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The Arbitration Ordinance Causes Confusion

Before the much talked about Ordinance to amend the Arbitration and Conciliation Act could complete a month, questions have arisen regarding the meaning, scope and applicability of the Ordinance.


The Ordinance was promulgated on 23rd October, 2015. Subsequently, Reliance Industries filed an application with the Supreme Court of India for the appointment of the third arbitrator in the arbitration pending between RIL and the Government of India over the KG Basin.


The Ordinance has amended the procedure for the appointment of the arbitrator by the Court and the provision now reads:


Appointment of arbitrators: “if …. the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court, or any person or institution designated by such Court.”


Thus, there is confusion on two points:


·  Who will make the appointment?


·  Whether this Ordinance shall apply to an arbitration which has been initiated?


Furthermore, adding to this confusion is the possibility that the Ordinance may lapse in a few weeks. All an all, not the best situation to promote investor sentiment in the country, which may the aim of the Ordinance to begin with.