energy systems to reduce carbon intensity while maintaining industrial scale and operational efficiency. For India, the opportunity is larger than domestic decarbonisation. The country is positioning itself as a future global hub for green hydrogen production, export-oriented hydrogen infrastructure and renewable-powered industrial manufacturing. This transition is creating substantial opportunities for infrastructure developers, renewable energy companies, sovereign wealth funds, institutional investors, lenders and multinational industrial groups. At the same time, green hydrogen projects in India are introducing a new generation of legal, regulatory and financing complexities that differ significantly from conventional infrastructure or renewable energy projects. Unlike mature sectors with established project finance models and predictable operational benchmarks, green hydrogen projects continue to evolve technologically, commercially and regulatorily. The success of these projects increasingly depends on sophisticated structuring, integrated renewable energy strategies, ESG compliance, cross-border financing capability and carefully negotiated risk allocation mechanisms. India’s National Green Hydrogen Mission and the Rise of a Hydrogen Economy India’s policy framework has evolved rapidly through the National Green Hydrogen Mission, which seeks to establish the country as a leading producer and exporter of green hydrogen and hydrogen derivatives. The policy ecosystem surrounding the sector now extends beyond simple renewable energy incentives and includes electrolyser manufacturing support, renewable energy integration mechanisms, infrastructure facilitation measures and industrial decarbonisation initiatives. The broader objective is not merely energy diversification. India’s hydrogen strategy is tied directly to long-term energy security, reduced fossil fuel dependence, export competitiveness and industrial transformation. Policymakers increasingly view green hydrogen as a strategic industrial input capable of reshaping sectors that have historically remained carbon-intensive and difficult to transition. This evolving framework is also creating a new category of long-term infrastructure assets. Large-scale hydrogen projects are expected to involve integrated renewable power generation, electrolysis facilities, storage infrastructure, transportation systems, export terminals and industrial offtake arrangements. As a result, green hydrogen infrastructure in India is beginning to resemble an ecosystem-driven investment model rather than a standalone energy project. Why Global Investors Are Aggressively Entering India’s Green Hydrogen Market Institutional capital is increasingly flowing toward green hydrogen projects because investors view the sector as a long-duration energy transition opportunity with strong alignment to ESG and sustainability mandates. Sovereign wealth funds, pension funds, climate-focused investment platforms, export credit agencies and multilateral financial institutions are actively evaluating hydrogen infrastructure investments in India due to several structural advantages: India’s rapidly expanding renewable energy capacity Competitive solar and wind power costs Industrial-scale domestic demand potential Export-oriented infrastructure opportunities Government-backed policy support Long-term carbon reduction commitments For many investors, the sector also presents a significant first-mover advantage. Businesses capable of securing renewable energy integration, industrial offtake arrangements and strategic port connectivity at an early stage may become dominant participants in India’s future hydrogen economy. However, unlike traditional infrastructure sectors where revenue visibility and operational performance are relatively established, hydrogen projects remain highly sensitive to policy evolution, technology advancement and future demand certainty. This continues to influence financing appetite and investment structuring strategies. Renewable Energy Integration Is the Foundation of Hydrogen Project Viability One of the most critical aspects of green hydrogen project development is access to low-cost renewable energy. Electricity pricing directly affects hydrogen production economics, making renewable integration one of the most important determinants of project bankability. Developers are therefore increasingly pursuing integrated renewable infrastructure models involving: Captive renewable energy projects Hybrid solar and wind arrangements Energy storage-backed supply systems Dedicated renewable transmission infrastructure Long-term renewable power procurement strategies This creates significant legal and regulatory overlap between renewable energy law, power sector regulation and hydrogen infrastructure development. From a financing perspective, lenders are placing substantial emphasis on long-term energy cost certainty, operational uptime and renewable supply reliability. Hydrogen projects that lack stable renewable integration may face material financing constraints due to concerns surrounding production economics and operational continuity. Electrolyser Manufacturing and Technology Risk Remain Central Concerns Electrolysers form the core technological infrastructure of hydrogen production systems. India is actively encouraging domestic electrolyser manufacturing and supply chain localisation through incentive-driven policy measures designed to reduce import dependence and build domestic industrial capability. Despite strong policy support, technology risk continues to remain one of the most significant challenges in green hydrogen project financing. Investors and lenders continue to evaluate concerns involving: Technology obsolescence Equipment degradation risk Efficiency uncertainty Vendor reliability Performance guarantees Long-term maintenance capability Unlike conventional renewable energy assets that benefit from relatively mature technologies and predictable operational models, hydrogen infrastructure continues to evolve rapidly. This creates substantial diligence requirements for project finance participants, particularly where projects rely on emerging electrolyser technologies or large-scale industrial deployment models. Technology-related