The government will introduce a slew of legislations aimed at amending its arbitration law, setting time limits for courts and easing judicial rules in order to speed up delivery of justice in corporate disputes, law minister Sadananda Gowda said today.
The proposed amendments to the arbitration law seek to attract more foreign investment, while also ensuring that the various government departments settle disputes through arbitration and reconciliation rather than long-drawn litigations in courts.
The minister said under the National Litigation Policy, ministries and departments of the government are encouraged to amend laws and reduce court cases.
"Billions of dollars are blocked in legal disputes in India," Gowda told an industry event. "There is a need to establish a speedy, cost-effective and efficient disputes resolution mechanism."
An Assocham report has estimated that scores of projects worth more than Rs4,00,000 crore ($64 billion) are under litigation in different courts and tribunals. India also spends billions of dollars every year in arbitration costs overseas, the Assocham report noted.
Parliament is expected to approve amendments to the arbitration law in the coming session beginning 23 February.
The government also plans to set up separate commercial courts to speed the resolution of corporate disputes, a move that could unlock billions of dollars in investments, Gowda said.
Meanwhile, a government panel has suggested limiting courts' authority to overrule arbitration awards and fixing time limits and fees to settle legal cases.
As of now, several domestic and foreign companies, such as Vodafone, Reliance Industries are proceeding with arbitration in foreign courts as they prefer to avoid Indian courts where settlements take years.