Need for comprehensive act on arbitration: SC judges

Supreme Court judges today expressed the view that there was need for a more comprehensive act on arbitration so that it could emerge as an acceptable form of alternative dispute redressal mechanism.

"There are many hurdles to conduct arbitration procedures under the Arbitration and Conciliation Act, 1996, at the moment," Justice S S Nijjar of the apex court said at a seminar organised by Indian Council of Arbitration (ICA).

The judge observed that one of the major hurdles the act was unable to deal was that of bad drafting of arbitration clauses.

"The act cannot handle effectively bad drafting of arbitration clauses which often result in delays, thus defeating the purpose of the mechanism," Justice Nijjar said.

He said there was also a need for bringing in some sort of control over arbitration such as by way of scheduling of arbitration cases as well as provisions for a fixed fee to be charged by the arbitrators.

Justice Nijjar, who is former CJI of Calcutta High Court, said that unlike other countries, arbitration acts in India were not subject to periodic reviews.

"The 1996 Act was passed after repealing the provisions of 1940 Act," he said.

Noting that India could be a hub of arbitration, Justice Nijjar said, "We will have to show to the world that the country is arbitration-friendly."

Justice P C Ghosh of Supreme Court said the judiciary should have little intervention in arbitration proceedings, adding that courts could also appoint arbitrators in special circumstances.

"Time and cost of arbitration procedures are of serious concern and need to be taken care of," he opined.