Latest news with #ArbitrationandConciliationBill
Mint
05-05-2025
- Business
- Mint
Law ministry to start work on plugging gaps in arbitration law, as directed by Supreme Court
New Delhi: The union law and justice ministry will start working to plug procedural gaps and lacunae in the domestic arbitration law following the Supreme Court's direction of 2 May, according to two people aware of the developments. The top court's direction will be followed, one person said, adding that legal research into the judgement will begin in the current week. This comes as the ministry works on the Arbitration and Conciliation (Amendment) Bill, 2024, the draft of which was published in October 2024 for comments and feedback. The bill is aimed at boosting institutional arbitration, reducing court interventions in arbitration and ensuring timely conclusion of arbitration proceedings. 'The law ministry receives continuous feedback on the bills that it is working on. Public consultations were held for the Arbitration and Conciliation (Amendment) Bill, too. Now, the honourable Supreme Court has directed the ministry towards an issue and work on it will start immediately," the person said, requesting anonymity. Also Read | India's bid to be arbitration hub hit by mediator council delay The top court urged the ministry to address gaps in procedure where the law is completely absent. This was part of a judgement regarding the powers of an arbitral tribunal to include non-signatories to an arbitration agreement in the dispute proceedings. In the case ASF Buildtech Pvt Ltd v. Shapoorji Pallonji and Company Pvt Ltd , the bench of justices JB Pardiwala and R Mahadevan said that the lacunae had persisted in the domestic arbitration law despite decades of practice under the 1996 Arbitration and Conciliation Act. 'It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand have continued to plague the arbitration regime of India," Justice Pardiwala said in the judgement. 'What is expressly missing in the Act… is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this Court as well as the various High Courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion," the top court said. The Supreme Court also said it had highlighted in last week's judgement on modifying arbitral awards that any uncertainty in the law of arbitration would be 'an anathema to business and commerce." Also Read | NHAI looks to reduce arbitration dues by roping in more retired judges However, policy experts indicated that amending the arbitration law to fill all such lacunae would only increase intervention from the judiciary. "The need for an Arbitration and Conciliation Act itself is very limited. Arbitration is supposed to involve limited judicial intervention, and the law on arbitration can only help out in procedural matters related to court -- in appointment of arbitrators, or in appealing an arbitral award," said Alok Prasanna, co-founder, Vidhi Centre for Legal Policy. 'The issue that the Supreme Court has highlighted is an issue of general procedural law. But the arbitration law, that is the legislation, in the country cannot address all such problems of procedural law because arbitration should happen according to the procedure set by the parties in the arbitration agreement and applied by the arbitrator, and not by following one complete code on procedure." The 1996 Arbitration and Conciliation Act has been India's most crucial arbitration law for decades. It was amended in 2015, 2019 and 2021. Under the 2019 amendment, the government aimed to create an Arbitration Council of India (ACI) to formulate standard rules of procedure and also a regulatory framework for arbitrators and arbitration institutions. However, the ACI has not been constituted. In February 2024, a high-level committee on arbitration reforms chaired by former law secretary TK Viswanathan concluded that massive reforms were required in the domain. The panel proposed techno-legal reforms in arbitration, which were implemented to some degree in the draft 2024 amendment. For instance, allowing arbitration via electronic means, which had no legislative backing previously. Also Read | Govt seeks to amend law to bolster institutional arbitration However, key proposals on the appointment of arbitrators and disclosures to be made by them have not found any legislative presence. The Viswanathan committee proposed that arbitrators should disclose the number of arbitration matters they were handling, which should not exceed 15. The committee also floated the idea of a uniform model rules of procedure for arbitration in an effort to aid arbitrators who were technical experts and did not have a background in law.
Time of India
02-05-2025
- Politics
- Time of India
SC urges law minister to make changes in arbitration bill yet to be taken up by Parliament
NEW DELHI: In an unprecedented step, Supreme Court appears to have vetted a bill pending consideration in Parliament. On Friday, it "urged" the law ministry to take a "serious look" and make changes in it, keeping in mind the arbitration regime in India. Constitutional courts are empowered to test the validity of laws enacted by Parliament and state legislatures and interpret the law. The Constitution under Article 141 provides that a law declared valid by the SC shall be binding on all courts. But these courts have never entertained a petition challenging the validity of a bill. Though the Arbitration and Conciliation Bill, 2024, proposing major changes in the 1996 law on the same subject, was not under challenge before SC, a bench of Justices J B Pardiwala and R Mahadevan decided to scrutinise it. They concluded that the bill suffered procedural lacunae and vacuum similar to the 1996 Act. 'Even after 30 yrs, procedural issues dog arbitration regime' The bench's comments came in a case involving arbitration between two parties. Giving a brief background of arbitration laws in India, starting with the 1940 Act, followed by the 1996 Act and the changes proposed to be effected through the 2024 bill, the bench said, 'It has been almost 30 years since the 1996 Act has remained in force. Various amendments to the 1996 Act have been made over the years to ensure that arbitration proceedings are conducted and concluded expeditiously. It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand, have continued to plague the arbitration regime of India.' Writing the judgment, Justice Pardiwala said, 'Unfortunately, even the new bill has taken no steps whatsoever for ameliorating the position of law as regards the power of impleadment or joinder of an arbitral tribunal. What is expressly missing in the 1996 Act is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this court as well as various high courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion.' He further said, 'We urge the department of legal affairs, ministry of law and justice, to take a serious look at the arbitration regime that is prevailing in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024, is still being considered.' The same bench had raised eyebrows in political and legal circles with its verdict setting a deadline of three months for the President to give assent to bills sent to her by governors, and by suggesting that she might consider it prudent to take the opinion of the apex court to determine the validity of bills.
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Business Standard
02-05-2025
- Politics
- Business Standard
SC flags gaps in arbitration law, urges changes to 2024 amendment Bill
The Supreme Court on Friday expressed its concern over continued absence of statutory clarity in the arbitration regime in the country even after nearly thirty years since the 1996 Act was enacted. Taking note of the Arbitration and Conciliation Bill, 2024, a bench of Justices JB Pardiwala and R Mahadevan, remarked that it fails to address a long-standing legislative vacuum, reported Bar and Bench. "It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand, have continued to plaque the arbitration regime of India," the court noted. "What is expressly missing in the Act, 1996 is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this court as well as the various high courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion," the bench added. The bill is currently under consideration of the ministry of law and justice. The court further urged the department of legal affairs under the ministry to take a serious look at the current arbitration regime in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024 is still being considered. The apex court made these observations in an appeal challenging a July 2024 decision by the Delhi High Court in an arbitration matter. The High Court had upheld the arbitral tribunal's decision dismissing the appellant firm's objection to its impleadment in arbitral proceedings, despite it being a non-signatory to the arbitration agreement.
