1. ADVOCATE S The Arbitration and Conciliation Act, 1996 - The Arbitration and Conciliation (Amendment) Ordinance, 2015 C-17, II Floor, LSC I Paschimi Marg Vasant Vihar New Delhi 110057 India E: contact@alayalegal.com T: +91 11-41674458

2. ADVOCATES INDEX1.Introduction 2.Key Amendments:  Amendment of Section 2  Amendment of Section 8  Amendment of Section 9  Amendment of Section 11  Amendment of Section 12  Amendment of Section 17  Insertion of new Section 29A  Insertion of new Section 29B  Amendment of Section 34  Amendment of Section 36 3.Conclusion

3. ADVOCATES  Arbitration and Conciliation (Amendment) Ordinance, 2015 (‘Ordinance’) promulgated by the President of India in exercise of powers conferred under Article 123 of the Constitution of India. The Ordinance amends certain provisions of The Arbitration and Conciliation Act, 1996 (‘1996 Act’).  Came into force with effect from October 23, 2015.  Required to be passed by the Parliament within six weeks from the date it reassembles in the winter session failing which the Ordinance shall lapse. INTRODUCTION

4. ADVOCATES Section 2 (2) proviso Amendment to Sub-Section (2) of Section 2 Section 2 (2) [Definitions-Scope] of the 1996 Act- proviso introduced Now,  Section 9 (interim measures by court)  Section 27 (court assistance in taking evidence)  Section 37(1)(a) and Section 37 (3) (appealable orders) of the 1996 Act shall apply to international commercial arbitrations even where the place of arbitration is outside India. KEY AMENDMENTS

5. ADVOCATES Section 8 Amendment to Sub-Section 1 of Section 8 Section 8 [Power of court to refer parties to arbitration] of the 1996 Act - modified  A non-signatory to an arbitration agreement can apply for reference of disputes to arbitration.  Non-signatory should be a person claiming through or under a party to an arbitration agreement.  Mandatory for court to refer parties to arbitration irrespective of any precedent.  Court not bound to refer the parties to arbitration if it finds that prima facie there is no valid arbitration agreement. KEY AMENDMENTS Contd

6. ADVOCATES Section 9 Addition of Sub-Sections (2) and (3) to Section 9 Section 9 [Interim measures by the court] of the 1996 Act - modified  Arbitration proceedings shall commence within ninety days from the date of passing of an order by court under Section 9 of the Act.  The aforesaid time period for commencement of arbitration proceedings can be extended by the court.  Once arbitral tribunal has been constituted, court shall not entertain an application under Section 9 [interim measures by court] unless court is of the opinion that the remedy under Section 17 [interim measures by arbitral tribunal] will not be effective. KEY AMENDMENTS Contd

7. ADVOCATES Section 11 Addition of Sub-section (6A) in Section 11 Section 11 [Appointment of arbitrators] of the 1996 Act - modified  While considering an application under Section 11 of the Act, the powers of the court have been restricted to examining only the existence of an arbitration agreement.  Amendment negates the decision of the Supreme Court in the case of National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. reported as (2009) 1 SCC 267 wherein Supreme Court had held that in addition to examining existence of arbitration agreement courts may even decide whether the claim is time barred or a dead claim. KEY AMENDMENTS Contd

8. ADVOCATES Section 12 Amendment to Sub-Section (1) of Section 12 Section 12 [Grounds for challenge] of the 1996 Act- modified  Potential arbitrator is required to disclose in writing the existence of any relationship and/or interest in the parties or in the subject-matter of the dispute.  Form for disclosure has been provided in the sixth schedule.  Fifth Schedule has been added to the Act which lists grounds to serve as a guide for determining the independence and impartiality of the arbitrator. KEY AMENDMENTS Contd

9. ADVOCATES Section 12 contd. KEY AMENDMENTS Contd Section 12 [Grounds for challenge] of the 1996 Act- modified  A person whose relationship with the parties/counsel/subject- matter of the dispute falls under any of the categories specified in seventh schedule cannot be appointed as an arbitrator.  This sub-section is applicable irrespective of any prior agreement of the parties to the contrary.

10. ADVOCATES Section 12 contd. Addition of Sub-Section (5) in Section 12  However, parties can waive the applicability of this sub-section of by an express agreement in writing after the disputes have arisen between the parties.  This sub-section does not have retrospective effect.

11. ADVOCATES Section 17 Amendment of Section 17 Section 17 [Interim measures by arbitral tribunal] of the 1996 Act- modified  Arbitral Tribunal has been empowered to grant interim measures which a court can grant under Section 9 [Interim measures by court] – powers extended.  Orders passed by the Arbitral Tribunal shall be enforceable under the Code of Civil Procedure, 1908 in the same manner as if it was an order of the court.

12. ADVOCATES Section 29 A Insertion of new Section 29A Section 29A [time limit for arbitral award] - inserted by the Ordinance.  Award shall be made within a period of twelve months from the date the arbitral tribunal enters upon reference. Arbitrator(s) shall be deemed to have entered upon reference on the date of receipt of written notice of appointment.  The aforesaid time period can be extended for a further period not exceeding six months by mutual consent of the parties.  Thereafter the time can be extended only by the court on an application of any of the parties only for sufficient cause.  The court while extending the period may substitute one or all the arbitrators whereinafter the arbitration shall continue from the stage already reached.

13. ADVOCATES Section 29 B Insertion of new Section 29B Section 29B [Fast Track Procedure] – inserted by the Ordinance.  Parties may either before or at the time of appointment of arbitral tribunal agree in writing to have their disputes resolved by a fast track procedure.  Fast track procedure contemplates decision by the arbitral tribunal on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing.  Oral hearing may be held only if all the parties request or the arbitral tribunal considers it necessary to clarify certain issues.  Award under this Section is required to be made within six months from the date the arbitral tribunal enters reference failing which provisions of Section 29A(3)-29A(9) shall apply to the proceedings.

14. ADVOCATES Section 34 Amendment to Section 34 Section 34 [Application for setting aside arbitral award] of the 1996 Act- modified.  Clarifies that an award can be set aside on the ground of conflict with public policy 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; (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.  Award passed in domestic arbitration can be set aside if court finds that the award is vitiated by patent illegality appearing on the face of the award.  Application under this section is required to be disposed of by the court within one year from the date notice is served on the other party.

15. ADVOCATES Section 36 Substitution of new section for Section 36 Section 36 [Enforcement] of the 1996 Act – modified.  Mere filing of application under Section 34 of the Act will not stay the operation of the award.  Party required to file separate application for grant of an order staying operation of the award.  Amendment negates the judgment of the Supreme Court in the case of National Aluminium Co. Ltd v Pressteel & Fabrications reported as (2004) 1 SCC 540 wherein it was held that the mandatory language of Section 34 entails that an award when challenged under Section 34 within the time stipulated therein becomes unexcutable.

16. ADVOCATES CONCLUSION TO CONCLUDE; Arbitration as a mechanism for dispute resolution been made more effective and efficient. Business houses can now look to quick resolution of commercial disputes. In summary;  Amendments introduced to make arbitrations time efficient and cost effective.  Ensure minimal judicial interference.  Ensure independence and impartiality of arbitrators.  Effectiveness of the amendments will depend on judicial interpretation.