Issues with the act

♤ The majority of the ACI is comprised of members of bureaucracy which mirrors similar problems like red-tape, inordinate delays, rule-based mindset rather than output orientation etc. in the arbitration process. This goes against the very nature of arbitration and the objectives sought to be achieved by the 2019 amendment.

♤ The next concern with the 2019 Amendment is the grading and accreditation of Arbitral Institutions (AI) by the ACI. India currently has over 35 Arbitral Institutions with varying quality and the ACI is responsible for grading based on infrastructure, quality of arbitrators, performance, compliance with time limits, and resolution rate. While this was done with the intent of creating a more efficient system of arbitration, the Amendment fails to provide a precise scale of grading and an exhaustive list of factors to be considered in the process of accreditation and grading. Without a system for grading, this provision creates an undesirable atmosphere for parties considering arbitration in India as they will not be able to make an informed decision.

♤ Another provision that has invited criticism is the exclusion of international commercial arbitration from the 12-month limit for the resolution of the dispute and pronouncement of the award. It seems like a huge mistake for an Act with the objective of making India

more appealing for international commercial arbitration as this doesn’t emphasize speedy

resolution which is the main attraction of arbitration.

As per the principle of party autonomy in the process of arbitration, parties have the freedom to choose their arbitrators but the 2019 Amendment introduces a provision disqualifying Foreign lawyers, Foreign Charted Accountants and Foreign Cost Accounts from the category of persons who are eligible to be appointed as Arbitrators for arbitrations seated in India. This is another move by the Government which will hinder the perception of India as a suitable place for international arbitration as it restricts party autonomy and creates a huge problem for international arbitrations seated in India.

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