BackArbitration provision prescribing time limit draws flak at NITI Aayog conference
At a NITI Aayog panel discussion, members of the legal community express apprehensions towards the implementation of Section 29A of the Arbitration and Conciliation Act 1996
Premium
New Delhi: The provision of the arbitration law introduced last year prescribing an 18-month time limit to conclude proceedings has received significant criticism.
At the panel discussions held during the National Initiative towards Strengthening Arbitration and Enforcement in India, members of the legal community expressed their apprehensions towards the implementation of Section 29A of the Arbitration and Conciliation Act 1996.
This section prescribes a maximum of 18 months to pass an award from the time the a reference for arbitration is made. For an extension of 6 months, the parties will have to approach the court.
“Section 29A of the (arbitration) amendment act is not going to work in India. It says from the day the arbitration tribunal becomes functional, the time of 1 year begins. Six months are taken only in completing pleadings. The sensible provision would be to begin the limitation from the day the trial begins," said R.C. Lahoti, former chief justice of India. He was part of the panel discussion on the pros and cons of the Indian arbitration Act.
The provision was also flagged by Alexis Mourre, president of the International Chamber of Commerce, during Friday’s inaugural session, for an added scope for judicial intervention. Finance minister Arun Jaitley had responded by saying that it was introduced to ensure quick disposal of cases.
Nish Shetty, head litigation practice (Asia Pacific) at law firm Clifford Chance, also suggested that Section 29A be revisited, as part of the panel that invited lawyers abroad to speak on how to make India a more lucrative arbitration avenue.
Moolchand Sharma, former law commission member which gave the report on amending the arbitration law, said that while a time limit was needed, the same had to be practical and reasonable. The original recommendation of the law commission had allowed for award to be given within 24 months.
However, there was some support for this provision.
Aditya Ghosh, CEO, IndiGo Airlines, supported the short deadline for passing the award saying it ensured quick decisions in the fast paced business atmosphere.
Sunil Bharti Mittal, chairman, Bharti Enterprises, also that given the amendments, India could become a place for low-cost, effective, timely and expeditious arbitration processes.
Another important factor that came through during the discussions was the need for a good framework and ecosystem of arbitration, including a specialized bar of lawyers.
Abhinav Bhushan, south Asia director for the ICC Arbitration and ADR, said that lack of specialization among the lawyers was an issue that often discouraged companies from coming to India to arbitrate.
The increasing arbitration and magnitude of the problem in the country, especially in the road sector, was highlighted by Raghav Chandra, chairperson, National Highways Authority of India. Chandra said that they were involved in arbitration cases going on in 130 matters of a value of ₹ 20,000 crore. Previous awards on technical issues are worth ₹ 13,000 crore, of which NHAI settled ₹ 5,000 crore and remaining is pending. On other, decentralized levels for land acquisition matters, there were some 20,000 arbitration cases pending.
The conference will continue on Sunday, where Prime Minister Narendra Modi is expected to speak.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
