Justice Nagarathna Advocates for Arbitration Reform, Highlights Lack of Misconduct Forum
Supreme Court judge Justice B V Nagarathna, speaking at the International Conference on 'Arbitration in the Era of Globalisation' in New Delhi on Saturday, asserted that arbitration and mediation have evolved beyond mere alternatives to become integral components of a modern and responsive justice system. However, she raised a critical concern regarding the absence of a dedicated forum to address complaints against arbitrators, many of whom are retired judges, which courts are hesitant to remove.
Addressing the Gap in Arbitrator Accountability
Justice Nagarathna pointed out that currently, there is no specific forum to lodge complaints about arbitrator misconduct, except through the courts. She explained, "Courts are very wary of changing arbitrators because many of the arbitrators are former judges, Chief Justices." This reluctance, she warned, could undermine the trust of litigants in arbitration proceedings, which is essential for their success. Allegations of bias or misconduct, if not properly addressed, risk eroding confidence in the system.
Shift Towards Alternative Dispute Resolution
Highlighting a discernible trend, Justice Nagarathna noted a significant shift from traditional litigation to alternative mechanisms like mediation and arbitration. She emphasized that disputes often involve not just legal issues but also social, commercial, and relational dimensions, which may benefit from more voluntary and flexible solutions than court adjudication. "Arbitration and mediation, therefore, are not merely alternatives to litigation, but integral components of a modern and responsive justice system," she reiterated.
Arbitration as a Preferred Method for Cross-Border Disputes
Justice Nagarathna also underscored why arbitration has become the most favored method for resolving cross-border commercial disputes. Key advantages include:
- Neutral forums that provide impartial settings.
- Procedural flexibility allowing parties to tailor the process.
- Confidentiality to protect sensitive information.
- Party autonomy in selecting arbitrators and rules.
These factors contribute to its effectiveness in the globalized era, making it a cornerstone of international business dispute resolution.
