SC Issues Notice To Centre On Plea Seeking Constitution Of Arbitration Council Of India

(MENAFN- KNN India) New Delhi, Jan 17 (KNN) The Supreme Court on Friday sought a response from the central government on a petition seeking directions for the constitution of the Arbitration Council of India (ACI), a statutory body envisaged under the Arbitration and Conciliation (Amendment) Act, 2019.

The plea was filed by cotton trader Anil Kalyandas Thanvi.

A Bench comprising Justices J K Maheshwari and Atul Chandurkar issued notice on the petition and directed that the matter be listed for hearing after six weeks.

Delay in Setting Up ACI

The petition pointed out that the ACI is provided for under Sections 43A and 43B of the Arbitration and Conciliation Act, 1996, introduced through the 2019 amendment.

The plea said that although draft notifications were issued in 2020, followed by amendments to the law in 2021 and notification of the relevant provisions in October 2023, the ACI has not been constituted for over six years.

Concerns Over Arbitration Framework

Apart from seeking the constitution of the ACI, the petitioner has sought directions for framing uniform policies and guidelines for the conduct, regulation and accreditation of arbitral institutions and arbitrators.

The plea highlighted that the Eighth Schedule of the Act, which earlier prescribed qualifications for arbitrators, has since been omitted, making the role of the ACI more critical to ensure minimum professional standards.

The petition raised concerns over arbitrations conducted by trade associations, alleging that they are unregulated and violate Articles 14 and 19(1)(g) of the Constitution. It claimed that some institutions impose mandatory membership, restrictive arbitral panels and unfair appointment procedures, limiting parties' statutory remedies.

Challenge to Trade Association Rules

The Cotton Association of India (CAI) has been specifically named in the petition. The petitioner, a CAI member, alleged that the association mandates its arbitration rules as a pre-condition for trading.

The plea challenges CAI's Rules of Arbitration dated April 26, 2024, contending that they override contractual agreements and statutory provisions, and has sought a declaration that the rules are unconstitutional.

The petition also questioned internal appellate mechanisms under certain trade association rules, alleging that they conflict with remedies provided under Sections 34 and 37 of the Arbitration and Conciliation Act.

(KNN Bureau)

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