Thursday, March 20, 2014

Law Commission to propose changes to Arbitration Act - From The Hindu

The Law Commission will submit a proposal for amendments to the Arbitration and Conciliation Act, 1996, to strengthen the arbitration system to settle disputes.

“The submission before the Law Ministry is likely by the end of April,” said AP Shah, Chairperson, Law Commission of India.

Arbitration is out-of-court dispute resolution. The procedure is simpler than the rigour observed in courts but the “award” by the arbitrator is legally binding. Speaking at a conference organised by The Nani Palkhivala Arbitration Centre here, he said the changes to the Act are aimed at a harmonious relationship between courts and the arbitration system. “Courts must be partners, not supervisors,” he said.

However, the proceedings of certain arbitrations seem questionable. He cited an instance of the Delhi High Court dismantling two arbitrations on the grounds of undue delay and complaint by the parties of excessive fees.

The amendments will help bolster the credibility of arbitration and fortify the process against interference by courts. There are provisions to look at enlarging the scope of cases that can be referred to arbitrators and non-appointment of arbitrators related in any way to parties in contention. A list of cases in which an arbitrator should not judge and proposals to regulate delay are also among the recommendations.

“After two years of proceedings, the parties may extend, but once 30 months get over, the court may intervene,” he said.

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