Dispute Resolution uses the mechanisms of Negotiation Mediation and Arbitration in order to let parties arrive at a consensual resolution. Arbitration is the third main method of Dispute Resolution. It is a mechanism in which a dispute is submitted, subject to agreement between the parties, wherein one or more arbitrators make a binding decision. In simple terms, it’s one of the three dispute resolution methods by which people try to arrive at a solution without having to go to court.

The conduct of the arbitration proceeding is very much outside of a court, but resembles a hearing nevertheless, in that both sides present their statements and evidence to make a strong case. The Arbitration and Conciliation Act, 1996 governs the law of Arbitration in India and sets out the conditions under which the process of Arbitration, whether domestic or international is conducted. It also covers aspects of enforceability of the arbitral awards.

One major milestone in Arbitration in India was set when the 2019 Amendment of the Indian Arbitration and Conciliation Act 1996 was made. The Arbitration and Conciliation (Amendment) Act came into effect from 9th August 2019, and was intended to make India an Arbitration friendly jurisdiction. The 2019 Amendment inter alia introduced the following amendments in Section 11 and Section 29A of the Arbitration and Conciliation Act.

Section 11: The 2019 Amendment Act introduced an appointment procedure by arbitral institutions designated specifically by the Supreme Court in cases of International Commercial Arbitration and the High Court in the other cases wherever the Council has graded arbitral institutions, and on an application made by parties. Alternatively, it provides for maintaining the panel of arbitrators by the Chief Justice of the concerned High Court for the discharging function of the arbitral institutions.

The amendment also clarifies that in a situation wherein more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made shall be competent to appoint, and that the application made under this section shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite Party.

Section 29A: The provision through 2015 Amendment mandated that an award shall be passed in a matter within 12 months of the arbitral tribunal entering upon the reference and that the parties may, by consent, extend the time for making an award by another six months. The 2019 Amendment Act added the following amendments to sub section (1) of section 29A:

One of the silver linings of the COVID pandemic is the adoption of online hearings. Even so, two problems still manifest. The first is solving the capacity problem, and then there’s the problem of accessibility to the judicial system. The only solution is that the reach of dispute resolution mechanism has to go beyond what it is today.

• international commercial arbitrations shall be excluded from the purview of the timeline provided in the section, but parties thereto must endeavour [retaining the UK English spelling] to adhere to the same; and

• For international commercial arbitration, the time limit for arbitral award shall be within 12 months from the completion of the pleadings of the parties under section 23(4) of the Arbitration Act instead of the existing period of 12 months that starts from the date on which the arbitral tribunal enters upon the reference.
• Further amendment was with respect to adhering to the timeline of award being made within six months from the date on which arbitral tribunal enters upon the reference. In such a case, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

Thus the 2019 amendments aimed at revamping the appointment procedure for Arbitrators under Section 11 and set stricter timelines for completion of the Arbitration process under section 29A. We will discuss the impact of these amendments to Section 11 and 29A in expediting/impeding the arbitral process in our next article!

Section 29A: The provision through 2015 Amendment mandated that an award shall be passed in a matter within 12 months of the arbitral tribunal entering upon the reference and that the parties may, by consent, extend the time for making an award by another six months. The 2019 Amendment Act added the following amendments to sub section (1) of section 29A:

One of the silver linings of the COVID pandemic is the adoption of online hearings. Even so, two problems still manifest. The first is solving the capacity problem, and then there’s the problem of accessibility to the judicial system. The only solution is that the reach of dispute resolution mechanism has to go beyond what it is today.

• international commercial arbitrations shall be excluded from the purview of the timeline provided in the section, but parties thereto must endeavour [retaining the UK English spelling] to adhere to the same; and

• For international commercial arbitration, the time limit for arbitral award shall be within 12 months from the completion of the pleadings of the parties under section 23(4) of the Arbitration Act instead of the existing period of 12 months that starts from the date on which the arbitral tribunal enters upon the reference.
• Further amendment was with respect to adhering to the timeline of award being made within six months from the date on which arbitral tribunal enters upon the reference. In such a case, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

Thus the 2019 amendments aimed at revamping the appointment procedure for Arbitrators under Section 11 and set stricter timelines for completion of the Arbitration process under section 29A. We will discuss the impact of these amendments to Section 11 and 29A in expediting/impeding the arbitral process in our next article!