By the time Justice L Nageswara Rao retired from the Supreme Court, he carried three decades of courtroom experience and, as he would later admit, a fundamental misreading of what arbitration was.

Four years of full-time arbitral practice have corrected that. He has since sat on proceedings linked to leading international institutions, travelled to London, Singapore, Dubai and Hong Kong, and spent enough time in international forums to say, without qualification, that India is nowhere near a preferred global arbitration seat.

In this conversation with Debayan Roy for Bar & Bench's After the Bench series, he addresses the art of unlearning, the IBC's Section 14 collision with the Arbitration Act, India's 2% standing in global preference surveys, and more.

Watch the interview here:

Edited excerpts follow.

Debayan Roy [DR]: You have argued cases before arbitrators. You have struck down arbitral awards as a judge. And now you write awards that are often challenged before courts. Which intersection defines Indian arbitration at the moment?

Justice L Nageswara Rao: It's been a long journey. As a lawyer and as a judge, arbitrations were part of your routine alongside public law, constitutional law, criminal matters. As an arbitrator for the past four years, I've been doing only arbitrations and I get a better perspective. Being in international arbitration, having rubbed shoulders with arbitrators and counsel who have spent their lifetime in this field, I get a better understanding of what arbitration needs, what are its ills, what are its advantages. There was no hands-on experience for Supreme Court judges to understand how arbitrations happen, except for participating in seminars. The better perspective is only when you're an arbitrator.

DR: After retirement, was there a defining moment where you realised you needed to learn something?

Justice Rao: It's not a case of learning. It's more a case of unlearning. There was some advice given to me by friends who have been in international arbitration: forget that you're a judge anymore because you do not run arbitration the way you do in courts. This is party autonomy. Whereas when you are sitting in court, you are owning the litigation. When you come and sit as an arbitrator, your role is completely different. That's why I said the defining moment is when I decided that every day when I start doing an arbitration, I keep telling myself I'm no more a judge of the Supreme Court. One of the criticisms against judges being arbitrators is that they are running courts and not doing the work of an arbitrator.

DR: There is criticism that when retired judges pen down awards, they move from the facts and get into the jurisprudential aspects. Do you think that's true?

Justice Rao: Not entirely, because there is a need to deal with law as well. I've seen several awards from outside India where arguments involve interpretation of provisions and interpretation of the contract. These things are not strange to an arbitral award. But writing a judgment is completely different from framing an award. In an appellate court, you take facts for granted because you are dealing mainly with the question of law. Whereas in an arbitral award, you should have complete control over facts. This is a first court which deals with every aspect. The stress is on facts.

DR: In May 2025, you delivered your award in the Aditya Birla Finance versus Zee and Essel dispute. That award is now under challenge in the Delhi High Court. Tell me what it actually feels like when a court scrutinises months of your reasoning.

Justice Rao: One of my colleagues who is also doing arbitration recently asked me: having been judges of the highest court of our country, what are we doing? He said our award goes to a district judge and we do not know what sort of comments he would make while scrutinising your award. That's not a correct way of looking at it. Having accepted doing arbitrations, you're not bothered about the scrutiny under the statute. You have to do your job. Once I pass an award, I forget about it. I do not even know how many of my awards are in challenge.

DR: The IBC and the Arbitration Act are colliding with increasing frequency. The moment a party goes into insolvency, the IBC moratorium under Section 14 stops the arbitration. In your Zee-Siti case you experienced this directly when one party went into insolvency mid-proceedings. Is the IBC hindering arbitration?

Justice Rao: In some cases, yes. Section 14 of the IBC puts a moratorium on all security debts. There is no way you can proceed with an arbitration. There are some judgments where courts are trying to get around Section 14 for the purpose of holding that where a corporate debtor has a claim, those arbitrations can continue. But it remains that Section 14 is there and there is nothing one can do if there is a claim against a security debt. There are an increasing number of arbitrations being affected by Section 14.

DR: Should India legislate a specific protocol for continuing arbitrations when one party enters insolvency?

Justice Rao: Section 14 is almost a blanket prohibition that you cannot proceed against the security debt with any proceedings. A dispute resolution by arbitration is not even possible by way of a proviso because that will be contrary to the main provision itself. Everything has to come to a standstill. It's not possible.

