ARBITRATION AMENDMENT ACT

ARBITRATION AMENDMENT ACT, 2019

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The Arbitration and Conciliation (Amendment) Act has been formally published on the Official Gazette. The Act has received the assent of the President of India on August 9, 2019 after it was introduced in Rajya Sabha by the Minister of Law and Justice, Mr. Ravi Shankar Prasad on, July 15th, 2019. It seeks to amend the Arbitration and Conciliation Act of 1996, containing provisions to deal with the International and Domestic arbitrations. It also aims at conducting the conciliation proceedings.

Firstly let’s move on with understanding what Arbitration is. Arbitration in simple words is a tool or a means to settle the disputes as an alternative to the regular practice of litigation. Due to the long lasting litigations, Alternative Dispute Resolution (ADR) provides a quicker, simpler and convenient way to the disputant parties to settle or put an end to the controversy. An arbitrator is a person who ensures to provide better settlement choices to the parties thereby making it a win-win situation for both the parties unlike in a litigation.

FEATURES OF ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019:-

  1. ARBITRATION COUNCIL OF INDIA

In order to promote the arbitration, conciliation, mediation and the redressal process of other disputes, this amendment of 2019 aims at establishing an Independent body named Arbitration Council of India abbreviated as ACI. This independent body that is ACI will manage various activities surrounded to dispute settlement, management, arbitration etc. The functions of Arbitration Council of India are as follows:-

Primary Functions of Arbitration Council Of India

  • Framing policies for grading arbitral institutions and accrediting the arbitrators.

  • Making policies for establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters.

  • Maintaining a depository of arbitral awards made in India and abroad.

The Chairperson of the Independent body of ACI will be appointed by the Chief Justice of India in Consultation with the Government. The Eligibility Criteria for the Chairperson of ACI is:-

  • He/she must be a judge of the Supreme Court or Chief Justice of a high court

  • He/she must be judge of a high court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration.

The Arbitration Council of India will have perpetual succession and a common seal, with power, subject to the provisions of the Act, to acquire, hold and dispose of property, both movable and immovable, and to enter into contract. It can sue or be sued, as stated by the Section 43B of the Arbitration and Conciliation Act of 2019.

2. COMPOSITION OF THE ACI:-

The ACI will consist of the following:-

  • A Chairperson

  • A Judge of a High Court or,

  • A Chief Justice of High Court

  • An eminent person with expert knowledge in Arbitration

    Other members will include:-

  • An eminent arbitration practitioner,

  • An academician with experience in arbitration,

  • Government appointees

    3. APPOINTMENT OF ARBITRATORS :-

Parties are free to appoint arbitrators, if any disagreement on an appointment occurs, then 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 as stated by 1996 Act. However, as per the bill it states that High Court or Supreme Court may designate the arbitral Institutions to appoint the same. It also states to dispose the application of appointment of arbitrator within 30 days

4. CONFIDENTIALITY OF THE PROCEEDINGS :-

Except the details of the arbitral award all the details of the arbitration proceedings shall be kept confidential as stated by the bill.

5. APPLICABILITY OF ARBITRATION AND COCILIATION ACT OF 2015 :-

It also clarifies that the Amendment Act of 2015 is applicable prospective only. It applies only to proceedings started after October 23rd of 2015.

6. RELAXATION OF TIME LIMITS :-

The Bill seeks to remove this time restriction for international commercial arbitrations. It adds that tribunals must strive to dispose off international arbitration matters within 12 months.

7. COMPLETION OF WRITTEN SUBMISSIONS :-

The bill stated that the written submissions of the claims and the defense to claims to be completed within the six months of the appointment of the arbitrator. Although currently there is no time limit prescribed to file the written submissions before the arbitral tribunal.

The bill also aims at establishing the Arbitral Institutions wherein, the parties can approach for the appointments. These institutions will be designated by the Supreme Court and the High Court of India. The institution designated by the Supreme Court will make appointments for International Commercial Arbitrations whereas, for the domestic arbitrations the designated High Courts of India will make appointments. In case of lack of available arbitral institutions the Chief Justice of the concerned panel will look after the arbitration supervising the panel of arbitrators under him/her. An application for appointment of an arbitrator is required to be disposed of within 30 days.

Thus the amendment has brought certain important changes like:

  • Provisions to dispose the application for appointment of arbitrator were a much needed step.
  • Aims to reduce the burden of the court by constituting ACI
  • Scope of International Arbitration has been enhanced
  • Effective arbitration proceedings by providing a stipulated time to submit written versions.