Aiming to send a message to global investors about ease of doing business in India, the government is preparing to amend the Arbitration Act and set up commercial benches in High Courts to ensure expeditious resolution of commercial disputes.
Keen to attract more foreign investment, the government will bring in the current session of Parliament a bill to amend Arbitration Act of 1996 to provide for settlement of commercial disputes within nine months.
The government is also proposing to bring a bill in the next session of Parliament providing for setting up of commercial benches in High Courts for expeditious resolution of disputes with a view to ensuring ease of doing business.
These measures are being taken to send out a message to global business community that settling commercial disputes in India will no longer be a time-consuming and tedious affair.
"Already amendment to Arbitration Act is ready... It will be brought in April because I have already taken this matter to the Cabinet and the Cabinet has given its approval. Now, I have to only bring it to Parliament," Law Minister Sadananda Gowda said in the Lok Sabha.
He said the government was going to bring the bill so that the ease of doing business is "geared up and people, investors and even the private players will be happy if some stringent amendments are brought to the Arbitration Act.
"I do concede that it is true that delay in disposal of disputes has created much confusion among the people across the country. Not only here, even in the arbitration cases, people prefer to file arbitration cases outside India rather than having arbitrations here. Now, this government has taken an initiation to bring some stringent amendments to the Arbitration Act," Gowda said.
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.
