IndiaFilings Review of Arbitration and Conciliation Bill, 2015

The Arbitration and Conciliation (Amendment) Bill, 2015 was by the Minister for Law and Justice, Mr. D.V. Sadananda Gowda. The Bill aims to make changes to the Arbitration and Conciliation Act, 1996. In this article, we review the proposed changes to The Arbitration and Conciliation (Amendment) Bill, 2015. Know more about arbitration in India.

Court for domestic and international arbitration

Under the Act, The Arbitration and Conciliation (Amendment) Bill, 2015 the provisions of the Arbitration and Conciliation Act, 1996 would be applicable to international commercial arbitrations even if the place of arbitration is outside India unless the parties agreed otherwise. Currently, the relevant court for all arbitration matters are a principal civil court or high court with original jurisdiction.

Power of Courts

Currently, if any matter is brought before a court, while subject to an arbitration agreement, the parties will be referred to arbitration. Under the proposed Bill, this power of referral is to be exercised by a court even if there is a previous court judgment to the contrary. The Court must refer the parties to arbitration unless it thinks that a valid arbitration agreement does not exist.

Currently, the Arbitration and Conciliation Act, 1996 states that a party to arbitration may apply to a court for interim relief before the arbitration is complete. Under the Arbitration and Conciliation (Amendment) Bill, 2015, if the Court passes such an interim order before the commencement of arbitral proceedings, the proceedings must commence within 90 days from the making of the order, or within a time specified by the Court. Further, the Court must not accept such an application, unless it thinks that the arbitral tribunal will not be able to provide a similar remedy.

Further, the current Act permits the court to set aside an arbitral award if it is in conflict with the public policy of India.  This includes awards affected by:

• fraud or corruption, and
• those in violation of confidentiality and admissibility of evidence provisions in the Act.

In the proposed Bill, Courts can set aside an arbitral award only if it is in conflict with the notions of morality or justice, in addition to the grounds already specified in the Act.

Appointment of Arbitrators

Under the current Act, parties involved in a contract can appoint arbitrators. If they are unable to appoint arbitrators within 30 days, the matter is referred to the court to make such appointments. In the proposed Bill the Court must confine itself to the examination of the existence of a valid arbitration agreement.

Time Period

The Arbitration and Conciliation (Amendment) Bill, 2015 introduces a provision that requires an arbitral tribunal to make its award within 12 months. This may be extended by a six month period. If an award is made within six months, the arbitral tribunal will receive additional fees. If it is delayed beyond the specified time because of the arbitral tribunal, the fees of the arbitrator will be reduced, up to 5%, for each month of delay. Further, any challenge to an arbitral award that is made before a Court, must be disposed of within a period of one year.

Finally, The Arbitration and Conciliation (Amendment) Bill, 2015 allows parties to choose to conduct arbitration proceedings in a fast track manner. Under this method, award would be granted within six months.