A Bill to amend the Arbitration and Conciliation Act, 1996.

BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—

1. (1) This Act may be called the Arbitration and Conciliation (Amendment) Act, 2015.

(2) It shall be deemed to have come into force on the 23rd October, 2015.

2. In the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the principal

Act), in section 2,—

(I) in sub-section (1),—

(A) for clause (e), the following clause shall be substituted, namely:—

‘(e) “Court” means—

(i) in the case of an arbitration other than international

commercial arbitration, the principal Civil Court of original

Short title

and

commence-

ment.

Amendment

of section 2.

26 of 1996.

LOK SABHA

————

The following Bill was introduced in Lok Sabha on 03rd December, 2015:—

BILL NO. 252 OF 2015

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EXTRAORDINARY

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PART II — Section 2

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PUBLISHED BY AUTHORITY

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No. 40] NEW DELHI, THURSDAY, DECEMBER 03, 2015/AGRAHAYANA 12, 1937 (SAKA)

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Separate paging is given to this Part in order that it may be filed as a separate compilation.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

jurisdiction in a district, and includes the High Court in exercise of

its ordinary original civil jurisdiction, having jurisdiction to decide

the questions forming the subject-matter of the arbitration if the

same had been the subject-matter of a suit, but does not include

any Civil Court of a grade inferior to such principal Civil Court, or

any Court of Small Causes;

(ii) in the case of international commercial arbitration, the

High Court in exercise of its ordinary original civil jurisdiction, having

jurisdiction to decide the questions forming the subject-matter of

the arbitration if the same had been the subject-matter of a suit, and

in other cases, a High Court having jurisdiction to hear appeals

from decrees of courts subordinate to that High Court;’;

(B) in clause (f), in sub-clause (iii), the words “a company or” shall be

omitted;

(II) in sub-section (2), the following proviso shall be inserted, namely:—

“Provided that subject to an agreement to the contrary, the provisions of

sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section

37 shall also apply to international commercial arbitration, even if the place of

arbitration is outside India, and an arbitral award made or to be made in such

place is enforceable and recognised under the provisions of Part II of this Act.”.

3. In section 7 of the principal Act, in sub-section (4), in clause (b), after the words “or

other means of telecommunication”, the words “including communication through electronic

means” shall be inserted.

4. In section 8 of the principal Act,—

(i) for sub-section (1), the following sub-section shall be substituted, namely:—

“(1) A judicial authority, before which an action is brought in a matter

which is the subject of an arbitration agreement shall, if a party to the arbitration

agreement or any person claiming through or under him, so applies not later

than the date of submitting his first statement on the substance of the dispute,

then, notwithstanding any judgment, decree or order of the Supreme Court or

any Court, refer the parties to arbitration unless it finds that prima facie no

valid arbitration agreement exists.”;

(ii) in sub-section (2), the following proviso shall be inserted, namely:—

“Provided that where the original arbitration agreement or a certified copy

thereof is not available with the party applying for reference to arbitration

under sub-section (1), and the said agreement or certified copy is retained by

the other party to that agreement, then, the party so applying shall file such

application along with a copy of the arbitration agreement and a petition praying

the Court to call upon the other party to produce the original arbitration

agreement or its duly certified copy before that Court.”.

5. Section 9 of the principal Act shall be renumbered as sub-section (1) thereof, and

after sub-section (1) as so renumbered, the following sub-sections shall be inserted,

namely:—

“(2) Where, before the commencement of the arbitral proceedings, a Court

passes an order for any interim measure of protection under sub-section (1), the

arbitral proceedings shall be commenced within a period of ninety days from the date

of such order or within such further time as the Court may determine.

(3) Once the arbitral tribunal has been constituted, the Court shall not entertain

an application under sub-section (1), unless the Court finds that circumstances exist

which may not render the remedy provided under section 17 efficacious.”.

Amendment

of section 7.

Amendment

of section 9.

Amendment

of section 8.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

6. In section 11 of the principal Act,—

(i) in sub-sections (4), (5) and (6), for the words “the Chief Justice or any

person or institution designated by him” wherever they occur, the words “the Supreme

Court or, as the case may be, the High Court or any person or institution designated

by such Court” shall be substituted;

(ii) after sub-section (6), the following sub-sections shall be inserted, namely:—

“(6A) The Supreme Court or, as the case may be, the High Court, while

considering any application under sub-section (4) or sub-section (5) or

sub-section (6), shall, notwithstanding any judgment, decree or order of any

Court, confine to the examination of the existence of an arbitration agreement.

(6B) The designation of any person or institution by the Supreme Court

or, as the case may be, the High Court, for the purposes of this section shall not

be regarded as a delegation of judicial power by the Supreme Court or the High

Court.”;

(iii) in sub-section (7), for the words “the Chief Justice or the person or institution

designated by him is final”, the words “the Supreme Court or, as the case may be, the

High Court or the person or institution designated by such Court is final and no

appeal including Letters Patent Appeal shall lie against such decision” shall be

substituted;

(iv) for sub-section (8), the following sub-section shall be substituted, namely:—

“(8) The Supreme Court or, as the case may be, the High Court or the

person or institution designated by such Court, before appointing an arbitrator,

shall seek a disclosure in writing from the prospective arbitrator in terms of

sub-section (1) of section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement

of the parties; and

(b) the contents of the disclosure and other considerations as are

likely to secure the appointment of an independent and impartial

arbitrator.”;

(v) in sub-section (9), for the words “the Chief Justice of India or the person or

institution designated by him”, the words “the Supreme Court or the person or

institution designated by that Court” shall be substituted;

(vi) for sub-section (10), the following sub-section shall be substituted,

namely:—

“(10) The Supreme Court or, as the case may be, the High Court, may

make such scheme as the said Court may deem appropriate for dealing with

matters entrusted by sub-section (4) or sub-section (5) or sub-section (6), to

it.”;