DR: Countries the world over are overhauling their arbitration frameworks. And India is still debating a Draft Amendment Bill that has not passed. In the global race for arbitration dominance, where does India actually stand?

Justice Rao: I don't think India is anywhere so far as a preferred seat of arbitration is concerned. Queen Mary's College and White & Case conduct surveys every year. LCIA is topping the list of last year's survey, followed by Singapore and Hong Kong. In the survey that was conducted, I think 2% of the people were preferring India as a seat. India not being preferred has so many reasons. The Arbitration Bill of 2024 has not seen the light of the day. That's not the only reason.

You won't see anybody from outside this country coming and having their dispute resolved here. Two Indian parties include the seat as Singapore or London because they want to get the disputes resolved outside. The reason is they're afraid of the courts in India, because of the delays and the apprehension that there would be unwarranted interference. For India to become an international seat, there's so much work to be done. By merely the 2024 Bill taking shape into legislation, I don't think that would be sufficient. Institutions have to take shape in this country, which is not happening. Ad hoc arbitration's efficiency has to improve. And interference by courts should be minimal.

DR: Statistics show that about 2,500 arbitrations from 2011 to 2024 involving primarily Indian parties happened in SIAC.

Justice Rao: At the DIAC 2025 seminar, I was chairing a session sponsored by SIAC. I found 37% of the work of SIAC is from Indian parties. So if we spruce up our system, this would not happen. The government wants India to be doing very well in dispute resolution. We are a global economy now. But I'm very sorry to say that all this talk is not taking shape in so far as results are concerned.

DR: The Ministry of Law has said that India should be a top 5 arbitral seat by 2030. Four more years to go. How close are we?

Justice Rao: As of now, definitely not. I haven't heard of two parties from other countries coming and getting their disputes resolved here. A London-based company and a Brazilian venture choosing India as its seat - I don't see it happening soon.

DR:  You have said publicly that courts should stop appointing only retired judges as arbitrators. But you are yourself one of the busiest arbitrators in India, appointed precisely because you are a retired Supreme Court judge. Does that not make you the most prominent example of the very problem you are describing?

Justice Rao: Let me tell you why only judges are appointed by courts as well as parties. A survey conducted showed that most law firms and lawyers would insist on retired judges as arbitrators. About 66% of them want retired judges. That is because of the culture of people in this country. They think that retired judges would be impartial, well versed with law, experienced in adjudication. But I still stand by what I said. Appointments should not be restricted only to retired judges.

Arbitrators outside this country take arbitration as their main profession. Senior arbitrators have spent 30 years, 40 years doing only arbitrations. They don't go to court at all. Here in India, legal professionals take this as a part-time activity. Their main activity is court. I asked commercial lawyers, senior lawyers who are doing well in arbitrations, whether they would accept appointments as arbitrators. Not even one person out of ten said they would be interested. They said, we are very happy as counsel. The question is, how are you going to build up the pool?

Only by making appointments of youngsters, training them, building confidence in them that this is a full-time activity. As of now, there is no pool of arbitrators except the judges. Take out the judges from the equation. Where are you going to get arbitrators from?

DR: Harish Salve said at the Delhi Arbitration Weekend 2025 that arbitration in India is a disaster and that the problem is not the law but that Indian judges are over-interventionists. You were at the same event and said the opposite: that arbitration is not doomed and is not going to die. Who is right?

Justice Rao: Both of us are right. Harish Salve has his own personal opinion. Actually what he said was something different. He said that he doesn't have faith in the arbitral tribunal once he sees a retired judge. These are the exact words used by him, I remember. And what I said was that it's not doomsday for arbitration because the number of arbitrations is growing multi-fold in this country.

The number of appointments from retired judges has not reduced; it is increasing. I do not see one colleague of mine who retired from the Supreme Court complaining that he doesn't have work. It is the faith of the consumer of arbitration that is more important than the opinion of a legal professional. I'm not saying that all of us are good arbitrators. But there's no contradiction in what he's saying and what I'm saying, though I do not agree with him.

DR: The Gayatri Balasamy Constitution Bench in April 2025 said that courts have a limited power to modify arbitral awards. The dissent by Justice Viswanathan said this opens a Pandora's Box. Does the majority's pragmatism comfort you or does the dissent alarm you more?

Justice Rao: It will not be proper for me to comment on a judgment of the Supreme Court, but I will tell you what I feel. Chief Justice Sanjeev Khanna was thinking of a situation where an arbitral award is set aside and parties are back to square one.

