Amendments to the Arbitration and Conciliation Act: 2015, 2019 and 2021

The Act of 1996 has been amended three times in a decade, and each round answered a different complaint. The Amendment Act of 2015, following the Law Commission's 246th Report, attacked delay, cost and the width of judicial review. The Amendment Act of 2019, following the Srikrishna Committee, attacked the dominance of ad hoc arbitration by creating an institutional framework. The Amendment Act of 2021 undid the most criticised feature of 2019 and added an unconditional stay where an award is tainted by fraud. Running through all three is a question that produced two of the most important decisions of the period: to which arbitrations and which court proceedings does an amendment apply.

The three Amendment Acts, the report behind each, and their principal changes

1. The Amendment Act of 2015

The Law Commission, in its 246th Report of August 2014, found that arbitration in India had become as slow and as expensive as litigation, that awards were routinely reopened on the merits under an expansive reading of public policy, and that the automatic stay on filing a challenge deprived a successful party of the fruits of the award for years. The Amendment Act of 2015, brought into force from 23 October 2015, addressed each.

1. Time. Section 29A required a domestic award within twelve months, extendable by six by consent and thereafter only by the court, with power to reduce the arbitrator's fees for delay attributable to the tribunal. Section 29B introduced the fast track procedure.
2. Cost. Section 31A introduced a costs regime under which costs ordinarily follow the event, and the Fourth Schedule supplied a model fee structure for arbitrators.
3. Independence. Section 12 was recast, with the Fifth Schedule listing grounds giving rise to justifiable doubts, the Sixth Schedule prescribing the form of disclosure, and the Seventh Schedule listing relationships that make a person ineligible, waivable only by an express agreement in writing after the dispute has arisen.
4. Judicial review. The public policy ground in Section 34 was confined by two Explanations, and patent illegality was moved into a separate Section 34(2A) available only for a purely domestic award.
5. Enforcement. Section 36 was substituted so that the filing of a challenge no longer operates as an automatic stay; a separate application is required and the court may impose conditions.
6. Reference and appointment. Sections 8 and 11 were amended to confine the court's examination to a prima facie view of the existence of the agreement.
7. Foreign seated arbitration. The proviso to Section 2(2) preserved Sections 9, 27 and parts of Section 37 for an international commercial arbitration seated abroad, unless the parties agree otherwise.

2. The Amendment Act of 2019

The High Level Committee chaired by Justice B.N. Srikrishna reported in 2017 that the central weakness of Indian arbitration was the predominance of ad hoc references, and recommended an institutional framework. The Amendment Act of 2019 gave effect to that recommendation and added several procedural changes.

• Part IA. Sections 43A to 43M created the Arbitration Council of India, to grade arbitral institutions, frame norms for the accreditation of arbitrators and maintain a depository of awards.
• Section 11. Appointment was to move from the courts to arbitral institutions designated by the Supreme Court and the High Courts from among graded institutions.
• Timelines. Section 23(4) required pleadings to be completed within six months of the arbitrators receiving notice of appointment, and Section 29A was amended so that the twelve months for the award runs from the completion of pleadings rather than from entry upon the reference; for an international commercial arbitration the period became a direction rather than a limit.
• Confidentiality and immunity. Section 42A imposed a duty of confidentiality, and Section 42B protected an arbitrator against suit for anything done in good faith.
• The Eighth Schedule. Qualifications for arbitrators were prescribed by statute, a provision criticised for appearing to exclude foreign-qualified practitioners and for cutting across party autonomy.
• Section 87. Inserted to confine the 2015 amendments to arbitrations commenced on or after 23 October 2015 and to court proceedings arising out of them, which had the effect of reviving the automatic stay in older matters.

3. The Amendment Act of 2021

The third round did two things. It inserted a proviso to Section 36(3) requiring the court to grant an unconditional stay of the award where it is satisfied that a prima facie case is made out that the arbitration agreement, or the contract which is the basis of the award, or the making of the award itself, was induced or effected by fraud or corruption; the proviso operates retrospectively from 23 October 2015. And it substituted Section 43J so that the qualifications, experience and norms for accreditation of arbitrators are to be specified by regulations, omitting the Eighth Schedule altogether.

4. Prospective or Retrospective

The sequence from Section 26 of the 2015 Act to the retrospective proviso of 2021

Section 26 of the Amendment Act of 2015 provided that nothing in it shall apply to arbitral proceedings commenced, in accordance with Section 21 of the principal Act, before the commencement of the Amendment Act, unless the parties otherwise agree, but that it shall apply in relation to arbitral proceedings commenced on or after that date. The difficulty was the phrase in relation to arbitral proceedings, which had to be read against the question whether a court proceeding arising out of an older arbitration attracted the amended Section 36.

The 2021 amendment took a different route to retrospectivity. Instead of restricting the operation of an earlier amendment, it made a new protection available from 23 October 2015, so that a party resisting an award tainted by fraud could obtain an unconditional stay even in a matter already pending. Because it confers a benefit rather than withdrawing one, it did not attract the objection that defeated Section 87.

5. Development after 2015

The statutory changes are only part of the picture. Four judicial developments have shaped the law since 2015 as much as the amendments themselves.

• The narrowing of review. Ssangyong Engineering and Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 held that the wider view of public policy taken in Saw Pipes and Western Geco no longer represents the law, and Delhi Airport Metro Express (P) Ltd. v. DMRC, (2022) 1 SCC 131 confined patent illegality.
• The narrowing of the referral stage. Duro Felguera SA v. Gangavaram Port Ltd., (2017) 9 SCC 729, Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1 and NTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385 reduced the court's examination under Sections 8 and 11 to a prima facie view.
• The correction of appointment clauses. TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760 and the Constitution Bench in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), (2025) 4 SCC 641 struck down unilateral and curated-panel appointment procedures.
• The reach of the agreement and the limits of the court's power. Cox and Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1 settled the position of non-signatories, and Gayatri Balasamy v. ISG Novasoft Technologies Ltd., decided on 30 April 2025, recognised a limited power to modify an award, qualifying Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1.

A draft Arbitration and Conciliation (Amendment) Bill, 2024 was published for consultation in October 2024, following the report of the expert committee chaired by Dr. T.K. Viswanathan. It proposes statutory recognition of emergency arbitration, recognition of proceedings conducted by audio-visual electronic means, and the removal of the conciliation provisions consequent on the Mediation Act, 2023. It remains a consultation draft: it has not been introduced in either House, and no provision of it is in force.

6. Related Topics and Provisions