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Report No. 176

(36) Section 43: Two amendments are proposed in Section 43.

(i) Section 43(3): This sub-section is proposed to be amended to declare the effect of the Contract (Amendment) Act 1996 which amended Section 28 of the Indian Contract Act. By that amendment to the Contract Act, the effect of what is known as the Atlantic clause, was neutralised by the Parliament.

The amendment stated that if a clause in a contract had the effect of extinguishing a right if a particular step (e.g. giving of a notice of 30 days soon after the cause of action) is not taken by the party, such a clause will be void. Now sub-section (3) is proposed to be amended and it is stated that such clauses will be void and that further there will be no necessity for the parties to seek extension of time in a Court in respect of the period prescribed under the Limitation Act 1963, as is now provided in sub-section (3).

(paragraph 2.34.3)

(ii) Section 43(5): This sub-section is proposed to be added to exclude the period covered by infructuous arbitration proceedings where the arbitral tribunal holds under section 16(2) or 16(3) that it has no jurisdiction or where such an order is affirmed on further appeals, or where in an application under Section 11 (13), the Supreme Court or the High Court, as the case may be, holds that there is no arbitration agreement or that it is null and void etc. In such cases, if the party has to file a regular suit, under the proposed amendment, he will now be able to exclude the period covered by the arbitration proceedings.

(paragraph 2.35.4)

(37) Section 30 of the Amending Act - amendment of section 82 of the principal Act: The High Courts are to make rules fixing the manner in which arbitral proceedings have to be conducted, proceedings to be held on continuous days and on each day from 10.30 AM to 4.00 PM or at least for five hours.

(paragraph 2.39.1)

(38) Section 31 of the Amending Act- amendment of section 84 by insertion of a new sub-section (1A): In this proposed sub-section (1A), the Central Government is empowered to make rules regarding the manner in which the fee of the members of the arbitral tribunal may be fixed and the procedure relating thereto, and regarding the other particulars required to be entered under clause (f) of sub-section (4) of section 31A. The guidelines regarding the fixation of fee in respect of purely domestic arbitrations between Indian nationals are also laid down.

(paragraphs 2.39.3 and 2.39.4)

The Arbitration and Conciliation (Amendment) Bill, 2001 Back

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