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Reforms and Recommendations for the Arbitration and Conciliation Act, 1996


Krishan Singhania and Annapurna Singh Rawat suggest various reforms and recommendations to India’s arbitration legislation.
 
 

The Arbitration & Conciliation Act, 1996 (hereafter referred to as ‘the Act’) provides that the Court has power to appoint Arbitrator under Section 11 (Appointment of arbitrators) of the Act, but has not framed any rules whereby the arbitral proceedings can be expedited. Therefore, I am of the opinion that the Law Commission should take this point into consideration and provide for steps to ensure that whenever the Court is appointing an Arbitrator, the Court should also lay down the rules as to:

i. What will be the issues which the Arbitrator has to decide as preliminary issues, particularly in relation to limitation and scope of Arbitration e.g. if a party files a claim which is either time barred or outside the scope of Arbitration claim then it should be decided as preliminary issue and heavy cost should be imposed on the party filing false claim in the Arbitration proceedings.

ii. Section 16 (Competence of arbitral Tribunal to rule on its jurisdiction) of the Act confers despotic power on the Arbitral Tribunal. It is more logical for the Courts to decide the jurisdiction of the Arbitral Tribunal when the Arbitrator has been appointed by the Court.

iii. The Arbitrator’s fees and time frame should also be fixed by the Court in advance as once the Arbitrator is appointed, it becomes difficult for the parties to negotiate the fee with the Arbitrator.

Section 13 (Challenge procedure) of the Act provides that the parties can agree upon a procedure for challenging an Arbitrator and in case of failure to agree upon a procedure the Party aggrieved is to intimate the Arbitral Tribunal in writing of the challenge of his veracity. In case the Arbitrator does not withdraw, the Arbitral Tribunal has the power to decide the challenge. Section 13 (Challenge procedure) of the Act is in complete violation of the principle of natural justice “Nemo iudex in causa sua” (no person can judge a case in which they have an interest). This is one of the major lacunas in the Act which should be rectified immediately without any delay. We are therefore of the opinion that in case there is any doubt about the integrity of the Arbitrator or any one of the parties has apprehension then that party should have a right to take up the matter immediately with the Court and not before the Arbitrator.

India has formally and legally recognised the concept of e-commerce and e-governance. Today many arbitration institutions have already adopted or supplemented their rules to include online arbitration as it is cost and time effective. For e.g. domain name disputes are governed by the .IN Dispute Resolution Policy (INDRP) and is overseen by the National Internet Exchange of India (NIXI). Once NIXI has received your request, and your filing fee, it assigns an Arbitrator and the parties concerned receive additional communications directly from NIXI. Therefore, the dispute is resolved without any personal hearings. Hence, in matters where no personal hearing is required and the amount involved is upto Rs. 50,00,000/- (Rupee Fifty Lac Only) online arbitration proceeding may be adopted.

It is therefore our suggestion that the Law Commission, Government of India should take into consideration the concept of online arbitration and frame rules which will define the basic issues involved in online arbitration such as the place of arbitration, the seat of arbitration, the mode of implementation of the arbitral award and with regards to evidence. We further suggest that an independent body may be appointed that will help the parties to the dispute with an online filing platform where the parties to the online arbitration may file their documents and evidence. The above suggestions are being made with the object that as we read in the newspapers that there are too many cases pending in the Court which cannot be decided in a reasonable manner, it is high time for the Law Commission to take up the matter and pursue with the Government that the above amendments are carried out in the Act to make it an effective tool for speedy disposal of matters. These amendments will also go a long way to attract foreign investors to come and invest in India and also give big relief to the over burdened courts where number of cases pending is very high and their disposal seems to be a distant dream.
 
KRISHAN SINGHANIA is the Managing Partner and ANNAPURNA SINGH RANAWAT is an Associate with Singhania and Co. They may be reached at kgs@singhanialaw.com.
 
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