Retired judges and top lawyers taking up arbitration (out-of-court settlement) cases to mainly settle commercial disputes by charging a hefty fee may soon face fresh regulations, according to a government document to be made public later this week.
The law ministry proposes to amend the Arbitration and Conciliation Act, 1996, to make arbitration in the country acceptable at the international level and remove long delays in settling disputes between parties.
According to the consultation paper seeking sweeping changes in the existing law, to be released by Law Minister M. Veerappa Moily, the person being approached as an arbitrator will have to give a “no conflict of interest” declaration.
“The possible arbitrator shall disclose in writing any past or present relationship, either direct or indirect, financial, business, professional or social or relationship with any of the parties involved in the dispute,” states the document seeking amendments in the law.
To institutionalise arbitration and reduce interference of courts, the ministry has sought to amend the powers of courts to appoint arbitrators.
“In case parties have not named an arbitrator, the Chief Justice instead of choosing an arbitrator may choose an institute and the said institute shall refer the matter to one or more arbitrator from their panel,” states the ministry document.
The ministry has relied heavily on the norms being followed by the International Chamber of Commerce, Paris, the London Court of International Arbitration and the American Arbitration Association to update the 1996 law.
“The aim of this exercise is to make arbitration a cost effective and efficient means of alternate dispute resolution,” said T. K. Viswanathan, adviser to the law ministry.