Dr. D. Mukhopadhyay
Government of India felt a necessity to amend the Arbitration and Conciliation Act, 1996 in order to make India a robust avenue for international and domestic arbitration under the globalised business environment and accordingly the Arbitration and Reconciliation (Amendment) Bill 2018 was introduced in Lok Sabha on 18th July, 2018 and subsequently the Bill has been passed in Lok Sabha on 10th August, 2018. The said amendment is based on the recommendations of the High Level Committee to Review the Institutionalization of Arbitration Mechanism in India, known as Srikrishna Committee under the Chairmanship of Justice B.N. Srikrishna, a former Judge of the Supreme Court of India. The recommendations of the Srikrishna Committee were to have a quick and effective resolution of commercial disputes through the mechanism of arbitration and conducting international and domestic arbitration and these were the causes for proposal of the referred bill. The Arbitration and Reconciliation (Amendment) Bill 2018 was introduced in Lok Sabha by the Minister of State of Law and Justice, P. P. Chaudhary. The objective of bill is to make India to deal with domestic and international arbitration and defines the law for conducting effective conciliation proceedings. This is definitely a welcome step from the end of Government of India as it is expected to facilitate ‘Ease of Doing Business’ as well as ‘Make in India ‘ mission. This would undoubtedly attract foreign investors for making fruitful investment in the Indian Economy and it would help India to increase the volume of commercial dealings not at national level but at international level too.
The law of arbitration and conciliation would enable India in achieving and bringing about improvement in institutional arbitration with the help of establishing an independent body which is known as the Arbitration Council of India (ACI). The principal role of the ACI shall be confined in framing norms and rules for institutional grading and monitoring quality performance of the arbitrators. This law shall be able to establish India as hub of arbitration. Now the question comes with regard to the qualification and experience of the Arbitrator which have been explicitly laid down in the Eighth Schedule of the said Bill. Qualification and experience of the arbitrators are very important and significant for appointing arbitrators as quality of performance of the arbitrators is dependent on these two variables and accordingly a person shall not be qualified to be an arbitrator unless he / she is an advocate within the meaning of Advocates Act, 1961 with ten years of practice as an advocate or a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 with ten years of practicing experience as a Chartered Accountant or he / she has been an officer of the India Legal Service or he / she has been an officer with Law Degree with ten years experience in the legal matters in the Government, Autonomous Body, Public Sector Undertakings at a senior level of managerial position in Private Sector or he / she has been an officer with Engineering Degree with ten years of experience as an engineer in Government , Autonomous body, Public Sector Undertaking or at senior level managerial position in private sector or self employed or the person has been an officer having senior level experience of administration in Central or State Government etc. or a person in any other case having educational qualification at degree level with ten years experience in scientific and technical stream in the fields of Telecom, Information Technology , Intellectual Property Rights or other specialized areas in Government, Autonomous Body, Public Sector Undertakings or at a senior level of managerial position in Private Sector as the case may be. From these, it is evident that a wide range of professionals belonging to senior management level persons and experienced professionals in the field of Law and Accountancy are included in the list of eligible arbitrators.
But it is a matter of great regret that two types of reputed professionals of India have been ignored /denied the rooms in that compartment and they are Cost & Management Accountants (CMAs) – alternatively also known as Cost Accountants within the meaning of Cost & Works Accountants Act 1959 and the Company Secretaries (CS) within the meaning of the Company Secretaries Act 1980. Both the professionals are value creating professionals and many CMAs and CSs are the corporate captains and are at the helm of affairs of economy management and administration across the country and overseas which is well acknowledged by the Ministry of Corporate Affairs and other Ministries of the Government of India. The Institute of Cost Accountants of India is a statutory body of the professional CMAs setup under an Act of Parliament i.e. Cost & Works Accountants Act, 1959 and she is ceaselessly engaged in nation building for the last 75 years (1944-2018) and contributes to the growth and development of Accountancy Profession in general and Cost & Management Accountancy profession in particular not only in India but across the globe. On the other hand, Company Secretaries’ role as key managerial personnel under the Companies Act, 2013 is well known to everybody. The Institute of Company Secretaries of India is a statutory body setup under an Act of Parliament i.e. the Company Secretaries Act 1980 and this Institute has also been serving India and globe and is engaged in national building for last 50 years (1969-2018). Though the Arbitration and Conciliation (Amendment) Bill 2018 has been passed in the Lok Sabha, but still the mistake / ignorance of the Government can be rectified by including CMAs / CSs within the meaning of the Cost & Works Accountants 1959 and the Company Secretaries Act 1980 having 10 years of practicing experience as CMAs and CSs respectively. Otherwise India shall be deprived of the rich professional service and expertise of these two professionals in the field of Arbitration and Conciliation.
It may not be out of place to mention that the Institute of Cost Accountants is offering a Certificate Course in Arbitration to various professional across also. Arbitration is an effective means of dispute resolution and it has been a binding effect by virtue complex framework of national and international laws. The international conventions and national arbitration along with the institutional arbitration rules provide a specialized legal environment for efficient arbitration and conciliation. It is hoped that Government of India shall follow the norm – ” Late is better than never” and include the CMAs and CSs with ten years experience in practice in the league of professions included in the matrix of Eighth Schedule containing ” Qualifications and Experience of Arbitrators” and strengthen the league of Arbitration Professionals of India . It is worth mentioning that both the Institute of Cost Accountants of India (ICAI-CMA) and the Institute of Company Secretaries of India (ICSI) are under direct administrative control of the Ministry of Corporate Affairs and both the professions have emerged as highly reputed professionals not only at the national level but also at the international level too as has been mentioned elsewhere. After the referred bill is passed passed by Rajya Sabha and receives the assent of the President of India, it shall become an effective instrument to make India an international and domestic hub for arbitration and conciliation which shall definitely be cost effective and quick commercial dispute resolution centre. Domestic arbitration takes place in India when arbitration and conciliation proceedings, the subject matter of the contract and the merits of the commercial disputes are within the jurisdiction of India. Domestic arbitration takes care of the cause of action for the dispute which arise in India or the parties to the disputes are the subject to Indian jurisdiction. Here the arbitration procedure is governed by the Indian Laws. Thus the arbitrators must have through knowledge of Indian circumstance and law in order to make the arbitration successful and binding in the eye of law. On the other hand, international arbitration can takes place either in India or outside India in cases where subject matter of disputes relates to foreign origin. The law application to the conduct of arbitration may be Indian Laws or foreign laws depending on the contract and rules of conflict of laws. However, procedure of arbitration is the same in both the cases.
Arbitration becomes international when at least one of the parties to dispute is resident or domiciled outside India or the subject matter of the dispute is not Indian perspectives. In international arbitration, the laws applicable may be the Indian laws or foreign laws depending on the terms and conditions of the contracts with regard to a particular commercial disputes and rules of conflict of laws. It may not be out of place to mention that both CMAs and CSs are competent professionals having expertise in the discussed discipline. It is worth mentioning in the context of qualifications and experience for appointments of the arbitrators as provided in the Arbitration and Conciliation (Amendment) Bill, 2018, CMAs and CSs may be considered to be adequately qualified to be included in the matrix of the Eight Schedule to the said Bill in the similar line of action as other professionals are considered suitable and if Government India does so, perhaps it will be right kind of justice to be delivered to the practicing CMAs and CSs.
(The author is the Professor of Management , School of Business and Dean-Faculty of Management, Shri Mata Vaishno Devi University, Katra, Jammu & Kashmir.)
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