Courts wary of removing arbitrators as many are former judges: Supreme Court Justice BV Nagarathna

Courts are often reluctant to remove arbitrators accused of misconduct since many arbitrators are former judges, Supreme Court Justice BV Nagarathna said on Saturday..She also highlighted structural gaps in India’s arbitration framework, particularly the absence of a dedicated forum to examine complaints against arbitrators.“There is no forum as such where a misconduct of an arbitrator is complained against except before a court. And courts are very wary of changing an arbitrators because many of the arbitrators are former judges, Chief Justices,” she saidShe was speaking at the 5th Edition of the Indian Council of Arbitration International Conference on the topic 'Arbitration in the Era of Globalization: Legal Technology, Economic Development & Cross-Border Disputes'..The judge said that while such instances of removal of arbitrator are rare, the issue underscores the need for maintaining high standards in arbitration and mediation. She emphasised that alternative dispute resolution (ADR) mechanisms must match the rigour and discipline of court adjudication.“ADR does not mean a slackening of standards or rigour or discipline,” she said.Justice Nagarathna also flagged concerns about trust in arbitration, noting that allegations of bias or misconduct can undermine confidence in the system. It remains difficult to replace arbitrators even where such concerns arise and hence, there is a need for institutional safeguards and accountability, she underscored..On dispute resolution itself, the Supreme Court judge advocated for a more integrated approach combining arbitration, mediation and negotiation. She noted that even at the advanced stages of proceedings, including challenges to arbitral awards under Section 34 of the Arbitration and Conciliation Act, parties should explore settlement..Senior Advocate Pinky Anand also spoke at the event.She raised concerns over the rising cost of dispute resolution including the sharp increase in legal fees. She noted that while the government spent around ₹400 crore on litigation over the past decade, private companies spent nearly ₹62,000 crore on legal fees in a single financial year.On law firm revenues, Anand cited the example of Trilegal and said that the firm had quadrupled its earnings between 2020 and 2025 and earned around ₹1,000 crore in 2024.“As a lawyer, I have no difficulty with these earnings. But as a patriot, I find this unacceptable,” she said, adding that the issue was not just the money spent on lawyers but also the opportunity cost to businesses..The panel also featured international arbitration practitioners including Sapna Jhangiani KC (judge of the DIFC Courts), Chong Yee Leong (co-head of international arbitration at Allen & Gledhill and Vice Chairman of SIAC), Divyam Agarwal of JSA, and Sahil Narang of Khaitan & Co.The speakers discussed evolving trends in arbitration, including the growing role of mediation and hybrid mechanisms in resolving cross-border commercial disputes, particularly in an increasingly globalised and technology-driven economic landscape..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.