About Arbitration and Conciliation Act:
- It established a sound framework for alternative dispute resolution (ADR) in India.
- The act updated and codified the laws about arbitration, mediation, and conciliation.
- It is vital for businesses and individuals alike; it allows them to have an easier, less adversarial, and less costly mode of dispute resolution as compared to those conducted outside traditional courts.
Features of the Arbitration and Conciliation Act:
- Two-tiered system: It offers arbitration and conciliation and thus differences in modes of conflict resolution.
- Flexibility: Parties can choose their rules of procedure and arbitrators for flexibility and convenience.
- Confidentiality: Confidentiality in the proceedings is required; it is important in cases of business disputes regarding issues that cannot easily be revealed.
- Finality and Enforceability: Arbitration awards become binding and enforceable by courts, so parties must adhere to them.
- Judicial Support and Limited Intervention: Courts could intervene under certain cases, which include the appointment of arbitrators or the enforcement of the award.
- Global Applicability: In regard to the United Nations Commission on International Trade Law (UNCITRAL) Model Law, it is globally compatible, and therefore this act helps in international arbitration.
Major Provisions of the Arbitration and Conciliation Act:
- Arbitration Agreement: An arbitration agreement refers to a written undertaking between parties to have their disputes arbitrarily determined, thereby paving the way for arbitration proceedings to be given the go-ahead.
- Appointment of Arbitrators: The appointment of arbitrators is at the discretion of the parties, but courts take action if the parties cannot agree on the appointment. The provision would promote self-regulation while providing judicial support when needed.
- Interim Measures by Courts: Gives courts the authority to issue interim relief before arbitration starts. This will prevent cases where parties may lose their assets before the case is settled.
- Arbitral Proceedings: Provides that parties can agree on procedures or adopt institutional rules, which promotes procedural autonomy.
- Forms and Contents of Arbitral Award: Requires awards to be in writing, dated, signed by arbitrators, and reasons given, unless parties agree otherwise. The award pronounced becomes binding.
- Setting Aside an Arbitral Award: Goes on to detail when the court shall set aside the award. The basis includes either the party's incapacity or an invalid agreement.
- Appeals: Gives limited grounds on appeal so that awards are substantially final and enforceable and sets a limit to risk-prolonged litigation.
Amendments to the Arbitration and Conciliation Act:
- Arbitration and Conciliation (Amendment) Act, 2015:
- Introduced timelines for the institution of arbitral proceedings so that it is completed within 12 months.
- Judicial interference has been curtailed to an extent to bring finality to arbitration.
- Cost control regulations have been enhanced to make ADR cost-effective.
- Arbitration and Conciliation (Amendment) Act, 2019:
- It has established the Arbitration Council of India (ACI) to regulate arbitration standards and promote institutional arbitration.
- Disclosure of the existence of conflicts of interest by the arbitrator is made mandatory, thereby increasing transparency.
- Focused on reducing delays by limiting stay orders on arbitral awards.
- Arbitration and Conciliation (Amendment) Act, 2021:
- Done away with automatic stays on arbitral awards for reasons such as fraud or corruption.
- Streamlined the process of enforcing arbitral awards, thereby endorsing a pro-enforcement approach in this manner of the Act.
