The new arbitration amending Act has come in to force in India with effect from 23rd October 2015. That means the said amendments will be applicable to all arbitration cases, if the arbitration gets initiated either on or after 23rd October 2015. For the arbitrations which got initiated before that cut-off date, these amendments can be applied only if both the parties agree for the same. In my opinion the said amendments will surely make a big positive impact on the present arbitration scenario of India. The article deals with each of the important amendments and how they can be used to increase the effectiveness of arbitrations in India.
This section is one of the amendments strongly criticized by the arbitrators and even lawyers. The main criticism is that Government is not practical in expecting disposal of any arbitration in 12 months’ time and has imposed a provision which will surely delay the arbitration, since all the parties may have to go to court seeking extension of time. But in my opinion S. 29.A of the Act, is the game changer of arbitration in India. Let us see the following points for a clear understanding of the section, An arbitrator or a tribunal has to make the final award in an arbitration matter within a period of 12 months from the date of appointment letter being received by the arbitrator. So the provision fixes the responsibility of concluding the arbitration within 12 months. This is because arbitrator being the presiding person, he can expedite the process by properly administering the arbitration by granting limited time for the completion of pleadings, allowing only short adjournments, cut short the mini trial style of arbitral proceedings, impose conditions with regard to oral hearings etc., But at the same time the Act empowers the court to penalise the parties if they delay the proceedings.
In a case where an arbitrator takes all possible actions to expedite the process but still due to nonco- operation of one of the parties, proceedings get delayed. Then the party which suffered due to the delay without giving the consent for extension, can take the matter to court and seek an extension of time on certain conditions. At that point of time, Court will examine the matter and impose conditions under S. 29(A) (5) like (Limitations to adjournments, examination of oral witnesses, filing of new documents, re-examination of witnesses, last minute Party appointed expert witnesses, delayed amendment to pleadings etc.,) and then extend the deadline for a reasonable time. More over when the court is able to find that the delay in the proceedings is attributable to one party, then the court can also impose costs (actual or exemplary) under S.29.A (8). Hence the amending Act has taken into consideration a delay due to a non-co-operating party and also has incorporated an effective mechanism to deal with such delays.
In many ad-hoc arbitration clauses, the tribunal consists of three arbitrators. The major problem faced by the parties in handling an arbitration before a three-member arbitration panel is getting the dates of all the three arbitrators and the counsels appearing for the parties. More over some of the arbitrators take many arbitration assignments and do not allocate the required time for each of those arbitrations. In such cases the arbitration gets delayed because of the non availability of one arbitrator even though the other two arbitrators have dates. In some other cases, one arbitrator is sick or not able to perform and the arbitration gets delayed. In such cases if parties approach the court seeking extension of time and if the parties are able to establish to the court that the delay is because of the non-availability of one arbitrator, then the court can replace that arbitrator with a new person S.29(A) (6) and also grant an extension of time.
In some of the cases arbitrators do not give their time and allow the matter to get dragged for years. In such cases if parties approach the court with an application for extension of time, the court can either replace the entire panel or reduce their fees S.29(A) 94) or remove the arbitrator who delays the proceeding and grant an extension of time.
In some arbitrations where the subject matter of the arbitration is complex and more time is necessary for an effective completion of the proceedings and both the parties are in agreement, then both can jointly extend the time by six months. In case of requirement of more time for the purpose of effective conclusion of the arbitration for genuine reasons, then parties can make an application to court and court can grant the required time after examining the facts and documents of the case. Hence S.29(A) if used wisely by either the arbitrator or by the parties it can ensure speedy and effective disposal of arbitration matters, using the powers granted by the supervisory courts under the Act.
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