India, the second most populous country in the world is undergoing a transition, both in terms of investor perceptions of its market potential and in reality. Results are apparent from the fact that India is registering a substantive growth in its economy during uncertain global economic conditions. With the current demonetisation scheme adopted by the current government, India’s national income is expected to grow considerably while the move is expected to significantly impact its disposable income as well.
A country whose economic liberalization began way back in the early 1990s and has accelerated at an encouraging rate ever since, has only recently opened its market further as more and more sectors have opened up to foreign direct investment (FDI). These amongst other measures so adopted by the current Government have made the Indian market a more attractive and lucrative destination for foreign companies who are now looking to expand their business in India.
Of the many important factors for an economy to become more attractive to global investors, it is important that its laws and judiciary are in tune with the changing market trends. Similar were the expectations placed on the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), adopted on the UNCITRAL Model Law on International Commercial Arbitration, 1985 and superseding the Arbitration (Protocol and Convention) Act, 1937, Indian Arbitration Act, 1940 and the Foreign Awards (Recognition and Enforcement) Act, 1961 upon its enactment was passed with inflated optimism and was expected to bring winds of change. But the Act, accompanied by a number of rigid decisions by the Judiciary ensured that the winds of change fell into their gorge. What was considered as a quick and cost effective form of dispute resolution with minimal to negligible intervention by the Courts gradually amalgamated into the Courts’ jurisdiction itself thereby hampering the pro-arbitration jurisdiction approach India pursued. This was followed by several heavily globally denounced decisions passed by the Supreme Court including but not limited to: ‘Bhatia International v. Bulk Trading S.A. & Anr.’ , (2002) 4 SCC 105 and ‘Venture Global Engineering v. Satyam Computer Services Ltd. & Anr.’ AIR 2010 SC 3371.
However, Indian Judiciary has evolved tremendously over the span of last couple of years and have developed a pro-arbitration outlook. This Seismic shift started with the Supreme Court of India’s judgment in ‘Bharat Aluminum & Company & Ors. v. Kaiser Aluminum Technical Service Inc. & Ors.’ (2012) 9 SCC 552, wherein the Supreme Court inter alia stated that Indian Courts do not have the power to intervene in foreign arbitration by either providing interim relief or by entertaining a challenge to foreign arbitral awards in India. This proclaimed a new dawn for Indian Arbitration. Furthermore, the Bombay High Courts Judgments in ‘Baker Hughes Singapore Pte v. Shiv-Vani Oil and Gas Exploration Services Ltd.’, 2014 SCC Online Bom 1663 (upholding arbitrator’s right to grant security as an interim award), ‘HSBC PI Holdings (Mauritius) Ltd. v. Avitel Post Studioz Limited & Ors.’ delivered on 22nd January 2014 in Arbitration petition No.1062 of 2012 (issues of arbitration should be properly dealt with by arbitral tribunals and not by the Courts, similar stand taken by the Supreme Court in ‘World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) Ltd’, AIR 2014 SC 968) have further solidified the stand of the Courts being less prone to intervention in the arbitral process.
In addition to these pro-arbitration measures taken by the Indian Judiciary, the Indian government has incorporated amendments to the age-old Act, with introduction of the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as “the Amendment Act”), which is in consonance with the recommendations put forth in the 246th Law Commission Report of India and aims largely at encouraging ease of doing business in India in a bid to promote foreign investments in the Country.
Let us take a look at some of the key amendments to the Act, which are likely to further the aforementioned cause.
KEY HIGHLIGHTS OF THE NEW ACT
1. Distinction drawn between territorial jurisdiction of International Commercial Arbitrations and Others
The Amendment Act amends the definition of a Court by drawing a distinction between the jurisdictions for International Commercial and Domestic Arbitrations. In terms of the said amendment, the High Court shall be the Court of appropriate jurisdiction in International Commercial Arbitrations and the Principle Civil Court of original jurisdiction (including the High Court in exercise of original civil jurisdiction) shall be the Court of appropriate jurisdiction for all other arbitrations.
2.Communications through electronic means,which provide a record of the arbitration agreement, shall be considered as anArbitration Agreement in writing.
3.Availing Original/Certified Copies of the Arbitration Agreement Through Courts
Any party applying for reference to arbitration may file an application along with a copy of the arbitration agreement and a petition praying to the Court to call upon the other party having the said Arbitration Agreement and its certified copy in its possession, to produce the original arbitration agreement or its duly certified copy.
