Amar Singh
Gujarat National Law University
Background:
Through the notification[1] of the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order, 2020 (Link to the Official Gazette is not yet available online) and in exercise of its powers under Section 96 of the Jammu and Kashmir Reorganisation Act, 2019 to make adaptations and modifications to facilitate the implementation of any law applicable to India, the Indian government has made 37 laws applicable to the newly carved out Union Territory of Jammu and Kashmir whose previous special status as a state was taken away recently. The separate Arbitration Act[2] for the state of Jammu and Kashmir will now no longer be applicable, rather the central Arbitration and Conciliation Act, 1996[3] will be applicable with certain modifications as provided in the order itself. Since the 1996 Act starts with the following provision, “An Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto“, it follows that these provisions will apply to international arbitrations in J&K as well, however it may be prudent to wait for a clarification from the government in this regard.
Changes it Brings:
What this means for the Union Territory of J&K is that now the 1996 Act will be applicable with the following modifications:
First is section 8A (one of the new sections applicable only to J&K in addition to section 8B) that allows for the court to refer petitions to mediation and conciliation if they deal with interim measures (section 9) or with the appointment of arbitrators (section 11).The same may be done with the consent of the parties if there are elements of settlement acceptable to the parties.
In addition, a mediated settlement arrived at by the parties shall have the same status and effect as an arbitral award and can be enforced as per section 36 of the Act. Furthermore, it provides that ‘With respect to reference of a dispute to conciliation, the provisions of Part II of this Act shall apply as if the conciliation proceedings were initiated by the parties under the relevant provision of this Act.’
Similarly, section 8B empowers the court to refer to mediation and conciliation matters relating to setting aside of arbitral awards or appeals to arbitral awards under sections 34 and 37 respectively.
Also, the time frame for an application for setting aside awards contained in section 34 (3), which provides that such application may not be made after 3 months have elapsed from the date on which the party making the application had received the arbitral award, has been extended to 6 months for J&K. The proviso to this section, in its original language, stated that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months, it may entertain the application within a further period of 30 days. Even this has been extended to 60 days for J&K.
Conclusion
The modifications to the Arbitration and Conciliation Act, 1996 that the 2020 order envisages have the goal of reducing routine litigation in courts. In a majority of cases of arbitration in India, the weaker party delays the process by initiating recourse against the arbitral award or challenging the appointment of an arbitrator under the Civil Procedure Code, 1908 to ordinary Indian courts already overburdened with cases. This defeats the very purpose of arbitration which arguably is speedier resolution of disputes. Perhaps what the government is trying to do here, by allowing such disputes relating to a challenge to the arbitral award or the appointment of an arbitrator to also go to mediation and conciliation, is trying to check the abuse of the procedural law which happens by way of a losing party taking recourse to the ordinary court system and thereby putting the dispute resolution process into uncertainty for years. Further, practical considerations have been taken into account and as a result, the time for filing an appeal to the arbitral award has been increased from 3 to 6 months, and in case the party due to genuine reasons wasn’t able to appeal, the extension has been raised from 30 days to 60 days. However, there is also the possibility of these extensions causing further delay or being misused. It is evident that the government is trying to improve the efficiency of law through a trial and error method, and if it is found successful, there is all possibility of it being applied to the whole country.
REFERENCES:
[1] ‘Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order’, (Tax Guru, 18 March 2020) https://taxguru.in/goods-and-service-tax/jammu-kashmir-reorganisation-adaptation-central-laws-order-2020.html accessed 16 June 2020
[2] Jammu & Kashmir Arbitration & Conciliation Act, 1997
[3] Arbitration & Conciliation Act, 1996