contractual protections are therefore becoming increasingly important in EPC agreements, supply contracts, insurance frameworks and financing documentation. Why Financing Green Hydrogen Projects Is More Complex Than Traditional Infrastructure Finance Green hydrogen projects are fundamentally different from conventional infrastructure financing transactions because the sector lacks fully mature commercial benchmarks. Traditional project finance structures typically rely on predictable cash flows, established operational histories and stable demand patterns. Hydrogen projects, however, often involve evolving technologies, uncertain demand trajectories and regulatory frameworks that continue to develop. As a result, financing structures for hydrogen infrastructure in India increasingly involve: SPV-based project finance models Blended financing structures Strategic industrial partnerships Sustainability-linked financing arrangements Cross-border investment platforms Government-supported viability mechanisms Large hydrogen developments may simultaneously incorporate renewable generation assets, electrolysis infrastructure, industrial integration facilities, storage systems and export logistics networks. This significantly increases structuring complexity and risk allocation requirements. Lenders continue to focus heavily on several key bankability concerns: Long-term offtake certainty Industrial demand visibility Creditworthiness of purchasers Regulatory stability Technology performance assurance Carbon market evolution Export competitiveness Until the sector achieves greater commercial maturity, many projects are likely to remain dependent on strategic partnerships, policy support and innovative financing structures. Offtake Agreements Will Shape Hydrogen Project Bankability Long-term offtake arrangements are expected to become one of the most important drivers of hydrogen project financing in India. Industrial demand is likely to emerge first from sectors already dependent on hydrogen or carbon-intensive industrial processes, including: Fertiliser manufacturing Refineries Steel production Industrial energy users Heavy manufacturing operations For lenders, revenue certainty will increasingly depend on the quality and enforceability of long-term supply arrangements. Hydrogen projects with credible industrial counterparties and stable pricing mechanisms are expected to attract stronger financing interest compared to projects dependent solely on speculative future export demand. As export markets mature, international hydrogen supply agreements and cross-border commercial frameworks are also likely to become increasingly significant. ESG, Water Sourcing and Environmental Regulation Are Becoming Critical Investment Factors Although green hydrogen is promoted as a low-carbon fuel solution, the sector remains highly sensitive from an environmental and ESG perspective. Hydrogen production requires substantial water resources, creating growing scrutiny around: Water sourcing rights Environmental sustainability Community impact Land usage patterns Biodiversity implications Renewable energy sourcing integrity Institutional investors and multilateral lenders are increasingly evaluating hydrogen projects through broader ESG compliance frameworks rather than merely assessing carbon reduction potential. Projects located in water-stressed regions or areas involving significant land acquisition challenges may face heightened regulatory scrutiny, financing challenges and stakeholder opposition. Consequently, ESG preparedness is no longer a secondary compliance exercise. It is becoming central to project finance viability, institutional investment participation and long-term operational sustainability. Land Acquisition, Port Connectivity and Industrial Infrastructure Will Determine Strategic Advantage Green hydrogen projects are infrastructure-intensive developments that require extensive industrial integration. Developers are increasingly prioritising project locations offering: Access to low-cost renewable energy Industrial demand clusters Port infrastructure proximity Export logistics capability Transmission connectivity Industrial zoning compatibility India’s future hydrogen ecosystem is expected to evolve around integrated industrial corridors and port-linked hydrogen hubs capable of supporting both domestic industrial consumption and export-oriented production. This creates substantial opportunities in infrastructure development involving: Hydrogen storage systems Port terminals Transportation infrastructure Pipeline networks Renewable energy corridors Industrial processing facilities However, land acquisition, environmental approvals and infrastructure connectivity continue to remain significant implementation challenges. Cross-Border Financing and FEMA Structuring Are Becoming Increasingly Important International participation in India’s hydrogen sector is accelerating rapidly. Sovereign wealth funds, strategic industrial groups, infrastructure investors, export credit agencies and climate finance institutions are increasingly exploring Indian hydrogen investments. This creates substantial legal and regulatory considerations involving: FEMA compliance External Commercial Borrowing (ECB) regulations Offshore investment structuring Tax optimisation Repatriation mechanisms Cross-border security structures Large-scale hydrogen infrastructure platforms may involve complex multi-jurisdictional financing arrangements combining domestic lending, offshore debt, sustainability-linked financing and strategic equity participation. As global hydrogen markets evolve, international regulatory alignment and cross-border contractual frameworks are also expected to become increasingly important for export-oriented projects. Carbon Markets, Green Bonds and Sustainability Financing Could Transform Project Economics Green hydrogen projects are closely connected to the broader evolution of carbon markets and ESG-driven capital allocation. Future project economics may increasingly benefit from: Carbon credit monetisation Sustainability-linked loans Green bonds Climate finance frameworks Transition finance mechanisms ESG-focused institutional investment Over time, these mechanisms could materially improve financing viability by