Giving a momentum to ease of doing business the Union Cabinet, chaired by Prime Minister Narendra Modi, has cleared two ordinances for speedy settlement of commercial disputes in the country. It has issued an ordinance to amend the Arbitration and Conciliation Act and the another one to bring into force the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 pending before a Parliamentary standing committee.
Earlier in august the Cabinet had decided to bring a bill to amend the Arbitration Act to set a fixed timeline to clear arbitration cases but the bill was not introduced in the Monsoon session of parliament. The ordinance will give force to the provisions of the bill that provides for time-bound settlement of cases. Under the proposed amendments to the Arbitration and Conciliation Act, 1996, an arbitrator will have to settle a case within 18 months. However, after the completion of 12 months, certain restrictions will be put in place to ensure that the arbitration case does not linger on.
The ordinance will give force to the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015. The bill is with the standing committee on Law and Personnel that will submit its report by November 30, after two extensions. This move will allow the Delhi High Court to transfer thousands of cases to the district courts of the capital, mostly related to property disputes, helping settle them faster and improve ease of doing business.
Once the winter session of Parliament starts, which is likely to commence after November 19, the government will have to seek Parliament's approval for the ordinances within 42 days/six weeks or else these will lapse. In its report submitted last year, the Law Commission had also supported amendment to the arbitration law to help India become a favoured destination for international arbitration, after Singapore and London. According to an estimate put before the Parliamentary committee which examined the bill, there are over 12,000 cases which will stand transferred to the lower courts.
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