(vii) in sub-section (11), for the words “the Chief Justices of different High

Courts or their designates, the Chief Justice or his designate to whom the request has

been first made”, the words “different High Courts or their designates, the High Court

or its designate to whom the request has been first made” shall be substituted;

(viii) for sub-section (12), the following sub-section shall be substituted,

namely:—

‘(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8)

and sub-section (10) arise in an international commercial arbitration, the reference

to the “Supreme Court or, as the case may be, the High Court” in those

sub-sections shall be construed as a reference to the “Supreme Court”; and

Amendment

of section 11.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and

sub-section (10) arise in any other arbitration, the reference to “the Supreme

Court or, as the case may be, the High Court” in those sub-sections shall be

construed as a reference to the “High Court” within whose local limits the

principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is

situate, and where the High Court itself is the Court referred to in that clause, to

that High Court.’;

(ix) after sub-section (12), the following sub-sections shall be inserted,

namely:—

“(13) An application made under this section for appointment of an

arbitrator or arbitrators shall be disposed of by the Supreme Court or the

High Court or the person or institution designated by such Court, as the case

may be, as expeditiously as possible and an endeavour shall be made to dispose

of the matter within a period of sixty days from the date of service of notice on

the opposite party.

(14) For the purpose of determination of the fees of the arbitral tribunal

and the manner of its payment to the arbitral tribunal, the High Court may frame

such rules as may be necessary, after taking into consideration the rates specified

in the Fourth Schedule.

Explanation.—For the removal of doubts, it is hereby clarified that this

sub-section shall not apply to international commercial arbitration and in

arbitrations (other than international commercial arbitration) in case where parties

have agreed for determination of fees as per the rules of an arbitral institution.’’.

7. After section 11 of the principal Act, the following new section shall be inserted,

namely:—

“11A. (1) If the Central Government is satisfied that it is necessary or expedient

so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and

thereupon the Fourth Schedule shall be deemed to have been amended accordingly.

(2) A copy of every notification proposed to be issued under sub-section (1),

shall be laid in draft before each House of Parliament, while it is in session, for a total

period of thirty days which may be comprised in one session or in two or more

successive sessions, and if, before the expiry of the session immediately following

the session or the successive sessions aforesaid, both Houses agree in disapproving

the issue of the notification or both Houses agree in making any modification in the

notification, the notification shall not be issued or, as the case may be, shall be issued

only in such modified form as may be agreed upon by the both Houses of Parliament.’’.

8. In section 12 of the principal Act,—

(i) for sub-section (1), the following sub-section shall be substituted, namely:—

“(1) When a person is approached in connection with his possible

appointment as an arbitrator, he shall disclose in writing any circumstances,—

(a) such as the 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 rise to justifiable doubts as to his

independence or impartiality; and

(b) which are likely to affect his ability to devote sufficient time to

the arbitration and in particular his ability to complete the entire arbitration

within a period of twelve months.

Insertion of

new section

11A.

Amendment

of section 12.

Power of

Central

Government

to amend

Fourth

Schedule.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Explanation 1.—The grounds stated in the Fifth Schedule shall guide in

determining whether circumstances exist which give rise to justifiable doubts

as to the independence or impartiality of an arbitrator.

Explanation 2.—The disclosure shall be made by such person in the

form specified in the Sixth Schedule.”;

(ii) after sub-section (4), the following sub-section shall be inserted, namely:—

“(5) Notwithstanding any prior agreement to the contrary, any person

whose relationship, with the parties or counsel or the subject-matter of the

dispute, falls under any of the categories specified in the Seventh Schedule

shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between

them, waive the applicability of this sub-section by an express agreement in

writing:

Provided further that this sub-section shall not apply to cases where an

arbitrator has already been appointed on or before the commencement of the

Arbitration and Conciliation (Amendment) Act, 2015.’’.

9. In section 14 of the principal Act, in sub-section (1), in the opening portion, for the

words “The mandate of an arbitrator shall terminate if ”, the words “The mandate of an

arbitrator shall terminate and he shall be substituted by another arbitrator, if ” shall be

substituted.

10. For section 17 of the principal Act, the following section shall be substituted,

namely:—

“17. (1) A party may, during the arbitral proceedings or at any time after the

making of the arbitral award but before it is enforced in accordance with section 36,

apply to the arbitral tribunal:—

(i) for the appointment of a guardian for a minor or person of unsound

mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following

matters, namely—

(a) the preservation, interim custody or sale of any goods which

are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

thing which is the subject-matter of the dispute in arbitration, or as to

which any question may arise therein and authorising for any of the

aforesaid purposes any person to enter upon any land or building in the

possession of any party, or authorising any samples to be taken, or any

observation to be made, or experiment to be tried, which may be necessary

or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the

arbitral tribunal to be just and convenient,

and the arbitral tribunal shall have the same power for making orders, as

the court has for the purpose of, and in relation to, any proceedings before

it.

Amendment

of section 14.

Substitution

of new

section for

section 17.

Interim

measures

ordered by

arbitral

tribunal.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(2) Subject to any orders passed in an appeal under section 37, any order

issued by the arbitral tribunal under this section shall be deemed to be an order of the

Court for all purposes and shall be enforceable under the Code of Civil Procedure,

1908, in the same manner as if it were an order of the Court.”.

11. In section 23 of the principal Act, after sub-section (2), the following sub-section

shall be inserted, namely:—

“(2A) The respondent, in support of his case, may also submit a counterclaim or

plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such

counterclaim or set-off falls within the scope of the arbitration agreement.”.

12. In section 24 of the principal Act, after the proviso to sub-section (1), the following

proviso shall be inserted, namely:—

“Provided further that the arbitral tribunal shall, as far as possible, hold oral

hearings for the presentation of evidence or for oral argument on day-to-day basis,

and not grant any adjournments unless sufficient cause is made out, and may impose

costs including exemplary costs on the party seeking adjournment without any

sufficient cause.”.

13. In section 25 of the principal Act, in clause (b), at the end, after the words

“allegations by the claimant”, the words “and shall have the discretion to treat the right of

the respondent to file such statement of defence as having been forfeited” shall be inserted.

