Arbitration Amendment Bill 2018 - Need for serious reconsideration

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Problem
We cannot allow the big strides we’ve made towards making India more arbitration friendly be undone with the amendments proposed in the Arbitration Amendment Bill 2018. The Bill was passed in the Lok Sabha without any deliberation. We cannot let the same happen in the Rajya Sabha. The present draft of the Bill requires serious reconsideration and change. Importantly:

  • The Bill is directly contrary to the recommendations of the High-Powered Committee Report whose suggestions it is intended to implement;
  • The Arbitration Council of India, a government appointed body, is intended to act as a regulator over arbitrations and arbitrators. This is contrary to the very concept of arbitration – and for that reason has no precedent in any arbitration friendly jurisdiction. In a country where the Government is the biggest litigant, it cannot act as a supervisor over the very arbitrators who are hearing cases against the Government. 
  • The exemption from the statutory time-limit of 18 months for ad hoc International Commercial Arbitrations is wholly unnecessary and counterproductive. The time limits have worked well in practice . Exemption may only be justified for institutional arbitration where there is an inbuilt safeguard and institutions, instead of courts can extend time limits.
  • Confidentiality provisions, as sought to be introduced, should include an exception allowing parties to protect their legal right or claim.
  • The attempt to change the law on applicability of the 2015 amendments is contrary to the position of law as recently settled by the Supreme Court and will create chaos. 


Solution
The Bill must be sent to a Standing Committee for a more thorough deliberation. The suggestions of the High Level Committee Report - which is itself a product of in-depth deliberations - must be followed.