September 03, 2019: Arbitration and Conciliation (Amendment) Act, 2019 notified by the Central Government
The Central Government has notified certain sections of the Arbitration and Conciliation (Amendment) Act, 2019 (“Amendment Act”) and these sections have come into effect from August 30, 2019. The Sections that have been notified by the Central Government are Section 1, Sections 4-9 (both inclusive), Sections 11-13 (both inclusive) and Section 15.
Some of the key changes brought about by these sections have been tabled below:
|
Sl. No. |
Section amended |
Position of law prior to Amendment Act |
Position of law post the Amendment Act |
|
1. |
Section 17- Interim measures ordered by arbitral tribunal |
Prior to the Amendment Act, parties to an arbitration could make an application to the arbitral tribunal for interim measures even after the making of the arbitral award but before the enforcement of the arbitral award under Section 36. |
Post the Amendment Act, however, the parties can now make an application for interim award only during the subsistence of the arbitral proceedings and not after the arbitral award has been made. |
|
2. |
Section 23- Statement of claims and defence |
Prior to the Amendment Act, there was no time limit to file a written submission before the arbitral tribunal |
The Amendment Act now mandates that the written claim and the defence to such claim should be completed within 6 months of the appointment of arbitrator |
|
3. |
Section 29 A-Time limit for arbitral award |
Prior to the Amendment Act, all arbitration proceedings were required to be completed within 12 months of the date of completion of pleadings |
The Amendment Act specifically removes this time restriction for international commercial arbitrations and specifies that for international commercial arbitrations, an endeavour must be made to complete the proceedings within 12 months. |
|
4. |
Section 34-Applicatio for setting aside arbitral award |
Section 34 (2) specifies the grounds on which the arbitral award can be set aside. Prior to the Amendment Act, in order to set aside an arbitral award, a party to the arbitration proceeding only had to “furnish proof” regarding the grounds mentioned in Section 34 for setting aside the arbitral award. |
Post the Amendment Act, to set aside an arbitral award, a party has to “establish on the basis of the record of the arbitral tribunal” that the grounds for setting aside the arbitral award under Section 34 have been complied with. Thus, a party’s claim to set aside the arbitral award has to be based on the documents submitted to the arbitral tribunal. |
|
5. |
Section 42A-Confidentiality of information |
New Section introduced by the Amendment Act |
The parties to an arbitration proceeding, the arbitral institution and the arbitrator are required to maintain confidentiality of all arbitral proceedings, except for the arbitral award in certain circumstances. Disclosure of the arbitral award shall only be made only where it is necessary for the enforcement of the arbitral award. However, the Amendment Act does not clarify the circumstances that would be deemed to be necessary for the enforcement of the arbitral award. |
Quick View
The changes brought about by the Amendment Act intends to make arbitration the preferred mode of dispute resolution and to inject a sense of efficiency in arbitration proceedings. These can be gauged from the changes introduced that specifies the time limit for making claims and defence and providing a 12-month timeline for completion of the arbitration proceeding. If implemented properly in letter and spirit, the changes brought about by the Amendment Act would be welcomed by practitioners, arbitrators, and the litigants alike.
Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.