How to Apply for Security for Costs in India (2026): When to Ask, Documents & Drafting Tips

Security for costs india applications have become a central tactical tool for commercial litigators as cross-border contracting, forum-shopping and early cash-security manoeuvres intensify in 2026. Where a defendant faces a claim brought by a party of doubtful solvency, a foreign claimant with no assets in India, or a counterparty with a history of evading process, an order compelling the provision of security can protect the eventual recovery of costs. This guide sets out a prescriptive, step-by-step pathway for seeking, or resisting, such relief in Indian commercial suits, with particular attention to tech, energy and infrastructure disputes where contract values are high and counterparties are frequently offshore.

It covers eligibility, documents, timelines, costs, drafting tips and enforcement, and reflects courtroom practice as generally observed on the commercial benches.

Who this is for: in-house counsel, general counsel and litigators handling cross-border commercial disputes in the technology, energy and infrastructure sectors who must decide whether to apply for or oppose security for costs. Outcome: a clear decision framework, a documented application and drafting process, required-document checklists, timeline and cost expectations, and the tactical considerations that matter in 2026.

Overview: What Is Security for Costs and Why Seek It?

Security for costs is a court-ordered protection, typically a cash deposit or a bank guarantee, furnished by a party so that, if the opposing party ultimately succeeds and is awarded costs, those costs can actually be recovered. The power flows from the Code of Civil Procedure, 1908 (CPC), which, notably through Order XXV, gives the court discretion to require a plaintiff to furnish security for the defendant’s costs in defined circumstances, and from the inherent powers preserved under Section 151 CPC to prevent abuse of process. Where a suit falls within the Commercial Courts Act, 2015, the costs regime under Section 35 CPC (as amended for commercial disputes) also informs quantum and the court’s broader discretion over costs.

The relief is most often sought by a defendant against a claimant whose ability to satisfy a costs order is genuinely in doubt.

The risk profile cuts both ways. For the applicant (usually the defendant), a well-grounded order converts a theoretical costs entitlement into a real asset held by the court or callable from a bank. For the respondent (usually the claimant), an order can impede access to justice if the quantum is excessive or the evidence thin, which is precisely why Indian courts scrutinise these applications carefully and insist on proportionality. Security may take the form of cash paid into court, an unconditional bank guarantee from a scheduled bank, a fixed deposit under lien, or in some matters an escrow arrangement.

Practical Examples in Tech, Energy & Infrastructure Disputes

Consider a foreign software vendor suing an Indian system integrator for licence fees, where the vendor is a thinly capitalised entity incorporated in a low-transparency jurisdiction with no assets in India. The integrator may legitimately seek security for costs to protect its defence spend. In an energy context, an EPC contractor domiciled offshore might sue a project developer over a terminated supply contract; if the contractor has already wound down operations, the developer can point to dissipation risk and the absence of recoverable Indian assets as the basis for an order. These scenarios illustrate why security for costs india strategy turns on solvency, asset location and the credibility of the enforcement threat.

Eligibility: When Can You Apply for Security for Costs in India?

The statutory foundation sits in the Code of Civil Procedure, 1908 (in particular Order XXV read with Section 151), supplemented by judicial principles developed by the Supreme Court of India and the High Courts. The classic triggers are: a plaintiff who resides or is incorporated outside India and holds no sufficient property within India sufficient to answer a costs order; credible evidence that the plaintiff will be unable to satisfy an adverse costs order; and conduct suggesting forum-shopping, asset dissipation or an intent to evade process. Under Order XXV, the court may on its own motion or on application order a plaintiff to give security, and residence outside India without sufficient immovable property in India is a recognised ground.

The court exercises a discretion, not a mechanical rule, and the burden rests on the applicant to establish a proper evidential basis.

Tests Courts Apply, Threshold, Balance of Convenience and Prima Facie Merits

Indian courts typically weigh several factors before granting security for costs. First, a threshold enquiry: is there a genuine, evidenced reason to doubt the plaintiff’s ability or willingness to pay costs? Second, the balance of convenience: would an order unfairly stifle a bona fide claim, or is it proportionate to the real risk? Third, a view on the prima facie merits: courts are generally more reluctant to order security against a claimant with an apparently strong case, and more willing where the claim looks speculative. Applicants should expect the bench to probe whether the application is being used tactically to pressure a legitimate claimant, and should calibrate quantum accordingly.

Who Can Be Asked to Provide Security

Security is most readily sought against a foreign corporate plaintiff with no Indian nexus, and may be sought in appropriate cases where a plaintiff is demonstrably unable to meet costs or is dissipating assets. Foreign-incorporated plaintiffs are the most common targets because enforcement of an eventual costs order abroad is slow, uncertain and expensive. Against a purely domestic plaintiff, the applicant must usually show a cogent basis, mere poverty or impecuniosity of a resident plaintiff is, on its own, generally not sufficient under Indian practice. Each category demands tailored evidence, addressed in the documents section below.

