New Delhi International Arbitration Centre (Amendment) Bill, 2022

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    In Context

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

    More about the news

    • Renaming Arbitration Centre:
      • The bill renames the New Delhi International Arbitration Centre as the India International Arbitration Centre. 
    • International and domestic arbitration:
      • The Act requires the Arbitration Centre to strive to facilitate the conduct of international and domestic arbitration and conciliation and the new legislation expands this to include the conduct of other forms of alternative dispute resolution. 
      • The bill will help India emerge as an attractive destination for arbitration at the global level.
    • Other highlights:
      • The manner of conduct of arbitration and other forms of alternative dispute resolution will be specified by the Central government through regulations. 
      • The Bill also 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 ADRs:
      • Bill also includes the conduct of other forms of alternative dispute resolution (ADRs) besides arbitration.

    Significance

    • Changing name:
      • Important cities in India such as Mumbai and Kolkata have their own arbitration centres. 
        • Even in Delhi, another body Delhi Arbitration Centre [DAC] is functioning.
      • So it was envisaged that it will not be good to have two arbitration centres having the same name of Delhi.
    • Making India international hub of arbitration:
      • India is the fifth biggest 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.
        • Presently people prefer places such as Singapore, London and Hong Kong for arbitration.
      • India can provide arbitration awards at more affordable charges in comparative to those centres.
    • Institutaionalisation of Arbitration:
      • The main problem in arbitration in the country right now is of 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 it institutionalised.
    • Not under pressure:
      • Government also rejected the allegations that the government has brought this bill and procedure under the pressure of the World Bank.

    More About Arbitration

    • Arbitration: 
      • About:
        • Arbitration is outside the court settlement of a dispute by one or more (odd number) persons who are appointed as arbitrators by both the parties. 
        • According to Section 2(1)(a) of the Arbitration and Conciliation Act, 1996 “Arbitration means any arbitration whether or not administered by 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 ambit of the Arbitration and Conciliation Act, 1996. 
      • How does it work?
        • It consists of a simplified trial, with simplified rules of evidence and with no discovery. 
        • Arbitration hearings are usually not a matter of public record. 
        • The arbitral award is binding on the parties just 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 for the establishment and incorporation of an independent body namely, the Arbitration Council of India (ACI) for the purpose of grading of arbitral institutions and accreditation of arbitrators, etc
      • Composition:
        • The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court; or (ii) a Judge of a High Court; or (iii) Chief Justice of a High Court; or (iv) an eminent person with expert knowledge in the conduct of the arbitration.
        • Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.
      • Functions:
        • Framing policies for grading arbitral institutions and accrediting arbitrators
        • Making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters
        • Maintaining a depository of arbitral awards (judgments) made in India and abroad.

    What is Alternative Dispute Resolution?

    • About:
      • ADR refers to the methods of resolving a dispute, which are alternatives for litigation in Courts.
      • Generally, it uses a neutral third party who helps the parties to communicate, discuss the differences and resolve the dispute.
      • It offers to resolve all types of matters related to civil disputes, as explicitly provided by the law.
      • It is capable of providing a substitute for the conventional methods of resolving disputes.
    • Significance of ADR:
      • Disputes happen frequently between parties in the world of business. Both parties suffer losses if the dispute becomes the victim of a long-drawn, complex court battle. 
        • The solution to this 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 dispute resolution.
    • Methods of ADR:
      • Arbitration, mediation, conciliation, and negotiation are usually the most common methods of ADR. 

    Source: TH

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