In yet another reform measure undertaken by the present NDA regime at the Centre, the government of India is aiming to make India an arbitration destination. To this effect, a legislation, The Arbitration and Conciliation (Amendment) Bill 2019 has been introduced in the Rajya Sabha, the Upper House in Parliament. This is one of the bills the government managed to get passed through the Lok Sabha during its first tenure of 5 years but got stalled in the Rajya Sabha merely due to the lack of support the government enjoys in the Upper House. The situation this time around may be quite different and there is every possibility that Law Minister Ravi Shankar Prasad, who piloted the bill, will have his way and it can become a law.
The highlights of this bill include laying down the framework for the appointment of arbitrators and a prescribed time limit of six months within which the arbitration proceedings will have to be completed and report submitted. The overall objective of this bill is to improve institutional arbitration and create the right ambience that will make India one of the preferred locations for arbitration. Countries like the UK, Singapore and France enjoy that status now.
The Arbitration and Conciliation (Amendment) Bill 2019 will pave the way for the establishment of an independent Arbitration Council of India which will lay down the arbitral norms and identify the arbitrators and accredit them for handling arbitration cases. The purpose is to create alternative dispute resolution mechanisms which can bring down the burden on the courts and cut down on the inordinate delays occurring in dispute resolution.
Apart from laying down some new guidelines, this bill seeks to amend Section 11 of the existing Arbitration Act by altering the way the arbitrators are appointed to handle different cases. This specifically relates to the selection of arbitrators by the Supreme Court or a High Court. If this bill becomes a law, then the SC/HC will designate â€śarbitral institutionsâ€ť which will then appoint the arbitrators. There are even fallback provisions where appropriate arbitral institutions are not available. In such cases, the courts will maintain a panel of arbitrators who will discharge the functions of the arbitral institutions.
The other amendment seeks to address the â€śStatement of Claims and Defence" and will insist on the process being completed within six months of the arbitrator receiving the order appointing him/her in that case.
There are also clauses relating to confidentiality being maintained and insulating the arbitrators from any legal actions arising out of their discharging their duties as arbitrators.