Report No. 176

The Arbitration and Conciliation (Amendment) Bill, 2001

Contents
	Arbitration and Conciliation (Amendment) Bill, 2001
Chapter I	Broad framework of the Arbitration and Conciliation Act, 1996 and certain drawbacks experienced in its working
	Broad framework of the Arbitration and Conciliation Act, 1996
	Speedy disposal and least Court intervention are the basis of 1996 Act
	Representations regarding grounds for interference by the Courts after making of the award
	Other aspects brought to the notice of the Commission
	Major reforms in speeding up pending and future arbitrations, applications and appeals under the 1996 Act and also under the 1940 Act
Chapter II	Discussion on the proposals for amendments and Commission's recommendations
	Discussion on the proposals for amendments and Commission's recommendations
	Definitions - Section 2
	Need for defining the scope of 'domestic arbitration', 'international arbitration' and 'international commercial arbitration'
	The new definitions as proposed will be as follows
	Proposed section 2(1)(fa)
	Application of Part I - Section 2(2)
	Omission in Section 2 (2) of the Act in not applying sections 8, 9, 35, 36, to international arbitration outside India
(i)	Omission to apply sec. 9 to international arbitrations outside India to be rectified
(ii)	Omission to apply sections 8, 35 and 36 to international arbitrations outside India to be rectified
	'Extent of Judicial Intervention
	Arbitration agreement
	Amendments to Section 8
	Whether certain preliminary issues at the stage of section 8 could be decided
	Situations in which the preliminary issues are to be decided under sec.8
	Provision to be made for stay of action in case reference is made under sec.8
	Section 8(3)
	The following amendments are proposed in sec. 8
	Proposed section 8(6)
	Necessity for a separate provision in sec. 42 as to the forum where subsequent applications including those under section 34 to set aside the award are to be filed in cases arising under section 8 - proposed section 42 (3)
	Proposed section 8A
	Hence a new section 8A is proposed to be added as follows
	Grant of interim measures etc by court
	Existing sec. 9 is proposed to be recast as follows
	Proposed Section 10A, Section 11 (5A) and Section 13
	Appointment of arbitrators - Various issues under section 11
	Orders under section 11
	Preliminary or jurisdictional issues raised at sec. 11 stage - whether can be decided by an administrative authority
	Preliminary issues to be decided only if some conditions are satisfied
	Difficulties arising if preliminary issues are not to be decided under sec. 11 - Examples
	The comparative advantages or disadvantages of the order under sec. 11 to be an administrative order or judicial order
	Order of Chief Justice of India
	Orders of the Chief Justice of High Courts
	Whether the Chief Justice of India or the Chief Justice of the High Court are 'persona designata
	Is it advantageous if the Chief Justice of India or Chief Justice of High Court is to be statutorily deemed to be 'persona designata'?
