This article is written by Youginder Singh, pursuing a Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho.

Introduction

Throughout the timeframe, courts have assumed an urgent part in giving reasonable equity. Courts have aided, and as yet helped each person, association, organization, government from getting their privileges abused/disregarded. However, the cycle of courts is extremely delayed, tedious, one needs to trust that years will get the issue settled by the courts. Subsequently, to spare time, energy, assets, cost – Arbitration comes into the picture to give a quick solution for the gatherings. The main focus of bringing arbitration into effect is to promote ADR (alternative dispute resolution) in India.

What is arbitration in law 

In straightforward word reference language, the word Arbitration is – a cycle to tackle the contention between the individuals by aiding and furnishing them with a pleasant arrangement.

In Law, Arbitration is a settlement of a debate between the pleasing gatherings by the arbitrator(s) who give a coupling answer for the contest. Taking a gander at the main side, in current occasions, where there is a shortage of time, intervention is a legitimate instrument that urges to speed up the question between parties commonly by naming an arbitrator(s), whose choice is official on the gatherings and this choice is called Arbitral Award. It is an approach to settle the contest outside the courts, subsequently, sparing time, cost, assets, and end up being viable.

Role of the courts before the Arbitration & Conciliation Amendment Act, 2019

The Arbitration and Conciliation Act, 1996 came into effect, with an objective to diminish the supervisory role of courts and restrict the judicial power limited to the appointment of arbitrators. However, the courts from time to time exercise some judicial supervision, which has extended to find whether a valid dispute exists between the parties. Looking at the position of the courts from the year 1996 to 2015, the courts took its view that their power under section 11, stipulates the procedure for appointment of arbitration, of arbitration and conciliation act, is administrative and only limited to the appointment of the arbitrator, but later it was clarified that courts could even look into the matter whether valid dispute existed between the parties.  

Arbitration and Conciliation Amendment Act, 2015 and its impact on judicial authority 

After a prolonged journey, infinite approaches and methods to diminish/restrict the intervention of courts into arbitration, finally a Law Commission on its 246th report of August, proposed a necessary amendment. With reference to our topic, the proposed amendment made by the Central Government was to promote the arbitration in India along with the minimum intervention of courts, that help to boost and make gatherings more trustworthy towards the role of arbitration in India & to make it more effective for the gatherings to go for arbitration for the settle the debates. Therefore, with the Arbitration and Conciliation Amendment Act, 2015 a novel provision has come into force.

A new provision section 11(6A) was introduced, which provided that the court’s role was limited only to examine the existence of the arbitration agreement. To illustrate whether the proposed amendment comes into effect or not, a crucial and prominent case law which gives insight into how the courts’ role has been restricted and limited to examining the existence of arbitration agreement. A plain reading has been affirmed by the Hon’ble Apex Court in Duro Felgurea SA vs Gangavaram Port Ltd (2017) [] where it ruled that, after the amendment, all the courts need to see whether an arbitration agreement exits – Nothing more or nothing less. In Mayavati Trading vs Pradyuat Deb Burman in which the Hon’ble apex court, while relying on Duro Felguera gave a finding that the pre-2015 position has been overruled by the legislation and the power of courts only limited to the examination of the arbitration agreement. 

How 2019 Amendment brought drastic changes towards promoting robust arbitration and limits the court’s job

The 2019 amendment has brought a certain measure that is significant in promoting the arbitration and ADR mechanism making it more robust and friendlier also aid in the minimal intervention of courts. 

The Key significant amendment of 2019 with reference to today’s topic is:

• Appointment by Arbitral Institution – The 2019 alterations have brought a strategy for the arrangement of arbitrator by the arbitral organization, assigned, by the high court in the event of International Commercial Arbitration and by the high court in different situations where ACI (Arbitration Council of India) evaluated the Arbitral Institution. 
• Constitution of Arbitration Council of India (ACI) – The 2019 amendment mandates establishment of ACI, which will carry out following functions:

1. Evolve a strategy and rules for foundation, up-gradation of uniform proficient norms in issues identified with the assertion and ADR instruments. 
2. Conduct workshops, preparing for territory intervention. 
3. Frame strategy and rules to review arbitral institutions and arbitrators according to the capability. 
4. Promote and support arbitration and the ADR system in India. 
5. To set up and keep up the electronic vault of the relative multitude of arbitral honors made in India.

