Fast Track Arbitration: Another Theory To Be Tested Under The Arbitration And Conciliation (Amendment) Act, 2015

The overarching purpose of the 2015 amendment to the Arbitration and Conciliation Act, 1996 (AC 1996) is to make arbitration in India an effective process by introducing enabling provisions that would  assist in speeding up the resolution process. Section 29B of the AC 1996 is one such example.

Provisions on fast track procedures are common and several arbitral institutions provide for it. The primary objective of fast track arbitration is to adhere to strict timelines and reduce procedural intervention in the process. In a similar fashion, Section 29B of the AC 1996 allows parties to agree to a fast track procedure with a sole arbitrator. In clause (3), it also sets out a framework procedure which the arbitral tribunal is to follow while conducting the arbitration proceedings.

Two novel elements in this provision are: (i) the arbitral tribunal “shall follow” the procedure set out and, (ii) the arbitral tribunal may dispense technical formalities, and adopt such procedure  as deemed appropriate for the expeditious disposal of the case.

While freedom to contract to a procedure of arbitration is available to parties, for arbitration agreements under the AC 1996, the contract is often silent. Therefore, the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872 are turned to for guidance and procedure. Section 29B, however, recognises the need to delineate from the complexities of civil procedure and trial which have in today’s practice become the norm in most arbitration proceedings conducted under the AC 1996. This is further fuelled by the fact that arbitration is neither viewed as a separate profession by the arbitrator nor as an independent practice area by most lawyers in India.

Today, lawyers need to view representation in arbitration as separate from representation in court. As a process, arbitration is to do away with the complexities of procedure. Section 29B embodies the essence of arbitration by recognising flexibility in procedure, which has over time gotten lost in the Indian arbitration regime.

Studies in various jurisdictions have identified that fast track arbitrations are best suited for contractual and commercial cases. Moreover, in the absence of an indentified institution whose rules provide for, fast track arbitration in breach of contract cases have been implemented primarily owing to an existing contractual agreement.  Here, the key word in Section 29B is the agreement of the parties to a contract / arbitration agreement to mutually agree upon a fast track procedure.

The availability of the fast track provision must be utilised and lawyers must educate parties in relation to it. The likelihood that parties agree to a fast track process at a dispute stage may be low, therefore, the important element is drafting of arbitration clauses to include fast track procedures, at the inception of the contract. Negotiation of a dispute resolution cause is equally important.

Identified disputes such as contractual claims up to an agreed amount or those that have pre-determined specific indemnification are two examples that could be subjected to and appropriate for fast track arbitration.

As stakeholders to the dispute system, in encouraging, recognising and promoting a process to a party, lawyers play a significant role in popularising or dismissing a process. A drafting mandate can be suggested for contracts to include a provision for fast track arbitration by counsels to contracting parties. Demarcations in adopting the procedure for potential hurdles should be made in dispute resolution clauses where the arbitration under the AC 1996 is being agreed to.  This may not bring about an overnight change, but it may considerably change mass viewpoints towards rigorous procedures that have made arbitration under the AC 1996 tedious.

For Section 29B to work, arbitration advocacy is the need of the hour. In the absence of this, Section 29B will become another untested theory without any practical usage or utility.

Ishana Tripathi is an advocate based out of Bangalore with ADR as a focussed practice area.

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same].