IAS Target

The New Delhi International Arbitration Centre Bill, 2019

Arbitration is a process of settling up conflict or disputes between two parties to an agreement by a neutral third party i.e, the arbitrator without resorting to court action. This can be personalized to suit parties' specific requirements. Arbitrators can be selected for their expertise. It is secret or confidential and can be cheaper and speedier than the court. There are restricted reasons for the appeal. Arbitral awards are binding and enforceable through courts. The New Delhi International Arbitration Centre Bill, 2019 was introduced by the Ministry of Law and Justice on July 3, 2019, in the lower house of the Parliament. It seeks to set up an independent and autonomous institution for better management of arbitration in India.

Important characteristics of the Bill include:

New Delhi International Arbitration Centre (NDIAC) The Bill seeks to provide for the establishment of the New Delhi International Arbitration Centre (NDIAC) to conduct mediation, conciliation and arbitration proceedings. The Bill mentioned the arbitration (NDIAC) as an institution of national importance.
International Centre for Alternative Dispute Resolution (ICADR) The International Centre for Alternative Dispute Resolution (ICADR) is a registered society to encourage the resolution of conflict or disputes through optional dispute resolution methods (such as mediation and arbitration). The Bill also seeks to handover the existing ICADR to the union government. Upon notification by the union government, all the rights, interest and title in the ICADR will be transferred to the New Delhi International Arbitration Centre (NDIAC).
Structure or Composition Under the Bill, the NDIAC will consist of 7 members including:
  • a Chairperson who may be a Supreme Court's judge or a judge of High Court, or a well-known person with experience and good knowledge in the conduct or administration of arbitration;
  • two well-known persons having a experience and considerable knowledge in institutional arbitration;
  • three ex-officio members, including a nominee from the Ministry of Finance and a Chief Executive Officer (CEO) (accountable for the day-to-day administration of the NDIAC). A representative from a recognised body of commerce and industry, on a rotational basis, appointed as a part-time member.
Term and superannuation The members of New Delhi International Arbitration Centre (NDIAC) will hold office for three years and will be eligible for re-appointment. The retirement age for the President or Chairperson is seventy years and other members is sixty-seven years.

The Key Objectives of the New Delhi International Arbitration Centre (NDIAC) include:

  • offering administrative assistance and facilities for the conduct of conciliation, mediation and arbitration proceedings;
  • providing training, promoting research and organising seminars and conferences in alternative dispute resolution matters;
  • to bring targeted reforms to grow itself as a flagship institution for domestic and international arbitration
  • co-operate with institutions, organisations, national or international for promoting alternative dispute resolution.

Key Functions of the NDIAC will include:

  • facilitating conduct of conciliation and arbitration in a professional, timely and cost-effective manner;
  • encouraging studies in the field of alternative dispute resolution (ADR).

Finance and audit:

The New Delhi International Arbitration Centre (NDIAC) will be needed to maintain a fund that will be credited with a grant received from the central government, fees collected for its activities, and other sources. The accounts of the NDIAC will be certified and audited by the Comptroller and Auditor-General of India (CAG).

Institutional support:

The Bill clears that The New Delhi International Arbitration Centre (NDIAC) will set up a Chamber of Arbitration which will maintain a permanent panel of arbitrators. Besides, the NDIAC may also establish an Arbitration Academy for researching the field of alternative dispute resolution and training arbitrators. The NDIAC may also create other committees to administer its functions.

Benefits

The institutionalized arbitration will benefit to Government, its agency, and the parties to a dispute. This will be beneficial for the public and the public institutions in terms of costs incurred and quality of expertise and will facilitate India becoming a center for Institutional Arbitration.

Significance

It is felt that a responsive and reliable alternative dispute resolution (ADR) system is necessary for rapidly developing countries like India. While business disputes require fast resolution, litigation is the least favoured method for that. The judicial system of India is blemish by delays because of which businesses suffer as disputes are not resolved in a specific time. That is why, it is a need for alternative dispute resolution processes like mediation, negotiation, arbitration, and conciliation is felt from time to time.