ARBITRATION COUNCIL OF INDIA

[Mr. M. GOVINDARAJAN]

Introduction

The Arbitration and Conciliation (Amendment) Act, 2019 amended some provisions of the Arbitration and Conciliation Act, 1996 (‘Act’ for short).  The Amendments in the Act of 1996 will facilitate achieving the goal of improving institutional arbitration by establishing an independent body to lay down standards, make arbitration process more party friendly, cost effective and ensure timely disposal of arbitration cases.   The amendment provides for creation of an independent body namely the Arbitration Council of India which will grade arbitral institution and accredit arbitrators by laying down norms and take all such steps as may be necessary to promote and encourage arbitration, conciliation, mediation and other ADR Mechanism and for that purpose evolve policy and guidelines for the establishment., operation and maintenance of uniform professional standards in respect of all matters relating to arbitration and ADR mechanism. The Council shall also maintain an electronic depository of all arbitral awards.

Establishment of Arbitration Council of India

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

Body Corporate

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

Head Office

The head office of the Council shall be Delhi.  The Council may establish its offices other than Delhi with the prior approval of the Central Government.

Composition of the Council

The Council shall consist of the following members-

• Chairperson – The Chairperson is to be appointed by the Central Government in consultation with the Chief Justice of India, from the following categories-

• Supreme Court Judge; or
• Chief Justice of a High Court; or
• High Court Judge; or
• An eminent person having special knowledge and experience in the conduct or administration of arbitration.

• Members-

• An eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international – to be nominated by the Central Government.
• 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.

• ex-officio Members-

• 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.
• Secretary to the Government of India, Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary.
• Chief Executive Officer – Secretary.

• Part time Member – One representative of a recognized body of commerce and industry – chosen on rotational basis by the Central Government.

Tenure

The Chairperson and Members of the Council shall hold office for a term of 3 years from the date on which they enter into their office.  The maximum age limit for Chairperson is 70 years and for the member the maximum age limit is 67 years.

Chief Executive Officer

The Chief Executive Officer shall be responsible for the day-to-day administration of the Council.  The qualifications, appointment and other terms and conditions of the services of the Chief Executive Officer shall be such as prescribed by the Central Government.   The Chief Executive Officer shall perform such functions and duties as may be specified by the regulations.

Secretariat

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 services of the employees and other officers of the Council shall be such as may be prescribed by the Central Government.

Salary and allowances

The salary, allowances and other terms and conditions of the Chairperson and Members shall be such as may be prescribed by the Central Government.  The part time members are entitled to travelling allowances and other allowances as may be prescribed by the Central Government.

Resignation of the Members

The Chairperson or Member or Part time Member may resign his office by giving a notice to the Central Government in writing.  Unless the Central Government relinquishes his office, the Chairperson or Member or Part time Member shall continue to hold his office-

• until the expiry of three months of the notice; or
• until a person duly appointed  as his successor enters upon his office; or
• until the expiry of his term,

whichever is earlier.

Removal of a Member

The Central Government may remove a member from his office, if he-

1. is an undischarged insolvent; or
2. has engaged at any time (except part time member) during his term of office in any paid employment; or
3.  has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
4. has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member; or
5. has so abused his position as to render his continuance in office prejudice to the public interest; or
6. has become physically or mentally incapable of acting as a Member.

No Member shall be removed from his office on the grounds (d) and (e), unless the Supreme Court on a reference being made to it in this behalf by the Central Government, has, on an inquiry, held by it in accordance with such procedure as may be prescribed in this behalf by the Supreme Court, reported that the Member, ought on such ground or grounds to be removed.

Duties of the Council

The Council shall take all such measures to promote and encourage arbitration, mediation, conciliation or other alternative dispute resolution mechanism.  It is also the duty of Council 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 policies 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 frame, review, update norms to ensure satisfactory level of arbitration and conciliation;
• to act as a forum of exchange of views 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;
• to establish and maintain depository of arbitral awards made in India;
• to make recommendations regarding personnel, training and infrastructure or arbitral institutions; and
• to perform such other functions as may be decided by the Central Government.

Vacancies

No act or proceedings of the Council shall be invalid merely by the reason of-

• any vacancy or any defect in the constitution of the Council;
• any defect in the appointment of a person acting as a Member of the Council;
• any irregularity in the procedure of the council not affecting the merits of the case.

Experts and Committees

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 infrastructure, quality and caliber of arbitrators, performance and compliance of time limits for disposal of domestic or international commercial arbitrations, in such manner as may be specified in the regulations.

Accreditation

The qualifications, experience and norms for accreditation of arbitrators shall be such as specified in the 8^th schedule.  The Central Government may, in consultation with the Council, amend the 8^th Schedule.

Regulations

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