New Delhi International Arbitration Centre (Amendment) Bill, 2022

Topic- Indian Polity [GS Paper-2]

Context- Recently, both the Houses of Parliament have passed the New Delhi International Arbitration Centre (Amendment) Bill, 2022.

Key Highlights 

Renaming Arbitration Centre

• The bill has changed the name of the New Delhi International Arbitration Centre to the India International Arbitration Centre. 

International and domestic arbitration

• The bill requires the Arbitration Centre to strive to facilitate the conduct of international and domestic arbitration and conciliation.
• The new legislation also expands this to include the conduct of other forms of alternative dispute resolution. 
• The bill will help the country emerge as an attractive destination for arbitration at the global level.
• The manner of conduct of arbitration and other forms of alternative dispute resolution will be specified by the Central government through certain regulations. 
• The Bill allows the government to provide for removing any difficulties in implementing the Act up to five years from the date of commencement of the Act. 

Other alternative dispute resolutions

• The bill includes the conduct of other forms of alternative dispute resolution (ADRs) besides arbitration.

Importance

• Changing name

• • Major cities in India such as Mumbai and Kolkata have their own arbitration centres. 
  • Also in Delhi, another body Delhi Arbitration Centre [DAC] is functioning.
  • So it was envisaged that it would not be good to have two arbitration centres having the same name of Delhi.
• Making India international hub of arbitration
  • India is the fifth largest economy in the world, yet we are not the international hub of arbitration, while small countries and cities have emerged as major centres for arbitration.
  • Currently people prefer places such as Singapore, London and Hong Kong for arbitration.
  • India can also provide arbitration awards at more affordable charges in comparison to those centres.
• Institutionalization of Arbitration
  • The major problem in arbitration in the country right now is delays  resulting from ad hoc arbitration which are often appealed in courts. 
  • Considering the issue of pending cases in different levels of courts, the current system of arbitration is not institutionalised and through this Bill, the Government is making the process institutionalised.
• The government rejected the allegations that the government had brought this bill and procedure under the pressure of the World Bank.

What is Arbitration?

• Arbitration is settlement of a dispute outside the court by one or more (odd number) persons who are appointed as arbitrators by both the parties. 
• As per Section 2(1)(a) of the Arbitration and Conciliation Act, 1996 “Arbitration means any arbitration whether or not administered by a permanent arbitral institution”. 
• In other words, any form of arbitration irrespective of its nature has been recognised statutorily in India by bringing such arbitration under the provisions of the Arbitration and Conciliation Act, 1996.

Working Procedure

• It consists of a simplified trial, with simplified rules of evidence and it has no discovery. 
• Generally arbitration hearings are not a matter of public record. 
• The arbitral award is binding on the parties like a court decree or order. 

Arbitration Council of India (ACI)

• Arbitration and Conciliation (Amendment) Act 2019 seeks to insert a new Part to the Act of 1996 in order to establish and incorporate an independent body namely, the Arbitration Council of India (ACI) for the purpose of grading of arbitral institutions and accreditation of arbitrators, etc
• The council will consist of a Chairperson who is either 

(i) a Judge of the Supreme Court; 

(ii) a Judge of a High Court; (iii) Chief Justice of a High Court; 

(iv) an eminent person with expert knowledge in the conduct of the arbitration.

• Other members include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.
• The function includes
  • Framing policies for grading arbitral institutions and accrediting the arbitrators
  • To make policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters
  • To maintain a depository of arbitral awards (judgments) made in India and abroad.

 Alternative Dispute Resolution

• The resolution refers to the methods of resolving a dispute, which are alternatives for litigation in Courts.
• Generally, it uses a neutral third party that helps the parties to communicate, discuss the differences and resolve the dispute.
• It offers to resolve all types of matters that are related to civil disputes, as explicitly provided by the law.
• It is also capable of providing a substitute for the conventional methods of resolving disputes.

Significance of ADR

• Disputes happen frequently between parties in business. And thus both parties suffer losses if the dispute becomes the victim of a long-drawn, complex court battle. 
• The solution to this issue comes in the form of Alternative Dispute Resolution (ADR) mechanisms.
• When the courts are understaffed and overburdened with cases, ADR serves the purpose of providing faster and simpler means of the dispute resolution.

Methods of ADR:

• Arbitration, mediation, conciliation, and negotiation are generally the most common methods of ADR.

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