lowering capital costs and strengthening investor participation. However, carbon market regulation and sustainability disclosure standards continue to evolve globally. Businesses participating in hydrogen infrastructure projects must therefore remain prepared for increasingly sophisticated compliance and reporting obligations. Safety Regulation and Hydrogen Infrastructure Standards Will Continue Evolving Hydrogen infrastructure involves complex operational and industrial safety considerations that remain comparatively underdeveloped from a regulatory perspective. Projects must currently navigate multiple overlapping compliance frameworks involving: Industrial safety regulations Hazardous materials handling Environmental approvals Transportation compliance Operational standards Infrastructure licensing requirements As India’s hydrogen economy expands, regulatory frameworks are expected to become increasingly specialised and technically sophisticated. Insurance markets are also likely to evolve significantly to address sector-specific risks involving equipment malfunction, industrial accidents, supply chain disruption, environmental liability and operational failure. The Future of Green Hydrogen Infrastructure in India India’s green hydrogen ecosystem is entering a decisive growth phase. Over the next decade, the sector is expected to witness the emergence of: Integrated renewable-hydrogen infrastructure platforms Export-oriented hydrogen hubs Port-linked hydrogen ecosystems Industrial decarbonisation clusters Hydrogen transportation infrastructure ESG-driven institutional financing models Carbon market-linked hydrogen projects The sector’s long-term trajectory will likely depend on the successful integration of renewable energy, industrial demand creation, financing innovation and regulatory certainty. For businesses, investors and lenders, green hydrogen is no longer merely an energy sector opportunity. It is becoming a large-scale industrial infrastructure transformation with implications across manufacturing, logistics, exports, climate finance and international trade. Conclusion Green hydrogen is expected to become one of the defining pillars of India’s long-term energy transition and industrial decarbonisation strategy. Strong policy support, growing renewable energy capacity, increasing ESG-focused investment and rising global demand for low-carbon industrial solutions are collectively accelerating the sector’s growth. At the same time, green hydrogen projects involve highly sophisticated legal, commercial, operational and financing considerations that require multidisciplinary planning and carefully structured execution. Successful projects will increasingly depend on: Integrated renewable energy strategies Technology diligence and risk allocation ESG and sustainability preparedness Long-term industrial offtake certainty Cross-border financing capability Regulatory compliance and infrastructure planning As India moves toward a lower-carbon economy, businesses participating in green hydrogen infrastructure development will need to navigate an evolving legal and commercial landscape that combines energy transition policy with large-scale industrial infrastructure financing. By Surbhi Kapoor, Partner, King Stubb and Kasiva https://ksandk.com/people/surbhi-kapoor/

India’s infrastructure story has long been associated with ambition, mega highways, renewable energy parks, airports, logistics corridors, smart cities, data centres and urban transformation projects. Over the last two decades, billions of dollars have flowed into the sector from banks, institutional lenders, sovereign wealth funds, infrastructure funds and global investors eager to participate in India’s growth trajectory. Yet beneath this expansion lies a parallel reality: a rising volume of stressed infrastructure assets, financially distressed projects and complex insolvency-driven restructurings. As India enters 2026, the market for distressed infrastructure acquisitions has evolved into one of the country’s most sophisticated investment and restructuring ecosystems. Today, infrastructure insolvency is no longer viewed merely as a lender recovery mechanism. It has become a strategic route for acquiring operational assets, consolidating market positions and unlocking long-term yield opportunities across sectors such as renewable energy, roads, airports, logistics, warehousing and digital infrastructure. The growing maturity of India’s insolvency regime under the Insolvency and Bankruptcy Code, 2016 (“IBC”) has fundamentally reshaped how infrastructure distress is managed. Investors are increasingly evaluating distressed infrastructure platforms in India not simply for recovery value, but for future scalability, ESG alignment, operational resilience and long-term cashflow generation. At the same time, infrastructure insolvencies remain among the most legally and operationally complex transactions in the market. Unlike ordinary corporate distress, infrastructure restructuring involves concession agreements, public utility obligations, regulatory approvals, operational continuity concerns, multi-layered financing structures and cross-border investment considerations. This article examines the evolving legal and commercial landscape governing stressed infrastructure assets in India and explores the major insolvency, restructuring and investment trends shaping the sector in 2026. Why Infrastructure Assets Become Financially Distressed Infrastructure projects are uniquely vulnerable to financial stress because they are capital intensive, highly leveraged and dependent on long-term regulatory and operational stability. Even relatively minor disruptions can significantly affect project cashflows, debt servicing capability and investor confidence. In many large projects, revenues begin years after substantial capital expenditure has already been incurred. Delays in land acquisition, environmental approvals, construction timelines or regulatory clearances can therefore create immediate pressure on financing structures. Some of the most common causes of infrastructure distress in India include: Land acquisition and rehabilitation delays Construction overruns and EPC disputes Tariff and regulatory conflicts Counterparty payment defaults