The Evolution of Arbitration and Conciliation Act in India: A Comparative Analysis of the Old and New Bill

(This New Bill is yet to be Introduced and Passed)

Introduction:

Arbitration and conciliation have long been recognized as effective methods for resolving disputes in India. In an effort to modernize and streamline the arbitration framework, the Arbitration and Conciliation Act underwent significant amendments in recent years. This article aims to explore the difference between the old and new acts, highlighting the key changes and their implications for arbitration and conciliation in India.

Overview of the Old Act:

The Arbitration and Conciliation Act, 1996, governed arbitration proceedings in India for over two decades. While it played a pivotal role in promoting alternative dispute resolution, certain shortcomings and ambiguities necessitated amendments to ensure more efficient and user-friendly processes.

Key Amendments in the New Bill:

The Arbitration and Conciliation (Amendment) Act, 2019, brought about several significant changes, introducing crucial reforms to enhance the effectiveness and credibility of arbitration in India. Let us now examine the key differences between the old and new acts:

Aspect	Old Act (Arbitration and Conciliation Act, 1996)	New Bill (Arbitration and Conciliation (Amendment) Bill
Appointment of arbitrators	The old act allowed for challenges to arbitrators based on justifiable doubts regarding their impartiality or independence. However, this process often led to delays and judicial intervention.	The new act introduced stricter timelines for the appointment of arbitrators, ensuring expeditious resolution. It also provides for the designation of an "arbitral institution" to appoint arbitrators in cases of default or in the absence of agreed-upon procedures.
Timeframe for arbitral proceedings	The old act did not specify a strict timeframe for completing arbitral proceedings, leading to prolonged disputes and unnecessary delays.	The new act imposes a time limit of twelve months for the completion of the entire arbitration process. This timeframe can be extended by six months by mutual agreement or by the court in exceptional cases.
Confidentiality	The old act did not explicitly address the issue of confidentiality, which raised concerns regarding the privacy of arbitral proceedings.	The new act introduces confidentiality provisions, ensuring that arbitration proceedings remain confidential unless disclosure is required by law.
Enforcement of awards	The enforcement of arbitral awards under the old act was a lengthy and cumbersome process, often requiring court intervention and resulting in substantial delays.	The new act streamlines the enforcement process by introducing stricter timelines and removing unnecessary court interference. It also provides for the establishment of dedicated arbitration cells to facilitate the enforcement of awards.
Arbitration-related court proceedings	The old act allowed for frequent and protracted court intervention during arbitral proceedings, leading to delays and increased costs.	The new act limits the scope of court interference, restricting judicial intervention to only essential matters such as determining the jurisdiction of the arbitral tribunal or granting interim measures.

Salient Implications and Benefits of the New Bill:

The amendments introduced in the new bill have several benefits for arbitration and conciliation in India. These include:

a. Efficiency: The new bill imposes stricter timelines, ensuring that arbitration proceedings are completed expeditiously, reducing delays, and promoting efficient resolution of disputes.

b. Streamlined enforcement: The simplified enforcement process facilitates the timely execution of arbitral awards, enhancing the credibility and enforceability of arbitration in India.

c. Confidentiality: The new bill explicitly recognizes the importance of confidentiality, safeguarding the privacy of arbitration proceedings and encouraging parties to freely participate.

d. Reduced judicial intervention: By limiting court interference, the new bill empowers arbitral tribunals to exercise their authority and resolve disputes effectively, minimizing unnecessary delays and costs.

Conclusion:

The Arbitration and Conciliation Act has witnessed a significant transformation through the amendments introduced in 2019. The new bill aims to make arbitration and conciliation more efficient, cost-effective, and reliable. By addressing the limitations of the old act, these reforms contribute to positioning India as a favorable destination for arbitration and conciliation. It is crucial for stakeholders to familiarize themselves with the new bill's provisions to leverage the benefits of the reformed arbitration framework and promote a culture of alternative dispute resolution in the country.

Please note New Bill is yet to be passed on the day of writing of the blog.

For any updates please refer the latest information and updates from relevant sources.