Road to institutionalised arbitration: Indian approach

The Times of India | 17th March 2023

Ajay Monga and Ateev Mathur in VoicesIndia, TOI

In a country where the Courts are over flooded with the pendency of cases, people look for alternate avenues for dispute resolution. The concept of Arbitration is not new to India. The step to replace the Arbitration Act, 1940 adopting the UNCITRAL model was indeed the need of the hour and the Arbitration & Conciliation Act, 1996 (1996 Act) came into force. Most of the arbitrations under the 1996 Act were ad-hoc arbitrations conducted by retired High Court and Supreme Court Judges.

Though India had various institutions to administer arbitrations but those institutions did not encourage parties to get their arbitration administered through them. Lack of good institutions deterred not only domestic players but also foreign investors to not to have India as their seat for arbitration.

Taking note, the situation prevalent in India surrounding arbitration and looking into the institutionalised framework at global level, with the objective of institutionalising the administration of arbitrations and to improve the infrastructural requirement for such institutionalisation, the Indian Legislature brought some important amendments to the 1996 Act in the year 2015 and 2019. The intent from these amendments was directed towards making India as a robust centre for International

Arbitration and bring India at par with global institutions like Singapore International Arbitration Centre (SIAC), London Court of International Arbitration Centre (LCIA), Hong Kong International Arbitration Centre (HKIAC), International Chamber of Commerce (ICC) and reckon India an arbitration friendly nation and to impose confidence in the foreign investors/entities.

The recent promulgation of The New Delhi International Arbitration Centre Act, 2019 seeks to provide more impetus towards the said intention. The objective of the Act is to provide for establishment and incorporation of New Delhi International Arbitration Centre (NDIAC) and to create an independent and autonomous regime. The Act also declares NDIAC as an institution of National importance. The Act contains provisions for composition of NDIAC, it’s finances, accounts and audits.

Later on, by way of an amendment, the name of the institution NDIAC has been changed to India International Arbitration Centre (IIAC). The Centre would be composed of a chairperson, who would be designated by the Central Government in conjunction with the Chief Justice of India and would be a retired High Court or Supreme Court Judge. There would be two full-time members possessed with substantial knowledge and experience in the regime of arbitration. These members will be appointed by the Central Government. A part-time member to be appointed as Secretary and Financial Advisor. A Chief Executive Officer is also to be appointed to keep a check on centre’s administrative activities. A Registrar would also to be appointed to supervise the activities of the centre.

The functions assigned to the Centre under Section 14 of the Act are for facilitating smooth conduct of international and domestic arbitration with transparency. The services and infrastructure offered by the institution would be cost-effective and with global standards. Besides these basic functions, the institution will also undertake promotional activities, research, and studies in alternative dispute resolution, offering of academic diplomas and courses and training etc.

The Act provides establishment of chamber of arbitration under Section 28, who would appoint arbitrator and also review the application for admission to panel of arbitrators. There is a provision for establishing an arbitration academy under Section 29 of the Act for providing training to the arbitrator(s). The Act also promotes alternative two arbitrations such as mediation and conciliation.

To match up the standard of this globally recognized institution for arbitration, the India International Arbitration Centre will surely put India on the global map of administering arbitration through institution. The continuous efforts by the Government to develop Centre and the infrastructure associated with smooth administration of arbitration and the institution will have to be made as per the global standards to ensure its success, and if it is achieved, then surely India would find its place on the institutionalized arbitration map with this Arbitration Centre as forefront.