NEW COMPETITION LAW - THE GAME CHANGER

“Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.”               - Nancy Pearcy

She might or might not be advocating a competitive economy in the above quote but her words fit perfectly at macroeconomic level as they would anywhere else. A healthy competition is the key to growth and it is in the interest of a country to ensure and maintain competition in its economy. And for that purpose competition laws become essential for growth of an economic system. The British could rule the World only because they encouraged open market system hence being able to enter international market.

Every economy has its set of competition laws – In the USA, it is called antitrust law, China and Russia have anti-monopoly law, in Australia and the United Kingdom it is referred to as trade practice law.

Foundational step towards the development of competition policy in India was laid down as a consequence of World Trade Organisation’s Singapore Ministerial Declaration in 1996. A group of professionals were appointed by the Union Ministry of Commerce, Government of India, in Oct, 1997, to analyse matters relating to the interaction which included anti-competitive agreements and the impact of company mergers and amalgamation on rivalry aspect of Indian Market.

In 1969, The Monopolies and Restricted Trade Practices (MRTP) Act was enacted with a view to prohibit monopolies and prevent restrictive and unfair trade practices. The objective behind the legislation was to prevent concentration of power in the hands of few.

After the introduction of the New Economic Policy and end of the “Licence Raj” and introduction of new concepts like globalisation and free trade, the MRTP was rendered irrelevant. Thus in 2003 Competition Act was passed and Competition Commission was established for its implementation. The act has since been amended twice by Competition Act, 2007 and Competition Act, 2009.

    

Bellow are a few important elements of the Competition Act, 2002 –

      I.         Anti-Competitive Agreements

The Section 3 of the Act deals with Anti-Competitive Agreements. Whenever any organization attempts to confine competition by developing agreements such as collusive agreements in order to fix prices and outputs they need to be prohibited through legal strategies mentioned under Competition law, 2002.

For a better understanding of what are Anti-Competition Agreements below are a few types of such agreements businesses get into in order to minimise competition.

Cartels are those kinds of agreements which are between two or more parties to avoid battlefield when it comes to pricing, product, services or customers. These may result in in higher prices, poor quality and limited choice for goods or services. One of the world's best-known cartels is the Organization of Petroleum Exporting Countries (OPEC).

Bid-rigging is defined as any agreement between enterprises or persons engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding.

Tie-in arrangement is an agreement in which a vendor conditions the sale of a particular product (“tying product”) on a vendee's promise to purchase an additional, unrelated product (“tied product”). Not every tying arrangement is illegal under the law of unfair competition. The following four elements must be proved to establish that a particular tying arrangement is illegal:

·         The tying arrangement must involve two different products. Manufactured products and their component parts, such as an automobile and its engine, are not considered different products and may be tied together without violating the law

·         The purchase of one product must be conditioned on the purchase of another product. In order for it to a Tie–in Agreement it must be impossible to buy the tying product separately and on indiscriminatory terms.

·         A seller must have sufficient market power in a tying product to restrain competition in a tied product.

·         Must be shown to appreciably restrain commerce. Evidence of anticompetitive effects includes unreasonably high prices for tied products and unreasonably low prices for competing products in a tied market.

    II.         Abuse of Dominance

Section 4 of the Act deals with Abuse of Dominance. Abuse of dominant position destroys the scope of having fair competition between different firms, exploits consumers in two ways first with respect to relevant product and second with respect to geographic market. It includes conditions like predatory pricing, limiting production/market or technical development, creating barriers to entry, denying market access, and using dominant position in one market to gain advantages in another market.

   III.         Combinations   Regulation

The term ‘Combination Regulations’ include regulations relating to mergers, amalgamations and acquisitions. With this provision the Act would not only apply to Indian businesses but also to entities established overseas. The Act makes pre-notification of combinations voluntary of parties but if the parties choose not  to notify they could be subjected to post-combination investigation by the CCI, if the combination adversely effects the market and the competition therein.

  IV.         Intellectual Property Rights and Competition Law

If taken in its strictest sense Intellectual Property Rights(IPR) would be opposite of  Competition laws. IPR majorly include patents, copyright, industrial design rights, trademarks, plant variety rights and trade secrets. It seeks to assign monopoly of the “Intellectual Property” to its designated owners. Whereas Competition Laws include legislations and policies aimed at preventing anti-competitive practices and promote competition and benefit the consumers by providing a free and fair market.

Therefore it is imperative to strike a balance between the two and find a middle ground to benefit both, the consumers and the innovators and owners of such “intellectual Properties”.

