Bills to speed up arbitration process in India gets RS nod

Parliament on Thursday passed a a bill to set up an independent and autonomous regime for institutionalised domestic and international arbitration in India. The New Delhi International Arbitration Centre (NDIAC) Bill, 2019, which seeks to replace an ordinance issued in March this year by the previous government, was passed by Rajya Sabha.

Under the Bill, undertakings of the International Centre For Alternative Dispute Resolution (ICADR) will be acquired and transferred to the New Delhi International Arbitration Centre (NDIAC) with effect from March 2 this year The Bill was already passed by Lok Sabha on July 10. The Upper House also passed the Arbitration and Conciliation (Amendment) Bill Act, 2019 that seeks to make changes in the existing law of 1996. It will now go to Lok Sabha.

The Bill was earlier cleared by Lok Sabha in August 2018 but could not be passed by Rajya Sabha. The bill lapsed following the dissolution of the 16th Lok Sabha. While replying to the debate in Rajya Sabha, Law Minister Ravi Shankar Prasad said that the changes in law would help to make India a hub of domestic and international arbitration through faster resolution of commercial disputes.

"This whole arbitration system is sought to be built in the context of the larger narrative to make India a good place for business, investment and also for dispute redressal," he said. Replying to members' concern over government's role in setting up of Arbitration council, Prasad said that the leading arbitration centres as Singapore International Arbitration Centre (SIAC) and Hong Kong Arbitration Center flourished by support from their governments.

The minister said the government has implemented all key recommendations of the Justice B N Srikrishna committee that comprised leading legal experts. "It was their idea like other countries, institutional arbitration should be promoted," he said.

On availability of arbitration professionals, he said that the country has a pool of experienced people required for that. According to the minister, the institution would try to work out with expert arbitrators from various sectors.

"I am also not in favour of judges becoming an arbitrators. India has a great pool of professional in IT, Technology, telecom, Intellectual Property rights," he said adding that it is besides people retired from secretary level and also from other sector. According to Prasad, the Arbitration Council of India would only grade, accredit and review the arbitration centres and the arbitrators.

"ACI would be only a body to accredit to grade review and subject to designation of the High Courts and Supreme Courts," he said adding that it has also time limits and has provision of incentive for completing before the period and penalty in case exceeds the time limit. Prasad said provision has been made for time frame, six months would be for claim and defence from the date the arbitrator receives the notice of appointment. Arbitration must be completed in 12 months.

"The actual work of arbitration would be done by those who are the arbitration institutions accredited by council and also designated by the High Court and Supreme Court," Prasad said assuring the members by adding :"There is no need of having any apprehension that it would not be fair." He added," If they are not fair, then they would lose the market. They can be unfair in one case but today reputation travels fast" According to him, the existing arbitration body ICADR has resolved 45 cases out of 55 in 25 years..