The document summarizes key amendments made to the Arbitration and Conciliation Act of India through the 2015 Amendment. Some of the major changes include expediting the referral of parties to arbitration, empowering arbitral tribunals to grant interim measures, reducing delays in the arbitral process through deadlines to issue awards, limiting grounds to challenge or vacate arbitral awards, and clarifying issues around applicability of amendments to ongoing arbitrations. There has been some inconsistency in court decisions on whether Indian parties can agree to a foreign seat of arbitration, which is an issue pending resolution by the Supreme Court of India.

1. Issues under the Arbitration and
Conciliation (Amendment) Act, 2015
By Agnish Aditya, IV Year, NLU Odisha

2. Key Amendments
Section(s) Amendment Effect
2(1)(e)-Definition
of Court
For Domestic Arb – Same
For ICA – only HC (Original Civil Jurisdiction)
To expedite ICA referral and
enforcement procedure. (White
Industries Award effect)
Proviso to 2(2)
S. 9 (Interim Measures), S. 27 (taking of evidence),
S. 37(1)(a) & S. 37(3) made applicable to ICA, unless
excluded by arbitration agreement. No insertion of
“only”.
To sort out the Bhatia-Balco tussle.
S. 8
Mandate to refer parties to an arbitration
agreement on ascertaining prima facie formal
validity of the arbitration agreement
Expediting referral process and
reducing judicial intervention.
S. 9
After passing of interim-measure, the arbitral
proceeding must commence within 90 days. S. 9
only applicable when S. 17 is inefficacious. No
application will be entertained after the
constitution of AT.
Limited parties’ ability to use S. 9 as
a disruptive tool.

3. Section(s) Amendment Effects
S. 11
Appoint arbitrator within 60 days. Only SLP for
appeal. Notwithstanding any judgment, order or
decree inserted to limit scope of review to
existence of arb. agreement.
Expediting appointment of
arbitrators and negating SBP v.
Patel Engineering.
S. 12 Independence of Arbitrator
Prohibits certain relationships b/w
arbitrator and parties as per
Schedule.
S. 17
Expands arbitral tribunal’s power to award interim
measures. Bars Courts to entertain S. 9 applications
on initiation of arbitral proceedings.
Empowering Arbitral Tribunals &
reducing intervention of Courts.
Added proviso to S.
24
AT shall not grant adjournments unless necessary
and may award exemplary costs. AT to conduct oral
hearings for evidence on day-to-day basis
Reducing delays.
29A
Award within 12 months; if within 6 months-AT
will be entitled to additional costs. Extension by 6
months. Termination of AT’s mandate in case of
default.
Reducing delays in arbitration.

4. Section(s) Amendment Effect
S. 29B
Fast track procedure . Dispute decided only on
the basis of written pleadings. Oral hearings will
be exceptional. Award to be made within 6
months; else 29A shall apply
Expediting arbitral process
S. 31
Interest on arbitral award will be +2% of the
current rate of Interest. Cost according to S.
31A.
The interest has been as the earlier
interest of 18% was almost penal in
nature.
S. 31A
Regime for Costs. No provision for 3rd party
funding
Codification of Common Law
Principles of costs in arbitral
regime.
S. 34
Vacatur of award limited on public policy
grounds to (i) award induced by fraud or
corruption; (ii) contravenes fundamental policy
of Indian Law & (iii) is in conflict with the most
basic notions of morality and justice. No review
on merits to determine (ii). Patent illegality also
a ground.
Reduced the scope of vacatur of
domestic awards

5. Section(s) Amendment Effects
S. 36 Post amendment, a S. 34 application won’t
automatically stay enforcement proceedings. Court
may impose certain conditions.
Well intended provision to limit
delay tactics. Applicability was a
concern in New Tirupur (MadHC)
inter alia.
S. 48 & 57 Limited the public policy exception. Higher standards of vacatur or
refusal of enforcement in case of
ICA.

6. Amendment to the 4th Schedule (AT Fees)
Sum in Dispute Model Fee
Upto Rs. 5,00,000 Rs. 45,000
Rs. 5,00,000 – 20,00,000 Rs. 45,000 + 3.5% of claim amt. over and above 5 lacs
20,00,000-1,00,00,000 97,500+3% of claim amt. over and above 20 lacs
1,00,00,000-10,00,00,000 3,37,500+1% of claim amt. over and above
1,00,00,000
10,00,00,000-20,00,00,000 12,37,500+0.75% of claim amt. over and above
1,00,00,000
Above 20,00,00,000 19,87,500+0.5% of claim amt. over and above 20 crore
with a ceiling of Rs. 30,00,000

7. Applicability of the Amendment
• The ordinance did not have any indication as to its applicability to
arbitrations initiated prior to the ordinance. Led to Delphi TVS Diesel
System v. UoI [MadHC].
• Date of commencement – October 23, 2015
• S. 26 was introduced into the Amendment Act. It states-
“Nothing contained in this Act shall apply to the arbitral proceedings
commenced, in accordance with the provisions of Section 21 of the
principal Act, before the commencement of this Act unless the parties
otherwise agree but this Act shall apply in relation to arbitral
proceedings commenced on or after the date of commencement of
this Act.”

