INDIA Law and Practice Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
5.2 Mechanism for Compensation India follows the common law principle of balancing equities in compensation, depending on the facts of each dispute. Parties often seek specific relief, especially where ancestral property with sentimental value is involved. Pecuniary damages may be awarded where specific relief is not possible. Given the sensitivity of wealth disputes, alterna - tive methods such as mediation and arbitration are increasingly popular to avoid court battles and main - tain family unity. Mediation in India has been formally recognised under a dedicated statute, the Mediation Act, 2023, which promotes cost-effective and timely dispute resolution by encouraging institutional mediation and prescribing clear procedural guidelines and timeframes. Arbitration is also gaining popularity for family wealth disputes due to its flexibility, privacy and quick resolu - tion. Singapore-seated arbitration is emerging as an option for families who prefer to keep disputes out of the Indian domain. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries In India, corporate trustees are commonly used for private trusts. In the last few years, a number of such service providers have emerged. While not mandat - ed by law, corporate trustees generally follow higher standards than individual trustees, favouring pragma - The Indian Trusts Act, 1882 governs the obligations and liabilities of trustees. For corporate trustees, their role, remuneration, and liabilities are set out in the trust deed. Typically, corporate trustees are not liable for losses or costs from good faith decisions if they act without bad intentions. Such protective clauses are common, even in private family trusts, offering comfort to trustees. tism and professionalism. 6.2 Fiduciary Liabilities
Wealth management companies are often preferred corporate trustees in India, especially when invest - ing trust funds for a fee. Judicial forums in India rec - ognise and allow the piercing of the corporate veil as provided under the Companies Act, 2013 to hold responsible officers accountable for fraud or defaults. 6.3 Fiduciary Regulation There are no specific laws for companies providing trusteeship services to private trusts. Corporate trus - tees follow the Indian Trusts Act, 1882, the trust deed, Typically, a portion of the trust property desired by a settlor of a trust is used by a corporate trustee for the purpose of making investments or curating a portfolio. Such investment theory is not different from a typical modern portfolio consisting of high yielding stocks and mutual funds. and other applicable laws. 6.4 Fiduciary Investment In India, there is no embargo on trusts holding the shares of a company having an active business. How - ever, there are some reporting requirements for trusts holding ownership beyond certain specified thresh - olds. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship Domicile Domicile is relevant in India for the purpose of suc - cession to the estate. In India, domicile has an impact on the succession to movable property. As in many countries, domicile in India depends on duration of stay and intention. Residency in India Residency in India can be determined on two counts. Residency under the FEMA Any individual who has been residing in India for more than 182 days during the course of the preceding financial year or a person who has come to or stays in India:
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