03 April 2018

Arbitration and Conciliation (Amendment) Bill, 2018

The Union Cabinet has recently approved the Arbitration and Conciliation (Amendment) Bill 2018 for introduction before the Indian Parliament.

The Bill is meant to encourage institutional arbitration and provide for a robust Alternative Dispute Resolution (ADR) mechanism in India. This Bill comes in furtherance of the J. Srikrishna High Level Committee Report (“HLC”) and the Arbitration and Conciliation (Amendment) Act, 2015 ("2015 Amendment").
The salient features of the aforesaid Bill, inter alia, are,

  1. To change the present system of appointment of arbitrators by the Supreme Court or High Court, to a system where the arbitrators shall be appointed by arbitral institutions designated by the Supreme Court or High Court;
  2. In case where no graded arbitral institutions are available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of arbitral institutions;
  3. To insert a new Part 1A to the Act for the establishment and incorporation of an independent body namely, the Arbitration Council of India (“ACI”) for the purpose of grading of arbitral institutions and accreditation of arbitrators, etc.;
  4. To provide that the arbitrator,  arbitral institutions and the parties shall maintain confidentiality of information relating to arbitral proceedings and also protect the arbitrator or arbitrators from any suit or other legal proceedings for any action or omission done in good faith in the course of arbitration proceedings; and
  5. To clarify that Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015, is applicable only to the arbitral proceedings which commenced on or after 23rd October 2015 and to such court proceedings which emanate from such arbitral proceedings, to address the divergent views given by various Courts.

Notably, post introduction of this Bill, the Supreme Court, in the matter of Board of Cricket in India v. Kochi Cricket Pvt. Ltd. And Ors. [SLP (C) Nos. 19545-19546 of 2016] pronounced its judgement on 15th March 2018 wherein it held inter alia that the Amendment Act prospectively applied to (i) arbitral proceedings that have commenced on or after commencement of Amendment Act and (ii) court proceedings which have begun after commencement of the Amendment Act.

The Court has also found that certain individual provisions in the Amendment Act may effectively have retrospective operation, depending on the nature and effect of the provision in question.


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