Answer: 

Introduction:

The Arbitration and Conciliation Act, 1996, is the primary legislation governing arbitration and conciliation in India. It aims to provide an effective and efficient dispute resolution mechanism outside the traditional court system. In recent years, several amendments have been made to the Act through ordinances to address various concerns and further improve the arbitration landscape in India.

Body:

Major changes brought by the recent ordinance:

• Appointment of arbitrators: The 2019 amendment establishes the Arbitration Council of India (ACI), which is responsible for grading arbitral institutions and accrediting arbitrators. This change aims to ensure a more transparent and streamlined process for the appointment of arbitrators.
• Confidentiality: The amendment introduces a provision mandating the confidentiality of all arbitration proceedings, except for the details necessary for the implementation and enforcement of the arbitral award. This change is expected to encourage parties to opt for arbitration by ensuring the privacy of the dispute resolution process.
• Time limit for arbitral proceedings: The amendment specifies a 12-month time limit for the completion of arbitral proceedings, which can be extended by the parties’ mutual consent. This provision aims to reduce delays and improve the efficiency of the arbitration process.
• Amendment to Section 34: The 2019 amendment clarifies that an award can be set aside if the court finds it to be in conflict with the “public policy of India.” This change is expected to provide greater clarity to parties and prevent the misuse of the public policy ground to challenge arbitral awards.

Impact on India’s dispute resolution mechanism:

• Improved efficiency: The time limits set for the completion of arbitral proceedings are expected to reduce delays and enhance the efficiency of the arbitration process, making it a more attractive option for parties seeking dispute resolution.
• Enhanced transparency: The establishment of the Arbitration Council of India and the grading of arbitral institutions aim to ensure greater transparency in the appointment of arbitrators and the functioning of arbitral institutions.
• Strengthened confidentiality: The mandatory confidentiality provision is expected to encourage more parties to opt for arbitration, particularly in sensitive commercial disputes, by ensuring the privacy of the process.
• Greater clarity: The amendments to the Act, particularly the clarification of the public policy ground for challenging arbitral awards, provide greater clarity to parties and reduce the scope for frivolous litigation.

Conclusion:

By addressing the concerns related to delays, confidentiality, and the appointment of arbitrators, these changes are likely to encourage more parties to opt for arbitration and contribute to the development of a robust and effective alternative dispute resolution framework in India.