New Delhi, May 5 (KNN) In a significant move, the Supreme Court has urged the Ministry of Law and Justice to reconsider the Arbitration and Conciliation (Amendment) Bill, 2024, which is currently under review.
The Court criticised the Bill for not addressing a critical gap that has existed since the enactment of the 1996 Arbitration Act—the lack of statutory clarity on the power of arbitral tribunals to implead non-signatories.
This issue, the Court noted, has been highlighted by numerous judicial decisions but remains unaddressed in the new Bill.
The Bench, consisting of Justices JB Pardiwala and R Mahadevan, expressed dismay over the persistent procedural ambiguities in India’s arbitration system, despite nearly thirty years since the 1996 Act’s passage.
“What is missing in the 1996 Act is still missing in the 2024 Bill,” the Court pointed out. The justices called on the Department of Legal Affairs to review the current draft and incorporate necessary reforms to ensure clarity and efficiency in the arbitration process.
The Supreme Court’s remarks came during its dismissal of a challenge by ASF Buildtech Pvt Ltd, a non-signatory, to its impleadment in arbitration proceedings.
The company had contested its involvement in a dispute involving Shapoorji Pallonji and Company Pvt Ltd (SPCPL), despite not being a party to the original arbitration agreement.
The Court upheld the tribunal’s decision, reasoning that the ASF Group, which includes ASF Buildtech, operated as a single economic unit.
It emphasised that ASF Buildtech’s actions indicated its intention to be bound by the arbitration agreement.
(KNN Bureau)
