246th report of law commission of india
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval appr oval for ame amendm ndment ents s to the Ar Arbit bitrat ration ion and Con Concil ciliat iation ion Bil Bill, l, 2! 2!" " ta# ta#ing ing int into o consideration the $a% Commission&s recommendations, and s'ggestions received from sta#e holders( The )overnment of *ndia has decided to amend the Arbitration and Conciliation Act, !++ by introd'cing the Arbitration and Conciliation -Amendment. Bill, 2!" in the Parliament(
The salient features of the amendments are as under:-i.( *n order to ens're ne'trality of arbitrators, it is proposed to amend Section !2/gro'nd for challenges(( to the effect that %hen a person is approached in connection %ith possible appointment of arbitrator, he shall disclose in %riting abo't e0istence of any relationship or interest of any #ind, %hich is li#ely to give rise to 1'stifiable do'bts( 'rther, if a person is having specified relationship, he shall be ineligible to be appointed as an arbitrator(/ its d'ty of the arbitrator to disclose its relation and chec# and balance are there( -ii.( *nsertion of a ne% provision that the Arbitral Trib'nal shall ma#e its a%ard %ithin a period of !2 months( 3good things( Parties may e0tend s'ch period 'p to si0 months( Thereafter, it can only be e0tended by the Co'rt, on s'fficient ca'se( The Co'rt %hile e0tending the period may also order red'ction of fees of arbitrator-s. not e0ceeding five percent for each month of delay, if the co'rt finds that the proceedings have been delayed for reasons attrib'table to the arbitral trib'nal( *f the a%ard is made %ithin a period of si0 months, arbitrator may get additional fees if the parties may agree( Cases li#e %hite ind'stry can be avoided( -iii.( *t is proposed to insert a provision for fast trac# proced're for cond'cting arbitration( Parties to the disp'te may agree that their disp'te be resolved thro'gh fast trac# proced're( A%ard in s'ch cases shall be given in si0 months period(
-iv.( Amendment of Section 45 relating to gro'nds for challenge of an arbitral a%ard, to restrict the term 6P'blic Policy of *ndia7 -as a gro'nd for challenging the a%ard. by e0plaining that only %here ma#ing of a%ard %as ind'ced or affected by fra'd or corr'ption, or it is in contravention %ith the f'ndamental policy of *ndian $a% or is in conflict %ith the most basic notions of morality or 1'stice, the a%ard shall be treated as against the P'blic Policy of *ndia( According to ne% ordinance %hat is meaning of stay order has change(
-v.( A ne% provision to provide that application to challenge the a%ard is to be disposed of by the Co'rt %ithin one year( -vi.( Amendment to Section 4 to the effect that mere filing of an application for challenging the a%ard %o'ld not a'tomatically stay e0ec'tion of the a%ard( (/ co'rt has to give specific order that there %ill be stay order(A%ard can only be stayed %here the Co'rt passed any specific order on an application filed by the party( -vii.( A ne% s'b/section in Section !! to be added to the effect that an application for appointment of an Arbitrator shall be disposed of by the 8igh Co'rt or S'preme Co'rt as e0peditio'sly as possible and an endeavo'r sho'ld be made to dispose of the matter %ithin days(/ phle no limitation( -viii.( A ne% Section 4!A is to be added for providing comprehensive provisions for costs regime( *t is applicable both to arbitrators as %ell as related litigation in Co'rt( *t %ill avoid frivolo's and meritless litigation9arbitration( -i0.( Section !:/interim meas're ordered by arbitral trib'nal; is to be amended for empo%ering the Arbitral trib'nal to grant all #inds of interim meas'res %hich the Co'rt is empo%ered to grant, 'nder Section + and s'ch order shall be 6enforceable in the same manner as if it is an order of Co'rt(
Apart from above, amendments in Sections 2-!.-e. , 2-!.-f.-iii., :-5.-b., <-!. and -2., +, !!, !5-!., 24, 25, 2", 2<-4., 4!-:.-b., 45 -2A. 4:, 5<, " and in Section ": are also proposed for ma#ing the arbitration process more effective(
Background:The )overnment of *ndia has 'nder its consideration proposals for ma#ing Arbitration a preferred mode for settlement of commercial disp'tes by ma#ing it more 'ser/friendly and cost effective( This %ill lead to e0peditio's disposal of cases( The )ovt( of *ndia is committed to improve its legal frame%or# relating to Arbitration( The $a% Commission of *ndia in its 25th =eport has recommended vario's amendments in the Arbitration and Conciliation Act, !++, so that *ndia may become a h'b of *nternational Commercial Arbitration( The $a% Commission has also s'bmitted a S'pplementary to =eport No( 25 on >Amendments to the Arbitration Act, !++ on 6P'blic Policy&/ ?evelopments post =eport 25@, %herein the $a% Commission ta#ing into acco'nt s'bse'ent decisions of the S'preme Co'rt has recommended reform'lation of amendment in Section 45-2.-b. of the Act(
