Author Name:   Khushbusahu

the Bill should reflect the recommendations made by the Law Commission in its 246th Report, however, since it is futile to proceed with an analysis on the assumption that it definitely will, an in-depth analysis of the Bill’s effect must wait. Still, the Law and Justice Minister

The Arbitration and Conciliation (Amendment) Bill, 2015

The 2015 Budget Session of the Houses of Parliament commenced on 23rdFebruary. The legislative agenda for the session includes a number of bills including the Arbitration and Conciliation (Amendment) Bill, 2015 (“Bill”). In December, the union cabinet approved an ordinance regarding the amendment of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) but, the same was withdrawn before it received presidential assent, and was instead decided that it would be tabled before Parliament. The contents of the Bill or that of the Ordinance have not been revealed to the public as of yet, and the specifics of its contents remain unknown.

It stands that the Bill should reflect the recommendations made by the Law Commission in its 246th Report, however, since it is futile to proceed with an analysis on the assumption that it definitely will, an in-depth analysis of the Bill’s effect must wait. Still, the Law and Justice Minister (“Law Minister”), Mr. D.V. Sadananda Gowda, has alluded to the Bills’ contents viz. the time bound disposal of matters, the imposition of a verdict based fee structure as opposed to the prevalent hearing based one, and a cap on the overall fees (perhaps to incentivize speedy disposal of matters).

The Government aims for the amendments to the Arbitration Act to function in conjunction with other legislations and policies, namely, a national litigation policy focusing on transparency and, the setting up of specialised commercial courts and benches. However, both of these are still just proposed by the Law Minister. The policy is yet to be formulated and, the legislative agenda of the current session of Parliament does not contain any specific legislation to set up the specialised courts.

The motivation of the Government in amending the Arbitration Act, and in bringing adjacent changes thereto, is to make India a more attractive destination for commercial arbitration, as well as to compete with the likes of Singapore and London as hubs of international commercial hub. The other causa proxima for the amendment is India’s abysmal ranking in the World Bank’s Ease of Doing Business Index released in 2014 (142 out of 189 countries) and the Prime Minister’s effort to better it.

The current status of the Bill is that Union Cabinet has given its nod for amendments to the Arbitration and Conciliation Bill, 2015. These amendments seek to make of commercial disputes more user-friendly and cost effective which in turn will lead to expeditious disposal of cases. Key Provisions of Bill Mandatory for arbitrators to settle disputes within 12 months. This period can be extended by 6 months only by a court on sufficient cause. Cut the fees of arbitrators if the court finds that the delay has been caused due to arbitrators. Rewarding arbitrators with extra fees in case the matter is disposed of within 6 months and the parties agree to pay more. Empower arbitration tribunals to grant all kinds of interim measures that courts provide.

Thus, giving more teeth to them in order to make tribunals directives enforceable in the same manner as those of courts. The amendments to this Bill are based on the Law Commission’s recommendations and suggestions received from stakeholders. Law Commission of India (LCI) in its 246th Report had recommended various amendments in Arbitration and Conciliation Act, 1996 in order to pave way for India to become a hub of International Commercial Arbitration.. Whether the Bill will bring about substantial change or will be whittled down to a pale reflection of what it ought to be by the rigours of parliamentary debate remains to be seen. But, rest assured we will be there to analyse the developments as and when they take place.

The author can be reached at: khushbusahu@legalserviceindia.com

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