Maritime Arbitration in India
- ByAdmin --
- 20 Apr 2024 --
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Arbitration in maritime disputes in India
Maritime law, also referred to as admiralty law, is a collection of laws, agreements, and treaties that control private marine operations as well as other nautical issues, such shipping and transgressions committed on open waters.
The Ministry of Shipping is responsible for overseeing shipping rules in India. To oversee the Indian Merchant Shipping Act of 1958, the Ministry formed the Directorate General of Shipping, a semi-autonomous organization. The statute gives the DG Shipping the authority to publish notices and circulars about shipping laws and policies.
Arbitration is a process wherein a dispute is agreed upon by the parties and then presented to one or more arbitrators who render a legally enforceable ruling.
Parties to intricate trade agreements from many nations are involved in maritime arbitration. Ship financing, insurance, cargo transit, and other related matters can give rise to conflicts in the maritime domain.
The Indian Council of Arbitration, which oversees maritime arbitration in India, has a component known as the Indian Council of Arbitration's Maritime Rule. The procedure for both local and international maritime arbitration in India is governed by these regulations.
The establishment of a maritime Arbitration Committee is required by rule 3 of the marine rule of the Indian Council of Arbitration. The Maritime Panel of Arbitrators, the Ministry of Shipping, the Shipping Corporation of India, and other seasoned nominations would make up its ten-member membership.
Any future modifications to the Arbitration and Conciliation Act, 1996 (26 of 1996) or its provisions shall govern arbitrations conducted under the maritime rule of the Indian Council of Arbitration.
Modifications to the 1996 Arbitration and Conciliation Act (26 of 1996)
The Arbitration and Conciliation Act, 1996 underwent revisions in 2015 and 2019 by the Indian Parliament to conform to international arbitration norms. A few of them consist of:
• Section 9 of the Act, which addresses temporary relief, was revised as part of the 2015 Amendment.
Section 37 has been amended. The Supreme Court has allowed the parties to seek the courts of appeal only in cases where the court has rejected their prior applications under section 34 of the statute.
The act's extant sections were amended by the amendment, including the appointment of arbitrators under section 11(3) by arbitral institutions that must be established in accordance with the new section 43D.
2021 Amendment
On March 11, 2021, the Arbitration Conciliation Act (Amendment) of 2021
1. Took the place of the ordinance. The amendment permits the courts to automatically halt the implementation of any arbitral decisions in the event that they discover evident evidence of fraud or corruption influencing the award. Using Section 2 of the main Act, this modification has been implemented in accordance with Section 36 of this Act.
2. Secondly, it removed the Eighth Schedule, which listed the requirements for the arbitrator's training, background, and standards to be adhered to, from the main Act.
ISSUES OF MARITIME ARBITRATION
International entities for maritime arbitration are constantly modernizing. In contrast to other global organizations like the Emirates Maritime Arbitration Centre (EMAC), India does not have the necessary infrastructure in place to resolve disputes.
Exorbitant expense of arbitration: Under rule 23(2) of the Maritime Arbitration Rules, maritime disputes must be arbitrated by professionals in the field, and the fee schedule is highly costly.
In the judgment of in re: interplay between arbitration agreements under the arbitration and conciliation act 1996 and the Indian stamp act 1899, the Supreme Court ruled in December 2023 that arbitration terms in unstamped or insufficiently stamped agreements are enforceable. This decision rejected the 3:2 judge benches in the N.N Global case, which decided that arbitration agreements based on unstamping are unenforceable and unlawful ab initio.
The court held that although an agreement that is not validly stamped or is not stamped enough is not admissible as evidence under the Stamp Act, the flaw in the law might be remedied. Consequently, the agreement's arbitration provisions are still in effect even if there is incorrect or non-stamping.
Conclusion
Under the Arbitration Maritime Regulations, maritime arbitration is recognized as a unique type of arbitration with its own standards and protocols. To make our nation more and more arbitration-friendly, several legislation and modifications to the Arbitration and Conciliation Act, 1996 have been introduced in recent years. However, India's maritime arbitration still lags behind international institutions, necessitating the development of adequate infrastructure in order to become globally established.
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