"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Monday, December 29, 2014

Updated (2): Cabinet Approves Arbitration & Conciliation Amendment Ordinance

The electronic media is abuzz with the news that the Cabinet has okayed amendments to the Arbitration and Conciliation Act, 1996 through an ordinance. The PIB Press Release, which is not available now on the PIB site, stated that the following were the proposed changes:

The salient features of the proposed amendments are as under: 

(i) Insertion of a new provision to provide that Arbitrator shall charge composite fees for disposal of case and not on the basis of per sitting or per hearing, as has been the practice. 

(ii) Insertion of a new provision that the Arbitral Tribunal shall make its award within a period of 9 months. If the Court finds that the Arbitrator has delayed the matter for his personal benefit, it may debar the Arbitrator from taking fresh arbitration for 3 years. 

(iii) Amendment of Section 34 relating to grounds for challenge of an arbitral award, to restrict the term 'Public Policy of India" (as a ground for challenging the award) by explaining that only where making of award was induced by fraud or corruption or is in conflict with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against the Public Policy of India. 

(iv) A new provision to provide that application to challenge the award is to be disposed of by the Court within one year. 

(v) Amendment to Section 36 to the effect that mere filing of an application for challenging the award would not automatically stay execution of the award. Award can only be stayed where the Court passed any specific order on an application filed by the party. 

(vi) A new sub-section of Section 11 to the effect that an application for appointment of an Arbitrator shall be disposed of by the High Court or Supreme Court as expeditiously as possible and an endeavour should be made to dispose of the matter within 60 days. 

(vii) A new sub-section of Section 11 to the effect that while considering any application for appointment of Arbitrator, the High Court or the Supreme Court shall only examine the existence of a prima facie arbitration agreement and not other issues. It is also proposed to insert a new sub-section to the effect that the Court while appointing an Arbitrator shall also fix the fees of the Arbitrator. 

Apart from above, amendments in Sections 2(l)(e), 2(l)(f)(iii), 7(4)(b), 8(1) and (2), 9, 11, 12(1), 14(1), 16A, 17(3), 23, 24, 25, 28(3), 31(7)(b), 34 (2A) 37, 48, 56 and in Section 57 are also proposed for making arbitration process more effective.


Source: Cached Copy of the PIB Press Release (link). The amendment has come as a surprise as it was expected that the amendments would only be introduced in the next session of the Parliament. More on the same in the next post.

Update 1: Certain news reports (here and here) suggest that the PIB has withdrawn the Press Release suggesting that the Government may not be ready with the Ordinance.

More on this once there is clarity.

Update 2: News reports confirm that the Cabinet has actually approved an Ordinance to amend the arbitration laws in India and the same has been sent to the President for assent.

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