Arbitration Must Balance Party Autonomy With Fairness, Justice KV Viswanathan Says At GHAC Arbitration Week

Addressing judges, lawyers, arbitrators and other dignitaries, Justice Viswanathan said that while arbitration is founded on the consent of the parties, judicial restraint cannot mean complete withdrawal from the arbitral process.

“Judicial restraint does not mean judicial indifference. That distinction, in my view, lies at the heart of the contemporary law of arbitration,” he said.

Justice Viswanathan observed that parties opting for arbitration have, to a considerable extent, chosen the forum, procedure and manner in which their disputes will be resolved. The role of law, therefore, is to facilitate that choice while ensuring that the process remains fair, impartial and consistent with minimum standards of justice.

“The legitimacy of arbitration derives substantially from party autonomy, yet autonomy cannot by itself provide an answer to every difficulty which arises in the arbitration process,” he said.

Courts must balance autonomy and supervision

Justice Viswanathan said courts have to maintain a balance between respecting the autonomy of parties and ensuring that arbitral proceedings comply with principles of equality, impartiality, procedural fairness and the rule of law.

He noted that developments following the 2015 amendments to the Arbitration and Conciliation Act have increasingly emphasised expedition, limited judicial interference and greater finality of arbitral awards.

At the same time, he cautioned that limited judicial review should not be understood as complete immunity from scrutiny.

“An award is not liable to be set aside merely because another view on the facts or law may be possible, nor can the court while exercising jurisdiction under the Arbitration and Conciliation Act substitute its own assessment of the merits for that of the arbitral tribunal,” Justice Viswanathan said.

He added that statutory grounds for judicial intervention continue to remain important.

“Neither excessive intervention nor complete withdrawal serves the cause of arbitration,” he observed.

Independence of Arbitrators crucial to confidence

Justice Viswanathan also highlighted the importance of independence and disclosure by arbitrators, observing that an arbitral tribunal can command the confidence of the parties only when its constitution is perceived as fair.

Referring to the UK Supreme Court’s decision in Halliburton Company v Chubb, he noted that repeat appointments in related arbitrations do not by themselves establish bias, but may attract a continuing duty of disclosure.

“The independence of an arbitrator is not merely a matter to be examined at the commencement of proceedings,” he said, adding that circumstances may arise during the course of arbitration that affect both the perception and reality of impartiality.

Arbitration in public contracts must retain public law standards

Turning to arbitration involving the State, particularly public procurement and public-private partnerships, Justice Viswanathan said the fact that a dispute is referred to arbitration does not erase the public character of the underlying transaction.

“The forum may change; the obligation of the state to act lawfully does not,” he said.

He observed that arbitration involving public contracts must continue to engage with standards of fairness, transparency and accountability governing the exercise of public power.

Institutional Arbitration needs credibility

Justice Viswanathan also spoke about the growing importance of institutional arbitration in India, noting that Indian arbitration had historically been predominantly ad hoc.

He said professionally administered institutions could provide procedural consistency, administrative support, established mechanisms for appointment and replacement of arbitrators, and greater predictability.

However, he cautioned that credibility cannot be achieved merely by adopting institutional rules.

“An institution cannot acquire credibility merely by adopting a set of rules. Confidence is ultimately built through performance,” he said.

According to him, the credibility of an arbitral institution would depend upon the quality of its administration, independence of its processes, competence of those administering and deciding disputes, and the confidence developed among the Bar and commercial community.

Climate change may pose new challenges for investment arbitration

Justice Viswanathan also addressed the emerging intersection between investment treaty arbitration and climate change regulation.

He noted that as States increasingly regulate areas such as energy, infrastructure, carbon emissions, natural resources and environmental standards, foreign investors may challenge regulatory changes on the ground that they have adversely affected the value of their investments.

At the same time, States may argue that such regulations are necessary to fulfil climate obligations and protect public interests.

He said this could become one of the defining questions in investment arbitration in the coming decades: how to protect legitimate expectations of investors without freezing the regulatory capacity of States to respond to evolving public concerns.

“Investment protection must provide sufficient certainty to investors. At the same time, a sovereign state should retain meaningful regulatory space to pursue legitimate public objectives,” he said.

Justice Viswanathan referred to the International Court of Justice’s 2025 advisory opinion on States’ obligations concerning climate change and noted the growing international discussion on its implications for investment protection.

AI in Arbitration: 'Responsibility...cannot be delegated'

Artificial intelligence also featured prominently in Justice Viswanathan’s address.

He noted that AI is already being used for document review, translation, legal research and organisation of voluminous records in complex disputes. He also referred to experiments by arbitral institutions involving AI-assisted tools for identifying arbitrators and, in some cases, AI-based adjudication in document-only disputes.

Justice Viswanathan said courts and arbitral tribunals could explore carefully defined uses of AI to reduce the time spent on fact-heavy matters.

However, he warned about the risks associated with AI-generated material, including fabricated legal authorities and propositions, commonly referred to as “hallucinations”, as well as confidentiality concerns.

“Artificial intelligence may inform an arbitrator or a party's work, but the responsibility for reasoning, for judgment and for the resulting award cannot be delegated to it,” he said.

He also shared a lighter moment from his experience with AI translation, recalling that after delivering his first judgment in the Supreme Court, he used AI to see how the judgment would read in Hindi.

The standard courtroom expression “leave granted”, he said, was translated as “Chhutti sveekruti”, meaning that “leave is sanctioned”.

“I only hope that the hallucination episodes are only during intervals and not the other way around, like lucid intervals,” he remarked.

'Arbitration' should become primary dispute resolution mechanism

Looking ahead, Justice Viswanathan said the debate should no longer be about whether arbitration ought to be encouraged, but about the kind of arbitral system India should build.

He noted the growing view that arbitration and mediation should move beyond being described merely as “alternate” dispute resolution mechanisms.

“The more important question is what kind of arbitral system we should build. A system which is efficient but lacks confidence will not endure. A system which is highly regulated but excessively dependent on court intervention will defeat the purpose for which arbitration was chosen,” he said.

Justice Viswanathan said the success of the Gujarat High Court Arbitration Centre should ultimately not be measured merely by the number of conferences conducted or arbitrations administered, but by whether parties come to regard it as an institution where disputes are resolved with efficiency, independence, fairness and integrity.

He concluded by recalling the history of arbitration in Gujarat and the efforts of Mahatma Gandhi in 1918 to resolve a dispute between textile mill management and workers in Ahmedabad.

Drawing a connection between that episode and the contemporary institutionalisation of arbitration, he said the confidence that had once been created through the intervention of an individual must now be built into institutions accessible to ordinary litigants.

“The confidence in the process, which in 1918 had to be created afresh by one man, must be built by this institution so that this forum is readily available to every party who walks through its doors,” Justice Viswanathan said.

He expressed confidence that the Gujarat High Court Arbitration Centre would emerge as such an institution and wished the participants and organisers of GHAC Arbitration Week 2026 success.