Bangalore: Union Law Minister Veerappa Moily on Saturdaysaid arbitration needed to be speedy, effective, transparent and cost-effective to ensure that it served its purpose and helped the country grow into a preferred destination for international arbitration.
Speaking at a national conference on proposed amendments
to the Arbitration and Conciliation Act, 1996, part of the
series of national consultation on the issue, he said if the
purpose of arbitration is not served owing to various reasons,
there is a need to revisit the entire system.
He said there was a need to remove the perception that
doing business in India was difficult.
A bill had been moved to set up commercial benches in
each High Court to fast track cases and remove any distortions
or aberrations in the law. But the Commercial Court Bill would
not suffice till the Arbitration and conciliation Act was
amended to respond to changing times, Moily said.
National consultations on the proposed amendments will be
held in Mumbai and Delhi on the issue. The shortcomings and
lacunae in the act due to various reasons, including different
interpretations by courts needed to be looked into.
"Our dream is to make the country preferred destination
for international arbitration", he said.
For this it was imperative to foster environment that the
rule of law prevails in India. There was a need to move from
ad hoc arbitration to more institutional arbitration, he said.
"Law is a living organ and needs to grow and respond to
changing needs of society", he said highlighting the need to
keep abreast with the changing times. "Law cannot afford to be
static", he said.
T K Vishwananthan, advisor to the Union Law Minister said
there was need to control the cost of arbitration which was
Venugopal, Senior advocate, called for specialised
arbitration benches to speed up the process. Currently, the
percentage of institutional arbitration is very low compared
to ad hoc arbitration. Arbitration was found to take
considerable time almost the time taken in a trial court.
Training for dispensing such cases, expediting the time
taken and fixing a lump sum fee for arbitration instead of the
current daily fee basis were suggestions offered.
Justice N Kumar, Judge High Court of Karnataka called for
some clarity in terms of procedure of such cases and opined
that leaving cases to the parties could be counterproductive.
Justice R V Raveendran said that copying a model law had
not worked for India where working culture and psyche of
litigants were different. The current act was vague
impractical and inadequate and had lacunae which were "taken
He said currently the claims against state governments
were not found to be defended well, resulting in the
government having to pay undeserving awards. He also differed
on the appointment of sitting government officials as
arbitrators in settling claims.
Karnataka Governor H R Bhardwaj, a former union law
minister, said no reforms in the country, including economic,
would be possible unless they were backed by legal reforms.
Earlier, whenever there was ambiguity in law, the court
tried to fill it up and followed by a legislation
However, now, "no interaction is taking place among
institutions in our country", he said.
He called on the Bar and the Bench to work in unison to
bringing about necessary legal reforms.