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Advocates Removing Arbitrator Appointments from Parties to Ensure in Arbitration
In a stirring contribution to the ongoing discourse on arbitration reform, noted arbitration expert has called for the complete removal of arbitrator appointment powers from disputing parties. He argues that institutionalising the appointment process is the only reliable way to ensure and restore faith in the arbitral mechanism. His comments come at a time when the arbitration landscape in India is undergoing significant transformation, with legislative amendments and judicial pronouncements shaping the future of .
Garg’s statement has ignited a robust debate among legal practitioners, scholars, and policymakers. The central question being posed is: can institutional appointments truly eliminate the spectre of , or do they merely transfer the same concerns from the parties to a new set of decision-makers? This question lies at the heart of the arbitration reform agenda and carries weighty implications for the credibility and efficiency of the process.
The Core Argument: Why Parties Should Be Removed
The traditional model of arbitration allows each party to appoint one arbitrator, with the two party-appointed arbitrators then selecting the presiding arbitrator. While this structure offers , it has long been criticised for fostering partiality. Arbitrators appointed by a party may feel an implicit obligation to favour their appointor, consciously or unconsciously, thereby undermining the that arbitration promises. Garg contends that this practice is fundamentally at odds with the concept of impartial justice.
“Take appointment of arbitrators away from parties, institutionalise the process,” Garg asserted, encapsulating his position in a single, powerful directive. He suggests that the best way to insulate arbitrators from external pressure is to vest the power of appointment in an independent, institutional body. This, he argues, would eliminate the that arises when a party selects the very person who will adjudicate its dispute.
The debate over arbitrator is not new. In many jurisdictions, including India, courts have repeatedly stepped in to scrutinise the and of arbitrators. The , in several landmark rulings, has emphasised the need for in appointments and laid down guidelines to prevent . Yet, Garg’s proposal goes a step further—it seeks to restructure the entire appointment mechanism at the foundational level.
Institutionalisation: A Double-Edged Sword?
While Garg's vision appeals to those seeking a more objective process, it has also drawn scepticism. Some experts caution that institutional appointments may not be a panacea. “The panellists debated whether institutional appointments could improve or merely shift existing concerns to a different set of decision-makers,” noted a participant in the discourse. This encapsulates the crux of the counterargument.
Institutional arbitration bodies, such as those operating under established rules, have their own procedures and preferences. Critics fear that institutions may develop , favouring certain sectors, nationalities, or legal traditions. Moreover, the sheer volume of appointments handled by a single institution could lead to a concentration of power, reducing diversity among arbitrators. The fear is that a small pool of “institutional insiders” might dominate appointments, defeating the purpose of .
Proponents of also highlight the practical advantages of allowing parties to choose their arbitrators, particularly in complex, technical disputes. Parties often select arbitrators with specific expertise in the subject matter, ensuring that the tribunal is well-equipped to understand the nuances of the case. An institutional body, no matter how competent, may not be able to match this level of customisation.
The Legal and Policy Framework in India
India’s arbitration framework, governed primarily by the , already contains safeguards aimed at ensuring . , along with the , sets out grounds for challenge and disqualification of arbitrators. The 2019 amendment introduced the (ACI), a body tasked with grading arbitral institutions and promoting . However, the ACI has not yet assumed the role of a central appointing authority.
Garg’s proposal would necessitate a paradigm shift in how the legal system approaches arbitrator appointments. Instead of the current hybrid model, where both parties and courts play a role, a fully institutionalised system would involve designated appointing authorities for each case—potentially including the ACI, designated arbitral institutions, or even a specialised roster of retired judges and experienced practitioners.
Such a change would require legislative intervention and might face resistance from stakeholders who value flexibility. The business community, in particular, values the ability to choose arbitrators with industry-specific knowledge. Additionally, foreign parties that opt for arbitration in India often do so precisely because they can exercise control over the composition of the tribunal. Removing that control could make India a less attractive seat of arbitration.
Impact on Arbitration Practice and the Justice System
If implemented, Garg’s recommendation would have far-reaching consequences for legal practice. Law firms and advocates who specialise in arbitration would need to adapt their strategies. Currently, much of the pre-appointment process involves vetting candidates and negotiating over the choice of arbitrators. An institutional model would shift the focus from selection to advocacy, potentially altering the skill set required of arbitration counsel.
For the justice system, institutionalisation could relieve courts of the burden of appointing arbitrators under . The courts are often called upon to intervene when parties fail to agree on an appointment. By centralising this function, the judiciary could reduce its caseload and refocus on substantive disputes. At the same time, it would reduce the risk of creeping into the process.
Yet, the transition would not be seamless. Establishing an efficient and trusted institutional mechanism requires significant investment in infrastructure, training, and oversight. There is also the question of cost—institutional appointments often come with administrative fees that may be prohibitive for smaller disputes. Garg’s vision, therefore, would need to be calibrated to ensure that is not compromised.
The Path Forward: Balancing Autonomy and
The debate sparked by ’s remarks is a healthy one for the arbitration community. It forces stakeholders to confront a fundamental tension: how to preserve the flexibility that makes arbitration attractive while guaranteeing the fairness that gives it legitimacy. No system is perfect. Even the most stringent institutional frameworks can be gamed, but they can also be designed to minimise risks.
Perhaps the solution lies in a hybrid approach, where parties retain the right to agree on a selection process, but default to institutional appointments in the absence of agreement. Alternatively, mandatory institutional appointments could be applied only to certain categories of disputes, such as those involving public interest or large sums.
As the discussion continues, Garg’s voice adds urgency to the need for structural reform. His call to “institutionalise the process” resonates with those who believe that arbitration, as a private system of justice, must hold itself to the highest standards of . Whether the Indian legal system embraces this call or opts for a more cautious path, the conversation itself marks a step forward in the evolution of arbitration.
Conclusion
’s proposition to remove arbitrator appointments from parties and institutionalise the process has opened up a critical dialogue on the future of arbitration. While the idea promises enhanced , it also raises legitimate concerns about efficiency, expertise, and access. As legal professionals and policymakers weigh these factors, the ultimate goal remains clear: to build an arbitral ecosystem that is both trusted and effective. The debate is far from settled, but it is one that no serious stakeholder can afford to ignore.
