Seeking to improve India's ranking on ease of doing business index, the government is mulling an ordinance which provides for time-bound settlement of commercial disputes and make arbitrators accountable, a senior government functionary has said. The government plans to bring the ordinance based on a bill cleared by Lok Sabha during the monsoon session.
As it is pending in Rajya Sabha and may get cleared in November or December during the winter session, the government has planned the ordinance as it feels that an early measure to settle commercial disputes at a faster pace will help improve India's ranking on ease of doing business index, the functionary explained.
The bill seeks to help India become a hub for domestic and global arbitration for settling commercial disputes.The draft law provides for a time-bound settlement of disputes as well as accountability of the arbitrator.The government feels that there is a need for robust mechanism to deal with institutional disputes.
The amendments to the Arbitration Act will facilitate achieving the goal of improving institutional arbitration by establishing an independent body to lay down standards, make arbitration process more friendly, cost-effective and ensure timely disposal of arbitration cases.
It provides for setting up of an independent body – Arbitration Council of India (ACI), which will frame arbitral institution and accredit arbitrators by laying down norms.
The ACI will frame proper rules as to how institutions would be graded, norms to be followed, monitoring of quality and performance, and encourage training of arbitrators.
Experts have time again suggested that unless India has a strong regulatory mechanism, judges, lawyers and arbitrators, the arbitration process will not gain speed.
The bill, which amends the 1996 Act, is part of the government's efforts to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution Mechanism.
A large number of arbitration cases are conducted outside India in locations such as Singapore, London and Paris and around 30 million cases are pending before the courts here.
Due to globalisation, industrialisation and liberalisation, the disputes have increased manifold even bilateral investment trade related issues are also referred to the Hague, London and Paris.