Indu Malhotra: Arbitration Tribunal Bias a Major Challenge

• Former Supreme Court Justice Indu Malhotra expressed significant concern that arbitration outcomes can be predicted based on the tribunal's composition.
• She criticized party-appointed arbitrators for acting as partisans, emphasizing their role should be impartial adjudication.
• Justice Malhotra identified this partisanship as the biggest challenge currently facing arbitration.
• She stressed the crucial importance of comprehensive conflict of interest disclosure by arbitrators.
• India's mandatory statutory disclosure framework was praised, and other jurisdictions were urged to adopt similar requirements.

According to the former Justice, this tendency for party-appointed arbitrators to adopt partisan roles represents the single biggest challenge confronting arbitration today, directly impacting arbitration impartiality.

Former Supreme Court Justice Indu Malhotra recently expressed profound concern regarding the integrity of arbitration proceedings, particularly the troubling phenomenon where the outcome of a dispute can be predicted based on the specific composition of the arbitral tribunal. Speaking at a panel session during the India ADR Week 2026 event held in Mumbai, Justice Malhotra underscored that such predictability poses a serious threat to the impartiality and fairness expected in dispute resolution. She explicitly stated that if the result can be anticipated from the tribunal's constitution, it becomes deeply problematic for the entire system.

The discussion, which was moderated by JSA Partner Farid Karachiwal, extensively covered critical issues including various forms of conflicts, the implications of repeat appointments for arbitrators, and the pervasive perceptions of bias within the arbitration ecosystem. A significant portion of her critique was directed at party-appointed arbitrators, who she observed sometimes deviate from their neutral role to act as partisans, thereby compromising the essential impartiality required of adjudicators in multi-member tribunals.

Justice Malhotra unequivocally stated that arbitrators, unlike legal advocates, are not meant to champion the cause of the parties who appoint them. She stressed that their fundamental mandate is to serve as impartial adjudicators, upholding justice without taking a partisan view. According to the former Justice, this tendency for party-appointed arbitrators to adopt partisan roles represents the single biggest challenge confronting arbitration today, directly impacting arbitration impartiality.

She emphasized that when an arbitrator adopts such a partisan stance, they effectively abandon their primary duty as an impartial adjudicator, failing to uphold the core principles of an unbiased dispute resolution mechanism. This departure from impartiality, she argued, transforms the arbitrator into an advocate, thereby ceasing to fulfill their true function within the arbitral process and undermining the ethical standards expected of the tribunal.

To effectively counteract the inherent risks of bias and partisanship, Justice Malhotra highlighted the critical importance of robust conflict of interest disclosure by arbitrators. She asserted that comprehensive and mandatory disclosure mechanisms are absolutely essential for maintaining the integrity, transparency, and perceived fairness of arbitration proceedings. In this context, she specifically lauded India's existing statutory framework for mandatory disclosure, recognizing it as a progressive and necessary measure that helps to ensure predictable arbitration outcomes are based on merit rather than hidden biases. India's Arbitration and Conciliation Act, 1996, particularly Section 12, as amended in 2015 and 2019, mandates arbitrators to disclose circumstances that could raise doubts about their independence or impartiality, a requirement that is continuous throughout the proceedings.

Furthermore, Justice Malhotra extended her recommendation to international jurisdictions, urging them to consider adopting similar statutory requirements to ensure greater transparency and to safeguard against potential conflicts that could compromise the impartiality of arbitral tribunals. Such proactive measures, she implied, are vital for fostering enduring trust in the arbitration process and for upholding the ethical conduct of party-appointed arbitrators.

Lawyers and compliance officers involved in arbitration in India should note the heightened scrutiny on arbitrator impartiality and potential bias, especially concerning party-appointed arbitrators. This emphasizes the critical importance of thorough due diligence in arbitrator selection and rigorous enforcement of conflict of interest disclosure requirements to safeguard the integrity and enforceability of arbitral awards.

Source: Reporting on recent legal commentary