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A Critical Analysis of the Independence and Impartiality of Arbitrators in India

Arbitration is a procedure that helps parties to resolve their dispute outside of court by third party with the agreement of the parties involved. It is quasi-judicial in nature. Arbitration is a noun that comes from the Latin word arbitrary, meaning "to judge". Arbitration is a formal method of Alternative Dispute Resolution (ADR), as the name suggests this process resolves the dispute between parties by appointing a neutral third party known as "Arbitrator" or "Arbiters". The decision taken by the arbitrator is binding on the parties unless other procedure agreed on.

Arbitrator is an independent and impartial body that takes decision without any biases. Here independence means the arbitrator's position or situation in a relationship to the parties and their counsels, an arbitrator should be perceived as an independent body by the third party too. On the other hand, impartial refers to the arbitrator's attitude or intellectual or psychological nature towards both parties. This dispute resolution procedure is often practiced in commercial disputes as it is both time-saving as well as money-saving mechanism.

Arbitrator plays a vital role in this as they are the ones making decisions, therefore from appointment to decision, this process should be independent and impartial. In this essay we are going to explore the independence and impartiality of arbitrators in the Indian context, if this basic but most vital requirement is being fulfilled or not.

It is a principle in international arbitration that an arbitrator must be independent, impartial and neutral. Arbitration, as a method of dispute resolution, has traversed a remarkable journey through legal landscapes, constantly evolving and pushing the boundaries of traditional litigation. Arbitration's roots trace back to ancient civilizations, where it served as a means to resolve conflicts outside formal court systems. In India arbitration was performed in the system called Panchayat, the course of arbitration flourished in India in the nineteenth century. Later British government enacted more specific legislation, the Indian Arbitration Act of 1899. It was enforced only in presidency area i.e., Bombay, Madras and Culcutta.

From the Lex Mercatoria of medieval Europe to the rise of modern commercial arbitration in the 20th century, its role has been pivotal in facilitating trade and commerce across borders. Over time, arbitration has transitioned from an informal process to a sophisticated mechanism governed by legal frameworks and international conventions. Arbitration operates under diverse procedural frameworks, ranging from ad hoc proceedings to institutional arbitration administered by organizations like the International Chamber of Commerce (ICC) or the American Arbitration Association (AAA). These frameworks provide parties with flexibility, confidentiality, and specialized expertise in resolving disputes across various sectors, including commercial, investment, and labor.

Despite its advantages, arbitration faces several challenges and legal frontiers. One such frontier is the intersection of arbitration with human rights and public interest concerns, particularly in investor-state disputes and consumer arbitration agreements. Striking a balance between party autonomy and public policy imperatives poses a significant challenge for arbitrators and policymakers alike. Moreover, issues surrounding diversity, impartiality, and transparency in arbitral proceedings continue to spark debates and reforms within the arbitration community. In this essay we will learn about independence and impartiality of arbitrators in detail.

Evolution of Arbitration Law in India
The first official law enacted specifying the arbitration process was Arbitration Act of 1899 which was only enforced in Bombay, Madras and Calcutta as this law was made by the Britishers. Later Arbitration Act of 1940 was made which was enforced in all over India, not just three presidencies. This law was eventually struck down and was concluded not affective as it only dealt with the domestic arbitration and was not useful in foreign matters.

In 1991 the biggest revolution to develop economy took place which needed foreign investment and in order to do so a strong arbitration system was needed to strengthen the International trust, therefore Arbitration and Conciliation Act of 1996 was introduced which not only dealt with the domestic arbitration but international arbitration too. This Act was based on UNCITRAL Model Law on International Commercial Arbitration, 1985. Every arbitration law to this date have been inspired by International arbitration law.

So many question were raised against this act which was related intervention of judiciary, money-taking and international arbitrator, therefore after the case of Bharat Aluminium and co. vs Kaiser Aluminium and co. along with the advise and research provided from legal experts the Arbitration and Conciliation (Amendment) Act, 2015 was enforced, several amendment were made in the act keeping objective of making arbitration procedure affective and easy, eradicating any dispute between part i and part ii of the act.

Despite all the major amendment made in the Act, the Act was again amended as The Arbitration and Conciliation (Amendment) Act, 2019, which led to the formation of Arbitration Council of India (ACI) and most importantly endorsement of arbitrator, their qualification and other requirement. This amendment played a big role in binding arbitrator to be independent, impartial and neutral.[1]

Appointment of Arbitrators
The appointment of arbitrators is dealt in Section 11 of the Arbitration and Conciliation Act of 1996. According to this section, the nationality of arbitrator is not important unless the parties disagrees. The procedure to appoint arbitrator is to be decided by both parties with mutual agreement. In case the parties fails to reach an agreement on the appointment of arbitrator, then according to section 11(3) each party shall appoint an arbitrator and those two arbitrator will appoint third arbitrator who will act as presiding arbitrator.

