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Report No. 176

1.3 Objectives of the 1996 Act - speedy arbitration and least court intervention:-

The 1996 Act was the result of recommendations for reform, particularly in the matter of speeding up the arbitration process and reducing intervention by the court. In Guru Nanak Foundation Vs. Rattan Singh (AIR 1981 SC 2075)(at 2076-77), the Supreme Court while referring to the 1940 Act observed that "the way in which the proceedings under the Act are conducted and without an exception challenged in courts, has made lawyers laugh and legal philosophers weep" in view of "unending prolixity, at every stage providing a legal trap to the unwary."

The Public Accounts Committee of the Lok Sabha had also commented adversely about arbitration in India (9th Rep. 1977-78 pp 201-202). The matter came up before the Law Commission in its 76th Report, which recommended certain amendments, e.g., a proviso should be inserted in section 28 of the Act of 1940 forbidding in respect of the time for making the award an extension beyond one year, except for special and adequate reasons to be recorded.

In Food Corporation of India Vs. Joginderpal (AIR 1981 SC 2075)(at 2076-77), the Supreme Court observed that the law of arbitration must be 'simple, less technical and more responsible to the actual reality of the situations', 'responsive to the canons of justice and fair play."

A reading of the 1996 Act shows that speedy arbitration and least court intervention are its main objectives. In fact sec.5 of the Act declares:

"Sec.5: Notwithstanding anything contained in any other law for the time being in force, in matters covered by this Part (i.e. Part I), no judicial authority shall intervene except where so provided in this Part."

This basic provision is found globally in the laws of all the countries which have adopted the UNCITRAL Model The provisions as to waiving objections etc. contained in Sections 4, 12, 13(4), 16(5), 19(1) and 25 amply demonstrate that the objective is to see that the disputes are not unduly prolonged.

In fact, the UNICTRAL Model, wherever it permitted intervention by court, by way of appeal, before the passing of the award, left it to the arbitrator, to proceed or not to proceed further. This was intended to see that the appeal proceedings are not allowed to be unreasonably delayed.

The Arbitration and Conciliation (Amendment) Bill, 2001 Back

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