8. Applicability of the Amendment
• “Arbitral proceedings” and “in relation to arbitral proceedings”.
• “In relation to arbitral proceedings” = Arbitral proceedings + Court
proceedings relating to arbitrations (reference, vacatur, enforcement/
recognition, injunctions, etc.). [Thyssen Stahlunion GmBH v. Steel
Authority of India, (1999) 9 SCC 334.
• High Courts have differed in their interpretation of the Section,
leading to inconsistency across the Country. Appeals are being heard
in this connection before the SC.

9. Madras HC
New Tirupur Area Development Corp. Ltd. v. Hindustan Construction Co.
Ltd.
• NTADCL filed an application under 36(2) for stay on enforcement, due to
pending vacatur proceedings on August 17, 2015.
• NTADCL argued that it was entitled to an automatic stay under the
unamended Act (s. 36).
• The Court classified Enforcement proceedings and vacatur proceedings as
post-arbitral proceedings.
• Held- the amendment was prospective to “arbitral proceedings”
commencing before the amendment, retrospective to “in relation to
arbitral proceedings” commencing after the Amendment.
• The amendment was applied and automatic stay was refused.

10. Bombay HC
Rendezvous Sports World v. BCCI
• Vacatur was filed on Sept. 21, 2015.
• The question of applicability of amended S. 36 arose.
• Held- no right accrued to the award-debtor and amended S. 36 will
apply.
• Accepted New Tirupur’s reasoning.
• Also held that the applicability of S. 36 is not retrospective since no
right has accrued to the award debtor.

11. Calcutta HC
Electrosteel Castings Ltd. v. Reacon Engineers
(Single Judge)
• Award made on July 30, 2015. Vacatur application made on
November 26, 2015.
• Held-The unamended Act would apply to the case. No reasons
provided. (Order passed on Jan 14, 2016).
Sri Tufan Chatterjee v. Rangan Dhar (Division bench)
• Section 9 application before Oct 23, 2015.
• Held- Amended S. 9 will be applicable to this case as arbitral
proceedings does not include Court proceedings.

12. Delhi HC
Raffles Design International India Pvt Ltd. v. Educomp Professional
Education
• S. 9 application in respect of a ICA Award from SIAC. Amendment to S.
2(2) made S. 9 applicable to ICA.
• Question for consideration - Whether S. 9 would apply to this
application due to amendments to S. 2(2)?
• Adopted a purposive interpretation. Held – S.9 will apply to this
proceeding as well

13. Delhi HC
Ardee Infrastructure Pvt. Ltd. v. Anuradha Bhatia
• Applicability of amended Ss. 34 & 36 on applications filed on May 31,
2016. Award passed on 13.10.2015.
• Arbitral Proceedings = Proceedings before the tribunal + proceedings
before the Court.
• S. 36 & S. 34 rights are accrued even though litigation is not pending.
• In case of any arbitral proceeding initiated before Oct 23, 2015; the
unamended sections shall apply.

14. The Ardee Diagram

15. Conclusion
• The flaw is a legislative one.
• Ardee seems to be the more temperate and correct approach.
• The appeal in the Tufan case is pending before the Supreme Court
and a decision is needed to clarify this conundrum.

16. Can Indian parties choose a foreign seat?
Case Held
TDM Infrastructure Pvt. Ltd. v. UE
Development India Pvt. Ltd. (SC)
S. 11 Application. When both parties have Indian nationalities, it can’t
be a ICA. “…Indian nationals should not be permitted to derogate
from Indian Law. This is part of public policy of the country.”
Addhar Mercantile Pvt. Ltd. v. Shree
Jagadamba Agrico (Bom HC)
S. 11 Application. Relying on TDM Infra, held that Indian parties
cannot arbitrate outside India and have a foreign law as their
substantive law.
State of West Bengal v. Associated
Contractors (SC)
Orders under S. 11 have no precedential value.
Sasan Power Ltd. v. North American
Coal Corp. Ltd.
Held - Two Indian parties can arbitrate outside India under the
substantive laws of the foreign country. However, on appeal to the SC,
the SC found that NAC had a foreign connection. Thus, no conclusive
answer to the question remains.

17. Can Indian parties choose a foreign seat?
• Foreign Seat = Foreign Curial Law.
• Refusing reference shall be wrong, since even though the parties may
apply foreign curial law (or even foreign substantive law) the award
eventually will come to India for enforcement.
• Any irregularity can be checked by the enforcing court. (Akin to the
second look argument; see Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth Inc., SCOTUS)
• Public Policy violation?

18. Thank You!