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Arbitration And Conciliation (Amendment) Bill 2021

Arbitration And Conciliation (Amendment) Bill 2021

Why in news?

  • The Parliament gave its nod to the Arbitration and Conciliation (Amendment) Bill, 2021 with Rajya Sabha
  • The legislation seeks to amend the Arbitration and Conciliation Act, 1996.
  • The Act contains provisions to deal with domestic and international arbitration and defines the law for conducting conciliation proceedings.
  • The Bill replaces an Ordinance with the same provisions promulgated on 4th November, 2020.

Provisions of the Bill | Arbitration And Conciliation (Amendment) Bill 2021

  • The Arbitration and Conciliation (Amendment) Bill 2021 deal with the domestic and international arbitration.
  • It also defines the law to conduct the conciliation proceedings.
  • It replaces the ordinance containing same provisions that was promulgated on 4th November, 2020.
  • The bill will amend the Arbitration and Conciliation Act, 1996.
  • With the amendment, the bill will enable automatic stay on awards in some cases.
  • The bill will also omit the eighth schedule of the act that specify through the regulations of qualifications, experience and norms of the accreditation of arbitrators.
  • Under the amendments, a stay on the arbitral award may be provided by the Court. It can be provided even during the pendency of the setting aside application.
  • The bill also amends the section 36 of the Arbitration and Conciliation Act, 1996.

What is Arbitration?  | Arbitration And Conciliation (Amendment) Bill 2021

  • Arbitration is an alternative dispute resolution (ADR) procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
  • In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

What is Conciliation? | Arbitration And Conciliation (Amendment) Bill 2021

  • Conciliation is also an alternative dispute resolution instrument where parties seek to reach an amicable dispute settlement with the assistance of the conciliator, who acts as a neutral third party.    Arbitration And Conciliation (Amendment) Bill 2021
  • It is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation.

Arbitration Council of India | Arbitration And Conciliation (Amendment) Bill 2021

The Bill seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.

Its functions include:

  • framing policies for grading arbitral institutions and accrediting arbitrators,
  • making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters, and
  • maintaining a depository of arbitral awards (judgments) made in India and abroad.

Composition of the ACI | Arbitration And Conciliation (Amendment) Bill 2021

The ACI will consist of a Chairperson who is either:

  • a Judge of the Supreme Court; or
  • a Judge of a High Court; or
  • Chief Justice of a High Court; or
  • an eminent person with expert knowledge in conduct of arbitration.
  • Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.

Benefits   | Arbitration And Conciliation (Amendment) Bill 2021

  • Would bring about parity among all the stakeholders in the arbitration process.
  • All the stakeholders get an opportunity to seek unconditional stay on enforcement of arbitral awards where the agreement or contract is “induced by fraud or corruption”.
  • Checking misuse of the provisions under Arbitration and Conciliation Act, 1996 would save the taxpayers money by holding those accountable who siphoned off of them unlawfully.

Disadvantages| Arbitration And Conciliation (Amendment) Bill 2021

  • India already lags behind when it comes to the enforcement of international contracts and agreements. The Bill can further hamper the spirit of Make in India campaign and deteriorate rankings in Ease of Doing Business Index.
  • India aims to become a hub of domestic and international arbitration. Through the implementation of these legislative changes, resolution of commercial disputes could take longer duration now onwards.

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