Need to streamline legal system for prompt dispute resolution: Gowda

Ruing the huge expenditure that the government has to incur on international arbitration cases, Law Minister DV Sadananda Gowda on Tuesday stressed on the need for streamlining India’s legal and judicial system for speedy resolution of commercial disputes.

He added that the government would have to evolve new principles and lay down new norms to deal with the problems that emerge in a highly-industrialised economy.

The minister hoped that amendments in the Arbitration Act and passage of a law to establish commercial benches in High Courts would help improve India’s ease-of-doing-business ranking.

At a conference on the ‘Effects and Implications of Recent Alternative Dispute Resolution and Commercial Courts Laws’, organised by an industry body, Gowda said that delay in legal procedures and want of timely disposal of investment-related cases lead to international arbitration, which involves “huge expenditure” out of the state exchequer.

“Hence, streamlining our legal and judicial system to ensure speedy resolution of commercial disputes is the need and a necessary requirement,” he said.

Gowda hoped that recent amendments to the arbitration law and creation of commercial benches in High Courts would help solve the problem.

Amendments to the arbitration law and the new statute on commercial benches came into force in December last year.

Law is a “living organ” and “has to grow” to satisfy the needs of a fast-changing society and to keep it abreast of the economic developments taking place in the country, he said.

“As new situations arise, the law has to evolve in order to meet the challenges of such new situations. The law cannot afford to remain static. We have to evolve new principles and lay down new norms, which would adequately deal with the problems which arise in a highly-industrialised economy,” he said, quoting a Supreme Court judgment. 

Former Law Minister HR Bhardwaj, who was also present, credited the then PM Manmohan Singh for pushing for the sorting of commercial disputes through out-of-court settlements using the alternative dispute resolution mechanism.

“But nobody wants to settle arbitration cases... judges (retired judges who preside as arbitrators) also prolong proceedings,” he lamented.

He supported the idea of having a separate Bar to deal with commercial cases.