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History And Development Of Arbitration Law In India

In the Biblical sense, King Solomon was the first Arbitrator in a dispute between two women who claimed to be the mother of a baby boy. Some writers also assert that the methods used by King Solomon were similar to those used in court cases today. Arbitration was also used by Philip II, father of Alexander the Great, in resolving territorial disputes in Greece back in 337 B.C. After all, about 600 BC, in a dispute between Athens and Megara, over the who responded to the island of Athens. Thus, International Arbitration can be easily traced back to the ancient world.

The arbitration process flourished in India from the end of the nineteenth century. Arbitration in India was officially recognized as a means of resolving disputes for the first time when the Indian Arbitration Act was passed, 1899, however, it was limited to only three presidential cities namely Madras, Bombay and Calcutta. It was also incorporated in Section 89 and Schedule II of the Civil Code, 1908, where arbitration provisions were extended to the various districts of British India where the Act of 1899 was not extended.

The 1899 Act and the provisions of the Civil Procedure Code, 1908 were found to be inadequate and therefore highly competent and therefore, the Arbitration Act, 1940 came into force and repealed the 1899 Act and the relevant provisions of the Civil Code. , 1908.

The 1940 Act was a reflection of the English Arbitration Act, 1934 and was the complete law on the subject but had no provisions to deal with the enforcement of foreign awards and as a result, only dealt with the settlement of domestic disputes. The 1940 law could not achieve its goal as its operation was far from satisfactory. Justice D.A. Desai expressed dissatisfaction with Indian courts and the inefficiency of the 1940 Act to Guru Nanak Foundation v Rattan Singh, (1981) 4 SCC 634, in which he briefly stated:

"Endless, time-consuming, complex and expensive court procedures forced lawmakers to seek alternative, informal, effective and speedy courts to resolve disputes, by avoiding applause and this led to the Arbitration Act, 1940. However, the manner in which prosecutions under the Act continued and without choosing to be challenged in the Courts, it caused the lawyers to laugh and the legal philosophers cried."

Modern Law Of Arbitration

Bengal Regulation, 1772:

The modern law of arbitration was enacted in India from 1772 by the Bengal Regulation of 1772, during the British rule. Mediation in India was recognized as a settlement of disputes and for the first time when the India Arbitration Act was enacted, 1899. Three presidential cities were closed: Madras, Bombay and Calcutta. Commend the parties for submitting their decision on their reason for the mediation.

Bengal Regulation, 1781:

For example, the rule of Bengal 1781 as long as the judge recommends and has so far to the best of his ability, without coercion, governs the parties to submit an unilateral agreement to be agreed by the parties.

The Bengal Regulation of 1787, 1793 and 1795 introduced certain procedural changes by giving the court the power to appeal against parties' consent and also authorized the court to promote criminal proceedings not exceeding Rs 200 in a debt-related dispute, co-operation. accounts and contract violations. Bengal Regulation of 1802, 1814 and 1833 by making various procedural changes as Regulation VII of 1827 provided for the resolution of civil disputes.

Legislative Code 1859:

After the establishment of the Indian Legislature in 1834 the Code of Civil Procedure Act, 1859 was passed with the intention of consolidating the process of public courts but this code could not achieve its purpose as this code had not been made superior to the Supreme Court. court (crown court under the Royal Character). The Code of 1859 was amended from time to time and was replaced by the passing of the Civil Procedural Code, 1877. This code of 1877 and 1879 and the third code of public policy was established in 1882, replacing the previous code.

Indian Communication Act 1899:

The Legislative Council enacted the Indian Arbitration Act in 1899. It was based on a model of the English Law of 1899. This action was used in cases where if the matter brought to a resolution was the subject of a claim, the case could be a break or otherwise set in the presidential city.

