Parliament passed a Bill to rename the New Delhi International Arbitration Centre as the India International Arbitration Centre.

The Rajya Sabha passed the New Delhi International Arbitration Centre (Amendment) Bill, 2022, which was piloted by Union Law Minister Kiren Rijiju in the House.

The Lok Sabha passed the Bill in August 2022, which expands this to include the conduct of other forms of alternative dispute resolution besides arbitration.

What is arbitration?

• Arbitration, a form of alternative dispute resolution, is a technique for the resolution of disputes outside the court system. In arbitration, the parties agree to have their dispute heard by one or more arbitrators and agree to be bound by their decision.

• Arbitration, like a lawsuit in court (litigation), offers a final means of resolving a dispute. Arbitration may be cheaper and quicker than litigating a dispute in court. 

• In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

• Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

• The parties select a neutral arbitrator or panel of arbitrators to decide if wrongdoing occurred and, if so, how to compensate the wronged party for it. 

• The Arbitration and Conciliation Act, 1996 governs the arbitral proceedings in India. It was amended in 2015 and 2021.

Significance of arbitration mechanism

• Desire for quick and affordable justice dispensation is universal. In present times, early resolution of a dispute not only saves valuable time and money of the parties to the dispute but also promotes the environment for enforcement of contract. 

• Commercial and financial markets have a big role to promote a country’s economic standing in the comity of nations. For such economic activities to prosper, a simple framework of rules that encourage investors and promote business activities is a prerequisite. 

• Therefore, the government and associated institutions are giving high priority to frame business facilitating laws and regulations with a view to make India one of the preferred destinations for investment and business.

• Several such measures have been taken by the government to make business regulations simpler, transparent, expeditious and effective which is helping India in becoming one of the preferred destinations for the investors, the world over. 

• The government has made amendments to the Arbitration and Conciliation Act, 1996 with a view to make the resolution of commercial disputes more expeditious and effective. 

• This is also with a view to boost the confidence of investors by assuring that their investments are safe and there is a legal system in place which will expeditiously come for their rescue, in such eventualities

• At present, corporate houses are preferring international places such as Singapore, London and Hong Kong for arbitration of commercial disputes.

• According to Law Minister Kiren Rijiju, presently the Singapore International Arbitration Centre (SIAC) is the most preferred place where 469 cases were referred last year, while 377 matters were referred to the London Court of International Arbitration (LCIA).

• Rijiju said it has a locational advantage and has headquarters presence of big banks and MNCs beside an efficient infrastructure support from the government. It is governed under the common law jurisprudence system, the system of law under which India is also governed.

• The law minister said that India would emerge as an arbitration centre in the coming years.

• As many as 3,704 cases were referred last year to the New Delhi International Arbitration Centre.

Delhi International Arbitration Centre (DIAC)

• The Delhi International Arbitration Centre (DIAC), formerly Delhi High Court Arbitration Centre, was established by the High Court in November 2009.

• With the distinction of being the first ever High Court annexed Institutional Arbitration Centre, DIAC has made significant contributions to the growth of arbitration by acting as an effective catalyst to the dispute resolution mechanism.

• DIAC maintains a comprehensive panel of experienced arbitrators comprising of eminent legal luminaries including former Chief Justices of India, former Supreme Court judges, former High Court Chief Justices and judges, international arbitrators, former district and session judges, senior advocates, engineers, architects, chartered accountants, Former Bureaucrats and other experts from various fields.

• The DIAC Secretariat carries out the day-to-day functioning and general administration of the Centre.

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