Conclusion

Competition Law isn't about protecting competing businesses from each other, it's about protecting competition itself on behalf of the public. The intent of the Competition Act, unlike the MRTP, is not to prevent existence of monopolies. It strives to develop healthy competition in the market and create conditions suitable for fair trade practices. The Act safeguards the interests of consumers as well as businesses specially those not in a position of dominance. What the Act prohibits are the ‘malpractices’ employed by businesses to ensure their power in the market. A business that by fair means commands dominance over a market does not come within the preview of the Act. 

Did someone call my country Intolerant ???

The one word which have engaged news channels in the recent past is intolerance. The debate on intolerant India has cropped out of two disturbing developments, viz, the murder of an Indian writer and second an increasingly violent reaction to Indians who consume beef. As rightly said by Chetan Bhagat "Ok, wrong to label Islam as violent after stray terror attack. But why did you label my entire country intolerant after a few stray incidents?" It has been portrayed, what has skulked into Indian living now is a certain level of ruffian aggression and anger which is awfully new. India, despite having a huge history and legacy of insolence and hostility, is now debating rising extremism and the dwindling tolerant space.

Intermittent occurrences don't change India's history of tolerance. In today’s times, when Intolerance is being sermonized to India, let us look at the very concept of tolerance, and the Indian way of acceptance. In 52 AD, St Thomas, one of the twelve Apostles of Jesus Christ, landed in Palayur, Kerala to spread the word, in short, to spread Christianity. The Viceroy of Goa, Antonio de Noronha issued an order for inhabitants of Portuguese rule whereby nobody under the law was allowed to construct a temple or repair one without permission and by 1567, 300 Hindu temples had been destroyed.  Rituals of Hindu marriages, sacred thread wearing and cremation were banned by law. The Islamic entry into India happened via Malik Deenar in Kerala who constructed the first mosque in 629 AD and after that, via the Arab traders, Islam came to the Malabar coast and many of the locals were converted. Despite all the ridicule, the driving out of the natives, and myriad racial killing, every religion survived and moreover flourished.

Incidences of communal violence continued in the recent history and in August 1947, across the Indian subcontinent, communities that had coexisted for almost a millennium attacked each other in a terrifying outbreak of sectarian violence, with Hindus and Sikhs on one side and Muslims on the other. In 1960s Freedom of Religion Acts encouraged Hindu efforts to stop Christian conversion. Christians in India faced a wave of violence between 1964 and 1996 where  church graves were despoiled. The anti-Sikh killings of 1984. The 2002 Gujarat riots which caused deaths, thousands injured and tens of thousands displaced and the haunting 1992 blasts in Mumbai. The memories of the horror continue, as do the scars, but the desire to go on keeps an Indian tolerant. The religion has been able to adapt all these other religions into an umbrella.  India loves it's diverse Gods which makes us a beautiful tolerant nation.

So now, is politics the culprit or is it the media which is sensationalizing events and forecasting them as national shame? When people are lynched, massacred, face blackened, abused, it is a serious failure of the law and order but in no way denote that we are becoming an intolerant nation. It is the social media, the vigilant media, activists and the political parties sensationalizing events and playing the blame game. Riots have taken place in the Congress-led government both at the Centre and the state. The 1984 riots against Sikhs, The Muzaffarnagar Riots, the killing of Kashmiri pundits, all happened during the Congress rule. The smearing of ink on Kulkarni's face and the cancellation of Ghulam Ali's concert in Mumbai are just instances of playing politics.[1]  All the government and municipal resolutions ordering meat bans were issued by Congress-led governments in the year 1964, 1994 and 2004 respectively[2]. The catch is that the beef controversy and the returning of the awards ploy has disappeared post Bihar elections. So,  what and why was the brouhaha all about?

India, from ages has been multicultural, multiethnic and multi dimensional with a vibrant democracy and as rightly said by the Finance Minister, Arun Jaitley can never be intolerant. Though religious intolerance is an undeniable reality to all religious groups but the essence is to coexist serenely. Hinduism, Buddhism, Christianity, Judaism, and Islam are 5 of the biggest religions in the world. Over the decades, these religions have shaped the course of history and had a reflective influence on the trail of the human race and these sundry occurrences is nothing but sporadic intolerance. Lastly, it can rightly be said that the Islamic world and the Hindu world and the Christian world are all on the same side and if we fall prey to the media and the political gimmick, we will soon be against them all.

