Law Commission for changes to Arbitration Act

Written by fe Bureau | New Delhi | Updated: Aug 6 2014, 07:42am hrs
The Law Commission of India on Tuesday submitted its recommendation to the government, proposing amendments to the Arbitration and Conciliation Act.

Law Commission chairman AP Shah said that amendments would not only minimise courtinterference but also help bolster credibility of arbitration.

The changes suggested by the commission have made an attempt to encourage the culture of institutional arbitration in India, which will go a long way to redress the institutional and systemic malaise that has seriously affected the growth of arbitration, which of lately has emerged as a commercially significant method of dispute resolution.

Justice Shah also feels that it is important for trade bodies and commerce chambers to start new arbitration centres with their own rules. The government may also consider formation of a specialised body, like an Arbitral Commission of India, which has representation from all the stakeholders of arbitration and which could be entrusted with the task of encouraging the spread of institutional arbitration in the country, the report said.

Besides recommending a model schedule of fees for arbitrators, it has suggested the government to create specialised and dedicated arbitration benches.

The commission also believes that one of the methods to provide relief against frivolous and misconceived actions is to implement a regime for actual costs as is implemented in the UK and also other jurisdictions.

The commission had earlier recommended various amendments to the Act under its 176th report on the Arbitration and Conciliation (Amendment) Bill, 2001.

The government decided to accept almost all the recommendations and introduced the Arbitration and Conciliation (Amendment) Bill, 2003 in the Rajya Sabha in December 2003.

Later, the bill was referred to the Department Related Standing Committee on Personnel, Public Grievances, Law and Justice, which was of the view that many provisions were insufficient and contentious. Later, the bill was withdrawn from the Rajya Sabha.

Later the law ministry in April 2010 issued a consultation paper to have a re-look into the provisions of the Act and invited suggestions from the experts and all stakeholders.

Thereafter, the ministry asked the commission to undertake a study of the amendments proposed to the Act.