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Lawyers take liberties in arbitration they would not in court: Senior Advocate Aditya Sondhi

Sondhi questioned whether public scrutiny changes lawyers' conduct in court, citing practices in arbitration that would be unacceptable in litigation.

S N Thyagarajan

Senior Advocate Aditya Sondhi on Saturday said that lawyers often took liberties during arbitration proceedings that they would not ordinarily take before courts, citing an instance where a tribunal comprising retired judges was allegedly pressured into recusing itself from a sensitive defence-contract dispute.

"I think lawyers take many liberties in arbitrations which they would not in court," Sondhi said.

Speaking at a conference on Ethics and Evidence in Arbitration in Bengaluru, Sondhi questioned whether public scrutiny encouraged lawyers to maintain higher ethical standards in court.

"Is it the fact that court hearings are in public? There is a bar watching you. There is Bar and Bench watching you. The public is watching you in a sense. Does that change the ethical approach of counsel to the proceedings, in contrast to arbitration, which is essentially a private confidential process?" he asked.

Sondhi was speaking during a panel discussion chaired by Karnataka High Court judge Justice Anu Sivaraman. The panel also comprised Lomesh Kiran Nidumuri, Partner at Cyril Amarchand Mangaldas, and Manini Brar, Founder of Arbridge Chambers & Solicitors.

Sondhi said institutional arbitration rules sometimes prescribed higher ethical standards than ordinary court proceedings, particularly concerning confidentiality and non-obstruction.

However, arbitral tribunals lacked some of the disciplinary powers available to courts.

He suggested that greater transparency, including reporting arbitral awards, could improve accountability.

Sondhi also recalled a defence-contract arbitration in which a tribunal of retired judges was allegedly pressured into recusing itself following an interim order favouring a private party.

According to Sondhi, the tribunal recorded that lawyers' tactics had compelled its recusal.

Nidumuri highlighted the responsibility of lawyers to avoid burdening arbitral tribunals with irrelevant documents and unnecessary evidence.

"I think the lawyers are also guilty of dumping loads and loads of material onto the tribunal, evidence that we know is not even relevant for the particular case. I think we have to hold ourselves accountable for it," Nidumuri said.

He also raised concerns about repeat appointments of arbitrators by the same parties, referring to a Delhi High Court case involving thousands of such appointments.

Brar discussed the distinction between disclosing potential conflicts of interest and disqualification of arbitrators, explaining that failure to disclose a circumstance did not automatically establish bias.

"You cannot propose the removal of an arbitrator simply because there has been nondisclosure. You must first assess the circumstances of the conflict," Brar said.

Justice Sivaraman emphasised that parties choosing arbitration gave up certain safeguards available in conventional court proceedings, making ethical conduct by arbitrators and lawyers particularly important.

"When parties choose arbitration, they forego the protections that a traditional courtroom affords them. They also forego any re-examination on facts, interpretation of the contract, so on and so forth. This is more the reason why the integrity of the system must be preserved," Justice Sivaraman said.

A second panel on evidence was chaired by Karnataka High Court judge Justice Nerale Veerabhadraiah Bhavani. It featured Senior Advocate Dhyan Chinappa, counsel and arbitrator Poornima Hatti and Hima Lawrence, Co-Founder of VH Law Chambers.

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Chinappa cautioned against accepting documents without establishing their authenticity merely because arbitral tribunals were not bound by strict statutory rules of evidence.

He recalled a construction arbitration in which an opposing party produced a photocopied bill purportedly bearing his client's signature.

When the arbitrator accepted the document despite objections, Chinappa demonstrated how easily a photocopy could be manipulated by replacing his client's signature with that of the arbitrator.

He said he lost the arbitration but subsequently succeeded in challenging the award under Section 34 of the Arbitration and Conciliation Act.

"My biggest problem and my biggest concern is the fact that we may end up in a scenario where we allow documentary evidence to come on record without the existence or the reliability having been established," Chinappa said.

Hatti called for clear evidentiary procedures at the outset of arbitration and greater transparency concerning the use of artificial intelligence by arbitrators.

Lawrence emphasised the importance of procedural fairness, particularly when examining expert witnesses.

"Every party should be given an equal and good opportunity to meet the case that is built against or made against them," Lawrence said.

The conference was jointly hosted by the London Court of International Arbitration, ArbitralWomen and the Arbitration and Conciliation Centre Bengaluru at the Karnataka Judicial Academy.

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