[1] http://www.huffingtonpost.in/k-s-venkatachalam/why-i-am-returning-the-aw_b_8477932.html

[2] http://scroll.in/article/755111/meat-ban-irony-how-a-congress-imposed-order-was-cut-to-size-during-bjp-rule

Bang Bang here comes the new robust Bankruptcy Bill….borrowers beware

Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors.

The nexus between better insolvency laws and economic growth is forthright. It has been established beyond doubt that the fierce and detrimental bankruptcy laws which ensures to protect the rights of borrowers and lenders, promote predictability, clarify the risks associated with lending, and make the collection of debt through bankruptcy proceedings more effective and pragmatic.

India witnessed an era of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and Board for Industrial and Financial Reconstruction (BIFR) as a failed mechanism for regulating bankrupt companies. The Indian laws are often termed as the toughest laws for the running of businesses in India.

The World Bank has ranked India at 142 out of 189 countries in 'resolving insolvency,' estimating that it takes 4.3 years on average in Mumbai to settle a case. In reality it takes much longer than that. To improve business condition in the country, Bankruptcy Law Reform Committee was setup by the government in Aug, 2014 

I. Key reforms

The Bankruptcy Law Reform Commission headed by former law secretary TK Viswanathan has proposed the following key reforms: 

1       Early recognition of financial distress in company and timely intervention by the government to rescue the organization. The first important suggestion is one that allows secured creditors to initiate rescue proceedings if a borrower fails to make good on any of its dues within a month of such a demand being made. The current rules under the Companies Act say that a borrower should be unable to repay 50% (or more) of its debt before debtors can initiate rescue proceedings. As the committee argues, waiting for a stage where a company has defaulted on 50% of its debt is probably waiting too long. By such time, the company would probably have turned unviable and a rescue would be unlikely. Act early, is the message.

2.     One of the most prominent and paramount feature of The Bill is that it proposes insolvency resolution within 180 days and a new regulator to oversee the process. It's also laid down a clear and speedy system for early identification of financial distress and revival of companies. The prescribed resolution timeline of 180 days can be cut further to 90 days from the trigger date for key categories. The proposed insolvency regulator will cover professionals and agencies specialising in the field. 

3.     Liquidate non viable company at the earliest.

4.     Permitting secured creditors to apply for the rescue of the company, as per the current law it was filled after the company had defaulted by 50 per cent of its outstanding debt.

5.     Another feather in the cap was introduced by allowing unsecured creditors representing 25 per cent of the debt to initiate rescue proceedings against the debtor company.

6.     The committee has been prudent enough to recommend individual solvency. The report incorporates provision on individual insolvency, a crucial area covering sole proprietorships and small and medium enterprises in India.

II. Crucial benefits 

1.     Improve the rank of India on ease of doing business

2.     The Bill has proposed a number of changes to the liquidation regime, including changes for increased protection of creditor rights, maximisation of asset value and better management of the company in liquidation. Simplifying exit policy is one of the criteria considered by entrepreneurs before setting any organization.

3.     It is also proposed that an early intervention by the government could salvage the entity from liquidation. 

III. Shortfall 

1.     We have witnessed that several provisions which deal with the early intervention by the government to save organization from being defaulted are already available under various laws and have failed to resolve the issue further, ineffective implementation of existing laws are major problems.

2.     There is lack of awareness, knowledge and information pertaining to the laws amongst the people who run and manage small businesses and micro enterprises, further they are managed by people who do not have much knowledge about laws and are largely illiterate thus, without required knowledge of existing laws, proper implementation seems to be a distant dream.

3.     We anticipate that in lieu of getting subsidies and tax benefits through state intervention, there will be an tendency amongst the entrepreneurs to show a well running organization as a sick organization.

4.     Although this may sound like an good news for creditors, on the flip side one needs to tread cautiously in giving the creditors unbridled power and leaving companies with fewer options to protect themselves.

 III Conclusion 

The Industry sentiments about the proposed law seems that it will create a robust and globally competitive insolvency regime. 

However lets not get carried away as if one recollects substantial opinions were offered about the state of the debt recovery tribunals. On paper, these were meant to speed up recoveries, but in practice, have done anything but that. Until this judicial bottleneck is cleared, little may change on the ground.

The present laws do not either help a sick industrial unit to revive itself or assist financial institutions to recover their money. A transparent bankruptcy law is overdue, getting a new bankruptcy law in place is critical in sending a message to promoters that the erosion of the sanctity of the debt contract, as it’s been termed by the RBI governor, must be reversed.

