NEW DELHI: In an unprecedented step, Supreme Court appears to have vetted a bill pending consideration in Parliament. On Friday, it "urged" the law ministry to take a "serious look" and make changes in it, keeping in mind the arbitration regime in India.
Constitutional courts are empowered to test the validity of laws enacted by Parliament and state legislatures and interpret the law. The Constitution under Article 141 provides that a law declared valid by the SC shall be binding on all courts. But these courts have never entertained a petition challenging the validity of a bill.
Though the Arbitration and Conciliation Bill, 2024, proposing major changes in the 1996 law on the same subject, was not under challenge before SC, a bench of Justices J B Pardiwala and R Mahadevan decided to scrutinise it. They concluded that the bill suffered procedural lacunae and vacuum similar to the 1996 Act.
‘Even after 30 yrs, procedural issues dog arbitration regime’
The bench’s comments came in a case involving arbitration between two parties.
Giving a brief background of arbitration laws in India, starting with the 1940 Act, followed by the 1996 Act and the changes proposed to be effected through the 2024 bill, the bench said, “It has been almost 30 years since the 1996 Act has remained in force. Various amendments to the 1996 Act have been made over the years to ensure that arbitration proceedings are conducted and concluded expeditiously. It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand, have continued to plague the arbitration regime of India.”
Writing the judgment, Justice Pardiwala said, “Unfortunately, even the new bill has taken no steps whatsoever for ameliorating the position of law as regards the power of impleadment or joinder of an arbitral tribunal. What is expressly missing in the 1996 Act is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this court as well as various high courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion.”
He further said, “We urge the department of legal affairs, ministry of law and justice, to take a serious look at the arbitration regime that is prevailing in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024, is still being considered.”
The same bench had raised eyebrows in political and legal circles with its verdict setting a deadline of three months for the President to give assent to bills sent to her by governors, and by suggesting that she might consider it prudent to take the opinion of the apex court to determine the validity of bills.
Constitutional courts are empowered to test the validity of laws enacted by Parliament and state legislatures and interpret the law. The Constitution under Article 141 provides that a law declared valid by the SC shall be binding on all courts. But these courts have never entertained a petition challenging the validity of a bill.
Though the Arbitration and Conciliation Bill, 2024, proposing major changes in the 1996 law on the same subject, was not under challenge before SC, a bench of Justices J B Pardiwala and R Mahadevan decided to scrutinise it. They concluded that the bill suffered procedural lacunae and vacuum similar to the 1996 Act.
‘Even after 30 yrs, procedural issues dog arbitration regime’
The bench’s comments came in a case involving arbitration between two parties.
Giving a brief background of arbitration laws in India, starting with the 1940 Act, followed by the 1996 Act and the changes proposed to be effected through the 2024 bill, the bench said, “It has been almost 30 years since the 1996 Act has remained in force. Various amendments to the 1996 Act have been made over the years to ensure that arbitration proceedings are conducted and concluded expeditiously. It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand, have continued to plague the arbitration regime of India.”
Writing the judgment, Justice Pardiwala said, “Unfortunately, even the new bill has taken no steps whatsoever for ameliorating the position of law as regards the power of impleadment or joinder of an arbitral tribunal. What is expressly missing in the 1996 Act is still missing in the Arbitration and Conciliation Bill, 2024, despite a catena of decisions of this court as well as various high courts, highlighting the need for statutory recognition of such power in order to obviate all possibilities of confusion.”
He further said, “We urge the department of legal affairs, ministry of law and justice, to take a serious look at the arbitration regime that is prevailing in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024, is still being considered.”
The same bench had raised eyebrows in political and legal circles with its verdict setting a deadline of three months for the President to give assent to bills sent to her by governors, and by suggesting that she might consider it prudent to take the opinion of the apex court to determine the validity of bills.
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