The Arbitration and Conciliation (Amendment) Act, 2019.

jftLVªh lañ Mhñ ,yñ—(,u)04@0007@2003—19 REGISTERED NO. DL—(N)04/0007/2003—19 vlk/kkj.k EXTRAORDINARY Hkkx [k.M II — 1 PART II — Section 1 izkf/kdkj ls izdkf'kr PUBLISHED BY AUTHORITY lañ ubZ fnYyh] 'kqØokj] vxLr 9] 2019@Jko.k 18] 1941 ¼'kd½ 52] No. 52] NEW DELHI, FRIDAY, AUGUST 9, 2019/SHRAVANA 18, 1941 (SAKA) bl Hkkx esa fHkUu i`"B la[;k nh tkrh gS ftlls fd ;g vyx ladyu ds :i esa j[kk tk ldsA Separate paging is given to this Part in order that it may be filed as a separate compilation. MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 9th August, 2019/Shravana 18, 1941 (Saka) The following Act of Parliament received the assent of the President on the 9th August, 2019, and is hereby published for general information:— THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019 NO. 33 OF 2019 [9th August, 2019.] An Act further to amend the Arbitration and Conciliation Act, 1996. BE it enacted by Parliament in the Seventieth Year of the Republic of India as follows:— 1. (1) This Act may be called the Arbitration and Conciliation (Amendment) Act, 2019. Short title and commencement. (2) Save as otherwise provided in this Act, it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. 26 of 1996. 2. In the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Amendment principal Act), in section 2,— of section 2. (i) in sub-section (1),–– (A) after clause (c), the following clause shall be inserted, namely:–– ‘(ca) “arbitral institution’’ means an arbitral institution designated by the Supreme Court or a High Court under this Act;’;2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— (B) after clause (h), the following clauses shall be inserted, namely:–– ‘(i) “prescribed” means prescribed by rules made under this Act; (j) “regulations” means the regulations made by the Council under this Act.’; (ii) in sub-section (2), in the proviso, for the word, brackets and letter “clause (a)”, the word, brackets and letter “clause (b)” shall be substituted. Amendment 3. In section 11 of the principal Act,— of section 11. (i) after sub-section (3), the following sub-section shall be inserted, namely:— “(3A) The Supreme Court and the High Court shall have the power to designate, arbitral institutions, from time to time, which have been graded by the Council under section 43-I, for the purposes of this Act: Provided that in respect of those High Court jurisdictions, where no graded arbitral institution are available, then, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of arbitral institution and any reference to the arbitrator shall be deemed to be an arbitral institution for the purposes of this section and the arbitrator appointed by a party shall be entitled to such fee at the rate as specified in the Fourth Schedule: Provided further that the Chief Justice of the concerned High Court may, from time to time, review the panel of arbitrators.”; (ii) in sub-section (4), in the long line, for the portion beginning with “the appointment shall be made” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”; (iii) in sub-section (5), for the portion beginning with ‘‘the appointment shall be made” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made on an application of the party in accordance with the provisions contained in sub-section (4)”; (iv) in sub-section (6), in the long line, for the portion beginning with ‘‘party may request” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”; (v) sub-sections (6A) and (7) shall be omitted; (vi) in sub-section (8), for the words “The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court”, the words, brackets and figures “The arbitral institution referred to in sub-sections (4), (5) and (6)” shall be substituted; (vii) in sub-section (9), for the words “the Supreme Court or the person or institution designated by that Court”, the words “the arbitral institution designated by the Supreme Court” shall be substituted; (viii) sub-section (10) shall be omitted;SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 3 (ix) for sub-sections (11) to (14), the following sub-sections shall be substituted, namely:— “(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made under the relevant sub-section shall be competent to appoint. (12) Where the matter referred to in sub-sections (4), (5), (6) and (8) arise in an international commercial arbitration or any other arbitration, the reference to the arbitral institution in those sub-sections shall be construed as a reference to the arbitral institution designated under sub-section (3A). (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party. (14) The arbitral institution shall determine the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal subject to the rates specified in the Fourth Schedule. Explanation.—For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) where parties have agreed for determination of fees as per the rules of an arbitral institution.”. 4. In section 17 of the principal Act, in sub-section (1), the words and figures “or at Amendment any time after the making of the arbitral award but before it is enforced in accordance with of section 17. section 36” shall be omitted. 5. In section 23 of the principal Act, after sub-section (3), the following sub-section Amendment shall be inserted, namely:–– of section 23. “(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment.”. 6. In section 29A of the principal Act,— Amendment of section (a) for sub-section (1), the following sub-section shall be substituted, namely:— 29A. “(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23: Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavour may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.’’; (b) in sub-section (4), after the proviso, the following provisos shall be inserted, namely:–– “Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application: Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.”. 7. In section 34 of the principal Act, in sub-section (2), in clause (a), for the words Amendment “furnishes proof that”, the words “establishes on the basis of the record of the arbitral of section 34. tribunal that” shall be substituted. 