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Workshop on " Role of Arbitration in the Wake of Code of Civil Procedure (Amendment) Act 1999" January 19, 2001 - Chennai

With a view to cutting short the delays at various levels, the Government of India enacted the Code of Civil Procedure (Amendment) Act, 1999. The Act makes it obligatory for the court to refer the dispute after issues are framed for settlement either by way of arbitration, conciliation, mediation, judicial settlement or through Lok Adalat. It is only after the parties have failed to get their dispute settled through ADR that the suit shall proceed further in the court. Apart from this, the Act has made the amendments on some of the very important issues like number of adjournments, procedure for recording evidence and other matters relating to simplification of procedures. These amendments thus shift the focus on civil litigation to settlement by arbitration, conciliation and mediation. ADR thus assumes a greater relevance to persons dealing with civil litigation.

After the enactment of the Code of Civil Procedure (Amendment) Act, 1999, however, no action could be initiated by the Government for its enforcement as a large number of representations were made to the Government against its enforcement. Considering this, the Government has now introduced the Code of Civil Procedure (Amendment) Bill 2000 to further amend the Code of Civil Procedure, 1908.

With a view to apprising the participants about the major amendments made in the Code of Civil Procedure (Amendment) Act 1999, the Indian Council of Arbitration organized a Workshop on "Role of Arbitration in the Wake of Code of Civil Procedure (Amendment) Act 1999' on 19th January 2001 at Chennai. Mr. Arun Jaitley, Minister of Law, Justice & Company Affairs, Government of India, inaugurated the Workshop.

Inaugurating the workshop, Mr. Jaitley said the main problem plaguing the courts in the country was the large number of pending cases in the High Courts. The High Courts are adding approximately two lakhs cases every year. Mr. Jaitley also called for a nationwide discussion on judicial reforms involving all parties concerned to reach a consensus on how to bring in changes in the judicial procedures. Dr. A C Muthiah, President of the Indian Council of Arbitration (ICA), urged the Minister to prevail upon Chief Justices of various High Courts to designate well-recognised arbitral institutions like the ICA under Sec. 11 of the Arbitration and Conciliation Act, 1996. The Council is organising four regional colloquium on how to facilitate increased/resort to court sponsored/court annexed/court referred arbitrations. The judges of the local high courts, judges of the district courts, representatives of different chambers of commerce, lawyers and members of bar council among others would participate in these functions.

Workshop on "Role of Arbitration in the Wake of Code of Civil Procedure (Amendment) Act 1999" - February 21, 2001 - Calcutta.

The Indian Council of Arbitration also organized 2nd Workshop on `Role of Arbitration in the wake of Code of Civil Procedure (Amendment) Act 99' on 21, February, 2001 at Calcutta. Mr. Justice Ashok Kumar Mathur, Chief Justice of Calcutta High Court inaugurated the workshop. The workshop was addressed by the eminent experts on the subject.

An Act further to amend the Code of Civil Procedure, 1908, the Limitation Act, 1963 and the Court Fees Act, 1870.

Be it enacted by Parliament in the Fiftieth Year of the Republic of India as follows:-

1. (1) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof. New Section 89

"89. (1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for-

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;

Consultation paper on review of working of the Arbitration and Conciliation Act, 1996

The Law Commissioner of India has prepared a consultation paper on review of working of the Arbitration and Conciliation Act, 1996 and has invited suggestions for improvements and modifications in the consultation paper. A summary of the proposals given in the consultation paper is reproduced below. Members are requested to send their suggestions directly to the Law Commission of India, Shastri Bhawan, New Delhi-110001 with a copy to Indian Council Of Arbitration.

1. While proposing amendments to the Arbitration & Conciliation Act, 1996 it is felt necessary to adhere to the objectives of speedy disposal and least court intervention, which were the crucial of the Act. However, where the Act has omitted to incorporate certain provisions of the Model Law, it is proposed to bring the Act in conformity with the Model Law. On that basis, so far as international arbitration is concerned, the provisions of Model Law are more or less adopted. However, in regard to domestic supervision, the proposals include a stricter supervision by court. The following are the proposals:

3. In Section 8, the word `judicial authority' should be replaced by the word `court'. The words "unless it finds the agreement is null and void, inoperative or incapable of being performed" to be included so as to bring sec.8(1) in conformity with Art.8 of Model Law. In sect. 8, `court' means the `court' in which suit is filed. Appeals to lie to Division Bench of High Court from the decision of the court.

