Arbitration Statutes - Short Notes

Arbitration between parties in India was formerly between parties in India and was formerly governed by the Arbitration Act, 1940. Foreign awards intended to be enforced in India were governed by Foreign Awards Act, 1961, which was preceded by Arbitration (Protocol and Convention) Act, 1937. The object of the Foreign awards clauses were enacted to give effect to the Protocol on Arbitration signed in Geneva on 24-Sep-1923, wherein India was a party.  In order to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also to define the law relating to ‘conciliation’, the President of India issued an Ordinance called the Arbitration and Conciliation Ordinance on 16th January 1996 and was same was given effect in the form of the new Act - Arbitration and Conciliation Act, 1996 (hereinafter “The Act”), which came into force as from 16th August 1996.

The said Act is intended to replace the Indian Arbitration Act, 1940, the Foreign Awards Act, 1961 and the Arbitration (Protocol and Convention) Act, 1937 which has been repealed by the Act (U/S. § 85). The Act is based on UNCITRAL Model Law adopted by the United Nations Commission on International Trade Law on 21st Jun 1985 and the wording and provisions of the Act are copied from or adapted from the Model Law. In so far as domestic awards that fall under the ambit of the said Act,  they are of two types —

1. An award on arbitration between Indian Citizens and
2. An award on arbitration in respect of International Commercial Agreements in India.

The Arbitration And Conciliation Act, 1996  - Object Of

In Western Shipbreaking Corporation v. Clare Haven, (1998) 1 RAJ 367 (Guj), the object of the the Arbitration and Conciliation Act, 1996 was summarized by the Hon’ble Court as —

“The main object is to drastically curtail the supervisory role of courts, in order to achieve speedy resolution of disputes”

In Sundaram Finance v. NEPC, (1999) 1 RAJ 365 (SC), it was observed that —

“The 1996 act has been enacted with the object to bring in its ambit the international commercial arbitration”

In Anuptech Equipments v. Ganpati Co-op. Housing Society, AIR 1999 Bom 219, the Hon’ble Court summarized the object of the said Act as under —

“… to provide that the arbitral tribunal gives reason for its final award, to minimize the supervisory role of courts in arbitral process, to provide that final arbitral award is enforced in the same manner as if it were a decree of the court, …”

SUGGESTED READINGS:

1. Johari's: Commentary on Arbitration and Conciliation Act, 1996: Kamal Law House..
2. Baddi, A. (2016, Dec 23). ARBITRATION STATUTES - Short Notes. Retrieved from http://satyagraha.com/portal/articles/9-business-law/1564-arbitration-statutes-short-notes.html

AUTHOR'S BIO: Anil is a domain expert and a Consultant in the area of Business, Technology and Project Management.  This article is a humble effort to share knowledge with fellow brethren in the legal field.