Further a new bankruptcy law, coupled with practical changes, removal of judicial bottlenecks and curbing delays will be crucial to the reform process.

Walking On Thin Ice: Women on BOD

Directors have been described as a company’s ‘directing mind and will’.[1] Success of a company largely depends upon the proficiency, veracity and integrity of its directors. 

Directors are the trustees for the enterprise, it is indispensable that management of companies should be in proper hands and thus it becomes obligatory to choose your board wisely. 

The new Companies Act’s stipulates that every listed company or public company with a minimum paid up capital of Rs.100 crore or a minimum turnover of Rs.300 crore needs to appoint at least one woman on its board.

Further, SEBI has directed that, all listed companies must have at least one woman director on the board. One person cannot be a director on the boards of more than seven listed companies.

Reaction by the Industries:

1. The BOD of India’s leading two-wheeler maker Hero MotoCorp Ltd met on 28 May 2015, to approve financial results for the March quarter. But the directors ended up spending most of the time discussing a process to induct women on the board, a director revealed this dilemma.[2] Dozens of companies are discussing the same topic and have begun to search for female board members.

2. Federation of Indian Chambers of Commerce and Industry (FICCI)outwardly opposed the idea of the reservation of women directors on company boards. It opined that gender of an individual must not be the basis for procuring an important position such as the board of directors.[3]

Reaction By Women

1. There was an astounding mixed reaction by the women in the business community on the issue of reservation. On one hand presence of women directors would make the board aware and sensitive towards issues like sexual harassment, maternity benefits, conditions of work and working hours and on other such reservation would prove counter-productive. However, it was argued that reservation would also stop relegation of women workers into less important responsibilities.

2. Savita Mahajan, deputy dean of the Indian School of Business offered her reaction on the comment of FICCI that concerns about lack of experience and training don’t hold much ground, because the same concerns are not expressed when men are inducted on boards for the first time she says, adding that even experienced women are not being roped in.[4]

Points in favour of Reservation

The extent to which your board is diversified board is directly proportional to the company’s success. That is true even with gender diversity.

Experts believe that companies with women directors deal more effectively with risk. Not only do they better address the concerns of customers, employees, shareholders, and the local community, but also, they tend to focus on long-term priorities.[5]

Companies with women board members make more money. That’s the defining finding of a TOI-commissioned study on the relation between companies with women on their boards and profitability.[6]

We can attribute one more advantage to the argument in favour of reservation, higher female representation may further lead to the empowerment of women and better representation of women in the corporate sector In India.

The Flip side

A recent case study revealed that few years back the Norwegian Government directed companies to increase the number of women directors by way of 40%. Many corporate reached this margin through window – dressing. The Norwegian companies, in order to comply with the norms of reservation promoted many women with much lesser experience than the directors before them to the position of the directors. This led to deterioration of business of such corporate. The Indian companies in current market scenario afford such a situation?

One really needs to be pragmatic and consider that if finding nearly 1000, women to have at least one chair on the BOD in companies is proving to be such a difficult task for Indian companies that out of the 242 women directors appointed last year, at least 45 seats were filled by women belonging to the promoter group companies? This effectively means that Corporate India is more interested in meeting the norm than being an actual driver of change and diversity. 

Our point of view

The initiative to bring in more women in the Board is no doubt comes with an optimistic motive behind it.

The very idea of a unblemished BOD derives from the concept of corporate governance reflecting on to the better management of the company along with securing the interest of all the stakeholders. The reservation fails to assure such a move, however, what it assures is better and a sounder social parity and structure.

Let the boards be the quintessence of the economic growth of the company, let the boards be free from the clutches of reservation, let the board be custodians of efficiency and accountability of the investment made by the shareholders.

There is always someone willing to do it cheaper.

Vagueness is the gremlin of all contracts, and ambiguous terms and conditions will irk the business deal to the end of its life. Crisp and tight contracts are thus vital for an unbeaten business deal.  Nonetheless, it is too simple to fall and tangle into a weakly designed contract at a discounted cost. Time constraint, false sanguinity, mislaid trust, greenness, poor language skills are some of the factors which connive to produce a low cost bemused and a vague contract undermining the very purpose of a contract; certainty and predictability. Thus, we explain how bespoke language in a contract is the foundation in any business transaction.

Even the most global business entity can be raw and not conversant in a given business deal. The most crucial purpose of any contract is to assign the parties' respective rights, risks and responsibilities.  How well  the contract is prepared and risks are dealt with is the significant part.  The risk is high. Even minute alteration and improvement in how a contract is structured and managed can have considerable positive impact. The success of critical commercial transaction thus depends on watertight execution which in turn requires proficient Contract drafting  skills.

