ARBITRATION COUNCIL OF INDIA

[Mr. M. GOVINDARAJAN]

Introduction

The Central Government proposed to amend the Arbitration and Conciliation Act, 1996 (‘Act’ for short) and the Lok Sabha passed the Arbitration and Conciliation (Amendment) Bill, 2018 (‘Bill’ for short) on 10.08.2018.  The amendment brings many a change in the provisions of the Act.  Among them is the introduction of Arbitration Council of India.

Arbitration Council of India

Clause 10 of the Bill proposed to insert a new Part IA after Part I of the Act.  Part IA of the Bill provides for the constitution of the Arbitration Council of India, its functions and powers.

The Central Government shall, by notification in the Official Gazette, establish, for the purposes of this Act, a Council to be known as the Arbitration Council of India (‘Council’ for short) to perform the duties and discharge the functions under this Act.

The Council shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to enter into contract, and shall, by the said name, sue or be sued.

Head Office of Council

The Head office of the Council shall be at Delhi.  The Council may, with the prior approval of the Central Government, establish offices at other places in India.

Composition of Council

The Council shall consist of Chairperson and Members.  The following is the composition of the Council-

• a person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or, a 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-Chairperson;
• an eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international, to be nominated by the Central Government-Member;
• an eminent academician having experience in research and teaching in the field of arbitration and alternative dispute resolution laws, to be appointed by the Central Government in consultation with the Chairperson-Member;
• Secretary to the Government of India, Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary-Member, ex officio;
• Secretary to the Government of India, Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary- Member, ex officio;
• one representative of a recognized body of commerce and industry, chosen on rotational basis by the Central Government-Part-time Member; and
• Chief Executive Officer-Member-Secretary, ex officio.

Functions of Chief Executive Officer

The Chief Executive Officer is responsible for the day-to-day activities of the Council.  He shall discharge such functions and perform such duties as may be specified by the regulations.

Secretariat to the Council

There shall be a Secretariat to the Council consisting of such number of officers and employees as may be prescribed by the Central Government.  The qualifications, appointment and other terms and conditions of the service of the employees and other officers of the Council shall be such as may be prescribed by the Central Government.'.

Tenure of Members

The tenure of the Chairman and Members other than ex-officio members is three years from the date of entering into their office.  The maximum age for holding the post of Chairman is 70 years and for the Members it is 67 years.

Salary and allowances

The salary, allowances and other terms and conditions of the Chairperson and Members of the Council shall be such as may be prescribed by the Central Government.  The Part-time Member shall be entitled to such travelling and other allowances as may be prescribed by the Central Government.

Duties of the Council

The duty of the Council is to take all such measures as may be necessary to promote and encourage arbitration, mediation, conciliation or other  alternative dispute resolution mechanism and for that purpose to frame policy and guidelines for the establishment, operation, and maintenance of uniform professional standards in respect of all matters relating to arbitration.

Functions of the Council

The following are the functions of the Council-

• to frame polices governing the grading of arbitral institutions;
• to recognize professional institutes providing accreditation of arbitrators;
• to review the grading of arbitral institutions and arbitrators;
• to hold training, workshops and courses in the area of arbitration in collaboration of law firms, law universities and arbitral institutes;
• to set up, review and update norms and ensure satisfactory level of arbitration and conciliation;
• to act as a forum for exchange of reviews and techniques to be adopted for creating a platform to make India a robust centre for domestic and international arbitration and conciliation;
• to make recommendations to the Central Government on various measures to be adopted to make provision for easy resolution of commercial disputes;
• to promote institutional arbitration by strengthening arbitral institutions;
• to conduct examination and training on various subjects relating to arbitration and conciliation and award certificates thereof;
• to establish and maintain depository of arbitral awards made both in India and overseas;
• to make recommendations regarding personnel, training and infrastructure of arbitral institutions; and
• to perform such other functions as may be decided by the Central Government.

Appointment of experts

The Council may, appoint such experts and constitute such Committees of experts as it may consider necessary to discharge its functions on such terms and conditions as may be specified by the regulations.

Grading of arbitral institutions

The Council shall make grading of arbitral institutions on the basis of criteria relating to infrastructure, quality and calibre of arbitrators, performance and compliance of time limits for disposal of domestic or international commercial arbitrations, in such manner as may be specified by the regulations.

Qualifications for an arbitrator

Clause 14 of the Bill proposes to insert Schedule VIII which prescribes the qualifications and experience required for a person to be appointed as an arbitrator.  The following is the qualification and experience required to be an arbitrator-

• Advocate with 10 years experience; or
• A Chartered Accountant in practice with 10 years practicing experience; or
• Officer of Indian Legal Service; or
• Officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or
• An officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking, or at a senior level managerial position in private sector or self-employed; or
• An officer having senior level experience of administration in the Central or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute;
• A person, in any other case, having educational qualification at degree level with ten years of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialized areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be.

Norms applicable to arbitrator

• The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes;
• The arbitrator must be impartial and neutral and avoid entering into any financial business or other relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or bias amongst the parties;
• The arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him;
• The arbitrator should not have been convicted of an offence involving moral turpitude or economic offence;
• The arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labor laws, law of torts, making and enforcing the arbitral awards;
• The arbitrator should possess robust understanding of the domestic and international legal system on arbitration and international best practices in regard thereto;
• The arbitrator should be able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also to apply judicial decisions on a given matter relating to arbitration; and
• The arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable arbitral award in any dispute which comes before him for adjudication.

Depository of awards

The Council shall maintain an electronic depository of all arbitral awards made in India and such other records related thereto in such manner as may be specified by the regulations.

Power to make regulations

The Council may, in consultation with the Central Government, make regulations, consistent with the provisions of this Act and the rules made there under, for the discharge of its functions and perform its duties under this Act