The Arbitration and Conciliation (Amendment) Act 2019 (the “2019 Amendment Act”) was passed by the both houses of parliament in the monsoon session of parliament and notified in the official gazette on 9 August 2019. The 2019 Amendment Act makes several important amendments to the extant provisions and introduces new provisions that would further enhance the efficacy of this method of dispute resolution. Significantly, it provides for the establishment of an Arbitration Council of India tasked with the responsibility of grading arbitral institutions whom parties would approach for appointment of arbitrator(s), thereby reducing the burden on Courts. Arbitrators will now be accredited by professional institutes based on their qualifications and experience. The Amendment Act also provides for best practices, such as a fixed time period for filing of the statement of claim and defence, confidentiality of arbitration proceedings and protection of arbitrators from actions taken in good faith. Moreover, it corrects the ambiguity with respect to the applicability of the Amendment Act of 2015 by clarifying that the Amendment Act of 2015 will apply only to arbitral proceedings commenced on or after 23 October 2015 and to court proceedings arising out of or in relation to such arbitral proceedings only.

The key amendments under the 2019 Amendment Act are as follows:

• The Supreme Court and High Courts to designate arbitral institutions graded by the ACI : In case of an international commercial arbitration, the arbitral institutions designated by the SC will, on an application made by a Party, appoint arbitrator(s). In case of other arbitrations, the arbitrator(s) will be appointed by arbitral institutions designated by the High Court. Where there are no arbitral institutions in the jurisdiction of the High Court, the Chief Justice of that High Court may maintain a panel of arbitrators for discharging the functions of an arbitral institution. [Insertion of sub-section 3A to section 11]

• Establishment of Arbitration Council of India (ACI) as an independent body to take measures to promote and encourage arbitration, conciliation, mediation and other ADR mechanisms and maintain uniform professional standards for all such matters. The ACI will, amongst other functions, grade arbitral institutions based on criteria such as infrastructure, quality and experience of arbitrators, completion of arbitral proceedings within time limits etc., recognise professional institutes for accreditation of arbitrators, maintain an electronic repository of all arbitral awards. [Insertion of Part IA]. The qualifications, experience and norms for accreditation of arbitrators have been specified in a new Eighth Schedule

• Time limit for statement of claim and defence : The statement of claim and defence shall be completed within six months from the date on which the arbitrator(s) receive notice of their appointment. [Insertion of sub-section 4 to section 23]

• Confidentiality of proceedings: The arbitrator, arbitral institutions and parties to the arbitration are required to maintain confidentiality of all arbitral proceedings except the award, if its disclosure is necessary for the purpose of implementation and enforcement. [Insertion of section 42A]

• Immunity for arbitrator : No suit or other legal proceedings shall lie against arbitrator(s) for act done or intended to be done in good faith under the Act . [Insertion of Section 42B]

• Applicability of Amendment Act, 2015: Unless parties agree otherwise, the Amendment Act 2015 shall not apply to Arbitral proceedings which have commenced before the commencement of the Amendment Act of 2015 and to Court proceedings arising out of or in relation to such arbitral proceedings, irrespective of whether such court proceedings are commenced prior to or after the commencement of the Amendment Act of 2015. It shall apply only to Arbitral proceedings commenced on or after the commencement of the Amendment Act of 2015 and to court proceedings arising out of or in relation to such Arbitral proceedings. [Insertion of section 87 and omission of section 26 of the Amendment Act, 2015]

• Section 29A [Time limit for arbitral award] amended : The arbitral award shall be made within 12 months from the completion of the pleadings of the parties (and not from the date the arbitral tribunal enters upon the reference) for arbitrations other than International commercial arbitrations. Where an application for extension of period for making an award is pending under sub-section (5) of section 29A, the mandate of the arbitrator shall continue till the disposal of the said application. In case the Court orders reduction of fees of the arbitrator on finding that the delay in making the award was due to reasons attributable to the arbitrator, the arbitrator shall be given an opportunity of being heard before the fee is reduced.

• Section 17 [Interim measures ordered by the Tribunal] amended to restrict its operation only to applications made by a party during the arbitral proceedings and not at any time after making of the award but before its enforcement.

• Section 34(2)(a) amended to limit the scope of inquiry for setting aside an award by providing that an arbitral award may be set aside by the Court only if the party making the application “establishes on the basis of the record of the arbitral tribunal” all of the circumstances under sub-section 2(a) in place of extant “furnishing proof” thereof.

• Sections 37 and 50 [Appealable orders] amended to provide for a non-obstante clause so as to restrict the right to appeal only in terms of these sections, thereby removing the ambiguity arising from section 13(1) of the Commercial Courts Act 2015, which provides for a wider right to appeal.

• Section 45 [Power of judicial authority to refer parties to arbitration] amended so as to be consistent with section 8, to provide that the judicial authority shall refer parties to arbitration it prima facie finds that the agreement is null and void, inoperative or incapable of being performed.

Except for Section 2 (definitions), Section 3 (designation by the Supreme Court of arbitral institutions graded by the Arbitration Council of India), Section 10 (establishment of Arbitration Council of India) and Section 14 (providing for a new Eighth Schedule listing the norms for accreditation of arbitrators) all the other provisions of the 2019 Amendment Act have been notified to come into force on 30 August 2019.