Lok Sabha passes arbitration bill by voice vote

The Lok Sabha on Thursday passed by a voice vote the Arbitration and Conciliation (Amendment) Bill, 2015, which aims to make the country more investor-friendly.

The bill, which seeks to amend the Arbitration and Conciliation Act of 1996, was introduced in the Lok Sabha on December 3 by Law and Justice Minister D.V. Sadananda Gowda.

Replying to a debate on the bill, the minister said it would give a new dimension to the Indian legal system.

Suggestions made by a parliamentary committee and the Law Commission were taken into consideration while preparing it, Gowda said, adding that the government was working to update the country's legal system.

While under the existing law, a principal civil court or a high court with original jurisdiction is the relevant court for handling arbitration matters, the bill makes the high court the relevant court for international arbitration.

As per the Arbitration and Conciliation Act of 1996, interim orders of a court, order of an arbitral tribunal and appealable orders only applied to matters where the place of arbitration was India.

Under the new bill, these provisions will also apply to international commercial arbitrations even if the place of arbitration is outside India. This will apply unless the parties agreed otherwise.

Under the existing act, if any matter brought before a court is a subject of an arbitration agreement, parties will be referred to arbitration.

The bill says this power of referral is to be exercised by a court even if there is a previous court judgment to the contrary. The court must refer the parties to arbitration unless it thinks that a valid arbitration agreement does not exist.