Diversity in Indian arbitration: Roadmap for justice through inclusion

The need for inclusion and representation has taken centre stage in the dialogue surrounding arbitration, as legal systems around the world are becoming increasingly sensitive to ensuring diversity.

In India, the dialogue for inclusion in arbitration has prominently been championed by Chief Justice of India (CJI) DY Chandrachud who stressed upon the need for not only creating a gender diverse arbitral pool, but also appointing experienced lawyers as arbitrators more frequently. This call for greater diversity was recently echoed by the Vice-President of India Jagdeep Dhankhar, who reflected on the CJI’s remarks while inaugurating the 6^th ICC India Arbitration Day in New Delhi.

Building an argument for diversity

While the conversation for necessity in diversity starts with gender diversity, it is equally important to consider geographical, cultural, racial, ethnic and socioeconomic diversity. Bearing in mind that India is a land of vast diversity in terms of regions, cultures, languages, etc, there is a dire need to for a diverse pool of arbitrators to cater to litigants from disparate regions. The study of the Indian arbitration landscape highlights certain common elements which are often identified as root causes for the lack of diversity, the top two factors being a lack of transparency in the appointment process and historical underrepresentation.

Much like arbitration, the pipeline issue has often been cited as an important underlying reason for the lack of gender representation. The pipeline, in its most basic sense, refers to the chain of education, experiences, associations and job positions that ultimately lead to one being appointed as an arbitrator. These barriers to entry can be even worse with respect to ethnic diversity, because the barriers exist not only in relation to career progression, but also as early as the recruitment stage. Parties seek to nominate/appoint seasoned arbitrators with outstanding records, leading to a dearth of opportunities for others.

Although people from all walks of life are now getting higher education, there is a disparity in representation at higher levels in organizations, such as management roles in companies, judges in higher judiciary, etc. This phenomenon, often referred to as the ‘glass ceiling’, remains a persistent challenge within the legal profession. The current representation of Indian women arbitrators on international panels is less than 10%, leading to the CJI referring to this situation as the diversity paradox. The position globally on appointment of women arbitrators is only marginally better. According to a study on Gender Diversity in Arbitral Appointments, in 2015, the proportion of women appointed as arbitrators was 12.6%, which increased to 26.1% in 2021. Notably, though the inclusivity of women is on the rise, there is a marginally low representation of the LGBTQIA+ community.  

Vis-à-vis appointment of an arbitrator, when a candidate is ‘highly recommended’ from a trusted source, it places a ‘halo’ around the candidate, distorting other characteristics of that candidate and over-shadowing other potential candidates. The current way in which arbitrators are recommended/appointed - by asking an acquaintance - leads to ‘halo’ effect. The CJI had commented that the arbitration space must shed the tag of being an old boys' club; provide equal opportunity to men, women and them.

Another aspect of diversity that is increasingly discussed in the context of arbitration relates to geographical origins, that is, arbitrators’ nationalities. In a survey conducted by Queen Mary University of London and White & Case, 40% of respondents expressed the opinion that diversity across an arbitral panel would improve the quality of the tribunal’s decision-making. The parties’ nationalities in the case of arbitration has witnessed an unprecedented expansion over the past century, while it is certain that little progress has been made with regard to nationalities of the choice of arbitrators. When it comes to the nationalities of arbitrators serving on tribunals in ICC cases, the available archives show that in the early years of the ICC Court, most arbitrators were French, Belgian, German, Dutch or Austrian, with very few arbitrators from the Asian Region. However, this position has steadily evolved now. Globally, 1/4 of ICC’s users are based in Asia. ICC arbitrators from Asia represent 15% of the total appointments and close to 20% of ICC arbitration are seated in Asia.

India is renowned for its human resource prowess on the global stage, with Indian professionals offering their expertise in virtually every corner of the world. However, a notable deficiency in generational diversity stands out as a significant factor hindering progress in Indian arbitration. Generational diversity, in essence, entails the imperative to prevent bias or prejudice based on age. The prevalent attitude of appointing mostly retired judges is a major reason which leads to neglect of qualified arbitrators in India. There is no doubt that some highly complex matters require for arbitrators with considerable experience acquired over many years, but the predominance of retired judges acts as a barrier in promoting diversity in arbitration.

The case for diversity hinges on the core argument that an arbitral panel that is homogeneous in experience and background lacks the perspective to provide a fair and impartial hearing. A parallel may be drawn from legitimacy accorded to jury trial verdicts - the need to be judged by a jury of peers finds its source in the Magna Carta. It thus becomes essential to have a diverse set of arbitrators. Diverse arbitrators possess a broader range of skills and expertise, allowing them to address complex issues more effectively. This diversity of thought can foster innovative approaches to dispute resolution, leading to more creative and satisfactory solutions for all parties. Furthermore, the presence of diverse arbitrators can promote confidence in the arbitration process among all stakeholders, increasing trust and credibility in the system. Diversity in arbitration not only strengthens the integrity and effectiveness of the process, but also contributes to the broader goals of justice, equity, and social inclusion.