14. In section 28 of the principal Act, for sub-section (3), the following sub-section

shall be substituted, namely:—

“(3) While deciding and making an award, the arbitral tribunal shall, in all cases,

take into account the terms of the contract and trade usages applicable to the

transaction.”.

15. After section 29 of the principal Act, the following new sections shall be inserted,

namely:—

“29A. (1) The award shall be made within a period of twelve months from

the date the arbitral tribunal enters upon the reference.

Explanation.—For the purpose of this sub-section, an arbitral tribunal shall be

deemed to have entered upon the reference on the date on which the arbitrator or all

the arbitrators, as the case may be, have received notice, in writing, of their

appointment.

(2) If the award is made within a period of six months from the date the arbitral

tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such

amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1)

for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the

extended period specified under sub-section (3), the mandate of the arbitrator(s) shall

terminate unless the Court has, either prior to or after the expiry of the period so

specified, extended the period:

Provided that while extending the period under this sub-section, if the Court

finds that the proceedings have been delayed for the reasons attributable to the

arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding

five per cent. for each month of such delay.

(5) The extension of period referred to in sub-section (4) may be on the

application of any of the parties and may be granted only for sufficient cause and on

such terms and conditions as may be imposed by the Court.

Amendment

of section 23.

Amendment

of section 24.

Amendment

of section 25.

Amendment

of section 28.

Insertion of

new sections

29A and 29B.

Time limit for

arbitral award.

5 of 1908.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(6) While extending the period referred to in sub-section (4), it shall be open to

the Court to substitute one or all of the arbitrators and if one or all of the arbitrators

are substituted, the arbitral proceedings shall continue from the stage already reached

and on the basis of the evidence and material already on record, and the arbitrator(s)

appointed under this section shall be deemed to have received the said evidence and

material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral

tribunal thus reconstituted shall be deemed to be in continuation of the previously

appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any

of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court

as expeditiously as possible and endeavour shall be made to dispose of the matter

within a period of sixty days from the date of service of notice on the opposite party.

29B. (1) Notwithstanding anything contained in this Act, the parties to an arbi-

tration agreement, may, at any stage either before or at the time of appointment of the

arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure

specified in sub-section (3).

(2) The parties to the arbitration agreement, while agreeing for resolution of

dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a

sole arbitrator who shall be chosen by the parties.

(3) The arbitral tribunal shall follow the following procedure while conducting

arbitration proceedings under sub-section (1):

(a) The arbitral tribunal shall decide the dispute on the basis of written

pleadings, documents and submissions filed by the parties without any oral

hearing;

(b) The arbitral tribunal shall have power to call for any further information

or clarification from the parties in addition to the pleadings and documents filed

by them;

the arbitral tribunal considers it necessary to have oral hearing for clarifying

certain issues;

(d) The arbitral tribunal may dispense with any technical formalities, if an

oral hearing is held, and adopt such procedure as deemed appropriate for

expeditious disposal of the case.

(4) The award under this section shall be made within a period of six months

from the date the arbitral tribunal enters upon the reference.

(5) If the award is not made within the period specified in sub-section (4), the

provisions of sub-sections (3) to (9) of section 29A shall apply to the proceedings.

(6) The fees payable to the arbitrator and the manner of payment of the fees shall

be such as may be agreed between the arbitrator and the parties.’’.

16. In section 31 of the principal Act,—

(i) in sub-section (7), for clause (b), the following clause shall be substituted,

namely:—

‘(b) A sum directed to be paid by an arbitral award shall, unless the award

otherwise directs, carry interest at the rate of two per cent. higher than the

current rate of interest prevalent on the date of award, from the date of award to

the date of payment.

Explanation.—The expression “current rate of interest” shall have the same meaning

as assigned to it under clause (b) of section 2 of the Interest Act, 1978.’;

Fast track

procedure.

Amendment

of section 31.

14 of 1978.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(ii) for sub-section (8), the following sub-section shall be substituted, namely:—

“(8) The costs of an arbitration shall be fixed by the arbitral tribunal in

accordance with section 31A.”.

17. After section 31 of the principal Act, the following new section shall be inserted,

namely:—

‘31A. (1) In relation to any arbitration proceeding or a proceeding under any of

the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal,

notwithstanding anything contained in the Code of Civil Procedure,1908, shall have

the discretion to determine—

(a) whether costs are payable by one party to another;

(b) the amount of such costs; and

Explanation.—For the purpose of this sub-section, “costs” means reasonable

costs relating to—

(i) the fees and expenses of the arbitrators, Courts and witnesses;

(ii) legal fees and expenses;

(iii) any administration fees of the institution supervising the

arbitration; and

(iv) any other expenses incurred in connection with the arbitral or Court

proceedings and the arbitral award.

(2) If the Court or arbitral tribunal decides to make an order as to payment of

costs,—

(a) the general rule is that the unsuccessful party shall be ordered to pay

the costs of the successful party; or

(b) the Court or arbitral tribunal may make a different order for reasons to

be recorded in writing.

(3) In determining the costs, the Court or arbitral tribunal shall have regard to all

the circumstances, including—

(a) the conduct of all the parties;

(b) whether a party has succeeded partly in the case;

in the disposal of the arbitral proceedings; and

(d) whether any reasonable offer to settle the dispute is made by a party

and refused by the other party.

(4) The Court or arbitral tribunal may make any order under this section including

the order that a party shall pay—

(a) a proportion of another party’s costs;

(b) a stated amount in respect of another party’s costs;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to a distinct part of the proceedings; and

(g) interest on costs from or until a certain date.

Insertion of

new section

31A.

5 of 1908.

Regime for

costs.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(5) An agreement which has the effect that a party is to pay the whole or part of

the costs of the arbitration in any event shall be only valid if such agreement is made

after the dispute in question has arisen.’.

