Minister Narendra Modi has said that his government has initiated far-reaching legal reforms, and it wants to create a vibrant arbitration mechanism to assure investors that there will be no arbitrary changes to the rules of the game, and commercial disputes will be resolved faster.
Enabling an alternative dispute resolution ecosystem is a national priority as it will not only add to investors’ comfort level but also ease the burden on courts, he said, adding there is a need to promote India globally as an arbitration hub.
“Businesses seek assurance of the prevalence of rule of law in the Indian market. They need to be assured that the rules of the game will not change overnight, in an arbitrary fashion. And that commercial disputes will be resolved efficiently. A robust legal framework backed by a vibrant arbitration culture is essential,” said PM Modi.
Addressing the valedictory function of ‘National Initiative towards Strengthening Arbitration and Enforcement in India’, Modi said towards this end, the government has initiated far-reaching legal reforms.
“Over a thousand archaic laws have been scrapped. We have enacted a comprehensive Insolvency and Bankruptcy Code, 2016, implemented the National Company Law Tribunals, established a statutory Monetary Policy Committee and effected a merger of the commodities and securities market,” said the Prime Minister to the gathering which included Chief Justice of India T S Thakur and members of the judiciary from several countries.
The Prime Minister said creation of a vibrant ecosystem for institutional arbitration, is one of the foremost priorities of his government.
Recently, major amendments have been made to the Arbitration and Conciliation Act. This has made the arbitration process easy, timely and hassle-free.
He said legal reforms can deliver desired results only when there is an effective and efficient dispute resolution mechanism.
“The independence of the judiciary is a basic feature of the Indian Constitution. Common citizens as well as businesses repose immense faith in the integrity of the judicial process. Our government has taken various initiatives to improve the judicial infrastructure and administration,” Modi noted.
He said the enactment of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act for speedy resolution of commercial disputes is a step in that direction.
Modi said the government has been working on a strategy for convergence of existing tribunals. This will help transform the existing complicated tribunal system into a simpler structure.
“We need to simultaneously facilitate a vibrant ecosystem for alternative dispute resolution, including arbitration, mediation and conciliation. This will provide additional comfort to investors and businesses. More importantly, it will also ease the case-load on Indian courts,” he said.
He said that the corporates and financial institutions of today want legal experts who can help close business deals and transactions without any disputes and litigations. If a dispute arises, corporates want to resolve them quickly through arbitration, without going to courts. For this, they require specialised arbitration lawyers.
“India has no dearth of brilliant lawyers and judges. India also has a large number of retired judges, engineers, and scientists who can function as competent arbitrators in various fields. India’s economic interests shall be better served by a higher number of arbitration experts and lawyers. This in turn requires widening the ambit of legal education in India. There is need to develop specialised arbitration bar associations,” he said.
He also said there is a need to have professionally run arbitral institutions which can deliver international standards of services at reasonable costs to businesses in India.
Recent trends, he said, indicate that Asian centres like Hong Kong and Singapore have emerged as preferred arbitration destinations. As popular business hubs, they also rank high in the levels of Ease of Doing Business.
“Thus, availability of quality arbitration mechanisms is an integral component of Ease of Doing Business, to which our government is committed,” the Prime Minister said.