Aggressive leverage structures Demand volatility and traffic shortfalls Technology underperformance Foreign exchange exposure Financing mismatches and refinancing constraints As infrastructure financing structures become more sophisticated, stress events increasingly involve multiple stakeholders, layered security structures and competing recovery expectations. How the IBC Transformed Infrastructure Resolution in India Before the introduction of the IBC, distressed infrastructure projects often remained trapped in prolonged litigation, fragmented restructuring frameworks and inefficient enforcement proceedings. Recovery timelines were uncertain, project values deteriorated rapidly and lenders faced significant difficulties in monetising distressed assets. The IBC fundamentally altered this landscape by introducing a structured, creditor-driven and time-bound insolvency framework. More importantly, it transformed distressed infrastructure from a purely recovery-oriented process into a viable investment and acquisition opportunity. For infrastructure investors, the IBC has improved: Transparency in distressed asset resolution Institutional creditor coordination Recovery discipline among borrowers Access to operational infrastructure assets Market-driven restructuring outcomes Platform consolidation opportunities In sectors such as renewable energy and roads, insolvency proceedings are increasingly being used as strategic entry routes by institutional investors seeking scalable infrastructure portfolios in India. Why Distressed Infrastructure Assets Are Attracting Institutional Capital One of the defining trends of 2026 is the growing participation of sovereign wealth funds, infrastructure investment platforms, private credit funds and global institutional investors in distressed infrastructure acquisitions in India. Operational infrastructure assets often continue to possess substantial long-term value despite sponsor-level distress. For sophisticated investors, financial distress may create opportunities to acquire strategically important assets at discounted valuations while retaining access to long-duration cashflows. This is particularly attractive in sectors where underlying demand remains structurally strong, including: Renewable energy projects Roads and highways Warehousing and logistics parks Urban infrastructure platforms Digital infrastructure and data centres Transmission and utility assets Infrastructure is increasingly being viewed as a long-term yield-generating asset class capable of delivering stable and predictable returns over extended investment horizons. Renewable Energy Insolvencies and Market Consolidation Renewable energy has emerged as one of the most active sectors for distressed infrastructure acquisitions in India. Solar and wind platforms continue attracting strong investor interest despite operational and regulatory challenges affecting several projects. Common causes of stress in renewable projects include: Delayed payments under power purchase agreements (PPAs) Curtailment disputes Aggressive debt financing Module performance issues Regulatory uncertainty Transmission connectivity challenges Despite these risks, distressed renewable energy assets remain highly attractive because they are often supported by long-term PPAs, government-backed procurement frameworks and strong ESG investment demand. Large renewable energy developers and infrastructure funds are increasingly using insolvency-led acquisitions as a route for portfolio expansion and market consolidation. The result is a rapidly evolving market for distressed renewable energy asset acquisition in India. Roads and Highway Projects: Continuing Stress Despite Structural Reforms Road and highway projects historically accounted for a major share of infrastructure stress in India. Earlier BOT-based concession models often relied on aggressive traffic projections and highly leveraged financing structures that became difficult to sustain. Although the transition toward Hybrid Annuity Models (HAM) and EPC-based structures has reduced certain categories of project risk, financial stress remains a continuing concern in several operational projects. Key stress triggers continue to include: Traffic and revenue underperformance Construction disputes Delayed annuity payments Land acquisition issues Refinancing pressure Concession-related disputes For lenders and investors, road sector insolvencies require careful evaluation of concession rights, termination compensation frameworks and operational continuity obligations. Airport and Aviation Infrastructure Insolvencies Airport restructuring transactions remain exceptionally sensitive because airports are strategically important national infrastructure assets subject to extensive regulatory oversight. Unlike conventional corporate insolvencies, airport distress scenarios frequently involve: Passenger service continuity concerns Government oversight obligations National security considerations Multi-party concession arrangements Regulatory transfer approvals Operational dependency risks Successful airport insolvency resolution in India requires coordination among lenders, regulators, concessioning authorities, operators and infrastructure investors. Operational continuity remains central to preserving both enterprise value and public confidence. Digital Infrastructure and Data Centre Restructuring India’s rapidly expanding digital economy is creating significant investment activity in data centres and digital infrastructure. However, as the sector matures, digital infrastructure restructuring and distress scenarios are expected to become increasingly relevant. Potential stress factors may include: Technology obsolescence High capital expenditure burdens Energy cost volatility Customer concentration risks Operational disruption exposure Cybersecurity liabilities Despite these concerns, digital infrastructure remains highly attractive to investors because of AI-driven demand growth, cloud expansion and long-term digital adoption trends. Data centres are increasingly being treated as infrastructure-like assets with stable recurring revenue characteristics. Concession Agreements and Insolvency Risks One of the most critical legal issues in infrastructure insolvency