Institutional Arbitration

Institutional Arbitration

It won’t be wrong to say that India has finally seen a new dawn of Institutional Arbitration after the Arbitration and Conciliation (Amendment) Act, 2019.2 Prior to this, The New Delhi International Arbitration Centre Act, 20193 came into force. The purpose of these recent legislations is to create and establish the independent and autonomous regime of institutional arbitrations in India. The 1996 legislation4 was a comprehensive piece of law which aimed at establishing an alternate dispute resolution mechanism in India to provide quick and pocket-friendly method to resolve tussle between parties. The 2015 amendment based on 246th Law Commission Report5 tried to update the existing law as per international standards by providing quick enforcement of contracts, reduce pendency of claims and many other areas which were previously left open to judicial interpretations. Despite covering many areas of conflict, the 2015 Act failed to talk about the institutional arbitrations. Ad Hoc arbitrations have been observably been a more preferred choice in Indian setting where parties prefer to resolve their issues (if any) mutually by appointing their arbitrator in each case6 and then reach a settlement (as the case may provide). Here the parties to arbitration are not governed by any institutional rules of arbitration, and requires the party to make their own mutual arrangements for selection of rules, appointment of arbitrators and other administrative procedures It cannot be denied that success of institutional arbitration depends upon a strong supporting legislation, commission to monitor the accreditation of arbitrators, institutions, framing of rules to govern appointment, fees, conduct of arbitrators etc. India has finally moved strongly towards strengthening of institutional arbitrations, giving it legal recognition. International Centre for Alternative Dispute Resolution (ICADR), an autonomous organization with its Headquarters at Delhi and Regional Centers at Hyderabad and Bangalore was established in the year 1995 for the promotion, facilitation and development of Alternate Dispute Resolution mechanisms. Subsequently with time, it was observed that the ICADR was plagued with long delays, cost ineffectiveness and procedural formalities. To curb the annoyances in the existing laws and practice, a High-Level Committee (hereinafter referred as Committee), under the chairmanship of Justice B.N. Srikrishna10 was set up to suggest possible changes and measures. The objective of the Committee was to identify the pot-holes which affected and slowed down the pace of India in becoming a hub of domestic arbitrations and hence, provide suggestions for the same.11 The committee in its case study of ICADR suggested that it had failed to achieve its objectives12 and should be taken over by the proposed New Delhi International Arbitration Centre. Based on this Report, New Delhi International Arbitration Centre Act, 2019 was passed on July 2019 with “the purpose of creating an independent and autonomous regime for institutionalized arbitration and for acquisition and transfer of the undertakings of the ICADR and to vest such undertakings in the NDIAC for the better management and improving the quality of arbitration.”13 The intention is to make it a hub for institutional arbitrations. The New Delhi International Arbitration Center Act, 2019 (Hereinafter referred as ‘The NDIAC Act’) establishes an institution with the name “New Delhi International Arbitration Centre”14. New Delhi International Arbitration Centre (NDIAC) has been established as a body corporate, viz., it can acquire, hold or dispose any property (under the provision of the NDIAC Act). It can also enter into contracts with its own name, can sue and can be sued. The centre is bestowed with the responsibility to promote and endorse research and study in the field of Alternate Dispute Resolution (ADR) and parallel to it also provide necessary training to its members, academicians, students etc. It would be the responsibility of the centre to organize and facilitate necessary conferences and seminars; and take necessary steps such as collaboration with other institutions and organizations of national and international stature, and setting up domestic and international facilities to promote its activity and agenda. Most importantly, it will maintain a panel of recognized and registered arbitrators at NDIAC both at domestic and international level which will enhance the quality of proceedings and awards passed (leading to lesser post-award dispute). The center would “lay down various parameters for different modes of alternative dispute resolution mechanism”18 and constantly work to improve the standards. Apart from the above-mentioned objectives, the Centre shall work and strive to facilitate the conduction of arbitration in most professional manner and provide timely requisite services required for such conduction. The center shall make sure that the arbitrators, conciliators and mediators are imparted training from time-to-time, as required. The center would constantly work in the field of academic research, legal courses, provide designed certificate courses etc. in alternative dispute resolution and always strive to improve and enhance. It has been embodied in the NDIAC Act that the Central government may pay to the center, such sums of money in each financial year as per the law made by parliament20 in this regard. The financial independence (partial) of the Centre has been assured by providing a fund to be maintained by the center.21 This fund will be credited with all financial assistance provided by the central government, fees received from its proceedings, donations, grants etc. This fund will be responsible for meeting all the salaries and remuneration given to the members, and expenditure of the Center to conduct and discharge its duties. The Comptroller and Auditor-General of India 22 will audit the accounts and records of the centre, which ensures vigilance and proper usage of funds. The audit reports are to be forwarded to the Central Government to be presented before each house of Parliament. The NDIAC will also provide institutional support in form of Chamber of Arbitration which will be responsible for maintaining a permanent panel of experienced and reputed arbitrators at domestic and international level; scrutinize application for admission and other such support. The criteria for the admission of a candidate into the pool of arbitrators maintained by the Chamber of Arbitration shall be laid down by the Center itself

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Author: jageshwar pateriya,
jagran lakecity university/student

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