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Report No. 76


Copy of The Letter Received from the Secretary, Department of Legal Affairs

P.G. Gokhale

Government of India,
Ministry of Law, Justice & Co. Affairs,
(Deptt. of Legal Affairs)
Dated 27th July, 1977.

My Dear Sri Bakshi,

It is a fact that on quite a few occasions the public Accounts Committee has commented adversely on the working of the Arbitration Act. Their comments include, inter alia, the long delays that take place in the completion of the arbitration proceedings, the number of extensions that are obtained either by consent of the parties or through the intervention of the court and the enormous expenses incurred by way of fees payable both to the arbitrators and the counsel. In some cases the arbitration proceedings were pending for a number of years-as long as 8 to 10 years.

The amount spent on the arbitrator and the Counsel by way of fees exceeded the amount of claim that was ultimately awarded in favour of the Government. The Government is therefore desirous to have a second look at the provisions of the Arbitration Act with a view to see whether the enormous delays occurring in the arbitration proceedings and the disproportionate costs incurred therein could be avoided. It is also the Government's intention to see whether any more powers could be conferred on the arbitrators to ensure effective, just and speedy conclusion of the proceedings.

2. In view of the facts stated above the Government has decided to refer this question for examination by the Law Commission on a priority basis. I shall be grateful if the matter is examined in detail by the Law Commission and a report submitted to the Government as early as possible. It appears that the present Commission may not have time to take up the matter and complete it. This may therefore be placed before the new Commission as may be reconstituted with effect from 1-9-77 so that it can be taken up on a top priority basis.

With kind regards,

Yours sincerely,
P.G. Gokhale

Shri P.M. Bakshi
Law Commission,
New Delhi.

Arbitration Act, 1940 Back

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