4.Once the Arbitral Tribunal has been constituted, the Court shall not entertain any application for interim measures, unless circumstances exist, which may not render interim measures ordered by the Arbitral Tribunal efficacious.
5. Arbitral Tribunal’s Fees and Manner of Payment to be determined by the High Court
The High Court shall determine and frame necessary rules, after taking into consideration the rates  under the Act for the fees and the manner of its payment to the Arbitral Tribunal. However, such rules shall NOTapply to International Commercial Arbitration and in arbitrations where parties have agreed for determination of fees as per the rules of an Arbitral Institution.
6. Mandatory Conditions to be fulfilled for Appointment as an Arbitrator
A person approached in connection with a prospective appointment, as an Arbitrator shall disclose in writing any circumstance, including:
Existence either direct or indirect, of any past or present relationship with or interest in any of the parties, or
In relation to the subject matter in dispute, whether financial, business, professional, or other kind, which is likely to give justifiable doubts as to his independence or impartiality, or
Which are likely to affect his ability to devolve sufficient time to the Arbitration and in particular his ability to complete the entire arbitration within a period of Twelve (12) months.
7. Interim Measures Ordered by Arbitral Tribunal
A party to arbitration during the course of arbitral proceedings or at any time after the making of the Arbitral Award but before itsenforcement, apply to the Arbitral Tribunal for:
Appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings,
Interim measures of protection for:
The preservation, interim custody or sale of any goods which are the subject matter of the Arbitration Agreement,
Securing the amount in dispute,
Detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise, or any form of authorizations, which may be necessary or expedient for the purpose of obtaining full information or evidence,
Interim injunction or the appointment of a receiver, or
Such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient.
8. Effectiveness and Enforceability of the Order of Arbitral Tribunal
Any order issued by the Arbitral Tribunal under this Section shall be considered as an order of the Court and shall be enforceable under the Code of Civil Procedure, 1908, in the same manner.
9. The respondent is now allowed to submit a counter-claim or plead a set-off, which shall be adjudicated upon by the Arbitral Tribunal, if such counter-claim or set-off falls within the scope of the Arbitration Agreement.
10. Extension of Time by Courts
The Mandate of an Arbitrator shall terminate if an Award is not made within Twelve (12) months or such extended period (not more than Six (06) months) as agreed between the parties, unless the Court has extended the period. If the Court while extending the period may find that the proceedings have been delayed for the reasons attributable to the Arbitral Tribunal, then, it may order reduction of fees by not exceeding 5% for each month of such delay.
While extending time, the Courts may substitute one or all of the Arbitrators, the arbitration proceedings however shall continue from the stage already reached and on the evidence and material already on record.
It shall be open to the Court to impose actual or exemplary costs upon any of the parties.
11. Measures for Expediting Arbitration Proceedings
If the Court of appropriate jurisdiction passes any interim measure under the Act, the arbitral proceedings must commence within Ninety (90) days of the Court doing so.
The Supreme Court, or the High Court, or the person or institution designated by such Court shall dispose of an application for Appointment of Arbitrator expeditiously. An endeavour shall be made to dispose of the Application within Sixty (60) days.
An Arbitral Award shall be made within Twelve (12) months from the date the Arbitral Tribunal enters upon the reference i.e. the date on which a single arbitrator or all arbitrators, have received notice, in writing, of their appointment.
Arbitral Tribunal shall to the extent possible hold oral hearings for the presentation of evidence or for oral argument on day-to-day basis.
Adjournments to be granted only if a sufficient cause is made out, costs to be imposed if sufficient cause is not made out.
The Arbitral Tribunal shall be entitled to additional fees (as agreed by the parties to the arbitration) if the Arbitration is concluded within a period of Six (06) months from the date of reference.
The parties to Arbitration may extend the period for making award for a time frame (not exceeding) Six (06) months.
The Court shall make an endeavour to dispose of the Application seeking extension of time for conclusion of arbitration proceedings within Sixty (60) days, from the date of service of notice on the opposite party.
Fast Track Procedure
The Parties to an arbitration agreement may, before or at the time of appointment of the tribunal, agree in writing to have the dispute resolved in fast track procedure.
The following procedure shall be followed by the tribunal while conducting Fast Track arbitration proceedings:
Dispute shall be decided on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing,
Tribunal shall have the power to call any further documents, information, clarification from the parties in addition to the pleadings and documents filed by them,
Oral hearing only on the request of all the parties, or if the tribunal considers it necessary fo