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Ahan Gadkari*
[This is the first part of the two-part contribution discussing the 2024 Arbitration and Conciliation Act Amendment Bill.]
I. INTRODUCTION
On October 18, 2024, the Government of India introduced the Draft Arbitration and Conciliation Act Amendment Bill, 2024 (“the Bill”). This legislative proposal follows the “Report of the Expert Committee to Examine the Working of the Arbitration Law and Recommend Reforms in the Arbitration and Conciliation Act 1996” (“the Report”), led by former law secretary Dr. T. K. Viswanathan. The Report suggested critical reforms aimed at enhancing the efficacy and competitiveness of India’s arbitration landscape. While the Bill incorporates some of the Report’s recommendations, significant ambiguities have been left unresolved.
The stated objective of the Bill is to fortify India’s appeal as a global arbitration destination by enhancing contract enforceability and limiting excessive judicial intervention, which has long been criticized for impeding the swift enforcement of arbitral awards. The Bill states that reducing such intervention is vital to bolstering arbitration as a viable dispute resolution mechanism, ultimately fostering economic efficiency and predictability in business transactions within India.
Despite these aims, the Bill, while clarifying key contentious principles, does little to meaningfully curtail judicial intervention in domestic arbitration and is almost entirely silent on facilitating international arbitration and on the question of setting aside of awards in international arbitration. Although the Indian government has repeatedly articulated its ambition for India to emerge as a global arbitration hub, the Bill’s limited scope on international arbitration suggests a lack of strategic legislative support for this vision.
This contribution seeks to analyse whether the amendments proposed in the Bill effectively advance the goal of reducing judicial intervention to enhance enforceability of contracts, and, if so, to what extent this aim can be realistically achieved with these amendments. Part I, First, begins by examining the clarification of the distinction between “seat” and “venue,” aligning India with international best practices. Second, it proceeds to discuss the introduction of emergency arbitration and highlights the imperative for Indian arbitral institutions to adapt accordingly. Part II, First, turns the analysis to the imposition of a 30-day timeline for resolving jurisdictional challenges, critiquing the missed opportunity to incorporate an immediate appellate mechanism that could preclude jurisdictional objections at the enforcement stage. Second, it addresses the Bill’s attempt to categorize grounds for partially setting aside domestic arbitral awards, arguing against such categorization. Third, it explores the introduction of appellate arbitral tribunals, assessing their unsuitability in the Indian context. Finally, it critically evaluates whether these proposed amendments genuinely fulfil the Bill’s objective of reducing judicial intervention to bolster contract enforceability.
The Bill further endorses the utilization of “audio-video electronic means” for the conduct of arbitration proceedings, incorporates digital signatures, and enhances the authority of the proposed Council dedicated to the promotion of arbitration and arbitral institutions within India. This analysis, however, will not explore these amendments in detail, as the practice of conducting arbitration through audio-visual electronic means has already been prevalent in India since the advent of the COVID-19 pandemic. Moreover, given that the Council has not yet been constituted, the author reserves commentary on its potential impact until such time as it is established and begins exercising its designated powers.
II. REVIEWING THE CHANGES INTRODUCED BY THE BILL
A. Distinction Between Seat and Venue Drawn
Section | Existing provision | Proposed Amendment |
20 | Place of arbitration.— (1) The parties are free to agree on the place of arbitration. | Option I
Seat of arbitration.— (1) The parties are free to agree on the seat of arbitration. |
| (2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. | (2) Failing any agreement referred to in sub-section (1), the seat of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. |
| (3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property. | (3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any venue it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property. |
|
| Option II
20 (1) In case of domestic arbitration other than international commercial arbitration the seat of arbitration shall be the place where the contract/arbitration agreement is executed or where the cause of action has arisen. (2) Notwithstanding sub-section (1), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any venue it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property. |
Table 1 – Proposed Amendments to Section 20 (p. 44)
The debate surrounding the terms “seat” and “venue” has long complicated Indian arbitration practice, persisting since the enactment of the Arbitration and Conciliation Act, 1996 [“the Act”] in 1996. The ambiguity originates from Section 20 of the Act, which only refers to the “place of arbitration,” omitting specific language on “seat” or “venue.” The 246th Law Commission Report, which played an influential role in the 2015 Amendment Act, advised replacing “place” with “seat and venue” to eliminate ambiguity (p. 52). Despite this, the 2015 amendment did not adopt this recommendation. Similarly, the Report echoed the need to distinguish “seat” and “venue,” suggesting that “seat” should denote the arbitration’s jurisdictional anchor, while “venue” should refer to the physical location of proceedings (¶3.2). This interpretation aligns with the Supreme Court’s judgment in BBR (India) Private Limited v. Singla Constructions Private Limited, affirming that jurisdiction is derived from the seat. Nevertheless, a multitude of conflicting judgments from various High Courts and the Supreme Court has created persistent uncertainties, particularly when “place” or “venue” appears in arbitration agreements alongside factors implying jurisdiction.[1]
The Bill addresses this long-standing issue by distinctly providing the “seat” as the jurisdictional locus and “venue” as the arbitration’s physical location. This clarification is a significant and much-needed reform, which brings India in line with international best practices. While many jurisdictions adhering to the UNCITRAL Model Law on International Commercial Arbitration have relied on judicial interpretation to delineate the difference between these concepts, the Bill has proactively codified this distinction. Notably, the Model Law itself, makes no explicit differentiation between “seat” and “venue,” though Article 20(2) permits arbitral hearings to occur at locations other than the designated seat. For instance, in Singapore, Section 2(1) of the Arbitration Act, 2001 provides for the “place” or “seat” of arbitration where the courts’ would have jurisdiction over arbitral proceedings, while the Singapore International Arbitration Act adopts the Model Law formulation of the distinction. In practice, the judiciary of Singapore has drawn the distinction between the “seat” and the “venue” of arbitration, thereby refining its application in practice. Similarly, in the United Kingdom, Section 3 of the Arbitration Act, 1996, provides a definition of the “seat” of arbitration, while the differentiation between the seat and the venue has been developed through judicial precedent. In contrast, Indian jurisprudence has struggled with inconsistencies in interpreting these terms, often leading to confusion regarding the courts’ supervisory authority.[2] Thus, the recent legislative initiative to clearly delineate the concepts of “seat” and “venue” marks a significant stride toward legal clarity.
