India: Light Of The Day For The Arbitration Council Of India Through Arbitration And Conciliation (Amendment) Bill, 2019

Last Updated: 7 August 2019
Article by Deiya Goswami

India aims to be a jurisdiction that is arbitration-friendly and the introduction of the Arbitration and Conciliation (Amendment) Bill, 2019 in the Rajya Sabha has proven to be step towards achieving that goal. The Bill was initially called the Arbitration and Conciliation (Amendment) Bill, 2018, which was passed by the Lok Sabha but was pending before the Rajya Sabha and subsequently, as the Lok Sabha was dissolved, the bill could not see the light of the day.

Subsequently on 15.07.2019, Mr. Ravi Shankar, Minister for Law and Justice introduced the Arbitration and Conciliation (Amendment) Bill, 2018 with minor changes as the Arbitration and Conciliation (Amendment) Bill, 2019 (hereinafter referred to as "The Bill") which was passed by Rajya Sabha on 18.07.2019. The Bill is the fruit of the recommendations of the High Level Committee chaired by Justice. B. N. Srikrishna (hereinafter referred to as "The Committee").

The key feature of the Bill is to provide a suitable framework for all the arbitration on or after 23.10.2015 which is appropriate for both domestic and international arbitration. The Bill aims to outline a proper timeline and procedure so that India could emerge as an arbitration-friendly jurisdiction. India has set sights on becoming a hub for international jurisdiction just as Singapore1, wherein appointment of arbitrators is designated as per the Singapore International Arbitration Centre (SIAC) and Hong Kong2, wherein appointment of arbitrators is in accordance with the Hong Kong International Arbitration Centre (HKIAC) respectively.

Likewise in India, the Bill has proposed to constitute an Independent Government body called Arbitration Council of India (hereinafter referred to as "ACI") which will be responsible for the promotion of arbitration, conciliation, mediation and other alternative dispute redressal mechanisms (ADR). The main reason for proposing ACI to be a government body is due to the fact that the Government of India is the largest litigator in India, and ACI will have to make serious attempts to overcome the shortcomings of the Arbitration and Conciliation Act (Act).

According to the Bill, the main functions3 of the ACI would be as follows;

  • Framing policies for grading arbitral institutions and accrediting arbitrators.
  • Making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters.
  • Maintaining a depository of arbitral awards (judgments) made in India and abroad.

The Bill is majorly based on the recommendations of the Committee, but a few modifications have been made in the Committee Report of Justice B. N. Srikrishna, while finalizing the Bill. The Bill proposes that the ACI will be headed by the Chairperson who would be either Chief justice of a High Court or a Judge from Supreme Court or High Court or an eminent person with expert knowledge in conduct of arbitration. Furthermore, the council will include eminent practitioners, academician, and government appointees with experience in arbitration. The Secretary to the Government of India in the Legal Affair, Ministry of Law and Justice or a representative, another member from the Government of India in the Department of Expenditure , Ministry of Finance or a representative could also be considered for being the members of the council. There would also be one representative from the Commerce and Industry on a rotational basis and finally a Chief Executive Officer or a Secretary ex officio could also be the member of the council.

The Committee had recommended that the retired Judge of the Supreme Court or High Court who would be nominated by the Chief Justice of India will be heading ACI. The other members in the council are envisaged to be eminent practitioners, academicians, and government appointees with experience in arbitration as will be nominated by the Central Government. The Committee has also recommended that a nominee member from the Ministry of Law and Justice and another representative from the Commerce and Industry department on a rotational basis, as selected by the Ministry of Commerce and Industry, would also be present. Finally, the Committee recommended that there should also be the presence of one overseas practitioner who has substantial knowledge and experience in the field of arbitration.

The amendments were made to facilitate and achieve the goal of improving institutional arbitration by establishing an independent body to lay down standards that are international in nature, and make the arbitration process more user-friendly, cost-effective and to also ensure timely disposal of cases.4 However,on the other hand, the ambiguity still prevails as the parties are free to choose and appoint arbitrator as per the Act, 19965 in the Bill. The next major question is whether or not a foreign legal professional will be able to act as an arbitrator given the fact that the Eight Schedule6 of the Bill, as the qualification of the arbitrator is as per the Advocates Act, 1961. The Hon'ble Supreme Court of India consisting of Justice A.K. Goel and Justice U.U. Lalit recently passed a crucial verdict in the matter titled Bar Council of India vs. A.K. Balaji and Ors.7 declaring that foreign lawyers/firms are not entitled to practice law in India either on the litigation or non-litigation side unless they fulfil the requirements of the Advocates Act, 1961, and the Bar Council of India Rules.8

Although the committee was of the opinion that Section 11 of the Act, 1996 should be amended by providing powers to the Supreme Court and the High Court to designate arbitrators and arbitration which have been accredited by the ACI, and the Bill has implemented the recommendations in Paragraph 39.

