Proposed Amendments to the Arbitration Act Consultation Paper released by the Law Ministry

The Arbitration and Conciliation Act, enacted in 1996 with a view to provide an efficient forum to resolve disputes outside the formal judicial framework is set for a major overhaul. The Law Ministry, Government of India has released a consultation paper on the amendments to the Arbitration Act..The Arbitration and Conciliation Act, enacted in 1996 with a view to provide an efficient forum to resolve disputes outside the formal judicial framework is set for a major overhaul. The Law Ministry, Government of India has released a consultation paper on the amendments to the Arbitration Act. Speaking at the release of the consultation paper, Law Minister Moily said “Arbitration should not be continuation of the courts. The idea should be resolving the issue at the earliest.”.In a press release issued by the Law Ministry on April 7, 2010, the Ministry has acknowledged the need to address the lacunas in the existing Arbitration Act framework. The press release states that “The Supreme Court and High Courts have interpreted many provisions of the Act and while doing so they have also realized some lacunas in the Act which leads to conflicting views. Further, in some cases, courts have interpreted the provisions of the Act in such a way which defeats the main object of such legislation. Therefore, it becomes necessary to remove the difficulties and lacunas in the Act so that ADR method may become more popular and object of enacting Arbitration law may be achieved.”.Prior to proposing any amendments to the Arbitration Act, the Law Ministry has initiated a consultative process and is seeking views of various stake holders such as judges, lawyers, arbitration institutions and the public at large. The idea behind the proposed amendments is to minimize court intervention in arbitral proceedings and to institutionalize the arbitration process in India. Law Ministry is hopeful that with the proposed amendments India will become a hub for international commercial arbitration. The consultation paper will be made available on the website of the Law Ministry within the next few days. This is a great opportunity for interested parties to provide their constructive comments on the proposed amendments..The Government of India has been contemplating amendments to the Arbitration Act for quite a while. In 2001, the 176th Law Commission Report, which was chaired by the then Law Commission Chairman Justice B.P Reddy, had given an exhaustive set of recommendations to overhaul the Arbitration Act. On the basis of these recommendations of the Law Commission, an Arbitration and Conciliation (Amendment) Bill, 2003 was introduced in the Rajya Sabha. The Standing Committee on Personnel, Public Grievances, Law and Justice was of the view that the provisions of the Bill gave room for excessive intervention by the Courts in the arbitration proceedings. The Bill had various other contentious issues that resulted in the Bill being withdrawn from the Rajya Sabha. This time around, one would have to wait and watch how long it takes for the consultation paper to result in concrete amendments to the Arbitration Act.