All you need to know about Fast Track Arbitration Proceedings

In this article, Pallavi Tiwari of Dr. Ram Manohar Lohiya National Law University discusses about Fast Track Arbitration Proceedings.

Fast Track Arbitration

Fast Track Arbitration was introduced in India by the Arbitration and Conciliation Amendment Act 2015, to expedite the process of arbitration in India and it does not run by ordinary rules and regulations. Initially, the International Chambers of Commerce came up with this idea and has been using it in a number of cases, imbibing it in Article 30 and Annexure V of the Rules. In India, the concept of fast track arbitration means that the proceedings shall end within 6 months and there is no provision for oral proceedings, instead of written pleadings suffice the matter.

The essential features of a fast track arbitration proceeding are

1. It is majorly governed by strict time limit policies and which have to be complied with by both the arbitrators and the parties. Basically, it means to accelerate the arbitral proceedings and to resolve the matter in the shortest deadline possible.  
2. If the time limit is not followed then the mandate of the arbitrator shall terminate, unless the court has extended the time period. If while extending the period the Court finds out that the delay has been caused without any substantial reasons, then there is a reduction of fees of the arbitrator by not exceeding five -percent for each month of the delay. This punishment procedure has been mentioned under Section 15 of the Act.
3. It does not provide a fixed set of elements or procedures to be followed as done in ordinary arbitral proceedings, mentioned in the following head,  any practice which helps in resolving the issue as soon as possible is accepted under fast track arbitration.
4. Mostly in Fast Track Procedures for Arbitration, no oral proceedings are required and only written submissions are relied upon.
5. The parties can appoint a sole arbitrator and the submissions majorly have to be written.
6. It protects the cost, speed and time without infringing any law and sometimes the procedures like examination of a witness is also avoided.

How does fast Track Arbitration proceedings differ from normal Arbitration proceedings

1. The first difference is about the presence of three arbitrators in ordinary arbitral proceedings each party appointing one arbitrator and these two arbitrators shall appoint one arbitrator who shall be the presiding arbitrator provided under Section 11(3) of the Arbitration and Conciliation Act with the amendments of 2016. Whereas, the fast track arbitration provides for a sole arbitrator appointed by the parties for the arbitration tribunal under Section 29B of the Act.
2. For an ordinary arbitral award, section 29A(1) of the Act provides for the award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree. The time period can be exceeded but not more than six months. Under section 29B(4) for fast track arbitration, the award under this section shall be made within a period of six months from the date the arbitral tribunal enters upon the reference. If the award is not passed within the specified period then the provisions of 29A shall apply here also, i.e. ordinary arbitral proceedings.
3. In a fast-track proceeding under section 29B(6) the fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed between the arbitrator and the parties. Whereas in ordinary proceedings according to section 11(14),  the rules for the payment of costs to the arbitral tribunal, shall be determined by the High Court, as the rates are provided in the Fourth Schedule of the Act.
4. For an ordinary arbitral proceeding, whether to hold an oral proceeding or have awards passed on the basis of documents shall be decided by the arbitral tribunal. Under section 24 it is provided that oral hearing can be allowed by the tribunal at a particular stage when the party requests for it. Under section 29B for fast track procedures, written submissions are relied upon for proceedings and no oral proceeding is appreciated unless requested by the party.

Laws regulating Fast Track Arbitration proceedings in India

In India, the concept of fast track arbitration came up with the recommendations of 246th Law Commission Report on 5th August 2014, which referred to a number of cases to provide the benefits of a speedy proceeding. Following this, came up the Amendment Act of 2015, where section 29B of the Arbitration and Conciliation Act, 1996 with the addition of amendments, talked about the procedure involved for fast track arbitration. 29B talks about the procedure involved and the rules to be followed for fast track arbitration.

Further, the Indian Council for Arbitration Clauses under Rule 44 discuss the fast track procedure where the Parties may opt for Fast Track Arbitration and request the arbitral tribunal, before the commencement of the arbitration proceedings, to decide the issue in a fixed time frame of 3 to 6 months. Here the arbitral tribunal can decide the issue only on the basis of written pleading without any oral hearing and can also call for clarifications. An oral hearing may be held if both the parties make a joint request or if the Arbitration tribunal considers an oral hearing necessary in any particular case, and the tribunal shall hear it with all measures to proceed with it expeditiously.

When to apply for Fast Track Arbitration

Under section 29B of the Act, people who are parties to an arbitration agreement can apply for fast-track arbitration in two ways,

1. Before the appointment of arbitration tribunal by the parties,
2. Or at the time of the appointment of arbitration tribunal by the parties.

This has to be submitted in writing by the parties that they want to be governed by the fast-track procedure under subsection 3. They shall also agree for the sole arbitrator to be chosen by them for the tribunal.

Procedure of Fast Track Arbitration proceedings

The parties shall agree with each other to solve the issues through fast track procedure by the following rules,

1. The dispute shall be decided on the basis of written pleading, with the use of documents, submissions provided by the parties and there shall be a sole arbitrator depending on the interest of the parties and relying on his skill and efficiency.
2. There shall be no oral hearing.
3. The tribunal can ask the parties for any other information or any kind of clarification to be provided to help in the matter of resolving the issue.
4. There is a provision for an oral hearing if the parties request the tribunal or if the tribunal considers it necessary to resolve the issues.
5. With the use of technical formalities, the tribunal shall resolve such issues and do whatsoever required for a speedy disposal of the case.
6. The award shall be given within six months from the date the tribunal starts taking notice of the case and if such award is not passed within the time prescribed then the procedure for extension of time provided under 29A is followed.
7. If the award could not be given in the prescribed time period for fast track arbitration which is six months, an extension period of six months is provided. This extension period is provided under Section 29A of the Act as ordinarily provided for normal arbitral proceedings. The authority of the arbitrator shall terminate if before the lapsing of the six month time period the Court has not extended the period.
8. If the proceedings have been delayed due to the error of the arbitral tribunal and thereby an extension is required the Court can order for the reduction of fees to be given to the arbitrator.
9. While extending the period, the Court can substitute the arbitrator and is such a thing happens the proceedings shall continue from the stage it has already reached, and the arbitrator shall be deemed to have the knowledge of the evidence and material already presented.
10. The fees to be paid to the arbitrator shall be fixed between the parties and the arbitrator.

Suggested Readings.

Rules of Arbitration And The Role of Indian Council of Arbitration

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