A bill aimed to provide speedy disposal of arbitration cases and improve the 'ease of doing business' was passed by the Lok Sabha today. (Photo: Parliament of India)
A bill aimed to provide speedy disposal of arbitration cases and improve the 'ease of doing business' was passed by the Lok Sabha today.
"The bill will give a new dimension to the legal system in the country ... and make India a centre of international commercial arbitration," Law Minister DV Sadananda Gowda said while moving the Arbitration and Conciliation (Amendment) Bill, 2015 for passage.
The bill was approved by voice vote after the House rejected certain amendments moved by NK Premachandran (RSP) and Saugata Roy (Trinamool Congress). However, an official amendment, envisaging that the new law would not apply to the ongoing cases until and unless both parties agreed, was accepted.
The amendment bill, Mr Gowda said, seeks to reduce the cost of litigation, improve India's ranking in 'ease of doing business' index of the World Bank and promote 'Make in India' campaign of Prime Minister Narendra Modi.
On the applicability of the provisions, he said it can take retrospective effect "if the parties agree". Otherwise, it would have prospective effect, the Minister said.
He said the changes in the Arbitration and Conciliation Act 1996, which were introduced after extensive consultation, will make arbitration "user friendly" in addition to reducing its cost.
The bill, which will replace an ordinance promulgated in October, is aimed at speedy settlement of high value business disputes through arbitration.
Under the amendments, an arbitrator will have to settle a case within 18 months. However, after the completion of 12 months, certain restrictions would be put in place to ensure that the arbitration cases do not linger on.
The Bill also has a provision for fast-track procedure for conducting arbitration if the parties to the dispute so desire. Award in such cases could be given in six months.
As per the amendment, any application challenging the award would have to be disposed of by the court within one year.