The Arbitration and Conciliation (Amendment) Act 2019 (the “2019 Amendment Act”) was passed by the both houses of parliament in the monsoon session of parliament and notified in the official gazette on 9 August 2019. The 2019 Amendment Act makes several important amendments to the extant provisions and introduces new provisions that would further enhance the efficacy of this method of dispute resolution. Significantly, it provides for the establishment of an Arbitration Council of India tasked with the responsibility of grading arbitral institutions whom parties would approach for appointment of arbitrator(s), thereby reducing the burden on Courts. Arbitrators will now be accredited by professional institutes based on their qualifications and experience. The Amendment Act also provides for best practices, such as a fixed time period for filing of the statement of claim and defence, confidentiality of arbitration proceedings and protection of arbitrators from actions taken in good faith. Moreover, it corrects the ambiguity with respect to the applicability of the Amendment Act of 2015 by clarifying that the Amendment Act of 2015 will apply only to arbitral proceedings commenced on or after 23 October 2015 and to court proceedings arising out of or in relation to such arbitral proceedings only.
Except for Section 2 (definitions), Section 3 (designation by the Supreme Court of arbitral institutions graded by the Arbitration Council of India), Section 10 (establishment of Arbitration Council of India) and Section 14 (providing for a new Eighth Schedule listing the norms for accreditation of arbitrators) all the other provisions of the 2019 Amendment Act have been notified to come into force on 30 August 2019.
The 2019 Amendment is intended to fix the loopholes created by the Arbitration and Conciliation (Amendment) Act 2015 and is a step towards making India an arbitration hub. However, the implementation of some of its provisions may create ambiguity in future.
The amendment to section 29A allows more flexibility by providing that the 12 month period must start from the date of completion of pleadings. However this timeline does not apply to ‘international commercial arbitrations’. But domestic arbitrations governed by institutional rules continue to be governed by the mandatory timeline, and ad hoc international commercial arbitration seated in India will not be covered by the fixed timeline. The amendment should have made an exception for all arbitrations administered by arbitral institutions instead of international commercial arbitrations.
While the Arbitration Council of India has laudable objectives, their implementation appear to be challenging as the provisions governing the Council are vague. Its members are appointed/nominated by the Centre or are ex-officio members by virtue of their position in ministries. The Council is duty bound to review the grading of arbitration institutions and accreditation of arbitrators. However, the government’s involvement in several arbitrations could make the independence and impartiality of arbitrators questionable. Further, the non-inclusion of foreign legal professionals qualified to be arbitrators could discourage foreign parties wishing for their arbitration to be seated in India, who would want an arbitrator from a neutral country to be on their panel. A detailed set of rules governing the working of the Council could resolve ambiguities associated with this provision.
The 2019 Amendment Act overrules the Supreme Court’s decision in BCCI vs Kochi Cricketand seeks to clarify the applicability of the 2015 Amendment Act. This will cause delay as all pending court proceedings in relation to arbitrations that had commenced prior to 23 October 2015 will be relegated to pre-amendment Act scenario. The legislature has not dealt with the status of thousands of pending petitions where courts have refused to grant a stay under the amended Section 36, nor is there clarity regarding what provisions in the 2015 Amendment Act would have a retrospective application considering they may be clarificatory, declaratory or procedure as held in the BCCI decision.
 Where it was held that the 2015 Amendment Act was prospective and would apply to: (a) arbitral proceedings commences on or after 23 October 2015; and (b) arbitration-related court proceedings filed on or after 23 October 2015, even where the arbitral proceedings were commenced before the amendments came into force.
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