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Union Cabinet gives nod to amend Arbitration and Conciliation Bill, 2015

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To make the resolution of commercial disputes less time-consuming and fast-tracking the whole process, union cabinet chaired by Prime Minister Narendra Modi has given its nod for amendments to the Arbitration and Conciliation Bill, 2015.


The amendments to this Bill are based on the Law Commission’s recommendations and suggestions received from stakeholders. Law Commission of India (LCI) in its 246th Report had recommended various amendments in Arbitration and Conciliation Act, 1996 in order to pave way for India to become a hub of International Commercial Arbitration.

Key Facts:

  • In order to ensure neutrality of arbitrators, it is proposed to amend Section 12 to the effect that when a person is approached in connection with possible appointment of arbitrator, he shall disclose in writing about existence of any relationship or interest of any kind, which is likely to give rise to justifiable doubts. Further, if a person is having specified relationship, he shall be ineligible to be appointed as an arbitrator.
  • It is mandatory for arbitrators to settle disputes within 12 months. This period can be extended by 6 months only by a court on sufficient cause.
  • Cut the fees of arbitrators if the court finds that the delay has been caused due to arbitrators and rewarding arbitrators with extra fees in case the matter is disposed of within 6 months and the parties agree to pay more.
  • Amendment of Section 34 relating to grounds for challenge of an arbitral award, to restrict the term ‘Public Policy of India’ (as a ground for challenging the award) by explaining that only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against the Public Policy of India. Also a new provision to provide that application to challenge the award is to be disposed of by the Court within one year.
  • Empower arbitration tribunals to grant all kinds of interim measures that courts provide thus giving more teeth to them in order to make tribunals directives enforceable in the same manner as those of courts.


The Government has planned for making Arbitration a preferred mode for settlement of commercial disputes by making it more user-friendly and cost effective. This will lead to expeditious disposal of cases.