Government

January 07, 2019

Highlights of New Delhi International Arbitration Centre Bill, 2018 passed by Lok Sabha


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Arbitration

On January 4, the Lok Sabha passed a bill [New Delhi International Arbitration Centre Bill, 2018] to set up a new international arbitration centre in New Delhi with an aim to make India its hub.

The New Delhi International Arbitration Centre Bill, 2018 provides for the establishment and incorporation of New Delhi International Arbitration Centre for the purpose of creating an independent and autonomous regime for institutionalized arbitration and for acquisition and transfer of undertakings of the International Centre for Alternative Dispute Resolution and vests such undertakings in the New Delhi International Arbitration Centre for the better management of arbitration so as to make it a hub for institutional arbitration and declares the New Delhi International Arbitration Centre to be an institution of national importance and for matters connected therewith or incidental thereto.

A few Highlights of the Bill are as follows:

WHEREAS dispute resolution process has a huge impact on the Indian economy and global perception on doing business in our country and it has become necessary to inspire confidence and credibility among the litigants of commercial disputes;

AND WHEREAS rapidly changing economic activity demands expeditious settlement of disputes and creation and establishment of institutional arbitration;

AND WHEREAS the International Centre for Alternative Dispute Resolution was set-up in the year 1995, under the aegis of the Central Government and registered under the Societies Registration Act, 1860, with the objective of promoting alternative dispute resolution mechanism and providing facilities for the same;

AND WHEREAS the International Centre for Alternative Dispute Resolution has received land and substantial funding by way of grants and other benefits from the Central Government for constructing infrastructure and making other facilities;

AND WHEREAS the International Centre for Alternative Dispute Resolution has not been able to actively engage and embrace developments in the arbitration ecosystem and to create a reputation par excellence keeping pace with the dynamic nature of arbitration over more than two decades;

AND WHEREAS studies conducted by the High Powered Committee appointed by the Central Government indicate that the International Centre for Alternative Dispute Resolution has failed to address the growing needs of the institutional arbitration and also to bear optimum caseload and to become better choice to the parties for arbitration;

AND WHEREAS it has become expedient to take over the undertakings of the International Centre for Alternative Dispute Resolution including its regional offices without interfering with its activities and without adversely affecting its character as a Society but to utilise its existing infrastructure and other facilities which have been set-up by using the public funds provided by the Government and to incorporate a robust institution for domestic and international arbitration to be known as the New Delhi International Arbitration Centre;

AND WHEREAS it is considered necessary to declare the New Delhi International Arbitration Centre as an institution of national importance for its overall development as a major arbitration hub by promoting quick and efficient dispute resolution mechanism.

ESTABLISHMENT AND INCORPORATION OF NEW DELHI INTERNATIONAL ARBITRATION CENTRE:

The Central Government shall by notification establish a body to be called the New Delhi International Arbitration Centre for the purposes of exercising the powers and discharging the functions under this Act.

The Centre shall be a body corporate by the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to enter into contract, and shall, by the said name, sue or be sued.

Whereas, the objects of the New Delhi International Arbitration Centre are such as to make it as an institution of national importance, it is hereby declared that the New Delhi International Arbitration Centre is an institution of national importance.

The head office of the Centre shall be at New Delhi and it may with the previous approval of the Central Government, establish branches at other places in India and abroad.

ESTABLISHMENT OF CHAMBER OF ARBITRATION AND ARBITRATION ACADEMY:

The Centre shall establish a Chamber of Arbitration which shall empanel the Arbitrators and also scrutinize the applications for admission in the panel of reputed arbitrators to maintain a permanent panel of arbitration.

The Chamber of Arbitration shall consist of experienced arbitration practitioners of repute, at national and international levels, and persons having wide experience in the area of alternative dispute resolution and conciliation.

The Centre shall by regulations lay down the criteria for admission to the panel of the cadre so as to maintain a pool of reputed arbitrators having expertise in international commercial arbitration and arbitration other than international commercial arbitration.

The Bill also provides details on:

• Establishment and incorporation of New Delhi International Arbitration Centre; Declaration of New Delhi International Arbitration Centre as an institution of national importance; Composition of Centre; Terms and conditions, etc., of Chairperson and Members.

• Acquisition and Transfer of Undertakings of Society; Transfer and vesting; General effect of vesting; Liability prior to specified date; Power of Central Government to direct vesting of undertaking in Centre; Management, etc., of undertakings; Duties of persons in charge of management of undertakings to deliver all assets; Certain powers of Central Government or Centre; Objects of Centre; Functions of Centre; Vacancies, etc., not to invalidate proceedings of Centre; Resignation of Members; Removal of Members; Committees of Centre; Meetings of Centre; Chief Executive Officer; Delegation of powers; Secretariat.

• Finance, Accounts and Audit; Grants by Central Government; Fund of Centre; Accounts and audit; Assessment of assets and liabilities of undertaking.

• Chamber of Arbitration and Arbitration Academy; Chamber of Arbitration; Arbitration Academy.

• Power to make rules; Power to make regulations; Laying of rules and regulations; Protection of action taken in good faith; Power to remove difficulty.

Hon’ble Ravi Shankar Prasad, Minister of Law & Justice and Electronics and Information Technology, Government of India, in the bill said, “...it has been decided to establish a new institution to be called the New Delhi International Arbitration Centre (NDIAC) for better management of arbitration in the country and to declare it an institution of national importance. Further, the undertakings of the International Centre for Alternative Dispute Resolution (ICADR) needs to be taken over without interfering with the activities and without adversely affecting the character of ICADR as a Society, so that the existing infrastructure and other facilities which have been set up by the public funds provided by the Government may be appropriately utilized for the overall development of institutional mechanism in arbitration.”

The Minister added, “The Bill envisages appointment of persons of repute and having knowledge and expertise in institutional arbitration as Chairperson and Members of the NDIAC. The objects of the NDIAC would be to bring targeted reforms to develop it as a flagship institution for domestic and international arbitration. It will conduct arbitration in a professional manner in the most cost effective way. The Bill also proposes to set up an Arbitration Chamber, which would empanel professional arbitrators at national and international level. An Arbitration Academy is also proposed to be set up by NDIAC to train arbitrators in India, so as to empower them to compete on par with reputed arbitral institutions.”

To read the entire Official Bill in detail, please view the file attached herein.

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