Concerns Over Predictable Arbitration Outcomes
Former Supreme Court Justice Indu Malhotra recently expressed significant concerns regarding the predictability of arbitration outcomes based on the composition of arbitral tribunals. According to Justice Malhotra, the ability to foresee the result of an arbitration based on the tribunal’s makeup poses a serious issue. She articulated these concerns during a panel session at the India ADR Week 2026, held in Mumbai.
Justice Malhotra emphasized the problematic nature of party-appointed arbitrators who act with partiality. She cautioned that when decisions become predictable in multi-member tribunals, it undermines the arbitration process. “If you can predict the result from the constitution of the tribunal, it is problematic,” she stated, highlighting the need for impartiality and independence among arbitrators.
Partisan Arbitrators and Their Impact
The panel discussion delved into the issues of conflicts of interest, repeat appointments, and perceived bias in arbitration. Justice Malhotra stressed that arbitrators should not advocate for the parties involved. “You cannot expect the arbitrators to be taking a partisan view. They are not required to advocate the cause of the party. That is what I think is the biggest challenge to arbitration today,” she emphasized.
She further elaborated that when arbitrators act in a partisan manner, they fail in their primary role. “You cease to be an arbitrator and adjudicator. You cannot be advocating the cause of the party,” she remarked. Justice Malhotra underscored the importance of disclosure regarding conflicts of interest as a critical component of maintaining arbitral integrity.
Statutory Framework and Disclosure
Justice Malhotra praised India’s statutory framework, which mandates disclosures by arbitrators, and suggested that foreign jurisdictions should consider implementing similar statutory requirements. The panel, moderated by JSA Partner Farheed Karachiwala, discussed the significance of transparency and neutrality in arbitration proceedings.
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Among the panelists was Sherina Petit, Partner and Head of International Arbitration at Stewarts, who defended the practice of repeat appointments of arbitrators. She argued that repeat appointments are often a result of genuine expertise. “Principally, if you’re good at what you do, the parties are going to want you again,” she noted, adding, “What you don’t want is a one-hit wonder!” Petit also advocated for transparency, suggesting that when in doubt, arbitrators should disclose potential conflicts.
Comparative Legal Perspectives
Pavani Reddy, Legal Director at Clyde & Co., contrasted the English and Indian legal systems. She explained that English courts utilize an objective ‘fair-minded observer’ test rather than rigid statutory schedules. This approach, she noted, offers a different perspective on managing potential conflicts.
Farheed Karachiwala highlighted that India’s 2015 statutory reforms were pioneering in establishing key disclosure standards. “Fairness and neutrality are paramount in any arbitration,” he said, stressing the importance of these principles in maintaining the credibility of arbitration as an alternative dispute resolution mechanism.