	Mandatory or directory nature of sec.11(4), 11(5) and 11(6)
	Section 11 (4) and 11 (5)
	Section 11 (6)
	Recommendations for recasting section 11
	Grounds of challenge to the appointment of arbitrators - more details to be disclosed by proposed arbitrators
	Now we shall advert to certain other aspects under section 12
	Section 13
	Termination of the mandate of an arbitrator
	Section 16
	The question then is as to whether sec.16 is to be amended in view of reliance on the above opinion of leading authors and hardship referred to
	Therefore sec. 17 can be amended on the following lines, by modifying its heading also
	Place of arbitration
	Amendment to section 23
	Amendments to section 24
	The Commission recommends that, in section 24 of the principal Act, for sub-section (1), the following sub-sections shall be substituted, and sub-section (1A0, (1B) and (1C) shall be inserted
	Powers to be granted to the arbitral tribunal to enforce its orders
	After section 24 of the principal Act , the following section shall be inserted, namely
	Procedure for enforcement of peremptory orders passed by the arbitral tribunal under sec. 17, 23 and 24 by the court
	We propose to insert Sec. 24B as follows
	Law applicable to substance of dispute
	It is, therefore, proposed to substitute sub-section (1), and (1A) for the existing sub section (1) of section 28 as follows. Section 28
	Time limits for completion of arbitral proceedings in India (both international and purely domestic) laid down
	The Commission, therefore, proposes to prescribe such a procedure in a new section
	Section 30: Settlement of disputes - Registration and Stamp duty
	Interest under sec. 31(7)(b): 18% to be the upper limit - proposal rejected
	Copy of the award to be filed in the 'Court' for purposes of record along with original arbitral records and courts to maintain register of awards
	After section 31 of the principal Act, the proposed section 31A shall be inserted as follows
	Section 34
	Two Additional grounds for setting aside the award only in case of purely domestic arbitration between Indian nationals
	Substantial error of law apparent on the face of the award - proposed
	Additional grounds of challenge in case of certain awards
	Ground of absence of reasons - proposed: (purely domestic awards between Indian nationals
	It is proposed that Section 34A may be inserted after section 34 of the principal Act as follows
	Section 34
	Explanation 2 below sec. 34(2)
	Proposal for inclusion of the ground of misconduct - Rejected
	Section 34A (continued)
	Section 36
	For section 36 of the principal Act, the following section shall be substituted namely
	Proposed section 37A
	After section 37 of the principal Act, the section 37A shall be inserted, namely
	Section 42
	General provision
	For section 42 of the principal Act the following section shall be substituted namely
	Proposal for panel of arbitrators by the Chief Justice of India
	Partnership Act
	The Commission recommends the insertion of a new section 42B after the proposed section 42A as stated above, to be inserted on the following lines
	Atlantic Clause
	Section 43: Regarding application of the Limitation Act, 1963
	The proposed amendments are as follows
	Supersession of arbitration agreement - plea for provision rejected
	Provision to enable arbitrators to refer question of law to the court - rejected
	Fast track arbitration: proposed 43A to 43D (chapter XI) in Part I
	Single Member Fast Track Arbitral Tribunal and Fast Track Arbitration
	High Court for purposes of this Chapter
	Constitution of Fast Track Arbitral Tribunal
	Parties to be bound by the procedure and time schedule
	Section 82
	Section 84
	Miscellaneous items
	Removal of arbitrators
	Interim Award
	Trade usages: suggestion to delete - rejected
	State immunity: To be dealt with under separate law
	Transitory provisions - limited retrospectivity given
	Section 32
	Section 33 of the amending Ac
	The proposed sec. 33 of the Amending Act reads as follows
	Section 34 of the amending Act
	With these objectives in view, the Commission has proposed the following sec. 34 in the amending Act
	Insertion of Fourth Schedule
Chapter III	Summary of Recommendations with Explanatory notes
	Sections 2(1)(e) to 2(1)(fa)
	Sections 2(2) to 2(10)
	Sections 5 and 6
	Section 8
	Section 9
	Section 11
	Sections 12 to 17
	Section 20
	Sections 23 and 24
	Section 28(1), (1A)
	Section 29A
	Section 31A
	Section 34 and 34A
	Section 36(1)
	Section 37A
	Section 42
	Section 43
	Chapter XI (Sections 43A to 43D and Schedule IV) in Part I
	Sections 32, 33 and 34 of the Amending Act
	Section 36
Annexure I	The Arbitration and Conciliation (Amendment) Bill, 2001
1.	Short title
2.	Amendment of Section 2
3.	Amendment of section 5
