The Arbitration and Conciliation Act 1996: Structure, Key Provisions, and What Changed

Every serious arbitration in or involving India starts and ends with the Arbitration and Conciliation Act, 1996.¹ It is the statute that determines whether a clause is an arbitration agreement, which court can intervene, how a tribunal is appointed, how long it has to act, on what grounds an award can be challenged, and how that award is ultimately enforced.

The Act replaced the Arbitration Act, 1940 and its companion statutes on foreign awards — a framework so permeable to judicial interference that arbitration had become an annexure to civil litigation rather than an alternative to it. The shift to the UNCITRAL Model Law was deliberate.² India sought a regime legible to foreign parties, capable of cross-border enforcement, and insulated from the appellate culture that had made its courts notoriously slow.

What followed was not immediate success. The statute was modern; its interpretation was not. For nearly two decades, judicial expansion — most damagingly through ONGC v. Saw Pipes Ltd. — reintroduced the very intervention the Act sought to eliminate. The course correction came with the 2015 amendment, and to a lesser extent the 2019 amendment.³ Understanding what they changed requires understanding the architecture they modified.

The Architecture of the Act

The Act has four Parts and two Schedules. The division is not administrative — each Part defines a distinct legal universe. Misunderstanding the structure leads directly to jurisdictional error.

Part I (Sections 2–43) is the main body. It governs all arbitrations seated in India: domestic disputes between Indian parties and international commercial arbitrations where parties have chosen India as the juridical seat. Every operative provision — arbitration agreements, tribunal appointment, interim measures, the award, and challenge — sits here.⁴

Part II (Sections 44–60) deals exclusively with enforcement of foreign awards. Chapter I (Sections 44–52) incorporates the New York Convention regime; Chapter II (Sections 53–60) the Geneva Convention, whose application in practice is now rare. In Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (BALCO), a Constitution Bench confirmed that Parts I and II operate in separate fields on a strictly territorial basis: Part I applies where the seat is in India; Part II governs recognition and enforcement of foreign awards, and Part I does not travel to foreign seats by default.⁵

The 2015 amendment partially recalibrated this through a proviso to Section 2(2): courts can grant limited assistance — including interim relief under Section 9 — to foreign-seated arbitrations, unless the parties have expressly excluded it. The separation remains intact in principle; it is no longer absolute in operation.⁶

Part IA, inserted by the 2019 amendment, establishes the Arbitration Council of India (ACI) as a statutory regulator to grade institutions, accredit arbitrators, and maintain a repository of awards. As of March 2026, the ACI has not been constituted — a six-year failure of implementation that the Supreme Court has formally noticed and the government has not resolved.⁷

Part III (Sections 61–81) provides a separate, non-adjudicatory regime for conciliation. The conciliator facilitates settlement; does not adjudicate. The outcome is a contract, not an award. It is structurally and functionally distinct from arbitration and should not be conflated with it.

Part IV contains supplementary provisions. The First and Second Schedules reproduce the New York and Geneva Convention texts.

Part I: The Provisions That Actually Matter

Part I runs to over forty sections. A handful do most of the practical work.

Section 2(1)(f) defines international commercial arbitration as a commercial dispute where at least one party is a foreign national, foreign body corporate, foreign government, or an entity whose central management is exercised outside India. The classification is not cosmetic. It determines the appointing court under Section 11 (Supreme Court for international commercial arbitrations, High Courts for domestic), affects the applicability of Section 29A timelines, and limits the availability of “patent illegality” as a challenge ground under Section 34 — a ground confined to purely domestic awards and unavailable against international commercial arbitrations even if seated in India.⁸

Section 5 states the foundational principle of minimal judicial intervention: no judicial authority shall intervene in matters governed by Part I except where the Act itself so provides. This is not a recital. It is an operative constraint that courts have used to discipline their own conduct. In Ssangyong Engineering & Construction Co. Ltd. v. NHAI, the Supreme Court explicitly tied its narrow post-2015 reading of Section 34 to Section 5’s discipline.⁹

Section 7 requires the arbitration agreement to be in writing — a clause in a contract or a standalone submission agreement. Emails and other recorded electronic communications are expressly recognised following the 2015 amendment. Incorporation by reference is permitted, but only where the reference clearly imports the arbitration clause; a bare reference to “standard terms” will not suffice. A defective Section 7 agreement does not invite judicial rescue. Tribunal jurisdiction derives entirely from the agreement. If the agreement fails, the arbitration fails. Every unstated element — seat, rules, number of arbitrators, governing law — is a future jurisdictional fight.¹⁰

Section 9 allows parties to approach a court for interim relief before, during, or after arbitral proceedings but before enforcement: attachment of assets, injunctions, appointment of receivers, preservation of evidence. BALCO confined Section 9 strictly to India-seated arbitrations. The 2015 proviso to Section 2(2) re-opened this for foreign-seated arbitrations, on an opt-out basis. The drafting decision whether to preserve or exclude Indian court support is therefore material where Indian assets are at stake — it must be made at the contract stage, not after a dispute has arisen.¹¹

