India - Report of the Expert Committee to Examine the Working of the Arbitration Law and Recommend Reforms in the Arbitration and Conciliation Act 1996 - February 2024
Country
Year
2024
Summary
1. EXECUTIVE SUMMARY
1.1 PREFACE
1.1.1 The Arbitration and Conciliation Act, 1996 ("Act"), was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration ("ICA") and enforcement of foreign arbitral awards and also to define the law relating to conciliation. This Act was enacted by specifically taking into account, the United Nations Commission on International Trade Law Model Law, 1985. ("UNCITRAL Model Law")
1.1.2 The Act replaced the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937, and the Foreign Award (Recognition and Enforcement) Act, 1961. Since its enactment in 1996, the working of the Act has been examined by the Law Commission in its 176th, 222nd, and 246th Report. Separately, a High Powered Committee was also constituted in 2017 to examine specific aspects of the 1996 Act.
1.1.3 The first attempt to address the difficulties encountered in the working of the Act was made in 2001 when the Law Commission undertook a comprehensive review of the provisions of the Act and made recommendations in its 176th Report in 2001.
1.1.4 The Arbitration and Conciliation (Amendment) Bill 2003 was introduced in Rajya Sabha in 2003 to give effect to recommendations of the 176th Report of the Law Commission. The Bill was examined by the Parliamentary Committee which recommended that the provisions of the Bill were open to more court interventions. Consequently, the Bill was not enacted into law.
1.1.5 The second major attempt to address the shortcomings of the 1996 Act was made by the Law Commission in its 246th Report in 2014. The 246th Report suggested major reforms to the then existing arbitral regime.
1.1.6 The Arbitration and Conciliation (Amendment) Act, 2015 ("2015 Amendments") which was enacted pursuant to the 246th Report of the Law Commission was aimed at addressing the criticism of the working of the Act.
1.1.7 A third major attempt was made to address further concerns arising out of the working of the arbitration regime, when the Ministry of Law constituted on 13 January 2017, a High-Level Committee under the Chairmanship of Hon'ble Justice B. N. Srikrishna, Former Judge of the Hon'ble Supreme Court of India ("Supreme Court"), to review the institutionalisation of arbitration mechanisms in India ("Srikrishna Committee"). On 30 July 2017, the Srikrishna Committee submitted its Report, suggesting various measures to, inter alia, strengthen institutional arbitration in India ("HLC Report").
1.1.8 Pursuant to the recommendations in the Srikrishna Committee Report, the Arbitration and Conciliation (Amendment) Act, 2019 ("2019 Amendments"), was enacted.
1.1.9 In 2021, the Act was again amended to address the issue of corrupt practices in securing contracts or arbitral awards and to promote India as a hub of ICA by attracting eminent arbitrators to the country.
1.1.10 In 2023, the Mediation Act 2023 was enacted which contained self- contained provisions for mediation, repealing the provisions relating to Conciliation in the Arbitration and Conciliation Act 1996.
1.1.11 It is against this background that on 14 June 2023, the Ministry of Law & Justice, Government of India ("Government") vide its notification dated 14 June 2023 constituted this Expert Committee ("Committee") to examine the working of arbitration law in India and recommend reforms to the Act.
1.1.12 The Committee functioned under the Chairpersonship of Dr. T.K. Viswanathan, former Law Secretary and Secretary General of the 15th Lok Sabha, to examine the working of arbitration law in India and to recommend reforms to the Act.
1.1.13 The Committee comprised of various other eminent members including Mr. N. Venkatraman (Senior Advocate & Additional Solicitor General of India), Mr. Gourab Banerji (Senior Advocate), Mr. A.K. Ganguli (Senior Advocate), Mr. Shardul S. Shroff (Executive Chairman, Shardul Amarchand Mangaldas & Co), Mr. Bahram Vakil (Co-Founder, AZB & Partners), Mr. Saurav Agarwal (Advocate), Mr. Tejas Karia (Partner and Head - Arbitration, Shardul Amarchand Mangaldas) for Confederation of Indian Industries, Mr. Shreyas Jayasimha (Advocate and co-Founder - Aarna Law, India and Simha Law, Singapore), Mr. Vyom Shah (Advocate), representative of NITI Aayog, representative of Public Enterprises/CPSES, representative of Department of Confederation of Public Indian Industries, representative of National Highways Authority of India/Ministry of Road Transport and Highways, representative of Ministry of Railways, representative of Department of Economic Affairs, representative of Ministry of Housing & Urban Affairs / Central Public Works Department, representative of Legislative Department and Dr. Rajiv Mani, Additional Secretary, Department of Legal Affairs.
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