Consultation On Proposed Amendment To Arbitration Act Underway, Supreme Court Told

The Centre told the Supreme Court on Wednesday that the consultative process on the proposed amendment in the Arbitration and Conciliation Act, 1996 is going on, prompting the top court to defer the hearing on the issue involving the appointment of arbitrators.

Attorney General R Venkataramani, appearing for the Centre, told the top court that the term of the expert committee set up by the Centre to go into the functioning of the arbitration law in the country has been extended and that their report is now expected by early November.

Taking note of the submission, a five-judge constitution bench headed by Chief Justice D Y Chandrachud adjourned the hearing on the legal question whether a person who is ineligible to be an arbitrator can nominate another person as an arbitrator till mid-November.

"The Attorney General states that a consultative process on the proposed amendment in the Arbitration and Conciliation Act, 1996 is being carried out. Hence, it is submitted that reference to the constitution bench may be taken up by the middle of November by which time there would be clarity on the law," the bench, also comprising Justices Hrishikesh Roy, P S Narasimha, Pankaj Mithal, and Justice Manoj Misra, said.

Two references were made by three-judge top court benches in 2021 for the constitution of a larger bench to consider the issue.

The top court had in 2017 and 2020 held that a person not eligible to become an arbitrator cannot nominate another person as arbitrator. However, in another matter in 2020, the Supreme Court had allowed the appointment made by a person who was ineligible to become an arbitrator.

Amid a push for making India a hub for international arbitration, the government has set up an expert panel led by former law secretary T K Vishwanathan to recommend reforms in the Arbitration and Conciliation Act in order to reduce the burden on courts.

Venkataramani is also part of the expert panel set up by the Department of Legal Affairs in the Union Law Ministry.

Law Ministry additional secretary Rajiv Mani, some senior advocates, representatives of private law firms, and officials of the Legislative Department, Niti Aayog, National Highways Authority of India (NHAI), railways and Central Public Works Department (CPWD) are its other members.

The top court was hearing the legal issue whether a person who is ineligible to be an arbitrator can nominate another person as arbitrator.

The CJI had on June 26 formed a five-judge constitution bench to examine it.

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