Legislation UpdatesStatutes/Bills/Ordinances

The Arbitration and Conciliation (Amendment) Act, 2019 was notified on 09-08-2019. Sub-Section 2 of Section 1 of the Arbitration and Conciliation (Amendment) Act, 2019 provides as under:-

“(2) Save as otherwise provided in this Act, it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.”

2. The Central Government by exercising powers conferred under sub-section 1 of the Arbitration and Conciliation (Amendment) Act, 2019, appointed the date 30-08-2019, for enforcement of the following Sections of the  Arbitration and Conciliation (Amendment) Act, 2019:-

(i)         Section 1;

(ii)        Section 4 to 9 [both inclusive];

(iii)       Section 11 to Section 13 [both inclusive];

(iv)       Section 15.

3. Necessary Gazette Notification in this regard has been issued by the Central Government. In pursuance of the above notification, Sections 17, 23,29A, 34, 37, 45 and 50 of the Arbitration and Conciliation Act, 1996 (the Act) stand amended. Also three new Sections namely 42A, 42B, and 87 stands inserted in the Act. The insertion of Section 87 is with retrospective effect i.e. 23-10-2015, with a view to clarifying the applicability of the said cut-off date on arbitration and related court proceedings.


Ministry Of Law & Justice

[Press Release dt. 04-09-2019]

Legislation UpdatesNotifications

On 09-08-2019, President gave its assent for the Arbitration and Conciliation (Amendment) Bill, 2019.

Arbitration and Conciliation (Amendment) Act, 2019 will further amend the Arbitration and Conciliation Act, 1996.

Following are the major amendments taken place under the Act:

Features & Highlights of the Arbitration and Conciliation (Amendment) Act, 2019:

  • Amendment of Section 2: Insertion of clause (ca) in sub-section 1 of Section 2:

(ca)  “arbitral institution’’ means an arbitral institution designated by the Supreme Court or a High Court under this Act;’

Insertion of clause (i) & (j) after clause (h):

  • “prescribed” means prescribed by rules made under this Act

(j) “regulations” means the regulations made by the Council under this Act.

  • Amendment of Section 11: Insertion of sub-section (3A) which is as follows:

“(3A) The Supreme Court and the High Court shall have the power to designate, arbitral institutions, from time to time, which have been graded by the Council under Section 43-I, for the purposes of this Act:

Provided that in respect of those High Court jurisdictions, where no graded arbitral institution are available, then, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of arbitral institution and any reference to the arbitrator shall be deemed to be an arbitral institution for the purposes of this section and the arbitrator appointed by a party shall be entitled to such fee at the rate as specified in the Fourth Schedule:

Provided further that the Chief Justice of the concerned High Court may, from time to time, review the panel of arbitrators.”;

Substitution made in Sub-section (4) of Section 11

Old New (Amended)
(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment,

the appointment shall be made, upon request of a party, by [the Supreme Court or, as the case may be, the High Court or any person or institution designated by such court].

 

(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment,

“the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”

 Substitution made in Sub-section (5) of Section 11

Old New (Amended)
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by 11[the Supreme Court or, as the case may be, the High Court or any person or institution designated by such court]. (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so “the appointment shall be made on an application of the party in accordance with the provisions contained in sub-section (4)”;

 Substitution in sub-section (6) of Section 11

Old New (As amended)
(6) Where, under an appointment procedure agreed upon by the parties,—

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,

a party may request [the Supreme Court or, as the case may be, the High Court or any person or institution designated by such court] to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

 

(6) Where, under an appointment procedure agreed upon by the parties,—

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,

“the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”

 Omission of sub-sections (6A) and 7 under Section 11

Old New (As amended)
(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of Section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.]

 

(8) “The arbitral institution referred to in sub-sections (4), (5) and (6)” , before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of Section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.]

 

 Substitution in sub-section (9) of Section 11

Old New (As amended)
(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, [the Supreme Court or the person or institution designated by that court] may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities. (9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, [“the arbitral institution designated by the Supreme Court] may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities

 Sub-section (10) of Section 11 has been omitted.

Sub-sections (11) to (14) have been substituted as follows:

“(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made under the relevant sub-section shall be competent to appoint.

(12) Where the matter referred to in sub-sections (4), (5), (6) and (8) arise in an international commercial arbitration or any other arbitration, the reference to the arbitral institution in those sub-sections shall be construed as a reference to the arbitral institution designated under sub-section (3A).

(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party.

(14) The arbitral institution shall determine the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal subject to the rates specified in the Fourth Schedule.

Explanation.—For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) where parties have agreed for determination of fees as per the rules of an arbitral institution.”

  • Amendment in Section 17: The following highlighted part will be omitted.

Interim Measures ordered by Arbitral Tribunal:

(1) A party may, during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to the arbitral tribunal—

  • Amendment of Section 23:

Sub-section (4) shall be inserted after sub-section (3):

(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment.”

  • Amendment of Section 29A:

Substitution of sub-section (1):

“(1) 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 under sub-section (4) of Section 23:

Provided 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 under sub-section (4) of Section 23.”

Insertion of provisos after the existing proviso in sub-section (4):

“Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.”

  • Amendment of Section 34
  • Amendment of Section 37
  • Insertion of new sections: Sections 42A & 42B after Section 42:

Confidentiality of Information 

“42A. Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of the award.

 Protection of action taken in good faith

42B. No suit or other legal proceedings shall lie against the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.”

  • Insertion of new part: PART 1A – Arbitration Council of India
  • Insertion of the new schedule: 8th Schedule after Schedule 7thQualifications and Experience of Arbitrator.

*Please refer to the amended act here: The Arbitration and Conciliation (Amendment) Act, 2019


Ministry of Law and Justice