Ordinance to Amend Arbitration Act

Arbitration act

To make India more investor friendly, the Union Cabinet along with the recommendation of the Federation of Indian Chambers of Commerce and Industry (FICCI) to introduce ordinance to amend the existing Arbitration and Conciliation Act of 1996, which has not yet received the president’s assent.

The ordinances adopts the amendments as recommended by the 246th report of the Law Commission. The reason foreign investors have been hesitant in their investments in India is mostly due to long drawn litigation.

The proposed changes in the Arbitration Act are; firstly, a timeline of nine months on declaring the final award, once the matter goes into dispute resolute. Secondly, a cap on the fees of the arbitrator. The arbitrator can seek an extension from the High Court, but the court can debar the arbitrator from taking up fresh cases for a certain period.


These changes would make dispute resolution less expensive and the timeline would also make it more effective. This comes out as a positive signal for the foreign investors who have in the past opted for Arbitration outside India, like the Vodafone case. This ordinance would make India the preferred venue for arbitration.