Arbitration Amendment Ordinance

The Arbitration Amendment Ordinance brought on 23^rd October 2015 to amend the act has brought greater objectivity and accountability to the arbitrators, parties and courts. The ordinance has actually strengthened the objectives of arbitration, as new teeth have been added to the Act. The provisions of time bound arbitration, adoption of speed track adjudication, lesser overlapping with courts, disclosure and qualification requirements, special provisions for international commercial and domestic arbitration, public policy grounds etc are the much awaited changes that would bring back the offsetting advantages of arbitration in India. Some of the few points of the amendment ordinance to mention are:- 

1.     The differentiation in courts for arbitration and International Commercial Arbitration.   

2.    Insertion of new clause enabling a party who is not in possession of certified copy to make a  request to the court to present the copy of the arbitration agreement.

3.    After appointment of arbitrator through court the arbitration has to start by default within 90 days or as the court may indicate.

4.    Insertion of two new sub clauses, for disclosure of any relationship and interests of arbitrator with party(s). Followed by explanations for disclosures in schedule 5 and 6. (newly inserted schedules)

5.    new clause has been introduced, that the respondent can submit counter claim or set-off before the tribunal.

6.    Time limit of award is 12 month from the date arbitral tribunal constitutes.  Though, the period can be extended by the will of parties but not more than for 6 months.

7.    The mandate of the tribunal will expire if the award is not made within specified time unless the court extended the period.

8.    The court can replace arbitrator while deciding the application for extension of time, the proceedings will continue from the same stage. Such application has to be disposed of within 60 days.

9.    The rate of interest in the award has been changed from 18% to 2% higher than the current rate of interest prevalent on the date of award from the date of award to the date of payment.

10. Addition of four new schedules,

            i.      Fourth schedule, to assist High Court on model fee structure for arbitral tribunal,

            ii.      Fifth schedule, reasons as to give justifiable doubts on partiality and transparency of arbitrator(s).

            iii.      Sixth schedule, form regarding qualification of arbitrator.

           iv.      Seventh schedule, arbitrator’s relationship with party or counsel.  

All in all, it’s a worth appreciating finely drafted piece of legislation. But, a question which needs to be acknowledged is, why such significant and radical changes have been brought through an ordinance, overpassing the needed debates in the house which could add more charisma to the amendment. In nutshell, the amendment has enriched and thickened the pith, ethos and spirit of the Act, thus reviving its soul.