Arbitration and conciliation act, 1996 versus prior enactments

The Arbitration and Conciliation Act, 1996, superseded the previous acts related to Arbitration, more so the Arbitration Act of 1940. Under the Act of 1996, Sec. §85 repealed the Act of 1940 and provides that the provisions of that Act of 1940, shall apply to proceedings in relation to arbitral proceedings which commenced before the Act of 1996 came into force.  Therefore, it is important to know the prime distinctions between the said Act of 1996 versus prior enactments.

The contradistinction, without going into merits, between the two Acts, viz, the Arbitration and Conciliation Act, 1996 versus the Arbitration Act, 1940 may be summarized as hereunder -

1. Vide the Act of 1996, arbitration tribunal has been conferred jurisdiction to decide on the question of validity or existence of arbitration agreement, whereas in the Act of 1940, the jurisdiction mandate was expressly missing.

2. Under the Act of 1966, arbitration award can be signed by either all the arbitrators or by the majority of arbitrators thereby relegating the minority arbitrator as an optional signee, whereas under the Act of 1940, all the arbitrators were required to sign the award.

3. Under the Act of 1996, the arbitrator(s) are required to give reasons for the award unless the parties consent to waiver of such requirement, whereas under the Act of 1940, the arbitrator was not bound to give reasons.

4. The Act of 1996 enables the arbitration tribunal to pass orders for interim relief whereas such powers of ad interim measures did not exist under the Act of 1940.

5. Under the Act of 1996, an award could only be set aside by the Court upon being satisfied by the grounds mentioned under Section §34 of the said Act, whereas under the Act of 1940, any award could be set aside by invoking any broad grounds including the grounds of misconduct by the Arbitrator.

6. Under the Act of 1996, an award itself is deemed executable as a decree vide Sec. § 36 of the said Act, whereas, under the Act of 1940, the award was required to be merged into a decree of the Court and therefore was not per se enforceable.

In Sundaram Finance v. NEPC, (1999) 1 RAJ 365 (SC) = (1999) 2 SCC 479, it was observed that -

“The 1996 Act is very different from the Arbitration Act, 1940. The provisions of this Act have, therefore to be interpreted and construed independently and in fact reference to the 1940 Act may actually lead to misconstruction. In other words, the provisions of the 1996 Act have to be interpreted being uninfluenced by the principles underlying the 1940 Act. In order to get help in construing these provisions, it is more relevant to refer to the UNCITRAL Model Law rather than the 1940 Act”.

Suggested Readings:

1. Johari's, Commentary on Arbitration and Conciliation Act, 1996, Kamal Law House.
2. O.P. Tiwari, The Arbitration and Conciliation Act (2nd Ed.), Allahabad Law Agency.
3. Acharya N.K., Law relating to Arbitration and ADR, Asia Law House, Hyderabad
4. Tripathi S.C., Arbitration, Conciliation and ADR, Central Law Agency, Allahabad.
5. Avatar Singh, Arbitration and Conciliation, Eastern Law Book House, Lucknow.
6. KSR Murthy, An introduction to ADR Mechanism, Gogia Law Agency, Hyderabad
7. P.C. Rao, Alternate Dispute Resolution (2001 Ed.), Universal Book Traders, New Delhi.
8. S.D.  Singh, Alternate  Dispute  Resolution,  Universal  Book  Traders, New Delhi
9. Baddi, A. (2016, Dec 23). ARBITRATION AND CONCILIATION ACT, 1996 VERSUS PRIOR ENACTMENTS. Retrieved from http://satyagraha.com/portal/articles/9-business-law/1567-arbitration-and-conciliation-act-1996-versus-prior-enactments.html

Author Bio:

Anil comes with a Consulting Background in the area of Business, Technology and Project Management. This Article is a humble effort to the aforementioned domains by making a foray into Legal Research. The Author may be reached via anil [at] Satyagraha [dot] com