4. In sec.11, the words `Chief Justice of India or his nominee' should be replaced by the words `Supreme Court' thereby meaning `Bench of two or more learned Judges of the court'. The words `Chief Justice of High Court or his nominee' should be replaced by the words `High Court' thereby meaning a `Bench of two more more learned Judges of the court'. This will bring sec.11 in conformity with Model Law which uses the word `court'. This will clarify that power that is exercised under section 11 is a judicial power. The supreme Court and High Court to clear off jurisdictional issues if raised at the stage of section 11 itself. If oral evidence is necessary, before the said courts, evidence is to be obtained by appointing Advocate Commissioners.

5. In sec.16, the Act permits arbitral tribunal to decide questions of their own jurisdiction, including objections as to the existence or validity of the arbitration agreement. Arbitral tribunal's decision on preliminary issues to be allowed to be questioned before court, within 30 days, even where the arbitrators have "rejected the plea. The right to object to the decision "rejecting" the preliminary jurisdictional issues to be included in section 34 or section 37. In section 16(5), the word `shall' should be replaced by the word `may'.

6. In section 12 and 13, decision of the arbitrators on preliminary issue of bias or disqualification "rejecting" the plea to be also subject to objections to court under section 34 or 37. In section 13(4), the word `shall' should be replaced by the word `may'.

7. Provision under section 9 (interim measures) in Part I should be made applicable even to foreign arbitration when the seat of arbitration is outside India. This will bring the Act in conformity with laws elsewhere which are based on Model law.

8. Provision under sections 8, 38 and 39 also to apply to foreign arbitration where seat of arbitration is outside India and where such arbitrations are not covered by Part II (New York or Geneva Convention Awards). Whether other provisions in English Act 1996 to support foreign award are to be introduced? Should there be a definition of `seat of arbitration'?

9. A provision similar to sec.21 of the 1940 Act, enabling any court (before which a suit or other proceeding is pending) to refer the parties to arbitration even if such an agreement is subsequent to the commencement of the suit or proceeding, should he introduced. Provision to be made for challenging the award passed on such reference, in the same court. This will enable all courts, including High Court/Supreme Court to refer issues to arbitration, if parties so agree during the proceedings and deal with the correctness of the award in the same court (on grounds mentioned in sec. 34 and sec 37) rather than give a fresh lease of life to the litigation.

10. S.34 (Sec.37) should be amended by providing (1) a right to object to the preliminary decision of the arbitral tribunal under sec.16 whether the tribunal accepts or rejects the jurisdictional pleas; (2) a right to object to the preliminary decision of the arbitrator under sec.13 whether the tribunal accepts or rejects the plea.

11. Sec.34 (or sec.37) to provide for objections to be filed where the arbitral tribunal omits to decide certain questions referred and conferring a power to remit the matter to the arbitral tribunal.

12. Sec.34 (or sec.37) should provide for objections to be filed if award does not contain reasons in regard to any dispute and seek a supplement award containing reasons.

13. `Misconduct' should be included as a specific ground of attack in sec.34 (or sec.37). Whether it should apply to domestic as well international arbitration?

14. `Error of law apparent on the face of the award' should be included as a specific ground in sec.34 (or sec. 37) (except where a specific question of law is referred to the arbitrators) but only in cases of domestic arbitration.

15. Provision enabling arbitrators to refer a question of law to the court should be included.

17. Power should be granted to court to supersede arbitration (in cases of domestic arbitration only).

19. All awards should be filed in the `court' for purposes of record by amending sec.31, so that authenticity of awards is taken care of.

20. Awards to be executable by court under section 36 only if they conform to laws relating to stamp duty/registration.

21. Employees of one of the parties should not be arbitrators, except in cases where they are employees of Govt. or Public Sector undertakings or corporatings.

22. Whether upper time limit should be provided for completing arbitration proceedings, subject to extension by court only for special reasons, so far as domestic arbitrations are concerned?

23. Whether and what guidelines should be prescribed for fixation of fee of arbitrators and what special Code of Ethics is to be introduced to govern the arbitrators and lawyers appearing before arbitrators?