Technological Revolution in Arbitration: the Expert Committee’s Game-Changing Recommendation
Introduction
The Expert Committee headed by Shri T.K. Vishwanathan (set up on June 12, 2023), has meticulously examined the functioning of the Arbitration Law in India and has released major recommendations for amendment of the Arbitration and Conciliation Act, 1996 (‘the Act’). The committee’s focus on recommending reforms to the Arbitration & Conciliation Act, 1996 is a pivotal step towards enhancing the efficiency and accessibility of arbitration processes.
A notable recommendation aims to integrate technology into arbitration proceedings, further revolutionising the way disputes are resolved.
Relevant Provision
Section 6 of the Act states:
Administrative assistance - In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
Section 6 empowers the parties involved or the arbitral tribunal, with the parties’ consent, to seek administrative assistance to streamline and enhance the efficiency of arbitral proceedings. Traditionally, this administrative assistance has been provided by suitable institutions or individuals, ensuring a smooth and organised arbitration process. The language of Section 6 does not explicitly mention technology, though its broad phrasing allows for the inclusion of technological advancements to improve administrative support in arbitral proceedings but there is no clarity and specificity, explicitly recognizing and harnessing the potential of technology in the realm of arbitration.
Recommended Suggestion
(a) amendment to section 6 to include Techno Legal Utilities as a suitable institution to provide administrative assistance;
(b) Insertion of new Section 6A –to provide for ‘Techno-Legal Utilities’, which provide techno-legal services to ad hoc as well as to institutional arbitrations. Techno- Legal services include, but are not limited to, secure online platforms for efficient document sharing, technological support for transcription, recordings and virtual hearings and cybersecurity measures.
(c) Insertion of new section 6B for regulating the functioning of the Techno-Legal Utility and providing for such Techno-Legal Utilities to be serviced by a registry with properly delineated functions.
Comments
The recommended amendments to Section 6 further enhance the incorporation of technology. By explicitly including “Techno Legal Utilities” as suitable institutions for administrative assistance, introducing provisions for secure online platforms, technological support for transcription, recordings, virtual hearings, and cybersecurity measures, the amendments align Section 6 with contemporary technological practices. The committee’s rationale for introducing techno-legal utilities is rooted in the challenges posed by conflicting court judgments and the need for cost-effective and efficient dispute resolution mechanisms.
Another driving factor behind this proposal is the issue of expensive venues and travel costs associated with physical arbitration proceedings. The 176th Report of the Law Commission highlighted the growing concern about parties having to bear the brunt of hefty expenses, especially when proceedings are conducted at luxurious venues. In response to these challenges, the committee suggests a shift towards virtual or hybrid modes of arbitration, facilitated by techno-legal utilities.
Embracing technology in arbitration has numerous advantages, not only reducing costs but also improving the overall efficacy of proceedings. The proposed amendments with technological innovations such as virtual dispute resolution mechanisms, document automation, and blockchain technology are crucial elements in making arbitration more efficient. The ability to conduct virtual hearings, share documents securely, and utilize machine learning for document analysis are specific benefits that techno-legal utilities can bring to the arbitration landscape.
Conclusion
The committee’s recommendations to amend Section 6 and introduce new sections, namely 6A and 6B, signify a progressive leap towards a technologically advanced arbitration framework. The proposed changes not only address the current challenges associated with arbitration process but also smoothen the path for ODR Platforms.
The recognition of techno-legal utilities and the statutory framework proposed in the amendments will also offer a comprehensive solution to the limitations of ad hoc arbitrations, bringing them into a more efficient and technologically savvy environment.
In embracing these changes, India has the potential to set a new standard for arbitration practices, aligning with global best practices and ensuring the swift and cost-effective resolution of disputes. The proposed recommendations, with its explanatory memorandum, lays the foundation for a modernized and accessible arbitration system, reflecting the evolving needs of the legal landscape. The adoption of these recommendations promises to usher in a new era of arbitration in India, where technology serves as a catalyst for efficiency, accessibility, and international recognition.
