Arbitration and it changing landscape in India has seen emerge through different complexities of changing times. The struggle Indian Economy faced with regards to alternate dispute resolution found its much needs rescue in the practice of Arbitration and to tap the process further Lok Sabha has passed the Arbitration and Conciliation (Amendment) Bill, 2021 to check misuse by “fly by night operators” who take advantage of the law to get favourable awards by fraud.
(Fly-by-night operators or business people cannot be trusted because they are likely to get into debt and close down the business to avoid paying the debts)
The new Bill intends to replace the Arbitration and Conciliation (Amendment) ordinance issued on November, 2020.
The key points of the Bill covered the following:
- Qualification of Arbitrators: where it does away with the qualifications of the arbitrators under the 8th schedule of the Arbitration and Conciliation Act, 1996 which categorically specified that the arbitrator must be an advocate under the Advocates Act, 1961 with 10 years of experience, or
- An officer of the Indian Legal Service.
- The qualifications for accreditations of arbitrators is proposed to be prescribed by regulations to be framed by an arbitration council to be set up.
- Unconditional Stay on Awards: according to the new amendment if the Award is being given on the basis of a fraudulent agreement or corruption, then the court can grant an unconditional stay as long as an appeal under Section 34 of the arbitration law is pending.
Advantages:
- It would bring about parity among all the stakeholders in the arbitration process.
- All the stakeholders get an opportunity to seek unconditional stay on enforcement of arbitral awards where the agreement or contract is “induced by fraud or corruption.”
- It will check the misuse of the provisions under the Arbitration and Conciliation Act, 1996 saving the taxpayers money by holding those accountable who siphoned off them unlawfully.
Disadvantages:
- India already lags behind when it comes to the enforcement of international contracts and agreements. The Bill can further hamper the spirit of Make in India campaign and can impact the rankings in Ease of Doing Business Index. Since, India aims to become a hub of domestic and international arbitration. Through the implementation of these legislative changes, resolution of commercial disputes could take longer duration now onwards.
- Arbitration Council of India and how arbitration as a mechanism finds its relevance in core sense of International participation: Speaking of our Indian Constitution, Article 51 India obliged to endeavour: Foster respect for international law and treaty obligations in the dealings of organised peoples with one country.
- Encourage Settlement of international disputes by arbitration. ACI is a step towards realisation of this constitutional obligations.
To conclude the objective of the new Arbitration and Conciliation (Amendment) Act is to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation and conciliation and other alternative dispute redressal mechanisms.
Composition of the ACI:
The ACI will consist of a Chair-person who is either:
A judge of the Supreme Court;
or a judge of a High Court;
or Chief justice of a High Court;
or an eminent person with expert knowledge in conduct of arbitration.
Whereas, the other members will include:
An eminent arbitration practitioner, an academician with experience in arbitration, and government appointees. The appointment of Arbitrators under the Act specifies the Supreme Court and High Courts may designate arbitral institutions, which parties can approach for the appointment of arbitrators and 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. In case there are no arbitral institutions available, the Chief justice of the concerned High Court may maintain a panel of arbitrators to perform the functions of the arbitral institutions. An application for appointment of an arbitrator is required to be disposed of within 30 days. The new legislation suggests a legal journey and not destination and will ensure success when grouped with patience, potential and maturity of the stakeholders to live through the process as vital stakeholders.
Introduction ICSID (International Centre for Settlement of Investment Disputes) is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between Read more
FDI reforms In 1990’s From independence in 1947 till 1990’s, FDI policies did not had any consistent direction. NEP in Read more
