Calls to reduce court intervention in Arbitration Act amendment

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Subscribe to enjoy similar stories. New Delhi: Practitioners and experts said proposed changes to the Arbitration Act should include provisions to minimise court intervention when litigants settle for out-of-court dispute resolution. While reforms pitched by the government seek to promote institutional arbitration, they still have provisions which would delay dispute resolution by allowing courts to intervene, said experts.

When the Arbitration Act was amended for the second time in 2019, it was strengthened to give powers of grading arbitration institutions to the Arbitration Council of India (ACI), a body of experts and policymakers which would make rules of procedure for arbitration. Now, under the new proposed amendments, the Arbitration Council of India would only have the powers to "recognise" arbitration institutions. Additionally, the amended law seeks to empower courts to designate arbitral institutions in matters before them.

“It is good that the gradation has been removed. However, designation by courts following ACI recognition dilutes ACI's authority, causes duplication of work, and invites unnecessary judicial intervention, all of which violate ADR (alternative dispute resolution) principles," said P. Madhava Rao, registrar of Hyderabad-based Amika Arbitration and Mediation Council, in the institution's recommendations to the government.

"As a result, this clause should be removed from the amendments, and the designation section from the original act should be removed entirely," he added. To be sure, although the ACI was created in the 2019 amendment to the Arbitration Act, it has not been constituted yet. Amika Arbitration and Mediation Council also suggested the government provide powers to arbitrators to