Step-by-Step: How to Make a Security for Costs Application

The procedural roadmap below is structured as a sequence of discrete steps. Each identifies who leads, what evidence is required, and the drafting points that determine whether the order is obtained and enforced. The timeline table follows the steps; durations are indicative and vary by court.

Step 1, Pre-Filing Assessment and Tactical Decision

Who: litigation team and in-house counsel. Before drafting anything, conduct a cold assessment of the plaintiff’s solvency and the enforcement landscape. Key checks:

• Solvency and asset mapping. Does the plaintiff hold attachable assets in India? Run Ministry of Corporate Affairs (MCA) / Registrar of Companies searches, review audited accounts and check for insolvency filings.
• Jurisdictional exposure. Is the plaintiff foreign-incorporated, and how enforceable would a domestic costs order be against its home-jurisdiction assets?
• Arbitration vs court. Does the contract contain an arbitration clause? If so, interim measures (including security) may be sought from a tribunal under Section 17, or from a court under Section 9, of the Arbitration and Conciliation Act, 1996, or from an emergency arbitrator where the applicable institutional rules provide for one.
• Contractual forum and choice-of-law clauses. These shape both the venue and the strength of any dissipation argument.

The output of Step 1 is a go/no-go decision and a provisional view on quantum and form of security.

Step 2, Collecting Evidence & Affidavits

Who: external counsel with a forensic accountant where quantum or solvency is contested. The quality of the evidence pack is the single biggest determinant of success in a security for costs india application. Assemble:

• Financial evidence of inability to pay, bank statements, credit reports, audited accounts, and any insolvency or winding-up filings.
• Dissipation evidence, asset transfers, charge creation, or operational wind-down indicating the plaintiff is placing assets beyond reach.
• Foreign registry searches, corporate filings from the jurisdiction of incorporation, confirming thin capitalisation or dormant status.
• Prior conduct, records of earlier defaults, unsatisfied judgments, or foreign actions evidencing forum-shopping.

Every factual assertion must be carried by a duly verified affidavit, affirmed or sworn in compliance with the applicable rules and deposed by a person with direct knowledge.

Step 3, Drafting the Application: Structure and Key Clauses

Who: external counsel. A disciplined structure helps the bench and improves your chances. Open with a rule-based headnote citing the relevant CPC provision (typically an application under Order XXV read with Section 151) and the court’s discretionary power. State the relief sought with precision, the exact sum, the form of security, and the deadline for provision. Attach a costs schedule showing how the quantum was calculated; an unquantified or round-figure demand invites refusal.

Draft the proposed order so the court can adopt it. A short illustrative cash-deposit clause: “The Plaintiff shall, within the time directed by this Court, deposit a sum of INR [●] with the Registry of this Court by way of security for the Defendant’s costs, failing which the suit shall be liable to be dealt with in accordance with Order XXV of the CPC. ” A bank-guarantee variant: “The Plaintiff shall furnish an unconditional, irrevocable bank guarantee from a scheduled commercial bank in the sum of INR [●], payable on first written demand upon a costs award, valid for twelve months and renewable until final disposal.

” (Under Order XXV, failure to furnish security within the time fixed may result in the suit being dismissed.

Step 4, Filing, Interim Hearings & Urgent Relief

Who: external counsel and the bench. File the application with the supporting affidavit and seek a listing. Where there is a credible, immediate risk of dissipation, request urgent listing, but note that the evidential threshold is high and the court will expect full and frank disclosure, particularly if any ex parte component is sought. On commercial lists, urgent matters may be able to secure an early hearing under the relevant High Court practice directions and eCourts listing protocols; timelines are not guaranteed and depend on the docket. At the first hearing, be ready to justify both the trigger and the quantum, and to offer the plaintiff a reasonable period to comply.

Step 5, Obtaining and Enforcing the Order

Who: external counsel, process server and court registry. Once the order is made, monitor compliance against the deadline. If the plaintiff deposits cash or lodges a conforming bank guarantee, the security sits with the court or is callable on an adverse costs award. If the plaintiff ignores the order, the consequences under Order XXV can include dismissal of the suit; the applicant can thereafter pursue execution, attachment of identified assets, garnishee relief or, in appropriate cases, contempt proceedings. Where the dispute overlaps with arbitration, coordinate the enforcement strategy with any interim measures ordered by the tribunal or court.

Practical Drafting Tips for Tech, Energy & Infrastructure Disputes

Tailor the wording to the project phase. In EPC and supply-contract disputes, align the security mechanism with existing performance bonds so the court is not asked to duplicate protection the respondent already holds. Prefer independent, on-demand instruments over conditional ones. For long-running infrastructure litigation, build in renewal obligations and escrow arrangements so security does not lapse mid-case, and consider third-party guarantees from a creditworthy parent where the claimant is a thinly capitalised project SPV.

Required Documents for a Security for Costs India Application

The document pack must prove both the trigger (why security is justified) and the quantum (how much and in what form). The table below lists core and supporting documents, with notes on format and evidentiary weight.