8. In section 37 of the principal Act, in sub-section (1), for the words “An appeal”, Amendment the words “Notwithstanding anything contained in any other law for the time being in of section 37. force, an appeal” shall be substituted.4 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— Insertion of 9. After section 42 of the principal Act, the following sections shall be inserted, new sections namely:–– 42A and 42B. Confidentiality “42A. Notwithstanding anything contained in any other law for the time being of in force, the arbitrator, the arbitral institution and the parties to the arbitration information. agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award. Protection of 42B. No suit or other legal proceedings shall lie against the arbitrator for anything action taken which is in good faith done or intended to be done under this Act or the rules or in good faith. regulations made thereunder.”. Insertion of 10. After Part I of the principal Act, the following Part shall be inserted, namely:–– new Part. ‘PART IA ARBITRATION COUNCIL OF INDIA Definitions. 43A. In this Part, unless the context otherwise requires,— (a) “Chairperson” means the Chairperson of the Arbitration Council of India appointed under clause (a) of sub-section (1) of section 43C; (b) “Council” means the Arbitration Council of India established under section 43B; (c) “Member” means a Member of the Council and includes the Chairperson. Establishment 43B. (1) The Central Government shall, by notification in the Official Gazette, and establish, for the purposes of this Act, a Council to be known as the Arbitration incorporation Council of India to perform the duties and discharge the functions under this Act. of Arbitration Council of (2) The Council shall be a body corporate by the name aforesaid, having India. 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. (3) The head office of the Council shall be at Delhi. (4) The Council may, with the prior approval of the Central Government, establish offices at other places in India. Composition 43C. (1) The Council shall consist of the following Members, namely:–– of Council. (a) 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; (b) an eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international, to be nominated by the Central Government–Member; (c) 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; (d) Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary–Member, ex officio;SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 5 (e) Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary– Member, ex officio; (f) one representative of a recognised body of commerce and industry, chosen on rotational basis by the Central Government–Part-time Member; and (g) Chief Executive Officer-Member-Secretary, ex officio. (2) The Chairperson and Members of the Council, other than ex officio Members, shall hold office as such, for a term of three years from the date on which they enter upon their office: Provided that no Chairperson or Member, other than ex officio Member, shall hold office as such after he has attained the age of seventy years in the case of Chairperson and sixty-seven years in the case of Member. (3) The salaries, allowances and other terms and conditions of the Chairperson and Members referred to in clauses (b) and (c) of sub-section (1) shall be such as may be prescribed by the Central Government. (4) The Part-time Member shall be entitled to such travelling and other allowances as may be prescribed by the Central Government. 43D. (1) It shall be the duty of the Council to take all such measures as may be Duties and necessary to promote and encourage arbitration, mediation, conciliation or other functions of Council. 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. (2) For the purposes of performing the duties and discharging the functions under this Act, the Council may— (a) frame policies governing the grading of arbitral institutions; (b) recognise professional institutes providing accreditation of arbitrators; (c) review the grading of arbitral institutions and arbitrators; (d) hold training, workshops and courses in the area of arbitration in collaboration of law firms, law universities and arbitral institutes; (e) frame, review and update norms to ensure satisfactory level of arbitration and conciliation; (f) act as a forum for 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; (g) make recommendations to the Central Government on various measures to be adopted to make provision for easy resolution of commercial disputes; (h) promote institutional arbitration by strengthening arbitral institutions; (i) conduct examination and training on various subjects relating to arbitration and conciliation and award certificates thereof; (j) establish and maintain depository of arbitral awards made in India; (k) make recommendations regarding personnel, training and infrastructure of arbitral institutions; and (l) such other functions as may be decided by the Central Government.6 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— Vacancies, 43E. No act or proceeding of the Council shall be invalid merely by reason of— etc., not to invalidate (a) any vacancy or any defect, in the constitution of the Council; proceedings of Council. (b) any defect in the appointment of a person acting as a Member of the Council; or (c) any irregularity in the procedure of the Council not affecting the merits of the case. Resignation 43F. The Chairperson or the Full-time or Part-time Member may, by notice in of Members. writing, under his hand addressed to the Central Government, resign his office: Provided that the Chairperson or the Full-time Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is earlier. Removal of 43G. (1) The Central Government may, remove a Member from his office if he–– Member. (a) is an undischarged insolvent; or (b) has engaged at any time (except Part-time Member), during his term of office, in any paid employment; or (c) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member; or (e) has so abused his position as to render his continuance in office prejudicial to the public interest; or (f) has become physically or mentally incapable of acting as a Member. (2) Notwithstanding anything contained in sub-section (1), no Member shall be removed from his office on the grounds specified in clauses (d) and (e) of that sub-section 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. Appointment 43H. The Council