Cabinet approves bill to replace ordinance on International arbitration centre

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the New Delhi International Arbitration Centre (NDIAC) Bill, 2019 for introduction in the ensuing session of Parliament.

A cabinet release on Wednesday said making India the hub of international arbitration has been one of the pioneering initiatives of the Narendra Modi-led NDA government and the setting up of an independent and autonomous regime for institutionalised domestic and international arbitration is a step in this direction.

The setting up of a institutionalized arbitration centre will result in quality experts being available in India and also an advantage in terms of cost incurred.  It will also facilitate India becoming a hub for institutional arbitration.

The bill provides for setting up of an independent an autonomous body for institutional arbitration and to acquire and transfer the undertakings of International Centre for Alternative Dispute Resolution (ICADR) to New Delhi International Arbitration Centre (NDIAC) with effect from 2 March 2019.

The bill replaces the New Delhi International Arbitration Centre Ordinance, 2019, promulgated by the President on 2 March 2019 for the creation of an independent and autonomous regime for institutionalised domestic and international arbitration and establishing India as an International hub of arbitration.

The bill provides for the repeal of the New Delhi International Arbitration Centre Ordinance, 2019 and saves all the actions done or taken under the ordinance which will be deemed to have been done or taken under the provisions of this bill.

In this regard, a high-level committee (HLC), headed by Justice BN Srikrishna, former Judge of the Supreme Court of India, was constituted in the year 2017. The HLC recommended that the government may take over the International Centre for Alternative Dispute Resolution (ICADR), an existing institution which has been established in the year 1995, using public funds and develop it as an Institution of National Importance.

Taking into consideration the HLC's recommendations, a bill, namely the New Delhi International Arbitration Centre (NDIAC) Bill 2018 was approved for introduction in the Parliament by the cabinet at its meeting held on 15 December 2017. The bill was introduced in the Lok Sabha on 5 January 2018 and was passed by the Lok Sabha on 4 January 2019. The New Delhi International Arbitration Centre Bill, 2018 could not be taken up for consideration and passing by the Rajya Sabha in its 248th session. Thereafter, the Parliament was adjourned sine die on 13 February 2019.

The President, in view of the importance of the matter and urgency to make India a hub of institutionalised arbitration and promote 'Ease of Doing Business' in India, promulgated an ordinance namely "The New Delhi International Arbitration Centre Ordinance, 2019" on 2 March 2019. In view of the provisions of the Article 107 (5) and 123 (2) of the Constitution, the New Delhi International Arbitration Centre Bill, 2019 is proposed to be introduced in the Parliament which will replace the New Delhi International Arbitration Centre Ordinance, 2019.

The 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, and will be appointed by the central government in consultation with the Chief Justice of India. Besides, it will also have two full-time or part-time members from amongst eminent persons having substantial knowledge and experience in institutional arbitration in both domestic and international. In addition, one representative of a recognized body of commerce and industry shall be nominated on rotational basis as a Part-time Member. The secretary, Department of Legal Affairs, ministry of law and justice, financial adviser nominated by the Department of Expenditure, ministry of finance and chief executive officer, NDIAC will be ex-officio members.