Process for Consultation on Proposed Amendment to Arbitration and Conciliation Act is Underway, Center Notifies SC

The Supreme Court postponed the hearing on the matter regarding the appointment of arbitrators after the Centre informed the court on Wednesday that the consultation process on the proposed change to the Arbitration and Conciliation Act, 1996, is ongoing.

Attorney General R. Venkataramani, speaking on behalf of the Centre, informed the Supreme Court that the expert committee’s investigation of how the country’s arbitration system operates has been given a longer term and that their report is now anticipated by early November.

A five-judge constitution bench led by Chief Justice DY Chandrachud took notice of the submission and postponed the hearing on the legal issue of whether a person who is unfit to serve as an arbitrator may designate another person as an arbitrator until mid-November.

The proposed revision to the Arbitration and Conciliation Act of 1996 is the subject of a consultation procedure, according to the Attorney General. As a result, it is proposed that a referral to the constitution bench be considered by mid-November, when the law would have been clarified, according to the bench, which was made up of Justices Hrishikesh Roy, P S Narasimha, Pankaj Mithal, and Manoj Misra as well.

In 2021, two three-judge apex court benches requested the formation of a bigger bench to address the matter.

In 2017 and 2020, the Supreme Court ruled that a person who is ineligible to serve as an arbitrator cannot propose another person to serve in that capacity. However, the Supreme Court has permitted the nomination of a person who was unfit to serve as an arbitrator in another case in 2020.

The government has established an expert group under the direction of former law secretary T K Vishwanathan to make recommendations for changes to the Arbitration and Conciliation Act that would lessen the load on courts as part of efforts to make India a center for international arbitration.

Venkataramani is a member of the expert group assembled by the Union Law Ministry’s Department of Legal Affairs.

There are also representatives from private legal firms, the Legislative Department, Niti Aayog, the National Highways Authority of India (NHAI), the Railways, and the Central Public Works Department (CPWD), in addition to assistant secretary for the legal Ministry Rajiv Mani.

The supreme court was debating the legality of allowing someone who isn’t qualified to serve as an arbitrator to propose someone else to serve in that capacity.

A five-judge constitution bench was established by the CJI on June 26 to review it.