Government clears two ordinances for
speedy settlement of commercial disputes
Times, October 22, 2015
The government has
decided to promulgate two ordinances that will help in speedy
settlement of commercial disputes in the country, a measure on
which India scores very poorly and has been flagged as a big
concern by investors.
The Union Cabinet on Wednesday issued an ordinance to amend the
Arbitration and Conciliation Act and another to bring into force
the provisions of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Bill, 2015, pending
before a Parliamentary standing committee.
A government official privy to the developments confirmed the
cabinet endorsement to the two emergency laws.
The Cabinet had in August decided to bring a bill to amend the
Arbitration Act to set a fixed timeline to clear arbitration
cases, but the bill was not introduced in the Monsoon session of
Parliament. The ordinance will give force to the provisions of
the bill that provides for time-bound settlement of cases.
India is placed at 186 in a ranking of 189 countries on
'Enforcing Contracts' in the World Bank's 'Ease of Doing
Business' ranking. India is looking for a substantial
improvement in its overall ranking of 142.
Under the proposed amendments to the Arbitration and
Conciliation Act, 1996, cleared by the cabinet in August,
arbitrators will have to make an award within 12 months,
extendable another six months only.
After this, only courts can extend the period.
The law provides for incentive for arbitrators to settle the
cases early and provides for a six-month fast track mechanism if
parties agree. It also introduces a provision that courts clear
the challenge of award in one year. India has been the top
recipient of greenfield FDI in the first six months of the year
and the government is keen to keep the momentum.
In its report submitted last year, the Law Commission had also
backed changes in the arbitration law to make India a preferred
destination for international arbitration. Currently, Singapore
and London are hubs of international arbitration.
The ordinance will give force to the Commercial Courts,
Commercial Division and Commercial Appellate Division of High
Courts Bill, 2015.
The bill is with the
standing committee on Law and Personnel that will now submit its
report by November 30, after two extensions. It will allow the
Delhi High Court to transfer thousands of cases, mostly related
to property disputes, to the district courts of the capital,
helping settle them faster and improve ease of doing business.
The Cabinet Committee on Parliamentary Affairs that also met on
Wednesday pushed back the decision on Winter Session of
Parliament to October 26. The session is likely to start after
The Cabinet has approved a proposal to double the wage ceiling
for calculating bonus to Rs 7,000 per month for factory workers
and establishments with 20 or more workers.
The higher limit is proposed to be effective from April 1, 2015
and a relevant bill to amend the Payment of Bonus Act, 1965,
will be tabled in Parliament for approval.
The limit was last revised in 2006. The revision was one of the
demands of the trade unions that went on strike on September 2.
Under the current law, even if the salary or wage of an employee
exceeds Rs 3,500 per month, the bonus payable to the employee is
calculated at Rs 3,500 per month.
The higher limit will mean a higher bonus for employees.
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