Contracts in today's day and age have become drastically more multifarious and too often entered into with inadequate blunt endeavor and without a reliable approach or the requisite controls; maybe to save cost. Significant aspects for a well drafted contract starts from a set of well defined terms and conditions understood by the parties that clearly defines the roles and responsibilities up to right control binding compensation to performance with constant supervision all built into one contract.

Further, what a contract must have is a well defined scope of work and execution plan which visibly and entirely identifies the parties respective responsibilities together with a means to review and gauge growth and the outcome. Favorable competitive pricing that allows the venture to attain its objectives for the particular transaction. Commercial terms and conditions that provide adequate rights and remedies whereby both parties have sufficient 'stake in the result' to keep them invested and focused on accomplishment.  Reporting and controls with processes that benefits all, shield and safeguard accountability right through the transaction's life, including setting up, building, deliverance phase and warranty period. Lastly, Contract management which is the plan for organizing the transaction after the deal is signed so that the contract is not simply ''filed and forgotten'' but instead managed until its completion with rights and remedies suitably exercised in an apt manner.

Additionally, the certainty that negotiations will take place post-execution is time and again ignored.  A variety of issues faced by the parties crop up during the performance of the contract where differences may need to be resolved. A well tailored contract aids to the continuing negotiations even after the contract is executed. In such cases, the contract lingo is useful not only in diminishing the probability for differences, but also in smoothening the progress of decision by having lucid language and a clear process to follow.

Lastly, while the preparation, offer, assessment, continuation and structure of the entire transaction may just take few months, the real performance of a contract can take years. Consequently, it holds the highest threat of something going haywire  at the performance phase of a contract. Thus, not only an ambiguous contract can ruin your transaction, it can also negatively impact the Company's reputation, weaken credibility and waste the time of judges, lawyers and clients, thereby wasting your hard earned money. In short it can be said that, contracts drafted at low and discounted  rates is directly linked with contemptible quality product.  Therefore choose astutely.

Big Law Firms To Boutique Law Firms: A Palladium Shift Less Spoken Of

In a complex and competitive world, every successful business needs access to lawyers who can bring experience, commercial acumen and legal ability to bear on the various corporate, commercial, regulatory and taxation issues which affect them. The critical question faced by most of our potential clients, is the choice between a law firm over an individual lawyer?

Hiring a lawyer is not just a black and white, huge or diminutive decision. It doesn’t have to be an alternative between a renowned big law firm and a single lawyer show.

Not to dispute the fact that big law firms offer host of legal services and often have complete section committed to different areas of the law which permits them to focus on the specific requirement of the client, yet their laid back culture, inefficiency and the reputation of overbilling not to mention the disbursements and out of pocket expenses included in the bill frustrates the clients as they do not see value for the fees they end up paying.

 As against choosing an individual lawyer with limitations, who can make manoeuvring the legal system much less taxing for you can be a real task. One would need a lawyer who can not only support the organization's growing needs but also ensure an outcome that is fair and also constructive to you. Whether big or small, businesses can get the best of both worlds by finding a mid-path in form of boutique law firms.

A boutique law firm is a collection of attorneys, typically organised in a limited liability partnership or professional corporation, specialising in a niche area of law practice. While a general practice law firm includes a variety of unrelated practice areas within a single firm, offering multiple services to the client, a boutique firm specialises in one or a select few practice areas.

These new firms are choosing to focus the work of the entire firm on lesser areas of law rather than try to maintain the general practice culture of the big law firms. The logic is in sickness, you visit your general practitioner who in turn directs you to a specialist depending upon your need. The same is true in the law: go to a specialist, that is, the boutique law firm.

  

We as a boutique law firm work on the following five principles:

1.     Client Centric. Each Client Matters. You are not a number or a pay-check to us. Your success is measure of our success and we take that seriously.  In a small pond there is no such thing as a small fish. Every client to us is a "big Fish".  All of our associates are familiar with your case and knows you by name, and we are proud of that. We believe reputation is everything and we have been practicing that almost a decade, with a proven success track record.  

2.     Accessibility. We make our selves accessible day and night. Ready to help when you need it all, our client have our office number, personal email and mobile numbers. We chart out the work group list with contact details of all associates working on the project and appoint a point person at the beginning of any assignment along with a proposed timeline.

