Amendments to ACA 2015 suggested by Srikrishna Panel on Arbitration

(P.S: This is In continuation of the Earlier Article/s) on the subject

One of the laudable achievements of the Modi Government is the amendment to Indian Arbitration and Conciliation Act 1996 as amended by the Arbitration and Conciliation (Amendment) Act 2015 (ACA 2015). These amendments came into effect from 23rd October 2015 .  Some of the important amendments were made to reduce delays in the conclusion of arbitration and reduce the possibility of Court intervention. It enabled use of electronic documents for communication, suggested a schedule for Arbitrator’s fees. The amendment suggested a one year time for completion of arbitration and introduced incentives for early completion and disincentives for delays. Some strict measures on the eligibility criteria of arbitrators were also suggested to avoid conflicts. Judicial challenges have also been made more difficult and over all the system of Arbitration was changed substantially for the better.

However,  the community of arbitrators who are already in the game consisting mainly or retired judges have not been happy with the limitations imposed by the suggested fee structure as well as the imposition of the time limits for completion. At the same time some genuine and not so genuine doubts were also raised on some provisions leading to a very low adoption of Arbitration in the last 18-20 months the amended Act has been in place in India.

Now the Srikrishna panel which was mainly looking at the “Institutionalization of Arbitration Mechanisms” also went into suggesting some more amendments to ACA 2015 Many of the amendments suggested are to correct some omissions and some of the more important suggestions are as follows:

1. The time limit of 12 months (extendable by another 6 months with Court permission) under Section 29A should be applicable to domestic arbitration only and not to international arbitration.
2. Time limit should be counted from the completion of pleadings with 6 months time given for submission of pleadings.
3. When the application is under a Court the time limit should be kept in deference.
4. If the application is not disposed of by a Court within the period mentioned there in it is deemed to be granted. (29A(9))
5. When the Court seeks to reduce the fees of the arbitrator for delay, opportunity should be given to the arbitrator to be heard.
6. The period of outer limit under Section 34(6) should not be mandatory
7. Imposition of costs in connection with Court proceedings should be incorporated
8. Fourth schedule may be amended to provide a model fee for disputes between INR 10 to 20 crores which has been omitted
9. An immunity to be granted for Arbitrator that he shall not be liable except when there is bad faith.
10. Provision for confidentiality of proceedings unless disclosure is required by legal duty, to protect or enforce legal right or to enforce or challenge an award before a Court.
11. A model set of rules have been proposed as a default rule.
12. Power to appoint an arbitrator where there is no agreement should be done by an Arbitral institution designated by  Supreme Court. (This will be part of the designation and grading)
13. Provision for an “Emergency” award from an “Emergency Arbitrator” to be made
14.  A New part to be introduced for establishment of APCI.
15. A repositroy of Arbitral awards may be maintained by APCI.
16. All arbitral institutions shall be constituted as Section 8 companies.

Excepting some suggestions made earlier, regarding the necessity for a separate institution such as APCI, other recommendations are more to reduce the practical difficulties and no specific comments can be made.

There is also a recommendation regarding Foreign Advocates to be allowed to participate in the international awards which is reasonable if India has to develop as a global center. Some other suggestions regarding how the recommendations may be implemented also have been made.

Committee has also recommended that every arbitral institution should provide mediation services and standardization of mediation law should be drafted.

We have some reservations on the “Mediation” since “Mediation” by definitions should be a mutually arrived settlement and hence some flexibility is required in the regulations. Too much of legal constraint is nor desirable.

Additionally, ICADR is recommended to be converted into an Apex organization for International ADR in India which also has been commented earlier.

Naavi

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