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The Arbitration and Conciliation Act, 1996; The 2015 and 2019 Amendments
Arbitration, means a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties and whose decision is binding, Black’s Law Dictionary, 7th edition, p.100. The Arbitration and Conciliation Act was enacted on 16th August, 1996 by the Parliament of India for the purpose of defining the laws relating to domestic arbitration, international commercial arbitration and enforcement of foreign awards. The 1996 act consisted of 2 parts: Part I had all the laws relating to domestic arbitration and Part II contained the laws relating to the enforcement of certain foreign awards.
THE 2015 AMENDMENT
The 1996 act was amended on the 31st December, 2015. Firstly, in Section 2(e) the term ‘court’ was redefined; as to for the purpose of international commercial arbitration the High Court will exercise original jurisdiction and for domestic arbitration, the principal Civil Court of original jurisdiction in a district. There was a non obstante clause introduced in Section 8 regarding the judicial authority. There were substantive changes enforced in Section 11. In the principal act, the powers were conferred upon the Chief Justice of the High Court for domestic arbitration and the Chief Justice of Supreme Court for international commercial arbitration. But now it is substituted by the words “the Supreme Court or, as the case may be, the High Court or any person or institution designated by such court.” Section 12 deals with the conflict of interest. It is necessary that the decision taken by the arbitrator is independent and impartial. There were two scheduled introduced in Section 12 regarding the degree and nature for a conflict of interest to be removed. Section 17 now empowers the court to grant interim relief. The next important amendment is Section 29 A which talks about time period allotted for an arbitration proceeding. Time bound period for the proceedings and the award to be given in 12 months, if not an extension period of 6 months will be provided, if the award is not passed even after that the partied have to approach the court. Section 29 B talks about fast track arbitration, where the award is passed after one or two hearings and by a sole arbitrator. Section 31 provides the statutory rate of interest on the amount awarded post the award. Section 31 A provides the costs under various heads. Section 34 deals with public policy defence. Through this section the award can be set aside if: (a) the parties prove fraud or corruption (b) violation of Section 72 of this act (c) violating any Indian law in general. Section 36 was substituted; the principal act stated that if the parties file a case relating Section 36 then the award will be automatically suspended. But this was substituted, where the parties have to apply for a stay but proving to the court the valid reasons.
THE 2019 AMENDENT
The 1996 was further amended on 9th August, 2019. Now, Section 11 provides that the Supreme Court in cases of international commercial arbitration and the High Court in the cases of domestic arbitration to delegate the power of appointment of arbitrators to and recognised arbitral institution setup by the Arbitration council. One of the most important amendments in 2019 act is Section 37 which now provides a non obstante clause, which now states that the appeals will be governed by the 1996 and not the 2015 act. Further Part IA has been introduced which talks about the establishment of a statutory body of the Arbitral council, so that the quality of arbitration is improved. Schedule 8 was also introduced which talks about the minimum qualification of an arbitrator and this is applicable only for Indian arbitrators and not foreign arbitrators.
- Introduction
- The 2015 Amendment
- The 2019 Amendment