relates to concession agreements, licences and regulatory approvals. Many infrastructure projects derive their economic value directly from government concessions or regulated operating rights. Accordingly, insolvency proceedings often raise complex questions such as: Whether concession rights survive insolvency Whether approvals can be transferred to new investors Whether lenders can exercise substitution rights Whether termination risks arise during restructuring For lenders, direct agreements and step-in rights have become essential risk mitigation tools. These mechanisms help preserve project continuity while facilitating restructuring or sponsor substitution during distress. In heavily regulated sectors, the enforceability and practical implementation of these protections often become central to successful resolution outcomes. Security Enforcement Challenges in Infrastructure Projects Infrastructure financing structures typically involve extensive security packages including: Mortgage over project assets Assignment of receivables Charge over project accounts Assignment of concession rights Pledge over project company shares However, enforcement in infrastructure projects is rarely straightforward. Public utility obligations, regulatory approvals, concession restrictions and insolvency moratoriums frequently complicate pure enforcement strategies. As a result, consensual restructuring and resolution planning are often commercially more viable than aggressive enforcement proceedings. Why Operational Continuity Matters During Infrastructure Insolvency Unlike ordinary commercial businesses, infrastructure assets frequently provide essential public services. Power generation projects, toll roads, airports and urban utility assets cannot simply cease operations during insolvency proceedings without broader economic and public consequences. Operational disruption may materially affect: Public service delivery Regulatory compliance Asset valuation Revenue stability Recovery outcomes for creditors For this reason, infrastructure insolvency strategies increasingly prioritise stabilisation measures, interim funding arrangements and business continuity planning. Investors and resolution applicants are expected to demonstrate operational capability alongside financial strength. The Growing Role of Infrastructure Funds and Private Credit Alternative capital providers are becoming increasingly influential in India’s infrastructure restructuring market. Private credit funds, distressed asset investors and infrastructure investment platforms are actively participating in: Rescue financing transactions Stressed infrastructure acquisitions Refinancing of operational assets Resolution plan funding Sponsor replacement structures Traditional banks often face provisioning pressure, sectoral exposure limits and regulatory constraints when dealing with stressed infrastructure projects. Alternative capital providers are therefore filling a critical financing gap within the distressed infrastructure ecosystem. This trend is expected to accelerate further in 2026 as institutional investors seek exposure to operational infrastructure assets with long-term yield potential. RBI Project Finance Directions 2025 and Early Stress Recognition The RBI Project Finance Directions, 2025 are expected to significantly influence future infrastructure stress and restructuring trends in India. The framework places greater emphasis on project monitoring, milestone-linked disbursements and early identification of implementation risks. The regulatory focus on: Delay recognition Project monitoring discipline Cost overrun controls Enhanced lender oversight may improve project governance and financing discipline across the sector. At the same time, stricter monitoring mechanisms may also accelerate stress recognition and trigger restructuring discussions much earlier in the project lifecycle. This could reshape how lenders and sponsors approach infrastructure risk management in India. Inter-Creditor Complexity in Large Infrastructure Insolvencies Modern infrastructure projects frequently involve consortium financing structures, offshore lenders, institutional investors, bondholders and multilayered security arrangements. As a result, infrastructure insolvencies often become highly complex inter-creditor exercises involving competing recovery priorities and divergent restructuring expectations. Different creditor groups may hold: Different security rights Different enforcement strategies Different recovery assumptions Different regulatory considerations Successful resolution strategies therefore depend heavily on stakeholder coordination, commercial negotiation and carefully structured inter-creditor arrangements. Cross-Border Infrastructure Distress and Foreign Investment Issues Many infrastructure projects in India involve foreign investment, offshore financing arrangements and international dispute resolution frameworks. Distress scenarios can therefore trigger complex cross-border legal issues involving: FEMA compliance Offshore enforcement rights Bilateral investment treaty protections Multi-jurisdictional restructuring International arbitration proceedings For global investors evaluating distressed infrastructure opportunities in India, legal due diligence must extend beyond domestic insolvency considerations and address broader cross-border enforcement and regulatory risks. ESG Considerations in Distressed Infrastructure Transactions Environmental, social and governance (ESG) considerations are increasingly influencing distressed infrastructure investment decisions. Institutional investors are now evaluating sustainability exposure and governance risk alongside traditional financial metrics. Key ESG considerations frequently include: Environmental liabilities Sustainability compliance Community impact exposure Governance failures Carbon transition risk Climate resilience considerations Assets with strong ESG alignment often attract better refinancing opportunities, enhanced institutional interest and stronger long-term valuations. Renewable and sustainable infrastructure platforms remain particularly attractive within this evolving investment landscape. Litigation, Arbitration and Contingent Liability Risks Infrastructure