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The Act is a statutory regulation on domestic arbitration in India. Which simply put means that the Act covers the procedural, technical and overall requirements of practicing Arbitration and Conciliation in India. The Act defines Arbitration as – "any arbitration whether or not administered by permanent arbitral institution".

In an attempt to regularize arbitration as the opted mode of settlement of commercial disputes, and to make the increasingly liberalizing economy of India a hub for international commercial arbitration, Arbitration and Conciliation (Amendment) Bill, 2015 was introduced in the Parliament. The President of India, brought in an Ordinance thereby amending the Arbitration and Conciliation Act, 1996 on October 23, 2015.

In the 2015 amendment, a clear distinction in made between international commercial arbitration and domestic arbitration by defining the term "court". While the definition of court is same as that in the 1996 Act for domestic arbitration, for international commercial arbitration, court has been defined to mean only High Court of competent jurisdiction; a sense of uniformity and balance has been strived for by making Section 2(2) of the Act applicable to international commercial arbitration, even if the third party intervention site is outside India unless parties have agreed to the contrary; section 8 of the previous Act, which dealt with judicial authority referring the parties to arbitration in regards to an action brought before it, IF it is subject matter of the ongoing arbitration – has been amended to allow parties to be directed to arbitration; lastly, Section 9 – "interim measures"- was also amended. The amended provisions enable for the arbitration proceedings to start within 90 days from date of ‘interim measure of protection’ given by the court or within such time as the court directs. Also, unless the remedy under Section 17 of the Act is not rendered useless, the court shall not entertain a plea under this section.

In 2019, an additional amendment was brought in, formally called – Arbitration and Conciliation (Amendment) Act, 2019. The clear relation of it with the preceding amendment raised a lot of questions which would be better understood by analyzing the different provisions. Let us take a closer look at these. The key highlight of the 2019 amendment was the insertion of Part 1A for establishment of Arbitration Council of India with a view of framing policies governing the grading of arbitral institutions, making recommendations to the Central Government over easy and effective ways to resolve commercial disputes, promoting institutional arbitration and holding training, workshops and courses in ADR in collaboration with functioning law institutes. Another key amendment was the addition of 8th schedule which prescribed categories and qualifications for becoming an arbitrator. It also inserted Section 43J which provided for norms for accreditation of arbitrators. After enforcement of this act, only such a person could become an arbitrator that fell within the ambit of categories freshly laid in the 8th Schedule, for instance – being an advocate or having practiced as a Chartered Accountant for 10 or more years. Amendment to Section 11 is also considered key in the sense that it provides for appointment of Arbitral Tribunal through courts when parties fail to constitute the tribunal.

Acknowledging how the limitations of Amendment of 2019, an ordinance was brought in in 2020, which was primarily being enacted with two purposes – one to address concerns raised by stakeholders and the other, to ensure all stakeholder parties get an opportunity to seek unconditional stay of enforcement of arbitral awards where the underlying arbitration agreement of the arbitral award are induced by fraud or corruption.

Practical impact on practice of ADR in India

As we have established before, the practice of ADR is not only booming in India, but given the dire scenario of pending cases, individuals and institutions alike are turning to Alternative Dispute Resolution professionals to seek an alternative way to address their dispute.

The Act of 1996 was an attempt at liberalizing the Arbitration Act of 1940. Brought in at the time when the Indian economy had newly liberalized, the act assumed a fresh and commercial friendly approach towards dispute resolution. The 2015 amendment, further liberalized the provisions by making them convenient and user friendly for not just international commercial arbitration, but for that in India as well. An attempt at further making these provisions uniform was attempted at.

While the Act covers Arbitration in great length, it did not shorten the lifespan of other alternative dispute resolution mechanisms in India, but acted as an added benefit for all. An issue raised in the 2010 Arbitration congress of the 1996 not effectively meeting the needs of the business community, was attempted to address with the amendments brought in.

An effort directed in the betterment could very backfire and that has been the case with some amendments brought in by the legislature. The practitioners think the court intervention has actually increased, making it difficult and inconvenient for the parties.

