The Stature of NDIAC on Institutionalised Arbitration

Vidhi Krishali and Keerthi Chowdary*

SYNOPSIS

The near future is all about dispute redressal methods which are efficient, fast and significant to the needs of the parties involved. With a tremendous paradigm shift in the business sector, there is a noteworthy splurge in the capital and along with it, disputes. The New Delhi International Arbitration Act thrives to provide for a mechanised platform that will monitor and assist such dispute resolution processes and will provide a much-needed overwatch within the vicinity of the country and beyond. This Act will promote the culture of institutionalised arbitration and will hamper any such deficient flaw in the arbitral proceedings that may arise. The Act will promote research, assistance and guidance in the field of arbitration and it will provide for an authoritative body to manage all the regulations for domestic as well as international arbitration.

CHAPTER I- INTRODUCTION

In the aftermath of the sudden dawn of Liberalisation, Globalisation, and Privatisation in the Indian markets in the middle 1990s, economic activities had a huge splurge of motion, both positive and negative where there was a huge flow of income and resources from within and outside the country. This brought viable business conditions for the investors and business moguls but along with it came considerable and ample disputes. The international and national disputes often had minuscule obstacles ranging from jurisdictional claims to company reputation.

This further led to courts being burdened by the constant corporate nagging and became the root-cause for the birth of the “Arbitration and Conciliation Act, 1996”, a calculative step towards the future of alternative dispute resolution. When the Act came into power, it ascended an untamed sense of tranquil and the prerequisite to encourage the active roles of institutional arbitration instead of Ad-hoc arbitrations as they were proving out to be exceedingly inefficient as well as overpriced for people from all walks of life. Furthermore, the courts started interfering with the arbitrational proceedings and thus the “Arbitration and Conciliation (Amendment) Act, 2015” was enacted.

In order to promote institutional, domestic and international arbitration, a certain mechanism is entailed to manage and govern the disputes arising out of increasing business trends. Justice BN Krishna Committee was formed in 2016 with mandated task to keep an eye out and identify the hurdles and roadblocks which are creating a nuisance in the holistic development of arbitration. One of the prior tasks was assessing all the existing issues which in turn would affect the landscape of Indian arbitration, and to prepare directive guidelines for converting India into a “Robust centre for international and domestic arbitration”.

The High-Level Committee of Justice Krishna presented some thorough restructuring and recommendations which led to the formulation of the “New Delhi International Arbitration Centre Bill, 2018” (“the NDIAC Bill 2018”). The bill lapsed in the Rajya Sabha due to the general course of ongoing elections. To curtail all the hurdles, and with a promissory vision to promote institutional arbitration, the President of India propagated the “New Delhi International Arbitration Centre Ordinance, 2019” (“the NDIAC Ordinance”) which was later challenged by the International Centre of Alternative Dispute Mechanism, 1996 (“ICADR”) before the Delhi High Court and a stay of the operation of the Ordinance was granted which was further vacated in the long run. Appeals have been filed before the Supreme Court of India against both these orders. The office bearers of the new government made it their primary task to replace the ordinance with the improvised “New Delhi Arbitration Centre Bill, 2019”. The bill was passed by both the houses and got the assent of the President and was enacted on March 2nd, 2019.

The Act contends for the establishment of “New Delhi International Arbitration Centre” (“NDIAC”), to aid and ameliorate the current situation of domestic and international arbitration in the country and provide for a structured institutionalised arbitration.

CHAPTER II- SIGNIFICANCE

Every Bill has a motive or agenda behind its inception. Section 14 and section 15 of the NDIAC Act, 2019 specify the objectives and targets of the act respectively. The act supposes to carry a huge responsibility upon its shoulders as it acts as the hub of arbitrational proceedings. This makes it a matter of national importance as it’s dealing with the aspect of providing justice to aggrieved citizens of the country in the most efficient manner. It aids in the fulfilment of this responsibility by striving to establish a fair code of conduct which minimizes the time and money consuming formalities of the parties involved and also provide the clients with an exhaustive list of professionals who would either mediate, conciliate or arbitrate their issues.

The flourishment of any economy is principally in the hands of the business sector of a country which aid in the boosting of GDP. These Public and Private companies prefer seeking assistance through the Alternative Dispute Resolution mechanisms as it facilitates the ease of doing business through minimum damage caused to them. The current scenario with respect to COVID-19 has caused a stir in the business environment which increases the demand for dispute resolution in the swiftest and amicable method and therefore, an arbitration hub would enable  simplifying the process with a distinguished panel to rely upon. The establishment of a flagship institution with a revised mechanism would change the perspective of interested parties and make it a more reliable platform. Subsequently, the institutionalization of Arbitration would put India on the world map and pave the way to global dominance.

The NDIAC carries the duty and responsibility of imparting knowledge and awareness through training sessions, workshops, research work and surveys to promote the idea of justice through means of alternate dispute mechanisms. Various studies are premeditated to be conducted at regular intervals of time. Plans are being developed to set up institutions in and around India to widen the collaboration with various esteemed panels which would in turn increase the credibility of the work carried out by NDIAC. It provides more weightage to the arbitral awards and envisages minimal interference from the courts of law. It also aims to deal with domestic and international arbitration along with bestowing foreign awards when required which increases the reach of the institution. The act is open to any other objective that might come up in the functioning of the system in the future provided it satisfies the purpose of the establishment of the act.

CHAPTER III- OBSCURITIES OF THE ACT

The increase in trade along with the disputes it brings along has made Arbitration the lucrative mechanism chosen to solve these disputes. The NDIAC Bill of 2019 was presented for this very reason to promote Alternate Dispute Mechanisms which would provide the industry with viable solutions to their problems, but no legislature comes without ambiguities in it.

The Central government is devoted with a lot of power and authority with respect to the NDIAC Bill starting from the power of appointing members of the NDIAC, being the principal  depositor of funds to removing the members of  the office. This level of autonomy and power vested upon a public sector undertaking decreases the credibility and reliability of the institution in the eyes of the parties involved. It automatically tends to eliminate the factor of independence and self-sufficiency of the working of the institution in the eyes of the public due to the combined proactive role played by the Central Government.

The smooth functioning of the NDIAC would be guaranteed with precession in rules and policies regarding administrative as well as the procedural framework. They must study the shortcomings of the ICADR and incorporate those elements which were left with hindsight in the present act. A static timeline, reasonable pricing, guarantee of confidentiality of information and a mandatory procedure to be adopted in case of emergencies are few elements and mechanisms that need detailing in the act.

CHAPTER IV- CONCLUSION

Article 14 and 21 of the Indian Constitution guarantees the service of justice to every citizen of the country and the Bill presented assures private justice to the parties involved in the disputes. The NDIAC Bill aims to eliminate the perception behind dispute settlement in India and promote the idea of an approachable and reliable institution amongst the aggrieved parties. The roadblocks created by the previous bill namely ICADR or International Centre of Alternative Dispute Mechanism, 1996 instigated the furnishing of an entirely new bill that would create a fresh base for the economic world. The timely review and grading system conducted as per the rules of the Arbitration Amendment Bill is believed to increase the reliability of the concerned parties upon arbitration proceedings taking place in the country. The act is required to ensure transparency and commitment as a neutral decision-making body to establish itself and this would be achieved by clearing the ambiguities and obscurities of the bill mentioned previously. 


* Vidhi and Keerthi are third-year students at Symbiosis Law School, Hyderabad. 


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