Latest News

Arbitration and Conciliation (Amendment) Ordinance, 2015

The various Alternative Dispute Resolution techniques especially the Arbitration and Conciliation in India are governed by the Arbitration and Conciliation Act, 1996. Even after implementation of the bill, there are many needed reform in the act to simplify the procedures and make international commercial arbitration much more prevelant and popular. For the same purpose, the Indian Law commission in its report suggested some essential ammendments that were necessary to make ADR a successful endeavour in India. The government, taking in head the suggestion of law commission, passed the Arbitration and Conciliation (Amendment) Ordinance, 2015, an ordinance promulgated by the President of India.

Some of the salient features of the act are mentioned below:

The ordinance limited the interference of the court in the matters of commercial arbitration. It changed the definition of court in respect to international commercial arbitration by stating that court refers to only high court of competent jurisdiction. This will result in non-interference by lower judiciary and a smooth procedure to be conducted in Hugh court.

The amendment has also brought some noticeable changes in the section 11 of the act relating to the appointment of arbitrator. In the section, the ordinance has successfully made some necessary changes like replacing the “chief justice of India and Chief Justice of high court” with “Supreme court and high court”. The section after the ordinance also enables the high court to make rules necessary for policing the price demanded in arbitration.

The ordinance has also been successful to reduce the time that the arbitral tribunal takes to resolve the dispute. The ordinance mandates that the proceeding in an arbitral tribunal shall be fast rack and thus the limit set for the tribunal is 6 months within which the arbitral award is to be promulgated. The extension can be granted by court for valid reason but the same will result in reduction of the fees by 5 %.

The original version of the act had a major issue when it came to the stay order on enforcement of an arbitral award. According to section 34 earlier, if the parties applied for the setting aside for the arbitral award, there was a stay on its enforcement even without any execution or action taken on the application. To remove this ailment in the act, the amendment specified that filling a mere application on setting aside the arbitral award does not require it to be stayed. According to the new provision, a stay on the enforcement of award relating to payment of money can only be made after a whole or part of amount is deposited.

The ordinance has also limited the scope of public policy which can be a reason for setting aside of an award passed by international arbitration. According to the act, the arbitral award can now be set aside only on three precise conditions: (i) there is presence of corruption or fraud (ii) it is in contravention to and fundamental policy of indian law (iii) it is in conflict with basic notions of morality and justice.    


  • The introduction of the bill
  • Salient features of the bill
  • Section wise Analysis

BY : Kopal Bansal

All Latest News