3.     Efficient.  We ensure every penny paid by you as fees is valued by us.  We understand that wasted time is, wasted money. 

4.     Personal Touch.  When you call our law firm you will always be working with the same associate who has a thorough understanding of your organisation. This personal relationship with clients sets our associates apart.   

5.     Focus.  We are focused on our niche areas of practice. Our focus is to build long-term relationships. As we believe that lasting association is directly attributable to growth, success and client satisfaction. We listen, we lead and we communicate with honesty and integrity.

Ensure to deal with a boutique law firm which gives outstanding quality work, consistency, support, ease and flexibility. Let the law firm make a difference in your business and helps you achieve that success by providing comprehensive legal support. Lastly, have an enduring relationship with the law firm and have a safe business.

ARBITRATION 2015 - WEAPON RELOADED

“When will mankind be convinced and agree to settle their difficulties by arbitration?” Benjamin Franklin.

Historically, arbitration was successfully used by the ancient Greeks and the Vikings to solve interstate and intrastate conflicts. In more recent history, arbitration played an important role in solving international border disputes. Currently, negotiation and mediation are the widespread mechanisms for resolving international conflicts and arbitration continues to be an efficient tool for conflict resolution, particularly for international and national commercial disputes.

Though historically significant for the resolution of disputes, in India, arbitration is not often used correctly in that way. The sluggish judicial system,  led to delays rendering arbitrations inept and unappealing. With an eye to make India an Arbitration hub, the Government of India has now approved number of amendments for making Arbitration a preferred mode for settlement of commercial disputes. This will not only lead to expeditious disposal of cases but also be more user-friendly, cost effective  and enhance the efficiency of arbitration.

To start off on the right foot, an application for appointment of an Arbitrator shall now be disposed of by the High Court or Supreme Court as expeditiously as possible and an endeavor to dispose of the matter within 60 days. Further, Arbitral tribunal will now make its award within a period of 12 months where parties may extend such period up to 6 months and shall be extended by the court only on sufficient grounds. The court while extending the period might also order reduction of fees of arbitrator(s) not exceeding five per cent for each month of delay, if the court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal. As an incentive, additional fee shall be paid to the arbitrator, if the award is made within six months.  Also, disputes be resolved through fast track procedure and award in such cases shall be given in six months period.[1]

The Arbitral tribunal shall now grant all kinds of interim measures which the Court is empowered to grant, and such order shall be enforceable in the same manner as if it is an order of Court. Further, an application to challenge the award is to be disposed of by the Court within one year and mere filing of an application for challenging the award would not automatically stay execution of the award. Award can only be stayed where the Court passed any specific order on an application filed by the party. [2]

One of the most significant amendment is of Section 34 relating to the grounds for challenge of an arbitral award, to restrict the term 'Public Policy of India" (as a ground for challenging the award) by explaining that 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. [3]

In order to avoid frivolous and meritless litigation/arbitration, a new Section 31A is to be added for providing comprehensive provisions for costs regime which will be applicable both to arbitrators as well as related litigation in Court. Further, in order to ensure neutrality, the amendment mandates the arbitrator to “disclose in writing about existence of any relationship or interest which may give rise to justifiable doubts about his neutrality”. Any person in the position of conflict of interest would be ineligible to be appointed as an arbitrator. Lastly, amendments in Sections 2(1)(e) , 2(1)(f)(iii), 7(4)(b), 8(1) and (2), 9, 11, 14(1), 23, 24, 25, 28(3), 31(7)(b), 34 (2A) 37, 48, 56 and in Section 57 are also proposed for making the arbitration process more effective.[4]

Thus, India did put in place a progressive piece of legislation which is essentially based on the Model Law and the United Nations Commission on International Trade Law (UNCITRAL ) Arbitration Rules which had an effective law in place and the Government of India is certainly committed to improve its legal framework relating to Arbitration. All it needs now is inculcation of the culture of arbitration within the bar, the bench and the arbitral community. The gear of the past needs to be dropped so that India, undeniably, not only will have an attractive arbitration mechanism on offer which could fairly be proclaimed that Arbitration is fair, effective, expedite and legally binding but also could be recognized as an favorable international venue for arbitration proceedings.

                                                                                     

---

[1] http://pib.nic.in/newsite/PrintRelease.aspx?relid=126356

[2] http://pib.nic.in/newsite/PrintRelease.aspx?relid=126356

[3] http://pib.nic.in/newsite/PrintRelease.aspx?relid=126356

[4] http://pib.nic.in/newsite/PrintRelease.aspx?relid=126356