- 13-Jun-2025
- Cyber and Technology Law
The 2015 amendments to the Arbitration and Conciliation Act, 1996 were significant changes designed to address key issues hindering the effective and timely resolution of disputes through arbitration in India. These amendments aimed to streamline the arbitration process, reduce judicial interference, introduce time-bound procedures, and make India a more attractive jurisdiction for both domestic and international arbitration. The reforms were driven by the need to make arbitration in India more efficient, predictable, and aligned with international best practices.
One of the most important amendments was the introduction of Section 29A, which mandates the completion of arbitration proceedings within 12 months from the date of the tribunal's constitution, with an additional six-month extension possible. This is aimed at preventing delays in arbitration, ensuring that disputes are resolved within a reasonable period.
This provision was introduced to speed up the arbitration process, which had often been criticized for excessive delays, and aligns with the government’s objective of making arbitration an efficient alternative to litigation.
The 2015 amendments narrowed the grounds on which an arbitral award can be challenged in Indian courts. Prior to the amendments, courts had broad discretion to set aside awards, leading to frequent delays and uncertainty in enforcement. The amendments made it more difficult to challenge awards based on merits, thus ensuring the finality of arbitration awards.
Grounds for challenge are now limited to corruption, fraud, or violation of public policy, thus reducing judicial interference in the process and enhancing the enforceability of awards.
The amendments introduced a fast-track procedure for the appointment of arbitrators. Under the previous regime, if the parties failed to agree on the appointment of an arbitrator, they could approach the courts, which would cause unnecessary delays. The 2015 amendments aimed to reduce court involvement by allowing the Supreme Court or High Courts to appoint arbitrators only if parties failed to do so within 30 days.
This was part of a broader effort to reduce judicial interference in arbitration and ensure the process remains swift and efficient.
Section 29B introduced a fast-track arbitration process, where the arbitration proceedings must be completed within six months. This mechanism is designed to resolve simple disputes in a shorter time frame while keeping the costs lower compared to regular arbitration proceedings.
This procedure is optional, but it aims to make arbitration a more attractive option for commercial disputes that do not require lengthy proceedings.
The 2015 amendments encouraged the use of institutional arbitration over ad-hoc arbitration. It emphasized the role of arbitration institutions in managing arbitration proceedings, as they ensure greater structure, transparency, and efficiency compared to ad-hoc arbitration.
Institutions like the Delhi International Arbitration Centre (DIAC) and the Mumbai Centre for International Arbitration (MCIA) provide a more organized environment for dispute resolution, which can help streamline the process and reduce delays.
Prior to the 2015 amendments, there was resistance to foreign arbitrators being appointed in domestic disputes. The amendments have made it easier for foreign nationals to be appointed as arbitrators, even in domestic arbitration cases, if both parties agree to their appointment.
This reform is aimed at making India more internationally competitive as a hub for arbitration by ensuring that international expertise is available to handle complex disputes.
The amendments provide a more narrow interpretation of ‘public policy’ as a ground to challenge an arbitration award under Section 34. The phrase public policy is now better defined and restricts its application only to cases involving corruption, fraud, or decisions that are contrary to the fundamental principles of law.
This clarity was necessary to prevent the overuse of public policy as a vague ground to challenge arbitration awards and to ensure that awards are respected and enforced promptly.
Section 9 was amended to give arbitral tribunals the authority to grant interim relief during arbitration proceedings, reducing the need to approach courts for such matters. Additionally, the concept of an emergency arbitrator was recognized, which allows parties to seek urgent relief even before the tribunal is constituted.
This amendment enhances the flexibility of arbitration by allowing parties to seek immediate relief in cases of urgency, thus preventing the need for long delays.
The 2015 amendments introduced provisions for the cost of arbitration and set up guidelines to ensure that arbitration costs are proportionate to the dispute's value and complexity. By doing this, the amendments aim to make arbitration a more affordable and accessible option for resolving disputes.
These reforms ensure that unnecessary delays and unreasonable expenses are avoided, making the arbitration process more cost-effective.
Suppose a construction company in India is involved in a dispute with a supplier over a delay in delivery of materials. The parties agree to resolve the matter through arbitration as per their contract.
Under the 2015 amendments:
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