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A New Dimension To Arbitration And Conciliation Act, 1996

There has been lot of changes taking place across the country from decriminalization of adultery to the present citizen ship amendment. Among all such major changes one of a significant aspect was has been the Arbitration & conciliation Amendment Bill 2019 .

The Arbitration & conciliation Amendment Bill 2019 was presented on July 15,2019 in Rajya sabha by Minister of Law and Justice Mr.Ravi Shankar Prasad and this bill after due discussions was passed on July 18TH ,2019 and was then presented in Lok sabha and was passed on August 1,2019 and was assented by the President on 9th August ,2019.

The bill was introduced to make requisite amendments in the Arbitration and Conciliation Act,1996.It mainly focused on insertion of various new provisions that was required for development of ADR mechanism India.It also consisted provision regarding the international and domestic arbitration and concentrated on changing different aspects of the Act respectively

The arbitration and conciliation Act has been a dynamic area that has been gradually improving in every new aspect leading to large contributions in the area of ADR Mechanism .The arbitration and conciliation Amendment bill 2019 focused more on the changes that need to be implemented in the act to make Arbitration and conciliation more adaptive with the contemporary changes .It aimed in improvising the standard of alternate dispute resolution to a level where people can rely on it without any second thought and build a strong foundation for the mechanism.

Let us have a glance to the aspects of new Amendment

Establishment of Arbitration Institution

Sec 2 clause (ca) has defined the arbitral institution as the institution designated by HON’BLE Supreme court of India or High court under this Act.These institution has been established after recommendations of high power committee who has raised the concern that there has to be more new ways and modes to be formulated to develop arbitration in India These council has said that establishment of this institutions will bring a more systematic structure of arbitration.

Main objective of establishment of this institutions was to lessen the difficulties that people are facing related to extensive delay in appointment of arbitrators to the proceedings and also there has been an unexpected delay in seeking arbitration as a remedy in dispute resolution as approaching high court or Supreme court for filling the applications of arbitration has become a cumbersome and delaying process.

To remove this difficulty, the Amendment bill 2019 has stressed on establishment of these institutions so that the parties can avoid undergoing of this long process and people need not approach supreme court or high court for seeking arbitration as a medium of resolution to the dispute but rather approach these institution which are designated by the member of arbitration council.

Theses institutions are responsible in training the arbitrators with proper necessary skills and make the more effective and efficient in the proceeding process and make sure that they are imbibed with the necessary skills that would make arbitrators more expeditious.

this institutions act as an regulating body in appointment of the arbitrators .The arbitration council of institution shall consist of retired judges and retried scientific ,finance minister or such that and aid the arbitrators.

Sec 11 –Appointment of Arbitrators

According insertion of new clause -that is clause has been introduced as an addition

According it states that –the Hon’ble Supreme court and High court shall have power to designate arbitral institutions from time to time which shall have been graded by the council that has been formed under sec 43-I for the purposes of that Act.

Provided that in case of a high court there is no graded arbitral institution available within its jurisdiction then in such case the Chief Justice of such High court may maintain a panel of arbitrators who are transparent and independent for discharging the functions and duties of arbitral institution and any reference to the arbitrator shall be deemed to be an arbitral institution for the purposes of this section and such arbitrator appointed by a party shall be entitled to such fees as the rates specified in the schedule.

The chief justice of such High court may with time to time review the panel of arbitrators . The application for appointment of the arbitrator shall be disposed off in thirty days from the date of service of the notice on the opposite party.

Arbitral Council of India-

The arbitral institutions shall be graded and evaluated by arbitral council of India.The 2019 Amendment bill has made it compulsory for the establishment of arbitral council of India. In lieu of this Amendment ,a new part -1A has been inserted consisting of section 43A- 43M related to Arbitration council .

Arbitral councils of India shall be established by the notification in official gazette by the central government. The council that has been established shall be a body corporate having perpetual succession having common seal ‘and such council shall have right to acquire or sell property in the name of council and can sue anyone or can be sued. The head office is to be located in New Delhi.

