As the government pushes through with the International arbitration act, Experts believe ‘under-regulation’ is key to making India a global dispute resolution hub. M Rochan reports

The government aims to put India on the global institutional arbitration map with The New Delhi International Arbitration Centre Act, 2019, and The Arbitration and Conciliation (Amendment) Act, 2019.

The first act proposes that the New Delhi International Arbitration Centre (NDIAC) takes over the undertakings of the International Centre for Alternative Dispute Resolution (ICADR), an autonomous New Delhi-based dispute resolution forum set up by the government in 1995.

The NDIAC will compete with other established international hubs such as the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC) and the Hong Kong International Arbitration Centre (HKIAC).

But questions are being asked about the laws’ efficacy. Will they deliver?

The genesis

It has been evident for some time that India has an ambition to establish itself as a leading hub for international institutional arbitration. That aside, the country’s overburdened judicial system stands to benefit greatly from the creation of such a centre.

The Indian government’s economic survey, tabled in parliament in July, said the country’s judicial system has a backlog of around 35 million pending cases, of which 87.5% is pending in district and subordinate courts.

So, with the courts in Asia’s third-largest economy battling to clear a huge backlog, the formation of the NDIAC could well provide relief for the judicial system, helping ease that burden.

There is also the government’s push towards making India more business-friendly to consider. The NDIAC could help boost India’s ratings as far as “ease of doing business” rankings go in reports such as that of the World Bank.

But, the NDIAC act, as it stands, has raised several concerns, particularly about autonomy.

Stakeholders, and India’s opposition parties, have argued that the government’s approach could rob the NDIAC of its autonomy, its neutrality, and therefore its relevance.

Speaking in the upper house of the parliament in July, former finance minister P Chidambaram, who is also a senior lawyer, said, “… It will be in the larger interest of this country, it will inspire confidence, if the central government maintains as much distance as possible from this centre. On the contrary, what this bill does is bring the government so close to the centre, it’ll be seen as a sarkari [government run] arbitration centre…”

Practitioners India Business Law Journal spoke with argue that only a fully autonomous centre, devoid of government intervention, can make India an international hub for institutional arbitration.


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