Ordinance Cleared By Cabinet on Arbitration and Conciliation Act ,1996

Arbitration AMLEGALS

Arbitration To See A Sea Change in India

The Law Commission had concluded its report no.246 , in August 2014,  with various suggestions for  amendments in Arbitration and Conciliation Act 1996 .

Finally, the same  has been approved by Cabinet on 5th August 2015 .Previously also this ordinance was passed by the cabinet , in December 2014, but could not be sent for  the assent of the President of India .

Reasons for Changes

  • to make India emerge as a favoured destination, after Singapore and London, for international arbitration.

  • foreign companies were also hesitant to do business in India because of the long duration of litigation .


  • Prime Minister has promised for changes in law for ease of doing business in India .


 Prominent  Changes

  • fixed timeline for arbitrators to resolve cases, whereby an arbitrator will have to settle the case within 18 months.

  • after the completion of 12 months, certain restrictions have been put in place to ensure that the arbitration case does not linger on

  • reduction in cost by fixing cap for  the fees of an arbitrator with reference to monetary involvement in a claim .The starting slab is upto 5 lakhs of claim where tentative fees of an arbitrator has been fixed for Rs 45,000  .

  • the arbitrator will also have to spell out if there is a conflict of interest in the case he or she is taking up.


Hope the Ordinance will get assent of President on an early date . Further ,the aforesaid and many other changes as proposed by Law Commission will bring parity of Arbitration in India with internationally practiced UNCITRAL Model law for commercial arbitration.

by Anand Mishra, Founder Advocate, AMLEGALS

( The author is a leading advocate and handling cases in Tribunals & High Courts of India. He can be contacted on anand@amlegals.com .For more please refer www.amlegals.com .)

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