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ICA apprehensive of courts interfering in arbitration
New Delhi, June 15: The Centre`s recent proposals to allow courts to interfere in arbitration process has come in for criticism with an apex arbitral institution warning that the move would defeat its very objectives and discourage out-of-court settlements.
New Delhi, June 15: The Centre's recent proposals to allow courts to interfere in arbitration process has come in for criticism with an apex arbitral institution warning that the move would defeat its very objectives and discourage out-of-court settlements.
"Hardly seven years have passed since the arbitration and
conciliation act came into force. More time should be given to
users to fully absorb its provisions, or else it will shake
the confidence in the system," said G K Kwatra, executive
director of Union Commerce Ministry-supported Indian Council
of Arbitration (ICA).
The 1996 act ushered in effective alternative dispute resolution (ADR) systems by promoting arbitration and conciliation methods for settling civil and commercial disputes as against time-consuming litigation in courts.
Pointing out that ADR systems helps cost-effective and quick settlement of business disputes out-of-court, Kwatra said "no amendment to the basic features of the act, providing for minimum interference by courts, should be done in haste".
"What ADR movement needs is not a 'supervisory' role from courts, but a 'supportive' role - of assisting ADR mechanisms and procedures to function freely and independently," he said.
"It will not be conducive to the development of ADR culture as an autonomous, parallel and independent avenue of dispute resolution if courts are given power to interfere with ADR process in the name of supervision," Kwatra said.
The Arbitration and Conciliation Act, 1940 - which was replaced by the 1996 act - had shown that various provisions for intervention by courts proved counter-productive for the growth of arbitration, he claimed.
Bureau Report
The 1996 act ushered in effective alternative dispute resolution (ADR) systems by promoting arbitration and conciliation methods for settling civil and commercial disputes as against time-consuming litigation in courts.
Pointing out that ADR systems helps cost-effective and quick settlement of business disputes out-of-court, Kwatra said "no amendment to the basic features of the act, providing for minimum interference by courts, should be done in haste".
"What ADR movement needs is not a 'supervisory' role from courts, but a 'supportive' role - of assisting ADR mechanisms and procedures to function freely and independently," he said.
"It will not be conducive to the development of ADR culture as an autonomous, parallel and independent avenue of dispute resolution if courts are given power to interfere with ADR process in the name of supervision," Kwatra said.
The Arbitration and Conciliation Act, 1940 - which was replaced by the 1996 act - had shown that various provisions for intervention by courts proved counter-productive for the growth of arbitration, he claimed.
Bureau Report