A judge presiding over an arbitration in a commercial dispute will have to settle the case in nine months unless a high court grants an extension, else he faces the prospects of being debarred from taking up new cases, according to one of the amendments cleared by government to the arbitration law.
The amendments to the Arbitration and Conciliation Act, 1996, aimed at sending a signal to the international community that settling commercial disputes in India is no more a difficult and costly proposition, were part of an ordinance cleared by the Union Cabinet yesterday.
"Government brought an ordinance as it wanted the amendments, aimed at attracting foreign investments, to come in place at the earliest," said a senior government functionary.
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The President will have to sign the ordinance before it comes into force.
According to the amendments, the presiding officer of a commercial dispute will have to clear the case within a nine-month time frame. He or she 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 for a certain period.
Attorney General Mukul Rohatgi had recently opined that a penalty be imposed on arbitrators who delay matters either because of personal benefit or otherwise. He had said they should be debarred from taking up fresh arbitrations, say for a period of three years, from the time of the default.
Another amendment puts a cap on fee of arbitrator.
The arbitrator will have to also spell out if there is a conflict of interest in the case he or she is taking up.
"Most of the recommendations of the Law Commission have been accepted. While some have been incorporated in the law itself, some of the recommendations will be used while framing rules," the functionary said.
