Jun 02, 2020


When was this bill passed? 

The Arbitration and Conciliation (Amendment) Bill, 2019 was passed by the Parliament in the Budget Session 2019. It seeks to amend the Arbitration and Conciliation Act, 1996. The Act contains provisions to deal with domestic and international arbitration, and defines the law for conducting conciliation proceedings. 

Features of the Act

What is Arbitration Council of India (ACI)? 

The Act 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: 

(i) Framing policies for grading arbitral institutions and accrediting arbitrators. 

(ii) Making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters. 

(iii) Maintaining a depository of arbitral awards made in India and abroad. 

(iv) Holding training, workshops and courses in the area of arbitration in collaboration with law firms, law universities and arbitral institutes. 

What is the composition of the ACI? 

The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court; or (ii) a Judge of a High Court; or (iii) Chief Justice of a High Court; or (iv) an eminent person with expert knowledge in conduct of arbitration. Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees. 

How will the arbitrators be appointed? 

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. Under this Bill, the Supreme Court and High Courts may now 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. In case there are no arbitral institutions available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators to perform the functions of the arbitral institutions. An application for appointment of an arbitrator is required to be disposed of within 30 days. 

What is the time limit for Arbitral award? 

Under the previous Act, arbitral tribunals are required to make their award within a period of 12 months for all arbitration proceedings. The Act seeks to remove this time restriction for international commercial arbitrations. It adds that tribunals must endeavour to dispose off international arbitration matters within 12 months. Previously, there is no time limit to file written submissions before an arbitral tribunal. The Act requires that the written claim and the defence to the claim in an arbitration proceeding, should be completed within six months of the appointment of the arbitrators. 

What is the amendment in confidentiality of information? 

The Act 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. 

What are the qualifications of the Arbitrator? 

The 2019 Act prescribes that the qualifications are specified in the Eighth Schedule of the Act. Must be (i) an advocate within the meaning of the Advocates Act, 1961 having ten years of practice experience or (ii) is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 having ten years of practice experience or (iii) is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 having ten years of practice experience or (iv) is a company secretary within the meaning of the Company Secretaries Act, 1980 having ten years of practice experience. 

What is the applicability of Arbitration and Conciliation Act, 2015? 

The Act of 2019 clarifies that the 2015 Act shall only apply to arbitral proceedings which started on or after October 23, 2015. This overrules the position laid down by the Supreme Court in BCCI v. Kochi Cricket Private Limited. 

Why is the Act important? 

The Act is important due to many factors. They are: 

1) To make India an international arbitration hub to settle commercial disputes. 

2) To make arbitration of excellent quality by holding trainings, courses, guidelines and ensure satisfactory levels of arbitrators, institutes etc. 

3) Reduce burden on courts by sharing the burden with ACI and appointment of arbitrators. 

4) To provide exhaustive list to choose an arbitrator. 

5) To speed up arbitration process.