New Delhi: The Lok Sabha Friday passed a Bill which will help India become a hub for domestic and global arbitration for settling commercial disputes.
Replying to the debate on the Arbitration and Conciliation (Amendment) Bill 2018, Law Minister Ravi Shankar Prasad said the legislation provides for time-bound settlement of disputes as well as accountability of the arbitrator.
“It is a momentous and important legislation. We want India to become a hub of domestic and international arbitration. So there is a need for robust mechanism to deal with institutional disputes,” Prasad said.
The amendments will facilitate achieving the goal of improving institutional arbitration by establishing an independent body to lay down standards, make arbitration process more friendly, cost-effective and ensure timely disposal of arbitration cases.
It provides for setting up of an independent body — Arbitration Council of India (ACI) which will frade arbitral institution and accredit arbitrators by laying down norms.
“The ACI shall frame proper rules as to how instutitions would be graded, norms to be followed, monitoring of quality and performance, and encourage training of arbitrators,” Prasad said.
He said the norms and accountability for the arbitrators framed by ACI would have to be “strictly followed”.
“Unless we have a strong regulatory mechanism, judges, lawyers, arbitrators… then the process will not gain speed,” Prasad added.
The bill, which amends the 1996 Act, is part of the government’s efforts to encourage institutional arbitration for settlement of disputes and make India a centre of robust Alternative Dispute Resolution Mechanism.
Earlier, while moving the bill, Minister of State for Law PP Chaudhary said a large number of arbitration cases are conducted outside India in countries like Singapore, London and Paris and around 30 million cases are pending before the courts here.
“Due to globalisation, industralisation and liberalisation, the disputes have increased manifold…We want to create India as a hub of arbritation,” Chaudhary said, adding that even bilateral investment trade related issues are also referred to the Hague, London and Paris.
“India should also have a seat of arbritation,” he said.
Participating in the debate, Anwar Raja (AIADMK) said the state governments should be consulted before appointing members of the ACI.
Saugata Roy (TMC) said arbitration has becoming biggest scams in India and many arbitatration lawyers are corrupt.
IBC amendment bill passed
New Delhi: With the Rajya Sabha Friday passing the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018, the legislation has got Parliament’s approval as the Lok Sabha has already cleared it. The Bill allows homebuyers to be treated as financial creditors as it defines a financial creditor as anyone who has extended any kind of loan or financial credit to the debtor, and clarifies that an allottee under a real estate project (a buyer of an under-construction residential or commercial property) will be considered as a financial creditor, as the amount raised from allottees for financing a real estate project has the commercial effect of a borrowing. It provides that during the insolvency proceedings, a committee consisting of financial creditors will be constituted for taking decisions (by voting) on the resolution process. The financial creditors will be represented on the committee of creditors by an authorised representative. These representatives will vote on behalf of the financial creditors as per the prior instructions received from them. Secondly, the bill also bars a guarantor of a defaulter from being an applicant.