Online Arbitration Under Judicial Scrutiny: Lessons from Radiance vs. Yes Bank

"Is an algorithm-based arbitrator truly neutral if only one party initiates the process?" 

The Bombay High Court recently addressed this pressing question in the landmark case of Radiance Galore vs. Yes Bank Ltd., marking a pivotal moment for the future of online arbitration (OA) in India. This case not only clarified the legal position on unilateral arbitrator appointments but also placed the spotlight on how Online Dispute Resolution (ODR) platforms must evolve to meet procedural fairness and statutory compliance. 

As legal systems embrace technology, platforms like PreSolv360, AdResNow, and Bharat Dispute Resolution (BDR) are transforming dispute resolution. But this transformation must not come at the cost of justice. Through the lens of the Radiance case, this blog explores the legal challenges, judicial reasoning, and the path forward for online platforms in India. 

The recent spotlight on Online Dispute Resolution is not just a wake-up call for platforms, but also a moment of validation for those already doing it right. At the center of this transformation is Bharat Dispute Resolution (BDR), the proprietary ODR arm of LegalPay.

While the Radiance vs. Yes Bank case exposed the pitfalls of algorithm-based arbitrator appointments triggered unilaterally, BDR has proactively built safeguards against such vulnerabilities. As India debates the boundaries of digital dispute resolution, BDR is already operating within the contours of consent, neutrality, and legal compliance positioning itself as a benchmark for future-ready platforms. 

Why Online Dispute Resolution Platforms Must Prioritize Legal Safeguards 

On July 9, 2025, the Bombay High Court delivered a significant ruling in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996. The petitioner, Radiance Galore, challenged an arbitral award passed by an arbitrator who was appointed through a process initiated solely by Yes Bank Limited. Though the appointment was conducted by an ODR platform using algorithmic selection, it was unilaterally triggered - a critical point of legal contention. 

Yes Bank acknowledged this flaw and informed the Court of its intent to withdraw the arbitration proceedings despite an award having already been passed. This aligned with a growing trend: lenders and corporates withdrawing or abandoning awards when faced with challenges based on unilateral appointment. 

Taking cognizance, Justice Somasekhar Sundaresan quashed the award by mutual consent of the parties. Importantly, the Court reinforced the principle that arbitrators may only be appointed in two legally valid ways: through mutual consent or via a Section 11 application to the Court. These are not merely procedural options but the foundation of a fair arbitration process. 

This judgment is far more than a case closure; it is a judicial declaration that E- Arbitrations must align with constitutional and legal standards. 

Online Arbitration and Party Neutrality: The Legal Challenge of Unilateral Appointments 

A key legal issue flagged by the Court pertains to party equality and procedural neutrality, foundational tenets of natural justice that underpin the legitimacy of any arbitration process. While Online Arbitration offers clear advantages in terms of speed and accessibility, its procedural framework must ensure that neither party enjoys a unilateral advantage in the appointment of the arbitral tribunal. 

ODR platforms such as PreSolv360 and AdResNow employ algorithmic models aimed at eliminating human bias in arbitrator selection. However, the integrity of such a process is compromised if the platform initiates arbitration based on a unilateral arbitration clause, i.e., where one party retains exclusive control over initiating or appointing the arbitrator. In such cases, the issue of neutrality is vitiated at inception, well before the algorithm comes into play. 

As clarified in Justice Sundaresan’s order, enforceability under the Arbitration and Conciliation Act, 1996 is grounded not merely in automation, but in mutual consent and procedural fairness. The judgment does not categorically discredit ODR platforms; rather, it interrogates whether these systems are structurally equipped to identify and reject appointments arising from void or unconscionable clauses. 

The broader implication is clear: ODR platforms must incorporate robust legal safeguards into their technological architecture. This includes: 

• Implementing consent-verification protocols at the outset of any arbitration; 

• Deploying automated alerts to detect and flag one-sided or non-mutual clauses; 

• Establishing internal legal compliance checks to ensure that the process conforms with statutory requirements under the Arbitration Act, particularly those concerning impartiality and fairness. 

