To send out a signal to foreign investors that settling commercial disputes in India will no longer be a time-consuming affair, the government has decided to promulgate an Ordinance to amend the Arbitration and Conciliation Act, 1996.
The Ordinance is aimed at making it mandatory for commercial disputes to be settled within nine months and also putting a cap on fee of arbitrator. The Centre has sent it to President Pranab Mukherjee for his assent.
The proposed amendments stipulate that the presiding officer of a commercial dispute will have to clear the case within nine months, reported agencies quoting an unnamed official. The arbitrator will be free to seek an extension from the High Court. But in case of further delays, the High Court will be free to debar the arbitrator from taking up fresh cases for a certain period.
The Union government had to take the Ordinance route to amend the Arbitration and Conciliation Act, 1996, as it wanted the reforms to be put in place at the earliest, an official said.
“Most of the recommendations of the Law Commission have been accepted. While some have been incorporated in the law itself, some of the recommendations will be used while framing rules,” the official was quoted as saying.
The Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement that the move would make India a more investor-friendly destination and help promote institutional arbitration.
FICCI Secretary-General and Indian Council of Arbitration Director-General A. Didar Singh said the proposed amendment of capping arbitrators’ fee and introducing timelines for giving final awards would make dispute-resolution less expensive and give a push to commercial activity.
