The Arbitration and Conciliation (Amendment) Act, 2015 which came into effect from 23rd October 2015 has brought about several significant changes to the existing arbitration law and has been hailed as a landmark step towards ease of doing business and speeding up the process of commercial dispute resolution. One of the most important and unique provisions brought about by this amendment is the fast track procedure for arbitration.
The Amendment Act has inserted Section 29B to the 1996 Act, to provide for fast track arbitration. The concept of fast track arbitration was introduced in order to expedite the arbitration process where the arbitration tribunal shall have to make an award within a period of 6 months from the date of reference of the dispute to the arbitration tribunal. Further, it is also provided that the tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing, unless the parties request for oral hearing or if the tribunal considers it necessary for clarifying the issues pertaining to the arbitration process.
Highlights of the Fast Track procedure for arbitration
- Fast track arbitration by agreement
The new section provides the parties to a dispute with an option to choose fast track procedure, even if they do not wish to subject their arbitration to any institutional rules. The parties can agree to fast-track procedure at the time of entering into arbitration agreement or at any stage either before or at the time of the appointment of the arbitral tribunal. It is also noteworthy that the enabling provision in Sec 26 of the amendment Act provides for fast track arbitration to be applied to the existing disputes if the parties mutually agree to apply this procedure.
- Sole arbitrator for fast track arbitration
The parties to a dispute, while agreeing to the resolution of a dispute by fast track procedure, may choose a sole arbitrator to act as an arbitration tribunal.
- Arbitration tribunal may decide on the basis of pleading, etc
The fast track arbitration procedure does away with the need for oral hearing since the dispute is settled on the basis of written pleadings, documents and submissions filed by the respective parties. But the need of oral pleadings is not completely eradicated in fast-track proceedings since it may be held at the request of the parties or if it is considered necessary by the tribunal to clarify certain issues. It is completely at the discretion of the tribunal to dispense any further technical formalities and adopt any such procedure that is suitable for the expeditious disposal of the dispute.
- Arbitration award to be made within six months
It is provided that the arbitration award shall be made within six months from the date the arbitral tribunal enters upon the reference. In case, the tribunal fails to make an award within six months, the parties can exceed the time period mutually to an additional period of 6 months. Further, if the award is not made within such extended time period, the mandate of the tribunal shall automatically terminate and any additional extension can only be granted by the court on sufficient cause being shown and on such terms and conditions as may be imposed.
- Arbitrator’s fees to be agreed by the parties
Though the amendment Act under Sec. 11(14) has prescribed the fees of arbitrators in the fourth Schedule, in the case of fast track arbitration, the fees and the manner of payment of fees shall be as agreed by the parties.
Fast Track Procedure in Institutional Arbitrations
Fast track procedures for dispute resolution were available in Institutional Arbitrations since long. These have been beneficial in cases where a minor dispute has cropped up or where parties don’t want the process to be very long. Rule 9A of the LCIA Arbitration Rules 2014 and Rule 5 of the SIAC Rules, 2016 provide for an expedited procedure of Arbitration in order to resolve the dispute.
In India also, arbitration institutions like Delhi International Arbitration Centre and the newly established Mumbai Centre for International Arbitration have incorporated provisions in their Rules that allow for parties to opt for fast track procedure.
The process of fast track arbitration is still new in India and needs to be actively practised to lessen the burden on the judicial system. By introduction of fast-track procedure in the Arbitration Act itself, fast track process has been granted statutory recognition and this will go a long way in legitimising and making fast track procedure an accepted mode of dispute resolution.