SC Asks Govt to Fill Gaps in Arbitration Bill: Key Issues Top Court Flagged

Union Ministry of Law and Justice will begin working on the arbitration law to fill the procedural gaps in the legislation suggested to it by the Supreme Court, the Mint reported. A draft of the Arbitration and Conciliation (Amendment) bill, 2024, was published last year and the government had invited suggestions on the same.  

“The law ministry receives continuous feedback on the bills that it is working on. Public consultations were held for the Arbitration and Conciliation (Amendment) Bill, too. Now, the honourable Supreme Court has directed the ministry towards an issue and work on it will start immediately,” the Mint reported, citing a source.

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The suggestion made by the apex court is related to the powers of an arbitral tribunal to add non-signatories to an arbitration agreement in case a dispute arises. This gap was highlighted by Justices JB Pardiwala and R Mahadevan in the case of ASF Buildtech v. Shapoorji Pallonji and Company. The judges mentioned that despite decades of practice under the present Arbitration and Conciliation Act of 1996, the lacunae in the legislation had continued to exist.  

“What is expressly missing in the Act...is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this court as well as the various high courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion,” said the Supreme Court, according to the Mint. 

Viswanathan Committee on Reforms 

The 1996 law has already been amended thrice since then, i.e. in 2015, 2019 and 2021. The government had constituted a committee headed by former law secretary TK Viswanathan to suggest arbitration reforms. The Viswanathan committee made recommendations including techno-legal reforms, appointments of arbitrators and disclosures regarding the number of cases handled by the arbitrators, which the committee suggested shouldn’t exceed 15. While to some extent techno-legal reforms have found a place in the draft bill, others remain absent.