Union Cabinet Approves –New Delhi International Arbitration Centre Ordinance, 2019

The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved promulgation of an Ordinance for establishing the New Delhi International Arbitration Centre (NDIAC) for the purpose of creating an independent and autonomous regime for institutionalised arbitration.

Benefits

The benefits of institutionalized arbitration will accrue to Government and its agency and to the parties to a dispute.  This shall be to the advantage of the public and the public institutions in terms of quality of expertise and costs incurred and will facilitate India becoming a hub for Institutional Arbitration.

Objective

The NDAIC shall be established with an aim to:-

(a) to bring  targeted  reforms  to develop itself as a flagship institution for conducting international and domestic arbitration

(b) provide facilities and administrative assistance for conciliation mediation and arbitral proceedings;

(c) maintain panels of accredited arbitrators, conciliators and mediators both at national and international level or specialists such as surveyors and investigators;

(d) facilitate conducting of international and domestic arbitrations and conciliation in the most professional manner;

(e) provide cost-effective and timely services for the conduct of arbitrations and conciliations at Domestic and International level;

(f) promote studies in the field of alternative dispute resolution and related matters, and to promote reforms in the system of settlement of disputes; and

(g) co-operate with other societies, institutions and organisations, national or international for promoting alternative dispute resolution.

In order to facilitate the setting up of NDIAC, the Ordinance envisages the transfer and vesting of the undertakings of the ICADR in the Central Government. The Central Government will subsequently vest the undertakings in NDIAC.

Salient Features:

  • New Delhi International Arbitration Centre (NDIAC) will be headed by a chairperson who has been a Judge of the Supreme Court or a Judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration law or management, to be appointed by the Central Government in consultation with the Chief Justice of India.
  • There will be two Full time or Part time Members from amongst eminent persons having substantial knowledge and experience in institutional arbitration, both domestic and international.
  • Also, one representative of a recognised body of commerce and industry shall be chosen on rotational basis as Part time Member.
  • Secretary, Department of Legal Affairs, Financial Adviser nominated by the Department of Expenditure and Chief Executive Officer, NDIAC shall be ex-officio Members.

Background:

The New Delhi International Arbitration Centre Bill, 2019, could not be taken up for consideration and passing by the Rajya Sabha in the recently concluded 248th Session. Further, the Parliament has been adjourned sine die on 13th February, 2019. As per the provisions of Article 107(5) of the Constitution of India, a Bill, which has been passed by the Lok Sabha but is still pending in the Rajya Sabha, shall lapse on dissolution of the Lok Sabha, which is likely to take place in near future.

Therefore, the Government in view of the urgency to make India a hub of institutionalised arbitration and promote ‘ease of doing business’ has decided to promulgate an Ordinance namely “The New Delhi International Arbitration Centre Ordinance, 2019”.

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