Additional notes: file clean copies in the format required by the relevant court, include certified translations of any foreign-language documents, and ensure foreign documents are properly notarised and, where required, apostilled or legalised. Incomplete or uncertified foreign documents are a common reason applications stall at the first hearing.

Timeline & Deadlines, Including Expedited Options

From filing to order, a security for costs india application can take anywhere from a few weeks upwards, and timelines vary materially by High Court and by the commercial bench hearing the matter. Where genuine urgency exists, counsel can seek urgent listing under the relevant High Court practice directions and eCourts protocols, and in exceptional dissipation cases an earlier hearing may be secured, but no fixed turnaround can be guaranteed. The timeline table above sets out indicative durations for each phase, including the dependency on bank guarantee issuance, which typically takes a few business days once the respondent instructs its bank.

There is no single statutory clock governing these applications; timing is driven by the court’s docket, the urgency demonstrated and local listing practice. Where the dispute is governed by an arbitration clause, interim security may be sought from the tribunal under Section 17 of the Arbitration and Conciliation Act, 1996, from a court under Section 9, or from an emergency arbitrator where the applicable institutional rules provide for one, a point counsel should assess at Step 1. Always confirm the current listing practice of the specific bench before promising a client a timeline.

Costs & Fees

Budgeting should account for court fees, counsel fees, bank guarantee commission, cross-border service and any enforcement spend. The indicative bands below are illustrative only; actual figures depend heavily on the court, the claimed amount, the applicable court-fee schedule and the complexity of the matter. Court fees in particular are governed by the relevant state Court-Fees legislation and local rules and should be verified for the specific forum.

What to Watch in 2026

Several practical themes shape security for costs india strategy in 2026. Commercial benches constituted under the Commercial Courts Act, 2015 continue to place emphasis on early, quantified cost assessment and a more robust costs-follow-the-event approach under the amended Section 35 CPC, which strengthens the rationale for well-evidenced security applications. eCourts digitisation and e-filing continue to streamline the handling of urgent commercial applications, which can assist in obtaining timely interim relief where dissipation risk is credibly evidenced. Banks apply their own issuance and margin standards for bank guarantees, so counsel should factor in collateral requirements and documentation lead time when proposing a guarantee-based order.

Judicial focus on proportionality and on protecting access to justice remains central, so overreaching quantum will remain vulnerable to challenge. The likely practical effect is that well-evidenced, carefully quantified applications against genuinely offshore or impecunious claimants stand a better prospect of success, while speculative applications will be refused. Before filing, confirm the current practice of your specific bench and check for any recent procedural amendments or High Court practice directions affecting cross-border parties.

Common Pitfalls and How to Avoid Them

Many applications fail not on principle but on execution. The comparison below distinguishes security for costs from the narrower concept of security for specific expenses, after which the most frequent pitfalls are listed.

The recurring pitfalls to avoid:

• Unquantified or excessive sums. Demanding a round figure without a costs schedule invites refusal on proportionality grounds.
• Weak dissipation evidence. Thin affidavits that assert risk without documentary support rarely clear the threshold.
• Ambiguous bank-guarantee call-in clauses. Conditional or vaguely worded guarantees can prove difficult to enforce when the costs award finally arrives.
• Ignoring issuer creditworthiness. A guarantee from a weak institution undermines the very protection sought.
• Overlooking arbitration routes. Where a clause applies, interim security may be more appropriately sought from a tribunal, an emergency arbitrator or a court under Section 9.
• Disregarding local bench practice. Urgent-listing norms differ between High Courts; assuming a uniform practice costs time.

Practical Next Steps & Templates

To move from strategy to filing, work through a short action checklist: map the plaintiff’s solvency and assets; assemble the affidavit and financial evidence; calculate and schedule the quantum; draft the application with a court-ready proposed order; and plan the enforcement route before you file. Where an arbitration clause applies, confirm whether a tribunal, an emergency arbitrator or a court under Section 9 should hear the application instead. For bespoke drafting and related guidance, consult a qualified commercial litigator, and refer to the Commercial Litigation, India practice page and the GLE Lawyer Directory for India where you need specialist assistance.

A disciplined, well-evidenced approach to security for costs india applications protects a defendant’s cost recovery without overreaching, and gives a claimant facing an unmerited application the tools to resist it. In 2026, with cross-border disputes and early cash-security tactics on the rise, getting the quantum, the evidence and the drafting right from the first hearing is what separates an enforceable order from an expensive refusal.

Sources

1. India Code, Code of Civil Procedure, 1908 (Order XXV; Sections 35, 151) and Commercial Courts Act, 2015
2. India Code, Arbitration and Conciliation Act, 1996 (Sections 9 and 17)
3. Supreme Court of India, Official Portal
4. eCourts (National Judicial Data / Courts Services)
5. Delhi High Court, Practice Directions & Cause Lists
6. Ministry of Corporate Affairs (MCA), Company Filings / Registrar of Companies
7. Bar Council of India