insolvencies rarely exist in isolation. Distressed projects are frequently accompanied by ongoing disputes involving EPC contractors, concessioning authorities, regulators and financing counterparties. Resolution applicants must therefore carefully evaluate: Pending arbitration claims Regulatory proceedings Enforcement litigation Contingent liabilities Contractual termination risks Insurance-related disputes Effective dispute management has become a critical component of infrastructure restructuring and distressed asset acquisition strategy in India. Key Risks in Distressed Infrastructure Investing Despite strong acquisition opportunities, distressed infrastructure investments continue to involve substantial legal, operational and regulatory risk. Some of the most significant risks include: Regulatory uncertainty Concession instability Technology failures Environmental liabilities Legacy litigation exposure Political and policy risk Operational disruption Enforcement complexity Accordingly, comprehensive legal, technical, financial and regulatory due diligence remains indispensable in any infrastructure distress transaction. The Future of Infrastructure Restructuring in India India’s stressed infrastructure market is expected to become increasingly sophisticated over the next several years. Distressed infrastructure is now viewed as strategic investment category within India’s broader infrastructure financing ecosystem. Key trends likely to shape the market in 2026 and beyond include: Greater infrastructure platform consolidation Increased participation by institutional capital Expansion of digital infrastructure restructuring ESG-linked refinancing models Growth of private credit and rescue financing More sophisticated turnaround and restructuring strategies As India continues expanding its infrastructure footprint, financial stress and restructuring activity will remain an inevitable part of the sector’s evolution. The key differentiator will increasingly lie in how effectively stakeholders manage operational continuity, regulatory complexity, dispute exposure and long-term value creation. Conclusion Infrastructure insolvency and distressed asset restructuring have become central components of India’s infrastructure and project finance ecosystem. The combination of rapid infrastructure growth, financing sophistication, institutional investor participation and regulatory complexity continues to create both significant risk and substantial acquisition opportunity. At the same time, infrastructure distress transactions require far more than conventional insolvency expertise. Successful outcomes increasingly depend on multidisciplinary execution involving restructuring strategy, regulatory planning, operational continuity management, dispute resolution, financing coordination and ESG assessment. For lenders, investors, developers and infrastructure funds, the Indian distressed infrastructure market in 2026 represents not merely a recovery environment, but a rapidly evolving platform for long-term strategic investment and consolidation. By Atul N. Menon, Partner – King Stubb and Kasiva https://ksandk.com/people/atul-n-menon/  

When two parties agree to arbitrate, they agree to place their dispute before a person, or a panel of persons, whom they trust to decide it. That is the whole of the bargain. Everything else, the seat, the rules, the language and the timetable, is machinery built around a single human act of judgment. It is worth holding that picture in mind, because a quiet change is taking place at the tribunal table. A new presence has pulled up a chair, and it is neither party, nor counsel, nor the arbitrator. Scholars of online dispute resolution gave it a name some years ago. Drawing on the work of Ethan Katsh and Janet Rifkin, they called technology the fourth party, sitting alongside the two disputants and the neutral and increasingly shaping what happens between them. The phrase was coined for the modest software of an earlier internet. It fits the arbitration room of 2026 far better than it fitted the one it was written for. The argument of this piece is narrow and important. So long as artificial intelligence in arbitration does the work of a clerk, it raises little that the existing law cannot handle. The moment it begins to shape the decision rather than merely speed up the typing, it stops behaving like a tool and starts behaving like a participant, and at that moment a set of Indian rules built entirely around human actors begins to misfire. The fourth party is not a metaphor to be admired. It is a problem to be located precisely, and Indian arbitration law, as it happens, gives us unusually sharp instruments for locating it. What the fourth party actually means The fourth party idea is best understood by contrast with the third. The third party in any dispute is the neutral, the mediator or the arbitrator, brought in to do what the two sides cannot do for themselves. The fourth party is the technology that increasingly assists, and sometimes supplants, that neutral. In its original and innocent form it was the platform that scheduled the mediation and held the documents. In its present form it is a system that can read the evidence, draft the analysis and propose the outcome. The point of the phrase is to make us notice that the technology is no longer merely infrastructure sitting in the background. It has moved into the foreground, close enough to the decision to deserve a name. It is essential to separate two modes of deployment of AI, because the entire analysis turns on the distinction. The first is clerical. A tool that transcribes a hearing, translates a document, organises an index or corrects the spelling in a draft does work that is real but not dispositive, and nobody sensible loses sleep over it. The second is dispositive, or close to it. A tool that weighs the evidence, assesses credibility, decides which line of authority to prefer or drafts the operative reasoning of an award is doing the very thing the parties appointed a human to do. The fourth party becomes a legal problem only in this second mode, and much of the confusion in the current debate comes from a failure to say which mode is in issue. The arbitrator we choose, and why we choose that one Indian