• As we discussed that Arbitral Institutions are graded by ACI, there are certain basic criteria as to which the institutions are graded, Infrastructure, quality, performance, caliber of arbitrator and compliance with regard to time specification for the disposal of the debates whether domestic or international commercial disputes. 
• With the amendment of 2019, the judicial intervention has limited to certain conditions which explained beneath:

Section 5 of the said act, talks about the Extent of Judicial Intervention which reproduced as:

“Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this part”.

Power of judiciary to refer the parties to arbitration

If a debate is brought before the judiciary despite having an original arbitration agreement or duly certified copy, not later than submitting the first statement, then the judiciary moves an application to arbitration under section 8 of the act. The Judiciary shall not entertain the application unless the application contains an original arbitration agreement or duly certified copy. 

Interim measures by the court

Section 9 of the act talks about the Judiciary to grant an interim measure to the party till the dispute is resolved by the final award. On an application by the party before the proceedings or during proceedings or after the award is made but before its enforcement, the Judiciary can grant interim order.

Arbitral award set aside by court

Section 34 of the Act justifies that – once an Arbitral Award is passed which is similar to the judgment of the Court, then, there are certain grounds on which court played a prominent role in setting aside an Arbitral Award, that’s where Judiciary comes into picture. The grounds on which an arbitral award set aside by the court: 

1. Incapacity of parties.
2. When the arbitration agreement is not valid under the law. 
3. Notice of appointment of arbitration is not given.
4. Composition of the arbitral tribunal is not in accordance with the agreement between parties.
5. Subject matter of dispute doesn’t fall under the ambit of the arbitration.
6. Arbitral grant is in a clash with the public approach.
7. The Applicant can file the application within the period of 3 months but in case the court finds that the applicant was prevented due to sufficient cause, then, in that case the court grants an extra period of 30 days to file the application.    

Cases laws where judicial power is limited to the examination of the arbitration and agreement

1. In Parsvnath Developers Ltd & Anr vs Rail Land Development Authority – The Delhi High Court reiterates that the power of the court is only and only limited to check the existence of an arbitration clause and not even its validity. 
2. In Picasso Digital Media Pvt Ltd vs Pick-A-Cent Consultancy Service Pvt Ltd – Delhi   High Court, at the stage of appointment of arbitrator, cannot examine the limitation, justifiable claim of the respondent against the petitioner as that would be the question to be examined by the arbitrator in arbitration proceedings.
3. In Uttarakhand Purv Sainik Kalyan Nigam Ltd vs Northern Coal Field Ltd – Court find was only limited to the existence of an arbitration agreement. All other objections are decided by the arbitral tribunal.  

Conclusion 

After the 2019 alteration, a greater need is given in reinforcing mediation in India and try to limit the intercession of legal power. As, we as a whole know that the Indian legal executive framework is overburdened with cases, particularly during the time of Coronavirus, where day by day matters are not really recorded in courts, finding an advantageous method to the assertion in settling the discussions will help in boosting and empowering Arbitration in India. The A&C Amendment Act, 2019 orders the foundation of ACI (Arbitration Council of India) to review the arbitral establishment relying upon the variables as examined in the article. Therefore, as time passing dependency on arbitration will extend in India. 

References

• https://www.latestlaws.com/arbitration/role-of-court-under-the-arbitration-conciliation-amendment-act-2019/
• https://www.mondaq.com/pdf/933030.pdf
• https://ibclaw.in/section-34-application-for-setting-aside-arbitral-award/

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