Key Highlights- The Arbitration and Conciliation (Amendment) Act, 2019 – Eshwars
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Key Highlights- The Arbitration and Conciliation (Amendment) Act, 2019

Author: N.V. Saisunder
 
Recently, in August 2019 The Arbitration & Conciliation (Amendment) Act, 2019 (“the 2019 Amendment”), which amends the Indian Arbitration & Conciliation Act, 1996 (“the Act”), came into force. This amendment was made pursuant to the Government of India’s intention to make India a hub for domestic and international arbitration by bringing in changes in law for faster resolution of commercial disputes.
 
Some of the key highlights brought in by the 2019 Amendment is as under:
 

    1. Establishment of Arbitration Council of India: New Sections 43A to Section 43M, makes provision for constitution of Arbitration Council of India (“Council”). The Council shall take necessary measures to promote and encourage arbitration, mediation, conciliation and other alternative dispute resolution mechanism in the country and is also tasked with the responsibility of framing policy guidelines for the establishment, operation and maintenance of uniform professional standard in respect of matters relating to arbitration. The Council of India shall frame policy for grading the arbitral institutions in order to ensure satisfactory levels of conduct of arbitrations and conciliations in the country.

     

    1. Revamped procedure for Appointment of Arbitrator – Section 11: The following revamped procedure has been prescribed for appointment of arbitrators under the 2019 Amendment:
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      • Supreme Court of India is now tasked with the responsibility of designating the arbitral institution for appointment of arbitrator (s) in international commercial arbitration matters, whereas the High Courts will designate arbitral institutions within their respective jurisdictions for appointment of arbitrators in cases of domestic arbitrations. In case there is no arbitral institution within jurisdiction of a High Court, such High Court can maintain a panel of arbitrators to perform the functions of arbitral institution.
      • The arbitral institutions to be designated by Supreme Court or the High Court would be those which have been graded by the Council.
      • The arbitral institution is mandated to dispose of an application for appointment of arbitrator within 30 days from the date of service of notice on the opposite party.

       

      1. Timelines under the 2019 Amendment in relation to conduct of proceedings and passing of award:
      2.  

        • The 2019 Amendment has introduced new Section 23 (4), which provides that a statement of claim and statement of defense shall be completed within a period of six months from the date the arbitrator received notice of appointment.
        • Further the time period of one year for making of the arbitral award as provided under Section 29A(1) shall be construed to have begun from the date of completion of pleadings (statement of claim and statement of defense) only. Therefore, the time period of one year for making of award shall commence irrespective of non-completion of pleadings within the said period. Accordingly, if the pleadings are completed before six months as mentioned hereinabove, the time period of one year for making of an award shall commence forthwith the completion of the pleadings.

         

        1. Amendment to Section 34 clarifies that at the stage of challenging the award, the court will not see any material other than records of the arbitral tribunal based on which an award was passed. Accordingly, it implies that the parties must rely on the records before the arbitral tribunal alone at the time of challenge of an award before a court of law.

         

        1. Confidentiality of the Arbitration Proceedings: New Section 42A and 42B states that the arbitrator, the arbitral institution and the parties to the arbitration agreement must maintain confidentiality of all arbitral proceedings except the award where its disclosure is necessary for the purpose of implementation and enforcement of award and further protects the arbitrators from any legal proceedings against acts done in good faith.

         
        The 2019 Amendment definitely aims at removing various shortcomings and difficulties under the previous enactments. The mandatory time frames for filing and completion of pleadings and passing of awards are indeed a welcome measure that will add more certainty to the conduct and conclusion of the arbitral proceedings in India. The 2019 amendment is definitely a welcome move and will increase the quality and volume of matters of arbitration in India.

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