Amendments To The Arbitration And Conciliation Act, 1996
Updated: Jan 18
Arbitration, Conciliation, and Mediation are the various mechanisms of alternative dispute resolution. Due to the enormous backlog of cases, these modes of dispute resolution have been applied in India. These methods are affordable, confidential, and less formal than the court. The application of an alternative dispute resolution system led to speedy disposal of cases. In India, Arbitration and Conciliation are governed by the Arbitration and Conciliation Act 1996. The Act originally consists of 86 sections and 3 schedules. The Arbitration and Conciliation Act was amended in 2015 and 2019.
The Arbitration And Conciliation (Amendment) Act, 2015
The Amendment Act is the reflection of recommendations suggested by the report of the Law Commission of India in 2014 and its supplementary report of 2015. This Amendment Act is said to be a milestone in the development of Arbitration in India. The main object of this Amendment Act is to make Arbitration the most preferred mode of the Alternative Dispute Resolution System.
The notable changes in Arbitration And Conciliation Act (Amendment) Act, 2015 are:
Section 2(e): In the matters of International Commercial Arbitration, the High Court shall be the court of reliefs under this Act.
Section 7: An Arbitration Agreement through electronic means can also be treated as an Arbitration Agreement in writing.
Section 8: A dispute is referred to Arbitration only when the Judicial Authority finds that the Arbitration Agreement is not null and void.
Section 9: A Court can accept the application for interim relief from the Arbitration Tribunal only when the parties prove that the tribunal is unable to provide such a remedy. When the court passes an order of interim relief before the commencement of arbitral proceedings, the arbitral tribunal must commence the proceedings within 90 days from the date of Court order.
Section 11: The Amendment Act 2015 provides that an application can be made to the Supreme Court for the appointment of arbitrator or arbitrators when the parties or the tribunal is unable to reach an agreement in the appointment of a third arbitrator.
Section 12: Fifth Schedule has been inserted which contains the list of grounds that would create justifiable doubt regarding the independence and impartiality of arbitrators. Another schedule (seventh schedule) is also added and a provision has been inserted that notwithstanding any prior agreement of the parties if the arbitrator's relationship with the parties or the subject matter of dispute falls under any of the categories provided in the seventh schedule, it would act as ineligibility to act as an arbitrator.
Section 25: As per the Amended Section right of the respondent to file the statement of defence has been forfeited, if the respondent fails to communicate such statement per the time limit agreed by the parties or the Tribunal without reasonable cause.
Section 29A: The Tribunal should pass an award within twelve months from the date when the arbitral tribunal enters upon the reference. The parties may extend this period without exceeding six months. If the award is not made within 12 months or an extended period, the mandate of the arbitrator shall terminate unless the time is extended by the court.
Section 29B: According to this section if the parties mutually agree, the arbitral proceedings shall be conducted through fast track procedure under this section.
The Arbitration And Conciliation (Amendment) Act, 2019
A High-level committee was constituted by the Indian Government in December 2016. The object of the committee was to review and reform the process of Arbitration in India. Based on the recommendations of this committee, The Arbitration and Conciliation Act was amended in the year 2019.
The Notable Changes In The Arbitration And Conciliation (Amendment) Act, 2019 are:
Arbitration Council Of India:
Under the amended act, an independent body named as “Arbitration Council of India” is established. The object of the council is to promote alternative dispute resolution mechanisms like Arbitration, Conciliation, and Mediation. It acts as a body that frames Arbitration related policies, strengthens the institution of Arbitration, and maintains the depository of Arbitral awards made in India and Abroad.
Eighth Schedule :
The eighth schedule is newly inserted which contains the qualifications to be an arbitrator. The Schedule allows advocates enrolled under the Advocates Act and persons with law degrees who have been officers in the public or private sector to be accredited as arbitrators.
Section 11 :
The Supreme Court (for international commercial arbitrations) and the High Courts (in cases of other arbitrations) to delegate appointment of arbitrators to arbitral institutions graded by the Council or in its absence, a panel of arbitrators. The appointment of the arbitrator must be completed within 30 days from the application being made by the parties. Further, the arbitral institutions or panel of arbitrators have the power to determine the fees of the arbitrators, subject to the rates specified in the Fourth Schedule of the Arbitration Act.
Section 29 A:
All the parties must file their statement of claim and defence within the 6 months from the date of receipt of notice of appointment of arbitrators. This amendment of Section 29A makes the revised timelines mandatory only for arbitrations where all parties are Indian.
Section 42 A :
The arbitrator and parties to the arbitration agreement should maintain the confidentiality of all arbitral proceedings except for the details of the Arbitral Award in certain circumstances.
ABOUT THE AUTHOR
G.S.Selma is currently pursuing Law at Chennai Dr. Ambedkar Government Law College.
Edited by: Swathi Ashok Nair
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