ARBITRATION COUNCIL

NEWS: Highlights if the Arbitration Council of India (ACI) has been set up for real and its working procedure is sufficient

Arbitration matters for India

• Arbitration = Alternative dispute resolution (ADR) outside regular courts
• Helps in: Reducing judicial backlog, faster dispute resolution, improving Ease of Doing Business
• India aims to become a global arbitration hub

Arbitration Council of India (ACI)-Legal origin

• Proposed under 2019 amendments to the Arbitration and Conciliation Act, 1996
• Intended as the central regulator and promoter of institutional arbitration
• Current status: Not yet constituted, even six years after the 2019 amendments

Proposed mandate of ACI

Based on recommendations of the Justice B.N. Srikrishna Committee (2017)

Functions:

• Promote and reform arbitration practice in India
• Grade and accredit arbitral institutions
• Recognise professional bodies accrediting arbitrators
• Maintain a repository of arbitral awards

Concerns about institutional independence

• Government dominance: Most members appointed or nominated by the Union government-Creates a conflict of interest
• Experts warn that a government-dominated ACI would: Grade arbitral institutions, accredit arbitrators
• Singapore & Hong Kong: Arbitration managed by single, independent institutions
• Power to accredit unlimited number of arbitral institutions → quality dilution

Draft Arbitration & Conciliation (Amendment) Bill, 2024 propose

• Redefinition of “arbitral institution”: Any body conducting arbitration under its own rules, Departure from 2019 framework
• Expanded powers for arbitral institutions: Institutions can: Extend time limits for arbitral awards, reduce arbitrators’ fees for delays
• Limits court intervention
• Introduces emergency arbitration