The Arbitration and Conciliation (Amendment) Bill, 2019

The Arbitration and Conciliation (Amendment) Bill, 2019


The Arbitration and Conciliation (Amendment) Bill, 2019 was passed by the Parliament on August 2019. It seeks to amend the Arbitration and Conciliation Act, 1996. The Arbitration and Conciliation Act, 1996, as amended by the Arbitration and Conciliation (Amendment) Act, 2015 in order to make arbitration process user-friendly, cost-effective and ensure speedy disposal and neutrality of arbitrators. However, to give a boost to institutional, arbitration vis-a-vis ad hoc arbitration and to remove some practical difficulties in the applicability of the Arbitration and Conciliation (Amendment) Act, 2015, a High-Level Committee (HLC) under the Chairmanship of Justice B. H. Srikrishna, was constituted by the Government. The proposed amendments are as per the recommendations of the High-Level Committee. The Act contains provisions to deal with domestic and international arbitration and defines the law for conducting conciliation proceedings.  Key features of the Bill are:

  • Arbitration Council of India: The Bill seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation, and other alternative dispute redressal mechanisms.
  • Its functions include framing policies for grading arbitral institutions and accrediting arbitrators, making policies for the establishment, operation, and maintenance of uniform professional standards for all alternate dispute redressal matters, among others.
  • Composition of the ACI: The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court, a Judge of a High Court, or Chief Justice of a High Court or an eminent person with expert knowledge in the conduct of the arbitration.
    • Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.
  • Appointment of arbitrators: Under the Bill, the Supreme Court and High Courts may designate arbitral institutions, which parties can approach for the appointment of arbitrators. For international commercial arbitration, appointments will be made by the institution designated by the Supreme Court. For domestic arbitration, appointments will be made by the institution designated by the concerned High Court.
    • Under the 1996 Act, parties were free to appoint arbitrators. In case of disagreement on an appointment, the parties could request the Supreme Court, or the concerned High Court, or any person or institution designated by such Court, to appoint an arbitrator.
  • Relaxation of time limits: Under the Act, arbitral tribunals are required to make their award within a period of 12 months for all arbitration proceedings.
    • The Bill seeks to remove this time restriction for international commercial arbitrations. It adds that tribunals must endeavor to dispose of international arbitration matters within 12 months.
  • Completion of written submissions: Currently, there is no time limit to file written submissions before an arbitral tribunal.
    • The Bill requires that the written claim and the defense to the claim in an arbitration proceeding should be completed within six months of the appointment of the arbitrators.
  • Confidentiality of proceedings: The Bill provides that all details of arbitration proceedings will be kept confidential except for the details of the arbitral award in certain circumstances. Disclosure of the arbitral award will only be made where it is necessary for implementing or enforcing the award.

Importance

  • Putting India on the world map in arbitration proceedings – It aims to make India an international arbitration hub by providing facilities for the settlement of commercial disputes.
  • To reduce the burden on courts– With the huge backlog of cases, the courts are already overburdened. An effective ACI will share this burden of the court and even facilitate speedy appointment of arbitrators. This would further aid the quick resolution of disputes outside the court.
  • To provide an exhaustive list to choose an arbitrator– The parties to an arbitration agreement can choose their own arbitrator, this choice is sacrosanct to the arbitration process.
  • To speed up the arbitration process– The bill provides for a statement of claim and defense to be completed within six months from the date the arbitrator receives the notice of appointment.

The Amendments in the Act of 1996 will facilitate achieving the goal of improving institutional arbitration by establishing an independent body to lay down standards, make arbitration process more party friendly, cost-effective and ensure timely disposal of arbitration cases.

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