Amendments To Arbitration Act Require Corrections, Says Justice Nariman
Justice Rohinton Nariman. (Source: BloombergQuint)

Amendments To Arbitration Act Require Corrections, Says Justice Nariman

Justice Rohinton F Nariman criticised the amendments made to the Arbitration Act this year, saying it has “glaring areas which require corrections”.

The arbitration law in India took a leap forward in 1994, when the Supreme Court, in the case of Renusagar Power—Renusagar Power Co. Ltd. v. General Electric Co. 1994 Supp (1) SCC 644—narrowed the meaning of public policy in arbitration law making it harder for arbitral awards to be challenged in Indian courts, the apex court judge said while delivering his keynote address at the third ICC India Arbitration Day in Delhi yesterday.

An arbitral award can be challenged in Indian courts if it violates the public policy of India and in the Renusagar Power case the apex court held that a mere contravention of Indian law won’t mean that the award is against public policy of the nation.

However, the 21st century saw a spate of court judgements that set the law backward, calling for a course correction which was done in amendments brought in 2015, the noted jurist said. “The suggestions made subsequently by the committee set up by Justice Srikrishna haven’t found place in the arbitration law of India which is unfortunate.”

The Arbitration and Conciliation Act was amended last month after both houses of the Parliament passed the bill and the President approved it on Aug. 9. The changes included setting up of Arbitration Council of India, changes in appointments of arbitrators and putting time limits on arguments by lawyers, among others.

After the 2015 amendment we had another high-powered committee set up under Justice BN Srikrishna and the committee made various recommendations. Most important of which was to have an Arbitration Council of India to regulate arbitration law process in India. This committee made number of recommendations some of which have not translated in the amendments brought in 2019.
Justice Rohinton Nariman

Setting up a model code of procedure to regulate arbitration in India were among the suggestions by the Justice Srikrishna panel that were included but those like the concept of emergency arbitral awards were given a miss. Amendments to Advocates Act, 1961 that would enable lawyers from other jurisdictions to participate in arbitration proceedings were also not included.

The 2019 amendments dealing with the appointments to the newly set up Arbitration Council of India included two secretaries of the Government of India is wholly necessary, said Justice Nariman.

A new addition to include the qualifications of arbitrators has a major lacuna, the apex court judge said. The Arbitration Act allows Supreme Court to appoint arbitrators when the parties are unable to do it themselves, he said, adding the amendments say the arbitrators can be picked from a panel of arbitrators and people in the panel can only be Indian nationals. “The aim to make India an international arbitration hub will be difficult if arbitrators can only be Indian nationals.”

Also read: India Has No Institution To Compete With International Arbitration Tribunals, Says Attorney General

Watch Justice Nariman’s speech here:

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