The Arbitration Amendment Act, 2019 and the Changing Arbitration Eco-System in India: Needs a Re-Look?

Abstract

Arbitration has always been a preferred mode of dispute resolution especially in commercial matters. For long, India has been striving to become a preferred seat of arbitration not only for domestic arbitration but also for international commercial arbitration since the enactment of Arbitration and Conciliation Act, 1996.3 In this endeavour, there have been several ups and downs noticed by the observers which were either due to certain judicial pronouncements or fallacies in the drafting of the Arbitration and Conciliation Act, 1996 itself.4 Soon it was realized both by the judiciary as well as by the legislature that they need to change the approach, if India has to become a preferred seat of arbitration. In this context, after various failed attempt to amend the Arbitration and Conciliation Act, 1996, major changes were introduced though the Arbitration and Conciliation Amendment Act, 2015. Immediately after this amendment, new problems were faced by the parties and need was felt to bring another amendment in the existing law. In this backdrop, in order to overcome the existing lacunae and to boost the confidence of commercial entities to make India an international hub of arbitration, an expert committee headed by the Supreme Court judge (Retd.), Justice B. N. Srikrishna, which was assigned the charge to suggest improvement in the existing arbitration law. The committee submitted its report in July 20175 suggestive of numerous actions for revamping the arbitration law in India. Its suggestion were mainly focused on facilitating the working of the institutional arbitration in India and removing few ambiguities in the Arbitration Amendment Act 2015. It is largely on the basis of Justice B. N. Srikrishna Committee report, the Central Government brought the Arbitration and Conciliation (Amendment) Act Bill, 2018 which was regarded as a noteworthy attempt by the Central Government to facilitate and streamline the working of Institutional Arbitration in India and also to make India a preferred seat of arbitration both for domestic as well as international commercial arbitration. This Bill subsequently received the assent of the President on 9 th August 2019 and became the part of the statue. The Central Government exercising its powers provided under section 1(2) of the Arbitration Amendment Act, 2019, appointed 30th August 2019 for the enforcement of different sections under the Arbitration Amendment Act 2019.