With effect from August 09, 2019, the Government notified the Arbitration and Conciliation (Amendment) Act, 2019 (“Amendment Act”), which shall come into force on date further notified by the Central Government in the Official Gazette.
The salient features of the Amendment Act are as follows:
1. Establishment of Arbitration Council of India
The Amendment Act establishes an independent body called the Arbitration Council of India (“ACI”) having its head office at New Delhi, for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms. Its functions include: (i) framing policies for grading arbitral institutions and accrediting arbitrators, (ii) making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters, and (iii) maintaining a depository of arbitral awards (judgments) made in India.
The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court; or (ii) a Judge of a High Court; or (iii) Chief Justice of a High Court; or (iv) an eminent person with expert knowledge in conduct of arbitration. Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.
2. Appointment of Arbitrators
Under the Arbitration and Conciliation Act, 1996 (“Principal Act”), parties were free to appoint the arbitrators. In case of disagreement on an appointment, the parties could request the Supreme Court, or the concerned High Court, or any person or institution designated by such Court, to appoint an arbitrator.
The Amendment Act amends the Principal Act by providing the Supreme Court and the High Court with the power to designate arbitral institutions which have been accredited by the ACI, to whom the parties can approach for the appointment of arbitrators. For international commercial arbitration, appointments will be made by the institution designated by the Supreme Court. For domestic arbitration, appointments will be made by the institution designated by the concerned High Court.
3. Relaxation of time limit for completion of arbitral proceedings
Under the Principal Act, the arbitral tribunals were required to complete the arbitral proceedings within a period of 12 months from the date on which the arbitral tribunal enters upon reference.
However, the Amendment Act has now amended the start date of this time limit to the date on which the pleadings are completed. Moreover, the 12 months’ time limit has now been exempted for international commercial arbitrations which now provides that the tribunals must endeavor to complete international matters within a period of 12 months from the date of completion of pleadings.
4. Confidentiality of proceedings
The Amendment Act has inserted a new section 42A which stipulates that all details of arbitration proceedings will be kept confidential except for the details of the arbitral award in certain circumstances. Disclosure of the arbitral award will only be made where it is necessary for implementing or enforcing the award.
5. Completion of written submissions
A new section 23(4) has been inserted in the Amendment Act stating that filing of the statement of claim and defense should be done within a period of 6 months from the appointment of arbitrator.
6. Applicability of Arbitration and Conciliation (Amendment) Act, 2015
The Amendment Act has added a new section namely, Section 87 which has a retrospective effect from October 23, 2015, this section states that the Arbitration and Conciliation (Amendment) Act, 2015 is applicable only to arbitral proceedings which commenced on or after October 23, 2015.