LI Network
Published on: 14 September 2023 at 15:40 IST
The Centre has informed the Supreme Court that an ongoing consultative process is in progress concerning proposed amendments to the Arbitration and Conciliation Act of 1996. This revelation has prompted the apex court to postpone the hearing related to the appointment of arbitrators.
Attorney General R Venkataramani, representing the Centre, conveyed to the apex court that the term of the expert committee established by the Centre to assess the functioning of arbitration law in the country has been extended, with their report expected by early November.
Taking cognizance of this update, a five-judge constitution bench presided over by Chief Justice D Y Chandrachud has deferred the hearing on the legal question regarding whether an individual who is ineligible to be an arbitrator can nominate another person as an arbitrator, with the new hearing scheduled for mid-November.
“The Attorney General states that a consultative process on the proposed amendment in the Arbitration and Conciliation Act, 1996 is being carried out. Hence, it is submitted that reference to the constitution bench may be taken up by the middle of November by which time there would be clarity on the law,” the bench, consisting of Justice Hrishikesh Roy, Justice P S Narasimha, Justice Pankaj Mithal, and Justice Manoj Misra, remarked in response.
This matter has its roots in two references made by three-judge apex court benches in 2021, seeking the formation of a larger bench to address this issue.
The Supreme Court had previously ruled in 2017 and 2020 that a person not eligible to become an arbitrator cannot nominate another person as an arbitrator. However, a separate ruling in 2020 allowed the appointment made by an individual who was ineligible to be an arbitrator.
Notably, the Indian government has been actively working towards establishing India as a hub for international arbitration. To this end, an expert panel led by former law secretary T K Vishwanathan has been set up to recommend reforms in the Arbitration and Conciliation Act aimed at reducing the burden on courts. Attorney General Venkataramani is also a member of this expert panel, which was established by the Department of Legal Affairs in the Union Law Ministry.
The panel comprises additional secretary Rajiv Mani from the Law Ministry, senior advocates, representatives from private law firms, and officials from various government departments, including Niti Aayog, National Highways Authority of India (NHAI), railways, and Central Public Works Department (CPWD).