The Supreme Court and the High Court have the power to designate arbitral institution. Each party must appoint their arbitrator within 30 days of receiving request and after the appointment of two arbitrators agreed upon they must appoint presiding arbitrator within 30 days. In case of failure the parties must request for arbitrator and the arbitral institution will appoint sole arbitrator on the agreement of parties. After the amendment of 2019, judicial intervention has been minimized as it shifted the power of appointment of arbitrator from courts to arbitral institution.[2]

Independence of arbitration
Independence is one of the essential requirement for complete justice and for smoothly functioning of arbitration as a dispute resolution machenism .Independence, under the influence of positive state law, is usually associated with certain institutional guarantees or safeguards that allow adjudicators to free themselves to some extent from external pressures when making their decisions and it also , follow the rule against bias. For securing their independence Section 11 of the Arbitration and Conciliation Act, 1996, provides the provision of appointment of arbitrators in an arbitration settlement.

It provides different methods through which the parties to a dispute can choose in order to appoint arbitrators. Section 11 allows the parties to choose arbitrators by themselves by agreeing upon a procedure for appointment. In case the parties cannot appoint arbitrators by themselves, they can get arbitrators appointed through any one of the procedures prescribed in Section 11. Over the years, the section has gone through several changes via, amendments in the years 2015 and 2019, substantially reducing the influence of the judiciary in arbitration.

In the cases of In the cases of Deepak Galvanising & Engg Industries (P) Ltd v. Government of India,[3] (1997) and Continental Constructions Ltd v. National Hydroelectric Power Corpn Ltd,[4] (1998), it was held that once the parties fail to appoint arbitrators by themselves, it leads to the forfeiture of their right to appoint. This gives the right of appointment to the Chief Justice or his designate.

And in Continental Constructions Ltd v. National Hydroelectric Power Corpn Ltd, (1998), it was held that once the parties fail to appoint arbitrators by themselves, it leads to the forfeiture of their right to appoint. This gives the right of appointment to the Chief Justice or his designate.

What is impartiality? Is it totally different from independence?
While we are talking about independence of arbitration we can not even imagine it without impartiality. Because, independence and impartiality is totally linked with each other. We can understand this better through an example suppose any arbitrator is appointed and has some interest in one party due to any submersion the order passed by arbitrator in such case is obviously not independent and justified.

In India, the independence and impartiality of arbitrators are secured through various legal provisions and guidelines. The primary legislation governing arbitration in India is the Arbitration and Conciliation Act, 1996, which incorporates the principles set out in the UNCITRAL Model Law. As already mentioned in above paragraph that how independence is secured in appointment procedure here are some another measure that should be taken to ensure the independence and impartiality of arbitrators in India:
  1. Disclosure of Conflict of Interest: Arbitrators are required to disclose any circumstances that may give rise to justifiable doubts about their independence or impartiality. This includes disclosing any past or present relationships, financial interests, or any other circumstances that may affect their neutrality in the arbitration proceedings.
  2. Challenge and Removal of Arbitrators: The Act allows a party to challenge an arbitrator if there are justifiable doubts about their independence or impartiality. The challenge is to be made within a specified time and is decided by the court. Additionally, an arbitrator can be removed if he/she becomes unable to perform their functions or fails to act without undue delay.
  3. Code of Conduct for Arbitrators: The Indian Arbitration and Conciliation (Amendment) Act, 2019 introduced the concept of a "Code of Conduct" for arbitrators. The Act empowers the arbitral institutions to frame and adopt a code of conduct for arbitrators, which sets out the standards of independence, impartiality, and professional conduct expected from them.
  4. Institutional Rules and Guidelines: Various institutional arbitration rules, such as those provided by the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), have been adopted in India. These rules often include provisions to ensure the independence and impartiality of arbitrators, such as vetting procedures, disclosure requirements, and challenge mechanisms.
  5. Judicial Oversight: The courts play a crucial role in safeguarding the independence and impartiality of arbitrators in India. They have the power to appoint arbitrators, decide challenges, and remove arbitrators when necessary. The courts also have the authority to set aside arbitral awards if there is evidence of bias or lack of independence or impartiality on the part of the arbitrators.
Independence and Impartiality are the true virtue of an arbitrator. Arbitration is a most sought after procedure for dispute resolution, as it ensures independent arbitrator. Overall, the combination of statutory provisions, institutional rules, codes of conduct, and judicial oversight works together to secure the independence and impartiality of arbitrators in India. These measures aim to promote fairness, integrity, and trust in the arbitration process.


  1. Hitesh_0420, Evolution of the Arbitration Law in India
  2. Ramendra Pratap Singh, Appointment of Arbitrator, Legal Services India
  3. Deepak Galvanising & Engg Industries (P) Ltd v. Government of India [1997] (5)ALT640
  4. Continental Constructions Ltd v. National Hydroelectric Power Corp. Ltd 73 [1998] DLT59
Written By:
  1. Rimjhim Sharma, Narayan School Of Law, Gopal Narayan Singh University, Jamuhar, Rohtas, Bihar
    Email: [email protected]
  2. Rashmi Kumari, University: Narayan School Of Law, Gopal Narayan Singh University, Jamuhar, Rohtas, Bihar
    Email:[email protected]

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