Arbitration and Conciliation Act, 1996

Section 42B of the Arbitration Act: Protection of Action Taken in Good Faith

Section 42B of the Arbitration and Conciliation Act, 1996 protects an arbitrator from a suit or other legal proceeding for anything done, or intended to be done, in good faith under the Act or the rules or regulations made under it.

Section 42B: Protection of Action Taken in Good Faith

No suit or other legal proceedings shall lie against the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.

Section 42B was inserted by section 9 of the Arbitration and Conciliation (Amendment) Act, 2019 and came into force on 30 August 2019.

Meaning and Effect of Section 42B

The section provides statutory protection to an arbitrator in relation to acts carried out, or intended to be carried out, in good faith while acting under the Arbitration and Conciliation Act, 1996 or under rules or regulations made under the Act.

  • The protection is expressly granted to the arbitrator.
  • It applies to both acts actually done and acts intended to be done.
  • The act or intended act must be in good faith.
  • The conduct must be under the Arbitration and Conciliation Act, 1996 or the rules or regulations made under it.
  • The statutory wording bars a suit or other legal proceeding against the arbitrator where these conditions are satisfied.

What Does "Good Faith" Mean?

Section 42B does not separately define the expression "good faith". Its application therefore depends on the facts and circumstances of the particular case and the applicable principles of statutory interpretation.

The important statutory requirement is that the act complained of must have been done, or intended to be done, in good faith under the Act or under rules or regulations made under it.

Scope of the Protection

Section 42B is framed as a protection against suits and other legal proceedings directed against the arbitrator for qualifying conduct. The provision is linked to the arbitrator's statutory role and is not expressed as a general immunity unrelated to the performance of functions under the Act.

Practical point: Whether Section 42B applies in a particular dispute depends on the nature of the act complained of, whether it was connected with the arbitrator's functions under the Act, and whether the requirement of good faith is satisfied.

Why Section 42B Was Added

Section 42B was introduced by the Arbitration and Conciliation (Amendment) Act, 2019 as part of a set of amendments intended to strengthen the institutional arbitration framework in India. The Legislative Department's materials on the 2019 amendment record that the new provision protects an arbitrator from suit or other legal proceedings for action or omission done in good faith in the course of arbitration proceedings.

Section 12 - Grounds for Challenge

Section 12 deals with disclosures by a prospective arbitrator and circumstances giving rise to justifiable doubts as to independence or impartiality, as well as the statutory framework governing eligibility and challenge.

Section 13 - Challenge Procedure

Section 13 provides the procedure for challenging an arbitrator where a party invokes grounds recognized by the Act.

Section 14 - Failure or Impossibility to Act

Section 14 addresses termination of an arbitrator's mandate where the arbitrator becomes de jure or de facto unable to perform the required functions or fails to act without undue delay.

Section 42A - Confidentiality of Information

Section 42A requires the arbitrator, arbitral institution and parties to maintain confidentiality of arbitral proceedings, subject to the statutory exception relating to disclosure of an award where necessary for implementation and enforcement.

Official Statutory Source

The current text of Section 42B can be verified from the Government of India's India Code version of the Arbitration and Conciliation Act, 1996. The official text places Section 42B immediately after Section 42A and records that both provisions were inserted by Act 33 of 2019 with effect from 30 August 2019.