18. In section 34 of the principal Act,—

(I) in sub-section (2), in clause (b), for the Explanation, the following

Explanations shall be substituted, namely:—

“Explanation 1.—For the avoidance of any doubt, it is clarified that an

award is in conflict with the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or

corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian

law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.—For the avoidance of doubt, the test as to whether there

is a contravention with the fundamental policy of Indian law shall not entail a

review on the merits of the dispute.”;

(II) after sub-section (2), the following sub-section shall be inserted, namely:—

“(2A) An arbitral award arising out of arbitrations other than international

commercial arbitrations, may also be set aside by the Court, if the Court finds

that the award is vitiated by patent illegality appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground of an

erroneous application of the law or by reappreciation of evidence.”;

(III) after sub-section (4), the following sub-sections shall be inserted, namely:—

“(5) An application under this section shall be filed by a party only after

issuing a prior notice to the other party and such application shall be

accompanied by an affidavit by the applicant endorsing compliance with the

said requirement.

(6) An application under this section shall be disposed of expeditiously,

and in any event, within a period of one year from the date on which the notice

referred to in sub-section (5) is served upon the other party.”.

19. For section 36 of the principal Act, the following section shall be substituted,

namely:—

“36. (1) Where the time for making an application to set aside the arbitral award

under section 34 has expired, then, subject to the provisions of sub-section (2), such

award shall be enforced in accordance with the provisions of the Code of Civil

Procedure, 1908, in the same manner as if it were a decree of the court.

(2) Where an application to set aside the arbitral award has been filed in the

Court under section 34, the filing of such an application shall not by itself render that

award unenforceable, unless the Court grants an order of stay of the operation of the

said arbitral award in accordance with the provisions of sub-section (3), on a separate

application made for that purpose.

(3) Upon filing of an application under sub-section (2) for stay of the operation

of the arbitral award, the Court may, subject to such conditions as it may deem fit,

grant stay of the operation of such award for reasons to be recorded in writing:

Amendment of

section 34.

Substitution

of new

section for

section 36.

Enforce-

ment.

5 of 1908.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Provided that the Court shall, while considering the application for grant of

stay in the case of an arbitral award for payment of money, have due regard to the

provisions for grant of stay of a money decree under the provisions of the Code of

Civil Procedure, 1908.”.

20. In section 37 of the principal Act, in sub-section (1), for clauses (a) and (b), the

following clauses shall be substituted, namely:—

“(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

21. In section 47 of the principal Act, for the Explanation, the following Explanation

shall be substituted, namely:—

‘Explanation.—In this section and in the sections following in this Chapter,

“Court” means the High Court having original jurisdiction to decide the questions

forming the subject-matter of the arbitral award if the same had been the subject-

matter of a suit on its original civil jurisdiction and in other cases, in the High Court

having jurisdiction to hear appeals from decrees of courts subordinate to such

High Court.’.

22. In section 48 of the principal Act, for the Explanation to sub-section (2), the

following Explanations shall be substituted, namely:—

“Explanation 1.—For the avoidance of any doubt, it is clarified that an award

is in conflict with the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or corruption

or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.—For the avoidance of doubt, the test as to whether there is a

contravention with the fundamental policy of Indian law shall not entail a review on

the merits of the dispute.”.

23. In section 56 of the principal Act, for the Explanation, the following Explanation

shall be substituted, namely:—

‘Explanation.—In this section and in the sections following in this Chapter,

“Court” means the High Court having original jurisdiction to decide the questions

forming the subject-matter of the arbitral award if the same had been the subject-

matter of a suit on its original civil jurisdiction and in other cases, in the High Court

having jurisdiction to hear appeals from decrees of courts subordinate to such

High Court.’.

24. In section 57 of the principal Act, in sub-section (1), for the Explanation, the

following Explanations shall be substituted, namely:—

“Explanation 1.—For the avoidance of any doubt, it is clarified that an award

is in conflict with the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or corruption

or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

5 of 1908.

Amendment

of section 37.

Amendment

of section 47.

Amendment

of section 48.

Amendment

of section 56.

Amendment

of section 57.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Explanation 2.—For the avoidance of doubt, the test as to whether there is a

contravention with the fundamental policy of Indian law shall not entail a review on

the merits of the dispute.”.

25. After the Third Schedule to the principal Act, the following new Schedules shall

be inserted, namely:—

‘THE FOURTH SCHEDULE

[See section 11 (14)]

Sum in dispute

Model fee

Up to Rs. 5,00,000

Rs. 45,000

Above Rs. 5,00,000 and up to

Rs. 45,000 plus 3.5 per cent. of the claim amount

Rs. 20,00,000

over and above Rs. 5,00,000

Above Rs. 20,00,000 and up to

Rs. 97,500 plus 3 per cent. of the claim amount

Rs. 1,00,00,000

over and above Rs. 20,00,000

Above Rs. 1,00,00,000 and

Rs. 3,37,500 plus 1 per cent. of the claim amount

up to Rs. 10,00,00,000

over and above Rs. 1,00,00,000

Above Rs. 10,00,00,000 and up to

Rs. 12,37,500 plus 0.75 per cent. of the claim

Rs. 20,00,00,000

amount over and above Rs. 1,00,00,000

Above Rs. 20,00,00,000

Rs. 19,87,500 plus 0. 5 per cent. of the claim

amount over and above Rs. 20,00,00,000 with

a ceiling of Rs. 30,00,000

Note:— In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an

additional amount of twenty-five per cent. on the fee payable as per the table set out

above.

THE FIFTH SCHEDULE

[See section 12 (1)(b)]

The following grounds give rise to justifiable doubts as to the independence or

impartiality of arbitrators:

Arbitrator’s relationship with the parties or counsel

1. The arbitrator is an employee, consultant, advisor or has any other past or present

business relationship with a party.

2. The arbitrator currently represents or advises one of the parties or an affiliate of

one of the parties.

3. The arbitrator currently represents the lawyer or law firm acting as counsel for one

of the parties.

4. The arbitrator is a lawyer in the same law firm which is representing one of the

parties.

