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Salient Features of the Arbitration and Conciliation Act, 1996
In light of discrepancies and inconsistencies found in the previous legislations on arbitration, a conference presided by the Prime Minister of India, P.V Narasimha Rao, considered international models like the United Nations Commission on International Trade Law (UNCITRAL) Model on Commercial International Arbitration and discussed the fate of arbitration in India on 4th December 1993[1]. As a result of this conference and the failure of previous legislations to satisfy the needs of the people, the Arbitration and Conciliation Act, 1996 was enacted. The Act repealed the then existing Arbitration Act, 1940 and improved upon the laws of arbitration in force at that time in India, like the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. The 1996 Act, as mentioned above, incorporated rules and regulations from the UNCITRAL Model Law on International Commercial Arbitration and the UNCITRAL rules on Conciliation. In this way, the Act also covers conciliation which was a new method of Alternate Dispute Resolution (ADR) that had not been codified before.
The Arbitration and Conciliation Act, 1996[2] (hereinafter known as the ‘Act’) aims to consolidate laws relating to arbitration, and define conciliation, to create a uniform framework that will enforce the regulations laid down in the UNCITRAL Model Law on International Commercial Arbitration and the UNCITRAL rules on Conciliation, to create effective settlement of disputes. The Act is a self-contained code as it deals with substantive and procedural aspects of arbitration in India, laying down the procedure for admission, termination and conduct of proceedings as well as the rules regarding jurisdiction, evidence and filing of an appeal. Part I of the Act lays down rules for domestic arbitration which can only be applied if the seat or place of arbitration is within the territorial limits of India, Part II relates to enforcement of certain foreign awards, Part III provides for the rules regarding conciliation and Part IV contains certain supplemental provisions[3].
In furtherance of the objectives laid down in the Preamble to the Act, the following are some of its salient features:
- The Act emphasises the importance of the Arbitration agreement without which arbitration proceedings cannot be instituted. The arbitration agreement is a clause in a contract or an agreement between parties stating that any dispute will be referred to arbitration proceedings[4]
- The Act mentions that the arbitration agreement or arbitration clause must contain the following information – subject matter of dispute, timing of dispute (past/present/future), number of arbitrators, qualifications of arbitrators, jurisdiction and composition of tribunal[5]
- The Act empowers parties to choose the seat of the arbitral tribunal or place of arbitration, and the venue of the arbitration proceedings to be conducted by the tribunal[6]
- The parties can choose the rules relating to conduct od the arbitral tribunal and if so, must be specified in the arbitration agreement or arbitration clause
- True to the spirit of arbitration, the Act allows parties to choose the substantive law to be applied by the arbitration tribunal and this must also be mentioned in the arbitration agreement[7]
- The Act also specifies that the arbitration agreement must contain provisions regarding the mandate of the arbitration and the termination of this mandate
The Act also specifies the power and functions of the Tribunals, abolishes the umpire system (breaking of an impasse in an arbitration proceeding), allows new forms of conciliation, provides for finality of awards by the arbitrators, states rules for international applicability and enhances powers of the arbitrators.
[1] Editor, The Arbitration and Conciliation Act, 1996 – An Analytical Outlook, Shodhganga, (Apr. 10, 2020, 2:56 PM), https://shodhganga.inflibnet.ac.in/bitstream/10603/201576/10/10_chapter%204.pdf.
[2] The Arbitration and Conciliation Act, 1996, No. 26 Acts of Parliament, 1996 (India).
[3] Abhishek Bhargava, Salient Features of Arbitration and Conciliation Act, 1966, India Institute of Legal Science, (Apr. 11, 2020, 3:09 PM), https://www.iilsindia.com/blogs/salient-features-of-arbitration-and-conciliation-act-1996/.
[4] Supra note 1.
[5] Editor, What is the Difference Between Arbitration and Mediation?, Singapore International Arbitration Centre, (Apr. 9, 2020, 12:16 PM), https://www.siac.org.sg/71-resources/frequently-asked-questions/174-what-is-the-difference-between-arbitration-and-mediation.
[6] Anil Satyagraha, Salient Features of the Arbitration Act and Conciliation Act, 1966, LawyersClub India (Dec. 27, 2016, 1:24 PM), https://www.lawyersclubindia.com/articles/Salient-features-of-the-arbitration-and-conciliation-act-1996-7773.asp.
[7] Puneet Tandon, Salient Features of the Arbitration Act and Conciliation Act, 1966, SCRIBD, (Apr. 11, 2020, 2:45 PM), https://www.scribd.com/document/186249940/Self-Study-Salient-Features-of-Arbitration-Conciliation-Act.
- Arbitration
- Arbitration and Conciliation Act, 1996
- Salient Features
