A COMMENT ON THE INDIAN ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2018
The article seeks to provide a critical comment of the recently introduced Arbitration and Conciliation (Amendment) Bill, 2018. The main objective of the paper is to show that though there are a number of welcome changes made by the amendment, there are still a few grey areas to be focused on. The introduction introduces the bill and the reasons for which the bill of 2018 has now been introduced. The next section attempts to show the salient features of the bill. The following segment analyses the positive changes that the bill has introduced. This part also seeks to appreciate the number of consequential changes being brought about by the bill. Further, the article seeks to provide a critical analysis or an insight in to the concerns regarding the bill. The final part portrays how the bill has missed an opportunity to bring about a series of other consequential changes that are much required in the present scenario. The paper concludes by showing that though there are a few loopholes, the bill is still a progressive step towards making India the next sort after destination for arbitration.
The Arbitration and Conciliation (Amendment) Bill, 2018, which seeks to further amend the Arbitration and Conciliation Act,1996 was approved on 7th of March 2018 by the cabinet of ministers for introduction in the next session of the parliament. There seems to be a strong inclination towards making India a desirable hub for international commercial arbitration. This can be seen from the various efforts taken by organizations in the country such as the conference organized by NITI Aayog on ‘National Initiative towards strengthening arbitration and enforcement in India’ and the introduction of the New Delhi International Arbitration Centre bill, 2018. In order to remedy issues faced by arbitration in India such as excessive costs, delays, and protracted proceedings, the Arbitration and conciliation (Amendment) Act, 2015 was introduced. One of the major objectives of the 2015 amendment act was to make arbitration the preferred mode of settlement of disputes, by providing a fixed timeline and making arbitration cost effective.
However, the amendment of 2015 created legal hurdles. There were many questions about the applicability of the act to court proceedings initiated prior to 23rd October 2015. Therefore, there was an extreme necessity to bring about a further amendment to clear the uncertainty created by the amendment act of 2015.
In order to amend the same and to make a number of consequential changes such as promoting institutional arbitration and further streamline the arbitration process to remove practical difficulties in the application of first round of amendments made by the amendment act of 2015, Arbitration and Conciliation (Amendment) Bill, 2018 has been introduced.
The introduction of the bill came after the central government constituted a high-level committee under the chairmanship of Justice (Retd.) B.N. Srikrishna. It was introduced in Lok Sabha by the Minister for Law and Justice, Mr. PP Chaudhary in 2018. The main aim of the committee was to suggest ways to improve the efficiency of the arbitral framework in India and to examine measures to strengthen arbitral institutions in India.
Though the bill as a whole is commendable, there are still a few peaks and valleys. Many provisions of the bill deviate from the recommendations of the committee and if implemented would be a backward step in the aim to make India a global arbitration hub. There are also many suggested areas of reform that remain unaddressed.
KEY HIGHLIGHTS OF THE BILL
The amendment bill seeks to amend the arbitration and conciliation act, 1996. The Bill contains provisions to deal in issues related to international and domestic arbitration. The most significant part of the bill is that it seeks to establish an independent body called the arbitration council of India. This is to enable the promotion of ADR mechanisms such as arbitration, conciliation, and mediation. The functions of the council include framing policies for the establishment, maintenance, and operation of uniform professional standards for all matters relating to alternative dispute redressal, making policies for accrediting arbitrators and grading arbitral institutions and to maintain a depositary of the judgments or arbitral awards made both in India and abroad. The High committee report also suggests that ACI may also encourage institutions that are not performing well to improve their structure and functioning.
The bill also states the composition of the proposed Arbitral council of India. The ACI is to consist of a chairperson who is either a judge of the supreme court or the chief justice of a high court or a judge of a high court or an eminent person with expert knowledge in the field of arbitration. The other members would consist of a practitioner of arbitration, an academician with experience in arbitration and persons appointed by the government.
The bill also differs from the 1996 Act with regard to the appointment of arbitrators. Under the act, the parties could appoint an arbitrator on their free will. They could even request the supreme court, high court or a person or institution designated by such a court to appoint an arbitrator, in case of a disagreement on the appointment. Whereas, under the bill, arbitral institutions may now be designated by the supreme court and high court. Appointments will be made by these institutions designated by the concerned high court in case of domestic arbitration. In the case of international commercial arbitration, institutions designated by the supreme court will make the appointments. The chief justice of the concerned high court may also maintain a panel of arbitrators to perform the functions of the arbitral institutions, in case no arbitral institutions are available. Further, any application for the appointment of an arbitrator should be disposed of within a period of 30 days.
With regard to the timeline for completing arbitration, to ensure that international commercial arbitrations are excluded from the timeline bounds, section 29A of the act shall be amended. It will further provide that the time limit for the arbitral award in other arbitrations shall be within 12 months from the completion of the pleadings of the parties. This amendment, if implemented is to be appreciated, because the high committee report has highlighted that the rigid timelines in conducting international commercial arbitrations have been heavily criticized since the monitoring of the conduct of the arbitral proceedings is best left to the arbitral institution itself.
The tribunals shall now have to follow a strict approach for timely completion of the pleadings and would have to forfeit the parties right if the pleadings are not filed on time as contemplated in the 2015 amendment, given that the time for completion of pleadings has been excluded. Otherwise, the very purpose of introducing a time limit of completion of proceedings will be defeated.
The bill also contains a specific provision relating to confidentiality and immunity. The amendment introduces a new section, 42A, which states that the arbitrator and the arbitral institutions shall keep all the arbitral proceeding except the award, confidential. Only when implementation or enforcement of the award becomes necessary, the disclosure of the arbitral award will be made. Additionally, a new section 42B protects an arbitrator from legal proceedings for any act or omission done in good faith during the course of the arbitration proceedings. Prior to this amendment, confidentiality provisions were only available for conciliation under section 75, but now it will extend to all the arbitration proceedings. This will create an obligation on not only the arbitrators but also everyone involved in the proceedings to keep the process strictly confidential. The high level committee report suggested the immunity of arbitrators from all acts or omissions, except those done in bad faith is to be ensured since it is the best practice internationally. This thus ensures the arbitrator will be immune as long as the act was done in good faith.
Finally, with the introduction of Section 87, the bill clarifies that unless parties agree otherwise, the 2015 amendment shall not apply to (a) arbitral proceedings which have commenced before the commencement of the 2015 Amendment; (b) court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the 2015 Amendment and shall apply only to arbitral proceedings commenced on or after the commencement of the 2015 Amendment and to court proceedings arising out of or in relation to such arbitral proceedings.
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- Quote paper
- Archa Rajeevi (Author), 2018, A Comment on the Indian Arbitration and Conciliation (Amendment) Bill, 2018, Munich, GRIN Verlag, https://www.grin.com/document/465681