The Upper House of the Indian Parliament, the Rajya Sabha, recently passed a bill (the “2019 Amendment Bill“) to amend the Indian Arbitration and Conciliation Act (the “Act“).
The 2019 Amendment Bill is an updated version of an amendment bill passed by the Lok Sabha, the Lower House of Parliament, in late 2018 (the “2018 Amendment Bill“) as part of the Indian Government’s efforts to make India a “hub of domestic and international arbitration“. The changes proposed in the 2018 Amendment Bill were previously discussed here and here.
The 2018 Amendment Bill was passed by the Lower House in August 2018. However, the bill lapsed following the dissolution of the Lower House session ahead of the General Election which returned Prime Minister Narendra Modi for a second term, and was presented again in the Upper house on 15 July 2019. The Upper House passed the new bill on 18 July 2019.
The 2019 Amendment Bill contains all of the key changes proposed by the 2018 Amendment Bill, with two minor updates.
- Removal of time limit for making award in international commercial arbitrations – The 2018 Amendment Bill excluded international arbitrations from the 12-month time limit for rendering an award that had been imposed under section 29A of the Act. For domestic arbitrations, the 2018 Amendment Bill extended the time limit from 12 months after the constitution of the arbitral tribunal, to 12 months after the filing of the defence (which must take place within six months of constitution of the tribunal in both domestic and international arbitrations). These changes are retained in the 2019 Amendment Bill, with one addition. The 2019 Amendment Bill introduces language to clarify that awards in international arbitrations “may be made as expeditiously as possible” and that “endeavour may be made” to issue the award within 12 months of the filing of the defence. The language is not binding and appears to be aimed instead at encouraging tribunals to conclude proceedings as quickly as possible.
- Changes to the procedure for the constitution of the Arbitration Council of India – The 2018 Amendment Bill provided for the establishment of the Arbitration Council of India, an independent body with a mandate to develop policies for grading arbitral institutions, develop guidelines for the accreditation of arbitrators, and promote the use of arbitration and ADR in India (among other things). The 2019 Amendment Bill adds several provisions governing the procedure to be followed by the Council regarding the removal and resignation of members, and other administrative matters. No change to the Council’s mandate is proposed.
In order to become law, the 2019 Amendment Bill must now be passed by the Lower House and receive the assent of the President. Given that the 2018 Amendment Bill was passed by the Lower House last year in much the same terms as the latest Bill, it is expected that the Bill will be passed in the near future.
The text of the bill can be found here.
For further information, please contact Nicholas Peacock, Partner, Donny Surtani, Partner, Kritika Venugopal, Senior Associate, or your usual Herbert Smith Freehills contact.