Union Cabinet approves Arbitration and Conciliation (Amendment) Bill, 2018

The Bill provides for creation of an independent body Arbitration Council of India (ACI).

Created On: Mar 9, 2018 13:33 ISTModified On: Mar 9, 2018 13:50 IST
Union Cabinet approves Arbitration and Conciliation (Amendment) Bill, 2018

The Union Cabinet on March 7, 2018 approved the introduction of Arbitration and Conciliation (Amendment) Bill, 2018 in the Parliament.

The Bill seeks to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution (ADR) mechanism.

Provisions of the Bill

• It facilitates speedy appointment of arbitrators through designated arbitral institutions by the Supreme Court or the High Court, without having any requirement to approach the court.

• It amends sub section (1) of section 29A by excluding International Arbitration from the bounds of timeline to provide that the time limit for arbitral award in other arbitrations shall be within 12 months from the completion of the pleadings.

• It inserts a new section 42A to provide that the arbitrator and the arbitral institutions shall keep confidentiality of all arbitral proceedings except award.

• It inserts a new section 42B to protect an Arbitrator from suit or other legal proceedings for any action or omission done in good faith in the course of arbitration proceedings.

• A new section 87 is also proposed to be inserted to clarify that unless parties agree, otherwise the Amendment Act 2015 shall not apply to (a) Arbitral proceedings, (b) Court proceedings arising out of or in relation to such arbitral proceedings.

Creation of Arbitration Council of India

• The Bill provides for creation of an independent body 'Arbitration Council of India (ACI)' to grade arbitral institution and recognize arbitrators by laying down norms and take all steps to promote and encourage arbitration, conciliation, mediation and other ADR Mechanism.

• The Arbitration Council of India shall also maintain an electronic depository of all arbitral awards and it will be a body corporate.   

• The Chairperson of council will be a person who has been a Judge of the Supreme Court or Chief Justice or Judge of any High Court or any eminent person.

• The other Members will include an eminent academician etc. besides other Government nominees.


Benefits of Amendment Bill

The Amendments in the Arbitration and Conciliation Act, 1996 will facilitate improvement in institutional arbitration by establishing an independent body to lay down standards, make arbitration process more cost effective and ensure timely disposal of arbitration cases.

Justice BH Srikrishna Committee

• The Arbitration and Conciliation Act, 1996, was amended by the Arbitration and Conciliation (Amendment) Act, 2015 to make arbitration process user friendly, cost effective and ensure speedy disposal.

• However, to remove some practical difficulties in applicability of the Arbitration and Conciliation (Amendment) Act, 2015, the Union Government constituted a High Level Committee (HLC) under the Chairmanship of Justice BH Srikrishna, Retired Judge of Supreme Court of India.

• HLC was mandated to examine the effectiveness of existing arbitration mechanism by studying the functioning and performance of Arbitral Institutions in India and submit a Report on suggested reforms in the statute.

• The HLC submitted its Report on July 30, 2017 and recommended for amendments in the Arbitration and Conciliation Act, 1996.

• The proposed amendments are as per the recommendations of the High Level Committee.

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