Section 11 is the appointment mechanism when parties fail to agree on arbitrators. Before 2015, Supreme Court jurisprudence had converted the appointment stage into a merits-level filter: courts examined arbitrability and limitation at the threshold, in cases such as National Insurance Co. Ltd. v. Boghara Polyfab. Section 11(6A), inserted in 2015, confined the court’s inquiry to the existence of an arbitration agreement and nothing more. The 2019 amendment went further by enabling designated arbitral institutions to make appointments under Section 11(3A), reducing court involvement for institutional arbitrations. In practice, MCIA and DIAC now exercise this function where parties have agreed to those rules.¹²

Section 16 embeds Kompetenz-Kompetenz: the tribunal rules on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. Jurisdictional objections must be raised no later than the statement of defence — failure to do so amounts to waiver under Section 16(2). An order upholding jurisdiction is not immediately appealable; it can only be challenged at the Section 34 stage along with the final award. The tribunal decides first; courts supervise later.¹³

Section 17 empowers the tribunal to grant interim measures: maintain status quo, secure the amount in dispute, preserve evidence, protect assets. Before 2015, Section 17 orders had no teeth — a party who disobeyed faced no direct sanction. The 2015 amendment provided that tribunal interim orders are enforceable “as if” they were orders of court. Disobedience is now contempt. This single change materially reduced the need to approach courts under Section 9 for interim relief during proceedings.¹⁴

Sections 29A and 29B impose time discipline. Section 29A, inserted in 2015 and clarified in 2019, requires a tribunal in domestic arbitration to render its award within 12 months of completion of pleadings — the 2019 amendment shifted the reference point from “entering reference” to “completion of pleadings under Section 23(4)”, resolving earlier disputes about the starting point. The period is extendable by party consent to 18 months, and further by court order on application, with the court empowered to reduce arbitrator fees or substitute arbitrators where delay is attributable to them. International commercial arbitrations are exempt from the hard timeline and are expected to proceed “as expeditiously as possible.” Section 29B permits a fast-track, documents-only process with a 6-month outer limit — used in practice for lower-value or relatively simple disputes.¹⁵

Section 31 prescribes form and content: the award must be in writing, signed by arbitrators, state reasons unless agreed otherwise, and specify the date and place of arbitration. The recorded place is not a cosmetic detail. It crystallises the juridical seat and determines which court has supervisory jurisdiction over any challenge.¹⁶

Section 34 is the most litigated provision in Indian arbitration. Grounds for challenge are: incapacity of a party, invalid arbitration agreement, lack of proper notice or inability to present a case, award beyond the scope of submission, improper tribunal composition, non-arbitrability, conflict with public policy, and — for domestic awards only — patent illegality. The application must be filed within 3 months of receipt of the award, extendable by 30 days on sufficient cause. No further extension is available.¹⁷

The evolution of “public policy” under Section 34 defines the trajectory of Indian arbitration jurisprudence. ONGC v. Saw Pipes Ltd. (2003) expanded it to permit what amounted to merits review, introducing “patent illegality” as a ground applicable to all awards. The Law Commission’s 246th Report criticised this expansion and recommended a narrower standard. The 2015 amendment codified patent illegality as a separate ground confined to domestic awards. In Ssangyong Engineering v. NHAI (2019), the Supreme Court confirmed that the Saw Pipes and Western Geco expansions have been undone: public policy now tracks the Renusagar standard — fundamental policy of Indian law, the interests of India, and the most basic notions of justice and morality.¹⁸

The 2025 Constitution Bench decision in Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd. introduced a new variable. By a 4:1 majority, the Court held that courts possess a limited power to modify arbitral awards: severing invalid portions, correcting clerical or computational errors, adjusting post-award interest, and invoking Article 142 with restraint. Justice Viswanathan dissented on the ground that no such power exists under the statute. The judgment is binding law, but its tension with the finality principle and Section 5’s minimal-intervention mandate has already generated substantial criticism.¹⁹

Section 36 governs enforcement of domestic awards. Before 2015, filing a Section 34 application triggered an automatic stay — a structural invitation to delay that award debtors exploited systematically. The 2015 amendment reversed this: awards are now enforceable as decrees unless a court actively grants a conditional stay, satisfied that a prima facie case for setting aside exists. The 2021 amendment added that where fraud or corruption in the underlying contract is prima facie established, the stay must be granted unconditionally — addressing concerns about state entities deploying Section 34 purely to frustrate awards against them.²⁰

Enforcement reality remains imperfect. Even after Section 36 triggers, execution through civil courts can be slow. The gap between an award surviving challenge and money reaching the award-holder’s account remains a known feature of Indian arbitration practice.

Part II: Enforcing Foreign Awards in India

Part II is narrower but critical for cross-border work.

