THE ARBITRATION AND CONCILIATION (AMENDMENT) ORDINANCE, 2015
No.9 or 2015
Promulgated by the President in the Sixty-sixth Year of the Republic of India.
An Ordinance to amend the Arbitration and Conciliation Act, 1996.
WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;
Now, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance:—-—
1. (I) This Ordinance may be called the Arbitration and Conciliation (Amendment) Ordinance, 2015.
(2) It shall come into force at once.
2. In the Arbitration and Conciliation Act, 1996 hereinafter referred to as the principal Act), in section 2,——
(I) in subsection (1)—
(A) for clause (e), the following clause shall be substituted, namely:~—
‘(e) “Court” means——
(i) in the case of an arbitration other than ~ international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original - civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes; '
(ii) in‘the case of international commercial . arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject~matter of the arbitration if the same had been the subject—matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;’;
(B) in clause (t), in sub-clause (iii), the words
“a company or” shall be omitted;
(II) in sub—section (2), the following proviso shall be inserted, namely:—
“Provided that subject to an agreement to the contrary, the provisions of sections 9, 27, and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable
and recognised under the provisions of Part II of this Ordinance”.
3. In section 7 of the principal Act, in sub-section (4), in clause (b), after the words “or other means of
telecommunication”, the words “including communication through electronic means" shall be inserted.
4. In section 8 of the principal Act;—
4. In section 8 of the principal Act;—
(i) for sub-section (1), the following sub-section shall be substituted, namely:—-—
“(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that primafacie no valid arbitration agreement exists”;
.(ii) in sub-section (2), the following proviso shall be inserted, namely:—
“Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub—section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying
the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy
before that Court”.
5. Section 9 of the principal Act shall be re—numbered as sub-section (1) thereof, and after sub-section (1) as so re- numbered, the following sub-sections shall be inserted,
namely:—
“(2) Where, before the commencement of the arbitral proceedings, a "Court passes an order for any interim measure of protection under sub-section (1), the'arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.
(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious“.
6. In section ll of the principal Act,—
(1') in sub-sections (4), (5) and (6), for the words “the Chief Justice or any person or institution designated by him” wherever they occur, the words “the Supreme Court or, as
the case may be, the High Court or any person or institution designated by such Court” shall be substituted;
(ii) after sub-section (6), the following sub-sections shall be inserted, namely:—~
“(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub- section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court”;
(iii) in sub-section (7), for the words “the Chief Justice or the person or institution designated by him is fin ”, the words “the Supreme Court or, as the cam may be, the High Court or the person or institution designated by such Court is final and no appeal including Letters Patent Appeal shall lie against such decision” shall be substituted;
(iv) for sub-section (8), the following sub-section shall be substituted, namely:——
“(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub- section (1) of section 12, and have due regard to—
(a) any qualifications required for the arbitrator by the agreement of the parties; and
(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.”;
(v) in sub—section (9), for the words “the Chief Justice of India or the person or institution designated by him", the words “the Supreme Court or the person or institution designated by that Court” shall be substituted;
(vi) for sub-section (10), the following sub—section shall be substituted, namely:——-
“(10) The Supreme Court or, as the case may be, the High Court, may make such scheme as the said Court may deem appropriate for dealing with matters entrusted by sub section (4) or sub-section (5) or sub-section (6), to it.”;
(vii) in sub-section (11), for the words “the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made”, the words “different High Courts or their designates, the High Court or its designate to whom the request has been first made” shall be substituted;
(viii) for sub-section (12), the following sub-Section shall be substituted, namely:—
‘(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in an international commercial arbitration, the reference to the “Supreme Court or, as the case may be, the High Court” in those sub-sections shall be construed as a reference to the “Supreme Court”; and
(b) where the matters referred to in sub—sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to “the Supreme Court or, as the case may be, the High Court” in those sub-sections shall be construed as a reference to the “High Court” within whose local limits the principal Civil Court referred to in clause (e) of sub—section (1) of section 2 is situate, and where the High Court itself is the Court referred to in that clause, to that High Court.’; -
(ix) after sub-section (12), the following sub-sections shall be inserted, namely:—
“(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case may be, as expeditiously as possible and an endeavor shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration 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) in case where parties have agreed for determination of fees as per the rules of an arbitral institution”.
7. After section 11 of the principal Act, the following new section shall be inserted, namely :—
“l lA.(l) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and thereupon the Fourth Schedule shall be deemed to have been amended accordingly.
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in drafi before each House of Parliament, while it is‘in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses of Parliament.”.
8. In section 12 of the principal Act,—
(i) for sub-section (1), the following sub-section shall be substituted, namely:~
“(1). When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in - writing any circumstances,—
(a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of
twelve months.
Explanation l.~« The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.
Explanation 2.»— The disclosure shall be made by such person in the form specified in the Sixth Schedule”;
(ii) after sub—section (4), the following sub-section shall be inserted, namely:—
“(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes _ having arisen between them, waive the applicability of this sub-section by an express agreement in writing:
Provided further that this sub-section shall not apply to cases where an arbitrator has already been appointed on or before the commencement of the Arbitration and
Conciliation (Amendment) Ordinance, 2015.”.
