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Arbitration and Covid19

Under the impact of Covid-19, a global pandemic that has brought lockdowns in many countries, the world is reeling. With the outbreak showing no signs of diminishing, the disruption of all facets of life around the world seems set to continue. India's legal framework is no exception including the Alternative Dispute Resolution Process which was adversely affected as well.

The Supreme Court of India, taking suo moto notice of the difficulties faced by litigants across the world, has passed an order dated 23 March 2020 on account of the Covid-19 Virus in view of the limitation period under various laws. It was held that in all proceedings before any court or tribunal [whether under general law or special laws] the limitation period shall be extended w.e.f. March 15, 2020 until further orders have been passed.

The challenge of arbitral proceedings in the current scenario and the consequences of Section 29A

The state of full lockout in the country is stopping arbitral hearings from being performed physically. Non-conducting the trials produces a collection of issues for themselves. Section 29A, which was adopted in 2015 by the Act on Arbitration and Conciliation (Amendment), sets the time for awarding the arbitral award at twelve months from the date of referral to the arbitral tribunal (i.e. when the arbitrator receives a notice of appointment) This, with the agreement of the parties, is extendable for a further six months. Such further extensions may only be issued by the court concerned before or after the expiry of the contract, unless the arbitral tribunal 's mandate is terminated. Thus, while imposing a strict timetable for the completion of arbitration proceedings, Section 29A also offers a saving grace that can be recourse to in cases such as this one.

To order to request an extension of the statutory deadline for the completion of arbitration proceedings, all the parties (jointly) or one of the parties separately may file an application with the court concerned within a fair timeframe, one with or after the 12-month expiry. The pending arbitration proceedings in which the stipulated time-limit expires within the lockdown period as specified by the Government of India may resort to Section29A for extension of time upon reopening of the courts.

However, in accordance with the Hon'ble Supreme Court 's direction of 23 March 2020, the legislative timetables for filing pleadings as well as for the conduct of all other proceedings are extended and may be referred to in the request for an extension being made. The ruling dated 23 March 2020 is all-encompassing and extends to all courts and tribunals which also include an arbitral tribunal.

Proceedings stemming from the Arbitration and Conciliation Act

The current situation also affects legislative deadlines specified under the Arbitration & Conciliation Act under which a court of law is required to proceed such as Section 27, requesting help from the Court for facts or Section 34 to appeal an arbitral award. The Hon'ble Supreme Court order of 23 March 2020, however, offers relief in expanding the limitation period for all such stipulated timelines codified in the Act.

Modernisation of international commercial arbitration procedures to lead the way

The Indian Arbitration Council (ICA) is a leading arbitration institution in India which administers arbitration proceedings including international commercial arbitration. The ICA was established through Government of India initiatives and handles a large number of arbitration cases. The ICA has formulated and adopted the International Commercial Arbitration Rules which govern the ICA 's conduct in international commercial arbitration and also serve as guidelines for other arbitral institutions.

The ICA rules require that the Arbitral Tribunal be empowered to conduct arbitration hearings by video conferencing, telephone, or any other means of communication that may be feasible and deemed necessary. Because the parties are often citizens of different countries in international commercial arbitration, in order to facilitate cost-effective arbitration proceedings and to follow the strict legislative deadlines, the use of modern technology is more than a convenience.

Since the virtual conduct of the proceedings in international commercial arbitration is already an established norm, domestic arbitration proceedings will do well to take a leaf out of their book and apply it to the tumultuous situation of today.

Continuity of arbitration During the time of Corona

Given the country 's growing restrictions and full shutdown, certain urgent arbitral proceedings can be technically performed. Section 19 of the 1996 Arbitration & Conciliation Act states that the Arbitral Tribunal shall not be bound by the 1908 Civil Procedure Code or the 1872 Indian Evidence Act. In conducting these arbitration proceedings, the parties to the arbitration proceedings or the Arbitral Tribunal may agree on the procedure to be followed.

Although the Arbitration & Conciliation Act of 1996 silences the conduct of arbitration proceedings by means of video conferencing, Section 19 definitely empowers the Arbitral Tribunal to authorize the same. The Arbitral Tribunal may direct the parties to the arbitration proceedings to file pleadings by electronic mail and conduct proceedings by means of video conferences which assist with minimal productivity loss in social distancing.

In fact, in line with the changing technology and the strict statutory timelines enumerated in the Arbitration & Conciliation Act, 1996, arbitral tribunals may even resort to video conferencing for convenience in routine circumstances as well as cost-effectiveness even in domestic arbitration process

  • The challenges of arbitral proceedings in the current scenario and the consequences of section 29A
  • Proceedings stemming from the Arbitration Act
  • Modernisation of international commercial Arbitration procedures to lead the way

BY : Sunaina Jain

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