Ministry of Law to Form Policy to Push Arbitration

Published: 01st December 2014 06:08 AM  |   Last Updated: 01st December 2014 07:31 AM   |  A+A-

NEW DELHI: In a bid to push Prime Minister Narendra Modi’s ‘Make In India’ campaign, the Ministry of Law (MoL) is coming out with a policy to persuade litigants for arbitration, to make India ‘business friendly’. Modi had asked the MoL to find ways to address issues for time-bound decisions by the courts and encourage arbitration of cases between the parties. He also suggested that arbitration should be made mandatory in all cases above `10 lakh.

The need for increasing arbitration arose after telecom major Vodafone entered into litigation in India and was directed to pay taxes. The case dealt a blow to various foreign companies, to invest in India.

Favouring alternate dispute resolution (ADR) for quicker resolution of cases, as there was great pressure on the judiciary, Law Minister D V Sadananda Gowda stated that the government was also committed to making India a hub of good and effective arbitration.

Gowda, while addressing a gathering at the Supreme Court on Law Day, had said that there was a need for laws to ensure a business-friendly environment, in tune with the Centre’s ‘Make in India’ vision.

“The objective behind the ‘Make in India’ vision is to enable India to attain global reputation as a country with a business-friendly environment,” Gowda said, adding that foreign direct investment (FDI) had become the rule rather than the exception and restrictions had been relaxed, and rules concerning trade and investment had changed over time. He also shared Modi’s vision of making India a major global arbitration hub for good and effective decisions. India is at present struggling hard to clear the pendency of over three crore cases across all courts.

The MoL is already considering the report by the Law Commission, emphasising the need for amending the Arbitration and Conciliation Act, 1996, to make it more friendly, quicker and expeditious.

In India, the ADR, provided by insertion of Section 89, through an amendment in 1999, paved the way for the settlement of disputes outside the courts.

The MoL is also setting up specialised fast- track courts and tribunals by April 2015, to clear the huge pile of cases. “We are making a road map for all the courts, as to how they should proceed for disposing of the cases, so that pendency can be cut down significantly,” a senior law official told Express.

The ministry is also working out ways to eliminate delays in deciding cases, speedy clearance of arrears and reduction in costs.

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