Arbitration Law

Current Affairs, Economy

Why in News:

The Indian government has established an expert committee to propose reforms to the Arbitration and Conciliation Act of 1996, with the objective of achieving a more efficient and party-driven arbitration process.

Important Points:

  • Led by former law secretary T K Vishwanathan, the committee is tasked with recommending reforms to the existing Arbitration and Conciliation Act of 1996 within a time frame of 30 days.
  • The key areas of focus for the committee include reducing court intervention, enhancing cost-effectiveness, and ensuring timely resolution of disputes through arbitration.
  • The committee will conduct a comprehensive examination of the functioning of the Act in comparison to foreign jurisdictions to identify strengths, weaknesses, and areas for improvement. This analysis will serve as the basis for drafting proposed amendments and recommendations to the government.

Limiting Judicial Intervention:

  • To make arbitration a more party-driven process, the committee will propose solutions that minimize the need for parties to seek judicial intervention. This is aimed at streamlining the arbitration process and reducing delays caused by court involvement, ultimately leading to a more efficient and time-bound resolution of disputes.

Expediting Finality of Awards:

  • The committee will address the issue of expeditiously attributing finality to arbitral awards. By suggesting modifications to existing provisions related to setting aside awards and appeals, the committee aims to facilitate the swift enforcement of arbitration awards, ensuring parties have a conclusive resolution to their disputes.

Developing a Competitive Environment:

  • Recognizing the significance of a competitive arbitration services market, the committee will recommend a framework for a model arbitration system that encourages healthy competition. This will attract both domestic and international parties, further enhancing India’s reputation as a preferred destination for arbitration.

Minimizing Reliance on Judicial Authorities:

  • The committee aims to propose a statutory mechanism to minimize reliance on judicial authorities and courts. Establishing an administrative mechanism and standard operating procedures will help reduce routine challenges to arbitral awards involving the government, leading to a more efficient and reliable dispute resolution process.

Cost Determination and Charter of Duties:

  • The committee will focus on determining the costs of arbitration and fees of arbitrators. By recommending principles for cost calculation, the committee aims to bring transparency and fairness to the arbitration process. Additionally, a charter of duties will be devised to guide the conduct of arbitral tribunals, parties, and arbitral institutions, enhancing the efficiency and effectiveness of arbitration proceedings.

Separate Laws for Domestic and International Arbitration:

  • The feasibility of enacting separate laws for domestic and international arbitration will be evaluated by the committee. Considering the unique requirements of each category, the committee aims to provide a robust legal framework that caters to the specific needs of both domestic and international arbitration. Model arbitration agreements and awards templates will also be recommended for adoption by parties and arbitrators.

Simplifying Arbitration Legislation and Standardizing Functions:

  • To promote accessibility and clarity, the committee will explore the need for new legislation on arbitration in simple language. Additionally, a handbook for arbitrators will be developed to standardize their functions and provide comprehensive guidance, enhancing the professionalism and consistency of arbitration proceedings.

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