New bill to improve investment climate

Introduction of alternate dispute settlement will bolster investor confidence

ISLAMABAD:

The government has decided to introduce Arbitration Bill 2024 in a bid to boost the overall investment climate and promote economic prosperity by bolstering the confidence of domestic and foreign stakeholders in the dispute settlement regime.

The lack of an arbitration mechanism has been a key issue that led to several disputes and litigation between the government and foreign investors in international courts.

Sources told The Express Tribune that the Ministry of Law and Justice tabled the Arbitration Bill 2024 in a recent meeting of the cabinet, chaired by Prime Minister Shehbaz Sharif.

The ministry told the cabinet that it had been recognised that arbitration, as an alternate dispute resolution mechanism, played a crucial role in expediting legal processes and easing the burden on the judicial system.

However, the absence of a comprehensive and updated legislative framework has led to inconsistencies and inefficiencies in arbitration procedures.

The gap poses challenges to the enforcement of arbitrary awards, which sparks uncertainty among the parties involved in arbitration proceedings and hinders the growth of the alternate dispute resolution mechanism.

The law ministry stated that the proposed Arbitration Bill 2024 represented a significant step towards strengthening the legal framework and promoting alternate dispute resolution mechanisms.

It encompassed various salient features aimed at modernising and streamlining arbitration proceedings. Provisions relating to the scope of application, judicial intervention, administrative assistance, arbitration agreements, interim measures, jurisdiction and enforcement of awards were also part of the bill.

By providing clear guidelines and mechanisms for the resolution of disputes through arbitration, the bill is expected to not only facilitate the timely resolution of disputes, but also enhance the overall investment climate and promote economic prosperity by bolstering the confidence of domestic and foreign stakeholders in the arbitration regime.

Those proposals were placed before the cabinet and its, in-principle, approval was sought for the contents of the bill to further process legislation under Rule 15(1)(a) read with Rules 27(1) and 30 of the Rules of Business 1973.

The cabinet was asked to approve the initiation of consultations with provinces since arbitration was a devolved subject. The endorsement of the proposed legislation by provinces is crucial to ensure unified implementation across the country in line with Article 144 of the Constitution.

During the ensuing discussion, a cabinet member proposed that the criminal justice system also needed to be improved along with strengthening of the prosecution system.

The minister for law and justice responded that those reforms were already under consideration and a proposal would be presented to the cabinet shortly. The integration of the alternate dispute resolution mechanism with the mediation system also came up for discussion.

The cabinet considered a summary titled “The Arbitration Bill 2024”, submitted by the Law and Justice Division, and approved the proposals.

It directed the Law and Justice Division to propose reforms for improving the criminal justice and prosecution system in order to provide relief to the common man within three weeks.