5. The arbitrator is a manager, director or part of the management, or has a similar

controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in

the matters in dispute in the arbitration.

6. The arbitrator’s law firm had a previous but terminated involvement in the case

without the arbitrator being involved himself or herself.

Insertion of

new Fourth

Schedule, Fifth

Schedule,

Sixth Schedule

and Seventh

Schedule.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

7. The arbitrator’s law firm currently has a significant commercial relationship with

one of the parties or an affiliate of one of the parties.

8. The arbitrator regularly advises the appointing party or an affiliate of the appointing

party even though neither the arbitrator nor his or her firm derives a significant financial

income therefrom.

9. The arbitrator has a close family relationship with one of the parties and in the case

of companies with the persons in the management and controlling the company.

10. A close family member of the arbitrator has a significant financial interest in one of

the parties or an affiliate of one of the parties.

11.The arbitrator is a legal representative of an entity that is a party in the arbitration.

12. The arbitrator is a manager, director or part of the management, or has a similar

controlling influence in one of the parties.

13. The arbitrator has a significant financial interest in one of the parties or the

outcome of the case.

14. The arbitrator regularly advises the appointing party or an affiliate of the appointing

party, and the arbitrator or his or her firm derives a significant financial income therefrom.

Relationship of the arbitrator to the dispute

15. The arbitrator has given legal advice or provided an expert opinion on the dispute

to a party or an affiliate of one of the parties.

16. The arbitrator has previous involvement in the case.

Arbitrator’s direct or indirect interest in the dispute

17. The arbitrator holds shares, either directly or indirectly, in one of the parties or an

affiliate of one of the parties that is privately held.

18. A close family member of the arbitrator has a significant financial interest in the

outcome of the dispute.

19. The arbitrator or a close family member of the arbitrator has a close relationship

with a third party who may be liable to recourse on the part of the unsuccessful party in the

dispute.

Previous services for one of the parties or other involvement in the case

20. The arbitrator has within the past three years served as counsel for one of the

parties or an affiliate of one of the parties or has previously advised or been consulted by

the party or an affiliate of the party making the appointment in an unrelated matter, but the

arbitrator and the party or the affiliate of the party have no ongoing relationship.

21. The arbitrator has within the past three years served as counsel against one of the

parties or an affiliate of one of the parties in an unrelated matter.

22. The arbitrator has within the past three years been appointed as arbitrator on two

or more occasions by one of the parties or an affiliate of one of the parties.

23. The arbitrator’s law firm has within the past three years acted for one of the parties

or an affiliate of one of the parties in an unrelated matter without the involvement of the

arbitrator.

24. The arbitrator currently serves, or has served within the past three years, as

arbitrator in another arbitration on a related issue involving one of the parties or an affiliate

of one of the parties.

SEC. 2]

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Relationship between an arbitrator and another arbitrator or counsel

25. The arbitrator and another arbitrator are lawyers in the same law firm.

26. The arbitrator was within the past three years a partner of, or otherwise affiliated

with, another arbitrator or any of the counsel in the same arbitration.

27. A lawyer in the arbitrator’s law firm is an arbitrator in another dispute involving the

same party or parties or an affiliate of one of the parties.

28. A close family member of the arbitrator is a partner or employee of the law firm

representing one of the parties, but is not assisting with the dispute.

29. The arbitrator has within the past three years received more than three appointments

by the same counsel or the same law firm.

Relationship between arbitrator and party and others involved in the arbitration

30. The arbitrator’s law firm is currently acting adverse to one of the parties or an

affiliate of one of the parties.

31. The arbitrator had been associated within the past three years with a party or an

affiliate of one of the parties in a professional capacity, such as a former employee or

partner.

Other circumstances

32. The arbitrator holds shares, either directly or indirectly, which by reason of number

or denomination constitute a material holding in one of the parties or an affiliate of one of

the parties that is publicly listed.

33. The arbitrator holds a position in an arbitration institution with appointing authority

over the dispute.

34. The arbitrator is a manager, director or part of the management, or has a similar

controlling influence, in an affiliate of one of the parties, where the affiliate is not directly

involved in the matters in dispute in the arbitration.

Explanation 1.—The term “close family member” refers to a spouse, sibling, child,

parent or life partner.

Explanation 2.—The term “affiliate” encompasses all companies in one group of

companies including the parent company.

Explanation 3.—For the removal of doubts, it is clarified that it may be the practice in

certain specific kinds of arbitration, such as maritime or commodities arbitration, to draw

arbitrators from a small, specialised pool. If in such fields it is the custom and practice for

parties frequently to appoint the same arbitrator in different cases, this is a relevant fact to

be taken into account while applying the rules set out above.

THE SIXTH SCHEDULE

[See section 12 (1)(b)]

NAME:

CONTACT DETAILS:

PRIOR EXPERIENCE (INCLUDING EXPERIENCE WITH ARBITRATIONS):

NUMBER OF ONGOING ARBITRATIONS:

CIRCUMSTANCES DISCLOSING 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 RISE TO JUSTIFIABLE DOUBTS AS TO YOUR

INDEPENDENCE OR IMPARTIALITY (LIST OUT):

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[PART II—

CIRCUMSTANCES WHICH ARE LIKELY TO AFFECT YOUR ABILITY TO DEVOTE

SUFFICIENT TIME TO THE ARBITRATION AND IN PARTICULAR YOUR ABILITY

TO FINISH THE ENTIRE ARBITRATION WITHIN TWENTY-FOUR MONTHS AND

RENDER AN AWARD WITHIN THREE MONTHS (LIST OUT):

THE SEVENTH SCHEDULE

[See section 12 (5)]

Arbitrator’s relationship with the parties or counsel

1. The arbitrator is an employee, consultant, advisor or has any other past or present

business relationship with a party.

2. The arbitrator currently represents or advises one of the parties or an affiliate of

one of the parties.

3. The arbitrator currently represents the lawyer or law firm acting as counsel for one

of the parties.

4. The arbitrator is a lawyer in the same law firm which is representing one of the

parties.

