Justice BV Nagarathna highlighted gaps in India’s arbitration system, noting absence of a dedicated forum for arbitrator misconduct complaints. She observed courts hesitate to remove arbitrators, especially former judges, raising concerns over accountability and effective dispute resolution mechanisms.
NEW DELHI: Supreme Court Justice BV Nagarathna said that courts often hesitate to remove arbitrators accused of misconduct, partly because many arbitrators are former judges and Chief Justices. She also pointed to structural weaknesses in India’s arbitration system especially the lack of a dedicated mechanism for investigating complaints against arbitrators.
She said,
“There is no forum as such where a misconduct of an arbitrator is complained against except before a court. And courts are very wary of changing an arbitrators because many of the arbitrators are former judges, Chief Justices,”
Justice Nagarathna made these observations while speaking at the 5th Edition of the Indian Council of Arbitration International Conference, held under the theme “Arbitration in the Era of Globalization: Legal Technology, Economic Development & Cross-Border Disputes.”
She noted that cases of arbitrator replacement for misconduct are uncommon, but said the concern highlights the need to uphold high professional standards in arbitration and mediation. She stressed that ADR mechanisms must operate with the same level of rigour and discipline as court adjudication.
She said,
“ADR does not mean a slackening of standards or rigour or discipline,”
The judge also raised concerns about confidence in arbitration, observing that claims of bias or misconduct can erode trust in the process. She added that replacing arbitrators is difficult even when such apprehensions arise, which makes institutional safeguards and accountability essential.
It remains difficult to replace arbitrators even where such concerns arise and hence, there is a need for institutional safeguards and accountability, she underscored.
On dispute resolution, Justice Nagarathna advocated a more connected framework that brings together arbitration, mediation, and negotiation. She suggested that even at later stages such as when parties challenge arbitral awards under Section 34 of the Arbitration and Conciliation Act they should still consider settlement.
Senior Advocate Pinky Anand also spoke at the conference. She flagged the rising cost of dispute resolution, including the steep increase in legal fees. She said that while the government reportedly spent about Rs 400 crore on litigation over the past decade, private companies spent close to Rs 62,000 crore on legal fees in a single financial year.
Citing law firm revenues, Anand noted that the firm reportedly increased its earnings four-fold between 2020 and 2025, and earned around Rs 1,000 crore in 2024.
Adding that the issue is not only the money paid to legal professionals but also the opportunity cost borne by businesses, She said,
“As a lawyer, I have no difficulty with these earnings. But as a patriot, I find this unacceptable,”
The panel included international arbitration practitioners: Sapna Jhangiani KC (Judge of the DIFC Courts), Chong Yee Leong, Divyam Agarwal and Sahil Narang.
They discussed emerging directions in arbitration, including the increasing role of mediation and hybrid dispute resolution models for cross-border commercial disputes particularly in a globalised and technology-driven economic environment.
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