What to Expect in the Future of Arbitration - Lexresolv

What to Expect in the Future of Arbitration

11The future of arbitration in India0

The future of arbitration is likely to be affected by a number of factors, including the increasing use of technology, the changing nature of dispute resolution, and the evolving role of arbitrators.

Technology is likely to have a significant impact on arbitration. The use of video conferencing and other virtual technologies is likely to increase, as parties seek to reduce the costs and time associated with travel. In addition, online dispute resolution platforms are likely to become more popular, as they offer a more efficient and convenient way to resolve disputes.

The changing nature of dispute resolution is also likely to impact the future of arbitration. The rise of alternative dispute resolution methods, such as mediation and collaboration, is likely to result in fewer cases being referred to arbitration.

With the rapid rate of development, arbitration is experiencing a growth momentum. Since the end of the 19th century, the impact of technology has increased in India. The expansion of arbitration in India was substantially stimulated by this. In addition to prosperity, India also makes use of its goal to develop as a prospective center for international arbitration. In short, arbitration is a private conflict resolving process. Rather than the arbitrators who make a binding decision about the subject (by consent of the parties engaged in the dispute).

Introduction

Allowing parties to settle the disagreement outside the court is an alternative dispute resolution strategy. These procedures include a third party that assists the parties in resolving conflicts in an unobtrusive manner. The Law Commission of India, Report 222nd, states that all citizens must have equal opportunities to get justice. And that they should never be denied justice for any citizen because of economic or other kinds of disability, in accordance with Article 39A.[1] The constitution guarantees equal access to justice for all citizens.

A recently adopted addition to the pro-arbitration approach is the Arbitration and Conciliation (Amendment) Act 2021. This is the third time the 1996 Act has been changed over the last six years. This shows the legislative wish to reform the 1996 Act and make India more arbitration-friendly. A revision to section 34 on the automatic staying of awards under the Act represents the change to the Act of 2021. In accordance with the existing system, a party may request the Court for the reservation under Section 34 of an arbitral judgment.[2] However, after the 2015 amendment to the Act, an automated stay in the performance of the award would not easily be achieved by submitting an application to revoke it.

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Role of Courts

The court was requested to evaluate the scope of an amendment. To an arbitrage request brought in accordance with section 34 of the Arbitration Act in the matter of Prakash Industries Limited v. Bengal Energy Limited.[3] The Court held that what had to be determined is whether there were necessarily new and independent reasons for the grounds to be added by way of a modification without a foundation in the original request to section 34; this means that the nature of the modifications had to be decided in each case.

According to the High Court in Calcutta, if the proposed grounds would involve filing a new request to set aside a decision, would constitute the criterion for accepting or refuting any amendment of the current reasons in an arbitration case. As a result, the court rejected the request, arguing that, since several new grounds in the existing petition were not founded, the petitioners were not able in the claimed manner to enter the ‘amplification’ route and that the petitioner did not have any other statutory cushion to fall back under the current law if an amplification recourse failed.

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Amendment of 2021

The 2021 amendment made a considerable change by adding a proviso pursuant to Section 36(3)[4] to ensure that the award was upheld when court proceedings are initially satisfactory based on either the arbitration contracts or the contract on which the award has been awarded or was triggered by fraud or corruption. It will continue to award the result of the challenge indefinitely. In the case of the Delhi Jal Board,[5] Mohini Electricals ltd v. Delhi Supreme Court declared that there is no statutory arbitrator’s right to direct payment of the stamp duty over a specified duration. Therefore at the moment of awarding or signing, there is no responsibility to pay the stamp duty.

Where a request is awaiting a judgment at the court pursuant to section 36(2) of the Act, applicants shall be asked, on new grounds, to submit fresh applications. The courts are likely to be delayed and additional expenses, unless they are able to themselves, notify this new amendment and dispose of the fresh submissions. The Minister maintained, despite his use of words, that fraud and corruption were essential under section 34 since section 34 did not provide the provision for an “automatic stay.” He also said that it was the goal of the government to prevent party collusion from winning a contaminated prize as quickly as feasible.

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Other Developments in ADR

There were two amendments in this area; nonetheless, they were discussed together because they are interrelated. The 2019 amendment set out criteria, eligibility, and standards for arbitrator accreditation, included Section 43J of the Principal Law. This provision was also intended at the Eighth Schedule of the Act, which presented an extensive list of traits that a referee must possess. The 2021 Amendment Act was replaced by Section 43J,[6] and the main Act was abolished by Schedule 8th. This means that parties can essentially appoint arbitrators with or without authorization.

The Minister of Legal Affairs further said that this amendment would enable greater freedom for the Indian Arbitration Board and promote institutional arbitration. The amendment to Article 43J provides that the qualifications of arbitrators will be based on the rules provided by Section 2(1)(j) to include the Regulations of the Arbitration Council of India. The Amendment Act also authorizes the Commission to review the appointment of foreign arbitrators, supported by UNCITRAL Model Law standards, by amending section 43J.[7] This change also restores the principle of party independence which permits parties, irrespective of credentials, to select arbitrators.

The 43J amendment[8] has the power to draw foreign arbitrators to the Indian pro-arbitration system. The latter represents a small move. In contrast, the shift of automatic stays in awards is more of a two-edged sword. With the possibility to prolong both and to prevent arbitrary rulings from being enforced. This requires clarifying some ambiguities which have been exploited by losing parties in the award challenges. This is leading to a lack of finality. It could be more successful to allow an arbitral tribunal to apply various ADR approaches. This can happen during the arbitral proceedings, though rarely employed in India.

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Conclusion

The potential of India in the domain of arbitration is exceedingly big. The modification of the arbitration act is an important indicator of India’s efforts. It is to improve the efficiency and economic efficiency of its judicial system. This meant that the arbitral awards were de-automated. The change affected the quality of the arbitration processes in India. This alteration. After then, India had limits on the performance of arbitral awards in court. This also encouraged the development of India’s trust institutions, particularly where it had the arbitral award aspect.

In addition, India continuously worked on the way the technology can be implemented in arbitrary proceedings as a norm. Especially as the pandemic started, this gained popularity. Article 19 of the arbitration & Conciliation Act provides that parties may agree: on the procedure to be followed in conducting the proceedings by the arbitral tribunal. This permits India to conduct arbitration proceedings, if necessary, by all methods. Arbitrary institutions are obliged to carry out their processes. Regardless of whether it is via the video conference method, according to the Indian Council for Arbitration (ICA). In the Covid scenarios, this was very significant.

Read Also – Recent Amendments to the Indian Arbitration and Conciliation Act, 1996


[1] The Constitution of India, 1949.

[2] The Arbitration and Conciliation Act, 1996.

[3] 2020 SCC OnLine Cal 971: AIR 2020 Cal 279.

[4] The Arbitration and Conciliation Act, 1996.

[5] 2021 SCC OnLine Del 3506.

[6] The Arbitration and Conciliation Act, 1996.

[7] Ibid.

[8] Ibid.

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