Role Of UNCITRAL And The Reasons Responsible For Enactment Of Arbitration Laws In India

The United Nations Commission on International Trade Law (UNCITRAL) was established by the General Assembly in 1966 as a core legal body of the United Nations system in the field of international trade law. The UNCITRAL has a universal membership specializing in commercial law reform worldwide for over 50 years, and thrives towards the modernization and harmonization of rules on international business. In establishing the UNCITRAL, the General Assembly recognized that disparities in national laws governing international trade created obstacles to the flow of trade, and it regarded the Commission as the vehicle by which the United Nations could play a more active role in reducing or removing these obstacles. The Commission carries out its work at annual sessions, which are held in alternate years at United Nations Headquarters in New York and at the Vienna International Centre at Vienna.

Enactment Of Arbitration And Conciliation Act, 1996

The Preamble of the Arbitration and Conciliation Act, 1996 enumerates the reasons for its enactment by the Parliament. A mere plain reading makes it evident that the UNCITRAL has played the most prominent role in widening the scope of alternate dispute resolution methods in India. The reasons for enactment of the Act, as enumerated in the Preamble are:

1. Adoption of UNCITRAL Model Law on International Commercial Arbitration by UNCITRAL in 1985;

2. Recommendation by United Nations General Assembly (UNGA) to all member countries to give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice;

3. Adoption of UNCITRAL Conciliation Rules by UNCITRAL in 1980;

4. Recommendation by UNGA to all member countries to use the said Rules in cases where a dispute arises in the context of international commercial relations and the parties seek an amicable settlement of that dispute by recourse to conciliation;

5. In view that the said Model Law and Rules would make significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations; and

6. Owing to the fact that it would be expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules.

UNCITRAL Model Law On International Commercial Arbitration, 1985

Adopted by the UNCITRAL on 21 June 1985, The Model Law is designed to assist the member States in reforming and modernizing their laws on arbitral procedure so as to take into account the particular features and needs of international commercial arbitration. These covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.

UNCITRAL Conciliation Rules, 1980

The UNCITRAL adopted the Conciliation Rules on 23 July 1980 to provide a comprehensive set of procedural rules upon which parties to a dispute could agree for the conduct of conciliation proceedings arising out of a commercial relationship. These Rules cover all aspects of the conciliation process, providing a model conciliation clause, defining when conciliation is deemed to have commenced and terminated and addressing procedural aspects relating to the appointment and role of conciliators and the general conduct of proceedings. The Rules also address issues such as confidentiality, admissibility of evidence in other proceedings and limits to the right of parties to undertake judicial or arbitral proceedings whilst the conciliation is in progress.

The structure and salient features of Arbitration and Conciliation Act

The Arbitration and Conciliation Act, 1996 is the major law which governs arbitration in India. The act has four parts:

· Part I of the Act sets out general provisions on domestic arbitration. There are 10 chapters in this part. The chapters deal with general provisions, arbitration agreement, the composition and jurisdiction of tribunals. Chapters also lay down the way arbitral proceedings should be conducted. It further includes provisions related to arbitral awards, the recourse against award and the appeals against it.

· Part II holds the enforcement of foreign awards where Chapter 1 of the Part deals with New York Convention awards and Chapter II deals with awards under the Geneva Convention, 1927.

· Part III of the Act deals with conciliation which includes the application and scope of conciliation. Also, deals with the method of appointment of conciliators, the proceedings, suggestions and status and effect of settlement agreement; and

· Part IV of this Act sets out certain supplementary provisions which includes the rules regarding power of High Courts to make rules, etc.

Parts I and II of the Arbitration and Conciliation Act are the most important parts which are based on the UNCITRAL Model Law and the New York Convention respectively.

The act also consists of seven schedules which are as follows:

· The NewYork Convention, 1958 on the Recognition and Enforcement of Foreign Arbitral Awards given under Section 44 of the Act;

· The Geneva Protocol on Arbitration Clauses, 1953 given under Section 53 of the Act;

· The Geneva Convention, 1927 on the Execution of Foreign Arbitral Awards mentioned under Section 53 of the Act;

· The Model Fee Schedule and criteria to decide or calculate Arbitrators’ Fees explained under Section 11(14) of the Act;

· The Guidelines of Arbitrator on Impartiality and Independence laid down under Section 12(1)(b) of the Act;

· The Model Form for Disclosure of Arbitrators’ Independence and Impartiality to be filled with reference to Section 12(1)(b) of the Act; and

· The grounds forineligibility of the Arbitrator if in case there exists a relationship of an arbitrator with the parties or counsel laid down under Section 12(5) of the Act.