The ODR Institute Advantage: Aligning Technology with Legal Standards 

The ODR Institute Advantage:

Although the outcome in the Radiance Realty case raised concerns about enforceability, the Court indirectly validated the role of ODR platforms within India’s evolving dispute resolution framework. It acknowledged that entities like PreSolv360 and AdResNow maintain operational independence and utilize randomized arbitrator selection processes. However, independence alone does not equate to procedural validity; adherence to statutory safeguards is paramount. 

This is where legally conscious platforms like Bharat Dispute Resolution (BDR) are poised to lead. BDR distinguishes itself through a design philosophy rooted in full compliance with the Arbitration and Conciliation Act, 1996, including: 

• Section 11 – Ensuring arbitrator appointments are neutral, mutually consented, and devoid of unilateral advantage; 

• Section 12 and Schedules V & VII – Mandatory disclosures regarding independence and impartiality, with automatic rejection of any appointments from biased or conflicted sources; 

• Section 29A – Time-bound resolution and award issuance within the statutory period, facilitated by platform-enforced process tracking; 

• Schedule VI – Maintenance of proper disclosures and ethical conduct by arbitrators. 

Further, BDR incorporates: 

• Consent-verification protocols to ensure bilateral initiation; 

• Clause-compliance detectors to screen and flag void or one-sided arbitration clauses; 

• Digital audit trails and governance layers for legal defensibility of each appointment. 

It is not merely a tech-enabled platform, it is a legally fortified ecosystem that blends procedural fairness, technological transparency, and judicial compliance. 

The Court’s direction was clear and constructive: ODR platforms must enhance transparency, proactively detect void clauses, and contribute to a judicially sound arbitration ecosystem. 

When designed with legal integrity, ODR platforms like BDR can deliver both efficiency and enforceability, ushering in a future where technology serves as a trusted enabler of justice. In that sense, they are not just compliant alternatives, they are essential instruments in India’s next-generation dispute resolution framework. 

Recalibrating Online Arbitration: A Blueprint Post-Radiance Judgment 

Following the Radiance ruling, ODR platforms must take several concrete steps to ensure continued legal relevance: 

1. Modify onboarding procedures to prevent arbitrator appointments based on unilateral initiation. 

2. Build internal verification layers to check if mutual consent exists or if a Section 11 order is available. 

3. Maintain immutable records of all appointment triggers, ensuring transparency. 

4. Notify users that appointments cannot proceed under invalid arbitration clauses. 

5. Train platform algorithms to screen out void or outdated appointment provisions in contracts. 

These steps are not just legally required, they are necessary for long-term viability. The era of blind automation is over. The era of smart, legally conscious automation begins now. 

Radiance vs. Yes Bank has made it clear: procedural shortcuts, even digital ones, are no longer acceptable. 

For legal finance companies like LegalPay, supporting enforceable Online Dispute Resolution through BDR is both a responsibility and a strategic differentiator. 

BDR: A Legally Compliant Path Forward

Amidst the growing concerns around the validity of E- Arbitrations, BDR stands as a model of legal and operational integrity. Powered by LegalPay to address these very concerns, BDR not only avoids unilateral arbitrator appointments but actively builds legal checks into its dispute resolution architecture. From consent-based appointment protocols to objection mechanisms and transparent documentation trails, every BDR arbitration is designed to be court-proof and compliant with Indian jurisprudence. This approach ensures that businesses not only resolve disputes swiftly but do so with awards that are fully enforceable under Indian law. 

Conclusion: Bharat Dispute Resolution and the Future of Online Arbitration in India 

The Bombay High Court’s decision in Radiance Galore vs. Yes Bank is not a setback - it's a necessary nudge toward procedural rigor and statutory compliance. It makes one thing crystal clear: speed and innovation must never come at the cost of fairness and legal validity. 