5. The arbitrator is a manager, director or part of the management, or has a similar

controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in

the matters in dispute in the arbitration.

6. The arbitrator’s law firm had a previous but terminated involvement in the case

without the arbitrator being involved himself or herself.

7. The arbitrator’s law firm currently has a significant commercial relationship with

one of the parties or an affiliate of one of the parties.

8. The arbitrator regularly advises the appointing party or an affiliate of the appointing

party even though neither the arbitrator nor his or her firm derives a significant financial

income therefrom.

9. The arbitrator has a close family relationship with one of the parties and in the case

of companies with the persons in the management and controlling the company.

10. A close family member of the arbitrator has a significant financial interest in one of

the parties or an affiliate of one of the parties.

11. The arbitrator is a legal representative of an entity that is a party in the arbitration.

12. The arbitrator is a manager, director or part of the management, or has a similar

controlling influence in one of the parties.

13. The arbitrator has a significant financial interest in one of the parties or the

outcome of the case.

14. The arbitrator regularly advises the appointing party or an affiliate of the appointing

party, and the arbitrator or his or her firm derives a significant financial income therefrom.

Relationship of the arbitrator to the dispute

15. The arbitrator has given legal advice or provided an expert opinion on the dispute

to a party or an affiliate of one of the parties.

16. The arbitrator has previous involvement in the case.

Arbitrator’s direct or indirect interest in the dispute

17. The arbitrator holds shares, either directly or indirectly, in one of the parties or an

affiliate of one of the parties that is privately held.

18. A close family member of the arbitrator has a significant financial interest in the

outcome of the dispute.

SEC. 2]

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19. The arbitrator or a close family member of the arbitrator has a close relationship

with a third party who may be liable to recourse on the part of the unsuccessful party in the

dispute.

Explanation 1.—The term “close family member” refers to a spouse, sibling, child,

parent or life partner.

Explanation 2.—The term “affiliate” encompasses all companies in one group of

companies including the parent company.

Explanation 3.—For the removal of doubts, it is clarified that it may be the practice in

certain specific kinds of arbitration, such as maritime or commodities arbitration, to draw

arbitrators from a small, specialised pool. If in such fields it is the custom and practice for

parties frequently to appoint the same arbitrator in different cases, this is a relevant fact to

be taken into account while applying the rules set out above.’.

26. (1) The Arbitration and Conciliation (Amendment) Ordinance, 2015, is hereby

repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the principal

Act, as amended by the said Ordinance, shall be deemed to have been done or taken under

the corresponding provisions of the principal Act, as amended by this Act.

Ord. 9 of 2015.

Repeal and

savings.

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[PART II—

STATEMENT OF OBJECTS AND REASONS

The general law relating to arbitration is contained in the Arbitration and Conciliation

Act, 1996 (hereinafter referred to as the Act). The Act, which is based on the UNCITRAL

Model Law on International Commercial Arbitration, as adopted in 1985 by the United Nations

Commission on International Trade Law (UNCITRAL), applies to both international as well

to domestic arbitration.

2. The Act was enacted to provide for speedy disposal of cases relating to arbitration

with least court intervention. With the passage of time, some difficulties in the applicability

of the Act have been noticed. Interpretation of the provisions of the Act by courts in some

cases have resulted in delay of disposal of arbitration proceedings and increase in

interference of courts in arbitration matters, which tend to defeat the object of the Act. With

a view to overcome the difficulties, the matter was referred to the Law Commission of India,

which examined the issue in detail and submitted its 176th Report. On the basis of the said

report, the Arbitration and Conciliation (Amendment) Bill, 2003 was introduced in the Rajya

Sabha on 22nd December, 2003. The said Bill was referred to the Department-related

Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice for

examination and Report. The said Committee, submitted its Report to the Parliament on

4th August, 2005, wherein the Committee recommended that since many provisions of the

said Bill were contentious, the Bill may be withdrawn and a fresh legislation may be brought

after considering its recommendations. Accordingly, the said Bill was withdrawn from the

Rajya Sabha.

3. On a reference made again in pursuance of the above, the Law Commission examined

and submitted its 246th Report on “Amendments to the Arbitration and Conciliation

Act, 1996” in August, 2014 and recommended various amendments in the Act. The proposed

amendments to the Act would facilitate and encourage Alternative Dispute Mechanism,

especially arbitration, for settlement of disputes in a more user-friendly, cost effective and

expeditious disposal of cases since India is committed to improve its legal framework to

obviate in disposal of cases.

4. As India has been ranked at 178 out of 189 nations in the world in contract enforcement,

it is high time that urgent steps are taken to facilitate quick enforcement of contracts, easy

recovery of monetary claims and award of just compensation for damages suffered and

reduce the pendency of cases in courts and hasten the process of dispute resolution through

arbitration, so as to encourage investment and economic activity.

5. As Parliament was not in session and immediate steps were required to be taken to

make necessary amendments to the Arbitration and Conciliation Act, 1996 to attract foreign

investment by projecting India as an investor friendly country having a sound legal

framework, the President was pleased to promulgate the Arbitration and Conciliation

(Amendment) Ordinance, 2015.

6. It is proposed to introduce the Arbitration and Conciliation (Amendment) Bill, 2015, to

replace the Arbitration and Conciliation (Amendment) Ordinance, 2015, which inter alia,

provides for the following, namely:—

(i) to amend the definition of “Court” to provide that in the case of

international commercial arbitrations, the Court should be the High Court;

(ii) to ensure that an Indian Court can exercise jurisdiction to grant interim

measures, etc., even where the seat of the arbitration is outside India;

(iii) an application for appointment of an arbitrator shall be disposed of by the

High Court or Supreme Court, as the case may be, as expeditiously as possible and an

endeavour should be made to dispose of the matter within a period of sixty days;

SEC. 2]

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(iv) to provide that while considering any application for appointment of

arbitrator, the High Court or the Supreme Court shall examine the existence of a prima

facie arbitration agreement and not other issues;

(v) to provide that the arbitral tribunal shall make its award within a period of

twelve months from the date it enters upon the reference and that the parties may,

however, extend such period up to six months, beyond which period any extension can

only be granted by the Court, on sufficient cause;

(vi) to provide that a model fee Schedule on the basis of which High Courts may

frame rules for the purpose of determination of fees of arbitral tribunal, where a

High Court appoints arbitrator in terms of section 11 of the Act;

(vii) to provide that the parties to dispute may at any stage agree in writing that

their dispute be resolved through fast track procedure and the award in such cases

shall be made within a period of six months;

(viii) to provide for neutrality of arbitrators, when a person is approached in

connection with possible appointment as an arbitrator;

(ix) to provide that application to challenge the award is to be disposed of by the

Court within one year.

