Keen to attract more foreign investment, the government will bring in the current session of Parliament a bill providing for settlement of commercial disputes within nine months as part of efforts to create ease of doing business in the country.
The amendment to the Arbitration and Conciliation Act, 1996 is aimed at sending a message to the international business community that settling commercial disputes in India will no longer be a time-consuming affair.
"Government has brought about some changes to the Arbitration Act. The Act is ready. We are going to bring that Bill in (second part of) this session of Parliament beginning April. It will have some stringent provisions," Law Minister Sadananda Gowda said in the Lok Sabha today.
The amendment to the Act of 1996 would make it mandatory for a judge presiding over commercial disputes to settle cases within nine months.
"With regard to ease of doing business, I agree that delay of disposal of dispute have created confusion... The situation is such that people prefer to file arbitration cases outside India, than within the country," Gowda said.
The amendments to the Act are aimed at giving a message to the international business community that settling commercial disputes in India will no longer be a time-consuming affair.
According to the amendments, the presiding officer of a commercial dispute will have to clear the case within a nine-month time-frame. 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.
This is a crucial amendment to the Arbitration law as many foreign companies are said to be hesitant to do business in India because of long-drawn litigations.
The government is moving to amend the law amidst its keenness to attract maximum foreign investment by projecting the 'ease of doing business' in India which is being highlighted by Prime Minister Narendra Modi.
Another amendment puts a cap on fee of arbitrator. The arbitrator will also have to spell out if there is a conflict of interest in the case he or she is taking up.
