I'm coming up on 20k hb again nd can't decide whether to upgrade my champ (3/5 stun talent) or my 80 pally (1/5 revive). I use my pally a lot for raids and he rarely dies plus it would boost my th for arena. Champ would be hitting higher on his proc but he likes to die so often that its annoying to level up..
Since you like and use your Paladin more often, then you should upgrade him. The thing about Champion is that his sole purpose it to proc his stun skill regardless of damage, since this allows you to go to town on your opponents Heroes; upgrading would only allow him to stay alive slightly longer. It would be better to focus more on his skill and talent level (High level Revitalize would be the best fit for a Champion in Arena).