7. The amendments proposed in the Bill will ensure that arbitration process becomes

more user-friendly, cost effective and lead to expeditious disposal of cases.

8. The Bill seeks to replace the aforesaid Ordinance.

NEW DELHI; D. V. SADANANDA GOWDA.

The 25th November, 2015.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Notes on clauses

Clause 2 of the Bill seeks to amend section 2 of the Arbitration and Conciliation Act, 1996

(hereinafter referred to as the principal Act) to re-define some of the expressions used in the

Act. A proviso below sub-section (2) is inserted to provide that some of the provisions of

Part I of the Act shall also apply to International Commercial Arbitration, even if the place of

arbitration is outside India.

Clause 3 of the Bill seeks to amend clause (b) of sub-section (4) of section 7 of the

principal Act to expressly provide that arbitration agreement contained in the form of

communication through electronic means shall also be treated as arbitration agreement in

writing.

Clause 4 of the Bill seeks to amend section 8 of the principal Act to specify that the

judicial authority shall refer the parties to arbitration unless it finds that prima facie no valid

arbitration agreement exits. A proviso below sub-section (2) is inserted to provide that where

the original arbitration agreement or certified copy thereof is not available with the party who

apply under sub-section (1), and is retained by the other party, such party shall file a copy of

the arbitration agreement along with application under sub-section (1) praying the Court to

call upon the other party to produce the original arbitration agreement or its duly certified

copy before the Court.

Clause 5 of the Bill seeks to amend section 9 of the principal Act to provide that where the

Court passes an order for any interim measure under sub-section (1) before the commencement

of arbitral proceedings, the arbitral proceedings shall be commenced within a period of

ninety days from the date of such order. It further provides that once the arbitral tribunal is

constituted, the Court shall not entertain an application for interim measure unless it finds

that circumstances which may not render the remedy provided under section 17 efficacious.

Clause 6 of the Bill seeks to amend section 11 of the principal Act to provide that

appointment of arbitrator shall be made by the Supreme Court or the High Court, as the case

may be, instead of the Chief Justice of India or the Chief Justice of the High Court. Sub-

section (6A) is inserted to provide that the Supreme Court or the High Court while considering

application under sub-section (4) to (6) shall confine to the examination of an arbitration

agreement. In sub-section (7), it is clarified that a decision on a matter entrusted under

sub-section (4) to (6) shall be final and no appeal including Letters Patent Appeal shall lie

against such decision. A new sub-section (13) is inserted to provide that an application for

appointment of arbitrator(s) shall be disposed of as expeditiously as possible and an endeavor

shall be made to dispose of the matter within a period of sixty days from the date of service

of notice on the opposite party. A new sub-section (14) is inserted to empower the High

Court to frame rules for the purpose of determination of fees of the arbitral tribunal and the

manner of such payment. The High Court while framing rules shall take into account the rates

of fee specified in the Fourth Schedule.

Clause 7 of the Bill seeks to insert a new section 11A in the principal Act to empower the

Central Government to amend the Fourth Schedule by notification in the Official Gazette after

laying the same in draft form before each House of Parliament.

Clause 8 of the Bill seeks to amend section 12 of the principal Act to ensure neutrality of

arbitrators. When a person is approached in connection with possible appointment of

arbitrator, he is required to disclose in writing regarding existence of any relationship or

interest of any kind which is likely to give rise to justifiable doubts. He is also required to

disclose any circumstances which are likely to affect his ability to devote sufficient time to

the arbitration and complete the arbitration within the specified period. A new sub-section

(5) is inserted to the effect that a person having relationship as specified in the Seventh

Schedule shall be ineligible to be appointed as an arbitrator.

SEC. 2]

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Clause 9 of the Bill seeks to amend sub-section (1) of section 14 of the principal Act to

provide that on termination of mandate of an arbitrator, he is to be substituted by another

arbitrator.

Clause 10 of the Bill seeks to amend section 17 of the principal Act to provide that the

arbitral tribunal shall have power to grant all kinds of interim measures which the Court is

empowered to grant under section 9. It further provides that such interim measures can be

granted by the arbitral tribunal during the arbitral proceedings or at any time after making the

arbitral award, but before it is enforced under section 36. Sub-section (2) is amended to

provide that, any order issued by the arbitral tribunal for grant of interim measures shall be

deemed to be an order of the Court for all purposes and shall be enforceable under the Code

of Civil Procedure, 1908 in the same manner as if it were an order of the Court.

Clause 11 of the Bill seeks to insert a new sub-section (2A) in section 23 of the principal

Act to provide that the respondent, in support of his case, may also submit a counterclaim or

a set-off, if such counterclaim or set-off falls within the scope of the arbitration agreement.

Clause 12 of the Bill seeks to insert a proviso in sub-section (1) of section 24 of the

principal Act to provide that the arbitral tribunal shall hold oral hearing for the presentation

of evidence or oral arguments on the day-to-day basis and shall not grant any adjournments

without any sufficient cause.

Clause 13 of the Bill seeks to amend section 25 of the principal Act so as to treat the right

of the respondent to file the statement of defence to have been forfeited, if the respondent

fails to communicate such statement in accordance with sub-section (1) of section 23 without

reasonable cause.

