President signs off on The Arbitration and Conciliation (Amendment) Act, 2019
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President signs off on The Arbitration and Conciliation (Amendment) Act, 2019

Aditi Singh

The President of India has given his assent for the latest amendments in the Arbitration and Conciliation Act, 1996 and the same has been published in the Official Gazette of India as the Arbitration and Conciliation (Amendment) Act, 2019 for general information.

The Arbitration and Conciliation (Amendment) Bill, 2019 was passed by the Rajya Sabha on July 18, 2019, and by the Lok Sabha on August 1, 2019.

Some of the key features of the Bill are:

  • Insertion of new section 87 on the application of 2015 amendments

It is clarified that unless the parties otherwise agree, the amendments made to the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2015 shall not apply to the arbitral proceedings which commenced before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 i.e. October 23, 2015.

  • Establishment of Arbitration Council of India under Part IA

The Amendment provides for the establishment of an Arbitration Council which will take measures necessary to promote and encourage arbitration, mediation, conciliation or other alternative dispute resolution mechanism in India.

It would also frame policy and guidelines for the establishment, operation and maintenance of uniform professional standards in respect of all matters relating to arbitration.

The Council shall function under the Chairmanship of the Chief Justice of India and have its head office at Delhi. The other members of the Council shall include a retired Judge of the Supreme Court/Chief Justice of a High Court/Judge of a High Court/an eminent person having special knowledge and experience in the conduct or administration of arbitration, an eminent arbitration practitioner and an eminent academician.

One representative of a recognised body of commerce and industry shall be its part-time member.

Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary, Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary and a Chief Executive Officer shall be its ex officio member.

  • Relaxation of time limit for International Commercial Arbitration under Section 29A

The Amendment to Section 29A of the Arbitration Act provides that the award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings.

It nonetheless adds that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavour may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings.

  • Arbitral Institutions for the appointment of arbitrators under Section 11(3A)

The amendment empowers the Supreme Court and the High Court to designate arbitral institutions for the purpose of appointment of arbitrators. Such arbitral Institutions shall be graded by the Arbitration Council under Section 43-I.

Where a graded arbitral institution is not available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of the arbitral institution.

The Amendment also mandates disposal of an application for appointment of an arbitrator by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party.

  • Confidentiality of information under Sections 42A and 42B

The Amendment states that an arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality with respect to the arbitral proceedings except for the award. It is further clarified that no suit or other legal proceedings shall lie against the arbitrator for anything which is done in good faith done or intended to be done under the Arbitration Act or its rules and regulations.

  • Qualifications and Experience of Arbitrator under Eighth Schedule

The newly inserted Schedule states that a person shall not be qualified to be an arbitrator unless he is an advocate or a chartered accountant or a cost accountant or a company secretary, having ten years of practice experience. He may also be an officer of the Indian Legal Service or an officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector.

An officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in the private sector or self-employed is also eligible.

An arbitrator may also be an officer having senior-level experience of administration in the Central Government or State Government or having experience of senior-level management of a Public Sector Undertaking or a Government company or a private company of repute.

Other than the above qualifications, a person having educational qualification at degree level with ten years of experience in a scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior-level managerial position in a private sector may also be appointed as an arbitrator.

The Schedule also lists the General norms applicable to Arbitrator.

  • Time limit for completion of pleadings under Section 23

The Amendment mandates that the statement of claim and defence shall be completed within a period of six months from the date the arbitrator or all the arbitrators receive notice, in writing, of their appointment.

Read the Gazatte Notification below:

The-Arbitration-and-Conciliation-Amendment-Act-2019.pdf
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