Latest News

Arbitration and Conciliation (Amendment) Act, 2019 : Analysis

The Arbitration and Conciliation (Amendment) Bill, was introduced in Rajya Sabha by Mr. Ravi Shankar Prasad ( Minister for Law and Justice), on 15th July 2019 and on 9th August 2019, the President of India gave his acquiescence to the amendments proposed by the Law Minister to the Arbitration and Conciliation Act, 1996 and the same has been published in the Official Gazette of India. And the Bill is now Arbitration and Conciliation (Amendment ) Act, 2019.

Mr. Ravi Shankar Prasad while introducing the Bill in Lok Sabha mentioned that as Indian economy is growing and flourishing, it is important for us to have an Arbitration centre in India.

Key Highlights of the Act suggest that there should be a proper establishment of Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.

 The functions of the ACI are as follows:

(i) Policy making for grading Arbitral Institutions and certifying arbitrators for the same.

(ii) Framing policies for the formation, operation and maintenance of uniform professional standards for all alternate dispute redressal matters,

(iii) Provide for a depository of arbitral awards (Judgements) both domestically and at international level.

According to the Bill the President of the council will be retired Judges of High Court and Supreme Court.

According to the Bill, the Supreme court and the High Courts  now has the power to appoint arbitral institutions, which parties can approach for the appointment of the arbitrators. The Supreme court has the power to appoint designate institutions for international commercial arbitration and in case of domiciliary and domestic arbitration, appointments will be made by the institution designated or nominated by the respective High Courts of the state. In simple words it states that, now there is no need for the concerned party (seeking arbitration) to directly go to the court, they can just approach the designated institution by SC and High Courts for the same.

Decentralization of courts' power to select arbitrators together with the reduction in timelines for appointments and selection of arbitrators is a favourable step towards speedy process of arbitration. Further this amendment is in accordance with other arbitration friendly nations like Hong Kong and Singapore.

The Appointment of Arbitrator earlier was done by Chief Justices of Supreme Court and High Court under section 11(6) of the Act, But now the SC and HC would nominate arbitral institutions to carry out the job.

The time limit to complete the procedure is being relaxed Section 29A of Arbitration Act to make alterations regarding timelines for finalizing the arbitration process. However, these timelines are not mandatory but only suggested for international commercial Arbitration.  The Act also ensures confidentiality of proceedings in certain cases, as people choose the option ADR because they want to avoid court proceedings and confidentiality is the essence of Arbitration.

The Bill clarifies that the 2015 Act shall only apply to arbitral proceedings which started on or after October 23, 2015.  - The amendment negates the Supreme Court Decision in Board of cricket in India v. Kochi cricket Pvt. Ltd. where the court held that 2015 Amendments will apply to all court proceedings commenced on and after 23rd October 2015 even if the court proceedings pertained to arbitration commenced before such date.

The Amendment in the Act holds mixed opinions of all, as amendments such as delegation of the court's power to appoint arbitrators, express provision for confidentiality, immunity to arbitrators, proof of incapacity or fraud for setting aside an award and continuation of an arbitrator's mandate pending application for extension of the arbitration timeline are progressive and commensurate with the objective of making India a more arbitration friendly jurisdiction. On the other hand, the amendment removing the mandatory timeline for international commercial arbitrations seated in India is likely to negatively impact India's perception as an attractive seat for arbitration.




  • Key Features of the Act
  • Pros and cons of the Act
  • Major Changes in previous Act

BY : Vani Shrivastava

All Latest News