Clause 14 of the Bill seeks to insert a new sub-section (3) in section 28 of the principal Act

to provide that the arbitral tribunal while deciding and making an award, take into account

the terms of the contract and trade usages applicable to the transaction.

Clause 15 of the Bill seeks to insert new sections 29A and 29B in the principal Act to

specify the time limit for making arbitral award. Section 29A provides that the award is to be

made within a period of twelve months from the date the arbitral tribunal enters upon the

reference. However, the parties may extend such period for a further period not exceeding six

months. If the award is made within a period of six months, the arbitral tribunal shall be

entitled to received additional fees as the parties agree. If the award is not made within

specified period or extended period, the mandate of the arbitrator shall terminate unless the

time is extended by the court in accordance with the provisions of sub-sections (4) to (9).

Further, section 29B provides for fast track procedure for conducting arbitral proceedings,

in cases where the parties mutually agree for such procedure. In such cases, the arbitral

tribunal shall decide the dispute on the basis of written pleadings, documents and written

submission and shall not hold oral hearing. The award is to be made within a period of six

months from the date the arbitral tribunal enters, failing which the provisions of sub-sections

(3) to (9) of section 29A shall apply.

Clause 16 of the Bill seeks to amend section 31 of the principal Act by substituting

clause (b) of sub-section (7) to provide that a sum directed to be paid by an arbitral award

shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher

than the current rate of interest prevalent on the date of award, from the date of award to the

date of payment. It further seeks to substitute sub-section (8) of the said section to provide

that the costs of an arbitration shall be fixed by the arbitral tribunal in accordance with

section 31A .

Clause 17 of the Bill seeks to insert a new section 31A in the principal Act to provide in

detail provisions related to regime of costs which may be determined and ordered by the

Court or arbitral tribunal in relation to any arbitral proceedings or any proceedings under the Act.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Clause 18 of the Bill seeks to amend section 34 of the principal Act to provide for

Explanation to the term ‘public policy of India’ in sub-clause (ii) of clause (b) of sub-section

(2) to the effect that an arbitral award shall be treated as an award in conflict with the public

policy of India only where making of award was induced or affected by fraud or corruption or

was in violation of section 75 or section 81; or is in contravention with the fundamental

policy of Indian law; or it is in conflict with the most basic notions of morality or justice.

Explanation 2 is inserted to explain that the test as to whether there is a contravention with

the fundamental policy of Indian law shall not entail a review on the merits of the dispute. A

new sub-section (2A) is inserted to provide an additional ground of patent illegality to

challenge the arbitral award arising out of arbitrations other than international commercial

arbitrations. Sub-section (5) is inserted to provide that an application for setting aside of

award under this section is to be filed after issuing prior notice to the other party. Sub-

section (6) is inserted to prescribe a period of one year for disposal of an application for

setting aside an arbitral award.

Clause 19 of the Bill seeks to amend section 36 of the principal Act relating to enforcement

of award to the effect that mere filing of application under section 34 for setting aside arbitral

award would not render that award unenforceable unless the court grants an order of stay on

the operation of the said award on a separate application made for that purpose.

Clause 20 of the Bill seeks to amend section 37 of the principal Act so as to include the

order refusing to refer the parties to arbitration under section 8 also appealable.

Clause 21 of the Bill seeks to substitute the Explanation in section 47 of the principal Act

to provide that the Court referred to in that section to mean the High Court.

Clause 22 of the Bill seeks to amend section 48 of the principal Act to provide for

Explanation to the term 'public policy of India' in clause (b) of sub-section (2), by amending

the existing Explanation, to the effect that an arbitral award is in conflict with the public

policy of India only if the making of award was induced or affected by fraud or corruption or

was in violation of section 75 or section 81; or is in contravention with the fundamental

policy of Indian law; or it is in conflict with the most basic notions of morality or justice.

Explanation 2 is inserted to explain that the test as to whether there is a contravention with

the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

Clause 23 of the Bill seeks to substitute the Explanation in section 56 of the principal Act

to provide that the Court referred to in that section to mean the High Court.

Clause 24 of the Bill seeks to amend section 57 of the principal Act to provide for

Explanation to the term ‘public policy of India’ in clause (e) of sub-section (1) by amending

the existing Explanation to the effect that an arbitral award is in conflict with the public

policy of India only if the making of award was induced or affected by fraud or corruption or

was in violation of section 75 or section 81; or is in contravention with the fundamental

policy of Indian law; or it is in conflict with the most basic notions of morality or justice.

Explanation 2 is inserted to explain that the test as to whether there is a contravention with

the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

Clause 25 of the Bill seeks to insert the Fourth, Fifth, Sixth and Seventh Schedules in the

principal Act.

Clause 26 of the Bill seeks to repeal the Arbitration and Conciliation (Amendment)

Ordinance, 2015.

SEC. 2]

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MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 6 of the Bill make provisions for amending section 11 of the principal Act relating

to appointment of arbitrators. Sub-clause (ix) of the said clause provides for insertion of a

new sub-section (14) in the said section empowering the High Court to frame such rules as

may be necessary for the purpose of determination of the fees of the arbitral tribunal and the

manner of its payment to the arbitral tribunal, after taking into consideration the rates specified

in the Fourth Schedule.

2. Clause 7 of the Bill provides for insertion of a new section 11A and sub-section (1) of

the said section empowers the Central Government to amend the Fourth Schedule by

notification in the Official Gazette, if it is satisfied that it is necessary or expedient so to do,

and thereupon the Fourth Schedule shall be deemed to have been amended accordingly.

Sub-section (2) of the said section provides that every notification proposed to be issued

under sub-section (1), shall be laid in draft before each House of Parliament.

3. The matters in respect of which notification or order may be made under the aforesaid

provisions are matters of administrative detail and it is not practicable to provide for them in

the Bill itself. The delegation of legislative powers is, therefore, of a normal character.

ANOOP MISHRA

Secretary General

GMGIPMRND—3266GI(S3)—05-12-2015.

PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI—2015.