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The government proposes to set up an arbitration council of India which would grade institutions involved in alternative dispute resolution involving commercial issues, Law Minister Ravi Shankar Prasad said today.
He said with India attracting investments, it was essential to provide for a reliable platform, which includes arbitration, to handle commercial disputes.
After the Union Cabinet last night approved the Arbitration and Conciliation (Amendment) Bill, 2018 to encourage institutional arbitration for settlement of disputes, his ministry would take the bill to Parliament in the ongoing Budget session.
The amendments will facilitate speedy appointment of arbitrators through designated arbitral institutions by the Supreme Court or a high court, without having any requirement to approach the court in this regard, he said.
The amendment also provides for creation of an independent body -- the Arbitration Council of India (ACI) -- which will grade arbitral institution and accredit arbitrators by laying down norms and take all such steps as may be necessary to promote and encourage arbitration, conciliation, mediation and other alternative dispute resolution mechanism.
It is proposed to provide that the time limit for arbitral award in other arbitrations will be within 12 months from the completion of the pleadings of the parties, he said quoting the decision of the cabinet.
Another law ministry proposal cleared by the Cabinet yesterday relates to commercial courts.
According to the amendments approved to the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, the specified value of a commercial dispute will be brought down to Rs three lakh from the present Rs one crore.
Now, commercial disputes of a reasonable value can be decided by commercial courts. This would bring down the time taken from the present 1,445 days in resolution of commercial disputes of lesser value.
The amendment also provides for establishment of commercial courts at district judge level for the territories over which respective high courts have ordinary original civil jurisdiction -- the cities of Chennai, Delhi, Kolkata, Mumbai and state of Himachal Pradesh.
The introduction of the pre-institution mediation process in cases where no urgent, interim relief is contemplated will provide an opportunity to the parties to resolve the commercial disputes outside the ambit of the courts through the authorities constituted under the Legal Services Authorities Act.
It will help in reinforcing investors' confidence in the resolution of commercial disputes, an official statement issued by the law ministry said.
The law, once passed, will be given prospective effect, so that the authority of the judicial forum presently adjudicating the commercial disputes is not affected.
Increase of foreign direct investment and overseas commercial transactions have further contributed to a significant increase of commercial disputes.
Ease of doing business is an index of the World Bank which refers to the dispute resolution environment in a country which facilitates the investors in deciding for setting up of and operation of a business.
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