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Ordinance not ideal way of legislation, says Justice Indu Malhotra


New Delhi: Ordinance is not an ideal way of legislation, which should be introduced through debate that helps refine law, Justice Indu Malhotra said Wednesday.

Although bringing a legislation through Ordinance is a valid method, there remain certain lacunae which can be mitigated through public discussions, she said.

She also said that if the lapsed Arbitration and Conciliation (Amendment) Bill, 2018 is reintroduced, then it should not be routed the same way.

Justice Malhotra made these comments while delivering the third 'Nani Palkhivala lecture, 'An Overview of the Arbitration Landscape in India', organised here on the occasion of the noted jurist's birth centenary.

 "The Arbitration and Conciliation Act 1996 was brought in through the Ordinance route and the benefit of public discourse and debate in Parliament by all parties was lost. I don't think that is an ideal way of bringing about a legislation although it is a valid method.

 "The Arbitration and Conciliation (Amendment) Act, 2015 was again brought through an ordinance. It is not a good idea. It should go through gamete of debates because it always helps in refining the legislation," Justice Malhotra said.

She added: "The Arbitration and Conciliation (Amendment) Bill, 2018, has been lapsed in the Lok Sabha and if it is reintroduced, I hope there will be public discussion and it would not be introduced through Ordinance route." The event was attended by senior advocates P H Parekh and Gourab Banerji and Major General (retd) Nilendra Kumar, Secretary, Nani Palkhivala Birth Centenary Celebrations Steering Committee.

 Justice Malhotra said it was important to train Indian judges as arbitrators so that they "take off the cloak of a judge" and "become arbitrator".

 Judges need to be "pragmatic" and have "commercial sense" so that they come up with good award, she added.

 "I have received complaints from various practitioners in international arbitrations. Indian judges are normally appointed as arbitrators but it is important to train them as arbitrators. You have to take off the cloak of a judge and become an arbitrator...

 "There are commercial disputes to be resolved so pragmatism is essential. They need to be trained more in international commercial arbitrations."              Justice Malhotra also said that most of the international awards with respect to India have been in the ratio 2:1, where most of the times the minority arbitrator has been an Indian judge.

She said high courts have not notified rules with respect to fees of arbitrators.

 "Arbitrators cannot be let loose to keep charging the fees which they please because the dispute settlement was meant to be not only expeditious but economic," she said.

In 2018 the World Bank placed India at 163 with respect to enforcement of contracts, adding that legislative amendments should be reviewed "periodically" and not after a gap of 20 years, she said.

"It is time for us to buckle up and not become complacent. Legislative amendments should be reviewed periodically rather than a period of 20 years which happened in 2015," she said.

She also said that an arbitrator should be a person who is neutral and is independent of the parties for providing a fair award.

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