Arbitration Act Of 1940:

Then, on July 1, 1940, a specific law of mediation came into effect. We worked all over India and this 1940 act had many conflicts, many criticisms and was lacking in many areas where we worked even though it brought uniformity across the country. The provisions of the Act of 1940 are as follows:

The arbitration law of 1940 made provision to protect the treaty from being disrupted by the presence of the same lacuna in it. He made arrangements for mediation without court intervention. In the case of mediation and intervention, where the case was pending in court, all parties may agree to refer any dispute to the settlement. The act of 1940 failed to achieve the goal and the whole process under which it was concentrated in the courts. The Indian Law Commission in its report dated 9 November, 1978 proposed broad amendments to the 1940 Arbitration Act.

Although the 1940 Act attracted a lot of criticism and negative comments from the Courts, however, no amendments were made to improve the application of the 1940 Act. Following the economic downturn in 1991, steps were taken to attract foreign investors who needed a comfortable business environment and ease of business. For this reason, the Mediation and Reconciliation Act, 1996 came into force and repealed the 1940 Act. Interestingly, the 1996 Act was based on the UNCITRAL Exemplary International Relations Act, 1985 and included both domestic and international compensation. The main reason for the introduction of the 1996 Act was to prevent delays in mediation.

In the application of the 1996 Act, a dispute arose when the Supreme Court of India in the case of Bhatia International v. Bulk Trading SA and another (2002) 4 SCC 105, stated that Part I of the 1996 Act will apply even to arbitration proceedings. sitting outside of India unless set aside explicitly or implicitly. In the same vein, the Supreme Court ruled in Venture Global Engineering v Satyam Computer Services td (2008) 4 SCC 190.

These rulings were widely criticized for adopting a retrospective mechanism. The matter was subsequently resolved in Bharat Aluminum and Co. v. Kaiser Aluminum and Co., (2012) 9 SCC 552, where the Supreme Court ruled that Part I of the Act does not apply to Part II of the Act. As per the decision of BALCO, the Courts of India were unable to accept interim applications under Section 9 of the Act on international remedies governed by Part II of the Act.

Despite the positive efforts of the legislature to make India a strong base for mediation, the 1996 Act faced a number of issues including high costs and substantial court intervention. Under the 1996 Act, the Award Challenge under Section 34 would disqualify the Prize as there was a practice of granting Default Residence when the Award was made at the insertion of Section 34. In addition, there was no time limit for arbitral award. Another issue with the 1996 Act was that some Mediators charged exorbitant fees which was contrary to the 1996 Act.

To address this concern, on April 8, 2010, the Department of Justice and Justice invited invitations from prominent lawyers, jurists and state law professionals to apply the 1996 Act. Subsequently, the Mediation and Reconciliation Act (Amendment), 2015 was passed and certain amendments were made to the 1996 Act. Interestingly, the provisions of Section 2 (2) provided that it is subject to the contrary agreement, the provisions of Sections 9, 27 and clauses (a) of subsection (1) and subsection (3) of the Constitution. Article 37 will also apply to resolving international disputes.

In addition, Section 9 was amended to provide that once a tribunal has been established, the Court will not accept an application unless circumstances so require, thus limiting the Court's intervention. In addition, Section 17 was amended and the teeth were provided in an Order passed by the Arbitral Tribunal. The amendment gave the tribunal all the jurisdiction of the Court under Section 9.

After all, the time limit for making an arbitral award was limited to twelve months after the establishment of the arbitral tribunal and this was included in the 1996 Act as a result of this Section. 29A (2015 amendment). Section 34 of the 1996 Act was also amended to reduce the level of court interference. As per Article 34 amended, the prize will be against India's public policy only if it is affected by fraud or corruption, contrary to the basic policy of Indian law; or contrary to basic moral principles or justice.

A major issue brought about by the 2015 amendment was whether Section 36 (2) applies to pending courts under Section 34 of the Act. The matter was discussed in the case of the Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. (2018) 6 SCC 287, in which the High Court ruled that Section 36 Amendment applies even to pending Section 34 applications on the effective date of the Mediation Amendment Act, 2015. -2018 shall place all amendments in contravention and shall be contrary to the purpose of the Amendment Act, 2015, Section 87 was introduced by an amendment to the 2019 Act.

