Bombay High Court Chief Justice DK Upadhyay recently called for stricter regulation of arbitrators’ conduct during arbitral proceedings, urging both the government and the legal community to address ongoing concerns. Speaking at a plenary session co-hosted by the Arbitration Bar of India and the Bombay Bar Association, Justice Upadhyay highlighted serious issues, particularly in rural areas, where weaker parties are often disadvantaged by unfair and biased arbitration practices.
He emphasized the challenges faced by vulnerable groups, such as farmers, who are often misled into purchasing agricultural equipment through loans from non-banking financial companies (NBFCs). Many farmers later find themselves entangled in arbitration proceedings in distant cities like Chennai. The Chief Justice shared his experiences from Uttar Pradesh, where farmers frequently fall victim to arbitrations conducted far away, without proper notice or the ability to contest the proceedings, leading to severe consequences like the loss of their agricultural properties.
“Much of the time, these misfortunes arise from unlawfully conducted arbitrations by arbitrators in far-off locations or due to their misconduct. This must be addressed and regulated,” he stressed.
Justice Upadhyay also discussed how interim arbitral awards are often enforced without the farmers’ knowledge, leaving them with limited recourse. Even when notices are served, the farmers typically lack the means to travel long distances or afford legal representation, compounding their difficulties. He noted that many farmers are left “baffled” and unable to find relief, even through the courts.
The Chief Justice underscored the urgent need for the Arbitration Council of India (ACI) to take proactive measures in overseeing arbitrators’ conduct. While the Arbitration and Conciliation (Amendment) Act of 2019, which aims to establish the ACI and enforce uniform professional standards, has been passed, it remains unimplemented due to a lack of notification. He urged Attorney General R Venkataramani, present at the event, to encourage the government to notify the Act and ensure the ACI’s establishment.
“I would urge, on my behalf and on behalf of all present here, that the Attorney General of India may persuade the government to notify the Amending Act, so that the Arbitration Council of India can be established, and proper steps can be taken to regulate the conduct of arbitration,” Justice Upadhyay stated.
He also highlighted how interim arbitral awards, though challengeable under Section 34 of the Arbitration Act, often face procedural and geographical barriers, with parties having to challenge these awards in distant locations where the arbitration was held, such as Chennai.
On the broader topic of “Judicial Support and the Role of Courts in Arbitration,” the Chief Justice acknowledged arbitration’s growing role in commercial dispute resolution. He stressed the need for a balance between arbitration’s autonomy and judicial oversight, especially in ensuring fairness and enforcing awards.
Although the Arbitration Act limits judicial intervention, courts still play a crucial role in appointing arbitrators, enforcing agreements, granting interim relief, and addressing misconduct. He also pointed out the need for involving stakeholders, including government representatives and businesses, in arbitration discussions to address users’ concerns and improve the arbitration process.
The event, powered by Alvarez and Marsal, featured prominent legal figures such as Justice Bharati Dangre, Justice GS Kulkarni, Justice AS Chandurkar, former Chief Justice SR Dhanuka, Solicitor General Tushar Mehta, and Maharashtra Advocate General Birendra Saraf.
