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Govt amends Arbitration and conciliation act 1996 for making arbitration user friendly

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On February 12, 2020, The union government has amended the Arbitration and Conciliation Act, 1996 by the Arbitration and Conciliation (Amendment) Act, 2015  with the aim to make the arbitration process smooth, cost efficient, speedy execution of the case and ensure the mediation of the arbitrator.Key Points:

i.Benefit: An amendment to the Act of 1996 will help in achieving the goal of improving institutional arbitration by setting standards, making the arbitration process a party and setting up an independent institution to execute the case in time.

ii.Salient features: This amendment provides for the creation of an independent institution Arbitration Council of India -ACI.

iii.Appointment: ACI will be headed by a Chairperson, who has been a Judge of the Supreme Court or a Chief Justice or Judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration, to be appointed by the Central Government in consultation with the Chief Justice of India. Besides, it will also have two Full-time Members from amongst eminent arbitration practitioners and academicians. In addition, one representative of a recognized body of commerce and industry shall be nominated on rotational basis as a Part-time Member. The Secretary, Department of Legal Affairs, Ministry of Law & Justice; Secretary, Department of Expenditure, Ministry of Finance and Chief Executive Officer, ACI will be ex-officio Members.

iv.Section 43M of the Act provides for the Secretariat to the Council comprising of such number of officers and employees as may be prescribed by the Central Government. In this regard, the Department of Legal Affairs has created the draft Rules. Some of these are,
The Arbitration Council of India (the Salary, Allowances and other Terms and Conditions of Chairperson and Members) Rules, 2020,
The Arbitration Council of India (the Travelling and other Allowances payable to Part-time Member) Rules, 2020,
The Arbitration Council of India (the Qualifications, Appointment and other Terms and Conditions of the service of the Chief Executive Officer) Rules 2020, among others.

v.Background: The Arbitration and Conciliation (Amendment) Bill 2019 was introduced in Rajya Sabha by the Minister for Law and Justice, Mr. Ravi Shankar Prasad, on July 15, 2019.

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