They would have to start arbitration again. So what he thought was that he can make out an exception by interpreting Section 34 such that in extraordinary circumstances, the court would have the power to modify an award. Whereas Justice Viswanathan said that this would give an opportunity for a person who has an award against him to go to court and seek modification, which is not permissible because Section 34 itself says that you can only annul an award or set aside an award. Modification is a completely different process.

And he said that once you open this up, you do not know how courts would exercise their power. What Justice Viswanathan said was that it is better we leave this to parliament. Especially when the 2024 Bill also proposes a proviso to Section 34 saying in extraordinary cases it can be modified. I have been always a proponent of not legislating from the bench. This should have been left to parliament, is my personal opinion.

DR: You argued Jayalalitha's case before the Karnataka High Court and got her acquitted. You were one of the most highly paid advocates in India. And now you are in arbitration, which is quieter, more private, more technical. Do you miss the theatre? And does your answer explain why so many senior advocates simply will not make this transition?

Justice Rao: I miss the court a lot. Right from the day I started my profession in 1984, I was in court for about 30 years before I became a judge - 10 years in Hyderabad, 20 years here (in Delhi). The legal profession was a challenge every day and I enjoyed every bit of being a lawyer. I never wanted to be a judge.

I enjoyed being a judge for about six years, but given a chance, I would continue to be a lawyer. The other point about wealth: money is not very important, at least for me. I used to tell my colleagues - you learn law, do well as a lawyer, money is consequential, it keeps coming. If money was important, I wouldn't have accepted judgeship. In so far as senior counsel are concerned for not accepting judgeship, I don't think money is the major consideration.

Most of them ask: what would they do after retirement? Once you are a Supreme Court judge, you can't practice. 65 is no age for retirement. When Arvind Datar was offered judgeship, he refused. He told me, I would have got about five years as a judge and I want to practice till I'm 85. I want to write books, which I don't want to stop. If you want good lawyers on the bench, you should pick them up early.

DR: Arbitration was supposed to be the escape from court delays. Today in India you appoint an arbitrator and that is contested. The award goes to Section 34, then Section 37, then the Supreme Court and now a 2024 Draft Bill proposes an Appellate Arbitral Tribunal as yet another layer. Has finality been killed along the way?

Justice Rao: The legislation is very clear: courts should not interfere. Judgments have been written on and off saying that there are limited grounds of interference. There is absolutely no ambiguity in the law. It's only in the understanding of law where the problems are arising. The problem is the judges who are sitting in Section 34 proceedings across this country.

This country has about 737-740 districts and there are 3 to 4 district judges in each district. So you have more than 2,000-2,500 district judges. Depending upon the seat of the arbitration, Section 34 goes to that district court. And if you have not trained all your district judges about the scope of Section 34, they will hear these matters like appeals. And that's exactly what is happening. A person spends about 3-4 years in Section 34, then it goes to Section 37 in the High Court, another 4-5 years, then it comes to the Supreme Court. Almost 10 years have passed by the time the award takes shape. What is to be done is training.

Let there be dedicated commercial courts in every district where you train the judges hearing Section 34. Don't change the roster at least for one year. And when the matter goes up for Section 37, you have a dedicated division bench hearing the appeals. The disposal would be faster.

This apart, the number of petitions filed for setting aside in this country in comparison to other countries is multi-fold. Not every award is taken to court for setting aside in London or Singapore because they know the courts are not going to interfere. But here, people are not aware as to what the result is going to be, so they would like to take a chance. In this country, costs are easy.

By merely filing a Section 34 petition, you are not going to be imposed high costs. So everybody takes a chance, every award goes to court and, in most cases, notice is issued. Once you issue a notice, there is an interim order on 50% of the award. This is becoming a vicious cycle.

Let us take the case of public sector undertakings. Once there is an award against them, nobody wants to take a chance. Why is the government the most important litigant in so far as the Supreme Court is concerned, more than 40 to 50% of the cases? Because no authority wants to take a chance of being blamed. The officer-in-charge doesn't want to take responsibility. So you send the matter to court. The same thing is reflected in arbitral awards. Persons in charge of these projects - if an award goes against them - do not want to be blamed for not taking it to court because somebody might tell them that you colluded with the other side. This is a circle we are not able to get out of.