Alpha Partners releases its annual round-up document for updates in law of arbitration for 2019. Please click here to access or download the document. The document primarily focuses on changing legislative and judicial trend in the arbitration law in India. The document analyses the changes incorporated in the Arbitration and Conciliation Act 1996 vide Arbitration and Conciliation (Amendment) Act, 2015, Arbitration and Conciliation (Amendment) Act 2019 and various judicial pronouncements of the Indian Judiciary. The importance of arbitration has grown significantly throughout the world and thus, the Arbitration and Conciliation (Amendment) Act 2019 has been enacted by Indian Parliament with a purpose to make India as an arbitration hub in coming future.
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The United Nations Commission on International Trade Law had adopted the UNICITRAL Conciliation Rules in 1980 (hereinafter referred to as the "Rules") and UNICITRAL Model Law on International Commercial Arbitration in 1985 (hereinafter referred to as the "Model Law"), as the model of arbitration laws and procedures and in view of having uniformity in arbitral and conciliation procedures and specific needs in international commercial arbitration, the General Assembly of United Nations recommended all member countries to give due consideration to these rules1.
- These aforesaid Model Law and Rules provides unified framework within which the international commercial disputes could be resolved in a fair and efficient manner without going through extraneous procedures of a court of law. In view thereof, the Indian Parliament enacted the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Arbitration Act").
- The Arbitration Act was enacted with the object of amending the existing framework of arbitration in India and to consolidate the various laws of pertaining to the international commercial arbitration, domestic arbitration and enforceability of foreign arbitral awards. The primary principle of the Arbitration Act is judicial minimalism.
- The Arbitration Act replaced the Arbitration Act of 1940 as the 1940 Act had various procedural defects which led to frequent interference by court during arbitral proceedings. Under the provisions of Arbitration Act of 1940, the enforceability of the arbitral award was also a hectic process as the award was to be first converted into a decree before execution. However, the aforesaid issue has been dealt with by the Arbitration Act as the arbitral award now deems to be a decree in itself and can be executed in the court as a decree passed by a civil court.
- Prior to enactment of Arbitration Act, the laws pertaining to domestic and international arbitrations were different, however, after the enactment of Arbitration Act, the laws pertaining to domestic and international arbitrations and laws concerning to conciliation has been consolidated within single framework.
- Though, the Arbitration Act was enacted with a view to resolve the procedural and other defects which were pre-existing and to some extent it was able to achieve its purpose, on careful examination of the Act and the judicial trends from 1996 to 2015, it is evident that there were numerous loop holes in the Act which further led to judicial intervention at various intervals in an arbitration proceeding thus, the primary objective and purpose of the Act remained unfulfilled.
- Realizing the importance of curing such defects, the Law Commission of India, in its 176th Report, has recommended a major overhaul to the Arbitration Act so that its original objective of minimizing judicial intervention could be fulfilled.
- Thereafter, the President of India promulgated an Ordinance (Arbitration and Conciliation (Amendment) Ordinance, 2015) on October 23rd, 2015, amending the Arbitration Act by taking into consideration the Law Commission recommendations and suggestions received from the various stake holders. The Arbitration and Conciliation (Amendment) Act, 20152 (hereinafter referred to as the "Amendment Act") received the assent of the President of India on 31.12.2015 and the amendment Act came into force with effect from 23.10.2015.
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1. General Assembly Resolution A/40/72, available at: https://www.un.org/documents/ga/res/40/a40r072.htm
2. No. 3 of 2016
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