The Bill has not changed the timeline that was introduced in the 2015 Amendment10. The Bill maintains the timeline of a total time frame of 18 months11 (12+6 months) to complete the arbitral proceedings and to pass an award. If the arbitral award is not passed by the arbitrator within the time frame of 18 months, the provision stipulates that the mandate of the arbitrators shall be terminated, unless a court of competent jurisdiction grants a further extension.12

The Bill fails to provide clarification regarding the fact that whether or not the parties can mutually decide, at their will, to extend the time limit beyond 18 months or if they mandatorily have to approach the court for seeking extension which is quite contradictory to the pith and substance of the Act, more so since arbitration is deemed to be something consensual.13 Furthermore, in case, the parties are forced to approach the court then it is very likely that judicial intervention will cause more delay, thus retarding the concept of having a timeline. Although the Amendment Act, 2015 provides a 60 days period for the courts to dispose of the dispute but the feasibility is questionable given the fact that the Indian Judiciary is overburdened and the timeline is far from being achievable14.

However, the timeline for filing written claim was provided in order to maintain proper balance of the timeline, a period of 6 months is prescribed for framing and completion of statement of claim and defence is incorporated in the Bill. Although the biggest challenge is to determine the stage at which the filing of statement has to be made, as arbitrational proceeding do not strictly follow the well-established procedural law completely.

The Bill has exempted the international commercial arbitration by providing a non-binding proviso, although, on the other hand ensuring that the international commercial arbitration be made as expeditiously as possible and aim to resolve the dispute well within the 12 months' timeline. One of the striking features of the Bill, 2019 is that they have provided with clear cut guidelines and exceptions with regards to confidentiality15. Although, the Bill has departed from the recommendations provided by the committee which was to insert a specific provision for confidentiality stating that unless the disclose is utmost necessary to protect or to enforce legal rights or is required to be disclosed under a legal duty, or to enforce or challenge any award, the confidentiality will be overlooked. In the Bill however, the disclosure is allowed only for the purpose of implementation and enforcement of award.

Another feature of the 2019 Bill is that in it, it is proposed that the arbitrator will be provided with immunity for anything done bona fide16 and/or done in accordance to the Act17. Along with that, there is an insertion of a provision prescribing the qualification of the arbitrator18 although whether or not the foreign professional can be an accredited arbitrator or not is still ambiguous. If the foreign professionals are not allowed to become arbitrator in an international arbitration, then it will act detrimental to the future of the international commercial arbitration as the foreigners would not find it user-friendly and hence, the aim to become the hub of international arbitration might be a little too optimistic to be achieved.

In a nut shell, the Bill seeks to provide for a robust mechanism to deal with institutional disputes, but there exists many lacunas that still need to be looked at. The arbitration is undoubtedly becoming more complex with every passing amendment. Although, the implementation of the Bill is yet to be evaluated,the legislature should look out for a comprehensive amendment covering all the grounds instead of implementing a piecemeal in short interval of time which will create a mistrust in the international judicial system as it may reflect as an amateur in the company of the other international arbitration jurisdiction.


1. Sections 9A(2), 2(1) and 8(2), International Arbitration Act (Chapter 143a) (Singapore).

2. Section 13(2) and 24, Arbitration Ordinance, L.N. 38 of 2011, 01/06/2011 (Hong Kong).

3. Ministry: Law and Justice, The Arbitration and Conciliation (Amendment) Bill, 2019,,

4. PTI, Cabinet clears bill to make arbitrators more accountable, Economic Times,

5. The Arbitration and Conciliation Act, 1996

6. Section 43J of the Arbitration and Conciliation (Amendment) Bill, 2019

7. Civil Appeal Nos. 7875-7879, 7170 and 8028 of 2015; Decided on 13.03.2018

8. Divya Harchandani, India: Supreme Court Prohibits Practice Of Law By Foreign Lawyers/Law Firms In India, Mondaq,

9. Paragraph 3, Arbitration and Conciliation (Amendment) Bill, 2019.

10. The Arbitration and Conciliation (Amendment) Act, 2015

11. Section 29A (3), The Arbitration and Conciliation (Amendment) Act, 2015.

12. Section 29A (4), The Arbitration and Conciliation (Amendment) Act, 2015.

13. What is Arbitration?, World Intellectual Property Organisation,

14. Ruchika Darira, India: Section 29A Of The Amended Indian Arbitration And Conciliation Act, Mondaq,

15. Section 42A, Arbitration and Conciliation (Amendment) Bill, 2019.


17. Section 42B, Arbitration and Conciliation (Amendment) Bill, 2019.

18. Section 43J read with the Eighth Schedule of the Arbitration and Conciliation (Amendment) Bill, 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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