August 10, 2018
Saugata Roy speaks on The Arbitration and Conciliation (Amendment) Bill, 2018
Arbitration and Conciliation Act was enacted in 1996. Then, in 2015, this government brought the Arbitration and Conciliation (Amendment) Act to make arbitration process cost-effective and speedy, with minimum court intervention, to maintain the credibility of arbitrators.
Sir, why do people go for arbitration? If a contractor does work for the government and he has a big bill but the government does not accept it, then if he goes to court it will take 15 years. So they settle for arbitration in the hope that it will be settled by 3-4 years. So arbitration is to shortcut the dispute resolution in case of commercial transaction or contract negotiation. It is a very common indication of civil contracts. You know that in civil contracts, most number of arbitrations happened for railways and NBCC etc. So arbitration is very essential.
Sir, what Mr Ravi Shankar Prasad, our Minister wants? To make India a robust centre for international arbitration, both domestic and international. For that, he appointed a committee under the chairmanship of Justice Srikrishna. Justice Srikrishna had earlier investigated the Bombay riots; he is a lucky judge who always gets these commissions. The 10-member committee included Justice RV Raveendran, retired Supreme Court Judge KK Venugopal, Attorney General Arghya Sengupta, Research Director of Vidhi Research Group. The 10-member committee then recommended. Not all, but some of the recommendations have been accepted by the government and they are being incorporated in this Bill.
The main recommendation was… the government is setting up regularly new bodies, appointing some of their own people. We had earlier passed the Insolvency and Bankruptcy Board of India. In similar lines, the Arbitration Council of India is being set up for the purpose of grading arbitral institutions and accreditation of arbitrators. So a regulatory body to control arbitrators has been formed. They have appointed a new regulator. But we do not know whether the situation will improve due to the regulators.
Now this Bill also tries to shorten the period of arbitration. The Bill proposes to change that to one year after pleadings are closed; also, that would apply only to domestic and not international arbitration, reversing an amendment passed in 2000, that sought to fast-track arbitration. Other changes include, providing immunity to an arbitrator except in acts of bad faith, incorporating model rules of procedures and ensuring confidentiality of proceedings. So, this ambition of the Law Minister to make India an arbitration hub is not unfounded. It is a good intention because these days people are having business all over the world. A company like Macdermot may dig for wells here, a company like Slumberjacks from America may dig for coal bed methane.
Sir, the most important point that I want to raise, and to which I seek the response from the government, is that arbitration has become the biggest scam today. Lawyer arbitrators are becoming more corrupt. The problem is that the arbitrators are not public servants, they are all retired judges. So they are not covered by rules governing public servants. Very often they are teaming up with the contending party. So, I want the law minister, to please put a cap on how many arbitrations one arbitrator can do, because they are taking five to ten arbitrations and are not giving time.
Sir, arbitrations must be completed in one or two years, but they are taking more than five years. Mr Chowdhury said there are 30 million cases pending in India. I want to know from the Law Minister, how many arbitration cases are pending, I want the exact number, and for how long. I want that there should be rules for arbitrators.