Constitution of Arbitral Council of India-

The council shall consist of following members:
  • person who has been Judge of supreme court high court / chief justice of high court /Judge of high court or an eminent person having required knowledge and experience in fields of conduct and administration of arbitration who to be appointed by the central government in consultation with the Chief justice of India who shall be chairperson
  • an eminent arbitration practioner having required knowledge and experience in institutional arbitration in both domestic and international and such person shall be nominated by the central government who is a member.
  • an eminent academician having experience in research and teaching in field of arbitration and alternate dispute resolution laws who shall be appointed in consultation with chairperson –member
  • secretary to the Government of India in the Department of Legal affairs ,Ministry of Law and Justice or his representative not below a rank of joint secretary –member ,ex officio
  • one representative of a recognised body of commerce and Industry,choosen on the rotational basis by the central government and such member is a part time member
  • Secretary to the government of India in the Department of Expenditure,Ministry of finance or his representative not below the rank of joint secretary
  • chief executive officer who shall be the Secretary or can be ex officio also.

Duties And Functions of Council-

It shall be the duty of the council to take all such measures as may be necessary to promote and encourage arbitration and other various alternate dispute mechanisms like mediation, negotiation, conciliation or any other alternate dispute resolutions. It is established mainly to frame policy and guidelines for the establishment ,operation and maintenance of uniform professional standard in respect of matters relating to arbitration. The council has been vested with many powers in order to properly discharge the duties and functions that are need to be performed by the council in order to properly implement and develop arbitration.

The council may:
  1. frame policies related to grading of the arbitral institutions.
  2. make recommendations to the central governments on various measure that needed to be adopted to make provisions related to commercial disputes.
  3. promote industrial arbitration by strengthen arbitral institutions.
  4. such other functions as may be decided by the central government.

Grading of Arbitral Institution

The council shall make grading of arbitral institutions on the basis of criteria relating to infrastructure ,quality and calibre of arbitrators ,performance and compliance of time limits for disposal for domestic or international commercial arbitrations, in such manner as may be specified by the regulations.

Standards Set Up For Arbitrators:

Also bill consists a clause which states that the qualifications, experience and norms for accreditations of arbitrators shall be such as specified in Eighth schedule which is inserted newly into the Act stating all the specifications related to arbitrators which ensures that the arbitrators that are appointed has the calibre and expertise in the matter and can effectively and efficiently pass an award without jeopardising any party to dispute or negating the main foundation of the arbitration proceedings. This was inserted mainly to win the confidence of people in the alternate dispute resolution mechanism and encouraging this kind of mechanism.

Electronic Deposit of Award

The new bill imposes a responsibility of maintaining an electronic depository of arbitral awards made in India and such other records related thereto in such manner as may be specified by the regulations. The main objective of maintaining of award in electronic form is to maintain the safety of records so that they are not manipulated at any time after the passing of the award

Retrospective or prospective effect of the Act

The 2015 Amendment Act shall be applied in following 2 cases unless the parties to dispute have agreed to apply 2015 amendment -
  1. The court proceeding arising out of or in relation to such arbitral proceeding irrespective of whether such court proceedings are commenced prior to or after the commencement of arbitration and conciliation (Amendment) ACT 2015.
  2. Arbitral proceedings commenced before the commencement of the arbitration and conciliation (Amendment )Act 2015

And the 2015 shall apply only to arbitral proceedings commenced on or after the commencement of the arbitration and conciliation Amendment Bill 2015 and to court proceedings arising out of or in relation to such arbitral proceedings.

Insertion of Section 42A Confidentiality

Not regarding to anything contained in any other that is in force ,the arbitrator,the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of its implementation and enforcement of award.

Insertion 42B Protection To Arbitrators

There is a protection provided against the arbitrators for anything done under this Act or to be intended to be done under this Act or the rules or in good faith

International Commercial Arbitration

It states that award in international commercial arbitration shall be done in expeditiously as possible and endeavour may be dispose of the matter within a period of twelve months from the date of the completion of pleadings. Other than international commercial arbitration shall be made by the arbitral tribunal within 12 months from the completion of pleadings

Statement of Defence And Claim

The statement of defence and claim in regard to the arbitral proceedings shall be completed within a period of six months from the date the arbitrator or all the arbitrators ,as the case may be received noticed in writing of their appointment. This clause ensures that there is no delay in the process of arbitration and within estimated time limit the proceeding shall be completed.

Conclusion

These changes are brought with an intention to increase the application ADR mechanisms in dispute resolutions and was mainly intended to gain confidence of people by grading the arbitration institutions by eminent members in the arbitration council.But there must be a proper check on the application of these provisions ensuring that main intension and objective behind inserting these clauses must be achieved and should enhance the arbitration proceedings at the end.

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