Govt Floats Draft Bill to Amend Arbitration Law; Adds Emergency Provision

New Delhi: In an effort to enhance institutional arbitration and minimize court involvement, the government has released a draft bill for public consultation on proposed amendments.

The Law Ministry’s Department of Legal Affairs is soliciting feedback on the draft Arbitration and Conciliation (Amendment) Bill, 2024, with the objective of bolstering institutional arbitration, curtailing court intervention in such matters, and ensuring arbitration proceedings conclude promptly.

This draft bill follows recommendations from an expert committee led by T K Vishwanathan, a former law secretary and Lok Sabha secretary general, who reported on arbitration sector reforms to the ministry.

A notable feature of the draft bill is the introduction of ’emergency arbitration’. It allows arbitral institutions to appoint an “emergency arbitrator” for interim measures before the formation of an arbitral tribunal.

The appointed emergency arbitrator will oversee proceedings according to guidelines set by the arbitration council. Concurrently, the draft bill proposes the removal of certain clauses from the existing law.

One omitted clause pertains to the requirement for proposed notifications to be laid before both Houses of Parliament while in session.

The clause stated: “A copy of every notification proposed to be issued shall be laid in draft before each House of Parliament while it is in session for a total period of 30 days, which may be comprised in one session or in two or more successive sessions. If, before the expiry of the session immediately following the session or the successive sessions aforementioned, both Houses agree to disapprove the issue of the notification or both Houses agree to make any modification to the notification, it shall not be issued, or shall only be issued in the modified form as agreed upon by both Houses of Parliament.”

Last year, Vice President Jagdeep Dhankhar expressed his concern that retired judges are monopolizing the arbitral system of the country, thereby preventing other qualified individuals from participating.

He remarked that although India is renowned for its rich human resources, these individuals are not selected to preside over the arbitral process.

Successive governments have endeavoured to establish India as a hub of international arbitration, akin to London and Singapore, but have achieved only limited success.