CREATION OF NEW DELHI ARBITRATION CENTRE PROPOSED IN INDIA’S LOWER HOUSE OF PARLIAMENT

Based on the recommendations of the Sri Krishna Committee (previously discussed here), on 3 July 2019, the current Law Minister, Ravi Shankar Prasad, introduced Bill No.127 of 2019, the New Delhi International Arbitration Centre Bill 2019 (the Bill) in the Lok Sabha. The Bill replaces an ordinance issued by the previous government in March 2019 (found here) (the Ordinance). The English text of the Bill can be found here.

Objects of the Bill

The Bill provides for the creation of the New Delhi International Arbitration Centre (the NDIAC) – an autonomous and independent institution that is meant to assume the place currently held by the International Centre for Alternative Dispute Resolution (ICADR) and be tasked with the professional, timely and cost-effective conduct and management of arbitration, mediation and conciliation proceedings in India. The Bill recognises that the ICADR has not been able to "actively engage and embrace developments in the arbitration ecosystem".

The key objectives of the NDIAC are to include:

• Promoting targeted reforms with the aim of establishing itself as a flagship institution for both domestic and international arbitration.
• Promoting research, providing training and organising conferences and seminars in arbitration and alternative dispute resolution matters with a view to encouraging the use of the same.
• Providing facilities and administrative assistance for the conduct of arbitration, mediation and conciliation proceedings.
• Maintaining a panel of accredited arbitrators, mediators and conciliators as well as specialists such as surveyors and investigators.
• Collaborating with other national and international institutions.

Composition of the Centre

The NDIAC shall comprise seven members and be headed by a chairperson. The chairperson must be a retired judge of the Supreme Court or a retired judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration, law or management; all of whom must be appointed by the Central Government. The other six members must comprise:

• Two eminent persons having substantial knowledge and experience in institutional arbitration, both domestic and international, who can be full-time or part-time members.
• Three ex-officio members, including a nominee from the Department of Expenditure, Ministry of Finance, a Secretary from the Ministry of Law and a CEO who would be responsible for day-to-day administration.
• One representative from a recognised body of commerce and industry, appointed by the Central Government, as a part-time member, on a rotational basis.

The Bill also provides for the following interesting developments, which have been discussed in the Indian legal sector for some time now, including:

• The establishment of a Chamber of Arbitration consisting of experienced arbitration practitioners.
• The establishment of an Arbitration Academy to train arbitrators (specifically in international commercial arbitrations) and to conduct research in areas of ADR.

A similar bill was passed in the Lok Sabha on 4 January 2019 which formed the basis of the Ordinance, which is now sought to be repealed. Successuve governments have held the goal of making India a centre of arbitration and support for the Bill is expected to be strong, although there have been queries raised as to the government's involvement in the appointment of NDIAC members.

As we had reported last year, the Lok Sabha had previously approved further amendments to the Arbitration and Conciliation Act 1996 which then needed to be approved by the Upper House of Parliament, the Rajya Sabha, but which lapsed due to the recent general election. It is understood that the Cabinet has approved the new Bill to be introduced in this session of Parliament for the Lok Sabha to pass again.

For more information, please contact Nicholas Peacock, Partner, Kritika Venugopal, Senior Associate, or your usual Herbert Smith Freehills contact.