may, appoint such experts and constitute such Committees of experts and of experts as it may consider necessary to discharge its functions on such terms and constitution of conditions as may be specified by the regulations. Committees thereof. General norms 43-I. The Council shall make grading of arbitral institutions on the basis of for grading of criteria relating to infrastructure, quality and calibre of arbitrators, performance and arbitral compliance of time limits for disposal of domestic or international commercial institutions. arbitrations, in such manner as may be specified by the regulations. Norms for 43J. The qualifications, experience and norms for accreditation of arbitrators accreditation. shall be such as specified in the Eighth Schedule: Provided that the Central Government may, after consultation with the Council, by notification in the Official Gazette, amend the Eighth Schedule and thereupon, the Eighth Schedule shall be deemed to have been amended accordingly. Depository of 43K. The Council shall maintain an electronic depository of arbitral awards awards. made in India and such other records related thereto in such manner as may be specified by the regulations.SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 7 43L. The Council may, in consultation with the Central Government, make Power to regulations, consistent with the provisions of this Act and the rules made thereunder, make regulations by for the discharge of its functions and perform its duties under this Act. Council. 43M. (1) There shall be a Chief Executive Officer of the Council, who shall be Chief responsible for day-to-day administration of the Council. Executive Officer. (2) The qualifications, appointment and other terms and conditions of the service of the Chief Executive Officer shall be such as may be prescribed by the Central Government. (3) The Chief Executive Officer shall discharge such functions and perform such duties as may be specified by the regulations. (4) There shall be a Secretariat to the Council consisting of such number of officers and employees as may be prescribed by the Central Government. (5) 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.’. 11. In section 45 of the principal Act, for the words “unless it finds”, the words Amendment “unless it prima facie finds”, shall be substituted. of section 45. 12. In section 50 of the principal Act, in sub-section (1), for the words “An appeal”, Amendment the words “Notwithstanding anything contained in any other law for the time being in of section 50. force, an appeal” shall be substituted. 13. After section 86 of the principal Act, the following section shall be inserted and Insertion of shall be deemed to have been inserted with effect from the 23rd October, 2015, namely:— new section 87. “87. Unless the parties otherwise agree, the amendments made to this Act by Effect of 3 of 2016. the Arbitration and Conciliation (Amendment) Act, 2015 shall— arbitral and related court (a) not apply to–– proceedings commenced (i) arbitral proceedings commenced before the commencement of prior to 23rd 3 of 2016. the Arbitration and Conciliation (Amendment) Act, 2015; October, 2015. (ii) 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 Arbitration and 3 of 2016. Conciliation (Amendment) Act, 2015; (b) apply only to arbitral proceedings commenced on or after the 3 of 2016. commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and to court proceedings arising out of or in relation to such arbitral proceedings.”. 14. After the Seventh Schedule to the principal Act, the following Schedule shall be Insertion of inserted, namely: –– new Schedule. ‘‘THE EIGHTH SCHEDULE (See section 43J) Qualifications and Experience of Arbitrator A person shall not be qualified to be an arbitrator unless he— 25 of 1961. (i) is an advocate within the meaning of the Advocates Act, 1961 having ten years of practice experience as an advocate; or (ii) is a chartered accountant within the meaning of the Chartered Accountants 38 of 1949. Act, 1949 having ten years of practice experience as a chartered accountant; or8 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— (iii) is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 having ten years of practice experience as a cost accountant; or 23 of 1959. (iv) is a company secretary within the meaning of the Company Secretaries Act, 1980 having ten years of practice experience as a company secretary; or 56 of 1980. (v) has been an officer of the Indian Legal Service; or (vi) has been an 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 (vii) has been 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 (viii) has been an officer having senior level experience of administration in the Central Government 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; (ix) is 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 specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be. General norms applicable to Arbitrator (i) The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes; (ii) 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; (iii) the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him; (iv) the arbitrator should not have been convicted of an offence involving moral turpitude or economic offence; (v) the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the arbitral awards; (vi) the arbitrator should possess robust understanding of the domestic and international legal system on arbitration and international best practices in regard thereto; (vii) 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 (viii) 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.’’. Amendment 15. Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 shall be to Act 3 of omitted and shall be deemed to have been omitted with effect from the 23rd October, 2015. 2016.SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 9 16. In the Fourth Schedule to the principal Act, for the brackets, words and figures Amendment “[See section 11 (14)]”, the brackets, words, figures and letter “[See section 11 (3A)]” shall to Fourth Schedule. be substituted. ———— DR. G. NARAYANA RAJU, Secretary to the Govt. of India. UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI–110002 AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI–110054. MGIPMRND—2600GI(S3)—09-08-2019.