The Union Cabinet chaired by the Prime Minister Narendra Modi on Wednesday gave its approval for amendments to the Arbitration and Conciliation Bill, 2015 that aims at ensuring speedy settlement of commercial disputes to promote ease of doing business in India.
The amendments approved by the Cabinet, which also talk of a fast-track procedure for arbitration, are in line with Modi’s emphasis that the duration of litigation should not be so long as to dissuade foreign companies from doing business in India.
The amendments seek to place a cap on the time as well as the arbitrator’s fee. An arbitrator will have to settle the case within 18 months. “Insertion of a new provision states that the Arbitral Tribunal shall make its award within a period of 12 months.
Parties may extend such period up to six months. Thereafter, it can only be extended by the Court on sufficient cause,” an official statement said after the Cabinet meeting. In case of fast-track procedure, the award should be given in six months period, it said.
Another amendment defines the grounds for challenge of an arbitral award, to restrict the term ‘Public Policy of India’. “Only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against the Public Policy of India”. The amendment adds a new provision to provide that application to challenge the award is to be disposed of by the Court within one year.
The Centre on Wednesday allowed developers to divest 100 per cent equity in projects two years after the completion of such schemes, a move that can unlock investments worth about Rs 4,500 crore in the sector.
"The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has amended its earlier approval dated May 13 for permitting 100 per cent equity divestment after two years of construction/completion for all BOT projects, irrespective of year of award," an official statement said after the meeting.