The Central government is planning to amend the law to encourage the establishment of accredited institutional arbitrators who will help resolve corporate disputes.
Although some institutional arbitrators now exist in India, the standard practice is for the parties involved in the dispute to appoint individual arbitrators for individual cases with court permission.
One objective behind the proposed amendment is to turn India into an international arbitration hub. Currently, arbitration of disputes involving Indian companies is often held in places like Singapore and London.
The Arbitration and Conciliation (Amendment) Bill, 2018, is expected to be introduced in the ongoing budget session of Parliament.
It envisages, among other things, an Arbitration Council of India that will regulate the institutional arbitrators and award them grading and accreditation on the basis of their calibre, credibility and quality of services.
Union law minister Ravi Shankar Prasad said the council would be headed by a former Supreme Court judge or a retired high court chief justice.
Under the scenario envisaged in the bill, various (private) institutions will come up, equipped with their own panels of arbitrators, made up of retired judges and senior lawyers.
Some 36 such institutional arbitrators already exist in major Indian cities such as Delhi, Calcutta, Chennai and Mumbai. The idea is to encourage the establishment of more such bodies, Prasad said.
Arbitration allows parties involved in corporate disputes to settle matters speedily while avoiding the hassles of regular court proceedings.