India Must Build Credible Arbitration Institution, Address Bias Concerns: Ex- Attorney General Mukul Rohatgi

Bhubaneswar: India must build a credible domestic arbitration institution capable of competing with global centres such as the Singapore International Arbitration Centre (SIAC) and address concerns over the representation of Indian arbitrators in international disputes, former Attorney General of India and senior advocate Mukul Rohatgi has said.

Mr Rohatgi’s observations lend credence to the concerns raised in earlier reports published by this newspaper, in which several eminent voices had strongly advocated the creation of such an institution.

Speaking on the NewsX’s legal show Legally Speaking, Rohatgi said the limited appointment of Indian lawyers as arbitrators in disputes involving Indian parties was only the “tip of the iceberg”.

“Why should we outsource our arbitration to SIAC? We should build a credible institution in India so that disputes involving Indian parties can be administered and heard here,” he said.

Rohatgi was responding to concerns over the reported disparity between the number of SIAC cases involving Indian parties and the appointments secured by Indian lawyers. He said Indian representation on arbitral tribunals should be commensurate with the contribution of Indian parties to the caseload of international institutions.

Drawing on his experience of arbitration-related disputes, Rohatgi also raised concerns over tribunal composition. He said tribunals in cases involving Indian companies often comprised one Indian and two foreign arbitrators, while the reverse composition was rarely seen.

“I have often had an uncomfortable feeling of bias in international arbitrations where one party is Indian,” he said, adding that institutional mechanisms were needed to ensure greater balance.

Rohatgi suggested that retired Supreme Court judges and other experienced Indian jurists should be considered for presiding arbitrator positions instead of such positions being routinely given to foreign arbitrators.

He also questioned the basis of damages reportedly awarded in the Tata Power-Kleros arbitration, saying his comments were based on information available in the public domain.

According to him, the reported award of around $500 million, or approximately ₹6,500 crore, appeared to be based on a “loss of chance” claim despite the proposed project not materialising and Tata Power not earning profits from the opportunity.

Rohatgi said the Indian arbitrator had reportedly assessed damages at around $13 million, while the majority of two foreign arbitrators awarded a substantially higher amount.

He further flagged concerns over alleged non-disclosure of potential conflicts involving members of the tribunal. He said prior professional connections involving an arbitrator, the opposing party, its funder or its lawyers could be relevant to assessing the appearance of independence and impartiality.

“The issue is not merely whether actual bias can be proved; relevant relationships must be disclosed so that the parties can take an informed decision,” Rohatgi said.