Centre floats draft Bill to amend arbitration law; adds proviso for emergency arbitration
New Delhi: In a significant move to strengthen the institutional arbitration framework and minimise court intervention, the government has released the draft Arbitration and Conciliation (Amendment) Bill, 2024. The Department of Legal Affairs in the Ministry of Law and Justice has invited public feedback on the draft, aiming to expedite arbitration processes and promote India’s status as an international arbitration hub.
The Bill follows recommendations from an expert committee led by former Law Secretary and ex-Lok Sabha Secretary General, TK Vishwanathan. Submitted to the law ministry earlier this year, the committee’s report advocates several reforms to streamline arbitration and encourage a quicker, more efficient resolution of disputes outside the courts. According to the law ministry, the objective is to “provide further boost to institutional arbitration, reduce court intervention in arbitrations, and ensure timely conclusion of arbitration proceedings.”
One of the draft Bill’s key proposals is the introduction of “emergency arbitration,” an increasingly popular mechanism in international arbitration circles. Under the proposed amendments, arbitral institutions can appoint an “emergency arbitrator” to grant interim relief before the constitution of an official arbitral tribunal. This provision aims to address urgent matters swiftly, offering interim solutions until the formal arbitration process can take over. The emergency arbitrator, once appointed, will follow procedures specified by the arbitration council, expediting the process for parties seeking timely intervention.
Additionally, the Bill seeks to simplify administrative procedures by omitting certain clauses from the current legislation.
Notably, it removes the clause that required a draft of every proposed notification to be laid before both Houses of Parliament for a 30-day review period, which could extend across multiple sessions. This omission is expected to streamline the enactment of updates to the arbitration framework, allowing timely and less encumbered legislative action.
The need for arbitration reform has been a point of discussion among India’s legal fraternity and policymakers. Vice President Jagdeep Dhankhar, addressing a recent event, criticised the control exerted by retired judges over the country’s arbitration processes, suggesting that India’s diverse pool of qualified professionals should have greater opportunities within this system. Dhankhar noted that, despite India’s abundant human resources, the potential remains largely untapped in the arbitration space.
Successive governments have expressed ambitions to position India alongside established arbitration hubs like London and Singapore. The 2024 Bill, with its focus on institutional arbitration and procedural efficiency, represents a step forward in that direction, aiming to make India a preferred destination for international dispute resolution.