Diverse perspectives stemming from a variety of backgrounds, cultures, and legal traditions offer a more comprehensive understanding of the issues at hand. Studies conducted in the corporate setting have shown that diverse teams achieve better outcomes. Companies who built teams with individuals from underrepresented identity groups reported that their diverse teams outperformed and were more effective than their homogeneous teams at executing their work.

A diverse arbitral tribunal also mitigates the risk of cognitive biases influencing decision-making. With a range of perspectives and backgrounds represented, there's less susceptibility to groupthink or confirmation bias, where individuals unconsciously seek information that confirms their preconceptions. Thus, a diverse tribunal is more likely to dodge the pitfalls of conformity and engage in more innovative thinking.

Lack of diversity also poses a problem in relation to the legitimacy of the process. When the arbitral tribunal reflects a diverse range of backgrounds, experiences and perspectives, it signals inclusivity and fairness in the decision-making process. A diverse panel of arbitrators is more likely to perceive the proceedings as impartial and representative of a broader spectrum of interests and values. This enhances trust in the integrity of the arbitration process and the legitimacy of its outcomes. Moreover, having a diverse set of arbitrators assists in assessing the contractual dispute with a wider social, religious and cultural context.

Institutional reforms for increasing the pool of expertise

India is swiftly advancing towards becoming a preferred seat of arbitration. While the legislature and judiciary have adopted a pro-arbitration approach, institutional institutions also have an important role to play. The ICC International Court of Arbitration (ICC Court) spearheaded the movement for increasing diversity through release of its Note to National Committees and Groups on the proposal of Arbitrators in January 2022 (NC Note). It provides:

“When proposing arbitrators, Committees and Groups are encouraged to consider diversity, broadly defined, including but not limited to racial, ethnic, cultural, generational, and gender diversity."

The NC Note further requires that even the nomination commission that proposes the appointment of arbitrators to the ICC Court should make best efforts to maintain gender parity and reflect the diversity, broadly defined, of the arbitration community in the committee’s country territory including racial, ethnic, cultural, generational and gender diversity. The ICC Court has included the above language in all letters to parties and co-arbitrators, encouraging them, when nominating arbitrators, to consider diversity.  

In order to make dispute resolution more inclusive for nearly one-fifth of the estimated global population living with significant disabilities, in 2021, the ICC Court also launched the ICC Task Force on Disability Inclusion and International Arbitration (Task Force), which marks the first such effort by an arbitral institution. ICC also launched an ICC Court LGBTQIA+ network and received a Global Arbitration Review Award for Equal Representation in Arbitration Pledge. In 2023, the Task Force released the Guide on Disability Inclusion in International Arbitration and ADR, which provides clear guidance and specific recommendations to adapt arbitral and ADR procedures to meet the needs of persons with disabilities and drive disability inclusion within the field of dispute resolution.

Roadmap for diverse perspectives

Inclusion is an organizational effort in which diverse individuals having different backgrounds are culturally and socially accepted and welcomed, and equally treated. An inclusive legal system incorporates in its scope professional, cultural and gender diversity.

According to the India Justice Report 2022, a Department of Justice Report to the Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice is reported to have stated that from 2018 to December 2022, a total of 537 judges were appointed to the High Courts and around 2.6 per cent were from minority communities. In terms of gender diversity, women account for 35 per cent of the total number of judges at the national level. However, the concentration of women judges is greater at the district level than the High Court level. Most High Courts saw less than a 2 per cent increase in women representation between 2020 and 2022.

There is a global move to bring the dialogue to the centre stage. As on date, the Equal Representation in Arbitration Pledge, which aims for recognition of the underrepresentation of women in arbitral tribunals, has over 5,000 signatories. The pledge seeks to achieve a fair representation of the number of women appointed as arbitrators on an equal opportunity basis. Similarly, the Pledge for Equal Representation for Expert Witnesses has over 1,480 signatories globally, from individuals, law firms and expert firms with the goal to eliminate barriers in equal representation.

On this front, the ICC Court continues to build on its conscious and focused efforts for ensuring diversity. The ICC’s Centenary Declaration, released in 2023, pledges to build on ground-breaking work on diversity, equity and inclusion in all aspects of dispute prevention and resolution as one of its ten core priorities for the coming century.

Over the years, ICC has seen a steady progress in its efforts to improve gender diversity within arbitral panels. In 2021, nearly 40% of arbitrators appointed by the ICC Court either directly or through proposals from national committees were women and arbitrators from over 99 nationalities were appointed in ICC arbitrations. What these steps demonstrate is clear - diversity is not merely tokenism but the need to build awareness among stakeholders by removing biases and taking measured active steps to remove blind spots for an inclusive arbitration landscape.

Shashank Garg is a Chair of the ICC India Arbitration Group and Shania Elias is the Deputy Director, Arbitration and ADR, ICC India.