The Arbitration and Conciliation (Amendment) Bill, 2015,
has been approved by the Union Cabinet on August 26, 2015. It is
hoped that the Bill will be introduced and passed by the Parliament
in the Winter session and will become law by early next year.
While the draft of the Bill is yet to be scrutinised in full,
the salient features of the proposed amendments have been released
and are as follow:
1.Appointment of arbitrator: Under Section 12
of the Act, a proposed arbitrator shall berequired to disclose in
writing about the existence of any interest of relationship which
can create justifiable doubts regarding his neutrality. This
amendment has been brought into effect keeping in mind the
international best practices, and to bring the Indian arbitration
practice in conformity with the IBA Guidelines on Conflicts of
Furthermore, Section 11 has been amended to provide that the an
application for appointment of an arbitrator shall be disposed of
by the High Court or the Supreme Court, as the case may be,
expeditiously, with the Court endeavouring to do so within 60 days.
Unfortunately, the recommendation of the Law Commission Report that
this function be regarded as an administration decision by the
Court, has not be implemented by the proposed amendment. This is
rather ill-advised this controversy has created significant debate
and delay in India (Refer: SBP & Co. v. Patel
Engineering (2005) 8 SCC 518).
2.Time Period: A new provision shall impose a
time restriction of 12 months on theTribunal to make its award,
with incentives being prescribed if the award is rendered in 6
months by the Tribunal. The 12 month time-period can be extended up
to a period of 6 months by the Parties consensually, but after that
the time-period can only be extended by the Court, on sufficient
cause. The Court is empowered to reduce the fees of the Arbitrators
if it finds that the delay was attributable to the Tribunal. This
provision is not found in the arbitration laws of most countries
since it can potentially interfere with justice in cases which are
lengthy and complicated and need more time for resolution. Thus, it
would be interesting to see how the Courts in India respond to it,
in the event that the amendment is passed.
3. Interim Measures: Under Section 17, the
Tribunal shall be now empowered to grant all kinds of interim
measures which the Court is empowered to grant under Section 9, and
these orders "shall be enforceable in the same manner as
if it is an order of Court." This will certainly add more
teeth to the arbitral processin
4. Fast Track Procedure: A provision regarding
fast-track procedure for dispute resolution is proposed. If the
Parties agree to the same, the awards shall be given in 6
5. Challenge of Awards: The grounds for setting
aside of an award under Section 34 (2) (b) of the Act, that is in
cases where the award violates the public policy of India have been
explained with the intention of negating the consequences of
ONGC v. Saw Pipes (2003) 5 SCC 705. The grounds
for the same would be limited to the following four conditions:
Award was induced or affected by fraud or corruption,
Award is in contravention with the fundamental policy of Indian
Award is in conflict with morality or justice.
Furthermore, the amendment provides that an application
challenging an award need to be disposed of by the Court within one
year. It is interesting to note that the law laid down in and
ONGC Ltd. v. Western Geco International Ltd.,
(2014) 9 SCC 263 clarifying fundamental policy of Indian law has
not been amended or discussed by this proposed amendment. This is
rather unfortunate, since this case has crippled the arbitration
process by causing an award to be challenged on multiple
Additionally, Section 36 has been amended to provide that the
filing of an application under Section 34 to set aside an award
will not automatically stay the execution of the award. The
execution can only be stayed if the Court passes a specific order
to that effect.
6. Costs: The law has also sought to regulate
costs in ad-hoc arbitration by insertion of Section 31A into the
7. Sections 2(1)(e) , 2(1)(f)(iii), 7(4)(b),
8(1) and (2), 9, 11, 14(1), 23, 24, 25, 28(3), 31(7)(b), 34 (2A)
37, 48, 56 and in Section 57 are also proposed to make the law more
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