The New Delhi International Arbitration Centre Ordinance, 2019

Update: India has enacted The New Delhi International Arbitration Centre Act, 2019 (Pdf) and now the Ordinance is an enforceable law of India.

The New Delhi International Arbitration Centre Ordinance, 2019 was promulgated by President of India on March 2, 2019. Among other things, It seeks to establish an independent and autonomous regime for institutionalised arbitration in India. Indian government is planning to make the New Delhi International Arbitration Centre (NDIAC) a hub for institutional arbitration in India. The government has also decided to declare NDIAC to be an institution of national importance.

Previously, the New Delhi International Arbitration Centre Bill, 2018 was passed by Lok Sabha on 04-01-2019. However, the Bill is yet to be passed by the Rajya Sabha and it will lapse with the dissolution of the current Lok Sabha/Parliament.

As the Parliament of India is currently not in sessions, the President of India was satisfied that circumstances exist which render it necessary for him to take immediate action. By exercising the powers vested in him by Article 123(1) of Constitution of India, the President deemed it fit to promulgate the ordinance.

As the Ordinance also mandated transfer of assets of International Centre for Alternative Dispute Resolution (ICADR) to NDIAC, a notification to this effect was issued by the central government. But a case was filed before the Delhi High Court challenging that notification. The Delhi High Court stayed the notification by central government for transfer of assets in favour of NDIAC for the time being and asked the central government to file its response. However, in all probability the Ordinance would remain valid and would become a law once the new Parliament is constituted.

Update 16-05-2019: As expected, the Delhi High Court has lifted the stay (Pdf) on 16-05-2019 and soon the control of ICADR would be in the hands of Central Government. This is the right decision and we welcome the same. 

We at Resolve Without Litigation (RWL) welcome this Ordinance as it is the first step to make India a premier destination for institutional arbitration and institutional ODR. However, much has to be done as stakeholders in India are not only slow in taking necessary steps but they are also averse to adoption of technology for dispute resolution purposes.

Some of the salient features of the Ordinance are:

(1) NDIAC has been constituted as a body corporate with similar rights and liabilities as a body corporate,

(2) NDIAC has been declared as an institution of national importance.

(3) The head office of NDIAC shall be at New Delhi and it may, with prior approval of Central Government, establish branches at other places in India and abroad,

(4) All possible moveable and immovable properties, including proprietary rights therein, of ICADR shall be transferred to NDIAC. Delhi High Court is presently seized with a litigation in this regard between ICADR  and Central Government,

(5) The objects of NDIAC are:

(a) To bring targeted reforms to develop itself as a flagship institution for conducting international and domestic arbitration

(b) To provide facilities and administrative assistance for conciliation mediation and arbitral proceedings;

(c) To maintain panels of accredited arbitrators, conciliators and mediators both at national and international level or specialists such as surveyors and investigators;

(d) To facilitate conducting of international and domestic arbitrations and conciliation in the most professional manner;

(e) To provide cost effective and timely services for the conduct of arbitrations and conciliations at Domestic and International level;

(f) To promote studies in the field of alternative dispute resolution and related matters, and to promote reforms in the system of settlement of disputes;

(g) To co-operate with other societies, institutions and organisations, national or international for promoting alternative dispute resolution, etc.

(6) NDIAC may constitute such committees as may be considered necessary to administer various aspects of its functions,

(7) There shall be a Chief Executive Officer (CEO) of NDIAC who shall be responsible for day-to-day administration of the Centre,

(8) The NDIAC shall establish a Chamber of Arbitration which shall empanel the Arbitrators and also scrutinise the applications for admission in the panel of reputed arbitrators to maintain a permanent panel of arbitrators,

(9) The NDIAC may establish an Arbitration Academy to train the Arbitrators, to conduct research in ADR and allied fields, to give suggestions for achieving the objectives of the Ordinance, etc,

These are good provisions but they are still cautious in nature. Indian government is still not confident that it can establish world class online dispute resolution (ODR) institutions in India. The main focus of the Ordinance is to make traditional Arbitration more effective and unless the NDIAC is tech oriented, this would remain the situation says Praveen Dalal.

ICADR failed for this reason and even NDIAC may face similar fate unless government is pro active and start using techno legal expertise of platforms like Resolve Without Litigation (RWL).