Solicitor General Tushar Mehta on Thursday flagged concerns about the impartiality and competence of arbitral tribunals which handle disputes involving the Indian government and public sector undertakings (PSUs)..He said that the government often does not get a level playing field when it comes to arbitration with private entities. “In case of a government and a private entity dispute, the government sometimes does not have a level playing field,” Mehta said,He also voiced concerns about the level of competence and integrity of arbitral tribunals..SG Mehta was speaking as part of a panel during London International Disputes Week (LIDW) 2025.The session was hosted by 39 Essex Chambers and Alvarez & Marsal, moderated by Vivek Kapoor and attended by senior arbitration figures including Senior Advocate Shashank Garg (Chair, ICC India Arbitration Group), as well as representatives from Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA), Welspun, and the Dedicated Freight Corridor Corporation of India (DFCCIL)..Mehta also defended the much-criticised 2024 government memorandum that discouraged public entities from referring disputes exceeding USD 1 million to arbitration. He said the circular was a reaction to structural shortcomings but clarified that it was not law and could be reviewed if systemic reforms—such as tribunal accountability and procedural clarity—were implemented. “These are circulars, ultimately not the law. It can always be re-looked at in view of the changed scenario,” he said.While acknowledging that arbitration remains a core dispute resolution mechanism for the Indian state, Mehta did not shy away from describing systemic limitations. He called for the establishment of a specialised arbitration court or tribunal, noting that the current system of challenges under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 was restrictive and also overloaded the courts. “The sheer volume of work may be a difficult problem and therefore it may be advisable to have a separate trial,” he said.Solicitor General Tushar Mehta clarified that the government has not abandoned arbitration as a mechanism but indicated that the current system lacks sufficient safeguards to be relied upon in significant public sector disputes..Shashank Garg echoed the Solicitor General’s concerns and described a persistent trust deficit experienced by PSUs in arbitration. “There is a perception that arbitrators are biased toward private parties, especially when the government is not seen as a repeat user,” he said. He also noted that PSUs face stricter scrutiny and must justify their claims to auditors unlike private entities who may inflate claims with impunity.Garg revealed that the Arbitration Bar of India has set up five task forces, including one focused on arbitrator conduct and ethics, to plug gaps left unaddressed by the Arbitration Act. The goal is to draft “soft laws” that could be adopted by the judiciary or the legislature, he said..Article 142, which empowers the Supreme Court to do “complete justice,” was discussed in light of its recent invocation in arbitration, notably in the Gayatri Balaswamy judgment. While constitutionally inherent, concerns were raised that citing Article 142 in such cases could create false hope—especially among PSUs—that arbitral awards can be routinely modified. It was underscored that this power lies solely with the Supreme Court and falls outside the statutory scheme under Section 34 of the Arbitration Act. The panel also debated whether High Courts could exercise a similar corrective function under Article 226—a question still unsettled in law..Abhijeet Shinde, General Counsel at Welspun World, underlined the strategic nature of arbitration planning. “When I’m negotiating contracts, I am actually negotiating future divorces,” he said, highlighting the importance of step clauses and culturally aligned arbitration seats. He noted that factors like enforceability under the New York Convention and cost are critical, especially in contracts that may not justify high-value institutional seats.Ajit Kumar Mishra of DFCCIL raised another red flag - the repetition of arbitrators and copy-paste awards.“If the arbitrator had not been repeated, there would have been no copy-paste,” he said, referencing recent awards involving Indian PSUs that were set aside in Singapore on grounds of plagiarism.He also pushed back against the over-reliance on institutional arbitration as a silver bullet. “The entire arbitration ecosystem has to be addressed—not just institutional arbitration in metropolitan centres.”.Shwetha Bidhuri, Director & Head (South Asia) at SIAC, shared data to underscore India’s centrality in global arbitration. “Over 2,500 Indian parties have used SIAC in the last ten years. Not a single SIAC award has been refused enforcement by Indian courts between 2011 and 2022,” she said. Bidhuri added that SIAC’s operations in India have grown significantly and now involve arbitrations seated within India itself.Deepanshi Ahlawat, Counsel at the LCIA, spoke about the benefits of institutional arbitration’s standardised rules and procedures, and of the oversight the LCIA has over procedural timelines and quality control of arbitrators. She also emphasized that institutions must maintain flexibility and party autonomy, the two hallmarks of international arbitration..Held as part of London International Disputes Week (LIDW) 2025, the session examined India’s evolving role in international arbitration. Several speakers observed that while India continues to grow as a commercial jurisdiction, challenges remain in its dispute resolution framework.