However, the practical impact will depend on whether parties incorporate this terminology in their arbitration agreements. If agreements continue to use ambiguous language, courts might revert to older interpretive approaches and the utility of this legislative clarification may be nullified.
B. Provision for Emergency Arbitration
The proposed Section 9A reads as follows:
“9A Emergency arbitrators – (1) Arbitral institutions may, for the purpose of grant of interim measures referred to in section 9, provide for appointment of emergency arbitrator prior to the constitution of an arbitral tribunal.
(2) The emergency arbitrator appointed under sub-section (1) shall conduct proceedings in the manner as may be specified by the Council.
(3) Any order passed by an emergency arbitrator under subsection (2) shall be enforced in the same manner as if it is an order of an arbitral tribunal under sub-section (2) of section 17 of the Act.
(4) An order of the emergency arbitrator may be confirmed, modified, or vacated, in whole or in part, by an order or arbitral award made by the arbitral tribunal.” (p. 33)
The Bill introduces provisions for emergency arbitration, empowering arbitral institutions to grant emergency relief and defining the powers under which such emergency arbitration proceedings can be conducted. Both the 246th Law Commission Report (p. 37) and the Srikrishna Report (which influenced the 2019 Amendment) (p. 76) advocated for the inclusion of an emergency arbitration framework. However, neither the 2015 nor the 2019 amendments incorporated this recommendation. The Supreme Court in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. & Ors., affirmed the enforceability of emergency arbitration awards in India, making the Bill’s recognition of emergency arbitration a welcome legislative endorsement.
Such a provision cannot exist in isolation; it must be effectively complemented by institutional arbitration rules that establish clear timelines for emergency proceedings to ensure the timely provision of urgent relief. International best practices provide a robust model in this regard. For instance, the Stockholm Chamber of Commerce, under Appendix II, Article 4, appoints an emergency arbitrator within 24 hours, granting them full discretion to expedite proceedings. Similarly, the Singapore International Arbitration Centre, per Schedule I, Article 3 and 9, mandates the appointment of an emergency arbitrator within one day, who must issue an interim order or award within 14 days. The International Chamber of Commerce, through Appendix V, Article 6(4), requires that an emergency arbitrator render a decision within 15 days from the transmission of the case file.
Indian institutions have already begun aligning with these standards. The Mumbai Centre for International Arbitration (“MCIA”), under Rule 14.2, provides for seeking the appointment of an emergency arbitrator within one day, with Rule 14.6 requiring a decision within 14 days. Likewise, the Delhi International Arbitration Centre, under Rule 14.4, mandates a two-day timeline for appointment and under Rule 14.10, a 14-day deadline for issuing an order, failing which the emergency arbitrator shall not be entitled to their fee. Indian arbitral institutions are well-positioned to embrace these streamlined procedures, and it is both prudent and necessary for them to implement clearly defined timelines for emergency arbitration proceedings. The MCIA Annual Report of 2022 states that two requests for the appointment of emergency arbitrators were made under its Rules (p. 1). In each instance, the MCIA successfully appointed an arbitrator within 24 hours, with both decisions rendered within the prescribed 14-day period, as set forth in its procedural framework. It is thus recommended that other Indian arbitral institutions similarly adopt these best practices to provide timely emergency relief.
[Part II continues the discussion of the amendments introduced by the Bill and provides an assessment of the Bill’s potential to achieve its intended objectives.]
[1] Enercon (India) Ltd v Enercon GmbH, Civil Appeal No 2086 of 2014; Indus Mobile Distribution Pvt. Ltd v Datawind Innovations Pvt. Ltd., (2017) 7 SCC 678 [Law governing the arbitration agreement was deemed to be the seat when only venue was provided]; Mankashi Impex Pvt Ltd v Airvisual Pvt Ltd, Arbitration Petition No 32 of 2018 (Order dated 3 May 2020, SC) [Arbitration being “managed” in the venue indicates that the venue and seat are the same]; Brahmani River Pellets Ltd v Kamachi Industries Ltd, 2019 SCC Online SC 929 [Place equates to seat when no other factors have been provided]; Balapreetham Guest House Pvt Ltd v Mypreferred Transformation and Hospitality Pvt Ltd, OP No 438 of 2020 (Order dated 19 March 2021, Madras HC) [In a conflict between the governing law of the contract and the place of the arbitration, the place of the arbitration would be declared as the seat].
[2] Id.
*Ahan Gadkari is an Associate at MGCO Advocates.
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