'Duty Of Arbitrator To Disclose Potential Conflict Of Interest In Proceedings': Justice BV Nagarathna

Speaking at the “Seat of the Future: Actionable Steps For Enhancing The Indian Arbitration Ecosystem” session organised by Delhi Arbitration Weekend 2025 (“DAW”), Justice Nagarathna stated that arbitrators must disclose any potential conflict of interests to avoid vioations of natural justice in proceedings.The panel included former judges Justice Nikhil S. Kariel, Dr Justice S. Muralidhar, Mr Michael Black, KC, and Mr David Quest, KC. Justice Nagarathna stressed upon the dire need of the arbitrators to act with unequivocal commitment to fairness, ethics, and independence.She said that an arbitrator must be quick in disclosing potential conflicts of interest as soon as possible and ensure adherence to the principles of natural justice. The arbitrator should not favour any party to the proceedings and must maintain the highest standards of professionalism during the arbitral proceedings. Justice Nagarathna highlighted that to enhance the Indian Arbitration ecosystem, mediation has to be promoted as a parallel mode of dispute resolution. Mediation can be included as a multi-tiered dispute resolution clause, incorporating mediation as a mandatory step before deciding to arbitrate. Michael Black, KC, speaking at the event, observed that Alternative Dispute Resolution is a very old-fashioned phrase. Many thought leaders of the arbitration fraternity are moving to a new definition of ADR, i.e., Appropriate Dispute Resolution. Arbitration is a process chosen by the people. They chose the jurisdiction of the Court governing their dispute. Judges in many jurisdictions think the tribunals are there to steal their work. On the contrary, the people choose a forum to settle their dispute. Justice Nikhil S. Kariel observed that parties do not choose India as the seat of the arbitration because of the gross delays in the arbitral proceedings, excessive interference by the courts, and procedural inconsistencies. He said that the problem that the Indian Arbitration system is grappling with is the huge dominance of ad-hoc arbitration. The ad-hoc arbitration does not offer any procedural choice, and the cost of the proceedings increases due to a structured fee schedule. Secondly, in the absence of structured timelines, there are delays in every arbitration stage. Justice Kariel further highlighted that the arbitral awards are enforced as a civil decree, bringing the award to the already congested civil courts. The enforcement of the award should be promoted. The civil court should have an exclusive jurisdiction to execute the arbitral award. By this, the execution proceedings can be saved from congested litigation in civil court. Mr David Quest KC discussed how novel technologies are reshaping our commercial landscape. Disputes concerning smart contracts, blockchain, algorithmic trading, and AI will arise in the future. While technology-related disputes are not new to arbitration, the current wave of novel technological disputes presents some unique challenges. Retd. Chief Justice Dr S. Muralidhar observed that, given how the Indian bar and judiciary are structured, it is practically impossible to produce quality arbitrators and arbitration lawyers. In the Indian legal system, we expect lawyers and judges to be generalists, not specialists. People practising in international commercial arbitration have excessive litigation capacity, which may or may not be the case concerning the counsels in domestic arbitration.

'Duty Of Arbitrator To Disclose Potential Conflict Of Interest In Proceedings': Justice BV Nagarathna

Mohd Talha Hasan

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