SC announces new norms for arbitration

Justice Ranjan Gogoi was designated by CJI to decide on arbitration petitions

The Supreme Court on Monday announced new norms for hearing arbitration petitions in view of the Arbitration and Conciliation Amendment Ordinance, which came into force in October. Justice Ranjan Gogoi, who was designated by the Chief Justice of India (CJI) to decide on arbitration petitions, said in future these norms would be followed. Gogoi sent all 24 cases listed before him, including the dispute between Reliance Industries and the Central government over the KG basin, to the CJI, who will decide the bench before which they will be listed. The new law uses ‘court’ in place of ‘designated judge’. This means a bench constituted by the chief justice.

Earlier, one judge designated by CJI in case of international arbitration, or chief justice of the respective high courts in domestic arbitration, was assigned the petitions.

That was the norm according to the Arbitration Act 1986. After the new law, this practice will have to be abandoned as the ordinance uses the word ‘court’ in place of ‘designated judge’. Court would mean a bench constituted by the chief justice, not one judge.      

Another clause has brought about significant change in the conduct of the proceedings. According to the amended law, once there is an arbitration clause in the agreement, disputes go directly to the arbitration tribunal. Arbitration in such cases is independent of the involvement of the court. This reduces the role of courts to a great extent and will speed up arbitration, which is often stalled in courts.

For instance, the Reliance arbitration case in the gas row has been pending for several years in the Supreme Court. Two arbitrators have been named, but the whole process in the international arbitration is stalled over the third and the presiding arbitrator. The new norms, issued by the registrar, might keep out the hurdles in this case.