Highlights of The Arbitration and Conciliation (Amendment) Act, 2019

Introduction

The Arbitration and Conciliation (Amendment) Bill, 2019 was introduced in the Rajya Sabha by Minister of Law and Justice, Mr. Ravi Shankar Prasad in July 2019 and received the President’s assent in August 2019. The amendments were aimed at strengthening India’s arbitration mechanism and gaining recognition as an important arbitration hub in the international space. The bill was majorly based on the recommendations given by the Justice B.N. Srikrishna Committee which was set up to bring new reforms in the institutional arbitration in India in 2017. It is important to note that the Act has become more important than ever considering the burden of pendency of cases in the Indian Judicial System. Thus, the article seeks to discuss the key highlights of the Arbitration and Conciliation Act, 2019.

Key Provisions

The 2019 Amendment Act has paved the way for the Arbitration Council of India which shall be established as an independent body. This independent body shall be responsible for carrying out important functions like framing of policies governing the grading of arbitral institutions, making recommendations to the central government concerning easy measures to solve the commercial disputes, framing and updating norms to be followed for arbitration and conciliation etc.[1] It also states that the Council may conduct training sessions and workshops in law firms, law universities and arbitral institutions. This provision in particular shall spread the much needed awareness in the areas where the concept of Alternate Dispute Mechanism is still not used as efficiently and effectively. The Council shall consist of a Chairperson who is either a judge of the Supreme Court or a judge of the High court or the Chief Justice of a High Court or an eminent person with expert knowledge of arbitration and other members like an arbitration practitioner, academician and government appointees.[2] Further, the Act has empowered the Supreme Court to appoint any person or institution as the arbitrator in international commercial arbitration and the High Courts in case of local arbitration. The qualifications required for a person to be appointed as an arbitrator have also been specified in the Act. The Arbitral tribunals are now required to make the awards within 12 months of the proceedings.[3] However, there is no strict guideline for internal commercial arbitration under the Act. Under this Act, the arbitrator, the arbitration institution and the parties are required to maintain a sense of confidentiality of the proceedings in all cases with the exception of cases where the disclosure is necessarily required for the award. Arbitrators have been immunised against any legal proceedings for any act done in good faith following the rules provided under the Act. The Act clearly states the prospective applicability of the 2015 Act i.e. the 2015 Act shall only be applicable to proceedings which began on or after October 23, 2015

Conclusion

The Arbitration and Conciliation (Amendment) Act, 2019 is an effort to ensure that Indian Arbitration standards keeps pace with the developments in the international arbitration space. With the advancement and changes that take place in the corporate world every day, it important for the government as well as the business entities to remain updated in order to prosper on the local and international platform. As far as the 2019 Act is concerned, it has been criticised for the involvement of the Central government’s appointed officials in the Council which has the potential of muddling with the neutrality of the Council’s decision-making process. Another concern rises out of the removal of a time limit for disposal in cases internal commercial arbitration which is likely to act as an impediment in India’s capacity to become an international arbitration seat. The Act, despite the challenges, can prove to be an effective step towards reducing the burden on the Indian judiciary and ensuring timely disposal of certain disputes if complemented by an effective enforcement and implementation in India.

[1] The Arbitration and Conciliation (Amendment) Act, 2019, No. 33, Acts of Parliament, 2019 (India).

[2] The Arbitration and Conciliation (Amendment) Act, 2019, No. 33, Acts of Parliament, 2019 (India).

[3] The Arbitration and Conciliation (Amendment) Act, 2019, No. 33, Acts of Parliament, 2019 (India).