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The New Delhi International Arbitration Centre Bill, 2018

Topics Covered:

  1. Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  2. Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

 

The New Delhi International Arbitration Centre Bill, 2018

 

What to study?

For Prelims and Mains: Key features and significance of the Bill.

 

Context: The Lok Sabha has passed the New Delhi International Arbitration Centre Bill to set up a revamped International Arbitration Centre at New Delhi with an aim to make India the hub of arbitration.

 

Key features of the Bill include:

New Delhi International Arbitration Centre (NDIAC): The Bill seeks to provide for the establishment of the NDIAC to conduct arbitration, mediation, and conciliation proceedings.  The Bill declares the NDIAC as an institution of national importance.

International Centre for Alternative Dispute Resolution (ICADR): The ICADR is a registered society to promote the resolution of disputes through alternative dispute resolution methods (such as arbitration and mediation). The Bill seeks to transfer the existing ICADR to the central government.

Composition: Under the Bill, the NDIAC will consist of seven members including: (i) a Chairperson who may be a Judge of the Supreme Court or a High Court, or an eminent person with special knowledge and experience in the conduct or administration of arbitration; (ii) two eminent persons having substantial knowledge and experience in institutional arbitration; (iii) three ex-officio members, including a nominee from the Ministry of Finance and a Chief Executive Officer (responsible for the day-to-day administration of the NDIAC); and (iv) a representative from a recognised body of commerce and industry, appointed as a part-time member, on a rotational basis.

Term and superannuation: The members of NDIAC will hold office for three years and will be eligible for re-appointment.  The retirement age for the Chairperson is 70 years and other members is 67 years.

Objectives and functions of the NDIAC: The key objectives of the NDIAC include (i) promoting research, providing training and organising conferences and seminars in alternative dispute resolution matters; (ii) providing facilities and administrative assistance for the conduct of arbitration, mediation and conciliation proceedings; (iii) maintaining a panel of accredited professionals to conduct arbitration, mediation and conciliation proceedings.  Key functions of the NDIAC will include: (i) facilitating conduct of arbitration and conciliation in a professional, timely and cost-effective manner; and (ii) promoting studies in the field of alternative dispute resolution.

Finance and audit: The NDIAC will be required to maintain a fund which will be credited with grants received from the central government, fees collected for its activities, and other sources.  The accounts of the NDIAC will be audited and certified by the Comptroller and Auditor-General of India.

Institutional support: The Bill specifies that the NDIAC will establish a Chamber of Arbitration which will maintain a permanent panel of arbitrators.  Further, the NDIAC may also establish an Arbitration Academy for training arbitrators and conducting research in the area of alternative dispute resolution.  The NDIAC may also constitute other committees to administer its functions.

 

What is Arbitration?

Arbitration is a settlement of dispute between two parties to a contract by a neutral third party i.e. the arbitrator without resorting to court action. The process can be tailored to suit parties’ particular needs.

  • Arbitrators can be chosen for their expertise. It is confidential and can be speedier and cheaper than court. There are limited grounds of appeal. Arbitral awards are binding and enforceable through courts.

 

Significance of ADR:

It is felt that a reliable and responsive alternative dispute resolution system is essential for rapidly developing countries like India. While business disputes need speedy resolution, litigation is the least favoured method for that. The Indian judicial system is marred by delays because of which businesses suffer as disputes are not resolved in a reasonable time period. Therefore, need for alternative dispute resolution processes like negotiation, mediation conciliation and arbitration is felt from time to time.

 

Sources: the hindu.

Mains Question: It is said that to improve ease of doing business in India, there is a need to provide viable alternatives to litigation and implement effective means for enforcement of contracts. Examine in detail why and what kind of institutional arbitration mechanism is required in India.