Justice Rohinton F. Nariman Calls For Direct Division Bench Appeals Against Domestic Arbitral Awards
Former Supreme Court Judge Justice Rohinton F. Nariman on Friday called for doing away with the Single Judge stage for challenges to domestic arbitral awards and allowing parties to go directly before a High Court Division Bench, with a full appeal on both facts and law.
He suggested that the Division Bench decide such appeals within one year.
Justice Nariman also stressed that the arbitration regime must ensure not only speed and cost-effectiveness, but also accuracy, so that awards which are wrong on facts or law do not survive judicial scrutiny.
Justice Nariman said that, after three decades of the working of the Arbitration and Conciliation Act, the time had come to provide for a full appeal on both facts and law at one stage.
According to him, allowing parties to go straight to a Division Bench would make a “huge difference”, particularly since the Single Judge process could itself take years.
“Go straight to a division bench. You will make a huge difference because the single judge process itself would take years. So if you go straight to a division bench and you give a timeline of one year, you'll take these speed things up,” he added.
Justice Nariman was delivering the keynote address on September 4 at the Gujarat High Court Arbitration Centre Arbitration Week 2026 at GIFT City Club, Gandhinagar.
The three-day programme, being held from September 4 to 6, is centred on the theme “Building Gujarat's Institutional Arbitration Ecosystem”.
Explaining the need for broader appellate scrutiny, Justice Nariman said arbitration had moved far beyond an era where commercial parties were prepared to accept “rough justice” merely in exchange for speed.
Modern disputes involved complex commercial contracts and large corporations, making accuracy as important as speedy and cost-effective dispute resolution.
Justice Nariman said arbitration must ensure not only speed and cost-effectiveness, but also accuracy, and that awards wrong on facts or law should not be allowed to survive judicial scrutiny.
Justice Nariman's proposal came after he examined five recent Supreme Court judgments dealing with important questions concerning the appointment of arbitrators and the setting aside of arbitral awards.
He said the decisions had not promoted certainty in arbitration law and that repeatedly reopening settled questions created “grave uncertainty”.
“So here we have five recent judgments of the Supreme Court. How has the Act fared? According to me, not particularly well because firstly, the judgments don't conduce to certainty. Secondly, constantly reopening closed questions again leads to grave uncertainty", he said.
Justice Nariman discussed Cox and Kings Ltd. v. SAP India Pvt. Ltd. & Anr., where a five-judge Bench considered when non-signatories could be bound by an arbitration agreement. He highlighted the ruling's emphasis on reading the Arbitration Act alongside the Contract Act and examining whether a person intended to be bound by the arbitration agreement.
He contrasted that approach with the subsequent seven-judge ruling in In Re: Interplay Between Arbitration Agreements Under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, concerning unstamped arbitration agreements, which described the Arbitration Act as a self-contained code and special enactment.
Justice Nariman questioned this reasoning, arguing that it contradicted Cox and Kings Ltd. v. SAP India Pvt. Ltd. & Anr., where the Contract Act had been treated as fundamental to determining whether an arbitration agreement existed.
He was particularly critical of the speed with which the five-judge ruling in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited & Others, which had upheld the earlier position on unstamped arbitration agreements, was reopened and reversed by a seven-judge Bench.
“And unfortunately, what was made certain by five judges was made uncertain. And God alone knows now whether a ninth judgment will overrule this view or whether whatever happens happens", he said.
Justice Nariman next questioned the Supreme Court's curative ruling in Delhi Metro Rail Corporation Limited v. Delhi Airport Metro Express Private Limited. According to him, the Court ultimately interfered on a factual issue after the proceedings had attained finality by invoking “miscarriage of justice”.
He said the arbitral tribunal had considered whether defects had been cured and whether effective steps had been taken to cure them.
What could be inferred from the relevant safety certificate, according to Justice Nariman, was a matter for the arbitrators to appreciate.
“Now, that's another big leap. Because the certificate by itself can show nothing. That again is something for the appreciation of the arbitrator", he said.
He cautioned that the ruling could open the door to factual interference with arbitral awards even at the curative stage, after the proceedings had otherwise attained finality, observing: “So, we have a major problem now with this case because all arbitral awards now have this chance of hopefully being interfered with, on fact, at the fag end in a curative petition, if finally the court's conscience, so to speak, is shocked.”
Justice Nariman criticised the majority ruling in Gayatri Balasamy v. ISG Novasoft Technologies Limited for recognising a limited power to modify arbitral awards. He said it did not overrule National Highways Authority of India v. M. Hakeem & Another, which had held that courts could set aside awards but not modify them, and instead merely “tweaked” that precedent.
Referring to the majority ruling, Justice Nariman remarked: “So, the whole thing is one big jamboree. I don't understand how the law gets furthered by having this kind of a judgment, which again doesn't conduce to either clarity or to any real forward advance in the law.”
Justice Nariman said Justice K.V. Viswanathan, who dissented from the majority, was “clearly right”.
Turning to the Constitution Bench ruling in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) A Joint Venture Company, concerning unilateral arbitrator appointments, Justice Nariman questioned the reliance on Section 18 of the Arbitration Act. He said the provision requiring equal treatment applies after the arbitral process begins, not at the appointment stage.
“Strictly speaking, 18 won't apply. Because 18 is equal treatment to be given to parties after the arbitration process begins, not before. This is the appointment stage.”
Further, Justice Nariman separately proposed changing the manner in which arbitrators are paid to address delays in arbitral proceedings.
He suggested that arbitrators and parties determine a lump-sum fee at the beginning of the proceedings, with both parties depositing the amount upfront and the arbitrator receiving it only after delivering the award.
“You, the arbitrator, will get the fee only when you give the award. I think this would be a great step. Speed things up at least at the arbitral proceedings stage," he added.