Section 87 was challenged in the famous case of Hindustan Construction Company Limited v. Union of India, (2019) SCC Online SC 1520, the Supreme Court overturned the inclusion of Section 87 of the Mediation Act of 2019 Amendment as a Public Notice.

Another long-running issue in the country is Seat v. Venue. The High Court referred to Bgs Sgs Soma Jv vs Nhpc Ltd. Public Appeal Decision No. 9307 of 2019 decreed on 10.12.2019, and ruled that the appointment of the chair gives special powers to the courts of the said seat; and the arbitration tribunal, regardless of whether it has been appointed as a tribunal, a tribunal or a tribunal, is a legal tribunal unless there is a cross-reference. The Supreme Court found that the decision of Hardy Exploration and Production (India) Civil Appeal no. 4628 of 2018 dated 25.09.2018 is incorrect as it does not properly follow the decision of the five BALCO judges.

The long-running dispute over the appointment of one-sided members has also been stopped by the Supreme Court recently. In the case of Perkins Eastman Architects DPC & Anr. V. HSCC (India) Ltd Arbitration Application No. 32 of 2019 ruled on 26.11.2019, the Court held that a person having an interest in the outcome or decision of a dispute should not have the power to appoint a single arbitrator.

The 2015 amendments faced a number of challenges however, some issues were still prevalent in the mediation process, one of which was the lack of institutional negotiation culture in the country as many of the solutions were decisions. On 13 January, 2017 the High Level Review Committee on the Institutionalization of Arbitration Mechanism in India, led by Justice B.N. Srikrishna the Retired Judge of Supreme Court of India, was suspended.

In considering the Committee's recommendations, on 9 August, 2019, the Mediation and Reconciliation Act (Amendment) was passed, 2019 and the Arbitration Council of India (ACI) was introduced. In terms of the Amendment Act of 2019, the ACI's core functions are to promote and promote ADR in the country, to balance the mediators and mediators in the country, and to help improve institutional mediation in the country.

Under the Act, there was no provision for a second appeal but the defeated party began filing appeals under the Commercial Courts Act which caused a lot of problems, so, because of the Amendment Act of 2019, Section 37 (1) of the Act, the words "Appeal", substituted for the words "Despite anything contained in any other law currently in force, a complaint".

The most controversial amendment to 2019 was the introduction of the 8th Declaration Pledging Procedure that a person will not be eligible for mediation unless he or she is a lawyer in terms of the Law of Attorney, 1961 with ten years' experience as a lawyer. The same has been criticized as there has been confusion as to whether this affects external mediators or not. Recently, the Hon'ble Minister of Justice explained that principle 8 does not apply to resolving international disputes.

The Amendment Act of 2019 took a continuous process and provided further clarification of the Amendment Act of 2015. Interestingly, certain provisions of the Amendment Act of 2019 have not yet been finalized and we must see how these amendments will be implemented and much will depend on the functioning of the Arbitration Council of India.

We can only hope that the mediation in India was made in accordance with the views expressed by Justice Sabyasachi Mukharji in the F.C.I case. V. Joginderpal Mohinderpal (1989) 2 SCC 347, in which he clarified that:

Arbitration in India is an ancient concept, originated in ancient India. All in all, it can be said that arbitration is still in the development phase, a mediation law in India regarding the issue of dispute resolution. But the current mediation process must go through a process of amendment, in order to work better in the coming days in the case of domestic or international trade compensation.

We must make the negotiation law simpler, less technical and more responsible for the realities of the situation, but we must respond to the canons of justice and fair play and make the mediator adhere to that process and practices that will create confidence, not just by mutual justice, but by building the idea that justice seems to be served.

Written By Rajpreet Kaur Kadamb, a first year student pursuing law from Christ university.]

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