law, like the law of most arbitral jurisdictions, treats the appointment of an arbitrator as personal. The choice is intuitu personae, made in respect of the particular individual and their particular qualities, their expertise, their judgment and their reputation for fairness. This is not sentiment. It is the reason the parties are bound by the award of a person whom they did not have to accept and could have rejected. Because the appointment is personal, the mandate that flows from it is non delegable. An arbitrator may take administrative help, but may not hand over the decision to someone else, because the someone else is not the person the parties chose. This principle already has a well known stress point that long predates artificial intelligence, namely the tribunal secretary. The international debate about how much a tribunal secretary may properly do, and at what point assistance shades into the secretary becoming a fourth arbitrator who improperly shares in the decision, is precisely the debate we are about to have again, only this time with a machine in the secretary’s chair. The lesson from that earlier debate applies directly. The line was never drawn at research, summarising or drafting, all of which a secretary may properly do. It was drawn at the decision itself, which must remain the arbitrator’s own. A language model is, for this purpose, a tireless and untrustworthy tribunal secretary, and the same line governs it. It may assist up to the point of decision. It may not make the decision, and it must not be permitted to make the decision in substance while a human merely ratifies the output. The Indian reality sharpens this point rather than softening it. A very large share of Indian arbitration is conducted by sole arbitrators, frequently retired judges, who carry heavy lists and lean, quite properly, on juniors and clerks to manage the paper. The institutional scrutiny that a tribunal secretary attracts in a large international reference is often simply absent in a domestic one. Into that environment now arrives a tool that will draft a confident analysis on request, at no marginal cost, at any hour of the night. The temptation to let it do more than it should is therefore greatest exactly where the supervision is thinnest. A rule that depends on busy sole arbitrators policing themselves, with no institutional check standing behind them, is a rule that will be honoured unevenly, and that is a reason to make the expectation explicit rather than to leave it to good intentions. A disclosure regime aimed at the wrong actor Here the fourth party exposes a genuine gap. Indian law polices the integrity of the decision maker through Section 12 of the Arbitration and Conciliation Act, 1996, read with the Fifth and Seventh Schedules introduced in 2015. An arbitrator must disclose any circumstances likely to give rise to justifiable doubts about independence or impartiality, and certain relationships render a person ineligible altogether. The entire apparatus is trained on the human arbitrator. It asks whether that person is independent, whether that person has a conflict, and whether that person can be trusted to hold the balance even. It asks nothing at all about the tool that may be shaping that person’s reasoning, because when the apparatus was designed there was no such tool. Consider how odd this sits. If a retired judge sitting as a sole arbitrator has a remote past association with one of the parties, the law requires disclosure and may require recusal. If the same arbitrator runs the entire dispute through a commercial artificial intelligence system whose training data, commercial alignments and systematic leanings are entirely unknown, the law currently requires nothing, because the system is treated as a pencil rather than as a participant. The disclosure regime is looking hard at the arbitrator and not at all at the fourth party that may be doing a meaningful part of the arbitrator’s thinking. That is no criticism of the draftsman of 2015, who could not have foreseen it. It is simply an identification of where the next reform must look. Equality of arms, and a recent warning from the Supreme Court The Indian courts have, if anything, been moving in the opposite direction to complacency about who controls the decision maker. In Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) reported as 2024 INSC 857, a Constitution Bench of the Supreme Court held in November 2024 that clauses allowing one party to unilaterally appoint a sole arbitrator, or to confine the other side’s choice to a panel curated by that one party, offend the principle of equality under the Act and the guarantee of equality before the law under Article 14 of the Constitution. The reasoning built on earlier decisions such as TRF Ltd. v. Energo Engineering Projects Ltd. reported as (2017) 8 SCC 377 and Perkins Eastman Architects DPC v. HSCC (India) Ltd. reported as (2020) 20 SCC 760, which established that a person ineligible to act as an arbitrator cannot validly appoint one either. The thread running through these decisions is a deep judicial insistence that neither side should hold a structural advantage in constituting the tribunal, because the tribunal is the heart of the bargain and must be equally the tribunal of both parties. Now place the fourth party against that thread. If the arbitral process leans heavily on an artificial intelligence system, and one party has access to a more powerful system than the other, or worse, if the tribunal itself relies on a system supplied or shaped by interests aligned with one side, the equality that the Supreme Court was so anxious to protect is quietly disturbed, not at the visible stage of appointment but at the invisible stage of reasoning. The Court closed the front door to a stacked tribunal. The fourth party can walk in through a window the Court was not yet looking at. Section 18 of the Act states the same value in the language of procedure, requiring that the parties be treated with equality and that each be given a full opportunity to present its case. A fourth party that one side can afford and the other cannot, or that systematically favours the kind of argument it was trained on, is a Section 18 problem wearing technological clothing. The