Expectations from Arbitration and Conciliation (Amendment) Ordinance, 2015 in Government Infrastructure Contracts

The main objectives of the Arbitration and Conciliation Act 1996 were to minimize the supervisory role of courts in the Arbitration process while simultaneously imparting a legal force to conciliation to effectively resolve contractual disputes. Thereafter, the law of Alternative Dispute Resolution (ADR) in commercial contracts in India has been ever evolving. Some judgments of the Supreme Court highlighted certain inadequacies of the Act whereas certain other judgments jolted the confidence of foreign investors in Indian Judiciary. Thus, a strong need was felt to revisit the Act and hence the Arbitration and Conciliation (Amendment) Ordinance, 2015 promulgated by the President on 23 Oct 2015. Due to several associated uncertainties, an infrastructure contract is more prone to occurrence of disputes than any other contract. A sound and efficient dispute resolution mechanism is most essential for infrastructure development of a country. This paper discusses the expectations from the ordinance and subsequent law on the current scenario of dispute resolution in Government Infrastructure Contracts to ensure that public money catered for infrastructure development does not get blocked in endless litigations.