Lok Sabha

August 1, 2019

Kalyan Banerjee speaks on The Arbitration and Conciliation (Amendment) Bill, 2019

Kalyan Banerjee speaks on The Arbitration and Conciliation (Amendment) Bill, 2019


With respect to The Arbitration and Conciliation (Amendment) Bill, 2019, I do not find any reason to disagree with any of the sections of this Bill. Rather, I would say, through you, to the Honourable Law Minister, that I would have been more happy to see Clause 3 of the Bill substituted in Section XI itself; that instead of saying that arbitrators would be chosen by the parties, that a third party would be appointed by the High Court or district courts, as the case may be, a permanent arbitration tribunal should have been established. None of the parties should choose the arbitrator, the arbitrator should be neutral. Maybe you can think about this suggestion in the future.. 

My second suggestion is that every arbitrator should be treated as a public servant, as per the definition in the Indian Penal Code, so far as the arbitration proceedings are concerned. This is because arbitrators appointed under the Act’s Section 11(i), (ii) and (iii) would not have any accountability. Even if someone has committed something wrong, let’s say some undue favour has been given, you won’t be able to catch and punish the person. Therefore my suggestion is that every arbitrator appointed under the Act should be treated as a public servant and they should disclose their assets.

 Sir, practical experience says that the arbitration process is a Saturday-Sunday. Lawyers practice in court from Monday to Friday and then conduct arbitration proceedings on weekends. But my view is that it should be a full-time job. 

Sir, through you, I will also request the Honourable Law Minister to kindly bring a provision that whenever an arbitrator is appointed, the person should not take more than five or seven or eight arbitrations at a time.In Delhi, you possibly do not know, a number of retired judges are over-burdened with arbitration. Hence they cannot give adequate time to each case, which also means that hearing dates for a case come up every five or six months. My suggestion is that a judge should take up an arbitration hearing only after finishing one . 

As an example, one arbitration is pending before an ex-Chief Justice of India for seven years. He was not able to give time for the hearing after the submission of evidence was completed over a period of two years. Therefore the entire object of the Act will be frustrated so far as time limit is concerned. 

Sir, another thing to consider is that the purpose of arbitration is defeated if the nominator, be it the Central Government or a State Government or a PSU, is too close to the arbitrator they have nominated. I have come across cases where the arbitrator is sitting with the one who nominated him, and partying together in hotels and restaurants. 

Therefore every aspect of arbitration needs to be examined closely. Now, kindly clarify Part 1A, which talks about the Arbitration Council of India. Through Amendment 43B(1), the Central Government, by notification in the official gazette, ‘establish, for the purposes of this Act, a council to be known as the Arbitration Council of India to perform the duties and discharge the functions under this Act’. Now ‘the functions under this Act’ means the whole Act. But in Section 43D(2), you have written, ‘for the purposes of performing the duties and discharging the functions under this Act, the Council may’, etc. Now, the question is, it is written that to perform the duties and discharge the functions under this Act, that means, instead of ‘arbitral institution’ I can also read to mean that the ‘Arbitration Council’ will discharge the functions, appointed under Section 11. Therefore kindly clarify this part. If it was written that ‘discharge the function’ under the chapter then it would have resolved the problem. Therefore under this Act, the whole Act, it has to be performed.      

Sir, I request, through you again, at the cost of repetition, to remove Section 11 totally and make it something like Section 11C. You substitute that, and make sure that an arbitral tribunal is there for the whole of India, and that for the members of that tribunal, it should be a full-time job; also, they should be treated as public servants. These are the points which I would like to be implemented.