provision is broad enough to reach it. What is missing, for now, is the habit of looking. The equality concern is not an abstract one either. Indian arbitration frequently pits a well resourced entity, a public sector undertaking, a bank or a large contractor, against an individual, a small supplier or a sub-contractor. The Supreme Court in the railway electrification case was alive to exactly this imbalance when it struck down panels curated by the stronger party. Now imagine that the stronger party deploys a sophisticated and expensive analytical system across the entire reference while the weaker party cannot, or that the tribunal itself adopts a tool whose defaults quietly reward the kind of voluminous, well organised submission that only the stronger party can produce. The inequality does not announce itself. It is laundered through the appearance of neutral efficiency. The lesson of the railway electrification judgment is that Indian law cares about structural advantage in the constitution and the conduct of the tribunal, and the fourth party is entirely capable of delivering such an advantage through the back door. The honest counter The strongest objection to all of this must be met head on, because it is a good one. Every arbitrator already uses tools. They use Manupatra and SCC Online, they use juniors and clerks, they use their own libraries and their own past awards. Nobody calls a legal database a fourth party or demands that it be disclosed and conflict checked. Why should a language model be any different? The answer is that the difference lies not in the tool being electronic but in the tool generating rather than retrieving. A database returns what a human asked for, and the human then evaluates it. A generative system proposes conclusions, frames the analysis and supplies reasoning that a tired or busy human may adopt with less scrutiny than they would give a junior, precisely because the output reads as finished and confident. The risk is not the technology in itself. It is the seductive completeness of the output and the human tendency to defer to it. That is what makes the generative tool a candidate for participant status when the database never was. This is not armchair psychology. The tendency to over rely on automated output, sometimes called automation bias, is well documented, and it is strongest under precisely the conditions in which arbitrators work, namely time pressure, large volumes of material and a confident, fluent answer that arrives already formatted. A junior who hands up a weak note invites correction, because the human relationship makes scrutiny natural. A machine that hands up a polished one invites adoption, because there is no relationship to mediate the scrutiny and the polish itself does the persuading. The danger is therefore not that arbitrators are careless. It is that the tool is built to be believed, and any rule that ignores this human factor is regulating the wrong thing. There is a fair reply to my own argument too, and intellectual honesty requires me to state it. One might say that all of this collapses into the simple and existing rule that the arbitrator must apply their own mind, so that no new concept of a fourth party is needed at all. I have some sympathy with that view, and in a sense the fourth party is only a vivid way of naming a failure of the old duty. But the vividness earns its keep. Naming the fourth party forces the system to ask a question it would otherwise skip, which is not merely whether the arbitrator applied their mind, but to what, and shaped by what, that mind was applied. The old duty asks about the arbitrator. The fourth party asks about the influence upon the arbitrator, and that is the question the present moment requires. Where the line falls So where does the line fall in practice? It falls; at influence over the dispositive reasoning. Below that line, in the clerical and the merely assistive, the fourth party is a tool, needs no special treatment, and the existing law is sufficient. At or above that line, where the system shapes the assessment of evidence, the choice of authority or the operative reasoning of the award, three things should follow. The arbitrator should disclose the use, because the parties are entitled to know what is in the room. The arbitrator must independently own every step of the reasoning, so that the award is genuinely their own and not a ratified output. And the institutions, when they next revise their rules, should extend the logic of Section 12 and the spirit of the railway electrification judgment to ask not only whether the human decision maker is independent, but whether the fourth party at the table is independent too. None of this requires heroic drafting. An institution could achieve most of it with a single default provision: that any use of a generative artificial intelligence tool by the tribunal which bears on the assessment of evidence or the reasoning of the award must be disclosed to the parties, that the tribunal remains personally responsible for every finding, and that any tool so used must meet stated standards of confidentiality and security. Parties who wished to contract out of the default could do so, by agreement, as party autonomy permits. Parties who said nothing would receive a sensible rule rather than a vacuum. That is precisely how arbitral institutions have introduced every other procedural innovation of the last two decades, from emergency arbitrators to expedited timelines, and there is no good reason the fourth party should be handled any differently. The fourth party is not a reason to keep artificial intelligence out of arbitration. It is a reason to keep it in its seat. Indian law has spent the last decade being unusually careful about who gets to constitute and influence a tribunal, and that care is exactly the right instinct to bring to this question. The arbitrator whom the parties chose must remain the one who decides. The fourth party may pull up a chair, take notes, hand up a draft and make itself useful in a hundred ways. What it may never do is pick up the pen that the parties placed, deliberately and personally, in a human hand. By Navod Prasannan,  Advocate and Partner, King Stubb & Kasiva https://ksandk.com/people/navod-prasannan/