For emerging platforms like Bharat Dispute Resolution, this judgment offers a timely opportunity. As a tech-enabled dispute resolution platform, Bharat Dispute Resolution is built on the core values of neutrality, consent-based engagement, and compliance with Indian arbitration jurisprudence. Its algorithms are not just efficient; they are designed to be legally defensible. 

Platforms like PreSolv360, AdResNow, and Bharat Dispute Resolution now carry the responsibility of setting new benchmarks in digital arbitration. By ensuring that arbitrator appointments are always based on mutual consent or judicial mandate, ODR institutes can elevate the standard of Online Dispute Resolution in India. 

We hope this blog has helped you understand how critical procedural integrity is to the enforceability of arbitral awards especially in the digital realm. At LegalPay, we are committed to advancing legal innovation through collaboration with credible ODR institutes like Bharat Dispute Resolution, proprietary  platform of LegalPay  which blend the speed of technology with the sanctity of law. 

Remember, technology must serve justice - not override it. 

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Frequently Asked Questions (FAQs)

1. What was the core issue in the Radiance vs. Yes Bank case? 

The central dispute revolved around the unilateral appointment of an arbitrator by Yes Bank, which was challenged by Radiance Galore. Even though the appointment was conducted via a tech-based platform using an algorithm, it was initiated without mutual consent. The Bombay High Court held that such one-sided appointments were invalid under Indian arbitration law, and it quashed the arbitral award accordingly. The judgment reaffirmed the importance of either party consent or court intervention under Section 11 for valid appointments. 

2. Why are unilateral appointments of arbitrators problematic in India? 

Unilateral appointments violate the principle of neutrality and fairness in arbitral proceedings. Indian courts, including the Supreme Court, have held that when one party alone chooses the arbitrator, it creates an imbalance and undermines trust in the process. As a result, such appointments are deemed void, even if carried out by a neutral third party or algorithm, unless there is mutual agreement or court sanction. 

3. How did the Bombay High Court view the role of technology platforms in disputes? 

The Court acknowledged the growing use of technology platforms in resolving disputes but emphasized that these systems must operate within the boundaries of law. While recognizing that such platforms use neutral algorithms for arbitrator selection, the Court stated that if the process is triggered unilaterally, it still violates legal norms. Hence, platforms must verify whether the arbitration initiation is legally valid before proceeding with appointments. 

4. What steps should dispute resolution platforms take post-Radiance judgment? 

Platforms must now embed safeguards to ensure they do not proceed with arbitrator appointments unless mutual consent is verified or a court order under Section 11 is obtained. This includes building internal checks, requiring documentation of party consent, screening out contract clauses that permit one-sided appointments, and maintaining transparent audit trails. Compliance with these steps will protect platforms from having their processes invalidated by courts. 

5. Can past awards made through similar unilateral processes be challenged? 

Yes, if a party can prove that the arbitrator was appointed unilaterally in violation of prevailing law, they may challenge the award under Section 34 of the Arbitration and Conciliation Act. The courts have consistently held such awards to be unenforceable, especially after the Supreme Court’s authoritative rulings on the issue. Each case will, however, be evaluated based on its specific facts and procedural history. 

6. What impact does this ruling have on corporate lenders and borrowers? 

Lenders can no longer rely on contract clauses that allow them to appoint arbitrators unilaterally. Borrowers now have stronger grounds to oppose such proceedings if initiated improperly. This ruling encourages fairness and mutual participation, requiring both parties to agree on the dispute resolution process. For corporates, this means revisiting their standard arbitration clauses and adapting them to the new legal reality to ensure enforceability. 

7. How can LegalPay and Bharat Dispute Resolution support compliant dispute resolution? 

LegalPay, along with Bharat Dispute Resolution (BDR), offers legally sound, technology-driven dispute resolution services that align with the latest judicial mandates. BDR ensures that all arbitrator appointments are based on mutual consent or proper court directives, avoiding procedural pitfalls. By combining legal expertise with secure digital infrastructure, we help businesses resolve disputes efficiently while staying fully compliant with Indian arbitration laws and judicial precedents.