INFLUENCE ON THE AMELIORATION OF ARBITRATION AND CONCILIATION ACT

1. INTRODUCTION

The Arbitration and Conciliation Act was enacted in 1996 which aimed to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation but the Act has failed to meet its destined plan and had been modified at various juncture to promote its efficacy and resolution.

"CONCILIATION IS NOT COMPROMISE OR CONCESSION BUT CESSATION OF A DISPUTE

2. DRAWBACKS OF ARBITRATION AND CONCILIATION ACT, 1996

There can be some possible reasons for the failure of the Arbitration and Conciliation, 1996:

• It could be lack of awareness and understanding about the act among the general public.
• There could be the reluctance of parties to engage in arbitration or conciliation due to concerns about the implementation of the decisions.
• The lengthy and complex legal procedures involved in arbitration and conciliation can sometimes hinder the effectiveness and efficiency of the process.
• The decision given by the arbitrator is considered as final. There is no system of appeal against the order even if one party is dissatisfied with the outcome of arbitration Arbitrators can not punish the offender under contempt of court for any delay or interruption etc.[1]

3. MODIFICATIONS MADE IN ARBITRATION AND CONCILIATION ACT, 2015

• Section 12 of the Act was amended to provide impartiality in process of appointment of the arbitrators to have fair and just arbitration proceedings.
• Insertion of a new provision that the Arbitral Tribunal shall make its award within a period of twelve months. Parties may extend such period up to six months. Thereafter, it can only be extended by the sufficient cause.
• Award obtained by fraud, misrepresentation etc will be considered to be against public policy under Section 34 of the Act.
• Amendment to Section 36 was that the automatic stay on arbitral order is only possible if order is passed by court.
• Section 17 is amended to provide arbitral tribunal's power is similar to that of court for implementation of order
• New provision to provide that application to challenge the award is to be disposed of by the Court within one year. [2]

4. DRAWBACKS OF ARBITRATION AND CONCILIATION ACT, 2015

• There is potential delays in the arbitration process due to various procedural requirements
• There is the limited scope for judicial intervention, which affect the implementation of arbitration awards.
• Differences and uncertainty in the interpretation of the facts of law.

5. ADVENT OF ARBITRATION AND CONCILIATION ACT, 2019

The Act aimed to bring efficiency, transparency, accountability in arbitration process and proceedings to provide more immediate redressal justice and fairness in the arbitration process to the aggrieved person, company or any juridicial person etc.

5.1 AMENDMENTS

• Formation of the Arbitration Council of India: It is an independent body to promote and regulate arbitration in the country established under the Act.
• End on lengthy procedure: The Act introduced a provision that requires arbitrators to dissolve the arbitration process within a specific time period ensuring faster resolution of disputes.
• Cancellation of automatic stay on arbitration awards: The Act removed the provision for an automatic stay on arbitration awards upon the filing of a challenge, minimizing delays in the enforcement of awards and etc

Confidentiality. The amendments strengthened the confidentiality provisions, ensuring that the arbitration proceedings and related documents remain confidential, unless otherwise agreed by the parties

5.2 IMPACTS

• Reasonable time frame: The act prescribes time frame to dispose the case ensuring speedy trial and efficacy.
• Maintaining of privacy: The Act focus on the confidentiality of arbitration proceedings, providing privacy to parties
• Selection of Arbitrators: It introduces provisions for the selection of arbitrators through appropriated arbitral institutions, enhancing accountability and reducing delays.
• Additional Arbitrators: The Act welcomed the concept of additional arbitrators for interim relief before the tribunal is constituted, offering quicker relief.
• Appeal: The Act specifies grounds for challenging an arbitral award, which sort to provide justice and contentment among parties.

5.3 DRAWBACKS

• The Act provides qualification for appointing of arbitration but there are very few skilled and expert person. It will create a void in arbitration
• There is no further clarity on the role of courts in arbitration process
• There is no specific design to appeal an arbitral award given by arbitral court. [3]

6. ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2021

The Arbitration and Conciliation Amendment Act 2021, which was passed into law on 10 March 2021 follows the Arbitration and Conciliation (Amendment) Ordinance, 2020 promulgated by the President of India in November, 2020

6.1 FEATURES

• The amendment specified that the arbitrator must be an advocate with 10 years of experience or an officer of legal service authority Court can allow unconditional stay on order on grounds of fraud or misrepresentation etc or against public policy under Section 34 of the Act
• Section 36 of the Act was changed to induce effectiveness of the order of the Arbitration
• It gives chances to the partiesor stakeholder to prevent execution of arbitral award on ground of induced fraud or misrepresentation etc. [4]

7. CASE LAWS

7.1 Konkan Railway Corporation vs Rani Construction Pvt Ltd [5]

The Supreme Court held that the function of CJI and his designates is to ensure the nomination of an arbitrator who is independent, competent and impartial and settles the dispute between the parties to the best of his knowledge.

7.2 Haryana Space Application Centre (HARSAC) vs Pan India Consultant Ltd [6]

It was ruled by the court that the clause given in Section 12 of the Act is obligatory when it is dealt together with the Schedule of the Act. It was also held that the Principal Secretary is not qualified to be an arbitrator. He would probably influence HARSAC and a new arbitrator was appointed to continue with the proceedings.

8. CONCLUSION

Arbitration has significantly risen in India. Nowadays, civilians also include an arbitration clause in their agreements and contracts to solve their disputes outside court as arbitration involves simple procedural, less resource, cases are disposed within stipulated time faster then the court. It act as an alternative to Court but is not powerful as the Court. The Act has been amended to remove all barriers and provide efficacy and justice in system.

"ARBITRATION IS WISE, SANE, AND BETTER THAN CHOOSING DISSENSION!"

9. CITATIONS

1. PRIYA KUMARI," ADVANTAGES AND DISADVANTAGES OF ARBITRATION " https://lexforti.com/legal-news/advantages-disadvantages-arbitration/ (last visited on December 31, 2023)

2. LOMESH K. NIDUMURI, INDIA: CRITICAL ANALYSIS OF THE ARBITRATION AND CONCILIATION (AMENDMENT)ACT, 2015 available at https://www.mondaq.com/india/arbitration--dispute-resolution/494184/critical-analysis-of-the-arbitration-and-conciliation-amendment-act-2015(last visited on December 31, 2023)

3. SAMRIDHI BHATT STATUTE ANALYSIS: ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019 available at https://www.livelaw.in/lawschool/arbitration-and-conciliation-amendment-act-2019-the-arbitration-act-1940-the-arbitration-and-conciliation-act-1996-the-arbitration-and-conciliation-amendment-act-2015-175948 (last visited on December 31, 2023)

4. ARINDAM SHIT," ARBITRATION AND CONCILIATION AMENDMENT ACT, 2021: Will It Interfere With Arbitral Awards ? " available at https://www.lawctopus.com/academike/arbitration-and-conciliation-amendment-act/ (last visited on December 31,2023)

5. (2000) 8 SCC 159

6. (2021) 3 SCC 103