There are certain objects which are provided in the Statement of Objects and Reasons for the Arbitration and Conciliation Bill, 1995. They are as follows:

· to broadly cover disputes relating to international and national commercial issues and to reach a solution through the process of arbitration and conciliation;

· to make provisions regarding the process of carrying out the proceedings of arbitration which is fair, efficient and has the capacity to bring both the parties to dispute to an amicable resolution;

· to make provision that enables the arbitral tribunal to give reasons for its decision for arbitral award;

· to make provisions which will bind the arbitral tribunal to conduct its work within the boundaries of its jurisdiction;

· to reduce the directions of the courts in the process of arbitration;

· to allow the tribunal to apply for mediation, conciliation or other dispute redressal processes during the arbitral proceedings to come to an agreement;

· to ensure that every award which is enforced by an arbitral tribunal is in line with a decree of a court of law;

In furtherance of the objectives laid down in the Act, there are following salient features of this Act:

· The Act insists upon the importance of the Arbitration agreement in the absence of which arbitration proceedings cannot be initiated. The arbitration agreement is a clause in a contract to commercial business or a separate agreement between parties stating that any conflict which might arise between them will be referred to arbitration proceedings.

· The Act mentions that the separate arbitration agreement or arbitration clause in the same commercial agreement must contain the following information – probable subject matter of dispute, timing of dispute (past/present/future), number of arbitrators (odd numbers), qualifications & minimum experience of arbitrators, jurisdiction and composition of tribunal.

· The Act allows both the party to choose the seat of the tribunal or place or venue of arbitration, where the proceedings will be conducted.

· The parties can choose the rules or statute which will be applying relating to conduct of the arbitral tribunal and if they decide so, it must be specified in the agreement or clause of arbitration.

· The Act also requires the mandate and the termination date or year of this mandate to be specified in the arbitration agreement.

There are certain general provisions which is common to most of the institutions administrating arbitration. These are:

1. Request for Arbitration

The institutions which administer arbitrations are required to submit a written request for arbitration by the complainant to the Registrar containing all the required and essential information within a set time from the date of the commencement of proceedings of arbitration. Some institutions may also contain a clause for a written response to the said request by the opposite party.

2. Appointment of an Arbitrator and formation of the tribunal

Acting upon the request for arbitration, the institutions forms the tribunal for the Arbitration. There can either be a sole arbitrator or three arbitrators depending on the clauses of agreement between the parties.

3. Seat of Arbitration and Venue of proceedings

The law allows parties to decide the seat and venue of the working of arbitration tribunal or venue of the proceedings to be conducted. The parties have to agree in writing on the agreement or arbitration clauses regarding the seat and place of proceedings.

4. Interim Relief

Both the parties are free to approach the tribunal for interim measures of protection, custody, preservation etc. in case of a dispute, which are necessary to protect their respective rights. Moreover, almost all arbitration institutions allow parties to approach court of law before, during or after the formation of the tribunal. In any case of emergency, parties may apply to the Court for the immediate appointment of a temporary arbitrator to conduct emergency proceedings.

5. Awards

It is on the discretion of the Arbitral Tribunal which may make separate awards on different issues at different times. It can also allow interim payments on account of any claim or cross-claim.

Administrative assistance

Section 6 provides in order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person for arbitration.

Section 68 states that in order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person "administrative assistance" includes services in respect of arbitration such as receiving and sending communications, arranging meeting, translation, interpretation etc.

Receipt of written communications

According to Section 3 of the Act, any receipt of written communication is deemed to have been received when it is delivered to the residential or business place of the person concerned. And if in any case his place is not described under the agreement then the receipt is sent to the addressee’s last known place of work and habitual residence.

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