4,5.	Amendment of sections 6 and 7
6.	Amendment of section 8
7.	Insertion of new section 8A
8.	Substitution of new section for section 9
9.	Insertion of new section 10A
10.	Amendment of section 11
11.	Amendment of section 12
12.	Amendment of section 14
13.	Amendment of section 15
14.	Substitution of new section for section 17
15.	Substitution of new section for section 20
16.	Amendment of section 23
17.	Amendment of section 24
18.	Insertion of new sections 24A and 24B
19.	Amendment of section 28
20.	Amendment of section 29
21.	Insertion of new section 29A
22.	Insertion of new section 31A
23.	Amendment of section 34
24.	Insertion of new section 34A
25.	Substitution of new section for section 36
26.	Insertion of new section 37A
27.	Substitution of new section for section 42
28.	Amendment of section 43
29.	Insertion of new Chapter XI in Part I
	Other provisions of the Act to apply subject to modifications 43B
	Proper court for filing subsequent applications 43C
30.	Amendment of section 82
31.	Amendment of section 84
32.	Transitory provisions
33.	Speeding up of all proceedings and time limit for passing awards
34.	Speeding up of all proceedings and time limit for passing awards under the Arbitration Act, 1940 (10 of 1940)
35.	Insertion of new Schedule
	Constitution of Fast Track Arbitral Tribunal
	Parties to be bound by the procedure and time schedule
	Consultation paper on review of working of the Arbitration and Conciliation Act, 1996
Chapter I	Arbitration & Conciliation Act , 1996
1.1	Broad framework of the Act of 1996 and certain drawbacks experienced in its working
1.2	Representations for amendment of the Act
1.3	Objectives of the 1996 Act - speedy arbitration and least court intervention
1.4	Necessity to adhere to the objectives of speedy disposal and least court intervention
Chapter II	Proposals on which views are invited
2.1	Does Section 5 of 1996 Act require any amendment?
2.2	Whether section 8 should be confined to 'courts' by omitting the word 'judicial authority', and issues of jurisdiction arising under section 8 in suits and other proceedings where defendant/respondent relies upon an arbitration agreement
2.3	Jurisdictional issues arising before the High Court and the Supreme Court in applications filed under Section 11 of the 1996 Act - question whether the Chief Justice of India or the Chief Justice of the High Court or their nominees act in an administrative capacity or a judicial capacity and whether issues of jurisdiction should be allowed to be decided at that stage or should be left to the arbitrators
2.5	Jurisdictional issues arising before the arbitrators under Section 16 of the Act in cases where disputes are referred to arbitrators by one party to the dispute or/by both the parties, (without reference to the court)
2.6	Sections 12 and 13 and questions relating to Bias and Qualifications of arbitrators - whether the decision of the arbitrator rejecting the plea of Bias and lack of qualifications should be decided as preliminary issues with a right of appeal or whether they can be challenged only after the award?
2.7	Interim measures under Section 9 in international arbitration where the place of arbitration is outside India and also allowing civil court under section 8 to deal with such arbitrations by amendment of Section 2(2)
2.8	Whether Sections 35 and 36 of the Indian Act should also be made applicable to international arbitrations outside India (other than those covered the New York convention 1958 and the Geneva convention 1924 in Part - II )?
2.9	Should not the Act contain a provision enabling a Court before which a suit or other proceeding is pending, to refer the disputes to arbitration by subsequent agreement of parties or should such arbitration agreement always precede the commencement of action before the Court?
2.10	Whether Sec 34 (or Section 37) of the Act is to be amended by providing a right of appeal (not only in respect of interim orders under Section 13 and 16) but also in other cases and if so whether such fresh grounds should cover both domestic and international arbitrations
2.11	Power of the court to give opinion on question of law
2.12	Modification and Remission
2.13	Power to supersede arbitration
2.14	Minority dissenting view of arbitrator
2.15	Filing of awards before a court for purposes of record (section 31 to be appropriately amended) and the court while enforcing the award - decree under section 36, to scrutinize if the award had complied with the relevant laws relating to stamp duty and registration
2.16	Independence or Bias or Disqualification of named arbitrator
2.17	Time limits for completion of domestic arbitration and guidelines in respect of fee stipulations
	Summary of Proposals