"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Wednesday, April 7, 2010

Amendments to the Arbitration & Conciliation Act, 1996?

A PTI news report suggests that the Ministry of Law  and Justice is considering amending the Arbitration & Conciliation Act, 1996 to include provisions on out-of-court settlement. The news report also indicates that the Ministry of Law  and Justice would release a consultation paper on the proposed amendments on 8th April 2010.

Another news report says that certain reforms on arbitration law were to be a part of the Commercial Division of High Courts Bill but such an idea has been dropped by the Ministry. The good news that this report is that sweeping changes are to be made in the way in which arbitration is conducted. One of the important changes that this consultation paper proposes seems to be the institutionalisation of institutional arbitration in India. High time, people. Another target of the said paper seems to be retired judges who charge extraordinarily huge fee. Readers might remember reading about ONGC's complaints about arbitration being an expensive option in this blog.

Right from 2001 (if not earlier), there have been proposals to amend/ reform the arbitration law. Nothing has happened so far. On this proposal, let us hope for the best.


DC said...

The basic purpose of the arbitration and conciliation act 1996 has been defeated.
a)No speedy justice as available as the arbitrators go on dragging the case for years , by asking parties to extend the date of publication of the award.By law , it should be made that no extensions are allowed and arbitrators should give their award in six months.
b) No appeal from the award should be allowed by law unless the defaulting party pays 75% of the amount awarded.This is nothing new.The Incometax Act and other Acts alow appeal only when a percentage of amount in dispute is paid.
c) By Law , the Courts should have a summary hearing on appeals challenging the award and dispose off the same as it takes 8-14 years for the litigant to finalise the case , which in a developing economy hurts.
The law should be made more strict specially for the Government Departments to challenge the award , as a matter of routine , wasting government money , time , and increasing the load on courts.

Badri said...

@ DC
Thanks for your comments.
While I agree with you that the ACA 96 has not achieved what was intended, I would love to have more detailing on your comments as to the following:

your point (b) [where you argue that defaulting party should pay 75% of the award. I am unclear as to what this would achieve],
your point cb) [are there data/ cases supporting your point that at times it takes "8-14 years for the litigant to finalise the case." By this do you mean that it an award takes 8-14 years to reach finality after the invocation of arbitration till it is enforced?,

your suggestion that law should be made more strict to government departments to challenge awards.