Section 44 defines a foreign award as one made in the territory of a New York Convention country pursuant to a commercial arbitration agreement. India follows a notified country system — not all 172 Convention signatories are automatically covered. Currently approximately 48 countries are notified. Whether a particular award qualifies must be verified at the advisory stage, before advising a client on enforceability.²¹

Section 47 sets out the documentary requirements: the original award or a certified copy, the original arbitration agreement or a certified copy, and translations where required. Courts are strict about compliance. Defects at this stage cause avoidable delays.

Section 48 provides the grounds for refusing enforcement, mirroring Article V of the New York Convention: incapacity, invalid agreement, lack of proper notice, decisions beyond the scope of submission, improper tribunal composition or procedure, the award not yet binding or having been set aside at the seat, non-arbitrability, and public policy of India. The provision must be construed narrowly. The burden lies on the party resisting enforcement. In Shri Lal Mahal Ltd. v. Progetto Grano Spa (2014) 2 SCC 433, the Supreme Court confirmed that the public policy ground under Section 48 is narrower than under Section 34 — courts have consistently refused to expand it beyond the Renusagar test — and that enforcement is not an occasion for re-litigation. Once an award survives Section 48, Section 49 deems it a decree of the enforcing court.²²

What the 2015 and 2019 Amendments Actually Changed

By 2014, the Law Commission’s 246th Report described a regime in which almost every modern arbitration value had been compromised: Section 34 was being used to re-try disputes, tribunals had no time discipline, automatic stays made awards illusory in practice, Section 11 appointments had become merits-review exercises, Section 17 orders were unenforceable, and the application of Part I to foreign-seated arbitrations under Bhatia International had created radical uncertainty.²³

The 2015 amendment addressed the worst of these failures. It introduced time limits through Section 29A and the fast-track option under Section 29B, made tribunal interim orders enforceable under Section 17(2), narrowed the public policy and patent illegality grounds under Section 34, removed the automatic stay under Section 36, and confined court scrutiny at the appointment stage through Section 11(6A). It also added model fee structures through Schedule IV and strengthened the framework on arbitrator independence and impartiality through Schedules V and VII.²⁴

The 2019 amendment was more forward-looking. It inserted Part IA to create the ACI, authorised institutional appointments under Section 11(3A), imposed a six-month pleading timeline under Section 23(4), introduced confidentiality through Section 42A and arbitrator immunity through Section 42B, and resolved the retrospective application dispute around the 2015 amendments through Section 87 — addressing the controversy left open after BCCI v. Kochi Cricket Pvt. Ltd.²⁵

The 2015 amendment was transformative. The 2019 amendment had institutional ambition — but its centrepiece, the ACI, has not been brought into existence. The gap between legislative intent and administrative execution is the persistent failure of India’s arbitration reform programme. The trajectory remains correct. The pace does not.

Three Things That Still Create Uncertainty

Seat versus venue remains a live source of litigation. Parties continue to draft clauses using “venue” where “seat” is intended — a distinction that determines supervisory court jurisdiction and the curial law. In BGS SGS SOMA JV v. NHPC Ltd. (2020) 4 SCC 234, the Supreme Court held that, read in totality, a “venue” designation can amount to a designation of the juridical seat, implicitly excluding the jurisdiction of other courts under Section 2(1)(e). That approach rescues bad drafting. It does not reward it. The correct approach in contract work remains to identify the seat in express terms and treat “venue” as merely the physical location of hearings.²⁶

Gayatri Balasamy has reopened the debate on finality. The recognition of a limited judicial power to modify awards sits uneasily with the minimal-intervention principle and the narrow grounds under Section 34. Parties resisting enforcement will attempt to reframe substantive challenges as “modification” requests. Courts will have to police that boundary. Where it will eventually settle is not yet clear.²⁷

The ACI gap is now explicit and documented. Government statements and press reports acknowledge that six years after Parliament provided for the Council, it has not been constituted. In the meantime, parties and courts rely on ad hoc criteria and private reputations when evaluating arbitral institutions. Proposed reforms in the draft 2024 amendment suggest that even the ACI model itself may be revised before it has operated at all.²⁸

Where Things Stand

The Arbitration and Conciliation Act, 1996, as amended, is a functional framework. Its core commitments — minimal intervention, party autonomy, finality, and convention-compliant enforcement — are now clearly expressed in the text and, more often than not, reflected in the case law. The 2015 amendment corrected the statute’s early distortions. The 2019 amendment pointed toward institutional development that has yet to materialise.

For international parties, the statute is no longer the primary concern. Implementation is. The gap between India’s arbitration law on paper and India’s arbitration practice in fact continues to be defined by enforcement machinery, judicial consistency, and institutional capacity that the law has prescribed but the administration has not delivered.

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The author is a law student at Law Centre-1, Faculty of Law, University of Delhi. Views are personal.

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