Arbitration law set to be changed again, in line with global best practices
The cabinet is likely to take it up in the coming days for it to be tabled in Parliament’s winter session, sources in the law ministry said.india Updated: Dec 15, 2017 16:38 IST
Nearly two years after major amendments were made to it, the country’s 21-year-old arbitration law is likely to see more changes, which experts believe will be in line with best practices across the world.
The law ministry is ready with another draft amendment bill for the Arbitration and Conciliation Act 1996, officials said.
The cabinet is likely to take it up in the coming days for it to be tabled in Parliament’s winter session, sources in the ministry said.
The fresh changes were necessitated to remove the errors and ambiguities of the 2015 law, which was the outcome of a hurriedly put together ordinance, according to the justice (retd) BN Srikrishna committee that recommended the changes.
The last amendments came into effect on January 1, 2016.
Officials believe the changes will reduce pendency in courts for private commercial disputes and make enforcing contracts in India easier. This would pave the way for flagship programmes like Make in India to do better through better ease of doing business rankings.
“The recommendations by the committee make appropriate tweaks to the amendments and address the practical problems that users face if these changes are not taken on board,” arbitration expert Ganesh Chandru, who is an executive partner at Lakshmikumaran and Sridharan, said.
“The changes will bring the Indian arbitration landscape in line with the best practices around the world,” he said.
The Srikrishna Committee, in its report, pointed to a number of typographical errors in the 2015 law.
Section 29A had set a time limit of one year for finishing hearings, extendable by another six months with the court’s permission.
The new bill proposes to change that to one year after “pleadings are closed”. Also, that would apply only to domestic and not international arbitration, reversing a 2015 amendment that sought to fast track arbitration.
A committee member said the section had an adverse impact on arbitration and imposed an unrealistic deadline on arbitral proceedings.
The proposed bill also seeks to reverse a retrospective clause brought in by the 2015 amendment.
Other important changes include providing immunity to an arbitrator except in acts of bad faith, incorporating model rules of procedure in the act and ensuring confidentiality of proceedings.